Company: NXDT
Filing Date: 2025-06-12
Form Type: S-4
Source: 0001437749-25-020201
Chunk: 133

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-06-12
Form: S-4
Chunk 133
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| • | any person from beneficially owning shares of New NXDT’s stock to the extent such ownership would result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code. |

The New NXDT Charter provides that any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of New NXDT’s stock that will or may violate the ownership limits or any of the other restrictions on ownership and transfer of New NXDT’s stock described above, or who would have owned shares of New NXDT’s stock transferred to the trust as described below, must immediately give notice to New NXDT of such event or, in the case of an attempted or proposed transaction, give New NXDT at least 15 days’ prior written notice and provide us with such other information as we may request in order to determine the effect of such transfer on our status as a REIT. The foregoing restrictions on ownership and transfer of New NXDT’s stock will not apply if the board of directors determines that it is no longer in New NXDT’s best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance with the restrictions and limits on ownership and transfer of New NXDT’s stock described above is no longer required in order for New NXDT to qualify as a REIT.

The New NXDT Charter further provides that if any transfer of shares of New NXDT’s stock would result in shares of New NXDT’s stock being beneficially owned by fewer than 100 persons, the transfer will be null and void and the intended transferee will acquire no rights in the shares. In addition, the New NXDT Charter provides that if any purported transfer of shares of New NXDT’s stock or any other event would otherwise result in any person violating the ownership limits or an excepted holder limit established by New NXDT’s board of directors, or in New NXDT being “closely held” under Section 856(h)(4)(B) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify as a REIT or as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code, then that the number of shares (rounded up to the nearest whole share) that would cause the violation will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations