CBP_11_09_21_v15

CLUB FINANCING

POSSIBLE VARIANCES BEFORE AND AFTER CLOSING

$7mm of the loan. These swaps and caps would be slightly more expensive if put in place today. The projection model we are using assumes we keep a similar percentage of swaps and caps for the combined larger loan and assumes rates increase by 50bp from today’s rates in the next 6 weeks, which would be a very large unusual move. Under this scenario the monthly Member assessment would be $460/month. The actual monthly Member assessment will be determined based on where swap rates and cap premiums are on the closing date. 2. The projected cost of the NewClubhouse is $73.6 mm (which is made up of a $64mm project plus $9.6mm in contin- gency reserves). These numbers are based on estimates provided to the Club by the Club’s owner’s rep, pre-construction contractor and architect and are being used as guidance only. These estimates include the increases in building material costs and wages that are currently in the market. Our concern about future cost increas- es is partly why the contingency reserve is so high. Actual costs cannot be determined until the Club has obtained biddable architectural plans and received contractor bids, which are not an- ticipated to be received until 9 months following approval by the Membership. It is at that time only that the Club will have defined construction costs. We are comfortable with this risk given the large contingency priced into the project. 3. The other area of possible variance is in the assumption that 8 new member homes sales will be available each year for paying down part of the reducing revolver. In the last 20 years, FCC has had only two years when new mem- ber home sales fell below 11 homes and that

was in fiscal 2008/2009 (5 homes) and fiscal 2002/2003 (7 homes). Over the last 20 years Frenchman’s has averaged 18.5 new member home sales per year. Last year the Club set up a 3 home-turn reserve in case new member home sales fell below 8 homes for several years in a row. Each new member home sale brings in $140,000. The Substantial Renovation project was approved in February of this year. The following outlines the various sources and uses of cash related to this project through December 2021: 1. Sources include eleven months of $262/month member assessments plus the proceeds of 8 new member home sales (2 at $115,000/home and 6 at $140,000/home.) Total sources total $2.8mm. 2. Uses include all professional fees associated with the Substantial Renovation until the Decem- ber vote plus the legal and bank fees associated with the Substantial Renovation loan plus the $.8mm allocated to the Temporary Facilities, as referred to in the booklet. Total uses total $1.7mm. 3. The $1.1mm of incremental sources has been built into the Truist New Clubhouse model. THE SUBSTANTIAL RENOVATION CASH FLOWS

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