Mayer Brown LLP
1221 Avenue of the Americas
New York, New York 10020-1001
Main Tel (212) 506-2500
Main Fax (212) 262-1910
www.mayerbrown.com
August 3, 2021
Dynex Capital, Inc.
4991 Lake Brook Drive, Suite 100
Glen Allen, Virginia 23060
Re: Dynex Capital, Inc. – Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Dynex Capital, Inc., a Virginia corporation (the “Company”), in connection with the issuance and sale by the Company from time to time of up to 8,333,333 shares of the Company’s common stock, par value $0.01 per share (the “Shares”), pursuant to a Registration Statement on Form S-3 (Registration Statement No. 333-257318) (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), the prospectus, dated August 3, 2021 (the "Base Prospectus") and the prospectus supplement, dated August 3. 2021 (the "Prospectus Supplement"), filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations of the Act. The Base Prospectus, and Prospectus Supplement are collectively referred to as the “Prospectus.” The Shares are to be sold by the Company in the manner described in the Registration Statement and the Prospectus.
In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Amended and Restated Articles of Incorporation of the Company, as amended through the date hereof; (ii) the Amended and Restated Bylaws of the Company, as amended through the date hereof; (iii) certain resolutions of the board of directors of the Company, relating to the issuance and sale of the Shares; (iv) the Registration Statement; (v) the Prospectus; and (vi) an executed copy of the Distribution Agreement, dated as of June 29, 2018, as amended as of May 31, 2019 and as further amended on August 3, 2021, by and among the Company and J.P. Morgan Securities LLC, JMP Securities LLC, JonesTrading Institutional Services LLC and BTIG, LLC. In addition, we have examined originals or copies, certified or otherwise identified to our satisfaction, of certain other corporate records, documents, instruments and certificates of public officials and of the Company, and we have made such inquiries of officers of the Company and public officials and considered such
questions of law as we have deemed necessary for purposes of rendering the opinions set forth herein.
In connection with this opinion, we have assumed the genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted to us as copies. In making our examination of documents executed by parties other than the Company, we have assumed that each other party has the power and authority to execute and deliver, and to perform and observe the provisions of, such documents and has duly authorized, executed and delivered such documents, and that such documents constitute the legal, valid and binding obligations of each such party. We also have assumed the integrity and completeness of the minute books of the Company presented to us for examination. With respect to certain factual matters, we have relied upon certificates of officers of the Company.
Based upon, subject to and limited by the foregoing, we are of the opinion that the Shares have been duly and validly authorized and, when and if issued and delivered against payment therefor in the manner contemplated by the Registration Statement and the Prospectus, will be validly issued, fully paid and nonassessable.
We do not express any opinion herein concerning any law other than the laws of the Commonwealth of Virginia and the federal laws of the United States of America, as in effect on the date hereof.
We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Company’s Current Report on Form 8-K to be filed with the Commission on or about August 3, 2021, which will be incorporated by reference in the Registration Statement, and to the reference to us in the Prospectus. In giving such consent, we do not hereby admit that we are acting within the category of persons whose consent is required under Section 7 of the Act or the rules or regulations of the Commission thereunder.
Very truly yours,
/s/ MAYER BROWN LLP
DYNEX CAPITAL, INC.
