EXHIBIT A

[LOGO]
FREMONT
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INVESTMENT & LOAN


FREMONT INVESTMENT & LOAN
175 N. Riverview Drive
Anaheim, California 92808
(714) 283-6500
(714) 283-6755 (fax)

February 5, 2001


California Investment Fund, LLC
550 West C Street
10th Floor
San Diego, California 92101
Attn: Michael R. Kelly,
Managing Member



RE: COMMITMENT FOR LOAN (THE "COMMITMENT")

Ladies and Gentlemen:

In reliance upon the representations and warranties made in the loan
application submitted to FREMONT INVESTMENT & LOAN, a California industrial
bank ("LENDER"), Lender offers to make a loan (the "LOAN") in the Loan
Amount (as hereinafter defined) to Borrower (as hereinafter defined) on the
terms and conditions set forth herein.

This Commitment supersedes and completely replaces all prior
expressions of interest correspondence, term sheets, and other discussions
concerning the subject matter hereof and is subject to (a) acceptance
hereof in the manner hereinafter provided on or before February 16, 2001
(the "ACCEPTANCE TERMINATION DATE"), (b) compliance with, and the
satisfaction of, all of the terms and conditions hereof (including, without
limitation, the conditions set forth on EXHIBIT A attached hereto) and (c)
the execution and delivery of definitive Loan Documents as more
particularly described on EXHIBIT B attached hereto. Upon the execution
and delivery of the Loan Documents, the Loan Documents shall be the
controlling documents notwithstanding any inconsistency with this
Commitment.

1. TERMS AND DEFINITIONS.

ACCEPTANCE DEPOSIT: $500,000 (consisting of the Expense Deposit
and the Breakage Fee).

BORROWER: At all times prior to the closing of the
Merger Transaction, Borrower shall be CIF,
and at all times thereafter Borrower will be
the surviving company following the merger of
Transitory Subsidiary into Dynex. Borrower's
organization documents shall have been
approved by Lender. Borrower shall not be a
"foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue
Code of 1986. The controlling shareholder(s)
of Borrower shall be Richard 0. Kelly and
Michael R. Kelly or entities controlled by
Richard 0. Kelly and Michael R. Kelly.

BREAKAGE FEE: $250,000.

CIF: California Investment Fund, LLC, a California
limited liability company.

CLOSING DATE: The date of completion of the Merger
Transaction and delivery of the Loan
Documents, but not later than the Commitment
Termination Date.

COMMITMENT
TERMINATION DATE: May 31, 2001.

DYNEX: Dynex Capital, Inc., a Virginia corporation,
as constituted immediate prior to the
Effective Time of the Merger Transaction (as
defined in the Merger Agreement).

EVENT OF DEFAULT: Any of the conditions or events specified in
any of the Loan Documents as an Event of
Default.

EXIT FEE: 2% of the Loan Amount.

EXPENSE DEPOSIT: $250,000.

GROSS RECEIPTS: The total gross revenues received by
Borrower for each calendar month under or from
all assets of Borrower, the sale of assets or
liquidation of Borrower's receivables, any
equity or debt issuances and all other
revenues of any kind received by Borrower in
such calendar month.

INTEREST RATE: 11% per annum.

LOAN AMOUNT: $90,000,000, less any dividends paid to
shareholders pursuant to the Merger Agreement.

LOAN FEE: 3% of the Loan Amount.

MATURITY DATE: The 18 month anniversary of either (a) the
first day of the calendar month following the
Closing Date or (b) the Closing Date, if the
closing occurs on the first day of a calendar
month.

MERGER AGREEMENT: That certain Agreement and Plan of
Merger dated as of November 7, 2000, by and
among CIF, the Transitory Subsidiary and
Dynex.

MERGER TRANSACTION: The acquisition by CIF of all of the
outstanding capital stock of Dynex for cash
through a reverse subsidiary merger of the
Transitory Subsidiary with and into Dynex in
substantial accordance with the Merger
Agreement and the terms of this Commitment.

