EXHIBIT NUMBER (A)(1)(B)(II)
Published on January 8, 2003
FORM OF LETTER OF ELECTION AND TRANSMITTAL
Exhibit (a)(1)(B)(ii)
LETTER OF ELECTION AND TRANSMITTAL
TO TENDER SHARES OF SERIES B PREFERRED STOCK,
Par Value $0.01 Per Share
DYNEX CAPITAL, INC.
PURSUANT TO THE OFFERING CIRCULAR DATED JANUARY 8, 2003
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 11, 2003,
UNLESS THE OFFER IS EXTENDED.
Deliver to:
Wachovia Bank, the Exchange Agent for the Offer
By Mail: By Overnight Delivery or Express Mail:
Wachovia Bank Wachovia Bank
c/o Alpine Fiduciary Services, Inc. c/o Alpine Fiduciary Services, Inc.
Corporate Actions Department Corporate Actions Department
P.O. Box 2065 P.O. Box 2065
South Hackensack, NJ 07606-9974 South Hackensack, NJ 07606-9974
Delivery of this Letter of Election and Transmittal ("Letter of
Transmittal") to an address other than one of those shown above does not
constitute a valid delivery. The instructions accompanying this Letter of
Transmittal should be read carefully before this Letter of Transmittal is
completed.
This Letter of Transmittal is to be used only (a) if you desire to effect
the tender transaction yourself, (b) if you intend to request your broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for you and the shares of Series B Preferred Stock of Dynex Capital,
Inc., par value $0.01 per share (the "shares"), are not registered in the name
of such broker, dealer, commercial bank, trust company or other nominee, or (c)
by a broker, dealer, commercial bank, trust company or other nominee effecting
the transaction as a registered owner or on behalf of a registered owner. A
properly completed and duly executed Letter of Transmittal (or photocopy thereof
bearing original signature(s) and any required signature guarantees), any
certificates representing shares tendered and any other documents required by
this Letter of Transmittal should be mailed or delivered to the Exchange Agent
at the appropriate address set forth herein and must be received by the Exchange
Agent prior to 5:00 P.M., New York City time, on February 11, 2003, or such
later time and date to which the Offer is extended. Shareholders whose stock
certificates are not immediately available (or who cannot follow the procedure
for book-entry transfer on a timely basis) or who cannot transmit this Letter of
Transmittal and all other required documents to the Exchange Agent before the
Expiration Time (as defined in "The Offer - Expiration Time, Extensions,
Termination and Amendments" section of the Offering Circular) may nevertheless
tender their shares according to the guaranteed delivery procedure set forth in
"The Offer - How to Tender" section of the Offering Circular. See Instruction 2.
The Senior Notes offered pursuant to this tender transaction will be issued
in book-entry form only (See the "Description of Senior Notes - Global Note;
Book Entry Form" section of the Offering Circular for a description of the
book-entry nature of the Senior Notes). No physical certificates for Senior
Notes will be issued to shareholders of record. Consequently, shareholders who
wish to tender any shares for Senior Notes, or who elect to receive Senior Notes
in the instance of an oversubscription for cash consideration, must tender those
shares through an institution that either clears through or maintains a
custodial relationship with a direct or indirect participant in the book entry
and transfer system of The Depository Trust Corporation ("DTC"), such as a bank,
broker-dealer or trust company. Such tendering shareholders should not submit
this Letter of Transmittal directly to the Exchange Agent. Instead, such
tendering shareholders should contact a DTC participant with whom they have an
account. The DTC participant will then tender the shares on behalf of the
shareholder using the procedures set forth in the "The Offer - How to Tender -
Tender Procedures for Nominees" section of the Offering Circular. If a
shareholder of record holds Preferred Stock in certificate form and does not
maintain an account with a DTC participant, he, she, or it, must establish an
account with such an institution prior to tendering their shares in the Offer in
order to receive Senior Notes pursuant to the Offer.
DELIVERY OF THE LETTER OF TRANSMITTAL AND THE OTHER REQUIRED DOCUMENTS TO
DYNEX CAPITAL, INC., MACKENZIE PARTNERS, INC., THE INFORMATION AGENT FOR THE
OFFER, OR THE BOOK-ENTRY TRANSFER FACILITY WILL NOT BE FORWARDED TO THE EXCHANGE
AGENT AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT.
