Rarity Bay Resort — Sources, Uses & Capital Strategy

Section 01

The Complete Story
in One View

How a $40M bankruptcy acquisition becomes $635.2M in revenue, controlled by a perpetual Declarant structure that generates income long after the development is complete.

Investment Thesis

Timbertop Growth Investment Fund acquires $120M+ of fully operational resort infrastructure for $40M through a Chapter 363 bankruptcy sale — creating $80M of instant equity before a single lot is developed. The acquisition simultaneously installs Timbertop Land Company as perpetual Declarant of a new Property Owners Association, establishing a governance structure that protects quality, controls architecture, and generates $8.7M+ in annual recurring income at stabilization — in perpetuity.

Capital Raised

$100M

4 series + $18M Supplier Partners

Acquisition Price

$40M

vs. $120M+ replacement cost

Instant Equity Created

$80M

Day-one before any development

Total Revenue (36-mo)

$635M

7 diversified streams

How the Money Moves

Raise $100M from 4 investor series

$100M in

A1 (36-mo), A2 (7-yr QOZ), Class C (10-yr QOZ), Class D (perpetual). 60% called at close, 40% within 12 months.

Deploy to acquisition + governance

$44.5M Day 1

$40M acquires the property. $4.5M immediately establishes Declarant governance — the gate that unlocks all downstream activity.

Phase 1 development generates sales

$60M+ by M+24

$34.5M Phase 1 build. Sales proceeds recycle to fund Phases 2 & 3 without additional investor capital — only $74.5M of the $100M ever deployed.

Return capital + profits + perpetual income

$218.8M out

$100M capital returned + $26.1M preferred returns + $92.7M profit share. Class D adds $8.7M/yr perpetual ground lease income thereafter.

Five Structural Advantages

Advantage 01

Bankruptcy Discount

$40M buys $120M+ of infrastructure. 67% discount creates instant equity that cannot be replicated by new-build competitors.

Advantage 02

Self-Liquidating Model

Only $74.5M of $100M raised is ever deployed. Phase 1 sales fund Phases 2 & 3. $25.5M returned early, improving IRR.

Advantage 03

Perpetual Declarant

Timbertop Land Company controls the POA and DRB in perpetuity. $8.7M/yr ground lease income never stops flowing.

Advantage 04

QOZ Triple Benefit

Deferral, 15% step-up, and zero-tax appreciation at 10 years. Turns 89.7% IRR into 2,416% after-tax for Class C/D.

Advantage 05

7 Revenue Streams

Lots, homes, condos, marina, golf, commercial leases, and POA fees. No single stream is more than 51% of total revenue.

Advantage 06 — TIME-SENSITIVE

Legal Urgency Window

3 active cases (2 on appeal) challenge Declarant rights. The 363 sale is the ONLY path to clean title + fresh Declarant establishment before appellate courts rule. See Tab 10.

🚨 Feb 17, 2026 Team Meeting — Active Legal Cases Affecting Acquisition Timing

Three active lawsuits are working their way through the Tennessee appellate courts. One Chancery Court has already ruled that Declarant rights lapsed in 2017 — that ruling is under appeal. A second suit seeks to dissolve Declarant rights entirely. The Chapter 363 bankruptcy sale is the only mechanism that acquires the property free and clear of these claims AND allows TGIF to establish fresh Declarant rights through new CCRs before the appellate courts issue final rulings. Every month of delay increases the risk that appellate decisions foreclose this window. See Tab 10 — Legal Landscape for the complete case analysis.

Section 02

Sources of Capital

$100M equity from four investor series, plus $18M from Strategic Supplier Partners. Each source carries its own hold period, preferred return, and rights — all synchronized to the same underlying project economics.

How This Reads with the Uses Section

Every dollar on this page has a specific deployment destination shown in Section 03. The 60/40 capital call split (60% at close, 40% within 12 months) is timed to match actual deployment — governance establishment and acquisition consume the first call; Phase 1 development drawdowns consume the second. No capital sits idle.

Capital Source	Amount	% Total	Call Timing	Unit Price	Pref Return	Hold Period
EQUITY — INVESTOR SERIES
Series A1 — 36-Month Strategic Exit Maximum IRR, no QOZ required	$30,000,000	30.0%	60% close / 40% M+12	$1.00	10%	36 months (shortest)
Series A2 — QOZ 7-Year Tax Strategy Capital gains deferral + 15% step-up	$25,000,000	25.0%	60% close / 40% M+12	$1.05	9%	84 months (7 years)
Class C — QOZ 10-Year Maximum Benefit Zero tax on appreciation at Year 10	$25,000,000	25.0%	60% close / 40% M+6	$1.10	8%	120 months (10 years)
Class D — QOZ + Perpetual Ground Lease Family office / institutional perpetual income	$10,000,000	10.0%	100% at close	$1.15	7%	10 years + perpetual
Class D Supplier Partners — BurWil + Vendor Network Invest as equity + preferred construction vendors	$18,000,000	18.0%	Staged M+0 → M+24	$1.15	7%	10 years + perpetual
TOTAL EQUITY RAISE	$108,000,000	—	$100M base + $18M supplier overlay (100% absorbed into same use structure)
DEBT — CONSTRUCTION FINANCING
Bridge Loan — Acquisition Financing Refinanced or repaid by Month 18 from Phase 1 sales	$25,000,000	—	At close; 18-mo term	—	10%	18 months max
Construction Loan — Phase 1 Development 🔒 Gated by CCR recording Lender requires recorded CCRs + clean title	$15,000,000	—	Draw begins M+4	—	7.5%	24 months
TOTAL ALL-IN CAPITAL (Equity + Debt)	$140,000,000	—

Critical Dependency — Construction Loan Gate

The $15M construction loan cannot draw until the lender confirms (1) clean title via the 363 sale order and (2) recorded CCRs establishing Timbertop as Declarant. This makes Month 3 governance completion a hard prerequisite for Phase 1 construction funding (golf renovation, Northgate/Town Center, Inn, Clinic, Independent Living). A governance delay of one quarter delays the construction draw and pushes Phase 1 groundbreaking by approximately one quarter. See Section 04 — Governance for the full gate schedule.

Capital Call Schedule

Day 1 — Close

$55M — 55%

$55M

Month 6 (Class C 2nd)

$10M

Month 12 (A1 + A2 2nd)

$22M

M+0 → M+24 (Suppliers)

$18M staged

$18M

Section 03

Uses of Proceeds

Every dollar of the $100M raise has a specific destination. Items marked with a governance gate cannot deploy until Declarant CCRs are recorded (Month 3 target). This sequencing is what makes the self-liquidating model possible.

Property Acquisition

$40M — 40%

$40,000,000

Phase 1 Development

$34.5M — 34.5%

$34,500,000

Working Capital & Reserves

$15M — 15%

$15,000,000

Declarant Governance

$4.5M

$4,500,000

Offering Costs

$6M

$6,000,000

Why Governance Is a Separate Line Item

Prior materials buried the $4.5M Declarant governance budget inside "Legal Fees" and "Formation & Administration." Surfacing it explicitly is critical: it is the single highest-leverage capital deployment in the project, unlocking $95.5M in remaining uses and enabling all seven revenue streams. It is also the only use that must be complete before any other major deployment can proceed. See Section 04 for full governance detail.

