Dye Development, Inc.

Dye Development, Inc. Real Estate Development Engineers Surveyors Planners MEMORANDUM To: All Interested Parties: From: David W. Dye III, President Re: Offer of Sale/Swap Waterwheel Resort Condominium 730 E. Mather Street New Braunfels, Tx 783 We are the developers of the Waterwheel Resort Condominium project located in New Braunfels, Texas, a very popular resort located in the heart of New Braunfels, Texas. The 9-unit project is nearly built-out, with 8 units constructed, including two pools and four hot tubs. We are currently offering our Building L Pad, the last 9plex to be constructed in Phase, for sale or trade, and will include a second asset for free (a $9,900 value) as an incentive for the Buyer to purchase the main asset. Attached please find a pdf binder that provides an introduction to the project, some pictures, floorplans, and spreadsheets outlining the financial figures we are offering as stated below. We have one main asset we are offering,. Main Asset: Bldg L Pad Site - Building L is our last building to be constructed in our Phase development. It is a 9plex pad site, and is shovel ready. Building permits have previously been issued on this building, and could be reissued in days. Our Phase is almost complete, as we have constructed and sold 8 units (in eleven buildings). (Our Phase project, called The Villas at Waterwheel, is a 4 unit complex that is currently in the design phase). The project's infrastructure is 00% complete, including two swimming pools, four hot tubs, 4 acres of sodded and sprinklered lawn, with 6 feet of frontage on the Guadalupe River in New Braunfels, five blocks down the street from Schlitterbahn.. Incentive Asset: Unit K30 nd Mortgage - Our builder, John Seidel of John Seidel Enterprises, Inc., owns this /,,6 sf unit, and we have a nd Mortgage. The unit is currently listed for sale at $66,900, with a first lien of about $7,000. We have all of the remaining equity in the unit. We expect Mr. Seidel would be agreeable to conveying the unit in exchange for assuming or paying off the first mortgage held by Jefferson State Bank. david3@dyedvpt.com 774 Irongate Rail San Antonio Texas 7847 Phone (0) 68-993

Page Our Offer: The following are the scenarios we are offering:. Cash Purchase: We are willing to sell the above main asset for $9,900, a savings of $,33 per unit, not including the incentive asset ($3,344 per unit with it). Once the building is constructed, the combined equity to be realized by the buyer is estimated to be $8,00 (see spreadsheet), resulting in a combined.0% ROI.. Partial Cash & nd Mortgage Subordination: We are willing to accept $00,000 in cash at closing and subordinate $39,900 to a construction loan. We need to get this amount at least because we must pay off our first mortgage on the property. We can be very flexible on the finance terms. The terms could include partial releases on sold condo units, or a more traditional amortization. 3. Equity Swap or Investment in another Project: We are willing to trade our equity for other real estate, or even invest our equity in another project. We are open to creative ideas! It is important to note that Building L will have the last new units available in Phase in Waterwheel. Our price points for the Phase project are at $0/sf (we are purposefully constructing an upscale project over what we did in Phase ), so we will continue to wait for the economy to strengthen before we proceed with that project. I believe the building could be sold out if seller financing with good terms were offered (see spreadsheet on seller financing - the scenario presents an estimated monthly principal and interest payment of $9,74). There is an additional upside to the Buyer if the units are sold once the economy has fully recovered. Sales prices of $00/sf should be very attainable, as we reached that price point before the market crashed. The value I have held on my spreadsheets is $.70/sf. An additional $30/sf (non-waterfront) would bring in an additional $9,000. I would be delighted to show any interested parties the Waterwheel Resort project. It is a very beautiful resort located in a great part of town. Thank you for your interest, and we look forward to hearing from you. Sincerely, David W. Dye III David W. Dye III P.E., R.P.L.S. President Dye Development, Inc. GP for Waterwheel Resort Condominium, LP david3@dyedvpt.com 774 Irongate Rail San Antonio Texas 7847 Phone (0) 68-993