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DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
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(1) Need not be completed if shares are delivered by book-entry transfer.
(2) If you desire to tender fewer than all shares evidenced by any
certificates listed above, please indicate in this column the number of
shares you wish to tender. Otherwise, all shares evidenced by such
certificates will be deemed to have been tendered. See Instruction 4.
ELECTION (See instructions 2, 14 and 15)
As set forth in "The Offer" section of the Offering Circular, you may
tender your shares of Series B Preferred Stock for cash, Dynex's 9.50% senior
notes, due February 28, 2005 (the "Senior Notes") or a combination of those two
forms of payment. You MUST make an election as to the form of payment you wish
to receive for all shares you tender. If you fail to make properly such an
election with respect to any shares of Preferred Stock you tender, you will be
deemed to have tendered such shares for cash. In addition, if the consideration
you select is oversubscribed, whether that is the cash consideration or the
Senior Notes consideration, you may elect to allocate any shares not exchanged
for that particular consideration to the other consideration, instead of having
your shares of Series B Preferred Stock that are not exchanged for the
oversubscribed consideration returned to you.
IMPORTANT: If you elect to tender your shares in exchange for either Senior
Notes or for a combination of cash and Senior Notes, or if you elect to receive
Senior Notes in the event of an oversubscription of the cash consideration, do
not return your certificates or this letter of transmittal to the Exchange
Agent. Instead, you must tender your shares through a broker, dealer, bank or
other financial institution that either clears through or maintains a custodial
relationship with a direct or indirect participant in the book entry and
transfer system of DTC because the Senior Notes will be issued only in
book-entry form.
I wish to allocate the shares of Series B Preferred Stock that I have
tendered in the following manner:
[____] CASH OPTION: I hereby tender the number of shares of Series B Preferred
Stock set forth above for cash in the amount of $24.50 per tendered
share, net, without interest, subject to proration and upon the terms
and subject to the conditions set forth in Dynex's Offering Circular,
dated January 8, 2003;
or
[____] NOTE OPTION: I hereby tender the number of shares of Series B Preferred
Stock set forth above for $25.725 in principal amount per tendered
share of the Senior Notes, subject to proration and upon the terms and
subject to the conditions set forth in Dynex's Offering Circular, dated
January 8, 2003. The Senior Notes will be issued in $25.00
denominations and any integral multiple thereof. In cases where the
consideration for shares tendered is not divisible, in the aggregate,
by the $25 denomination, you will receive cash consideration for the
amount in excess of the nearest $25 denomination not to exceed $24.99;
or
[____] COMBINATION OF CASH AND SENIOR NOTE CONSIDERATION: I hereby tender the
number of shares set forth above in the following manner:
OVERSUBSCRIPTION ALLOCATION:
After Dynex has determined which shares to accept pursuant to the terms of
the Offering Circular, if the particular consideration which you select is
oversubscribed, whether the cash consideration or the Senior Notes
consideration, you may elect to allocate any shares not exchanged for that
particular consideration to the other consideration, instead of having your
shares of Series B Preferred Stock that are not exchanged for the oversubscribed
consideration returned to you. Please place an "X" in the box provided below if
you wish any shares which were not exchanged due to an oversubscription, to be
allocated to the undersubscribed option, if available.
[____] Oversubscription Allocation: Please allocate any shares that I tendered
and which were not exchanged because the consideration I chose has been
oversubscribed, to the undersubscibed consideration, if available, regardless of
whether that is the cash consideration or the Senior Notes consideration.
PRORATION/ALLOCATION ELECTION:
Proration Election: Indicate in this box the order (by certificate number) in
which shares are to be purchased in event of proration as a result of more
shares of Series B Preferred Stock being tendered than we are offering to
purchase and/or in the event of allocation as a result of an oversubscription of
either the cash or the Senior Notes consideration. (Attach additional signed
list if necessary)(1). See Instruction 7.
1st: 2nd: 3rd: 4th: 5th: 6th:
(1) If you do not designate an order, in the event fewer than all shares
tendered are purchased due to proration, shares will be selected for
purchase by the Exchange Agent. See Instruction 7.
[ ] Check here if any certificates representing shares tendered hereby have
been lost, stolen, destroyed or mutilated. You must complete an affidavit of
loss and return it with your Letter of Transmittal. A bond may be required to be
posted by the shareholder to secure against the risk that the certificates may
be subsequently recirculated. Please call (888) 422-8979 to obtain an affidavit
of loss and for further instructions and as to the determination of the
requirement for posting of a bond. See Instruction 13.