NET CASH FLOW: For any calendar month shall mean all Gross
Receipts in that calendar month less all bona
fide and normal operating and business
expenses actually paid by Borrower during
such calendar month and provided for in the
operating budget for Borrower approved by
Lender (provided that such business expenses
were not paid out of any budgeted and
approved reserve) determined in accordance
with generally accepted accounting principles
applicable to cash basis taxpayers
consistently applied, such expenses to
include, but not be limited to, obligatory
payments of monthly interest on the Loan,
payments on the Target Senior Notes (as
defined in the Merger Agreement), budgeted
reserves (which reserves are approved by
Lender in its discretion), ad valorem and
personal property taxes, and insurance
premiums, all of which must be approved by
Lender in its discretion. In determining Net
Cash Flow, no deduction from Gross Receipts
shall be made for income taxes, expenses not
paid in the calendar month in question, or
depreciation or any other non-cash deduction
of the Borrower for Federal income tax
purposes. If any of the above-mentioned
expenses are paid to an affiliate of
Borrower, such expenses shall not exceed
amounts approved by Lender in its discretion.

POTENTIAL DEFAULT: A monetary or material nonmonetary condition
or event which, with the giving of notice or
the passage of time, or both, would
constitute a Event of Default.

PRINCIPAL PARTIES: Borrower, CIF, Meridian Corners Apartments,
LLC, a wholly-owned subsidiary of CIF, WC
Arizona Apartments, LLC, a wholly-owned
subsidiary of CIF, each of the general
partners, managers (not including any third
party management companies), managing members
and/or major shareholders, as applicable, of such
parties, and each of the latter such parties'
constituent general partners, managers (not
including any third party management companies),
managing members and/or major shareholders,
as applicable.

PROCESSING FEE: $5,000,

TRANSITORY SUBSIDIARY: DCI Acquisition Corporation, a Virginia
corporation and a wholly-owned subsidiary of
CIF.


2. BASIC LOAN TERMS.

(a) Interest Rate. Interest shall commence to accrue upon the
disbursement by Lender of Loan proceeds into the escrow for the Loan
closing. Interest for any partial calendar month in which the Closing Date
occurs shall be deducted from the funds disbursed by Lender on the Closing
Date. All interest shall be calculated based on a three hundred and sixty
(360) day year (which may result in a higher annual rate), but shall be
computed for the actual number of days in the period for which interest is
charged. Interest shall accrue on the unpaid principal balance of the
Loan from time to time at the Interest Rate. The Interest Rate shall be
subject to increase upon a default by Borrower under the Loan Documents,
including, without limitation, any failure to deliver financial statements
as required by the terms of the Loan Documents.

(b) Payments. Concurrently with the closing of the Loan, and as a
condition thereto, Borrower shall make a principal reduction payment in the
amount of $23,000,000, less any dividends paid to shareholders pursuant to
the Merger Agreement. Borrower shall make monthly payments of interest only
on the first calendar day of each month during the term of the Loan.

(c) Exit Fee and Prepayment. Borrower may prepay the outstanding
principal balance of the Loan in whole or in part at any time without
charge or premium except as provided herein. Upon the earlier to occur of
the repayment in full of the Loan or the Maturity Date, Borrower shall pay
to Lender, at the time of such payment, the Exit Fee. The Exit Fee herein
provided will be due and payable whether the payment is made voluntarily,
involuntarily, or upon the acceleration of the Maturity Date.

(d) Cash Flow. Borrower shall deliver to Lender the monthly Net Cash
Flow from the operations of Borrower and from any sales, financings or
other capital transactions involving Borrower's assets, which Net Cash Flow
shall be applied by Lender to accrued but unpaid interest on the Loan,
principal on the Loan, and costs and expenses of Borrower under the Loan
Documents, in such order and in such amounts Lender shall determine in its
sole and absolute discretion. Borrower shall remit the Net Cash Flow and
operating statement prepared on a cash basis within fifteen (15) days
after the end of each calendar month.

(e) Transfers. The Loan Documents will contain "due on sale" and "due
on encumbrance" clauses allowing Lender to accelerate the Loan and demand
payment in full of all amounts owed to Lender under the Loan Documents in
the event of the occurrence of any of the following without Lender's prior
consent in its discretion: (i) a transfer of all or any portion of the
assets owned by Borrower or by CIF, (ii) the transfer or pledge of stock
in Borrower or CIF which results (or could reasonably be expected to
result) in a change in control of Borrower, or (iii) the further
encumbrance of any assets owned by Borrower or by CIF.

(f) Assumption. The Loan is not assumable.