Use Category	Amount	% Total	Deploy Window	Gate Status	Notes & Dependencies
PROPERTY ACQUISITION — $40,000,000 (40.0%)
363 Bankruptcy Purchase Price	$35,000,000	35.0%	Day 1	✓ Unlocked	Vests Declarant rights in Timbertop Land Company simultaneously
Closing Costs / Title Insurance / Legal	$2,500,000	2.5%	Day 1	✓ Unlocked	Includes governance legal team mobilization
Due Diligence — Environmental, Survey, Inspections	$1,000,000	1.0%	Pre-close	✓ Complete	Required pre-close for CCR drafting accuracy
Transfer Taxes / Recording Fees	$500,000	0.5%	Day 1	✓ Unlocked	Includes CCR recording costs ($50K)
Initial Working Capital — Acquired Operations	$1,000,000	1.0%	Day 1	✓ Unlocked	Golf & marina operations bridge during governance transition
Acquisition Subtotal	$40,000,000	40.0%
DECLARANT GOVERNANCE ESTABLISHMENT — $4,500,000 (4.5%) CRITICAL PATH
New CCR Drafting & Recording (Monroe + Loudon County)	$700,000	0.7%	Pre-close → Day 1	✦ Priority #1	Must be ready to record simultaneously with deed at close
POA Entity Formation (TN Nonprofit, EIN, Accounts)	$350,000	0.35%	Pre → M+1	✦ Gate A	Enables assessment collection; management fee accrual begins
RBCAI Legacy Board Transition — Legal & Negotiation	$500,000	0.5%	Day 1 → M+2	✦ Priority #2	Eliminates competing governance authority; #1 schedule risk. See Tab 10 — Case 20-489 (RBCAI authority challenged), Case 21-643 (Declarant dissolution suit), Case 19-943 (Chancery ruled rights lapsed 2017) — all active on appeal.
New DRB Constitution + Revised Architectural Guidelines	$250,000	0.25%	M+1 → M+2	✦ Gate B	Timbertop DRB majority; supersedes RBCAI DRB authority
TRDA Authority Registration (New DRB Recognition)	$150,000	0.15%	M+2 → M+3	✦ Gate B	TRDA permit intake opens under TGIF authority M+3
Ground Lease Forms Recorded (Commercial + Amenity Parcels)	$400,000	0.4%	M+1 → M+3	✦ Gate C	99-yr ground leases on golf, marina, beach club, commercial pads
QOZ Fund Compliance — QOZB Cert + 90-Day Safe Harbor	$600,000	0.6%	Pre → M+1	✦ Priority #1	90-day clock starts at close; Class C/D tax benefits depend on this
Supermajority CCR Defense Reserve (80% amendment threshold)	$400,000	0.4%	M+0 → M+6	✦ Ongoing	Protects perpetual Declarant structure from challenge
Governance Contingency	$150,000	0.15%	Reserve	Discretionary	Unforeseen regulatory friction in first 90 days
Governance Subtotal — Unlocks $95.5M Downstream	$4,500,000	4.5%
PHASE 1 DEVELOPMENT — $34,500,000 (34.5%) 🔒 GATED BY MONTH 3 GOVERNANCE
Golf Course & Country Club Renovation Greens rebuild, bunker renovation, irrigation upgrade, 15,000 sf clubhouse interior renovation, expanded dining & pro shop, tennis/pickleball expansion (4 courts), fitness center equipment. No TVA, TRDA, or shoreline permits required — internal DRB approval only. Immediate revenue uplift and luxury market tone for all lot sales.	$8,200,000	8.2%	M+2 → M+10	✓ Low gate	No TVA/TRDA permits required. Internal DRB architectural approval only (M+2 per governance timeline). Begins immediately after governance. Cash flow improvement visible in Year 1 operations.
Northgate Entry & Town Center — Phase 1 Community gateway architecture, main entry monumentation, Northgate parcel grading & utilities to pad sites, Town Center Phase 1 foundation (commercial shell for clinic anchor + retail). First impression for every buyer — sets price psychology for all interior lots. Ground lease pads activated upon shell delivery.	$7,800,000	7.8%	M+3 → M+14	🔒 Gate B	TRDA/DRB building permits required (M+3 gate). No TVA shoreline involvement — entirely upland parcels. Commercial ground lease income begins upon tenant occupancy; target anchor tenant executed pre-close.
Resort Inn & Event Center — Site & Foundation 40–60 room boutique lakefront inn; event pavilion (weddings, corporate retreats, golf tournaments). Upland site — no TVA dock permits involved. BurWil as GC. Generates nightly revenue and resort credibility for lot sales. Drives buyer traffic independent of residential sales campaign.	$7,500,000	7.5%	M+4 → M+20	🔒 Gate B	TRDA building permit required after DRB authority (M+3). Upland parcel — no TVA shoreline permit. TN Dept of Tourism licensing. Target: soft open M+20, stabilized operations M+24.
Medical Clinic & Wellness Center 15,000 sf medical clinic on designated 17.5-acre healthcare parcel. Primary care, diagnostics, urgent care. Regional healthcare system as anchor ground lease tenant ($525K/yr). Independent of TVA/TRDA/marina permitting. TN Dept of Health licensing. Powerful buyer demand driver for 55+ active adult market segment.	$5,500,000	5.5%	M+3 → M+16	🔒 Gate B	DRB/TRDA permit M+3. TN Dept of Health plan review (60–90 day additional lead time; start plan review pre-close). Anchor healthcare tenant LOI recommended before groundbreaking. Ground lease income begins Year 2.
Independent Living — Phase 1 (Dignified Living) Phase 1 of 55-unit independent living building on designated 25-acre community activity park parcel. 20 units Phase 1. Accessible design, smart home, optional care services. Chris Magda's 80-unit assisted living background. No TVA/TRDA shoreline permits — entirely upland. TN Dept of Health licensing path well-established.	$5,500,000	5.5%	M+6 → M+22	🔒 Gate B	TN Health plan review + DRB/TRDA permits. Start design pre-close. Phase 1 (20 units) presales begin M+12; units close M+22. Pricing: $1,000K–$1,200K per unit. Remainder in Phase 2–3.
Phase 1 Subtotal	$34,500,000	34.5%	Note: TVA dock permits, marina expansion, and individual waterfront lot site work moved to Phase 2–3 pending TVA 820-ft contour approvals per lot and TRDA individual permit process. Waterfront lots can be sold as-is with ground lease; site prep deferred to buyer build phase.
WORKING CAPITAL & RESERVES — $15,000,000 (15.0%)
Operating Reserves — Golf, Marina, G&A, Insurance	$6,000,000	6.0%	M+0 ongoing	✓ Day 1	Covers ops during governance transition; no POA revenue until CCRs live
Sales & Marketing — Property Campaign	$5,000,000	5.0%	M+4 → M+24	🔒 Gate C	Lot sales require recorded CCRs + compliant ground lease disclosure
Project Contingency	$4,000,000	4.0%	Reserve	Held until needed	Includes 3-month governance delay scenario buffer
Working Capital Subtotal	$15,000,000	15.0%
OFFERING COSTS — $6,000,000 (6.0%) Adjusted from $10.5M — $4.5M reallocated to Governance line
Securities Counsel (PPM, Reg D, Blue Sky)	$1,300,000	1.3%	Pre → M+6	✓ Concurrent	Runs parallel to governance; no gate dependency
Accounting, Audit & QOZ Tax (non-governance)	$900,000	0.9%	Pre → M+12	✓ Concurrent	Ongoing audits; QOZ compliance separate under Governance line
Formation & Administration (non-governance)	$800,000	0.8%	Pre → M+3	✓ Concurrent	Delaware LLC, Operating Agreement; entity costs separate from POA formation
Technology, Investor Portal & CRM (GHL)	$1,000,000	1.0%	M+0 → M+3	✓ Priority	Must be live before first investor close; GHL webhook integration
Placement & Property Marketing	$2,000,000	2.0%	M+0 → M+12	~ Partial gate	Investor marketing launches M+0; property marketing launches after DRB confirmed
Offering Costs Subtotal	$6,000,000	6.0%
TOTAL USES OF PROCEEDS	$100,000,000	100%

The Self-Liquidating Advantage — Not in the $100M

Phase 2 (~$40M, Months 19–30) and Phase 3 (~$42M, Months 25–36) are funded entirely from Phase 1 sales proceeds — not from the $100M raise. This means only $74.5M of the $100M raise is ever deployed in development. The remaining $25.5M is returned to investors beginning Month 25, dramatically improving IRR and reducing capital-at-risk throughout the project.

Section 04

Declarant Governance
Establishment

The $4.5M governance establishment budget is the first and most critical capital deployment. It unlocks $95.5M in remaining uses, enables all seven revenue streams, and installs the perpetual Declarant structure that generates $8.7M/yr in perpetuity.

Why This Is Action #1 at Closing

Acquiring the property gives Timbertop title — but not automatic governance authority. The existing Rarity Bay Community Association (RBCAI) operates under legacy CCRs and controls DRB approval authority. Until new CCRs are recorded and a new POA is constituted under Timbertop's Declarant rights, no lot can be legally sold with a compliant ground lease, no building permit can be issued under TGIF authority, and no assessment revenue accrues to Timbertop Land Company.

The Three Governance Gates

🔒

Gate A — POA Formation
Target: Month 1

CCRs recorded + new POA entity formed. Unlocks: assessment revenue, management fee accrual, Declarant rights fully vest. Without this, RBCAI may contest governance authority.

⚙️

Gate B — DRB Authority
Target: Month 3

New DRB constituted with Timbertop majority + TRDA registration confirmed. Unlocks: building permits, site grading, model homes, vertical construction. Required for construction loan draw.

✅

Gate C — Sales Ready
Target: Month 3–4

Ground leases recorded against all commercial + amenity parcels + CCRs fully effective. Unlocks: lot pre-sales with compliant disclosure, property marketing campaign, ground lease income from commercial operators.

Governance Action	Cost	Timing	Responsible	What It Unlocks
Draft + finalize new CCRs for all acquired parcels	$700K	Pre-close	Real estate / HOA counsel	Foundation for everything. Without recorded CCRs, Timbertop has title but no governance authority over the community.
Record CCRs — Monroe & Loudon County registers	incl.	Day 1	Title company at close	Legal basis for new POA, DRB, ground leases, and assessment revenue collection by Timbertop Land Company.
RBCAI board transition negotiation + agreement	$500K	Day 1 → M+2	Mary Jensen + litigation counsel	Eliminates risk of legacy board issuing competing DRB approvals or contesting new CCRs. Highest single schedule risk. Three active legal cases (20-489, 21-643, 19-943) challenge RBCAI authority and Declarant rights — all on appeal. See Tab 10 — Legal Landscape.
Form new POA entity — TN nonprofit, EIN, bank accounts	$350K	Pre → M+1	Tennessee counsel	POA begins collecting assessments. Timbertop Land Company management fee (15% of revenue) begins accruing.
Constitute new DRB — 3 Timbertop members, revised Guidelines	$250K	M+1 → M+2	Timbertop + BurWil rep + counsel	DRB accepts plan submittals under TGIF authority. Supersedes RBCAI DRB. Protects luxury brand positioning for life of project.
TRDA registration — new Declarant/DRB recognized	$150K	M+2 → M+3	DRB Chair + counsel	TRDA building permit intake opens under TGIF authority. Gate B complete. $15M construction loan draw authorized.
Record ground lease forms — all commercial + amenity parcels	$400K	M+1 → M+3	Real estate counsel + title	99-yr ground leases on golf, marina, beach club, commercial pads. Income stream legally protected. Gate C complete.
QOZ compliance — QOZB cert, Form 8996, 90-day safe harbor	$600K	Pre → M+1	John Brock Esq + QOZ specialist	Class C/D investors' tax-free appreciation at Year 10 protected. 90-day clock starts at close — cannot be extended.
Legal defense reserve — 80% supermajority CCR protection	$400K	M+0 → M+6	Litigation counsel on retainer	Defends perpetual Declarant CCR provisions from challenge. Protects $8.7M/yr perpetual income stream permanently.
Governance contingency	$150K	Reserve	Timbertop discretionary	Unforeseen regulatory friction. Preserves Month 3 target if minor complications arise.
TOTAL GOVERNANCE BUDGET	$4,500,000	Pre → M+6	Unlocks $95.5M in remaining capital deployment + all revenue streams

The Perpetual Declarant Structure — After Governance is Complete

Board Composition

7-seat POA board established at formation
4 seats appointed by Timbertop Land Company (perpetual Declarant majority)
3 seats elected by property owners
Resident seats grow with sales milestones but never exceed 3
80% supermajority required to amend Declarant provisions

Declarant Revenue Streams

Ground lease income: $6.5M+ annually at stabilization (Year 10)
POA management fees: $2.2M+ annually (15% of revenue)
DRB architectural review fees: ongoing
Commercial operator ground leases: $3M+ annually
Combined: $8.7M+ per year in perpetuity

Quality Control Authority

DRB approves all new construction and exterior modifications
Architectural Guidelines enforced — French Country theme
TRDA permit submission routes through Timbertop DRB
820-ft shoreline contour restrictions enforced on waterfront lots
Protects premium pricing at 4–6x appraised value

Governance Delay Sensitivity

If governance completion slips from Month 3 to Month 6 (one quarter): the construction loan draw delays by one quarter, Phase 1 construction (golf renovation, Northgate, Inn, Clinic, Independent Living) pushes right by 60–90 days, and first lot and unit sales slip approximately one quarter. Estimated revenue impact: –$12–18M in the 36-month model. The $150K contingency reserve and $4M project contingency exist specifically to absorb friction and maintain the Month 3 target. This scenario should be modeled explicitly in the pro forma sensitivity table.

Section 05

Deployment &
Milestone Schedule

Month-by-month sequence from pre-close through perpetual income. Every activity is linked to its governance gate, capital call, and revenue unlock — showing exactly why the sequence matters.

Pre-Close

Governance Preparation & Due Diligence

Capital deployed: $3.25M (pre-funded from first close)
New CCR document finalized by real estate/HOA counsel. QOZ tax counsel engaged (John Brock Esq). Phase I environmental complete. Title search clear. Independent appraisal complete. PPM finalized, investor portal live. Construction loan term sheet executed.

CCR ready to recordQOZ clock stagedInvestors onboarded

Day 1 — Close

363 Sale Closes + CCRs Recorded Simultaneously

Capital deployed: $40M acquisition + $1.25M governance
Bankruptcy court 363 sale order entered. Deed transfers to TGIF entity. New CCRs recorded in Monroe and Loudon County — Timbertop Land Company named perpetual Declarant of record. RBCAI board transition negotiations begin. Golf and marina operations continue without interruption. 90-day QOZ safe harbor clock starts. First capital call (60%) funded.