This Letter of Transmittal is to be used only if (1) certificates for
shares are to be forwarded with it, or such certificates will be delivered under
a notice of guaranteed delivery previously sent to the Exchange Agent, or (2) a
tender of shares is to be made by book-entry transfer to the account maintained
by the Exchange Agent at The Depository Trust Company, referred to as the
"Book-Entry Transfer Facility," under "The Offer - How to Tender" section of the
Offering Circular.
Shareholders who desire to tender shares under the Offer and who cannot
deliver the certificates for their shares, or who are unable to comply with the
procedures for book-entry transfer before the "Expiration Time" (as defined in
the "Expiration Time, Extensions, Termination and Amendments" section of the
Offering Circular), and who cannot deliver all other documents required by this
Letter of Transmittal to the Exchange Agent before the Expiration Time may
tender their shares according to the guaranteed delivery procedures set forth in
"The Offer - How to Tender" section of the Offering Circular. See Instruction 2.
Delivery of documents to the Book-Entry Transfer Facility does not constitute
delivery to the Exchange Agent.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of tendering institution:
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Account number:
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Transaction code number:
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[ ] CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED
UNDER A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of registered holder(s):
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Date of execution of Notice of Guaranteed Delivery:
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Name of institution which guaranteed delivery:
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Account number:
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NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
To Dynex Capital, Inc.:
The undersigned hereby tenders to Dynex Capital, Inc., a Virginia
corporation ("Dynex"), the above-described shares of Dynex's Series B Preferred
Stock, par value $0.01 per share, at the price per share of (a) $24.50, net to
the seller in cash, without interest, (b) $25.725 in principal amount of Dynex's
9.50% Senior Notes, due February 28, 2005, or (c) a combination of cash and
Senior Notes, upon the terms and subject to the conditions set forth in Dynex's
Offering Circular, dated January 8, 2003, receipt of which is hereby
acknowledged, and in this Letter of Transmittal which, as amended and
supplemented from time to time, together constitute the "Offer."
The undersigned elects to have his, her or its shares of Series B Preferred
Stock exchanged pursuant to one of the following options:
CASH OPTION: For cash in the amount of $24.50 per tendered share, net,
without interest, subject to proration and upon the terms and subject to the
conditions set forth in Dynex's Offering Circular, dated January 8, 2003;
or
NOTE OPTION: For $25.725 in principal amount per tendered share of Dynex's
9.50% Senior Notes, due February 28, 2005, subject to proration and upon the
terms and subject to the conditions set forth in Dynex's Offering Circular,
dated January 8, 2003;
or
COMBINATION OF CASH OPTION AND SENIOR NOTE CONSIDERATION: For a combination
of Cash and Senior Notes as designated by the undersigned in this Letter to
Transmittal.
OVERSUBSCRIPTION ALLOCATION: Tendering shareholders may affirmatively elect
to have any shares that are tendered for an oversubscribed type of
consideration, whether that is the cash or Senior Notes consideration, applied
to the undersubscribed consideration by placing an "X" in the box provided in
the "OVERSUBSCRIPTION ALLOCATION" section of this Letter of Transmittal.
The undersigned acknowledges that Dynex is offering to purchase up to
662,944 shares of Series B Preferred Stock; consequently, the undersigned's
tender could be subject to proration in the event that more shares of Series B
Preferred Stock are tendered than we are offering to purchase. In that case,
proration for each shareholder tendering shares shall be based on the ratio of
(A) the number of shares of the series that we are offering to purchase to (B)
the total number of shares of the series properly tendered and not properly
withdrawn by all shareholders of Series B Preferred Stock.
In addition, after Dynex has made any necessary proration as a result of
more shares of Series B Preferred Stock being tendered than Dynex is offering to
purchase, the aggregate cash and/or Senior Notes consideration that the
undersigned may receive in the Offer is subject to possible additional pro rata
reduction because Dynex is offering only a limited amount of cash and a limited
principal amount of Senior Notes in the Offer with the result that not more than
272,977 shares of Series B Preferred Stock in the aggregate can be exchanged for
cash and not more than 389,967 shares in the aggregate can be exchanged for
Senior Notes. If either the cash consideration or the Senior Notes consideration
is oversubscribed with respect to the series, proration of the oversubscribed
consideration for each shareholder tendering shares for the oversubscribed
consideration shall be based on the ratio of (A) the number of shares of the
series that Dynex is offering to purchase for the oversubscribed consideration
to (B) the total number of shares of the series properly tendered and not
properly withdrawn by all shareholders of the series for the oversubscribed
consideration.