(g) Lender's Recourse. The Loan and the amounts payable to Lender
under the Loan Documents will be fully recourse to Borrower.

(h) Assignment of Commitment. This Commitment may not be assigned by
CIF other than to Borrower.

(i) Expenses. Whether or not the Loan closes, Borrower agrees to
promptly pay or cause to be promptly paid, and costs and expenses incurred
by Lender in connection with this Commitment and the Loan, including all
charges for environmental and seismic assessments, title examination, title
insurance and survey, appraisal, recording and filing fees, inspection fees
and the fees and costs charged by Lender's counsel, all of Lender's other
out-of-pocket expenses in connection with this Commitment, and the Loan,
and the non-refundable Processing Fee payable to Lender. As a deposit for
the payment of such expenses and fees now or hereafter incurred by Lender,
upon acceptance of this Commitment as provided herein, the Expense Deposit
shall be delivered to Lender (such Expense Deposit shall be included,
without duplication, as part of the Acceptance Deposit.) Lender shall apply
the Expense Deposit to the costs and fees incurred by Lender in connection
with this Commitment and the Loan. Any portion of the Expense Deposit
remaining after such payments, and after receipt by Lender of all original
documentation to be delivered to Lender pursuant to this Commitment or the
Loan Documents, shall be promptly returned to Borrower. In the event the
Expense Deposit is insufficient to pay or reimburse Lender for all such
out-of-pocket costs incurred by Lender, Borrower shall promptly pay the
deficiency to Lender. The obligations under this Section constitute a
condition precedent to Lender's obligations under this Commitment and the
Loan Documents and a continuing covenant by Borrower. The obligation of
Borrower to pay and/or reimburse Lender for all such expenses shall remain
in full force and effect notwithstanding any termination of this Commitment.

(j) Brokerage Commission. By its acceptance of this Commitment,
Borrower hereby indemnifies, and agrees to defend and hold Lender harmless
from and against all expenses, loss, claims, damage or liability for any
commissions, fees, charges or other compensation claimed to be due by any
mortgage or real estate broker, Realtor, agent or finder with whom it, or
any of its agents, employees, or representatives have had any dealings in
connection with the issuance of this Commitment or the making of the Loan.

(k) Indemnity. Whether or not the transactions contemplate hereby are
consummated, Borrower hereby agrees to indemnify and hold harmless Lender
and its directors, officers, employees and affiliates (each, an
"indemnified person") from and against any and all losses, claims, damages,
liabilities (or actions or other proceedings commenced or threatened in
respect thereof) and expenses that arise out of, result from or in any way
relate to this Commitment, or the providing or participation of the Loan,
and to reimburse each indemnified person, upon its demand, for any legal or
other expenses (including the allocated cost of in-house counsel) incurred
in connection with investigating, defending or participating in any such
loss, claim, damage, liability or action or other proceeding (whether or
not such indemnified person is a party to any action or proceeding out of
which any such expenses arise), other than any of the foregoing claimed by
any indemnified person to the extent incurred by reason of the gross
negligence or willful misconduct of such person. Neither Lender nor any of
its affiliates, shall be responsible or liable to Borrower or Dynex or any
other person for any consequential damages which may be alleged. The
obligation contained in this paragraph will survive the closing of the
Loan.

3. ACCEPTANCE OF COMMITMENT.

This Commitment will be void and not be binding upon Lender, nor shall
any party (including, without limitation, Borrower) be entitled to rely on
this Commitment, unless, on or before 5:00 p.m. Pacific time on the
Acceptance Termination Date, this Commitment is accepted in the manner
provided below and the party accepting this Commitment agrees to be bound
by the terms hereof by signing a copy hereof in the space provided below
and delivering such executed copy, together with the Acceptance Deposit to
Lender. The acceptance of this Commitment by or on behalf of Borrower shall
constitute Borrower's agreement to borrow the Loan.

4. COLLATERAL.

The Loan shall be secured by, among other things, (a) all of the
assets, rights, entitlements and benefits accruing to, of and for
Dynex, including those hereafter acquired, which shall be vested in Borrower
as of the closing of the Loan and which shall be not be less than those shown
on the most recently filed financial statements for Dynex except as approved
by Lender in writing, (b) a pledge in favor of Lender by Michael R. Kelly and
Richard 0. Kelly of all of their ownership interests in, and all of their
rights to receive income, profits and distribution from, CIF, which pledge
shall contain, among other things, the agreement by the pledgors to cause CIF
to obtain Lender's written consent prior to (i) modifying any documents
evidencing, securing or pertaining to any indebtedness of CIF or its
subsidiaries and (ii) CIF or any of its subsidiaries incurring new
indebtedness secured by any assets of CIF or its subsidiaries.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS.

