| Item 1.01. | Entry into a Material Definitive Agreement. |
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 FormS-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 Company’s registration statement on FormS-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 Company’s 8.50% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share, or more than 4,750,000 shares of the Company’s 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 Company’s registration statement on FormS-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 Company’s Preferred Stock from time to time through the Agents, each as the Company’s 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 Agent’s 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.
