DEBT RESTRUCTURING AGREEMENT

DEBT RESTRUCTURING AGREEMENT


THIS AGREEMENT is made this 30th day of August, 1999,


AMONG:


MFC BANCORP LTD., a company continued under the laws of the Yukon
Territory


("MFC")


AND:


DRUMMOND FINANCIAL CORPORATION, a company
incorporated under the laws of the State of Delaware


("Drummond")


WHEREAS Drummond is indebted to MFC and MFC has agreed to reduce the interest rate applicable to that indebtedness in exchange for a general security interest over the property, assets, effects and undertakings of Drummond, all as hereinafter set forth;


NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the mutual covenants and agreements hereinafter contained and the sum of $1.00 paid by each party to the other (the receipt and sufficiency of which are hereby acknowledged by each party) the parties hereto warrant, represent, covenant and agree as follows:


1. INTERPRETATION


1.1 In this Agreement and the recitals hereto the following words have the
following meanings:


(a) "Agreement" means this agreement between MFC and Drummond;


(b) "Closing Date" means August 30, 1999 or such other date as the
parties hereto may agree; and


(c) "Indebtedness" means the indebtedness of US$21,515,000 bearing
interest at 8.75% owed by Drummond to MFC which is evidenced by
a promissory note due July 31, 2008.


1.2 The division of this Agreement into articles, sections and subsections
and the insertion of headings are for reference purposes only and
shall not effect the interpretation of the Agreement. Unless
otherwise indicated, the reference to a particular article, section,
subsection or Schedule refers to a specified article, section,
subsection or Schedule of this Agreement.


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1.3 This Agreement shall be construed in accordance with the laws of the
Province of British Columbia. All references to sums of money shall
be deemed to refer to the legal tender of Canada unless otherwise
stated.


2. RESTRUCTURING OF INDEBTEDNESS


2.1 Subject to and in accordance with the terms and conditions of this
Agreement, MFC and Drummond hereby covenant and agree with each other
to reduce the interest rate payable on the Indebtedness from 8.75% per
annum to 5.00% per annum and MFC and Drummond further covenant and
agree to secure the Indebtedness by way of a general security
agreement and securities pledge agreement.


3. REPRESENTATIONS AND WARRANTIES


3.1 MFC represents and warrants to Drummond that:


(a) it is a company duly continued and validly existing under the
laws of the Yukon Territory;


(b) it has all necessary corporate authority, power and capacity to
enter into this Agreement and to carry out its terms and
conditions to the full extent; and


(c) the acceptance of the general security interest in exchange
for the reduction of the interest rate applicable to the
Indebtedness has been validly authorized by all necessary
corporate acts.


3.2 Drummond represents and warrants to MFC that:


(a) it is a company duly incorporated and validly existing under
the laws of the State of Delaware;


(b) it has all necessary corporate authority, power and capacity to
enter into this Agreement and to carry out its terms and
conditions to the full extent; and


(c) the reduction of the interest rate applicable to the
Indebtedness as consideration for the granting of the general
security interest has been validly authorized by all necessary
corporate acts.


4. COMPLETION


4.1 On or before the Closing Date, MFC shall deliver, or cause to be
delivered to Drummond, the following:


(a) the promissory note due July 31, 2008 in the principal amount
of US$21,515,000 bearing interest at 8.75% per annum evidencing
the Indebtedness surrendered for cancellation; and


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(b) such other documents as may be required in order to carry out
the terms of this Agreement.


4.2 On or before the Closing Date, Drummond shall deliver, or cause to be
delivered to MFC, the following:


(a) a certified copy of a directors' resolution authorizing the
entering into, the execution and delivery of this Agreement by
Drummond and the consummation of the transactions contemplated
hereby;


(b) a promissory note substantially in the form attached hereto as
Schedule A due July 31, 2008 in the principal amount of
US$21,515,000 bearing interest at 5.00% per annum;


(c) a general security agreement substantially in the form attached
hereto as Schedule B;


(d) a securities pledge agreement substantially in the form
attached hereto as Schedule C; and


(e) such other documents as may be required in order to carry out
the terms of this Agreement.


5. GENERAL


5.1 Time is of the essence of this Agreement.


5.2 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.


5.3 The parties hereto agree to execute such further and other agreements
as may be necessary to give effect to the meaning and intent of this
Agreement.


5.4 This Agreement constitutes the entire agreement between the parties
with respect to the subject matter of this Agreement and supersedes
every previous agreement, communication, expectation, negotiation,
representation or understanding whether oral or written, express or
implied, statutory or otherwise among the parties with respect to the
subject matter of this Agreement except as specifically set out
herein.


