I hereby agree to purchase the quantity of Middle Bass Island Yacht Club Capital Improvement Bonds listed below, subject to the following terms and conditions:

To complete the purchase of Bonds, a member must complete and sign this agreement and submit it along with a check for the full amount of the Bond and a completed IRS Form W-9 to the Treasurer of the Club. This agreement shall not bind the Club until it has been accepted as evidenced by the signature of an authorized Club Officer.

BONDHOLDER: (Name) __________________________________________

(Address) ________________________________________

________________________________________

(Member Number) ________________________________

PRINCIPAL AMOUNT: $____________________________________________

Whereas, the above listed Bondholder, a member of Middle Bass Island Yacht Club, has purchased the Principal Amount shown of Capital Improvement Bonds from the Issuer with the intent that the Issuer will use the proceeds to purchase and install docks and construct a clubhouse for the use of Club members on Middle Bass Island, Ohio and with the understanding that this Bond sets forth the terms and conditions that apply to the repayment of such Principal Amount.

Promise to Pay For value received, the Issuer hereby promises to pay to the Bondholder the Principal Amount plus accrued interest, calculated as described below, subject to the terms and conditions set forth herein.

Calculation of Interest The Principal Amount, or any portion thereof which remains outstanding, shall bear simple interest computed from the Issue Date shown above to the date of payment at the rate of 5% per annum. Interest for any partial year shall be calculated on the basis of a 365 day year.

Payment Payment of the Principal Amount and all accrued interest will be made in a single lump sum on or before October 1, 2018. Amounts due under this Bond may, at the option of the Issuer, be prepaid in whole or in part at any time without premium or penalty. All prepayments shall first be applied to interest, and then to principal.

Place of Payment All payments due under this Bond shall be made to the Bondholder at the address set forth above or at such other place as the Bondholder shall designate in writing.

Security This Bond is unsecured.

Transfer This Bond is not transferable except to the heirs or legatees of a Bondholder in the event of death or the beneficiaries or successor trust if the Bondholder is a trust for a member. The terms of this Bond remain binding on, and for the benefit of, any such heirs, legatees, beneficiaries or permitted successors.

Change in Membership Status Change in the membership status of a Bondholder in the Middle Bass Island Yacht Club after the Issue Date shall not affect the ownership or enforceability of this Bond.

Collection Costs In the event of default by the Issuer, in addition to amounts due hereunder, the Issuer agrees to pay the costs and expenses, including reasonable attorney fees, incurred by the Bondholder in an action to enforce collection of this Bond.

Entire Agreement This Bond is the entire agreement between the parties with respect to the subject matter hereof. It replaces and supersedes all prior written or oral agreements between the parties. No amendment, modification or waiver of any of the terms of this Bond shall be effective unless evidenced by a writing executed by a duly authorized officer of the Issuer.

Severability In the event any provision of this Bond is deemed unenforceable, all other provisions of this Bond shall remain in full force and effect. Governing Law This Bond shall be governed by and construed in accordance with the laws of the State of Ohio.

In Witness Whereof, the Issuer has caused this Bond to be executed by its duly authorized officer effective as of the Issue Date set forth above.

MIDDLE BASS ISLAND YACHT CLUB, INC.

By: ________________________________

Its: ________________________________

The total estimated cost of improvements for the new MBIYC marina is $1,200,000 and includes the cost of the docks, a clubhouse and other incidental equipment and facilities needed to complete the project. Over the years, the Club has built a sizable building fund, but in order to meet the net operating income requirements for bank financing, additional funds are needed.

In order to maintain our needed cash flow levels over the next ten years, the finance committee has recommended that we secure a minimum of $300,000 in bonds. At this level, assuming income from dues and docks meets our conservative estimates, the Club will be able to comfortably meet operating and debt-related expenses. If additional funds are raised through the bond program, the need for traditional bank financing with higher interest rates will be reduced accordingly.

The term of all bonds is ten years, however the cash projections made for the project assume that we will begin to pay back the bonds in year six of the term. The bonds will be paid on a first-in-first-out basis with 20% of the total bonds paid each year, provided our cash position meets our conservative projections.

The interest rate is 5% simple and will be paid at the time of the principal payment.

No. A member may purchase any amount in increments of $500 over the initial minimum of $500.

A member who resigns, or the estate of a deceased member, may petition the Board of Directors for an early retirement of their bond. The Club will make every effort to accommodate such requests based on the Club’s financial status at the time.

Yes, the interest on the bonds is taxable and a 1099 will be issued after payment showing the amount of interest earned. In general, taxes are due based on the payment date, but, as always, you should consult your tax advisor regarding your individual situation.

No. The bond program is a private offering and bonds will only be issued to members or personal trusts of members.

The Club is required to report to the IRS any income paid to you. The W-9 form is required to collect the information for such reports. The form is also used for you to indicate whether or not you are subject to withholding. These forms will only be used for such purpose and will be kept confidential and secure.

No special privileges will accrue to members who participate in the program. The purchase of bonds is strictly voluntary and a separate investment like any other investment you make at a bank, credit union or with your broker. The purchase of bonds is a way for members to facilitate the financing of what we think will by the premier yacht club facility on Lake Erie and beyond.

The monies collected in the bond program will be used to fund the purchase and installation of docks and construction of a clubhouse and other capital improvements. The money will initially be deposited in the Building Fund and invested in CDs along with the current Building Fund monies. As the project progresses, those funds, along with any necessary bank financed funds will be dispersed.

While there is no specific deadline for the purchase of bonds, members are encouraged to make their bond commitment by October 1, 2008. This will allow us to arrange for any needed bank financing and to keep the first phase of the project, dock construction and installation, on schedule. Additionally, members who purchase bonds early will be eligible for an earlier retirement of their bonds.

The financial projections for both the income and expenses related to the project were based on very conservative estimates. The most critical factor to the project’s success is the number of members and the financing plan assumed 300 members in 2008 with 10% growth in succeeding years. At the time the original projections were made, we had not had our 2008 renewal period and stood at approximately 370 members. With the vast majority of members renewing, a sizable number of former members returning and several new members this year, we now stand well above the 300 level and, in fact, have more members than in 2007. As the marina development begins to take shape, we are confident that our membership will continue to grow and that membership will out pace the plan.

In the unlikely event the Club discontinued operations before all Bonds were paid, the Bondholders would be unsecured creditors of the Club. The Club would sell or otherwise liquidate its assets. The proceeds would go first to the bank holding the mortgage. All remaining funds would go to unsecured creditors on a pro rata basis.

Checks should be made payable to Middle Bass Island Yacht Club and sent to the treasurer at the following address:

Kaye Soka, Treasurer
Middle Bass Island Yacht Club
5573 Ginger Tree Lane
Toledo, OH 43623