Company: NXDT
Filing Date: 2025-04-11
Form Type: S-4
Source: 0001437749-25-011826
Chunk: 229

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-11
Form: S-4
Chunk 229
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 If the transfer to the trust as described above would not be automatically effective, for any reason, to prevent violation of the applicable ownership limits or New NXDT’s being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or New NXDT’s otherwise failing to qualify as a REIT or as a “domestically controlled qualified investment entity,” then the New NXDT Charter provides that the transfer of the shares will be null and void and the intended transferee will acquire no rights in such shares.

Shares of New NXDT’s stock held in the trust will be issued and outstanding stock. The New NXDT Charter provides that the prohibited owner will not benefit economically from ownership of any shares of New NXDT’s stock held in the trust and will have no rights to distributions and no rights to vote or other rights attributable to the shares of New NXDT’s stock held in the trust. The trustee of the trust will exercise all voting rights and receive all distributions with respect to shares held in the trust for the exclusive benefit of the charitable beneficiary of the trust. Any distribution made before New NXDT discovers that the shares have been transferred to a trust as described above must be repaid by the recipient to the trustee upon demand by New NXDT. Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the New NXDT Charter provides that the trustee will have the authority to rescind as void any vote cast by a prohibited owner before New NXDT’s discovery that the shares have been transferred to the trust and to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary of the trust. However, if New NXDT has already taken irreversible corporate action, then the trustee may not rescind and recast the vote.

Shares of New NXDT’s stock transferred to the trustee are deemed offered for sale to New NXDT, or New NXDT’s designee, at a price per share equal to the lesser of (a) the price paid by the prohibited owner for the stock (or, in the case of a devise or gift, the market price at the time of such devise or gift) and (b) the market price on the date New NXDT accepts, or New NXDT’s designee, accepts such offer. New NXDT may reduce the amount so payable to the trustee by the amount of any distribution that New NXDT made to the prohibited