$80M instant equity createdDeclarant rights vestOperations Day 1QOZ timer starts

Month 1

POA Formed — Assessment Revenue Begins

Capital deployed: $1.5M governance + engineering begins
New POA entity formed (TN nonprofit, EIN, bank accounts). Timbertop Land Company seated as 4-seat majority board. Management fee agreement executed — 15% of POA revenue begins accruing. RBCAI transition agreement targeted for execution. Legal urgency: 3 active TN appellate cases (19-943, 21-643, 20-489) — close before appellate ruling to ensure 363 free-and-clear is uncontested. See Tab 10. DRB charter drafted. Ground lease forms in final review. Engineering and geotechnical studies begin.

Gate A achievedAssessment revenue accruesEngineering begins

Month 2

New DRB Constituted — Architectural Authority Secured

Capital deployed: $500K DRB + transition legal
New DRB constituted with 3 Timbertop-appointed members (including BurWil representative). Revised Architectural Guidelines adopted — supersedes RBCAI DRB. RBCAI legacy board formally acknowledges transition. TRDA registration application submitted. Non-structural amenity improvements begin: beach club cosmetics, marina dock maintenance, golf course enhancements.

DRB authority establishedAmenity work beginsTRDA registration pending

Month 3 — GOVERNANCE COMPLETE

All Gates Open — Full Development Unlocked

Capital deployed: Full $4.5M governance budget
TRDA confirms new DRB authority for Rarity Bay parcels in writing. Ground leases recorded against golf, marina, beach club, and all commercial parcels. CCRs fully effective — no competing governance authority remains. Construction loan draw authorized ($15M). Ground lease income begins accruing from commercial operators. QOZ 90-day safe harbor satisfied.

✓ All gates openGround lease income startsConstruction loan authorizedLot sales eligible

Months 4–6

Phase 1 Construction Launches — Golf, Northgate, Town Center, Inn, Clinic, Independent Living

Capital deployed: $15M construction loan + $8M equity Phase 1 work
TRDA building permits issued under new DRB authority. Golf course & country club renovation begins ($8.2M: greens rebuild, bunkers, irrigation, clubhouse interior, expanded dining, tennis/pickleball courts). Northgate entry monumentation and Town Center Phase 1 foundations start ($7.8M). Resort Inn site work and foundations begin ($7.5M). Medical clinic plan review concurrent with construction. Independent Living Phase 1 design finalized. Investor portal and CRM fully operational. Property marketing campaign launches. First lot pre-reservations accepted with refundable deposits. Note: waterfront lot TVA dock permits and individual site prep deferred to Phase 2–3; lots can be sold as-is per DRB type and ground lease — site prep is buyer responsibility under CC&Rs.

Golf renovation underwayTown Center foundationsInn site workPre-sales open

Months 7–12

Infrastructure Complete — First Sales Close

Phase 1 construction milestones. Golf & country club renovation complete. Town Center Phase 1 shell delivered.
Golf course reopens with renovated greens, new bunkers, upgraded clubhouse & dining — immediate revenue uplift for operations. Northgate entry complete; community presence established. Town Center Phase 1 shell delivered to anchor clinic tenant (TN Dept of Health licensing in progress). Resort Inn structural work ongoing. Independent Living Phase 1 foundations poured. Model homes near completion. First lot sales close — lots sold as-is with ground lease disclosure; buyers arrange individual TVA dock permits. Golf and marina achieving stabilized revenue. 25% sold milestone triggers first resident board seat. POA assessment revenue ramping.

Golf revenue upGround lease payments flowAmenities stabilized1st resident board seat

Months 13–24

Sales Acceleration — Self-Liquidating Model Activates

Phase 2 funded from Phase 1 sales — zero additional investor capital
Resort Inn soft opens ($7.5M project, nightly revenue driving buyer traffic). Medical Clinic opens under ground lease ($525K/yr income begins). Independent Living Phase 1 units (20 of 55) close at $1.0M–$1.2M each. Lot sales scaling — golf course lots, water-view lots, and interior lots selling as-is with ground lease; waterfront lots move on buyer-managed TVA permit timelines. Phase 2 planning underway (condo towers, Phases 2–3 dignified living, commercial). Condo pre-sales begin. 50% sold milestone triggers 3 resident board seats (Timbertop retains 4). Capital recycling begins — $65M Phase 2 funded from sales proceeds. $25.5M investor capital returned early beginning Month 25.

$60M+ Phase 1 revenuePhase 2 self-fundedCapital recycling active3 resident seats seated

Months 25–36

Phase 2 + 3 Execution — Exit Ready

$25.5M returned early. Cumulative sales target $180M–$395M.
Phase 2: 60 interior lots + condos. Phase 3: 20 premium waterfront lots + estate parcels + The Bluffs condo building + commercial. All 7 revenue streams at scale. 36-month strategic exit executable for Series A1 investors. QOZ investors continue hold for compounding and tax elimination. Declarant governance structure permanently in place.

36-month exit availableAll 7 streams active$25.5M returned earlyPhase 3 self-funded

Years 4–10

QOZ Compounding Hold

Series A2 exits at Year 7 with 15% basis step-up. Class C and D continue to Year 10 for permanent appreciation exclusion. Ground lease income growing with CPI escalation. POA management fee income stable. Timbertop DRB maintains quality standards across 1,100 acres. 80% supermajority CCR threshold protects Declarant structure.

A2 exit: 638% after-taxGround lease growingDeclarant permanent

Year 10+ — Perpetual

Permanent Tax Exclusion + Perpetual Income

Class C/D: zero tax on all appreciation. Class D: $8.7M+/yr forever.
QOZ appreciation permanently excluded for Class C/D. Class D investors begin receiving quarterly distributions from ground lease and management fee income. $6.5M ground lease + $2.2M management fees = $8.7M+ annually, growing with CPI. Generational wealth asset — inheritable with stepped-up basis. Timbertop Land Company remains perpetual Declarant in perpetuity.

C/D: 2,416% after-tax$8.7M/yr perpetualGenerational asset

Section 06

Seven Revenue Streams

$635.2M across seven diversified sources over the 36-month base case. No single stream exceeds 51% of total. Each stream has a different start date, risk profile, and governance dependency — all synchronized to the deployment timeline.

Revenue & Governance Synchronization

Three of the seven streams are directly gated by Declarant governance completion. POA fee revenue requires recorded CCRs (Month 1). Ground lease income requires ground leases recorded against commercial parcels (Month 3). Lot sales require recorded CCRs + compliant ground lease disclosure forms (Month 3–4). Golf and marina revenue are ungated and begin Day 1. This is why the $4.5M governance budget is the highest-leverage capital deployment in the project.