Dynex will return all other shares, including shares not purchased because
of proration, promptly following the Expiration Time.
The undersigned acknowledges that the Senior Notes offered in the Offer
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"). Dynex is relying on the exemption from the registration
requirements of the Securities Act contained in Section 3(a)(9) of that Act for
the Senior Notes. Under that exemption, if the shares of Preferred Stock the
undersigned tenders are freely tradable, the Senior Notes the undersigned will
receive in the Offer will be freely tradable. If the shares of Preferred Stock
tendered in the Offer are restricted, the Senior Notes the undersigned will
receive will be restricted to the same degree.
Subject to and effective upon acceptance for payment of the shares tendered
hereby in accordance with the terms and subject to the conditions of the Offer,
including, if the Offer is extended or amended, the terms or conditions of any
such extension or amendment, the undersigned hereby sells, assigns and transfers
to or upon the order of Dynex all right, title and interest in and to all shares
tendered hereby or orders the registration of such shares tendered by book-entry
transfer that are purchased under the Offer to or upon the order of Dynex and
hereby irrevocably constitutes and appoints the Exchange Agent as
attorney-in-fact of the undersigned with respect to such shares, with the full
knowledge that the Exchange Agent also acts as the agent of Dynex, with full
power of substitution, such power of attorney being an irrevocable power coupled
with an interest, to:
(a) deliver certificates for shares, or transfer ownership of such shares
on the account books maintained by the Book-Entry Transfer Facility, together in
either such case with all accompanying evidences of transfer and authenticity,
to or upon the order of Dynex, upon receipt by the Exchange Agent, as the
undersigned's agent, of the purchase price with respect to such shares;
(b) present certificates for such shares for cancellation and transfer on
Dynex's books; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such shares, subject to the next paragraph, all in accordance with
the terms of the Offer.
The undersigned hereby covenants, represents and warrants to Dynex that:
(a) the undersigned understands that tendering of shares under any one of
the procedures described in the "How to Tender" section of the Offering Circular
and in the instructions hereto will constitute the undersigned's acceptance of
the terms and conditions of the Offer, including the undersigned's
representation and warranty that (i) the undersigned has a "net long position"
in shares or equivalent securities at least equal to the shares tendered within
the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended,
and (ii) such tender of shares complies with Rule 14e-4 under the Exchange Act;
(b) the undersigned "owns" the shares tendered hereby within the meaning of
Rule 14e-4 under the Exchange Act and has full power and authority to tender,
sell, assign and transfer the shares tendered hereby and when and to the extent
Dynex accepts the shares for purchase, Dynex will acquire good, marketable and
unencumbered title to them, free and clear of all security interests, liens,
charges, encumbrances, conditional sales agreements or other obligations
relating to their sale or transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any additional
documents the Exchange Agent or Dynex deems necessary or desirable to complete
the assignment, transfer and purchase of the shares tendered hereby; and
(d) the undersigned has read and agrees to all of the
terms of the Offer.
The names and addresses of the registered holders should be printed, if
they are not already printed above, exactly as they appear on the certificates
representing shares tendered hereby. The certificate numbers, the number of
shares represented by such certificates, and the number of shares that the
undersigned wishes to tender, should be set forth in the appropriate boxes
above.
The undersigned recognizes that under certain circumstances set forth in
the Offering Circular, Dynex may terminate or amend the Offer or may postpone
the acceptance for payment of, or the payment for, shares tendered or may accept
for payment fewer than all of the shares tendered hereby. In either event, the
undersigned understands that certificate(s) for any shares not tendered or not
purchased will be promptly returned to the undersigned at the address indicated
above, unless otherwise indicated under the "Special Payment Instructions" or
"Special Delivery Instructions" below. The undersigned recognizes that Dynex has
no obligation, under the Special Payment Instructions, to transfer any
certificate for shares from the name of its registered holder, or to order the
registration or transfer of shares tendered by book-entry transfer, if Dynex
purchases none of the shares represented by such certificate or tendered by such
book-entry transfer.
