1. Should You Buy or Lease Your Signs? The Pros and Cons of Billboard Loans and Billboard Leases Dave Westburg dave.westburg@billboardloans.com www.billboardloans.com April 2015

2. Billboard Loans, LLC. (www.billboardloans.com) Has provided debt and equity financing to small billboard companies since 1997. Provides billboard loans, billboard leases and equity. Direct lender, not a loan broker Multiple products means we do what’s best for you, not what’s best for us. You lease when it makes sense for you. You borrow when it makes sense for you.

3. Billboard Loan Terms Loan is to your company, not project specific. Collateral includes all company assets. Personal guarantee. 7-20 year amortization, depending on the length of your land leases. Cost of loan equals loan fees plus interest. Loan fees of 2-4% of loan amount. Floating interest rate. Title of the billboards and the land lease is in your name.

4. Billboard Lease Terms Project specific (one sign or a group of signs) You assign purchase order with sign manufacturer and and landlease to Leasing company. Leasing company writes checks for equipment and construction costs. Lease terms typically 5-7 years. Cost of lease equals lease fees plus finance charge plus residual payment due at end of lease. You pay all costs of operating sign (taxes, electricity, insurance, landlease). You keep all revenues from the sign. Leasing company sells sign to you and assigns land lease to you when the lease balance is repaid in full.

5. Pros and Cons of A Billboard Loan Pros – You retain title to the sign and landlease. – No prepayment penalty. – 10-15 year amortization. – No residual buyout cost. Cons – May not be able to finance 100% of cost. – Hard to get fixed interest rate. – Requires personal guarantee. – Credit approval takes longer because lender is underwriting a loan to your company.

6. Pros and Cons of a Billboard Lease Pros – Can finance 100% of construction costs. – Quick approval (48 hours) – Project specific financing means you don’t tie up all your company assets. – Usually fixed rate financing. Cons – Huge prepayment penalties. – Residual value payments can be expensive. – 5-7 year amortization can squeeze cashflow. – You do not have title to the sign and landlease until the lease balance is repaid.

7. Leasing Prepayment Penalties (in order of severity) Fixed Prepayment Penalty. 1-10% or original lease balance. Yield maintenance clause. Can be substantial if interest rates fall after you’ve taken out the lease. Sum of all future payments. Avoid at all costs if you want to sell or refinance your sign before the lease matures.

8. What’s So Bad about Sum of All Future Payments Prepayment Language? You must pay all originally scheduled principal and interest payments due no matter when you pay the lease off. The Worst Case – $350,000 digital sign lease. – 84 month term. – 12% finance charge. – Cost to buyout lease in month two: $513,851.

9. Residual Payments (in order of severity) $1 buyout 10% of lease balance due at end of lease term. Fair market value of equipment due at end of lease term.

10. What’s best for you? A lease is best if you – Need 100% financing for the project. – Don’t wish to personally guarantee. – Need to move fast. A loan is best if you – Want complete control over your sign and lease. – May be selling your company in the near future and wish to avoid prepayment penalties and complicated asset transfers. – Are seeking longer term financing.

11. A Better Billboard Lease Contact Dave Westburg (dave.westburg@billboardloans.com, 206- 910-1283) if you would like a term sheet for a loan or a term sheet for a billboard lease with: – No prepayment penalty. – A 7-15 year term. – A $1 end of term buyout clause. – Fully disclosed costs.