Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 128

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 128
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 actually or constructively, an interest in a tenant of NXDT (or a tenant of any entity owned or controlled by NXDT, including a subsidiary real estate investment trust) that would cause NXDT (or such subsidiary real estate investment trust) to own, actually or constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant (for this purpose, a tenant shall not be treated as a tenant of NXDT if NXDT (or an entity owned or controlled by NXDT, including such subsidiary real estate investment trust) derives (and is expected to continue to derive) a sufficiently small amount of revenue from such tenant such that, in the judgment of the NXDT Board, rent from such tenant would not adversely affect NXDT’s (or such subsidiary real estate investment trust’s) ability to qualify as a real estate investment trust). |

Any violation or attempted violation of any such representations or undertakings (or other action which is contrary to the Restrictions) will result in such shares of beneficial interest being automatically subject to a Charitable Transfer.

Prior to granting any exception pursuant to the foregoing (a “Representation Exception”), the NXDT Board may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the NXDT Board as it may deem necessary or advisable in order to determine or ensure NXDT’s status as a real estate investment trust. Notwithstanding the receipt of any ruling or opinion, the NXDT Board may impose such conditions or restrictions as it deems appropriate in connection with granting such exception. The NXDT Board has granted Representation Exceptions to James Dondero and his affiliates and others and may grant additional Representation Exceptions in the future. These Representation Exceptions will be subject to certain initial and ongoing conditions designed to preserve NXDT’s status as a real estate investment trust.

Subject to (ii) of the Restrictions, an underwriter or placement agent that participates in a public offering or a private placement of the shares of beneficial interest (or securities convertible into or exchangeable for shares of beneficial interest) may beneficially own or constructively own shares of beneficial interest (or securities convertible into or exchangeable for shares of beneficial interest) in excess of the aggregate share ownership limit, the common share ownership limit, or both such limits, but only to the extent necessary to facilitate such public offering or private placement.

The NXDT Board may only reduce the Excepted Holder Limit for an Excepted Holder with