FUNDING   PROPOSAL

This a funding request by REM Enterprises for a joint venture/partnership with a Hotel/Restaurant/Nightclub venture in South Beach Miami.  The term for return on investment to the investor is 5 years and the amount requested is 11 million dollars. The proceeds will be utilized for paying off the current loan of 8.6 million, the construction of the new nightclub "Mingles", create cash reserves and funds for cost overruns for construction.

The venture will allow for the construction of the new nightclub "Mingles" on the first floor of the hotel. The construction costs will encompass all hard and soft costs pursuant to the removal of the entire 14 rooms on the first floor of the hotel, part of second floor and completion of the nightclub on both levels. The city of Miami building and planning department has verbally committed to approve the plans once submitted.  There are 6 nightclubs in Miami Beach in the top 30 in the country in gross revenue for 2009-2010. This area is second only to Las Vegas, Nevada which has 12 nightclubs in the top 30 even during these economic times. This information can be found in the attachment and confirmed at www.nightclub.com.  The addition of the new nightclub will increase gross revenue by 8-10 million annually with an expected 10% increase annually for the next 5 years. The nightclubs on this list gross from 10-35 million a year. The 2 Nightclubs located on Ocean drive are Mango’s Tropical Café and The Clevelander and they each gross 34 and 32 million respectively.

 The investor will receive an interest payment of 5% monthly on the outstanding principal balance until paid in full beginning in 13th month from the date of funding.  There will be an annual payment at the end of each fiscal year of 25% or 2.75 million in years 2,3,4, and 5 of this venture to the investor.   At the end of the 5th fiscal year, a payment to the investor in the amount of 30% of the equity value of the asset at that time. These proceeds will be from net revenue and will be determined based upon a current appraised value. This payment will be made within 6 months of the 5^th fiscal year end.  Inclusive of the interest and equity payments the investor will receive a return on investment of 30-40% .  The investor will also have a buyout clause to take 100% ownership of the nightclub at the current appraised value at that time.

At this time, we have everything place to move this venture forward. The city of Miami Beach has viewed and verbally approved this project going forward with a nightclub with a Max capacity of 820 patrons. The construction will take 4 to 6 months for completion of an 8,800 sq. ft. nightclub in the 19,200 sq. ft. building. The building has a historical classification as well and it will remain intact.  Upon funding, we will initiate all aspects of this venture to ensure success. We have all documents in place for review by the investors.  Lastly, we are open to changes to the proposal if they are beneficial to all parties. Use of funds is to pay off the existing mortgage and to build the nightclub, and refurbish the rest of the rooms and bathrooms in the hotel.

The Pro Forma is a conservative estimate of gross revenues for the hotel, restaurant and nightclub. The numbers used for the hotel and restaurant are actual numbers. The estimates for the nightclub are based on 1/3^rd the revenue of the closest competition that is Mango’s Tropical Café and The Clevelander . The property has been recently appraised as a “going concern” for 17 million in October 2011.

Please contact my office with any questions.

Thanks,

Ronald E. McFarland

REM Enterprises

951-545-7629