(a) The Loan Documents shall contain representations and warranties
usual for facilities and transactions of this type, those specified below
and others to be reasonably specified by Lender, including but not limited
to:

(i) Corporate existence and power;

(ii) Corporate, shareholder and governmental authorization
for consummation of the Merger Transaction and the
transactions contemplated by the Loan Documents;

(iii) Consummation of the Merger Transaction and the
transactions contemplated by the Loan Documents will
not violate, or conflict with, organizational
documents, any law or regulation, or any agreements;

(iv) Compliance with laws and regulations;

(v) Enforceability of Basic Agreements (as defined on
Exhibit A) and loan and security documentation;

(vi) Absence of material adverse change and material
litigation;

(vii) Accuracy of financial statements;

(viii) Disclosure of capitalization, subsidiaries, material
agreements (including employment agreements),
properties and employee benefit plans; and

(ix) Absence of material misstatements.

(b) The Loan Documents will contain affirmative and negative covenants
usual for facilities and transactions of this type, those specified below
and others to be reasonably specified by Lender, including but not limited
to:

(i) Maintenance of corporate existence, rights and
franchises (except as a result of the transactions
contemplated by the Merger Transaction);

(ii) Maintenance of insurance;

(iii) Payment of taxes;

(iv) Delivery of financial statements and information;

(v) Notices of material litigation and other matters;

(vi) Compliance with laws;

(vii) Access to premises and records;

(viii) Restrictions on additional indebtedness (including
subsidiary indebtedness);

(ix) Restrictions on fundamental changes, mergers,
acquisitions, consolidations, and asset sales;

(x) Avoidance of liens;

(xi) Restrictions on prepayment of other indebtedness;

(xii) Share repurchases, redemptions, dividends, and
distributions (other than contemplated by or in
connection with the consummation of the Merger
Transaction); and

(xiii) Investments.

6. FEES AND EXPENSES

The Breakage Fee shall be fully earned by Lender, and shall be payable
(without duplication) as part of the Acceptance Deposit upon acceptance of
this Commitment as provided herein, and shall be non-refundable unless
Lender elects to terminate this Commitment as provided herein. The Loan Fee
shall be non-refundable and fully earned by Lender, and shall be payable by
Borrower, upon the closing of the Loan and the disbursement of Loan
proceeds. Borrower's payment of the Loan Fee is in addition to Borrower's
obligation to pay the Expense Deposit, closing costs, brokers' commissions
and any and all other sums due hereunder and under the Loan Documents.
Borrower sha11 pay all expenses in connection with the Loan including all
actual fees and disbursements of Lender's counsel (including Lender's local
counsel(s), if any), travel expenses of Lender's personnel related to the
making of the Loan, all report fees (including appraisal, engineering and
environmental), title insurance premiums, survey charges, mortgage and
documentary stamp taxes, if any, note intangible taxes, if any, recording
charges and brokerage fees and commissions and costs of tax lien searches.
To the extent incurred, the foregoing expenses shall be paid by Borrower
whether or not the Loan shall close or be funded.

7. PARTICIPATIONS

As a condition precedent to Lender's obligation to fund the Loan,
Lender shall have obtained a binding commitment from a lender acceptable to
Lender to participate in not less than $25,000,000 of the Loan Amount,
together with the execution by such lender of Lender's form of loan
participation agreement. (Lender acknowledges receipt of a letter of
interest from First American Bank-Texas with respect to a participation in
the Loan in such amount.) Lender may sell additional participations in all
or any part of this Commitment, the Loan, the Loan Documents, or any other
interest herein or in the Note, to any person or entity, all without notice
to or the consent of Borrower. Lender may furnish any information
(including, without limitation, financial information) concerning the
Borrower, Principal Parties and any of their assets to third parties from
time to time for legitimate business purposes in connection with the
transactions contemplated hereby or the sale of any participation interests
in the Loan or as required by applicable law or court order

8. NO ASSIGNMENTS

This Commitment and the proceeds of the Loan are not assignable by
Borrower and are only for the benefit of the parties hereto and, any
participants in the Loan and Borrower and no other party shall have any
interest therein or in the proceeds of the Loan. Any modification of the
organizational structure or beneficial ownership of Borrower may be
considered an assignment unless Lender shall have given its prior written
consent to such modification.

9. GOVERNING LAW

This Commitment and the Loan Documents shall be governed, construed
and enforced in accordance with the laws of the State of California.
Borrower hereby consents to the jurisdiction of any state or federal court
located within the State of California, and waives personal service of any
and all process upon it and consents that all service of process be made by
certified mail directed to Borrower at the address stated in this
Commitment. Borrower and Lender hereby waive any right to a jury trial in
any action or controversy arising out of this Commitment.

10. GENERAL PROVISIONS

(a) Entire Agreement. This Commitment sets forth the entire agreement
between CIF and Lender, and all other agreements shall be deemed to have
merged herewith. Where terms and conditions of this Commitment differ from
the terms and conditions of the Loan as applied for or any expression of
interest previously issued by Lender, this Commitment shall prevail.

(b) No Waiver/Modification. The provisions of this Commitment cannot
be waived or modified unless such waiver or modification be in writing and
signed by both CIF and Lender. ANY CHANGES TO THIS COMMITMENT REQUIRE THE
RE-APPROVAL OF THIS COMMITMENT BY LENDER'S CREDIT COMMITTEE.
NOTWITHSTANDING LENDER'S ACCEPTANCE OF THE BREAKAGE FEE OR THE EXPENSE
DEPOSIT, ANY UNILATERAL CHANGES TO THIS COMMITMENT WILL NOT BE EFFECTIVE
UNLESS AND UNTIL LENDER AGREES T0 SUCH CHANGES IN WRITING.

(c) No Oral Change. This Commitment may not be modified, amended,
waived, extended, discharged or terminated orally, or by any act or failure
to act on the part of Lender or Borrower, but only by an agreement in
writing signed by the party against whom the enforcement of any
modification, amendment, waiver, extension, discharge or termination is
sought

(d) No Liability. In the event Lender elects to terminate this
Commitment in accordance with the terms hereof, neither Lender nor any of
its employees, officers, directors, representatives or agents shall have
any liability to Borrower, or any Principal Party in connection therewith
and Borrower, on behalf of itself and all Principal Parties, waives and
releases Lender and its employees, officers, directors, representatives and
agents from all such liability. Without limiting the foregoing, at Lender's
request upon any termination of this Commitment, and as a condition to
Lender's refund to Borrower of any fees or amounts to which Borrower may be
entitled under the terms of this Commitment, Borrower and such Principal
Parties shall execute and deliver to Lender a Release reflecting the
provisions of this Section

(e) Legal Fees. In the event of any dispute between or among Borrower
and Lender relating to this Commitment or either party's obligations and
liabilities thereunder, the prevailing party in any litigation, arbitration
or other proceeding relating to such dispute shall be entitled to
recover from the non-prevailing party the prevailing party's actual,
reasonable legal fees and expenses incurred in connection therewith.

(f) Confidentiality. This Commitment is furnished to or on behalf of
CIF on a confidential basis and may not be reproduced, used, distributed or
disclosed by CIF or any of its agents to any third party, except in
connection with the acceptance of this Commitment and the closing of the
Loan or with Lender's prior written consent, and other than to Dynex,
holders of the Target Senior Notes and as required by applicable law.

(g) Time is of the Essence. CIF acknowledges and agree that, in light
of the changing real estate market and economic conditions generally, time
is of the essence with respect to the acceptance of this Commitment and the
closing of the Loan.

(h) Right to Publicize Lender reserves the right to announce that it
is the source of financing for the Merger Transaction Prior to including
the terms of the financing in any general public advertisements, Lender
shall use its good faith efforts to obtain Borrower's approval to such
advertising.

Very truly yours,



FREMONT INVESTMENT & LOAN

By /s/ Gwyneth E. Colburn
---------------------------
Its EVP
--------------------------



ACCEPTANCE
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The undersigned on behalf of Borrower unconditionally accepts the
foregoing Commitment in accordance with their terms, covenants and
conditions and agrees to be bound thereby. The undersigned hereby
authorizes Lender to apply the Expense Deposit against any fees or expenses
incurred or paid by Lender in connection with processing and underwriting
the proposed financing, including, without limitation, property inspection
fees, travel expenses, fees for appraisal, building condition and
environmental reports, lien search fees and legal fees. The undersigned on
behalf of Borrower further agrees that the Loan will be accepted by
Borrower on the terms and conditions set forth therein. This acceptance
shall be deemed effective when received by Lender, together with the
Acceptance Deposit.

The undersigned hereby expressly acknowledges that the provisions of
this Commitment may not be waived or modified unless such waiver or
modification is in writing and signed by both the undersigned on behalf of
Borrower or Borrower and Lender. THE UNDERSIGNED FURTHER EXPRESSLY
ACKNOWLEDGES AND AGREES THAT ANY CHANGES TO THIS COMMITMENT REQUIRE THE
RE-APPROVAL OF THIS COMMITMENT BY LENDERS CREDIT COMMITTEE.
NOTWITHSTANDING LENDER'S ACCEPTANCE OF THE BREAKAGE FEE OR THE EXPENSE
DEPOSIT, ANY UNILATERAL CHANGES TO THIS COMMITMENT WILL NOT BE EFFECTIVE
UNLESS AND UNTIL LENDER AGREES TO SUCH CHANGES IN WRITING.

The signatories for the undersigned represent and warrant to Lender
that they have the full power and authority to execute and deliver this
Commitment on behalf of the undersigned and Borrower.

Dated as of February 5th, 2001

CALIFORNIA INVESTMENT FUND, LLC,
a California limited liability company



By: /s/ Michael R. Kelly
-----------------------------------------
Michael R. Kelly
Managing Member



EXHIBIT A
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CONDITIONS TO CLOSING

(a) Conditions. The making of the Loan is contingent upon the
completion of the necessary documentation and the negotiation, execution
and delivery of satisfactory agreements incorporating the principles set
forth herein and containing such other terms, conditions and covenants as
the parties may deem appropriate to the transaction, along with other
matters remaining to be examined and approved by Lender and its counsel.
Further, all representations, warranties and covenants of CIF and Borrower,
as applicable, contained in any application for the Loan or made to Lender
in connection with the Loan or contained in the Loan Documents, shall
survive the closing of the Loan and shall remain continuing obligations,
warranties and representations of CIF and Borrower, as applicable, so long
as any portion of the Borrower's obligations under the Loan Documents
remains outstanding.

(b) Closing Conditions.
------------------

(i) Borrower and Dynex each shall be the sole owner of its
assets, with good and marketable title and rights thereto, free and
clear of all liens, restrictions and encumbrances except as approved
by Lender.

(ii) Borrower shall have furnished to Lender current most recently
filed financial statements for Dynex and for the Principal Parties,
prepared in accordance with generally accepted accounting principles
consistently applied.

(iii) Lender shall have approved the businesses, properties,
financial condition, capability and such other factors as Lender
deems material of the Principal Parties.

(iv) There shall be no material adverse change in the financial
condition, business, operations or properties of (i) CIF and its
subsidiaries taken as a whole or (ii) Dynex and its subsidiaries taken
as a whole, in either case since the date of the most recently filed
financial statements prior to the date of the Commitment.

(v) There shall be no material amendment of, or material waiver
under, any material documents pertaining to the Merger Transaction
(collectively, the "Basic Agreements") without the written consent of
Lender. The transactions contemplated by the Basic Agreements shall
have been consummated without waiver or forbearance to exercise any
material rights or conditions. The representations and warranties
set forth in the Basic Agreements shall be true and correct in all
material respects.

(vi) No litigation or judgment, order, injunction, or other
restraint prohibiting or imposing materially adverse conditions upon
the consummation of the transactions contemplated by the Basic
Agreements or the making of the Loan by Lender, or the performance by
Borrower of its obligations under the Loan.

(vii) Lender shall have received an opinion letter from counsel
to the Principal Parties covering such matters as may be reasonably
required by Lender

(viii) Lender shall have received the formation documents for the
Principal Parties, together with all such documents evidencing the
authority of such parties to enter into the Loan Documents as may be
reasonably required by Lender.

(ix) No event shall have occurred and no condition shall exist
which would result either immediately, or with the giving of notice or
the passage of time, or both, in a default under any of the Loan
Documents.

