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Dunkirk Roller Rink
Partner Scenario – October 2007


  Enclosed is the outline for the partnership agreement for Dunkirk Center LLC, a limited liability company formed for the purchase of the former Dunkirk roller Rink in Dunkirk, Maryland. Dunkirk is located in Calvert County Maryland about twenty minutes outside the beltway on Solomon’s Island Road, Route 4. The building was constructed in 1982 and is a free standing 20,000 foot building located on a 4 acre lot. Zoning allows an additional 5,000 foot retail building to be constructed on the property. We have signed a lease with World Gym for the entire 20,000 foot building and they expect to open in December. World Gym is a franchise health club, and the owner has three other World Gym franchises in that region. We plan to build and lease an additional building on the undeveloped portion of the property. The expansion could be a bank with a drive through, or any retail or office user. The partnership acquired the property on August 30, 2007 for $2,600,000. The remaining equity raised will complete the construction and carry until the tenant opens for business.

The managing partner of the LLC shall own 50% of the property as a result of the managing partner interest. The managing partner shall be responsible for putting the deal together including executing a sales contract and posting the earnest money deposit, securing investors for the project, leasing the project, personally guaranteeing the first and second trust financing, supervising the management company, contributing any cash deficiency at the initial offering and making loans to the partnership from time to time if necessary. The managing partner shall have no cash investment in the partnership as a result of the managing partner interest. Peter Mallios shall be the sole managing partner. Property management and leasing shall be handled by Peter Mallios at market rates.

Investors shall invest 100% of the required capital and shall own 50% of the project. Peter Mallios may make a cash investment in the project as an investor, in which case he will own his pro rata portion of the investor half of the property. Investors shall receive an 8% return on their investment annually and then the balance of cash flow shall be distributed to all members. If investors do not receive their 8% return for any year the deficiency shall accrue with interest. Upon sale or refinance, investors shall have their investment repaid first and the balance shall be split among the members pro rata. Plans are for annual distributions.

The Initial Capital Contribution is $800,000 consisting of 16 investor units of $50,000 each. We acquired the property with a first trust in the amount of $1,950,000, which is 75% of the purchase price. The loan will be payable interest only for three years at one point over prime rate, so the current rate is 8.75%. The seller holds a second note of $650,000 at 8.25% interest for three years. Both loans are personally guaranteed by Peter Mallios. This will require us to refinance within three years, which will coincide with completion of the expansion and at that time the expectation is to return some or all of the investor capital. Based on this amount each unit owns 3.125% of the LLC. The debt is equal to the purchase price so all the equity is available to renovate and subdivide the building and commence construction on the expansion.

Cash Flow (other than from a sale or refinance) shall first pay member loans including back interest, then investors shall receive a cumulative annual return equal to eight percent (8%) on each of the investors Capital Contributions and thereafter any remaining Cash Flow shall be distributed in proportion to members Percentages. Proceeds from a Sale or Refinance shall first repay secured loans, then member loans, then to repay the investors their accrued and unpaid eight percent (8%) priority return from prior years and then for the current year, next to the investors to repay them for the balance of their unpaid Capital Contributions and any surplus then to all Members in proportion to their Percentages. All voting issues will require a 75% margin to change the partnership Agreement or for a sale.

Peter Mallios is the general partner of three other properties in Calvert County. This familiarity with the market shall help ensure the property will lease quickly and will stay leased over the years to come. This investment is not registered with the Securities and Exchange Commission so each member must be an accredited investor.

  If you are interested in this opportunity please call Pete at 202-374-0123 or email at .