Company: NXDT
Filing Date: 2025-04-11
Form Type: S-4
Source: 0001437749-25-011826
Chunk: 227

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-11
Form: S-4
Chunk 227
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dero and his affiliates and others, and may grant additional waivers in the future. These waivers will be subject to certain initial and ongoing conditions designed to preserve New NXDT’s status as a REIT. Our Board previously granted James Dondero and certain of his affiliates such a wavier with respect to Old Common Shares of Old NXDT.

In connection with granting a waiver of the ownership limits or creating an excepted holder limit or at any other time, New NXDT’s board of directors may from time to time increase or decrease the common stock ownership limit, the aggregate stock ownership limit or both, for all other persons, unless, after giving effect to such increase, five or fewer individuals could beneficially own, in the aggregate, more than 49.8% in value of New NXDT’s outstanding stock or we would otherwise fail to qualify as a REIT. A reduced ownership limit will not apply to any person or entity whose percentage ownership of New Common Stock or New NXDT’s stock of all classes and series, as applicable, is, at the effective time of such reduction, in excess of such decreased ownership limit until such time as such person’s or entity’s percentage ownership of New Common Stock or New NXDT’s stock of all classes and series, as applicable, equals or falls below the decreased ownership limit, but any further acquisition of shares of New Common Stock or stock of all other classes or series, as applicable, will violate the decreased ownership limit.

The New NXDT Charter further prohibits:

| • | any person from beneficially or constructively owning, applying certain attribution rules of the Code, shares of New NXDT’s stock that would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause us to fail to qualify as a REIT; |

| • | any person from transferring shares of New NXDT’s stock if the transfer would result in shares of New NXDT’s stock being beneficially owned by fewer than 100 persons (determined under the principles of Section 856(a)(5) of the Code); and |

| • | any person from beneficially owning shares of New NXDT’s stock to the extent such ownership would result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code. |

The New NXDT Charter provides that any person who acquires or attempts or intends