2016 PACENation Summit Accounting Treatment Presentation by David A. Rogers President, FBT Project Finance Advisors LLC Member, Frost Brown Todd LLC 1

I. PACE Financing Options A I. PACE Financing Options A. Special Assessment secures bond issued by political subdivision or special authority B. Special Assessment secures direct loan; with or without a promissory note C. Special Assessment reimburses asset owner II. Nature of Energy Asset A. Owned by property Owner B. Owned by ESC C. Owned by assessing jurisdiction

III. Financials Reflect Reality A. Asset owner should book an asset? B. Who owes assessment – treat the same as any annual tax? C. If no promissory note or similar agreement; is there a long-term obligation? IV. Tax-Exempt Bonds A. Not available for most privately owned Energy Assets – exceptions for “exempt facilities” B. Available for 501(c)(3)’s and true governmental owners (i) Need bond issuer (ii) Need authority to assess normally exempt real property

Questions and Contact David A. Rogers President, FBT Project Finance Advisors LLC Member, Frost Brown Todd LLC 614-559-7252 – Office 614-582-0688 – Cell drogers@fbtprojectfinance.com drogers@fbtlaw.com