NexPoint Diversified Real Estate Trust

Headnote

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order that the Issuer is not a reporting issuer under applicable securities laws -- The issuer's securities are traded only on a market or exchange outside of Canada -- Canadian residents own less than 2% of the issuer's securities and represent less than 2% of the issuer's total number of security holders -- the issuer does not intend to do a public offering of its securities to Canadian residents -- the issuer is subject to the reporting requirements of U.S. securities laws.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.

August 1, 2025

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the "Jurisdiction") AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF NEXPOINT DIVERSIFIED REAL ESTATE TRUST (the "Filer")

ORDER

Background

The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the "Order Sought").

Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland & Labrador, Nova Scotia, Prince Edward Island and Saskatchewan (together with Ontario, the "Reporting Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this Order, unless otherwise defined.

Representations

This order is based on the following facts represented by the Filer:

1. The Filer is a Delaware statutory trust that has its head office located outside of Canada at 300 Crescent Court Suite 700, 75201, Dallas, Texas.

2. The Filer owns no assets in Canada and all of the Filer's officers and directors are residents of the United States.

3. The Filer is currently a reporting issuer in the Reporting Jurisdictions and an "SEC foreign issuer" pursuant to National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers.

4. As of April 17, 2025, the Filer became a reporting issuer in the Reporting Jurisdictions as a result of its merger transaction with NexPoint Hospitality Trust ("NHT") pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated November 22, 2024, by and among, inter alios, the Filer and NHT.

5. Prior to the completion of the Transaction (as defined herein), NHT (i) was an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario; (ii) had its registered head office located in Ontario; and (iii) was a reporting issuer in the Reporting Jurisdictions and its trust units were listed on the TSX Venture Exchange (the "TSXV") under the symbol "NHT.U". NHT ceased to be a reporting issuer and its trust units were delisted from the TSXV following closing of the Mergers (as defined below).

6. Under the terms of the Merger Agreement:

(a) NHT completed a reorganization transaction (the "Reorganization") pursuant to which (i) unitholders (the "NHT Unitholders") received, for each trust unit of NHT (a "Unit"), either US$0.36 cash or one common share of NHT Hospitality, Inc. ("New NHT"), which was subsequently converted into the right to receive a number of common shares of the Filer (the "NXDT Common Shares"), rounded to the nearest thousandth, equal to the quotient of US$0.36 divided by the volume weighted average price of the NXDT Common Shares quoted on the New York Stock Exchange (the "NYSE") for the ten (10) trading days prior to closing of the Transaction; and (ii) New NHT caused NHT to be wound up and liquidated, distributing all of its assets and liabilities to New NHT; and

(b) Immediately following the Reorganization, a series of merger transactions were completed (the "Mergers" and, together with the Reorganization, the "Transaction") pursuant to which New NHT was merged with an entity owned by the Filer.

7. In connection with closing of the Transaction, the Filer issued 1,295,194 NXDT Common Shares to former NHT Unitholders representing (i) 2.91% of the total number of NXDT Common Shares issued and outstanding as of April 17, 2025; and (ii) 2.81% of the total number of NXDT Common Shares issued and outstanding as of June 16, 2025.

8. The Filer became a "reporting issuer" in the Reporting Jurisdictions at the time of implementation of the Transaction by virtue of (i) the issuance of NXDT Common Shares to former NHT Unitholders; and (ii) the Filer meeting the definition set out in the securities legislation of the Reporting Jurisdictions based on NHT's status at that time as a "reporting issuer".

9. The Filer's outstanding securities consist of Common Shares, Series A Preferred Shares, Series B Preferred Shares and Restricted Shares Units. As of June 16, 2025, there were 46,010,015 NXDT Common Shares issued and outstanding, 3,359,593 Series A Preferred Shares issued and outstanding, 99,755 Series B Preferred Shares issued and outstanding, and 2,492,622 Restricted Share Units issued and outstanding (collectively, the "NXDT Shares").

10. The NXDT Common Shares are listed on the NYSE under the symbol "NXDT" and the Series A Preferred Shares are listed on the NYSE under the symbol "NXDT PA".

