Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 36

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 36
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 filed with the requisite securities regulatory authorities and on SEDAR+ on January 15, 2024. The reporting package consists of the notice of change of auditor, and a letter from each of Frazier & Deeter, LLC as former auditor and MNP LLP, as successor auditor confirming their agreement with the information contained in the notice of change of auditor.

Unless otherwise instructed, the persons named in the enclosed Form of Proxy intend to vote such Form of ProxyFORof the appointment of MNP LLP as auditor of NHT to hold office until the next annual general meeting of Unitholders and the authorization of the Board to fix its remuneration.

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| 4. | Approval of Amendments to COVID Loans |

The REIT received 12 loans from entities controlled or managed by Mr. Dondero between September 2019 and June 2021 in the aggregate amount of $15,624,417 (the “COVID Loans”). The proceeds from the COVID Loans were principally used to fund the REIT’s operating expenses, interest and principal payments on outstanding indebtedness during the COVID-19 pandemic to allow the REIT to continue as a going concern.

Each of the COVID Loans is unsecured, has a 20-year term and bears an interest rate of 2.25% per year (which were market interest rates at the time of their issuance). The principal and interest owing under the COVID Loans is convertible into Class B Units of NHT OP, at the option of the holder at any time, based on the value of a Class B Unit at the time of conversion.

The COVID Loans were provided by funds managed or controlled by Mr. Dondero, the REIT’s controlling Unitholder. Mr. Dondero, through the entities he manages or controls, holds an approximate 79.5% interest in the outstanding Units of the REIT. As a result, the REIT treated the COVID Loans as a “related party transaction” under MI 61-101, which subjects the COVID Loans to the formal valuation (the “Formal Valuation Requirement”) and minority approval requirements set forth in Part 5 of MI 61-101 (the “Minority Approval Requirement”), unless an exemption was available.

As a TSXV-listed issuer, the REIT relied upon the exemption from the Formal Valuation Requirement in Section 5.5(b) of MI 61-101 (the “Specified Markets Exemption”), which provides that an issuer is exempt