Company: NXDT
Filing Date: 2025-04-11
Form Type: S-4
Source: 0001437749-25-011826
Chunk: 225

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-11
Form: S-4
Chunk 225
---
 shorter taxable year. Also, not more than 50% of the value of the outstanding shares of New NXDT’s stock may be owned, directly, indirectly, or constructively, by five or fewer individuals (as defined in the Code to include certain entities such as private foundations) at any time during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). Attribution rules in the Code determine if any individual or entity actually or constructively owns shares of New NXDT’s stock for purposes of this ownership limitation. To qualify as a REIT, New NXDT must satisfy certain other requirements as well.

The New NXDT Charter contains restrictions on the acquisition, ownership and transfer of New NXDT’s stock. The relevant sections of the New NXDT Charter provide that, subject to the exceptions described below, no person or entity may own, or be deemed to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, more than 9.8%, in value or in number of shares, whichever is more restrictive, of the outstanding shares of New Common Stock (the “common stock ownership limit”) or 9.8% in value of the outstanding shares of all classes or series of New NXDT’s stock (the “aggregate stock ownership limit”). We refer to the common stock ownership limit and the aggregate stock ownership limit collectively as the “ownership limits.” We refer to the person or entity that, but for operation of the ownership limits or another restriction on ownership and transfer of New NXDT’s stock as described below, would beneficially own or constructively own shares of New NXDT’s stock in violation of such limits or restrictions and, if appropriate in the context, a person or entity that would have been the record owner of such shares of New NXDT’s stock as a “prohibited owner.”

The constructive ownership rules under the Code are complex and may cause shares of stock owned beneficially or constructively by a group of related individuals and/or entities to be owned beneficially or constructively by one individual or entity. As a result, the acquisition of less than 9.8%, in value or in number of shares, whichever is more restrictive, of the outstanding shares of New NXDT’s common stock, or less than 9.8% in value of the outstanding shares of all classes and series of New NXDT’s stock (or the acquisition by an individual or entity of an interest in an entity that owns, beneficially or constructively