1036-00004 · Client 1036 · Engagement & Matter Management

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CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

CALDERWOOD & HARKNESS LLP Attorneys at Law

1700 K Street NW, Suite 900 Washington, DC 20006

Telephone: (202) 555-7400 Facsimile: (202) 555-7401 www.calderwoodharkness.com

October 12, 2023

BY EMAIL AND FIRST CLASS MAIL

Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044

Attention: David Elgin Park, General Counsel

Copy to: Camille Oduya, In-House Real Estate Counsel Copy to: Patricia Sung-Calloway, Chief Financial Officer

Re: Supplement to Engagement Letter dated October 5, 2023 — Tax Advisory Services

Matter: Proposed Acquisition of 14-Property Sun Belt Logistics and Office Portfolio from Greystone Meridian Partners Fund III, L.P.

Matter Number: 1036-00004

Dear Mr. Park:

We are pleased to provide this supplement to our engagement with Fairwater Real Estate Investment Trust in connection with the proposed acquisition of a fourteen-property Sun Belt logistics and office portfolio from Greystone Meridian Partners Fund III, L.P. This supplement sets forth the terms under which our Tax Practice Group will provide specialized tax advisory services in connection with the Transaction. We appreciate the confidence that Fairwater has placed in the Firm, and we look forward to working with you and your team on this important matter.

1. Reference to Primary Engagement Letter

This letter (the "Supplement") supplements the engagement letter dated October 5, 2023 (the "Primary Engagement Letter") between Calderwood & Harkness LLP ("C&H" or the "Firm") and Fairwater Real Estate Investment Trust ("Fairwater" or the "Client"), pursuant to which C&H was engaged to represent Fairwater as buyer's counsel in connection with the proposed acquisition (the "Transaction") of one hundred percent (100%) of the membership interests in fourteen (14) property-owning single-purpose Delaware limited liability companies (each, a "Target Entity" and collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or the "Seller"), a Delaware limited partnership controlled by Greystone Meridian Capital LLC, for a total purchase price of One Billion One Hundred Million Dollars ($1,100,000,000) (the "Purchase Price").

The purpose of this Supplement is to define the scope, staffing, fee arrangements, and related terms for specialized tax advisory services to be provided by the Firm's Tax Practice Group in connection with the Transaction. These tax advisory services are an integral component of the Firm's overall legal representation of Fairwater in the Transaction and are intended to complement and support the real estate, corporate, and regulatory work being performed by the Firm's Real Estate Practice Group under the direction of Douglas Fairchild and Angela Fontaine.

All capitalized terms used but not otherwise defined in this Supplement shall have the meanings ascribed to such terms in the Primary Engagement Letter. In the event of any conflict between the terms and conditions of this Supplement and the terms and conditions of the Primary Engagement Letter, the terms and conditions of this Supplement shall govern with respect to the tax advisory scope described herein. The Primary Engagement Letter shall otherwise remain in full force and effect in accordance with its terms, and nothing in this Supplement shall be construed to modify, amend, or supersede any provision of the Primary Engagement Letter except to the extent expressly set forth herein.

2. Tax Advisory Staffing

Lead Tax Attorney. Sylvia Hartwell, Specialist Partner in the Firm's Tax Practice Group, based in the Firm's Washington, DC office at 1700 K Street NW, Suite 900, Washington, DC 20006, will serve as the responsible partner for all tax advisory matters in connection with the Transaction. Ms. Hartwell brings over twenty-two years of experience in federal and state tax matters involving real estate transactions, REIT qualification, and tax-efficient structuring of portfolio acquisitions. She will be the primary point of contact for the Client on all tax-related aspects of the engagement.

Coordination with Transaction Leadership. Ms. Hartwell will coordinate closely with Douglas Fairchild, Responsible Partner, Real Estate Practice Group, in the Firm's New York office at 450 Park Avenue, 28th Floor, New York, New York 10022, and Angela Fontaine, Billing Partner, Real Estate Practice Group, also in the Firm's New York office, on all tax-related workstreams. This coordination will ensure that the tax advisory work is fully integrated with the broader transaction legal strategy, including the negotiation and drafting of the Purchase and Sale Agreement (the "PSA"), ancillary transaction documents, and closing deliverables.

Additional Team Members. Additional tax associates, counsel, and professional staff from the Firm's Washington, DC and New York offices may be assigned to the engagement as needed to ensure timely and comprehensive delivery of tax advisory services. The Firm will provide prior notice to the Client of any material additions to the tax advisory team, and all such personnel will bill at the Firm's standard billing rates as set forth in the Primary Engagement Letter.

Coordination with Client's Outside Accounting and Tax Advisors. The tax advisory team will also coordinate, at the Client's direction, with Fairwater's outside accounting and tax advisors, Ashford Prewitt LLP, located at 1 South Street, Suite 2700, Baltimore, Maryland 21202. The principal contacts at Ashford Prewitt LLP for purposes of this engagement are Martin Ashford, CPA, engagement partner, and Naomi Ikeda, CPA, tax partner. The Firm understands that Ashford Prewitt LLP has been engaged by Fairwater to provide accounting and tax compliance services in connection with the Transaction and on an ongoing basis, and the Firm's tax advisory team will work collaboratively with Ashford Prewitt LLP to avoid unnecessary duplication of effort and to ensure a seamless and efficient workflow across all tax-related matters.

3. Scope of Tax Advisory Services

The Firm's Tax Practice Group will provide the following tax advisory services in connection with the Transaction. The scope described below is intended to be comprehensive with respect to the principal tax matters anticipated to arise in connection with the Transaction, but the Firm acknowledges that additional tax issues may emerge as the Transaction progresses. Any material expansion of the tax advisory scope will be discussed with the Client in advance.

3.1 Transaction Structure — Tax Analysis

The Firm will provide a comprehensive analysis of the tax implications of the proposed transaction structure, including the following:

(a) Entity-Purchase vs. Asset-Purchase Analysis. Analysis of the entity-purchase structure contemplated by the Transaction — specifically, the acquisition of one hundred percent (100%) of the membership interests in each of the fourteen (14) Target Entities, each of which is a single-purpose Delaware limited liability company wholly owned by GMP Fund III — versus an alternative asset-purchase structure in which Fairwater would acquire the underlying real property and related assets directly. This analysis will address the federal income tax implications of each approach, including but not limited to differences in basis treatment, depreciation, transfer tax exposure, and overall after-tax economic outcomes for Fairwater.

(b) Federal Income Tax Treatment. Evaluation of the tax consequences of acquiring the membership interests in the fourteen (14) Target Entities for federal income tax purposes, including characterization of the transaction, treatment of the Target Entities as disregarded entities or partnerships for federal tax purposes (as applicable), and the effect of the acquisition on Fairwater's consolidated tax position.

(c) Assumed Debt Analysis. Analysis of the assumption of approximately Six Hundred Twelve Million Dollars ($612,000,000) in existing mortgage debt across three lender facilities in connection with the entity-level acquisition, including:

(i) Pinnacle Federal Bank, N.A. — aggregate outstanding principal balance of approximately $421,600,000;

(ii) Veltrano Capital Lending Corp. — aggregate outstanding principal balance of approximately $142,300,000; and

(iii) Sycamore Life Insurance Company — aggregate outstanding principal balance of approximately $48,100,000.

The analysis will address the tax treatment of the assumed debt, including the effect on Fairwater's basis in the Target Entities and the underlying properties, any cancellation of indebtedness implications, and the interaction of the assumed debt with the purchase price for purposes of determining Fairwater's aggregate investment in the portfolio.

