Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the U.S. federal withholding tax obligations of Nexford Industrial Holdings Inc. (EIN: 36-4178552), as Borrower, and Crescent Harbor Bank, N.A., as Administrative Agent, with respect to interest payments under the $1,400,000,000 senior secured Term Loan B facility (the "Term Loan B" or the "Facility"). This analysis is provided to assist the Banking &

II. Scope and Limitations This memorandum addresses U.S. federal income tax withholding considerations only. State and local withholding tax considerations, including potential state-level withholding obligations and mortgage recording tax implications arising from the collateral grants under the Term Loan B security documents, are addressed separately in the Tax Memorandum — State and Local Tax Implications of Colla

III. U.S. Federal Withholding Tax on Interest Payments — General Framework A. Statutory Withholding Under IRC Sections 871 and 881 The starting point for the withholding tax analysis is the default statutory withholding regime applicable to U.S.-source income paid to non-U.S. persons. Under the Code, the United States imposes a flat-rate tax on certain categories of U.S.-source income received by foreign persons that

Section 881(a) — Foreign Corporations. Section 881(a)(1) of the Code imposes a tax of 30% on the amount received from sources within the United States by a foreign corporation as interest (including original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical ("FDAP") gains, profits, and income. This 30

Section 871(a) — Nonresident Alien Individuals. Section 871(a)(1) of the Code imposes a parallel 30% tax on FDAP income received by a nonresident alien individual from U.S. sources. Although individual lenders are unlikely in the institutional Term Loan B syndication context, certain fund structures may have individual beneficial owners, and the withholding analysis at the beneficial owner level may implicate Section

IV. FATCA (Foreign Account Tax Compliance Act) — Sections 1471–1474 A. Overview of the FATCA Regime The Foreign Account Tax Compliance Act, enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act of 2010 and codified in Sections 1471 through 1474 of the Code, established a comprehensive information reporting and withholding regime targeting U.S. tax evasion through offshore financial accounts and en

V. Credit Agreement Tax Provisions — Key Recommendations The tax provisions of the credit agreement are a critical component of the overall transaction structure, as they allocate the economic risk of withholding taxes between the Borrower and the lenders. The following recommendations are based on market practice for Term Loan B credit agreements and are informed by the withholding tax analysis set forth in Sections

VI. Analysis of Identified Syndicate Lenders A. U.S. Domestic Lenders — No Withholding Concerns Based on our review of the identified syndicate lenders, the named participants in the Term Loan B syndication are predominantly domestic U.S. entities. Assuming proper IRS Form W-9 certification is obtained, interest payments to these lenders should not be subject to U.S. federal withholding tax. The following is a lender