Item 1.01.
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Entry into a Material Definitive Agreement.
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On September 4, 2018, Dynex Capital, Inc., a Virginia corporation (the
Company
), entered into an amendment no. 1
(the
Amendment
) to the equity distribution agreement, dated November 21, 2016 (the
Original Agreement
and, as amended by the Amendment, the
Amended Agreement
),
by and among the Company, Ladenburg Thalmann & Co. Inc. (
Ladenburg
) and JonesTrading Institutional Services LLC (
Jones
, and with Ladenburg, each an
Agent
and
collectively, the
Agents
).
The Amendment amends the Original Agreement (i) to reflect the effectiveness of
a new registration statement on Form
S-3
(file no.
333-222354)
of the Company, (ii) to amend the term Maximum Amount to refer to $83,099,644, which
includes an aggregate of $33,099,644 of Preferred Stock (as defined below) that the Company has sold pursuant to the Original Agreement prior to entry into the Amendment under the Companys registration statement on Form
S-3
(file no.
333-200859);
and (iii) to provide that in no event will the Company sell pursuant to the Amended Agreement more than 5,700,000 shares of the Companys
8.50% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share, or more than 4,750,000 shares of the Companys 7.625% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share (the Series A and Series B
Preferred Stock together, the
Preferred Stock
), which 4,750,000 shares includes an aggregate of 1,358,999 Series B Shares sold prior to the date hereof under the Companys registration statement on Form
S-3
(333-200859).
Pursuant to the Amended Agreement, on or
after September 4, 2018, the Company may offer and sell up to $50,000,000 of aggregate value of shares of the Companys Preferred Stock from time to time through the Agents, each as the Companys sales agents under the Amended
Agreement. Sales of shares of the Preferred Stock, if any, under the Amended Agreement may be made in sales deemed to be at the market offerings as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, including sales
made directly on or through the New York Stock Exchange or on any other existing trading market for the Preferred Stock, or sales made to or through a market maker other than on an exchange, or, subject to a written notice from the Company, by any
other method permitted by law.
Under the terms of the Amended Agreement, the Company may also sell shares of the Preferred Stock to
either Agent as principal for such Agents own account at a price agreed upon at the time of sale. If the Company sells shares of the Preferred Stock to an Agent as principal, the Company and the applicable Agent will enter into a separate
terms agreement.
Each Agent is entitled to compensation of up to two percent (2.0%) of the gross sales price per share for any
shares of the Preferred Stock sold by such Agent under the Amended Agreement. The Amended Agreement contains various representations, warranties and agreements by the Company and the Agents, conditions to closing, indemnification rights and
obligations of the parties and termination provisions.
From time to time, in the ordinary course of business, Ladenburg and its
affiliates have provided, and in the future both Agents and their respective affiliates may provide, investment banking services to the Company and have received or may receive fees from the Company for the rendering of such services.