(d) Basis and Depreciation Implications. Assessment of basis step-up and carryover basis considerations resulting from the entity-level acquisition structure, including the availability of an election under Section 754 of the Internal Revenue Code (if applicable), the determination of Fairwater's inside and outside basis in the Target Entities and the underlying properties, and the depreciation implications of the chosen acquisition structure for Fairwater's post-closing tax position.

3.2 REIT Qualification Analysis

The Firm will analyze the impact of the portfolio acquisition on Fairwater's ongoing qualification as a real estate investment trust ("REIT") under the Internal Revenue Code, including the following:

(a) REIT Qualification Framework. Analysis of the impact of the acquisition on Fairwater's qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). This analysis will address the organizational requirements, distribution requirements, and operational requirements applicable to Fairwater as a publicly traded REIT.

(b) Income and Asset Test Compliance. Assessment of Fairwater's compliance with the seventy-five percent (75%) gross income test, the ninety-five percent (95%) gross income test, the seventy-five percent (75%) asset test, and the five percent / ten percent (5%/10%) asset tests following the acquisition of the fourteen-property portfolio. The portfolio comprises ten (10) logistics properties and four (4) office properties totaling approximately 5,224,000 rentable square feet across the states of Georgia, Texas, Florida, Tennessee, and North Carolina. The Firm will model the impact of the portfolio's income and asset characteristics on Fairwater's REIT test compliance on a pro forma basis, taking into account Fairwater's existing portfolio and the incremental effect of the acquisition.

(c) Prohibited Transaction Risk. Evaluation of prohibited transaction risk under Section 857(b)(6) of the Code in connection with the entity-purchase structure, including analysis of whether the acquisition and any contemplated near-term disposition of any of the acquired properties could give rise to a one hundred percent (100%) excise tax on net income from prohibited transactions.

(d) Tenant Income and Service Income Issues. Review of any tenant income or service income issues arising from the eighty-seven (87) in-place leases across the portfolio (generating approximately $74,800,000 in annual in-place base rent) that could affect REIT income test compliance. This review will include analysis of any non-customary services being provided to tenants, impermissible tenant service income, and the availability of the taxable REIT subsidiary ("TRS") structure to isolate any non-qualifying income.

(e) Ongoing REIT Compliance Coordination. Coordination with Ashford Prewitt LLP on quarterly and annual REIT compliance testing following the acquisition to ensure that Fairwater maintains its REIT qualification on an ongoing basis. The Firm will be available to consult with Ashford Prewitt LLP and with the Client's internal tax and accounting teams as questions arise in connection with post-closing REIT compliance matters.

3.3 Transfer Tax Analysis — Five States

The Firm will analyze the controlling-interest transfer tax exposure arising from the entity-level transfer of membership interests in the fourteen (14) Target Entities across the five states in which the portfolio properties are located. This analysis will encompass the following:

(a) Georgia (4 Properties). Analysis of Georgia's controlling-interest transfer tax provisions as applicable to the transfer of membership interests in the Target Entities that own the following Georgia properties:

(i) Fairfield Logistics Center I; (ii) Fairfield Logistics Center II; (iii) Buckhead Place Office Tower; and (iv) Peachtree Corners Logistics Center.

(b) Texas (3 Properties). Analysis of Texas's transfer tax and documentary stamp tax provisions (or absence thereof) as applicable to the transfer of membership interests in the Target Entities that own the following Texas properties:

(i) Westlake Distribution Hub; (ii) Katy Freeway Logistics Park; and (iii) Alliance Commerce Center.

(c) Florida (3 Properties). Analysis of Florida's documentary stamp tax provisions and controlling-interest transfer tax exposure as applicable to the transfer of membership interests in the Target Entities that own the following Florida properties:

(i) Lakeland Crossings Industrial; (ii) Southport Logistics Park; and (iii) Brickell Bay Office Building.

(d) Tennessee (3 Properties). Analysis of Tennessee's controlling-interest transfer tax provisions as applicable to the transfer of membership interests in the Target Entities that own the following Tennessee properties:

(i) Murfreesboro Distribution Center; (ii) Cool Springs Office Park; and (iii) Mount Juliet Commerce Park.

(e) North Carolina (1 Property). Analysis of North Carolina's excise tax and controlling-interest transfer tax provisions as applicable to the transfer of membership interests in the Target Entity that owns the following North Carolina property:

(i) SouthPark Corporate Center.

(f) State-by-State Memoranda. Preparation of detailed memoranda analyzing each state's controlling-interest transfer tax, documentary stamp tax, or equivalent transfer tax provisions applicable to entity-level transfers. Each memorandum will identify the applicable statutory and regulatory framework, analyze the applicability of such provisions to the Transaction, estimate the transfer tax liability (if any), and identify any available exemptions or mitigation strategies.

(g) Coordination with Local Counsel. The Firm's tax advisory team will coordinate with local counsel in each of the five jurisdictions on state and local transfer tax matters. The following local counsel firms have been engaged or are expected to be engaged in connection with the Transaction:

(i) Texas: Breckenridge Osgood LLP (James Breckenridge); (ii) Georgia: Talmadge Beaumont LLP (Catherine Beaumont); (iii) North Carolina: Haversham Cole PLLC (Marshall Haversham); (iv) Tennessee: Ellsworth Ridley LLP (Diane Ellsworth); and (v) Florida: Palmetto Strauss PA (Roberto Strauss).

(h) Transfer Tax Returns and Declarations. Preparation or review of transfer tax returns and declarations for filing in all applicable jurisdictions in connection with the closing of the Transaction, including coordination with Ashford Prewitt LLP (Naomi Ikeda) on transfer tax return preparation and filing logistics.

3.4 FIRPTA Analysis

The Firm will analyze the Foreign Investment in Real Property Tax Act ("FIRPTA") implications of the Transaction, including the following:

(a) FIRPTA Applicability. Analysis of whether FIRPTA withholding requirements under Section 1445 of the Code apply to the Transaction, including an assessment of whether the acquisition of the membership interests in the Target Entities constitutes the acquisition of a "United States real property interest" within the meaning of Section 897 of the Code.

(b) Seller's Status. Confirmation of Seller's status as a domestic partnership for FIRPTA purposes. GMP Fund III is a Delaware limited partnership (EIN: 83-1647205). The Firm will analyze whether GMP Fund III's status as a domestic partnership, and the composition of its partners, affects the application of FIRPTA to the Transaction.

(c) Non-Foreign Person Affidavit / FIRPTA Certificate. Preparation or review of a non-foreign person affidavit and/or FIRPTA certificate for execution by Seller in connection with the closing of the Transaction, in form and substance satisfactory to the Client and to the title company.

(d) Belt-and-Suspenders Protective Measures. Advisory on belt-and-suspenders protective measures even where FIRPTA withholding is determined to be inapplicable, including potential escrow or holdback provisions in the PSA to protect Fairwater against FIRPTA-related liability in the event that Seller's representations regarding its domestic status are inaccurate.

3.5 Purchase Price Allocation — Section 1060

The Firm will advise on the allocation of the Purchase Price among the fourteen (14) properties and related assets in connection with the Transaction, including the following:

(a) Allocation Methodology. Analysis of the appropriate methodology for allocating the One Billion One Hundred Million Dollars ($1,100,000,000) Purchase Price among the fourteen (14) properties and related assets (including in-place leases, above-market and below-market lease intangibles, tenant relationships, and other intangible assets) under Section 1060 of the Code and the Treasury Regulations promulgated thereunder.

(b) Coordination with Appraiser. Coordination with Stonebridge Valuation Advisors, LLC (Maureen Alcott, MAI), located at 227 West Trade Street, Suite 1010, Charlotte, North Carolina 28202, regarding the appraised values of each property to support the agreed allocation. The Firm will review the appraisals prepared by Stonebridge Valuation Advisors, LLC for consistency with the Section 1060 allocation methodology and will work with the appraiser to resolve any valuation issues that may affect the allocation.

(c) Purchase Price Allocation Memorandum. Preparation of a comprehensive purchase price allocation memorandum setting forth the agreed allocation among the fourteen (14) properties and related assets, with supporting analysis and documentation. The memorandum is anticipated to be included as Exhibit K to the Purchase and Sale Agreement.

(d) IRS Form 8594. Preparation or review of a draft IRS Form 8594 (Asset Acquisition Statement Under Section 1060) reflecting the agreed allocation for inclusion in Fairwater's federal income tax filings for the taxable year in which the closing occurs.

3.6 State Income and Franchise Tax Obligations

The Firm will advise on state income tax and franchise tax obligations arising from the Transaction, including the following:

(a) Identification of Filing Obligations. Identification of all state income tax and franchise tax filing obligations arising from Fairwater's acquisition of the fourteen (14) Target Entities and Fairwater's resulting ownership of properties in Georgia, Texas, Florida, Tennessee, and North Carolina. This analysis will address initial registration, annual reporting, and tax filing requirements in each jurisdiction.

(b) State Treatment of REITs. Analysis of each state's treatment of REITs for state income tax and franchise tax purposes, including the availability of dividends-paid deductions, REIT-specific exemptions, and any state-level qualification or filing requirements for REITs.

(c) Local Counsel Coordination. Coordination with local counsel in each of the five jurisdictions, as identified in Section 3.3(g) above, regarding state-specific income tax and franchise tax compliance requirements.

(d) Coordination with Ashford Prewitt LLP. Coordination with Ashford Prewitt LLP on the preparation of any required state income tax or franchise tax filings arising from the Transaction.

3.7 Depreciation and Cost Recovery

The Firm will advise on the depreciation and cost recovery implications of the Transaction, including the following:

(a) Depreciation Analysis. Analysis of the depreciation and cost recovery implications of the entity-purchase structure, including the available methods (straight-line, accelerated, bonus depreciation, if applicable) and recovery periods for the logistics properties and office properties acquired in the Transaction. This analysis will address the interaction of the entity-level acquisition structure with the depreciation rules applicable to the underlying real property and personal property assets.

(b) PCA-Related Repair Credits. Assessment of the impact of any capital expenditure items identified in the property condition assessments ("PCAs") prepared in connection with the Transaction on Fairwater's depreciable basis, including the treatment of repair and maintenance expenditures versus capital improvements under the tangible property regulations and the effect of any repair credits or reserves established at closing on the depreciable basis of the acquired properties.

3.8 Additional Tax Matters

In addition to the specific tax advisory services described in Sections 3.1 through 3.7 above, the Firm's Tax Practice Group will provide the following general tax advisory services as reasonably requested by the Client or the Transaction team in connection with the acquisition:

(a) PSA Tax Provisions. Review of tax-related representations and warranties in the PSA, including Seller's representations regarding the tax status of the Target Entities, the filing of tax returns, the payment of taxes, and the absence of pending or threatened tax audits or assessments. The Firm will also advise on the drafting and negotiation of tax indemnification provisions, tax representation survival periods, and related provisions of the PSA.

(b) Proration and Working-Capital True-Up. Advisory on the tax aspects of the proration and working-capital true-up mechanism contemplated by the PSA, including the treatment of real property tax prorations, income tax prorations, and the tax effect of any post-closing adjustments to the Purchase Price.

(c) Other Tax Matters. Advisory on any other tax matters arising in the course of the Transaction that fall within the Firm's tax advisory competence and are requested by the Client, including but not limited to tax issues arising in connection with title insurance, environmental matters, zoning and land use approvals, and any restructuring or reorganization of the Target Entities that may be contemplated in connection with the Transaction.

4. Exclusions from Scope

The Firm's tax advisory services under this Supplement do not include the following:

(a) Preparation of Fairwater's federal or state income tax returns, which will be handled by Ashford Prewitt LLP in accordance with Fairwater's existing engagement with that firm;

(b) Audit defense or controversy representation before the Internal Revenue Service or any state or local taxing authority, whether in connection with the Transaction or otherwise;

(d) Tax advice to any party other than Fairwater, including without limitation any partner, member, or affiliate of GMP Fund III, any tenant of the properties, or any lender;

(e) Advice regarding Seller's tax consequences of the Transaction. The Firm understands that Seller is separately represented by Blackridge Hayes LLP (Nathaniel Pryce, Ingrid Solberg (tax partner), and Thomas Keating) as transaction counsel and by Caldwell Murray & Oakes LLP (William Oakes, CPA, engagement partner) as accounting and tax advisors; and

(f) Property tax assessment, valuation advisory, or property tax appeal services, which are being handled by Stonebridge Valuation Advisors, LLC.

In the event that any of the foregoing excluded services are requested by the Client, the Firm will discuss with the Client whether such services can be provided under a separate engagement arrangement and at what cost.

5. Deliverables

The following principal work products are anticipated under this engagement Supplement. The precise form, substance, and timing of each deliverable will be determined in consultation with the Client and the Transaction team as the Transaction progresses.

1. Tax Structure Memorandum — A comprehensive memorandum analyzing the entity-purchase structure versus an asset-purchase structure, including the federal income tax implications of each approach, REIT qualification considerations, and prohibited transaction risk assessment.

2. REIT Qualification Impact Memorandum — A detailed memorandum analyzing the impact of the portfolio acquisition on Fairwater's compliance with the REIT income tests and asset tests, including pro forma modeling of test compliance following the acquisition.

3. Transfer Tax Analysis — Five States — A multi-part memorandum (or series of state-specific memoranda) analyzing the controlling-interest transfer tax exposure in Georgia, Texas, Florida, Tennessee, and North Carolina, including estimated transfer tax liability and available mitigation strategies.

4. FIRPTA Analysis Memorandum — A memorandum analyzing the FIRPTA implications of the Transaction and the adequacy of the Seller's non-foreign status representations and certifications.

5. Purchase Price Allocation Memorandum — A memorandum setting forth the Section 1060 allocation methodology and the agreed allocation of the Purchase Price among the fourteen properties and related assets, with supporting documentation.

6. State Income / Franchise Tax Filing Memorandum — A memorandum identifying all state income tax and franchise tax filing obligations arising from the acquisition and Fairwater's resulting property ownership in the five portfolio states.

7. Draft IRS Form 8594 — A draft Asset Acquisition Statement under Section 1060 of the Code reflecting the agreed purchase price allocation for Fairwater's federal income tax filings.

8. Transfer Tax Returns and Declarations — All Jurisdictions — Preparation or review of transfer tax returns, declarations, and related filings for all applicable jurisdictions in connection with the closing of the Transaction.

9. Tax Due Diligence Memorandum — A memorandum summarizing the Firm's review of Seller's tax representations, the tax attributes of the Target Entities, and any tax risks or exposures identified during the due diligence process.

Additional memoranda, analyses, and advisory communications may be prepared as the Transaction requires. All deliverables will be prepared in the course of the Firm's legal representation of Fairwater and are subject to the attorney-client privilege and work product protections discussed in Section 8 below.

6. Fee Arrangements

Fees for tax advisory services rendered under this Supplement shall be billed on an hourly basis at the Firm's standard billing rates for each timekeeper, as set forth in the rate schedule attached to the Primary Engagement Letter. The Firm's current standard hourly billing rates for the principal members of the tax advisory team are set forth in the Firm's rate card provided to the Client in connection with the Primary Engagement Letter, and Sylvia Hartwell's current standard hourly billing rate is as specified therein.