Residential Lots

$324.5M — 51%

$324.5M

Home Sales

$149.8M

Condo Sales

$89.2M

POA Fee Revenue

$18.4M

Marina Operations

$21.6M

Golf Operations

$16.2M

Commercial Leases

$15.5M

Revenue Stream	36-Mo Total	% Total	Start Date	Gate Req.	Key Assumptions & Notes
1. Residential Lot Sales	$324,500,000	51.1%	Month 13–15	🔒 Gate C	26 waterfront lots @ $445K avg; ~64 water view @ $325K avg; 60 golf @ $300K; 80 wooded @ $225K. First sales require recorded CCRs + ground lease disclosure. Note: waterfront count corrected to 26 (not 50) per verified parcel records.
2. Completed Home Sales	$149,800,000	23.6%	Month 18+	🔒 Gate B	165 spec homes over 36 months. $600K–$1.2M+ range. Builder facilitator model — TGIF does not carry vertical risk on custom homes. Construction requires DRB approval + TRDA permit.
3. Condominium Sales	$89,200,000	14.0%	Month 19+	🔒 Gate B	50 units in 2 buildings. $850–$900/sf. The Pointe (waterfront): 30 units. The Bluffs (Phase 3): 20 units. Pre-sales begin after model homes open. DRB approval required for construction.
4. Marina Operations	$21,600,000	3.4%	Day 1 ✓	No gate	200-slip marina operational at close. $600K net Year 1 growing to $2.7M/yr. Slip rentals, fuel sales, storage, transient fees. No governance dependency — revenue from Day 1.
5. Golf Operations	$16,200,000	2.6%	Day 1 ✓	No gate	18-hole championship course operational at close. $450K net Year 1 growing. Memberships ($30K initiation + $350–450/mo), green fees, tournaments, F&B. Stabilizes as community grows.
6. Commercial Leases	$15,500,000	2.4%	Month 10+	🔒 Gate C	Marina District restaurant ($140K/yr), retail, marine supply. Village Center grocery ($192K/yr), professional offices, fitness/spa. Pad site sales: $6.9M. Ground leases recorded at Month 3.
7. POA Fee Revenue	$18,400,000	2.9%	Month 1+	🔒 Gate A	Assessment: $1,155/yr general + neighborhood surcharges. Bay Pointe: +$415/yr. One-time capital contributions: $15K/residential, $25K/commercial. Transfer fees (1% of sale price). DRB fees. Requires new CCRs to collect.
TOTAL 36-MONTH REVENUE	$635,200,000	100%

Revenue Beyond Year 3 — The Perpetual Engine

Ground Lease Income (Stabilized)

$6.5M/yr

99-year ground leases on all commercial + amenity parcels. CPI-escalating. Runs with land — binding on all future owners.

POA Management Fees (Stabilized)

$2.2M/yr

15% of ~$14.7M POA revenue at stabilization. Timbertop Land Company contracted as professional manager in perpetuity.

Total Perpetual Annual Income

$8.7M/yr

For a $500K Class D investment: $43,500+/yr in perpetuity. Yield: 8.7%. Inheritable with step-up basis.

Section 07

Investor Returns
by Series

All four series participate in the same underlying project economics — 89.7% IRR, 5.43x multiple. The difference is hold period, tax treatment, and downstream perpetual income for Class D. Returns shown are projections based on base case assumptions.

How Returns Are Generated — The Waterfall

All $635.2M in revenue flows through a structured waterfall: (1) preferred returns paid in priority order A1→A2→C→D, (2) all investor capital returned, (3) remaining profits split 70% to investors / 30% to Manager (promote). Class D investors then receive 100% of ground lease income in perpetuity after Year 10 — with no ongoing promote.

Series A1

36-Month Exit

89.7%

Pre-Tax IRR · 5.43x Multiple

Min Investment$100,000

Unit Price$1.00

Preferred Return10%

Hold Period36 months

QOZ BenefitsNone

After-Tax Return427.7%

Distribution Priority1st

Example $500K → $2.72M

Series A2

7-Year QOZ Strategy

638%

After-Tax · 15% Basis Step-Up

Min Investment$150,000

Unit Price$1.05

Preferred Return9%

Hold Period84 months

QOZ BenefitsDeferral + 15% step-up

After-Tax Return638%

Distribution Priority2nd

Example $1M → $7.38M net

Class C

10-Year QOZ Maximum

2,416%

After-Tax · Zero Tax on Appreciation

Min Investment$250,000

Unit Price$1.10

Preferred Return8%

Hold Period120 months

QOZ BenefitsDeferral + 15% + exclusion

After-Tax Return2,416%

Distribution Priority3rd

Example $1M → $6.93M net

Class D

Perpetual Ground Lease

2,416%

After-Tax + $43.5K+/yr Perpetual

Min Investment$500,000

Unit Price$1.15

Preferred Return7%

Hold Period10 yrs + perpetual

QOZ BenefitsDeferral + 15% + exclusion

Perpetual Income$43,500+/yr / $500K

Distribution Priority4th (but perpetual)

Yield on cost8.7% / yr forever

Distribution Waterfall — Base Case 36-Month Exit

Waterfall Step	Amount	Description
Gross Project Revenue	$635,200,000	7 revenue streams over 36-month base case period
Less: Total Project Costs	($478,800,000)	Acquisition $40M + development $296.5M + operations $89.8M + marketing $27.5M + contingency $25M
Net Operating Income	$156,400,000
Step 1 — Preferred Returns (8–10% annually)	($26,100,000)	A1: $6M (10% × $20M × 3yr) + A2: $10.8M + C: $7.2M + D: $2.1M. Priority order: A1 → A2 → C → D
Distributable Cash Flow	$130,300,000
Step 2 — Return of Capital	($100,000,000)	All investor capital returned in priority order. Only $74.5M was deployed — $25.5M returned early from recycled capital.
Remaining Distributable Profits	$30,300,000
Step 3a — 70% to All Investors (pro rata)	$92,700,000	Distributed pro rata across all series based on units held. Calculated on full $132.4M before Step 2 offset.
Step 3b — 30% Manager Promote	$39,700,000	Sponsor carried interest. Timbertop Growth Investment Fund managing partner compensation.
Total Investor Distributions	$218,800,000	$100M capital + $26.1M preferred + $92.7M profit share
Class D Only — Perpetual Ground Lease (Year 10+)	$8,700,000+/yr	100% of ground lease and management fee income to Class D investors pro rata. No ongoing promote after Year 10.

Capital Efficiency — The 25.5% Advantage

Of the $100M raised, only $74.5M is ever deployed in development (the remaining $25.5M is returned to investors beginning Month 25 from recycled Phase 1 sales proceeds). This capital efficiency is rare in real estate development and is a direct result of the bankruptcy acquisition discount providing sufficient instant equity to pursue a self-liquidating structure. It materially improves IRR for all series — investors receive back a portion of capital while the project is still generating revenue.

Section 08

Sensitivity Analysis
& Scenario Planning

Five scenarios from optimistic to combined stress. The governance delay scenario is the most likely adverse outcome and must be disclosed in PPM risk factors — it is currently absent from the pro forma sensitivity table. Even the worst-case combined scenario returns strongly positive IRR due to the $80M instant equity cushion.

The $80M Equity Cushion — The Foundation of Downside Protection

The bankruptcy acquisition creates $80M of instant equity that cannot be replicated by any new competitor. This means the project could return 40% less than base case revenue on every single line — lots, homes, condos, operations — and still return all investor capital in full. The downside scenarios below are genuinely bounded by this structural advantage, not dependent on optimistic assumptions.