(x) Lender shall have received such other items, and Borrower
shall have satisfied such other conditions, as may be reasonably
required by Lender.

(xi) Lender shall have received evidence satisfactory to it in
its sole discretion of the consent to the Merger Transaction and the
Loan by the holders of at least 75.01% of the outstanding principal
amount of the Target Senior Notes.

(xii) Standard & Poor's Corporation and Moody's Investor Service
shall have confirmed, in writing, that there will not be a downgrade
in the rating of the Target Senior Notes as a result of the Merger
Transaction or the closing of the Loan.

(xiii) Lender shall have received an opinion in form and
substance acceptable to Lender as to the solvency of Dynex both
immediately prior to, and immediately following, the Merger
Transaction and the closing of the Loan, given by one of the
nationally recognized accounting firms.

(xiv) Lender shall have received a fairness opinion in form and
substance acceptable to Lender in favor of the trustee under the
Target Senior Notes Indenture (as defined in the Merger Agreement) and
Lender with respect to the Merger Transaction

(xv) Lender shall have received evidence, in form and substance
acceptable to Lender, confirming that the Merger Transaction and the
Loan are authorized or permitted by the Target Senior Notes Indenture
and the documents executed or delivered in connection with the
issuance of the Target Senior Notes (collectively, the "Bond
Documents") and are in accordance with the terms thereof.

(xvi) Lender shall have received an opinion in form and substance
satisfactory to Lender, and from a party acceptable to Lender in its
sole discretion, confirming that, immediately following the Merger
Transaction and the closing of the Loan, Dynex's "Indebtedness" (as
defined in the Bond Documents) does not exceed the levels permitted
under the Bond Documents.

(xvii) Lender shall have validated the cash flow projections and
valuations by Andrew Davidson & Co., Inc. of Dynex's net investment in
collateralized bonds and collateralized bonds retained.

(xviii) Prior to the closing of the Loan, CIF shall have
purchased at least $50,000,000 of the Target Senior Notes and shall
have entered into documentation satisfactory to Lender evidencing that
CIF's rights to payments on such Target Senior Notes shall be
subordinate to the Loan and to the rights of the holders of the
remaining Target Senior Notes.

(xix) Prior to the closing of the Loan, Borrower shall have
submitted a proforma business plan to Lender, which business plan shall
be subject to Lender's approval in its sole discretion.

(c) Termination of Obligation to Fund. If, on or before the Closing
Date, any of the following shall have occurred, Lender shall have no
obligation to close and fund the Loan under this Commitment:

(i) Dynex, Borrower, any Principal Party or any general partners,
managing members or principal shareholders or executive officers of
any of them, shall be the subject of any bankruptcy, reorganization or
insolvency proceeding;

(ii) The financial condition of Dynex, Borrower, or any Principal
Party, as represented in this Commitment, in any loan application or
in any other documents and communications presented to Lender in order
to induce Lender to make the Loan, shall have materially adversely
changed;

(iii) Any action, suit or proceeding, judicial, administrative or
otherwise is pending against or affecting Dynex, Borrower or any
Principal Party;

(iv) Any of the representations and warranties contained herein
are false or incorrect in any respect;

(v) Any condition occurs or shall have occurred which would be
deemed an Event of Default under the Loan Documents if they were in
effect; or

(vi) Borrower fails to comply with each of the conditions to
closing prior to the Commitment Expiration Date.



EXHIBIT B
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LOAN DOCUMENTS

(a) Basic Loan Documents. The Loan shall be evidenced by a loan and
security agreement (the "LOAN AGREEMENT") and a secured promissory note in
the amount of the Loan and secured by first priority pledge agreements
or similar instruments and UCC-1 financing statement(s), all satisfactory
in form and substance to Lender in its discretion.

(b) Additional Loan Documents. If determined by Lender after its due
diligence and underwriting of the Loan application, the Loan Documents may
also include additional security agreements, other assignments, and such
other documentation as Lender may require in order to adequately protect
and perfect Lender's security interests.

(c) Other Documentation. Borrower shall provide Lender with such other
evidence, information and material as Lender or its counsel may reasonably
require.

(d) Loan Documents. The Basic Loan Documents and Additional Loan
Documents referred to in this Exhibit B are collectively referred to as the
"LOAN DOCUMENTS".