Tax advisory fees incurred under this Supplement are included within the overall fee cap of Two Million Eight Hundred Thousand Dollars ($2,800,000) (plus disbursements) established by the Primary Engagement Letter for all legal services rendered by the Firm in connection with the Transaction. The tax advisory fees are not subject to a separate sub-cap unless otherwise agreed in writing by the parties, but the Firm will endeavor to manage the tax advisory budget efficiently and will provide the Client with periodic updates on the allocation of fees between the real estate and tax advisory workstreams.

Billing and invoicing for tax advisory services shall follow the procedures set forth in the Primary Engagement Letter. All tax advisory time entries will be identified by timekeeper and task code for tracking within the overall Transaction budget. The Firm's invoices will provide sufficient detail to enable the Client to distinguish between time charges attributable to tax advisory services under this Supplement and time charges attributable to other legal services under the Primary Engagement Letter.

Angela Fontaine remains the billing partner for the overall engagement. All invoices, including those reflecting tax advisory services, will be issued under her supervision and in accordance with the billing procedures and payment terms established by the Primary Engagement Letter.

The Client will not be separately billed for tax advisory services in excess of the overall fee cap established by the Primary Engagement Letter without the prior written approval of the Client. In the event that the Firm anticipates that the overall fee cap may be exceeded as a result of the tax advisory scope described herein or otherwise, the Firm will promptly notify the Client and will seek written authorization before incurring any fees in excess of the cap.

7. Coordination with Other Advisors

Sylvia Hartwell and her tax advisory team are authorized to communicate directly with the following advisors and consultants engaged by or on behalf of Fairwater in connection with the Transaction, to the extent reasonably necessary to perform the tax advisory services described herein:

(a) Ashford Prewitt LLP (Martin Ashford, CPA, engagement partner; Naomi Ikeda, CPA, tax partner) — Fairwater's outside accounting and tax advisors, for purposes of coordinating on REIT compliance testing, purchase price allocation, transfer tax return preparation, state income and franchise tax filings, and other tax compliance matters;

(b) Stonebridge Valuation Advisors, LLC (Maureen Alcott, MAI) — the appraiser engaged in connection with the Transaction, for purposes of coordinating on property valuations and purchase price allocation support under Section 1060 of the Code;

(c) Local Counsel in each of the five jurisdictions identified in Section 3.3(g) above — Breckenridge Osgood LLP (James Breckenridge, Texas), Talmadge Beaumont LLP (Catherine Beaumont, Georgia), Haversham Cole PLLC (Marshall Haversham, North Carolina), Ellsworth Ridley LLP (Diane Ellsworth, Tennessee), and Palmetto Strauss PA (Roberto Strauss, Florida) — regarding state and local tax matters, including transfer taxes, state income and franchise taxes, and any other state-specific tax issues arising in connection with the Transaction; and

(d) Hartwick Gunderson & Associates, Inc. (Peter Langford) — the insurance broker engaged in connection with the Transaction, to the extent that tax considerations arise in connection with the structuring, pricing, or terms of the representations and warranties insurance policy being procured in connection with the Transaction.

All communications with Seller's counsel, Blackridge Hayes LLP (Nathaniel Pryce, Ingrid Solberg, and Thomas Keating), or Seller's accountants, Caldwell Murray & Oakes LLP (William Oakes, CPA), regarding tax matters shall be coordinated through Douglas Fairchild or Grace Nakamura, unless the Client otherwise directs in writing. This coordination protocol is intended to ensure that all communications with the Seller's advisors are consistent with the Transaction team's overall negotiation strategy and are conducted in a manner that protects the Client's interests.

8. Conflicts and Ethical Obligations

Conflicts of Interest. The Firm has confirmed, as set forth in the Conflict Check Memorandum dated October 3, 2023, prepared by the Firm's General Counsel's Office, that no conflicts of interest exist with respect to the provision of tax advisory services in this matter. The conflict check encompassed Sylvia Hartwell, all other attorneys and professional staff anticipated to be assigned to the tax advisory workstream, and all parties and entities identified in connection with the Transaction. In the event that a conflict or potential conflict is identified after the date of this Supplement, the Firm will promptly notify the Client and will take appropriate steps to address the matter in accordance with the applicable rules of professional conduct.

Privilege. The Firm's tax advisory work product prepared under this Supplement is prepared in the course of the Firm's legal representation of Fairwater and is subject to the attorney-client privilege and the work product doctrine. The Client is the holder of the attorney-client privilege and may waive or assert the privilege at its discretion. The Firm will take reasonable steps to protect the confidentiality of all tax advisory work product and will label such work product as privileged and confidential where appropriate.

Treasury Circular 230 Disclosure. The tax advisory services provided under this Supplement are not intended to constitute a "covered opinion" or a formal tax opinion for purposes of Treasury Department Circular 230 (31 C.F.R. Part 10). The Firm's tax advisory memoranda and analyses are provided as part of the Firm's legal representation of Fairwater in connection with the Transaction and are intended for the Client's use in evaluating the tax aspects of the Transaction. Any formal tax opinion, if required or requested by the Client (for example, in connection with any tax indemnification obligation, opinion delivery requirement in the PSA, or REIT qualification opinion), will be the subject of a separate engagement letter and fee arrangement between the Firm and the Client.

9. Term and Termination

This Supplement shall be effective as of October 12, 2023 and shall continue in effect through the completion of all tax advisory services described herein in connection with the Transaction, including any post-closing tax matters. Post-closing tax matters are anticipated to include, without limitation, the finalization of the proration and working-capital true-up (with a deadline of ninety (90) days following the closing date) and advisory services during the tax representation survival period (thirty-six (36) months from the closing date).

Either party may terminate this Supplement upon written notice in accordance with the termination provisions set forth in the Primary Engagement Letter. Upon termination of this Supplement, the Firm will take reasonable steps to transition any pending tax advisory work to the Client or to such other counsel as the Client may designate, subject to the Firm's ethical obligations and the Client's payment of all fees and expenses incurred through the date of termination.

Fees for tax advisory services rendered through the date of any termination of this Supplement shall remain due and payable in accordance with the billing and payment terms set forth in the Primary Engagement Letter. Termination of this Supplement shall not affect the Firm's obligations under the Primary Engagement Letter with respect to non-tax legal services, unless the Primary Engagement Letter is also terminated in accordance with its terms.

10. Acceptance

We would appreciate your confirming Fairwater's agreement to the terms and conditions set forth in this Supplement by countersigning this letter in the space indicated below and returning a signed copy to Sylvia Hartwell at the address set forth above or by email at shartwell@calderwoodharkness.com. We are, of course, available to discuss any questions or comments you may have regarding this Supplement.

We look forward to working with you and the Fairwater team on this Transaction.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Sylvia Hartwell

Title: Partner, Tax Practice Group

Date: ________

ACKNOWLEDGED AND AGREED:

FAIRWATER REAL ESTATE INVESTMENT TRUST

By: ________

Name: David Elgin Park

Title: General Counsel

Date: ________

cc: (by email)

Douglas Fairchild, Partner, Real Estate Practice Group, Calderwood & Harkness LLP (New York)

Angela Fontaine, Partner, Real Estate Practice Group, Calderwood & Harkness LLP (New York)

Grace Nakamura, Counsel, Real Estate Practice Group, Calderwood & Harkness LLP (New York)

Marcus Devereaux, Executive Vice President, Acquisitions, Fairwater Real Estate Investment Trust

Patricia Sung-Calloway, Chief Financial Officer, Fairwater Real Estate Investment Trust

Enclosures: None (this Supplement references and incorporates by reference the Primary Engagement Letter dated October 5, 2023)

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
CALDERWOOD & HARKNESS LLP Attorneys at Law
1700 K Street NW, Suite 900 Washington, DC 20006
Telephone: (202) 555-7400 Facsimile: (202) 555-7401 www.calderwoodharkness.com
October 12, 2023
BY EMAIL AND FIRST CLASS MAIL
Fairwater Real Estate Investment Trust 7200 Chesapeake Parkway, Suite 1100 Columbia, Maryland 21044
Attention: David Elgin Park, General Counsel
Copy to: Camille Oduya, In-House Real Estate Counsel Copy to: Patricia Sung-Calloway, Chief Financial Officer
Re: Supplement to Engagement Letter dated October 5, 2023 — Tax Advisory Services
Matter: Proposed Acquisition of 14-Property Sun Belt Logistics and Office Portfolio from Greystone Meridian Partners Fund III, L.P.
Matter Number: 1036-00004
Dear Mr. Park:
We are pleased to provide this supplement to our engagement with Fairwater Real Estate Investment Trust in connection with the proposed acquisition of a fourteen-property Sun Belt logistics and office portfolio from Greystone Meridian Partners Fund III, L.P. This supplement sets forth the terms under which our Tax Practice Group will provide specialized tax advisory services in connection with the Transaction. We appreciate the confidence that Fairwater has placed in the Firm, and we look forward to working with you and your team on this important matter.
1. Reference to Primary Engagement Letter
This letter (the "Supplement") supplements the engagement letter dated October 5, 2023 (the "Primary Engagement Letter") between Calderwood & Harkness LLP ("C&H" or the "Firm") and Fairwater Real Estate Investment Trust ("Fairwater" or the "Client"), pursuant to which C&H was engaged to represent Fairwater as buyer's counsel in connection with the proposed acquisition (the "Transaction") of one hundred percent (100%) of the membership interests in fourteen (14) property-owning single-purpose Delaware limited liability companies (each, a "Target Entity" and collectively, the "Target Entities") from Greystone Meridian Partners Fund III, L.P. ("GMP Fund III" or the "Seller"), a Delaware limited partnership controlled by Greystone Meridian Capital LLC, for a total purchase price of One Billion One Hundred Million Dollars ($1,100,000,000) (the "Purchase Price").
The purpose of this Supplement is to define the scope, staffing, fee arrangements, and related terms for specialized tax advisory services to be provided by the Firm's Tax Practice Group in connection with the Transaction. These tax advisory services are an integral component of the Firm's overall legal representation of Fairwater in the Transaction and are intended to complement and support the real estate, corporate, and regulatory work being performed by the Firm's Real Estate Practice Group under the direction of Douglas Fairchild and Angela Fontaine.
All capitalized terms used but not otherwise defined in this Supplement shall have the meanings ascribed to such terms in the Primary Engagement Letter. In the event of any conflict between the terms and conditions of this Supplement and the terms and conditions of the Primary Engagement Letter, the terms and conditions of this Supplement shall govern with respect to the tax advisory scope described herein. The Primary Engagement Letter shall otherwise remain in full force and effect in accordance with its terms, and nothing in this Supplement shall be construed to modify, amend, or supersede any provision of the Primary Engagement Letter except to the extent expressly set forth herein.
2. Tax Advisory Staffing
Lead Tax Attorney. Sylvia Hartwell, Specialist Partner in the Firm's Tax Practice Group, based in the Firm's Washington, DC office at 1700 K Street NW, Suite 900, Washington, DC 20006, will serve as the responsible partner for all tax advisory matters in connection with the Transaction. Ms. Hartwell brings over twenty-two years of experience in federal and state tax matters involving real estate transactions, REIT qualification, and tax-efficient structuring of portfolio acquisitions. She will be the primary point of contact for the Client on all tax-related aspects of the engagement.
Coordination with Transaction Leadership. Ms. Hartwell will coordinate closely with Douglas Fairchild, Responsible Partner, Real Estate Practice Group, in the Firm's New York office at 450 Park Avenue, 28th Floor, New York, New York 10022, and Angela Fontaine, Billing Partner, Real Estate Practice Group, also in the Firm's New York office, on all tax-related workstreams. This coordination will ensure that the tax advisory work is fully integrated with the broader transaction legal strategy, including the negotiation and drafting of the Purchase and Sale Agreement (the "PSA"), ancillary transaction documents, and closing deliverables.
Additional Team Members. Additional tax associates, counsel, and professional staff from the Firm's Washington, DC and New York offices may be assigned to the engagement as needed to ensure timely and comprehensive delivery of tax advisory services. The Firm will provide prior notice to the Client of any material additions to the tax advisory team, and all such personnel will bill at the Firm's standard billing rates as set forth in the Primary Engagement Letter.
Coordination with Client's Outside Accounting and Tax Advisors. The tax advisory team will also coordinate, at the Client's direction, with Fairwater's outside accounting and tax advisors, Ashford Prewitt LLP, located at 1 South Street, Suite 2700, Baltimore, Maryland 21202. The principal contacts at Ashford Prewitt LLP for purposes of this engagement are Martin Ashford, CPA, engagement partner, and Naomi Ikeda, CPA, tax partner. The Firm understands that Ashford Prewitt LLP has been engaged by Fairwater to provide accounting and tax compliance services in connection with the Transaction and on an ongoing basis, and the Firm's tax advisory team will work collaboratively with Ashford Prewitt LLP to avoid unnecessary duplication of effort and to ensure a seamless and efficient workflow across all tax-related matters.
3. Scope of Tax Advisory Services
The Firm's Tax Practice Group will provide the following tax advisory services in connection with the Transaction. The scope described below is intended to be comprehensive with respect to the principal tax matters anticipated to arise in connection with the Transaction, but the Firm acknowledges that additional tax issues may emerge as the Transaction progresses. Any material expansion of the tax advisory scope will be discussed with the Client in advance.
3.1 Transaction Structure — Tax Analysis
The Firm will provide a comprehensive analysis of the tax implications of the proposed transaction structure, including the following:
(a) Entity-Purchase vs. Asset-Purchase Analysis. Analysis of the entity-purchase structure contemplated by the Transaction — specifically, the acquisition of one hundred percent (100%) of the membership interests in each of the fourteen (14) Target Entities, each of which is a single-purpose Delaware limited liability company wholly owned by GMP Fund III — versus an alternative asset-purchase structure in which Fairwater would acquire the underlying real property and related assets directly. This analysis will address the federal income tax implications of each approach, including but not limited to differences in basis treatment, depreciation, transfer tax exposure, and overall after-tax economic outcomes for Fairwater.
(b) Federal Income Tax Treatment. Evaluation of the tax consequences of acquiring the membership interests in the fourteen (14) Target Entities for federal income tax purposes, including characterization of the transaction, treatment of the Target Entities as disregarded entities or partnerships for federal tax purposes (as applicable), and the effect of the acquisition on Fairwater's consolidated tax position.
(c) Assumed Debt Analysis. Analysis of the assumption of approximately Six Hundred Twelve Million Dollars ($612,000,000) in existing mortgage debt across three lender facilities in connection with the entity-level acquisition, including:
(i) Pinnacle Federal Bank, N.A. — aggregate outstanding principal balance of approximately $421,600,000;
(ii) Veltrano Capital Lending Corp. — aggregate outstanding principal balance of approximately $142,300,000; and
(iii) Sycamore Life Insurance Company — aggregate outstanding principal balance of approximately $48,100,000.
The analysis will address the tax treatment of the assumed debt, including the effect on Fairwater's basis in the Target Entities and the underlying properties, any cancellation of indebtedness implications, and the interaction of the assumed debt with the purchase price for purposes of determining Fairwater's aggregate investment in the portfolio.
(d) Basis and Depreciation Implications. Assessment of basis step-up and carryover basis considerations resulting from the entity-level acquisition structure, including the availability of an election under Section 754 of the Internal Revenue Code (if applicable), the determination of Fairwater's inside and outside basis in the Target Entities and the underlying properties, and the depreciation implications of the chosen acquisition structure for Fairwater's post-closing tax position.
