EX-99.2 3 0003.txt EXHIBIT B DYNEX DYNEX CAPITAL, INC. 4551 COX ROAD, SUITE 300 GLEN ALLEN, VIRGINIA 23060 804-217-5800 FAX 804-217-5860 January 26, 2001 VIA FACSIMILE AND CERTIFIED MAIL -------------------------------- California Investment Fund, LLC 550 West C Street 10th Floor San Diego, CA 92101 Attention: Michael R. Kelly, Managing Member RE: MERGER AGREEMENT DATED NOVEMBER 7, 2000 Dear Mr. Kelly: Reference is made to the Agreement and Plan of Merger dated November 7, 2000, as amended ("Merger Agreement") between California Investment Fund, LLC ("CIF"), DCI Acquisition Corporation and Dynex Capital, Inc. ("Dynex") and to the letter dated December 22, 2000 between Dynex and CIF (the "December 22nd Letter"). Dynex hereby notifies you that Dynex is terminating the Merger Agreement for CIF's breaches of its obligations under numbered paragraphs 2 and 3 of the December 22nd Letter and pursuant to Section 7(a)(vii) of the Merger Agreement. Very truly yours, DYNEX CAPITAL, INC. By: /s/ Stephen J. Benedetti -------------------------------- Stephen J. Benedetti Vice President, Treasurer cc: Stephen Fraidin, Esquire