The undersigned understands that acceptance of shares by Dynex for payment
will constitute a binding agreement between the undersigned and Dynex upon the
terms and subject to the conditions of the Offer.
The check and/or Senior Notes for the aggregate net purchase price for such
of the tendered shares as are purchased by Dynex will be issued to the order of
the undersigned and mailed to the address indicated above unless otherwise
indicated under either of the "Special Payment Instructions" or the "Special
Delivery Instructions" boxes below. The undersigned acknowledges that Dynex has
no obligation, under the "Special Payment Instructions," to transfer any shares
tendered by book-entry transfer if Dynex does not purchase any of such shares.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligations or duties of the undersigned under this Letter of Transmittal shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned. Except as stated in the Offering Circular, this tender is
irrevocable.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 4, 5, 6 and 8)
To be completed ONLY if certificates for shares of Preferred Stock not
tendered or not purchased and/or any check or Senior Notes are to be issued in
the name of someone other than the undersigned or if shares tendered hereby and
delivered by book-entry transfer which are not purchased are to be returned by
credit to an account at the Book-Entry Transfer Facility other than that
designated above.
Issue: [ ] Check [ ] Certificate(s) [ ] Senior Notes to:
Name:
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(Please Print or Type)
Address:
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(Including Zip Code)
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(Tax Identification or Social Security Number)
(See Substitute Form W-9 Included Herewith)
[ ] Credit shares delivered by book-entry transfer and not purchased to the
account set forth below:
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(Account No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4, 5 and 8)
To be completed ONLY if certificates for shares not tendered or not
purchased and/or any check or Senior Notes exchanged for shares should be
registered in the name of someone other than the undersigned or to the
undersigned at an address other than that shown above.
[ ] Preferred Stock Certificates [ ] Senior Notes:
Name:
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(Please Print or Type)
Address:
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(Including Zip Code)
SHAREHOLDER(S) SIGN HERE
(See Instructions 1 and 5)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Must be signed by the registered holder(s) exactly as name(s) appear(s)
on certificate(s) or on a security position listing or by person(s) authorized
to become registered holder(s) by certificate(s) and documents transmitted with
the Letter of Transmittal. If signature is by attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary or representative capacity, please set forth the full title. See
Instruction 5.
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(SIGNATURE(S))
Name(s):
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(PLEASE PRINT)
Capacity (full title):
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Address:
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(INCLUDING ZIP CODE)
Area code and telephone number:
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Dated: _________________, 2003
Tax Identification or Social Security Number:
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GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized signature:
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Name(s):
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(PLEASE PRINT)
Title:
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Name of Eligible Institution Guaranteeing Signature:
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Address:
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(INCLUDING ZIP CODE)
Area code and telephone number:
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Dated: _________________, 2003
Tax Identification or Social Security Number:
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INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of
the shares exactly as the name of the registered holder appears on the
certificate, which term, for purposes of this document, shall include any
participant in a book-entry transfer facility whose name appears on a security
position listing as the owner of shares, tendered with this Letter of
Transmittal, and payment and delivery are to be made directly to such registered
holder unless such registered holder has completed either the box entitled
"Special Payment Instructions" or "Special Delivery Instructions" above; or
(b) such shares are tendered for the account of a bank, broker, dealer,
credit union, savings association or other entity which is a member in good
standing of the Securities Transfer Agents Medallion Program or a bank, broker,
dealer, credit union, savings association or other entity which is an "Eligible
Guarantor Institution," as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, each such entity, referred to as an
"eligible guarantor institution."
In all other cases, signatures must be guaranteed by an eligible guarantor
institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be used only if certificates are
delivered with it to the Exchange Agent, or such certificates will be delivered
under a Notice of Guaranteed Delivery previously sent to the Exchange Agent, or
if tenders are to be made under the procedure for tender by book-entry transfer
set forth in the "How to Tender" section of the Offering Circular. Certificates
for all physically tendered shares, or confirmation of a book-entry transfer
into the Exchange Agent's account at the Book-Entry Transfer Facility of shares
tendered electronically, together in each case with a properly completed and
duly executed Letter of Transmittal or manually signed facsimile of it, or an
agent's message, and any other documents required by this Letter of Transmittal,
should be mailed or delivered to the Exchange Agent at the appropriate address
set forth herein and must be delivered to the Exchange Agent before the
Expiration Time.
The term "agent's message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Exchange Agent, which states that the
Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the Book-Entry Transfer Facility tendering the shares that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal, and that Dynex may enforce such agreement against such participant.
Shareholders whose certificates are not immediately available or who cannot
deliver certificates for their shares and all other required documents to the
Exchange Agent before the Expiration Time, or whose shares cannot be delivered
before the Expiration Time under the procedures for book-entry transfer, may
tender their shares by or through any eligible guarantor institution by properly
completing and duly executing and delivering a Notice of Guaranteed Delivery, or
facsimile of it, and by otherwise complying with the guaranteed delivery
procedure set forth in the "How to Tender" section of the Offering Circular.
Under such procedure, the certificates for all physically tendered shares or
book-entry confirmation, as the case may be, as well as a properly completed and
duly executed Letter of Transmittal, or manually signed facsimile of it, or an
agent's message, and all other documents required by this Letter of Transmittal,
must be received by the Exchange Agent within three (3) NASDAQ trading days
after receipt by the Exchange Agent of such Notice of Guaranteed Delivery, all
as provided in the "How to Tender" section of the Offering Circular.
The Notice of Guaranteed Delivery may be delivered by hand or transmittal
by telegram, facsimile transmission or mail to the Exchange Agent and must
include, if necessary, a guarantee by an eligible guarantor institution in the
form set forth in such notice. For shares to be tendered validly under the
guaranteed delivery procedure, the Exchange Agent must receive the Notice of
Guaranteed Delivery before the Expiration Time.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
Dynex will not accept any alternative, conditional or contingent tenders,
nor will it purchase any fractional shares, except as expressly provided in the
Offering Circular. All tendering shareholders, by execution of this Letter of
Transmittal, or a facsimile of it, waive any right to receive any notice of the
acceptance of their tender.
3. Inadequate Space. If the space provided in the box captioned "Description of
Shares Tendered" is inadequate, the certificate numbers and/or the number of
shares should be listed on a separate signed schedule and attached to this
letter of transmittal.
4. Partial Tenders and Unpurchased Shares (not applicable to shareholders who
tender by book-entry transfer). If fewer than all of the shares evidenced by any
certificate are to be tendered, fill in the number of shares that are to be
tendered in the column entitled "Number of Shares Tendered" in the box captioned
"Description of Shares Tendered." In such case, if any tendered shares are
purchased, a new certificate for the remainder of the shares evidenced by the
old certificates will be issued and sent to the registered holder(s), unless
otherwise specified in either the "Special Payment Instructions" box or "Special
Delivery Instructions" box in this Letter of Transmittal, promptly after the
Expiration Time. Unless otherwise indicated, all shares represented by the
certificates listed and delivered to the Exchange Agent will be deemed to have
been tendered.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements.
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the shares tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificate(s) without any change
whatsoever.
(b) If the shares are registered in the names of two or more joint holders,
each such holder must sign this Letter of Transmittal.
(c) If any tendered shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal, or photocopies of it, as there are
different registrations of certificates.
(d) When this Letter of Transmittal is signed by the registered holder(s)
of the shares listed and transmitted hereby, no endorsements of certificate(s)
representing such shares or separate stock powers are required unless payment is
to be made, Senior Notes are to be delivered, or the certificates for shares not
tendered or not purchased are to be issued to a person other than the registered
holder(s). If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, or if payment is to be made,
Senior Notes are to be delivered, or certificate(s) for shares not tendered or
not purchased are to be issued to a person other than the registered holder(s),
the certificate(s) must be endorsed or accompanied by appropriate stock powers,
in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on the certificate(s). SIGNATURE(S) ON ANY SUCH CERTIFICATE(S) OR
STOCK POWERS MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION. See
Instruction 1.
(e) If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and must submit proper
evidence to the Exchange Agent that is satisfactory to Dynex of their authority
so to act.