About Us I, David W. Dye III, am the developer and general partner of Waterwheel Resort Condominiums, LP. The 9 unit project is nearly built out, with 8 units constructed, including two pools (one heated) and four hot tubs. The condos are sold to the buying public fee simple. We are not a condotel, meaning that we do not have a rental desk, nor hotel units available for nightly rental. Waterwheel s land consist of 8. acres that are located on the Guadalupe River, complete with huge pecan and cypress trees. The remaining land we have that is undeveloped is a. acre tract adjacent to Waterwheel that has terrific C 4A zoning on it, along with a development agreement with the City for a4 unit condominium facility that we can annex into Waterwheel. We are located in the heart of New Braunfels, a noted tourist town that attracts 4 million plus visitors each year (New Braunfels Chamber s web page is http://www.nbcham.org). New Braunfels is located on IH 3, just or so miles from San Antonio s City Limits, and about a 4 minutedrivefromaustin. Wearefiveblocks down the street from Schlitterbahn, Americas # Water park (per the Travel Channel and the 007 Golden Ticket Award ceremony). (Their web address is http://www.schlitterbahn.com). Wurstfest is our ten day salute to sausage, and is famous as one of the largest and best Oktoberfest celebrations in America.ButNewBraunfelsismostlyfamousforitstworivers thecomalandtheguadalupe,that provide toobing and other water sports that are enjoyed by all ages. New Braunfels is a really special place, and we are proud that we are a part of its tourism industry.

(front/street view) Buildings J and K respectively (rear/courtyard view) Building J Buildings J, K and L courtyard pool (rear/side view) Buildings K and J respectively Buildings J, K and L courtyard amenity area