3.2 REIT Qualification Analysis
The Firm will analyze the impact of the portfolio acquisition on Fairwater's ongoing qualification as a real estate investment trust ("REIT") under the Internal Revenue Code, including the following:
(a) REIT Qualification Framework. Analysis of the impact of the acquisition on Fairwater's qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). This analysis will address the organizational requirements, distribution requirements, and operational requirements applicable to Fairwater as a publicly traded REIT.
(b) Income and Asset Test Compliance. Assessment of Fairwater's compliance with the seventy-five percent (75%) gross income test, the ninety-five percent (95%) gross income test, the seventy-five percent (75%) asset test, and the five percent / ten percent (5%/10%) asset tests following the acquisition of the fourteen-property portfolio. The portfolio comprises ten (10) logistics properties and four (4) office properties totaling approximately 5,224,000 rentable square feet across the states of Georgia, Texas, Florida, Tennessee, and North Carolina. The Firm will model the impact of the portfolio's income and asset characteristics on Fairwater's REIT test compliance on a pro forma basis, taking into account Fairwater's existing portfolio and the incremental effect of the acquisition.
(c) Prohibited Transaction Risk. Evaluation of prohibited transaction risk under Section 857(b)(6) of the Code in connection with the entity-purchase structure, including analysis of whether the acquisition and any contemplated near-term disposition of any of the acquired properties could give rise to a one hundred percent (100%) excise tax on net income from prohibited transactions.
(d) Tenant Income and Service Income Issues. Review of any tenant income or service income issues arising from the eighty-seven (87) in-place leases across the portfolio (generating approximately $74,800,000 in annual in-place base rent) that could affect REIT income test compliance. This review will include analysis of any non-customary services being provided to tenants, impermissible tenant service income, and the availability of the taxable REIT subsidiary ("TRS") structure to isolate any non-qualifying income.
(e) Ongoing REIT Compliance Coordination. Coordination with Ashford Prewitt LLP on quarterly and annual REIT compliance testing following the acquisition to ensure that Fairwater maintains its REIT qualification on an ongoing basis. The Firm will be available to consult with Ashford Prewitt LLP and with the Client's internal tax and accounting teams as questions arise in connection with post-closing REIT compliance matters.
3.3 Transfer Tax Analysis — Five States
The Firm will analyze the controlling-interest transfer tax exposure arising from the entity-level transfer of membership interests in the fourteen (14) Target Entities across the five states in which the portfolio properties are located. This analysis will encompass the following:
(a) Georgia (4 Properties). Analysis of Georgia's controlling-interest transfer tax provisions as applicable to the transfer of membership interests in the Target Entities that own the following Georgia properties:
(i) Fairfield Logistics Center I; (ii) Fairfield Logistics Center II; (iii) Buckhead Place Office Tower; and (iv) Peachtree Corners Logistics Center.
(b) Texas (3 Properties). Analysis of Texas's transfer tax and documentary stamp tax provisions (or absence thereof) as applicable to the transfer of membership interests in the Target Entities that own the following Texas properties:
(i) Westlake Distribution Hub; (ii) Katy Freeway Logistics Park; and (iii) Alliance Commerce Center.
(c) Florida (3 Properties). Analysis of Florida's documentary stamp tax provisions and controlling-interest transfer tax exposure as applicable to the transfer of membership interests in the Target Entities that own the following Florida properties:
(i) Lakeland Crossings Industrial; (ii) Southport Logistics Park; and (iii) Brickell Bay Office Building.
(d) Tennessee (3 Properties). Analysis of Tennessee's controlling-interest transfer tax provisions as applicable to the transfer of membership interests in the Target Entities that own the following Tennessee properties:
(i) Murfreesboro Distribution Center; (ii) Cool Springs Office Park; and (iii) Mount Juliet Commerce Park.
(e) North Carolina (1 Property). Analysis of North Carolina's excise tax and controlling-interest transfer tax provisions as applicable to the transfer of membership interests in the Target Entity that owns the following North Carolina property:
(i) SouthPark Corporate Center.
(f) State-by-State Memoranda. Preparation of detailed memoranda analyzing each state's controlling-interest transfer tax, documentary stamp tax, or equivalent transfer tax provisions applicable to entity-level transfers. Each memorandum will identify the applicable statutory and regulatory framework, analyze the applicability of such provisions to the Transaction, estimate the transfer tax liability (if any), and identify any available exemptions or mitigation strategies.
(g) Coordination with Local Counsel. The Firm's tax advisory team will coordinate with local counsel in each of the five jurisdictions on state and local transfer tax matters. The following local counsel firms have been engaged or are expected to be engaged in connection with the Transaction:
(i) Texas: Breckenridge Osgood LLP (James Breckenridge); (ii) Georgia: Talmadge Beaumont LLP (Catherine Beaumont); (iii) North Carolina: Haversham Cole PLLC (Marshall Haversham); (iv) Tennessee: Ellsworth Ridley LLP (Diane Ellsworth); and (v) Florida: Palmetto Strauss PA (Roberto Strauss).
(h) Transfer Tax Returns and Declarations. Preparation or review of transfer tax returns and declarations for filing in all applicable jurisdictions in connection with the closing of the Transaction, including coordination with Ashford Prewitt LLP (Naomi Ikeda) on transfer tax return preparation and filing logistics.
3.4 FIRPTA Analysis
The Firm will analyze the Foreign Investment in Real Property Tax Act ("FIRPTA") implications of the Transaction, including the following:
(a) FIRPTA Applicability. Analysis of whether FIRPTA withholding requirements under Section 1445 of the Code apply to the Transaction, including an assessment of whether the acquisition of the membership interests in the Target Entities constitutes the acquisition of a "United States real property interest" within the meaning of Section 897 of the Code.
(b) Seller's Status. Confirmation of Seller's status as a domestic partnership for FIRPTA purposes. GMP Fund III is a Delaware limited partnership (EIN: 83-1647205). The Firm will analyze whether GMP Fund III's status as a domestic partnership, and the composition of its partners, affects the application of FIRPTA to the Transaction.
(c) Non-Foreign Person Affidavit / FIRPTA Certificate. Preparation or review of a non-foreign person affidavit and/or FIRPTA certificate for execution by Seller in connection with the closing of the Transaction, in form and substance satisfactory to the Client and to the title company.
(d) Belt-and-Suspenders Protective Measures. Advisory on belt-and-suspenders protective measures even where FIRPTA withholding is determined to be inapplicable, including potential escrow or holdback provisions in the PSA to protect Fairwater against FIRPTA-related liability in the event that Seller's representations regarding its domestic status are inaccurate.
3.5 Purchase Price Allocation — Section 1060
The Firm will advise on the allocation of the Purchase Price among the fourteen (14) properties and related assets in connection with the Transaction, including the following:
(a) Allocation Methodology. Analysis of the appropriate methodology for allocating the One Billion One Hundred Million Dollars ($1,100,000,000) Purchase Price among the fourteen (14) properties and related assets (including in-place leases, above-market and below-market lease intangibles, tenant relationships, and other intangible assets) under Section 1060 of the Code and the Treasury Regulations promulgated thereunder.
(b) Coordination with Appraiser. Coordination with Stonebridge Valuation Advisors, LLC (Maureen Alcott, MAI), located at 227 West Trade Street, Suite 1010, Charlotte, North Carolina 28202, regarding the appraised values of each property to support the agreed allocation. The Firm will review the appraisals prepared by Stonebridge Valuation Advisors, LLC for consistency with the Section 1060 allocation methodology and will work with the appraiser to resolve any valuation issues that may affect the allocation.
(c) Purchase Price Allocation Memorandum. Preparation of a comprehensive purchase price allocation memorandum setting forth the agreed allocation among the fourteen (14) properties and related assets, with supporting analysis and documentation. The memorandum is anticipated to be included as Exhibit K to the Purchase and Sale Agreement.
