Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 44

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 44
---
 of MI 61-101 (the “Minority Approval Requirement”), unless an exemption was available.

<div align='center'>-29-</div>

As a TSXV-listed issuer, the REIT relied upon the Specified Markets Exemption, which provides that an issuer is exempt from the formal valuation requirements if its securities are not listed on the Toronto Stock Exchange, the Aequitas NEO Exchange Inc., the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market, or a stock exchange outside of Canada and the United States other than the Alternative Investment market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc.

At the time the CDOR Loans were issued, the REIT relied upon the exemption under Section 5.7(1)(a) of MI 61-101. In addition, the REIT had available, and relied upon, the exemption in Section 5.7(1)(e) of MI 61-101 (the “Financial Hardship Exemption”) to exempt the REIT from the Minority Approval Requirement. The Financial Hardship Exemption was available to the REIT based on the following criteria:

| (v) | The REIT was in serious financial difficulty. |

As a hospitality REIT that owned 11 hotel properties across the United States at the beginning of the COVID‑19 pandemic, the global response to the COVID-19 pandemic had a devastating impact on the REIT’s operations. The COVID-19 pandemic also negatively impacted the REIT’s ability to obtain new financing, which was particularly relevant in September 2020 when Condor delivered the Termination Notice.

| (vi) | The CDOR Loans were not subject to court approval under bankruptcy or insolvency law. |

At the time of the CDOR Loans, the REIT was not subject to court oversight or approval under any bankruptcy or insolvency laws.

| (vii) | The REIT had two independent trustees in respect of the CDOR Loans. |

During the time that the CDOR Loans were advanced to the REIT, the REIT had two independent trustees, namely Neil Labatte and Graham Senst. The independent trustees did not participate in the CDOR Loans, were free from any interest in the CDOR Loans, and were unrelated to the entities managed or controlled by Mr. Dondero that provided the CDOR Loans.

In December 2023, the TSXV advised the REIT that the CDOR Loans were required to be treated as “Convertible Securities