Scenario 1 — Optimistic

~98%

+10% prices · governance M+3 · faster absorption · Tellico market outperforms

Scenario 2 — Base Case ◄

89.7%

Corrected 26-lot inventory · $635M revenue · governance M+3 · waterfall as modeled

⚠ Scenario 3 — Gov. Delay

~85%

Most likely adverse scenario. +3 months governance slip · ~$18M revenue deferred · IRR −3–4 pts. MUST appear in PPM risk factors.

Scenario 4 — Pessimistic

~44%

−20% prices · −20% absorption (100 lots sold) · governance M+3. Still positive due to $80M equity cushion.

Scenario 5 — Combined Stress

~36%

Pessimistic pricing + governance delay. Worst plausible case. Investor capital still protected by $80M day-one equity.

Scenario	Revenue Adjustment	Lot Count	Governance	A1 IRR	Key Risk Driver
1. Optimistic	+10% on all prices	26 WF + extras	M+3 on target	~98%	Market upside, smooth governance, faster absorption velocity
2. Base Case ◄	Model as filed (corrected)	26 WF confirmed lots	M+3 on target	89.7%	Corrected lot inventory; 7-yr revenue $635.2M; waterfall as modeled
3. Governance Delay (+3 Mo) ⚠ Must disclose in PPM risk factors	−$18M (one quarter deferral)	26 WF lots	M+6 completion	~85–86%	All gated activities shift one quarter right; construction loan delayed to M+9; IRR impact ~3–4 pts. Most likely adverse scenario — currently not in sensitivity table.
4. Pessimistic −20% prices, −20% absorption	−$127M revenue	100 lots total sold	M+3	~43.8%	Price reduction + slower sales velocity. Still strongly positive due to $80M instant equity cushion. Investor capital protected at all price points above cost basis.
5. Combined Stress Pessimistic + governance delay	−$145M revenue	100 lots total sold	M+6	~35–38%	Worst plausible case combining price/absorption stress with maximum governance delay. Strongly positive returns. $80M equity cushion means Day 1 book value exceeds total investor capital invested.

Downside Protection Mechanics

The $80M instant equity from the bankruptcy acquisition means the property could be worth 40% less than pro forma at every level — lot prices, home prices, condo prices, operations — and still return all $100M of investor capital. This is not a speculative investment protected only by an optimistic market assumption; it is structurally protected by the acquisition discount from Day 1. Even in Scenario 5 (worst case), the 35–38% IRR represents strong absolute returns with full capital recovery.

⚠ Required PPM Addition: Governance Delay Scenario

Scenario 3 — the +3-month governance delay — is the most realistic adverse outcome in this project and is currently absent from the pro forma sensitivity analysis in the PPM. It must be added to the PPM risk factors section before the document is distributed to JLL Capital Markets or any investor. The disclosure should state: a 3-month governance delay from Month 3 to Month 6 reduces 36-month IRR by approximately 3–4 percentage points and defers approximately $18M of revenue recognition by one quarter, as all lot sales, construction loan draws, and building permits are conditioned on completed CCR/DRB/TRDA governance establishment.

IRR Comparison — All Five Scenarios

Optimistic

~98% IRR

Base Case ◄

89.7% IRR

⚠ Gov. Delay

~85–86% IRR

Pessimistic

~43.8% IRR

Combined Stress

~35–38% IRR

Section 09

Corrections &
Pending Actions

All corrections identified across prior working sessions are logged here with status. Seven pending actions must be resolved before this document set is distributed to JLL Capital Markets or any investor. Two Excel model corrections are critical blockers.

Corrected & Incorporated

In this document set

Excel Model — Pending

Must fix before JLL

Actions Before Distribution

Required before JLL & investor use

Corrections Log — 10 Items

1

Fixed

Waterfront Lot Count — Revenue Sheet

Prior: 50 "Lakefront" lots @ $445K avg = $22.25M. Corrected: 26 confirmed Type A waterfront lots per verified parcel records across 3 portfolios (BEP/Landeavor, RB Partners, Salem Pointe Capital — 398 total parcels). Net revenue impact: −$9.43M (−$10.68M waterfront, +$1.43M water-view). IRR impact: minimal at ~1.5% of total revenue. See Waterfront Lot Inventory Correction Memo for complete 26-lot list with parcel IDs and appraised values.

2

Fixed

Water-View Lot Count and Pricing

Prior: 50 "Lake View" lots @ $387.5K = $19.375M. Corrected: 64 water-view lots @ $325K = $20.8M (+$1.425M net). TRDA building permit form uses separate checkboxes for "Custom Waterfront" vs. "Custom View" — pro forma was conflating both categories into one pricing tier.

3

Fixed

Governance Costs Surfaced as Explicit Line Item

Prior: $4.5M governance costs buried in Legal Fees ($2.5M) + Formation & Administration ($2M) with no gate tracking. Corrected: $4.5M "Declarant Governance Establishment" is now an explicit Section B in the Uses table. No net change to $100M total — categories restructured only. See Tab 03 reconciliation note.

4

Fixed

Construction Loan Gate Condition Not Modeled

Prior: $15M development construction loan draw assumed available at will — not conditioned on any milestone. Corrected: Draw explicitly conditioned on CCR recording confirmation from lender. Gate = Month 3 governance completion → Month 6 draw. A 3-month governance delay cascades into a 3-month construction loan delay and shifts all Phase 1 construction (golf renovation, Northgate, Inn, Clinic, Independent Living) right by one quarter.

5

Fixed

POA Assessment Revenue Start Date

Prior: POA assessment revenue modeled as beginning at close (implicit in OCF sheet). Corrected: Revenue starts Month 3 only — after CCRs are recorded and the new POA entity is legally formed. TGIF has no authority to collect assessments before this point. Now disclosed in Tab 04 (Governance Gates) and Tab 06 (Revenue Bridge).

6

Fixed

TRDA Building Permit Timing — Silent Schedule Risk

Prior: Instant permit availability assumed from Day 1 — not modeled. Corrected: 60-day lag from Month 3 governance completion before first TRDA building permits flow; first permits ~Month 5. TRDA requires a registered DRB before accepting permit applications. Was a silent, unmodeled schedule risk — now explicitly disclosed in the governance gate schedule.

7

Fixed

Governance Delay Sensitivity Scenario Added

Prior: No governance delay scenario existed in the sensitivity analysis — the most likely adverse outcome was completely unmodeled. Corrected: Added Scenario 3 (+3-month governance delay, ~85–86% IRR). Added to Tab 08 of this document. Still pending: must also be added to the PPM risk factors section before external distribution.

8

⚠ Pending

Lock-and-Leave Management Fee Formula Error — Excel Model

CRITICAL — Excel model unreliable until fixed. Years 5–7 show management fees of 125%–325% (should be 25%), creating an approximate $72M revenue overstatement in the Excel model output. Revenue figures used in this document set reflect corrected assumptions. However the Excel model itself cannot be used for investor presentations until this is resolved. Owner: John Hartman (CIO). Must fix before JLL Capital Markets submission.

9

⚠ Pending

IRR Circular Dependency & Waterfall Disconnection — Excel Model

CRITICAL — IRR output unreliable. Period 40 shows no exit value; waterfall distributions are not connected to the IRR Setup sheet. Detailed fix instructions are documented in the Rarity Bay IRR Guide (Rarity_Bay_IRR_Guide.docx), Sections 2.1–2.5. Revenue and return figures in this document set are based on corrected assumptions, not Excel model XIRR output, which should not be presented to investors until fixed. Owner: John Hartman (CIO). Concurrent fix with item #8.

Required Actions Before Investor / JLL Distribution — 7 Items

#	Action Required	Owner	Target	Impact If Delayed
1	Fix Lock-and-Leave mgmt fee formula (Years 5–7 showing 125–325% instead of 25%) Correction 8 above — $72M overstatement	John Hartman, CIO	Before JLL	Excel model output not usable; cannot present to institutional investors
2	Fix IRR circular dependency — connect Waterfall to IRR Setup sheet Per Rarity_Bay_IRR_Guide.docx Sections 2.1–2.5	John Hartman, CIO	Before JLL	IRR calculations unreliable; XIRR output invalid; credibility risk with institutional investors
3	Update pro forma Revenue Sheet: correct lot count to 26 waterfront + 64 water-view at corrected pricing	Financial modeling team	Before JLL	Lot revenue overstatement flagged in due diligence; $9.43M discrepancy vs. verified parcel records
4	Add governance delay sensitivity scenario to PPM risk factors (Scenario 3, ~85% IRR)	Securities counsel + John Rock	Before PPM final	Material risk not disclosed; Reg D compliance issue; investor litigation exposure
5	Add TRDA building permit lag (60 days from M+3 governance) to PPM development timeline	Magda / legal team	Before PPM final	Silent schedule risk undisclosed to investors; Phase 1 milestones (golf reopening, Inn, Clinic, Town Center delivery) deferred
6	Engage bankruptcy counsel to confirm 363 sale order explicitly addresses legacy RBCAI CCR extinguishment	John Rock, Esq.	Before 363 bid	Governance transition risk unmitigated; RBCAI could claim competing authority post-close — #1 project risk
7	Finalize Landeaver lis pendens resolution — confirm no competing Declarant rights claims at close	Toney Cosey + legal	Before close	Competing Declarant claim would paralyze governance establishment at closing; deal integrity risk

10

Fixed

Phase 1 Development Activities — Revised to Reflect Regulatory Reality

Prior: Phase 1 Site Development ($18M) described as "waterfront lot preparation, road improvements and extensions, utility extensions" — activities that require individual TVA 820-ft contour approvals per lot and sequential TRDA permit processing that cannot be batched. Marina expansion referenced Mastercraft dealership agreement that is not yet signed. Roads and utilities already ~74% complete per existing infrastructure. Corrected: Phase 1 restructured to five parallel workstreams that require only DRB/TRDA building permits (unlocked at Month 3 governance gate): (1) Golf Course & Country Club Renovation $8.2M — immediate revenue uplift, no TVA/shoreline permits; (2) Northgate Entry & Town Center Phase 1 $7.8M — commercial ground lease income begins upon tenant occupancy; (3) Resort Inn & Event Center $7.5M — nightly revenue and buyer traffic driver; (4) Medical Clinic $5.5M — anchor ground lease $525K/yr, 55+ buyer demand driver; (5) Independent Living Phase 1 $5.5M — 20 units at $1.0–1.2M, leverages Chris Magda's assisted living background. Waterfront lot TVA dock permits and individual site prep moved to Phase 2–3 or delegated to buyers under CC&Rs. Total Phase 1 budget unchanged at $34.5M.

Document Set Version Control

Version 1.0 · Prepared February 2026 · Status: Internal Working Draft · Distribution: TGIF Core Team only until all 7 pending actions above are resolved. Upon resolution, cleared for: JLL Capital Markets due diligence package, qualified accredited investor distribution, legal counsel review for PPM final. All numbers in this document set supersede prior PPM version where noted in the corrections log above.

Section 10

Legal Landscape
& Acquisition Urgency

Three active lawsuits — all currently on appeal in Tennessee courts — directly threaten Declarant rights and acquisition timing. Based on a February 17, 2026 team meeting. The Chapter 363 bankruptcy sale is the only mechanism that resolves all three simultaneously and locks in clean title with fresh Declarant establishment before appellate courts issue final rulings.

🚨

Time-Critical Acquisition Window · February 17, 2026 Team Meeting

One Tennessee Chancery Court has already ruled that Declarant rights lapsed in 2017. That ruling is on appeal consolidated with a second case seeking to dissolve Declarant rights entirely. A third case challenges RBCAI's authority to act without a 75% community vote. The 363 bankruptcy sale operates under federal court jurisdiction — it is the only legal mechanism that can acquire the property free and clear of all three cases AND allow TGIF to establish fresh Declarant rights through new CCRs before the Tennessee appellate courts issue final rulings. Every quarter of delay raises the probability that one or more adverse appellate decisions forecloses this window permanently.

Active Litigation — 3 Cases, All Currently On Appeal

19-943

RBP v. SPC, LLC

Filed date unknown · Under appeal, consolidated with 21-643

🔴 HIGHEST RISK Chancery Court Ruled Against Declarant

What The Court Already Ruled

The Tennessee Chancery Court ruled that Declarant rights — claimed to be owned by the LLC — lapsed in 2017. This is an existing adverse judicial finding. It is currently on appeal, but it represents the most dangerous active legal exposure for any acquiring party who does not use the 363 process.

Why 363 Solves This

A 363 sale under federal bankruptcy jurisdiction transfers the property free and clear of this ruling and all related claims. TGIF then records new CCRs establishing fresh Declarant rights — not the lapsed 2017 rights this case concerns. The appellate court's eventual ruling becomes irrelevant to TGIF's position.

Investor Action Required: Closing before appellate ruling on 19-943 is essential. An adverse appellate decision affirming lapse could complicate even the 363 title chain and trigger additional litigation.

21-643

Hoban + 10 Residents v. SPC, LLC & RBCAI

Filed 10/4/22 · Under appeal, consolidated with 19-943 · Plaintiffs: Harless, Misslin ×2, Wood ×2, Whitman, Guido, McHugh, Farnsworth, Mundle

🔴 HIGH RISK Seeking Dissolution of Declarant Rights

What Plaintiffs Are Seeking

Eleven current residents are seeking to completely dissolve Declarant rights at Rarity Bay. This case is consolidated on appeal with 19-943 — the court will address both simultaneously. A ruling dissolving Declarant rights would eliminate the most valuable long-term income stream in TGIF's investment thesis: the $8.7M/yr perpetual ground lease revenue.

Why 363 Solves This

The 363 sale extinguishes claims against the debtor's Declarant rights. TGIF doesn't acquire those lapsed rights — it acquires the real estate and infrastructure, then creates entirely new Declarant rights under new CCRs as the successor developer. New rights are not subject to this litigation.

Consolidated Appeal: Because 21-643 is consolidated with 19-943, a single appellate decision could resolve both. This concentrates the legal risk into one ruling — making the pre-ruling acquisition window more defined and more urgent.

20-489

RBCAI v. RBP

Filed 4/24/19 · RBCAI appealing after RBP won at trial

⚠ MODERATE — PROCEDURAL RBCAI Authority Challenged

Case Background & Current Status

RBCAI sued RBP for unpaid lot assessments. RBP won — the court awarded RBP $447,000 in legal fees. RBCAI is now appealing at an estimated cost of $150,000. The deeper procedural question: RBP argues the derivative action required a 75% community vote to initiate. RBCAI used an exceptions clause (unpaid assessments). The live question on appeal: can RBCAI initiate an appeal without the 75% vote?

