Material Agreement Form 8 K

On October 4, 2024, NexPoint Diversified Real Estate Trust (the "Company") entered into a guaranty of recourse obligations (the "Guaranty") for the benefit of Citi Real Estate Funding, Inc. ("Citi") and JPMorgan Chase Bank, National Association ("JPM" and together with Citi, collectively, "Lender") under the Loan Agreement (defined below), pursuant to which the Company guaranteed certain obligations of the borrowers ("Borrower") under the Loan Agreement, dated October 4, 2024 (together with one or more applicable promissory notes thereunder, the "Loan Agreement"), by and among Borrower and Lender. The Company is the owner of an indirect interest in Borrower and entered into the Guaranty as a condition of Lender lending to Borrower under the Loan Agreement.

Pursuant to the Guaranty, the Company guaranteed certain recourse obligations of Borrower pertaining to exculpation or indemnification of Lender, including but not limited to any fraud, misrepresentation, or certain other misconduct (including gross negligence, willful misconduct and certain waste), by Borrower or the Company, certain defaults with respect to legal requirements pertaining to the collateral and Borrower's business, management or ownership of Borrower under the Loan Agreement. The Guaranty also provides that the Company may be required to repay principal amounts upon the occurrence of certain events, including bankruptcy or certain other insolvency events with respect to or actions taken by Borrower, raising or assertion by Borrower of a defense or certain related rights or requests in connection with enforcement actions or assertions of rights or remedies by Lender or any right in connection with any security for the loan, or failure on the part of Borrower to maintain status of each borrower as a single purpose entity as described in the Loan Agreement, to obtain consent before incurring certain additional indebtedness or liens encumbering any real property that is collateral under the loan, or to obtain consent for a transfer of or certain related transactions with respect to any real property that is collateral under the loan other than certain permitted transfers.

The Loan Agreement provides for a single initial advance of the loan in the amount of $750 million to Borrower on the closing date. Amounts outstanding under the Loan Agreement are due and payable on November 1, 2029. The Loan Agreement generally provides that the loan proceeds will be used for acquisitions, to repay and discharge existing loans related to owned properties, for working capital requirements related to the real property that is collateral under the loan, and for payments and deposits required under or pursuant to the terms of the Loan Agreement. The terms of the Loan Agreement allow the Company to convert to a Maryland corporation that will continue as a real estate investment trust, which the Company expects to complete in 2025.

Borrowings outstanding under the Loan Agreement are secured by mortgages on real property owned by one or more of the borrowers comprising Borrower and bear interest at approximately 4.32% with respect to approximately $358.4 million of initial principal thereunder, 4.66% with respect to approximately $58.9 million of initial principal thereunder, 5.00% with respect to approximately $46.3 million of initial principal thereunder, 5.67% with respect to approximately $97.4 million of initial principal thereunder, 6.71% with respect to approximately $113.5 million of initial principal thereunder, 7.90% with respect to approximately $38 million of initial principal thereunder and 10.28% with respect to approximately $37.5 million of initial principal thereunder. Borrowings outstanding under the Loan Agreement may be repaid from time to time on certain terms and conditions, including payment of administrative costs, expenses, exit fees, and interest for the period, as well as a spread maintenance payment in some circumstances.

The guaranteed obligations by the Company under the Loan Agreement are recourse obligations to the Company and each agreement contains representations and warranties, affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants pertaining to the nature of the applicable borrower's business, management or ownership, acquisitions or dispositions of assets, mergers or dissolutions, the incurrence of additional liens on the assets of the applicable borrower, and the enforcement thereof. If an event of default occurs, the applicable lender may, among other things, require the applicable borrower to repay all amounts outstanding under the Loan Agreement or foreclose on the collateral thereunder. Upon the occurrence of certain events as described above, the Company may also be required to make such repayment. Investors are not third-party beneficiaries of, and should not rely upon, any such representations, warranties and covenants.

The description of the material terms of the Guaranty is qualified in its entirety by reference to the Guaranty, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 1.01.