6. Stock Transfer Taxes. Except as provided in this Instruction 6, no stock
transfer tax stamps or funds to cover such stamps need to accompany this Letter
of Transmittal. When payment is to be made to the registered holder(s), Dynex
will pay or cause to be paid any stock transfer taxes payable on the transfer to
it of shares purchased under the Offer. If, however:
(a) payment of the purchase price is to be made to any person other than
the registered holder(s);
(b) shares not tendered or not accepted for purchase are to be registered
in the name(s) of any person(s) other than the registered holder(s); or
(c) tendered certificates are registered in the name of any person(s) other
than the person(s) signing this Letter of Transmittal;
then the Exchange Agent will deduct from the purchase price the amount of any
stock transfer taxes, whether imposed on the registered holder(s), such other
person(s) or otherwise, payable on account thereof, unless satisfactory evidence
of the payment of such taxes or an exemption from them is submitted.
7. Order of Purchase in Event of Proration. As described in "Proration if Shares
of Series of Preferred Stock Tendered Exceed Maximum; Limitations on Cash
consideration and Senior Notes consideration" section of the Offering Circular,
shareholders may designate the order in which their shares are to be purchased
in the event of proration. The order of purchase may have an effect on the
Federal income tax classification of any gain or loss on the shares purchased.
See section "Certain United States Federal Income Tax Consequences" of the
Offering Circular.
8. Special Payment and Delivery Instructions. If certificate(s) for shares not
tendered or not purchased and/or check(s) are to be issued in the name of a
person other than the signer of the Letter of Transmittal or if Senior Notes are
to be delivered to someone other than the person signing the Letter of
Transmittal or to the signer at a different address, the boxes captioned
"Special Payment Instructions" and/or "Special Delivery Instructions" on this
Letter of Transmittal should be completed as applicable and signatures must be
guaranteed as described in Instructions 1 and 5.
9. Irregularities. All questions as to the number of shares to be accepted and
the validity, form, eligibility, including time of receipt, and acceptance for
payment of any tender of shares will be determined by Dynex in its sole
discretion, which determinations shall be final and binding on all parties.
Dynex reserves the absolute right to reject any or all tenders of shares it
determines not be in proper form or the acceptance of which or payment for which
may, in the opinion of Dynex's counsel, be unlawful. Dynex also reserves the
absolute right to waive any of the conditions of the Offer and any defect or
irregularity in the tender of any particular shares, and Dynex's interpretation
of the terms of the Offer, including these instructions, will be final and
binding on all parties. No tender of shares will be deemed to be properly made
until all defects and irregularities have been cured or waived. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Dynex shall determine. None of Dynex, the Exchange Agent, the
Information Agent (as defined in the Offering Circular) or any other person is
or will be obligated to give notice of any defects or irregularities in tenders
and none of them will incur any liability for failure to give any such notice.
10. Questions and Requests for Assistance and Additional Copies. Any questions
or requests for assistance or for additional copies of the Offering Circular,
the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed
to the Information Agent at the telephone number and address set forth on the
back cover of this Letter of Transmittal. You may also contact your broker,
dealer, commercial bank or trust company for assistance concerning the Offer. To
confirm delivery of your shares, you are directed to contact the Exchange Agent.
11. Tax Identification Number and Backup Withholding. Federal income tax law
generally requires that a shareholder whose tendered shares are accepted for
purchase, or such shareholder's assignee, in either case, referred to as the
"payee," provide the Exchange Agent with such payee's correct taxpayer
identification number, which, in the case of a payee who is an individual, is
such payee's social security number. If the Exchange Agent is not provided with
the correct taxpayer identification number or an adequate basis for an
exemption, such payee may be subject to penalties imposed by the Internal
Revenue Service and backup withholding in an amount equal to 31% of the gross
proceeds received under the Offer. If withholding results in an overpayment of
taxes, a refund may be obtained. To prevent backup withholding, each payee must
provide such payee's correct taxpayer identification number by completing the
Substitute Form W-9 included herewith, certifying that the taxpayer
identification number provided is correct, or that such payee is awaiting a
taxpayer identification number, and that (i) the payee is exempt from backup
withholding, (ii) the payee has not been notified by the IRS that such payee is
subject to backup withholding as a result of a failure to report all interest or
dividends, or (iii) the IRS has notified the payee that such payee is no longer
subject to backup withholding. If the payee does not have a taxpayer
identification number, such payee should (i) consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
instructions on applying for a taxpayer identification number, (ii) write
"Applied For" in the space provided in Part 1(A) of the Substitute Form W-9 and
check the appropriate box in Part 1(B), and (iii) sign and date the Substitute
Form W-9 and the Certificate of Awaiting Taxpayer Identification Number included
herewith. If the payee does not provide such payee's taxpayer identification
number to the Exchange Agent prior to the payment of the purchase for shares
pursuant to the Offer, backup withholding will apply and will reduce the net
amount paid to the selling shareholder. Note that writing "Applied For" on the
Substitute Form W-9 means that the payee has already applied for a taxpayer
identification number or that such payee intends to apply for one in the near
future. If shares are held in more than one name or are not in the name of the
actual owner, consult the W-9 Guidelines for information on which taxpayer
identification number to report. Exempt payees, including, among others, all
corporations and certain foreign individuals, are not subject to backup
withholding and reporting requirements. To prevent possible erroneous backup
withholding, an exempt payee should write "Exempt" in Part 2 of Substitute Form
W-9, and should sign and date the form. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions. In order for a nonresident alien or foreign entity to
qualify as an exempt payee, such person must submit a completed IRS Form W-8 BEN
or a Substitute Form W-8 (or similar form), signed under penalties of perjury
attesting to such exempt status. Such form may be obtained from the Exchange
Agent.