5.5 No director, officer, employee or agent of any party has any authority
to make any representation, warranty or covenant not contained in this
Agreement and each party agrees that it has executed this Agreement
without reliance upon any such representation or promise.


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5.6 This Agreement may be executed in several parts and in the same form
and by facsimile and such parts so executed shall together constitute
one original document, and such parts, if more than one, shall be read
together and construed as if all the signing parties had executed one
copy of the said agreement.


IN WITNESS WHEREOF the parties hereto have hereunto executed this Agreement as of the day and year first above written.


MFC BANCORP LTD.


Per: /s/Roy Zanatta
-----------------------------
Authorized Signatory


Per:
-----------------------------
Authorized Signatory


DRUMMOND FINANCIAL CORPORATION


Per: /s/ Michael J. Smith
------------------------------
Authorized Signatory


Per:
------------------------------
Authorized Signatory


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SCHEDULE A


PROMISSORY NOTE
---------------


AUGUST 30, 1999


PRINCIPAL AMOUNT: $21,515,000 (U.S.) DUE: JULY 31, 2008


FOR VALUE RECEIVED, the undersigned DRUMMOND FINANCIAL CORPORATION ("Drummond") hereby promises to pay to MFC BANCORP LTD. ("MFC"), of 6 Rue Charles-Bonnet, 1206 Geneva, Switzerland, on July 31, 2008, at such address or at such other place as MFC may from time to time designate by written notice to Drummond, the principal amount of TWENTY-ONE MILLION FIVE HUNDRED AND FIFTEEN THOUSAND DOLLARS (U.S.) ($21,515,000), together with interest thereon at the rate of 5.00% per annum compounded semi-annually as well after as before maturity and judgment and both before and after default, such interest payable semi-annually on the 25th day of January and the 25th day of July in each year until payment in full.


The payment of the principal and the interest thereon is secured by way of a general security agreement and a securities pledge agreement issued and delivered by Drummond to MFC and each dated August 30, 1999.


Presentment for payment, demand, protest and notice of dishonour and protest hereof are hereby waived. This note shall be governed by and construed in accordance with the laws of the Province of British Columbia.


DRUMMOND FINANCIAL CORPORATION


By: /s/ Michael J. Smith
-------------------------------------


Name: c/s
----------------------------------


Title:
---------------------------------


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SCHEDULE B


GENERAL SECURITY AGREEMENT
--------------------------


THIS GENERAL SECURITY AGREEMENT is dated for reference the 30th day of August, 1999,


BETWEEN:


DRUMMOND FINANCIAL CORPORATION, a company
incorporated under the laws of the State of Delaware


("Drummond")


AND:


MFC BANCORP LTD., a company incorporated under the laws
of the Yukon Territory


("MFC")


WHEREAS Drummond has executed a promissory note dated the 30th day of August, 1999 in favour of MFC (the "Note") in the principal amount of US$21,515,000 due July 31, 2008 and MFC has requested that Drummond secure the payment of the principal and interest by way of a general security agreement;


NOW THEREFORE for good and valuable consideration, receipt and adequacy of which is acknowledged by the parties, the parties agree that:


1. DEFINITIONS


1.1 In this general security agreement:


(a) the terms "Goods", "Chattel paper", "Documents of Title",
"Equipment", "Accounts", "Consumer Goods", "Instruments",
"Intangibles", "Licenses", "Money", "Securities", "Proceeds",
"Inventory" and "Accessions" and other words and expressions
which have been defined in the Personal Property Security Act
(British Columbia) (the "PPSA") shall be interpreted in
accordance with their respective meanings given in the PPSA
unless otherwise defined herein or unless the context otherwise
requires and specifically;


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(b) "Indebtedness" means all liabilities of every kind and
description of Drummond to MFC, whether now or hereafter owed
or any future advance, whether direct, indirect, contingent,
and whether Drummond be bound alone or with others and whether
as principal or surety and including, but not limited to, the
principal amount of the Note and any interest accruing thereon;


(c) "PPSA" means the Personal Property Security Act (British
Columbia); and


(d) "Related Documents" means the Note and any other documentation
in connection with this general security agreement or the
Indebtedness or related to its operation or administration,
whether already existing or executed now or later.