11. The Filer retained Broadridge Financial Solutions, Inc. ("Broadridge") to conduct a geographic search of the beneficial ownership of the NXDT Common Shares and the Series A Preferred Shares, and retained Equiniti Trust Company, LLC ("EQ") to provide a breakdown of the holders of NXDT's NXDT Common Shares, Class A Preferred Shares and Series B Preferred Shares. The Filer maintains the ownership information for the Restricted Share Units and has confirmed none of the Restricted Share Units are held by Canadians.

12. The Broadridge report and the EQ geographical analysis has a record date of April 25, 2025. As of April 25, 2025, the specific number of and percentage of each class, inclusive of both the Broadridge report and the EQ geographical analysis, were as follows: 220,142 Common Shares (0.48%) were owned by Canadian resident security holders; and 2,549 Series A Preferred Shares (0.08%) were owned by Canadian resident security holders. Pursuant to an additional EQ geographical analysis with a record date as of June 16, 2025, no Series B Preferred Shares were owned by Canadian resident security holders. Per the Broadridge report and the EQ geographical analysis, the Filer has a total of 237 securityholders that are residents of Canada, which represents approximately 1.23% of the total number of securityholders of the Filer worldwide.

13. Residents of Canada do not directly or indirectly:

(a) beneficially own more than 2% of each class or series of outstanding securities (including debt securities) of the Filer worldwide; or

(b) comprise more than 2% of the total number of securityholders of the Filer worldwide.

14. The Filer does not meet the criteria for the simplified procedure under Section 19 of the National Policy 11-206 Process for Cease to be a Reporting Issuer Applications ("NP 11-206") because (a) its outstanding securities, including debt securities, are beneficially owned, directly or indirectly, by more than 15 securityholders in each of the jurisdictions of Canada and more than 51 securityholders in total worldwide; and (b) the NXDT Common Shares and Series A Preferred Shares are traded on the NYSE.

15. Based on the foregoing, the Filer is eligible to use the modified procedure under Section 20 of NP 11-206 because residents of Canada do not directly or indirectly (i) beneficially own more than 2% of each class or series of outstanding securities (including debt securities) of the Filer worldwide; or (ii) comprise more than 2% of the total number of securityholders of the Filer worldwide.

16. None of the Filer's securities, including debt securities, have ever been traded on (and are not currently traded on) a market or quotation or a trade reporting system in Canada and there is no public market in Canada for the Filer's securities and no such public market is expected to develop.

17. In the twelve (12) months before the date hereof, the Filer has not taken any steps that indicate there is a market for its securities in Canada, including conducting a prospectus offering in Canada, establishing or maintaining a listing on an exchange in Canada or having its securities traded on a marketplace or any other facility in Canada for bringing together buyers and sellers where trading data is publicly reported.

18. The Filer is subject to reporting obligations (including the filing of annual and quarterly periodic reports) under U.S. securities laws. The NXDT Common Shares and Series A Preferred Shares are listed on the NYSE, a U.S. stock exchange. Prior to the Transaction, NXDT was not a "reporting issuer" in Canada and the NXDT Shares were never listed on and are currently not listed on a Canadian stock exchange.

19. The Filer undertakes to concurrently deliver to its Canadian securityholders, in the same manner and at the same time, all disclosure the Filer would be required to deliver to its United States resident securityholders under United States securities laws and stock exchange requirements.

20. The Filer issued a press release on July 2, 2025 (the "Press Release") providing advance notice to its Canadian resident securityholders that the Filer has made an application for the Order Sought, and has not received any communication in response to this news release. The Press Release states that if the Order Sought is made, the Filer will no longer be a reporting issuer in any of the Reporting Jurisdictions in Canada.

21. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.

22. The Filer is not in default of any of its obligations under the securities legislation of the Reporting Jurisdictions. The Filer is not in default under any of the requirements of the securities and corporate legislation in its governing jurisdiction, United States securities legislation or the rules and policies of the NYSE.

23. The Filer has no current intention to seek a public financing by way of an offering of its securities in Canada.

Order

The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.

The decision of the principal regulator under the Legislation is that the Order Sought is granted.

"Erin O'Donovan" 
Associate Vice President, Corporate Finance 
Ontario Securities Commission

OSC File #: 2025/0321