N LABOR ST. 60' R.O.W. EAST ST. 60' R.O.W. - UNIMPROVED SW RAMP (TYP) 4' CONC S/W SW RAMP (TYP) SW RAMP (TYP) 4 4 8 GENERAL NOTES. THE NUMBER OF PARKING SPACE ASSIGNMENTS PER UNIT HAVE BEEN DETERMINED BY THE DECLARANT, BASED ON CONTRACTUAL AND PRACTICAL CONSIDERATIONS.. EACH PARKING SPACE ASSIGNMENT ASSIGNS THAT SPACE(S) FOR THE SPECIFIED UNIT, AS A LIMITED COMMON ELEMENT. 3. ALL ASSIGNED PARKING SPACES SHALL BE PAINTED TO DENOTE THE ASSIGNED UNIT #. THE DECLARANT SHALL BE RESPONSIBLE FOR THE PAINTING OF SAME. THE PAINT SHALL BE PLACED ON THE CONCRETE WHEEL STOP. WRCA, INC. WILL BE RESPONSIBLE FOR THE CONTINUED MAINTENANCE OF SAME. 4. THIS PLAN IS SUBJECT TO THE CITY'S APPROVAL OF ALL REQUIRED PERMITS, AND THE FILING BY THE DECLARANT OF AN AMENDED DECLARATION. J 03, 03, 303 K 0, 0, 30 L 03, 03, 303 J 0, 0, 30 J 0, 0, 30 K 0, 0, 30 K 03, 03, 303 L 0, 0, 30 L 0, 0, 30 4 7 6 3 3 4 E 03, 03, 303 F 0, 0, 30 F 0, 0, 30 A 0, 0, 30 A 0, 0 30 B 0, 0, 30 B 0, 0, 30 C 0, 0, 30 D 0, 0, 30 D 0, 0, 30 E 0, 0 E 0, 0, 30 C 0, 0, 30 S.30 36'06''E 70.83' ' RIVER ACCESS & PRIVATE DRIVE # OF BEDROOMS B B 3B 4B Total # OF UNITS 79 9 9 # PS PER UNIT..0. 3.0 TOTAL # OF PS REQ'D. 8.0. 6.0 78.0* *THE TOTAL NUMBER OF PARKING SPACES REQUIRED HAS BEEN REDUCED BY 0 SPACES DUE TO AN APPROVED VARIANCE RECEIVED FROM THE CITY OF NEW BRAUNFELS. 30.00' 603. SCALE: " = 30' /" IRON PIN SET WITH A YELLOW CAP STAMPED "DYE ENT SATX" FND. /" IRON PIN FND. " PIPE SET CHS. " " IN TOP OF CURB. ELEV = 67.84 PROPERTY CORNER AT EDGE OF WATER PIN NOT SET - SEE REFERENCE PIN SET PK NAIL IN WILLOW TREE ROOT EXISTING SPOT ELEVATION FIRE HYDRANT UTILITY POLE PROTECTED TREE TREE TO REMAIN C0 PARKING SPACE ASSIGNMENT.00' 4 6 I 0, 0, 30 REVISED: Checked: Date: Drawn: DWD 7 8 I 03, 03, 303 H 0, 0, 30 H 0, 0, 30 H 03, 03, 303 I 0, 0, 30 NOTE: BUILDING UNIT NUMBERS SHOWN IN BLACK BOXES. GROUND LEVEL UNITS = 00 SERIES SECOND FLOOR UNITS = 00 SERIES THIRD FLOOR UNITS = 300 SERIES EXISTING WATERWHEEL CONDOMINIUM COMPLEX 3 EXISTING DROP INLET WATERWHEEL RESORT CONDOMINIUM ANNEXATION OF RIVERS GROVE PHASE CONDOMINIUM COMPLEX PROPERTY LINE ESTABLISHED AT (APPROX.) WATERS EDGE (TYP) RIVERS GROVE PHASE 3 LOT - 3.47 ACRE TRACT RIVERS GROVE SUBD. VOL. 4, PG. 373, M&P LOT -.87 ACRE TRACT RIVERS GROVE SUBD. VOL. 4, PG. 373, M&P TOTAL # OF PS PROVIDED 79 PROPOSED FENCE Date: 0/6/08 PROJECT NO. 00008/090606 PARKING PLAN DYE ENTERPRISES STATE OF TEXAS COUNTY OF BEXAR SHEET OF GUADALUPE RIVER S 60 34'0''W 80.7' N 46 0'''W 63.07' GUADALUPE RIVER S 8 9'7''W - 87.7' S 30 36'06''E 806.3' 6' BLDG. SETBACK S 30 36'06''E 70.83' 4 MATHER ST. 60' R.O.W. ASPHALT PVM'T. 6" CONC. CURB 0' UTILITY ESM'T CITY OF NEW BRAUNFELS COMAL COUNTY, TEXAS 8 # OF PARKING SPACES 6.794 ACRE TRACT WATERWHEEL RESORT CONDOMINIUM SUBD. VOL. 4, PG. 7, M&P 6' BLDG. SETBACK G 0, 0, 30 G 03, 303 G 0, 0, 30 6 6 6 N 9 00'00''E 377.8' ' BLDG. SETBACK PARKING PLAN BUILDINGS A - L WATERWHEEL RESORT CONDOMINIUMS 0.00'

WATERWHEEL RESORT CONDOMINIUM - BUILDING L UNITS BUILDING UNIT #* SQ FT # BDRM/BATH L 0 94 / L 0 94 / L 30 94 / L 0 6 / L 0 6 / L 30 6 / L 03 / L 03 3/ L 303 3/ 9,840 00 Level are first floor, 00 are nd, 300 are 3rd

