MBN Bond Fund Introduction

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About MBN Group Of Companies

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Glossary Of Terms

MBN Bond Fund Glossary Of Terms

In this Offering Memorandum, unless the context otherwise requires, the following words and terms   shall have the indicated meanings and grammatical variations of such words and terms shall have corresponding meanings:

"Accountants" means an independent firm of chartered accounts appointed as accountants for the Corporation, whether or not such firm of chartered accounts is regularly so retained.

"Appointed Law Firm" means the legal firm(s) selected by the Corporation from time to time, currently Scott Hall LLP, Barristers and Solicitors, located in Calgary, Alberta.

"Bonds" means those bonds to be sold and reflected by a Bond Certificate to be issued by the Corporation. All Bonds will be secured by MBN Finance Ltd. (and the chattels, collateral and security obtained from its borrowers), and shall bear, and be paid, interest at a rate of 7.0% compounded monthly (effective annual rate of return is 8.25%). Bonds in the amount of $5000 - $249,999.99 shall be for a term of four years. Exception may be made for Bonds purchased outside of a Deferred Plan in amounts invested above $250,000-$499,999.99 which could have a term of 3 years; and Bonds purchased in an amount between $500,000 and $749,999.99 which could have a term of 2 years and Bonds above $750,000 both term and interest will be negotiated. Bonds purchased within a Deferred Plan shall have the interest paid at the end of the term. Bonds purchased outside of a Deferred Plan may, at the election of the Subscriber, have the interest paid monthly, annually or at the end of the term.

"Business Day" means a day which is not a Saturday, Sunday or a legal holiday in the City of Calgary, in the Province of Alberta.

"Closing" means the day or days upon which the Securities are issued to the Subscribers pursuant to this Offering.

"Deferred Plan" means a trust governed by a RRSP, RRIF, RESP, DPSP, TFSA or LIRA.

"Gross Proceeds of this Offering" means for any period the aggregate amounts received from all Subscribers under this Offering Memorandum.

"MBN Building Systems Ltd." is that Alberta Corporation, incorporated on the 12th day of February, 2008. MBN Ltd. owns and or controls of the Voting Shares of MBN Building Systems Ltd.;

"MBN Developments Ltd." is that Alberta Corporation incorporated on the 9th day of October, 2007. Formerly 1354988 Alberta Ltd., a name change to MBN Developments Ltd. was effected on February 12th, 2008. MBN Ltd. owns 50% of the Voting Shares of MBN Developments Ltd. Daniel Horner owns the other 50% of the Voting Shares;

"MBN Domestic Bond Fund (7-1) Ltd." means the Issuer, being an Alberta Corporation; incorporated on January 10, 2008.

"MBN Finance Ltd." is that Alberta Corporation, incorporated on the 12th day of February, 2008.  MBN Finance Ltd. will be the initial borrower from the Corporation of all of the net proceeds of this Offering.  MBN Ltd. owns and or controls the Voting Shares of MBN Finance Ltd.

"MBN Group of Companies" shall include any or all of MBN Building Systems Ltd., MBN Developments Ltd., MBN Ltd., MBN Mortgage Ltd., MBN Realty (Alberta 2500 Group Corp.), MBN Accounting Systems Ltd., MBN Property Services Ltd, all Alberta Corporations.  More information on each of the MBN Group of Companies is set forth in Appendix 1 attached hereto.

"MBN Ltd. is that Alberta Corporation, incorporated on the 5th day of Dec, 2002.  Mr. Christopher Giuffre owns and or controls the Voting Shares of MBN Ltd.

"MBN Mortgage Ltd." is that Alberta Corporation, incorporated on the 8th day of August, 2003.  MBN Ltd. owns and or controls the majority of the Voting Shares of MBN Mortgage Ltd.

"Non-Arm's-Length Parties" means related persons within the meaning of the Tax Act.

"Offering" means the offering of the Securities described herein or in any amendment hereto.

"Offering Memorandum" means this confidential offering memorandum, including any amendment hereto.

"Resident" means a person (other than a partnership) who is resident in Canada for the purposes of the Tax Act or a “Canadian Partnership” within the meaning of the Tax Act.

"Securities" means Bonds or Class B Non-Voting Shares sold pursuant to this Offering, which is comprised of both Bond Securities and Share Securities.

"Securities Act" means the Securities Act (Alberta), including the rules and regulations promulgated there under, as may be amended from time to time.

"Share Block" means 100 Class B Non-Voting Shares of the Corporation, at the price of $5.00 per share, which is available to be purchased by a Bond subscriber for every $50,000.00 increment in Bonds they acquire.

"Subscribers" means those persons subscribing for Securities pursuant to this Offering.  Where the purchase of Securities is split such that the Class “B” Non-Voting Shares and the Bonds have been purchased by a combination of a person and their Deferred Plan, the person and the trust governing the Deferred Plan shall be collectively referred to as the "Subscriber".

"Tax Act" means the Income Tax Act (Canada) and the regulations there under, as amended from time to time; and In this Offering Memorandum, references to “dollars” and $ are to the currency of Canada, unless otherwise indicated.