EXHIBIT B
DRAFT - NOT FOR RELEASE
Contacts:
Michael Kelly Judy Brennan/Jonathan Gasthalter
California Investment Fund Citigate Sard Verbinnen
(619) 687-5000 (212) 687-8080
CALIFORNIA INVESTMENT FUND AND DYNEX CAPITAL
SIGN LETTER OF INTENT REGARDING ACQUISITION OF DYNEX
SAN DIEGO, CALIFORNIA - October 3, 2000 - California Investment Fund, LLC
(CIF), a private real estate company headquartered in San Diego,
California, today announced that it has signed a letter of intent with
Dynex Capital, Inc. (NYSE: DX), a Virginia-based mortgage lending
institution, with respect to CIF's proposed acquisition of 100% of the
equity of Dynex for a purchase price of $90 million in cash. CIF currently
owns 572,178 shares of the common stock of Dynex, approximately 5% of the
outstanding shares.
The letter of intent provides for a three-week period of exclusivity during
which Dynex will not directly or indirectly engage in or facilitate
discussions or negotiations with any third party concerning an alternative
acquisition transaction. During this period, CIF will also use its best
efforts to obtain necessary financing commitments on terms reasonably
satisfactory to CIF to consummate the acquisition.
Consummation of the proposed transaction is subject to execution of a
definitive merger agreement and to a number of customary conditions.
In connection with the execution of the letter of intent, CIF amended its
Schedule 13D. Additional information regarding the letter of intent can be
found in such amended Schedule 13D.
California Investment Fund, LLC is a real estate investment company that is
a subsidiary of First Commercial Corporation. First Commercial, a private
real estate investment company based in San Diego, California, is focused
on the acquisition of whole loans and whole loan portfolios secured by
commercial real estate. Founded in 1993 by Michael and Richard Kelly, First
Commercial Corporation specializes in the commercial real estate secondary
market.
Dynex Capital, Inc. is a financial services company that elects to be
treated as a real estate investment trust (REIT) for federal income tax
purposes.