Significance for TGIF

This case establishes that RBCAI cannot act unilaterally without community consent — directly supporting TGIF's argument that RBCAI's board authority is constrained. If the appellate court rules RBCAI cannot appeal without the 75% vote, it further weakens RBCAI's standing to challenge the 363 sale or the post-close CCR transition. The $447K judgment against RBCAI also signals financial distress contributing to the bankruptcy.

Procedural Note: Community approval threshold of 75% for legal actions means RBCAI has limited ability to mount organized opposition to the 363 sale — any attempt to do so would likely require a community vote it cannot achieve given the existing dissension evidenced by cases 19-943 and 21-643.

Why Chapter 363 Bankruptcy Sale Resolves All Three Cases

How 363 Works — Federal Preemption

Section 363 of the Bankruptcy Code authorizes a sale of estate assets free and clear of all interests, claims, and encumbrances — including pending litigation. The federal bankruptcy court's jurisdiction is superior to state court proceedings. All three Tennessee cases involve claims against the debtor's assets and rights. A confirmed 363 sale order permanently bars those claimants from asserting their claims against the acquired property or the purchaser.

Fresh Declarant Rights — Not Inherited Rights

TGIF does not acquire the old, disputed Declarant rights from SPC, LLC or any other debtor entity. Instead, Timbertop Land Company records entirely new CCRs as the successor developer of a property it now owns free and clear. New Declarant rights established by a new owner on a clean title chain are not subject to cases 19-943 or 21-643 — those cases concerned the prior owner's rights, not a new developer's rights created post-close.

The Competitive Moat Created By Legal Complexity

The legal complexity that appears threatening is actually what creates TGIF's competitive moat. No conventional buyer will touch this acquisition because of the three pending cases. Only a 363 bankruptcy acquisition eliminates all three risks simultaneously. TGIF has the legal sophistication and institutional structure to execute this path — competitors do not. The legal overhang is precisely what allows TGIF to buy $120M+ of infrastructure for $40M.

Acquisition Counsel Requirement — Action Item

The 363 sale order must explicitly address (1) RBCAI's CCR extinguishment, (2) the lapsed Declarant rights finding in 19-943, and (3) any surviving claims from 21-643 plaintiffs. This is pending action #6 in Tab 09 — engage bankruptcy counsel to confirm the 363 order language covers all three cases before submitting the bid. This is the single most important legal action before close.

Acquisition Timeline — Why Delay Is Genuinely Costly

Scenario

Description

Outcome for TGIF

Close Before Appellate Ruling

363 order entered before consolidated appeal on 19-943/21-643 is decided. TGIF acquires free and clear, records new CCRs, establishes fresh Declarant rights. Appellate ruling becomes moot as to TGIF's ownership.

✅ Full thesis intact. Clean title. Fresh Declarant rights.

Close After Appellate Ruling (Favorable)

Appellate court reverses Chancery — finds Declarant rights were valid and did not lapse. TGIF can still proceed, but the legal landscape is cleaner and the acquisition may attract competing bids, reducing the bankruptcy discount advantage.

⚠ Thesis intact but discount reduced by competition.

Close After Appellate Ruling (Adverse)

Appellate court affirms lapse of Declarant rights and/or orders dissolution. Even a 363 sale now requires additional litigation to establish that new CCRs are permissible. 363 still works but creates a contested post-close environment that delays governance establishment beyond Month 3.

🔴 Governance delay. IRR impact. Additional legal costs.

No Acquisition — Appellate Ruling Adverse

If TGIF does not proceed and the appellate court rules adversely, the community loses Declarant governance entirely. The property deteriorates without developer control, POA becomes dysfunctional, and the opportunity disappears. No future acquirer can establish new Declarant rights without a fresh legal fight.

❌ Opportunity window closes permanently.

For Investors: The Legal Risk Is Priced Into The $40M Acquisition

The $80M instant equity discount exists precisely because conventional buyers cannot navigate this legal complexity. TGIF's institutional structure, bankruptcy counsel, and 363 expertise transforms what appears to be legal risk into a structural competitive advantage. The three pending cases are not reasons to avoid this investment — they are the reason the $40M price exists. Investors who understand the 363 process recognize this as risk that has already been accounted for in the acquisition price, not risk that survives closing.

⚠ Required Actions Before Close — Legal

Three legal actions required before 363 bid submission, per Tab 09 Pending Actions #6–7: (1) Engage bankruptcy counsel to confirm 363 order language explicitly extinguishes RBCAI CCR authority, addresses 19-943 Declarant lapse finding, and bars 21-643 plaintiffs from asserting claims against acquired property; (2) Confirm Landeaver lis pendens resolution does not create competing Declarant claims that survive 363; (3) Obtain legal opinion from Tennessee real estate counsel confirming TGIF's right to record new CCRs post-close as successor developer on clean title. All three should be completed concurrently, not sequentially.

Quick Reference — Case Cross-Index

Case	Filed	Parties	Core Issue	Status	Risk Level	363 Resolution
19-943	Unknown	RBP v. SPC, LLC	Declarant rights lapsed 2017 — Chancery Court ruling already entered	ON APPEAL with 21-643	Highest	363 free-and-clear order + new CCRs post-close bypass this ruling entirely
21-643	10/4/22	Hoban + 10 v. SPC & RBCAI	Dissolve Declarant rights — 11 residents seeking complete elimination	ON APPEAL with 19-943	High	363 bars plaintiffs from asserting claims against acquirer; fresh Declarant rights not subject to this suit
20-489	4/24/19	RBCAI v. RBP	RBCAI authority — 75% vote requirement; RBCAI appealing $447K loss	ON APPEAL (RBCAI appealing)	Moderate	Weakens RBCAI standing to challenge 363 or post-close transition; supports TGIF's governance argument

Source: February 17, 2026 Timbertop Team Meeting

The case details above are drawn from internal team meeting notes dated February 17, 2026, five days before this document. Legal analysis reflects the team's current assessment; formal legal opinions from Tennessee real estate and bankruptcy counsel are required before final acquisition decisions are made. This tab should be reviewed with legal counsel before distribution to investors. The framing above presents the investment case — not a legal opinion — and investors should conduct their own due diligence on the litigation landscape.

STRICTLY CONFIDENTIAL — This document is prepared for informational purposes only and is intended solely for the use of authorized parties of Timbertop Growth Investment Fund LLC. Financial projections, IRR figures, and return estimates are forward-looking statements based on assumptions that may not be realized. Actual results may differ materially. This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. Any offering of securities is made only pursuant to the Private Placement Memorandum and associated subscription documents, which contain important information about investment risks, fees, and restrictions. All projected returns are pre-tax unless otherwise noted. Past performance is not indicative of future results. This document contains numbers that have been updated from prior versions to reflect verified parcel inventory data (26 confirmed waterfront lots vs. prior assumption of 50) and explicit Declarant governance cost allocation ($4.5M surfaced from prior "Legal Fees" and "Formation & Administration" categories).

Rarity Bay ResortSources, Uses &Capital Strategy

How the Money Moves

Five Structural Advantages

Capital Call Schedule

The Three Governance Gates

The Perpetual Declarant Structure — After Governance is Complete

Board Composition

Declarant Revenue Streams

Quality Control Authority

Revenue Beyond Year 3 — The Perpetual Engine

Distribution Waterfall — Base Case 36-Month Exit

Rarity Bay Resort
Sources, Uses &
Capital Strategy