12. Withholding on Foreign Holder. The following discussion applies to any
"foreign shareholder," that is a shareholder that, for United States federal
income tax purposes, is a non-resident alien individual, a foreign corporation,
a foreign partnership, a foreign estate or a foreign trust. A foreign
shareholder who has provided the necessary certification to the Exchange Agent
as described in Instruction 12 above will not be subject to backup withholding.
However, foreign shareholders generally are subject to withholding under
Internal Revenue Code sections 1441 or 1442 at a rate of 30% of the gross
payments. The general 30% withholding rate may be reduced under a tax treaty, if
appropriate certification is furnished to the Exchange Agent. A foreign
shareholder may also obtain exemption from withholding by delivering to the
Exchange Agent appropriate certification that the gross proceeds are effectively
connected with the conduct of a trade or business within the United States, or
establishing to the satisfaction of the Exchange Agent that such shareholder
meets those tests described in the "Certain United States Federal Income Tax
Consequences" section of the Offering Circular that would characterize the
exchange as a sale (as opposed to a dividend). A foreign shareholder may be
eligible to obtain a refund of all or a portion of any tax withheld if such
holder is able to establish to the IRS that no tax, or a reduced amount of tax,
is due. FOREIGN SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING
THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING, INCLUDING
ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE REFUND
PROCEDURE.
13. Lost, Stolen, Destroyed or Mutilated Certificates. If any certificate
representing shares has been lost, stolen, destroyed or mutilated, the
shareholder should promptly notify the Exchange Agent by checking the box set
forth above in the box captioned "Description of Shares Tendered" and indicating
the number of shares so lost, stolen, destroyed or mutilated. Such shareholder
will then be instructed by the Exchange Agent as to the steps that must be taken
in order to replace the certificate. A bond may be required to be posted by the
shareholder to secure against the risk that the certificate may be subsequently
recirculated. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, stolen, destroyed or
mutilated certificates have been followed. Shareholders may contact the Exchange
Agent at (888) 422-8979 to expedite such process and to determine the
requirements for posting of a bond.
14. Election Procedure. To properly complete the "Election" section, you must
indicate the number of Series B Preferred Stock shares being tendered hereby and
whether, with respect to such shares, you are electing to receive cash or Senior
Notes. If you fail to properly make an election, you will be deemed to have
elected to receive cash in exchange for all properly tendered shares.
15. Revocation or Change of Election. An election is irrevocable, except that
shares tendered pursuant to the Offer, may be withdrawn at any time prior to the
Expiration Time. After an effective withdrawal, you may change your election by
submitting to the Exchange Agent a completed replacement of this document (an
any other documents required by the Offer for properly tendering such shares)
prior to the Expiration Time of the Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED PHOTOCOPY OF IT
(TOGETHER WITH CERTIFICATE(S) FOR SHARES OR CONFIRMATION OF BOOK- ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS) OR, IF APPLICABLE, THE NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT BEFORE THE EXPIRATION TIME.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.,
105 Madison Avenue
New York, New York 10016
Please call: (800) 322-2885 (toll free) or (212) 929-5500
Email: proxy@mackenziepartners.com
Any questions or requests for assistance may be directed to the
Information Agent at the address and telephone number set forth above. You may
also contact your broker, dealer, commercial bank or trust company or any other
nominee for assistance concerning this Offer.