AMENDMENT NO. 2 TO
DISTRIBUTION AGREEMENT
August 3, 2021
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
JMP Securities LLC
600 Montgomery Street
Suite 1100
San Francisco, CA 94111
JonesTrading Institutional Services LLC
757 Third Avenue 23rd Floor
New York, NY 10017
BTIG, LLC
65 East 55th Street
New York, NY 10022
Ladies and Gentlemen:
Reference is made to the Distribution Agreement, dated June 29, 2018, as amended on May 31, 2019 (the “Distribution Agreement”), by and among Dynex Capital, Inc., a Virginia corporation (the “Company”), J.P. Morgan Securities LLC (“J.P. Morgan”) JMP Securities LLC (“JMP”) and JonesTrading Institutional Services LLC (“JT” and together with J.P. Morgan and JMP, the “Existing Agents”), pursuant to which the Company agreed, in its sole discretion, to issue and sell, from time to time, through the Existing Agents, as agent and/or principal, up to 8,117,622 shares of common stock, par value $0.01 per share, of the Company. All capitalized terms used in this Amendment No. 2 to Distribution Agreement (this “Amendment”) and not otherwise defined herein shall have the respective meanings assigned to such terms in the Distribution Agreement. The Company and the Existing Agents hereby agree as follows:
A. Amendments to Distribution Agreement. The Distribution Agreement is amended as follows:
1. The definitions of the terms “Agent” and “Agents” in the first sentence of the Distribution Agreement are hereby amended to read as follows: “J.P. Morgan Securities LLC, JMP Securities LLC, JonesTrading Institutional Services LLC and BTIG, LLC (each an “Agent” and collectively, the “Agents”)”.
2. The definition of “Maximum Number” in the first sentence of the Distribution Agreement is hereby amended to read as follows: “8,117,622 shares”.
3. The following subsection shall be added as subsection (ww) to Section 3 of the Distribution Agreement:
(ww) Cybersecurity; Data Protection. The Company and its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their businesses, and there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal review or investigations relating to the same. The Company and its subsidiaries are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.
4. Section 10 of the Distribution Agreement is hereby amended to include the following subsections following JT’s relevant information in each of the sentences in such section:
“and (iv) BTIG, LLC, 65 East 55th Street, New York, NY 10022, Email: dblood@btig.com, Attention: Dan Blood”
“and (iv) Dan Blood, Managing Director, dblook@btig.com”
5. Section 15 of the Distribution Agreement is hereby amended and restated as follows:
“Counterparts. This Agreement and any Terms Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart by one party to the other may be made by facsimile or by electronic delivery of a portable document format (PDF) file (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com).”
B. Obligations Binding upon BTIG, LLC. BTIG, LLC hereby agrees to be bound by the terms of the Distribution Agreement. BTIG, LLC shall be considered to be an Agent under the Distribution Agreement to the same extent as if it were a party to the Distribution Agreement on the date of the execution thereof.
C. Prospectus Supplement. The Company shall file a Prospectus Supplement pursuant to Rule 424(b) of the Act reflecting the terms of this Amendment within two business days of the date hereof.
D. No Other Amendments; References to Distribution Agreement. Except as set forth in Part A above, all the terms and provisions of the Distribution Agreement shall continue in full force and effect. All references to the Distribution Agreement in the Distribution Agreement or in any other document executed or delivered in connection therewith shall, from the date hereof, be deemed a reference to the Distribution Agreement as amended by this Amendment.
E. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart by one party to the other may be made by facsimile or by electronic delivery of a portable document format (PDF) file (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com).
F. Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the principles of conflicts of laws.
[Remainder of page intentionally left blank.]
If the foregoing correctly sets forth the understanding among the Company and each of the Agents, please so indicate in the space provided below for that purpose, whereupon this Amendment No. 2 to Distribution Agreement and your acceptance shall constitute a binding agreement among the Company and each of the Agents.
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Very truly yours,
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DYNEX CAPITAL, INC.
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By: /s/ Stephen J. Benedetti
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Name: Stephen J. Benedetti
Title: Executive Vice President, Chief Financial
Office and Chief Operating Officer
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Accepted and agreed to as of the date first above written:
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J.P. MORGAN SECURITIES LLC
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By: ______________________________
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Name:
Title:
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JMP SECURITIES LLC
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By: ______________________________
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Name:
Title:
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JONESTRADING INSTITUTIONAL SERVICES LLC
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By: ______________________________
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Name:
Title:
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BTIG, LLC
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By: ______________________________
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Name:
Title:
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