2. GENERAL SECURITY INTEREST


2.1 For value received and as a general and continuing security for the
payment of the Indebtedness including any ultimate unpaid balance
thereof, owed to MFC and to secure the payment of the Indebtedness
under this general security agreement or any Related Documents,
Drummond hereby:


(a) grants to and in favour of MFC by way of mortgage, charge,
assignment and transfer, a general security interest in all
presently owned and hereafter acquired personal property of
Drummond of whatsoever nature and kind and wheresoever situate
and all Proceeds thereof and therefrom, renewals thereof,
Accessions thereto and substitutions therefor including,
without limiting the generality of the foregoing, all the
presently owned or held and hereafter acquired right, title,
and interest in and to all Goods (including all accessories,
attachments, additions, and Accessions thereto), Chattel Paper,
Documents of Title (whether negotiable or not), Instruments,
Intangibles, Licenses, Money (including, without limitation,
the principal), Securities, and all:


(i) Inventory of whatsoever nature and kind and wheresoever
situate;


(ii) Equipment (other than Inventory) of whatsoever nature
and kind and wheresoever situate, including, without
limitation, all machinery, tools, apparatus, plant,
furniture, fixtures, and vehicles of whatsoever nature
and kind;


(iii) book accounts and book debts and generally all Accounts,
debts, dues, claims, choses in action and demands of
every nature and kind howsoever arising or secured
including letters of credit, letters of guarantee and
advices of credit, which are now due, owing or accruing
or growing due to or owned by or which may hereafter
become due, owing or accruing or growing due to or owned
by Drummond (all of which are herein collectively called
the "Debts");


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(iv) deeds, documents, writings, paper, books of account and
other books relating to or being records of Debts,
Chattel paper or Documents of Title or by which such are
or may hereafter be secured, evidenced, acknowledges or
made payable;


(v) contractual rights including rents, revenues and
incomes, and insurance claims and policies, and all
goodwill, patents, trademarks, copyrights, and other
industrial property;


(vi) monies (including, without limitation, the principal)
other than trust monies lawfully belonging to others;
and


(vii) personal property described in any schedule now or
hereafter annexed hereto;


(all of which are herein collectively called the "Specifically
Charged Property").


(b) charge as and by way of a floating charge in favour of MFC all
the presently owned or held and hereafter acquired property,
assets, effects and undertakings of Drummond of whatsoever
nature and kind and wheresoever situate, other than such of the
property, assets, effects and undertakings of Drummond as are
validly and effectively subjected to the grant, mortgage,
pledge and charge, and the general security interest granted to
MFC pursuant to subsection 2.1(a) including, without limiting
the generality of the foregoing, all presently owned or held
and hereafter acquired:


(i) right, title and interest of Drummond in and to real and
immovable and leasehold property and rights whether in
fee or of a less estate and all interest in and rights
relating to lands and all easements, rights of way,
privilege, benefits, licenses, improvements and rights
whether connected therewith or appurtenant thereto or
separately owned or held and all structures, buildings,
plant, machinery, fixtures, apparatus and fixed assets;
and


(ii) businesses, goodwill and uncalled capital of Drummond;


and the Specifically Charged Property and the property charged
by this subsection 2.1(b) and all property and assets expressed
to be charged by any instruments supplemental hereto or in
implementation hereof are collectively referred to as the
"Collateral".


2.2 TO HAVE AND TO HOLD unto and in favour of MFC on the terms and
conditions herein set out, PROVIDED THAT Drummond shall not have the
power without the prior written consent of MFC to:


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(a) grant or allow any lien, charge or other encumbrance, whether
fixed or floating, to be registered against or exist on any
part of the Collateral, which ranks or could in any event rank
to be enforced in priority to or pari passu with the security
constituted by this general security agreement, save for:


(i) mortgages and charges and any other encumbrances, if
any, previously disclosed by Drummond;


(ii) mortgages and charges, and any other encumbrances to
MFC; and


(iii) encumbrances approved in writing by MFC prior to their
creation or assumption; and


(b) grant, sell, exchange, transfer, assign, lease or otherwise
dispose of any of its properties, assets, effects, and
undertakings.


3. RIGHTS AND OBLIGATIONS OF DRUMMOND


3.1 Drummond warrants and covenants that it holds title or has rights in
the Collateral sufficient for a general security interest to attach to
the Collateral and that there are no existing encumbrances on this
Collateral, except as previously disclosed to MFC by Drummond.


3.2 Until default, or unless otherwise agreed with MFC, Drummond may deal
with the Collateral in the ordinary course of Drummond's business.


3.3 Drummond shall defend its own and MFC's rights in the Collateral
against the claims and demands of all persons.


3.4 Drummond will conduct its business and affairs in a proper and
efficient manner, in accordance with applicable law and keep records
in accordance with generally accepted accounting principles. Drummond
shall pay all charges, such as taxes, as ...