Waterwheel Resort Condominium, LP 774 Irongate Rail, San Antonio, Tx 7847 w/c 0 68 993 david3@dyedvpt.com www.dyedvpt.com BUILDING L CONSTRUCTION LIST PRICE ANALYSIS - 9 plex WATERWHEEL RESORT CONDOMINIUM 730 E. MATHER ST., NEW BRAUNFELS, TEXAS 7830 August 4, 0 PROP. BLDG. L LIST PRICES - August, 0 EXISTING UNITS LISTED FOR SALE AS OF August,0 EXISTING UNITS SOLD LISTINGS: 4/0 thru Current BUILDING UNIT SQ FT # Bdrms $/sf LIST PRICE BUILDING UNIT SQ FT # Bdrms LIST PRICE $/sf BUILDING UNIT SQ FT # Bdrms SOLD PRICE $/sf SOLD DATE L 0, $ 43 $ 74,400 A 0 94 $ 76,900 $ 88 C 30 94 $,000 $ 60 4// L 0, 3 $ $ 89,400 B 0 94 $ 79,900 $ 9 H 0 94 $ 64,000 $ 74 /0/ L 30, 3 $ $ 89,400 E 0 736 $ 38,000 $ 88 C 0 94 $ 60,00 $ 70 6//0 L 0,6 $ 0 $ 66,900 F 30 94 $ 69,000 $ 79 D 0 94 $ 74,000 $ 8 9//0 L 0,6 $ 0 $ 66,900 I 03, $,000 $ 76 G 0, $ 00,000 $ 64 7/8/0 L 30,6 $ 0 $ 66,900 K 30,6 $ 66,900 $ 0 L 03 94 $ 69 $ 9,400,900 $,04,700 4,990 $ 849,00 L 03 94 $ 69 $ 9,400 L 303 94 $ 69 $ 9,400 Note: Buildings A thru I are waterfront buildings. Note: Buildings A thru I are waterfront buildings. Total 9,840 $,3,00 Avg $/sf= $ 6 Avg $/sf: $ 77 Avg $/sf: $ 70

Waterwheel Resort Condominium, LP 774 Irongate Rail, San Antonio, Tx 7847 w/c 0 68 993 david3@dyedvpt.com July, 0 SWAP EQUITY SUMMARY - BUILDING L & K30 Condo WATERWHEEL RESORT CONDOMINIUM 730 E. Mather Street, New Braunfels, Tx 7830 Description $ Bldg L Equity Avg. Sales/SF= $.70 9 Units ( 9plex) List Prices (9,840 sf),3,00 Construction of 9 Units (-9plex) - 9,840 sf (70,000) Actual Costs of Bldgs J&K Gross Equity: 78,00 Swap Equity Credit for Constructing Bldg. (8,00) ROI: 37.6% on $70k;.7% on $.M total Swap Equity: 00,000 K30 nd Mortgage Current List Price of Condo:,6 sf / Ist Mortrgage Jefferson State Bank (Owner: JSE, LLC) 66,900 $0/sf (7,000) est. payoff 9,900900 Combined Swap Equity: 9,900 st Lien Payoff on Bldg L Pad (SIF3, LP) (67,) Net Swap Equity for WRC, LP: 44,749

Waterwheel Resort Condominium, LP 774 Irongate Rail, San Antonio, Tx 7847 w/c 0 68 993 david3@dyedvpt.com BUILDING L SELLER FINANCING ANALYSIS - 9 PLEX WATERWHEEL RESORT CONDOMINIUM 730 E. MATHER ST., NEW BRAUNFELS, TEXAS 7830 July 30, 0 BLDG. L LIST PRICES - JULY 0 July 0 List Prices Seller Carry Prices First Total Monthly BUILDING UNIT SQ FT # Bdrms $/sf $ 0% Down Mortgage Payment L 0, $ 43 $ 74,400 $ 7,440 $ 6,960 $,044 L 0, 3 $ $ 89,400 $ 8,940 $ 70,460 $,34 L 30, 3 $ $ 89,400 $ 8,940 $ 70,460 $,34 L 0,6 $ 0 $ 66,900 $ 6,690 $ 0,0 $ 999 L 0,6 $ 0 $ 66,900 $ 6,690 $ 0,0 $ 999 L 30,6 $ 0 $ 66,900 $ 6,690 $ 0,0 $ 999 L 03 94 $ 69 $ 9,400 $,940 $ 43,460 $ 94 L 03 94 $ 69 $ 9,400 $,940 $ 43,460 $ 94 L 303 94 $ 69 $ 9,400 $,940 $ 43,460 $ 94 Total 9,840 $ 6 $,3,00 $ 3,0 $,378,890 $ 9,74 Note: Proposed Loans: 0% Down, 7% Interest, 30 Year Amortization