(d) IRS Form 8594. Preparation or review of a draft IRS Form 8594 (Asset Acquisition Statement Under Section 1060) reflecting the agreed allocation for inclusion in Fairwater's federal income tax filings for the taxable year in which the closing occurs.
3.6 State Income and Franchise Tax Obligations
The Firm will advise on state income tax and franchise tax obligations arising from the Transaction, including the following:
(a) Identification of Filing Obligations. Identification of all state income tax and franchise tax filing obligations arising from Fairwater's acquisition of the fourteen (14) Target Entities and Fairwater's resulting ownership of properties in Georgia, Texas, Florida, Tennessee, and North Carolina. This analysis will address initial registration, annual reporting, and tax filing requirements in each jurisdiction.
(b) State Treatment of REITs. Analysis of each state's treatment of REITs for state income tax and franchise tax purposes, including the availability of dividends-paid deductions, REIT-specific exemptions, and any state-level qualification or filing requirements for REITs.
(c) Local Counsel Coordination. Coordination with local counsel in each of the five jurisdictions, as identified in Section 3.3(g) above, regarding state-specific income tax and franchise tax compliance requirements.
(d) Coordination with Ashford Prewitt LLP. Coordination with Ashford Prewitt LLP on the preparation of any required state income tax or franchise tax filings arising from the Transaction.
3.7 Depreciation and Cost Recovery
The Firm will advise on the depreciation and cost recovery implications of the Transaction, including the following:
(a) Depreciation Analysis. Analysis of the depreciation and cost recovery implications of the entity-purchase structure, including the available methods (straight-line, accelerated, bonus depreciation, if applicable) and recovery periods for the logistics properties and office properties acquired in the Transaction. This analysis will address the interaction of the entity-level acquisition structure with the depreciation rules applicable to the underlying real property and personal property assets.
(b) PCA-Related Repair Credits. Assessment of the impact of any capital expenditure items identified in the property condition assessments ("PCAs") prepared in connection with the Transaction on Fairwater's depreciable basis, including the treatment of repair and maintenance expenditures versus capital improvements under the tangible property regulations and the effect of any repair credits or reserves established at closing on the depreciable basis of the acquired properties.
3.8 Additional Tax Matters
In addition to the specific tax advisory services described in Sections 3.1 through 3.7 above, the Firm's Tax Practice Group will provide the following general tax advisory services as reasonably requested by the Client or the Transaction team in connection with the acquisition:
(a) PSA Tax Provisions. Review of tax-related representations and warranties in the PSA, including Seller's representations regarding the tax status of the Target Entities, the filing of tax returns, the payment of taxes, and the absence of pending or threatened tax audits or assessments. The Firm will also advise on the drafting and negotiation of tax indemnification provisions, tax representation survival periods, and related provisions of the PSA.
(b) Proration and Working-Capital True-Up. Advisory on the tax aspects of the proration and working-capital true-up mechanism contemplated by the PSA, including the treatment of real property tax prorations, income tax prorations, and the tax effect of any post-closing adjustments to the Purchase Price.
(c) Other Tax Matters. Advisory on any other tax matters arising in the course of the Transaction that fall within the Firm's tax advisory competence and are requested by the Client, including but not limited to tax issues arising in connection with title insurance, environmental matters, zoning and land use approvals, and any restructuring or reorganization of the Target Entities that may be contemplated in connection with the Transaction.
4. Exclusions from Scope
The Firm's tax advisory services under this Supplement do not include the following:
(a) Preparation of Fairwater's federal or state income tax returns, which will be handled by Ashford Prewitt LLP in accordance with Fairwater's existing engagement with that firm;
(b) Audit defense or controversy representation before the Internal Revenue Service or any state or local taxing authority, whether in connection with the Transaction or otherwise;
(c) Tax compliance services for the Target Entities or GMP Fund III, whether before or after closing;
(d) Tax advice to any party other than Fairwater, including without limitation any partner, member, or affiliate of GMP Fund III, any tenant of the properties, or any lender;
(e) Advice regarding Seller's tax consequences of the Transaction. The Firm understands that Seller is separately represented by Blackridge Hayes LLP (Nathaniel Pryce, Ingrid Solberg (tax partner), and Thomas Keating) as transaction counsel and by Caldwell Murray & Oakes LLP (William Oakes, CPA, engagement partner) as accounting and tax advisors; and
(f) Property tax assessment, valuation advisory, or property tax appeal services, which are being handled by Stonebridge Valuation Advisors, LLC.
In the event that any of the foregoing excluded services are requested by the Client, the Firm will discuss with the Client whether such services can be provided under a separate engagement arrangement and at what cost.
5. Deliverables
The following principal work products are anticipated under this engagement Supplement. The precise form, substance, and timing of each deliverable will be determined in consultation with the Client and the Transaction team as the Transaction progresses.
1.  Tax Structure Memorandum — A comprehensive memorandum analyzing the entity-purchase structure versus an asset-purchase structure, including the federal income tax implications of each approach, REIT qualification considerations, and prohibited transaction risk assessment.
2.  REIT Qualification Impact Memorandum — A detailed memorandum analyzing the impact of the portfolio acquisition on Fairwater's compliance with the REIT income tests and asset tests, including pro forma modeling of test compliance following the acquisition.
3.  Transfer Tax Analysis — Five States — A multi-part memorandum (or series of state-specific memoranda) analyzing the controlling-interest transfer tax exposure in Georgia, Texas, Florida, Tennessee, and North Carolina, including estimated transfer tax liability and available mitigation strategies.
4.  FIRPTA Analysis Memorandum — A memorandum analyzing the FIRPTA implications of the Transaction and the adequacy of the Seller's non-foreign status representations and certifications.
5.  Purchase Price Allocation Memorandum — A memorandum setting forth the Section 1060 allocation methodology and the agreed allocation of the Purchase Price among the fourteen properties and related assets, with supporting documentation.
6.  State Income / Franchise Tax Filing Memorandum — A memorandum identifying all state income tax and franchise tax filing obligations arising from the acquisition and Fairwater's resulting property ownership in the five portfolio states.
7.  Draft IRS Form 8594 — A draft Asset Acquisition Statement under Section 1060 of the Code reflecting the agreed purchase price allocation for Fairwater's federal income tax filings.
8.  Transfer Tax Returns and Declarations — All Jurisdictions — Preparation or review of transfer tax returns, declarations, and related filings for all applicable jurisdictions in connection with the closing of the Transaction.
9.  Tax Due Diligence Memorandum — A memorandum summarizing the Firm's review of Seller's tax representations, the tax attributes of the Target Entities, and any tax risks or exposures identified during the due diligence process.
Additional memoranda, analyses, and advisory communications may be prepared as the Transaction requires. All deliverables will be prepared in the course of the Firm's legal representation of Fairwater and are subject to the attorney-client privilege and work product protections discussed in Section 8 below.
6. Fee Arrangements
Fees for tax advisory services rendered under this Supplement shall be billed on an hourly basis at the Firm's standard billing rates for each timekeeper, as set forth in the rate schedule attached to the Primary Engagement Letter. The Firm's current standard hourly billing rates for the principal members of the tax advisory team are set forth in the Firm's rate card provided to the Client in connection with the Primary Engagement Letter, and Sylvia Hartwell's current standard hourly billing rate is as specified therein.
Tax advisory fees incurred under this Supplement are included within the overall fee cap of Two Million Eight Hundred Thousand Dollars ($2,800,000) (plus disbursements) established by the Primary Engagement Letter for all legal services rendered by the Firm in connection with the Transaction. The tax advisory fees are not subject to a separate sub-cap unless otherwise agreed in writing by the parties, but the Firm will endeavor to manage the tax advisory budget efficiently and will provide the Client with periodic updates on the allocation of fees between the real estate and tax advisory workstreams.
Billing and invoicing for tax advisory services shall follow the procedures set forth in the Primary Engagement Letter. All tax advisory time entries will be identified by timekeeper and task code for tracking within the overall Transaction budget. The Firm's invoices will provide sufficient detail to enable the Client to distinguish between time charges attributable to tax advisory services under this Supplement and time charges attributable to other legal services under the Primary Engagement Letter.
Angela Fontaine remains the billing partner for the overall engagement. All invoices, including those reflecting tax advisory services, will be issued under her supervision and in accordance with the billing procedures and payment terms established by the Primary Engagement Letter.
The Client will not be separately billed for tax advisory services in excess of the overall fee cap established by the Primary Engagement Letter without the prior written approval of the Client. In the event that the Firm anticipates that the overall fee cap may be exceeded as a result of the tax advisory scope described herein or otherwise, the Firm will promptly notify the Client and will seek written authorization before incurring any fees in excess of the cap.
7. Coordination with Other Advisors
Sylvia Hartwell and her tax advisory team are authorized to communicate directly with the following advisors and consultants engaged by or on behalf of Fairwater in connection with the Transaction, to the extent reasonably necessary to perform the tax advisory services described herein:
(a) Ashford Prewitt LLP (Martin Ashford, CPA, engagement partner; Naomi Ikeda, CPA, tax partner) — Fairwater's outside accounting and tax advisors, for purposes of coordinating on REIT compliance testing, purchase price allocation, transfer tax return preparation, state income and franchise tax filings, and other tax compliance matters;
(b) Stonebridge Valuation Advisors, LLC (Maureen Alcott, MAI) — the appraiser engaged in connection with the Transaction, for purposes of coordinating on property valuations and purchase price allocation support under Section 1060 of the Code;
(c) Local Counsel in each of the five jurisdictions identified in Section 3.3(g) above — Breckenridge Osgood LLP (James Breckenridge, Texas), Talmadge Beaumont LLP (Catherine Beaumont, Georgia), Haversham Cole PLLC (Marshall Haversham, North Carolina), Ellsworth Ridley LLP (Diane Ellsworth, Tennessee), and Palmetto Strauss PA (Roberto Strauss, Florida) — regarding state and local tax matters, including transfer taxes, state income and franchise taxes, and any other state-specific tax issues arising in connection with the Transaction; and
(d) Hartwick Gunderson & Associates, Inc. (Peter Langford) — the insurance broker engaged in connection with the Transaction, to the extent that tax considerations arise in connection with the structuring, pricing, or terms of the representations and warranties insurance policy being procured in connection with the Transaction.
All communications with Seller's counsel, Blackridge Hayes LLP (Nathaniel Pryce, Ingrid Solberg, and Thomas Keating), or Seller's accountants, Caldwell Murray & Oakes LLP (William Oakes, CPA), regarding tax matters shall be coordinated through Douglas Fairchild or Grace Nakamura, unless the Client otherwise directs in writing. This coordination protocol is intended to ensure that all communications with the Seller's advisors are consistent with the Transaction team's overall negotiation strategy and are conducted in a manner that protects the Client's interests.
8. Conflicts and Ethical Obligations
Conflicts of Interest. The Firm has confirmed, as set forth in the Conflict Check Memorandum dated October 3, 2023, prepared by the Firm's General Counsel's Office, that no conflicts of interest exist with respect to the provision of tax advisory services in this matter. The conflict check encompassed Sylvia Hartwell, all other attorneys and professional staff anticipated to be assigned to the tax advisory workstream, and all parties and entities identified in connection with the Transaction. In the event that a conflict or potential conflict is identified after the date of this Supplement, the Firm will promptly notify the Client and will take appropriate steps to address the matter in accordance with the applicable rules of professional conduct.
Privilege. The Firm's tax advisory work product prepared under this Supplement is prepared in the course of the Firm's legal representation of Fairwater and is subject to the attorney-client privilege and the work product doctrine. The Client is the holder of the attorney-client privilege and may waive or assert the privilege at its discretion. The Firm will take reasonable steps to protect the confidentiality of all tax advisory work product and will label such work product as privileged and confidential where appropriate.
Treasury Circular 230 Disclosure. The tax advisory services provided under this Supplement are not intended to constitute a "covered opinion" or a formal tax opinion for purposes of Treasury Department Circular 230 (31 C.F.R. Part 10). The Firm's tax advisory memoranda and analyses are provided as part of the Firm's legal representation of Fairwater in connection with the Transaction and are intended for the Client's use in evaluating the tax aspects of the Transaction. Any formal tax opinion, if required or requested by the Client (for example, in connection with any tax indemnification obligation, opinion delivery requirement in the PSA, or REIT qualification opinion), will be the subject of a separate engagement letter and fee arrangement between the Firm and the Client.
9. Term and Termination
This Supplement shall be effective as of October 12, 2023 and shall continue in effect through the completion of all tax advisory services described herein in connection with the Transaction, including any post-closing tax matters. Post-closing tax matters are anticipated to include, without limitation, the finalization of the proration and working-capital true-up (with a deadline of ninety (90) days following the closing date) and advisory services during the tax representation survival period (thirty-six (36) months from the closing date).
Either party may terminate this Supplement upon written notice in accordance with the termination provisions set forth in the Primary Engagement Letter. Upon termination of this Supplement, the Firm will take reasonable steps to transition any pending tax advisory work to the Client or to such other counsel as the Client may designate, subject to the Firm's ethical obligations and the Client's payment of all fees and expenses incurred through the date of termination.
Fees for tax advisory services rendered through the date of any termination of this Supplement shall remain due and payable in accordance with the billing and payment terms set forth in the Primary Engagement Letter. Termination of this Supplement shall not affect the Firm's obligations under the Primary Engagement Letter with respect to non-tax legal services, unless the Primary Engagement Letter is also terminated in accordance with its terms.
10. Acceptance
We would appreciate your confirming Fairwater's agreement to the terms and conditions set forth in this Supplement by countersigning this letter in the space indicated below and returning a signed copy to Sylvia Hartwell at the address set forth above or by email at shartwell@calderwoodharkness.com. We are, of course, available to discuss any questions or comments you may have regarding this Supplement.
We look forward to working with you and the Fairwater team on this Transaction.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Sylvia Hartwell
Title: Partner, Tax Practice Group
Date: ________
ACKNOWLEDGED AND AGREED:
FAIRWATER REAL ESTATE INVESTMENT TRUST
By: ________
Name: David Elgin Park
Title: General Counsel
Date: ________
cc: (by email)
Douglas Fairchild, Partner, Real Estate Practice Group, Calderwood & Harkness LLP (New York)
Angela Fontaine, Partner, Real Estate Practice Group, Calderwood & Harkness LLP (New York)
Grace Nakamura, Counsel, Real Estate Practice Group, Calderwood & Harkness LLP (New York)
Marcus Devereaux, Executive Vice President, Acquisitions, Fairwater Real Estate Investment Trust
Patricia Sung-Calloway, Chief Financial Officer, Fairwater Real Estate Investment Trust
Enclosures: None (this Supplement references and incorporates by reference the Primary Engagement Letter dated October 5, 2023)

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CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND AGREED:

FAIRWATER REAL ESTATE INVESTMENT TRUST

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