Company: NXDT
Filing Date: 2025-04-11
Form Type: S-4
Source: 0001437749-25-011826
Chunk: 63

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-11
Form: S-4
Chunk 63
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 consideration to be paid in the transaction or series of related transactions and the present or potential issuance of Old Common Shares or, if the Conversion is completed, New Common Stock, or securities convertible into Old Common Shares or, if the Conversion is completed, New Common Stock, could result in an issuance that exceeds either five percent of the number of shares of Old Common Shares or five percent of the voting power outstanding before the issuance.

On July 22, 2024, Old NXDT and the Adviser entered into an amendment to the Advisory Agreement (the “Advisory Agreement Amendment”). The Advisory Agreement Amendment changed the structure of the fees which Old NXDT pays the Adviser such that the monthly installment of the administrative fee shall be paid in cash and the monthly installment of the advisory fee shall be paid one-half in cash and one-half in Old Common Shares, subject to certain restrictions including that in no event shall the Old Common Shares issued to the Adviser under the Advisory Agreement exceed five percent of the number of Old Common Shares or five percent of the voting power of Old NXDT outstanding prior to the first issuance of Old Common Shares to the Adviser pursuant to the Advisory Agreement (the “Share Cap”) and that in no event shall the Old Common Shares issued to the Adviser under the Advisory Agreement exceed 6,000,000 Old Common Shares. Our Adviser is a Related Party under Rule 312 and as a result of his indirect beneficial ownership of our Adviser, our President and Chairman of the Board James Dondero, may be deemed to have a five percent or greater interest in the issuance of Old Common Shares to our Adviser under Rule 312.

We are requesting your approval to issue up to 6,000,000 Old Common Shares or, if the Conversion is completed, shares of New Common Stock, to our Adviser pursuant to the Advisory Agreement, which may exceed five percent of our Old Common Shares outstanding prior to the first such issuance. The issuance may or may not occur, and may occur in current and future periods.

If we receive shareholder approval, the restriction that no more than 6,000,000 Old Common Shares or, if the Conversion is completed, shares of New Common Stock, shall be issued to the Adviser under the Advisory Agreement will remain in place and the Share Cap will no longer be of any effect. If we do not receive shareholder approval, the Share Cap will remain in place. The Advisory Agreement Amendment became effective on July 22, 2024, and we are not seeking shareholder approval