SC 13D/A: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities
Published on November 8, 2000
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(a)*
(AMENDMENT NO. 6)
Dynex Capital, Inc.
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(Name of Issuer)
Common Stock, $0.01 par value per share
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(Title of Class of Securities)
26817Q506
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(CUSIP Number)
with a copy to:
Michael R. Kelly Stephen Fraidin
550 West C Street Fried, Frank, Harris, Shriver & Jacobson
San Diego, CA 92101 One New York Plaza
(619) 687-5000 New York, NY 10004-1980
(212) 859-8000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 6, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the Schedule, including all exhibits. SEE Rule 13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, SEE the NOTES).
SCHEDULE 13D
CUSIP No. 26817Q506
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
CALIFORNIA INVESTMENT FUND, LLC 33-0688954
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
NOT APPLICABLE
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 572,178
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH -0-
10 SHARED DISPOSITIVE POWER
572,178
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
572,178
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
SCHEDULE 13D
CUSIP No. 26817Q506
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MICHAEL R. KELLY
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
NOT APPLICABLE
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 572,178
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH -0-
10 SHARED DISPOSITIVE POWER
572,178
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
572,178
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
SCHEDULE 13D
CUSIP No. 26817Q506
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
RICHARD KELLY
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
NOT APPLICABLE
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 572,178
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH -0-
10 SHARED DISPOSITIVE POWER
572,178
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
572,178
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) (SEE INSTRUCTIONS) [ ]
EXCLUDES CERTAIN SHARES
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
This amendment amends and supplements Schedule 13D of California
Investment Fund, LLC, dated April 3, 2000 and filed on April 4, 2000 with the
Securities and Exchange Commission ("SEC"), Amendment No. 1 to Schedule 13D,
dated September 13, 2000 and filed on September 13, 2000 with the SEC, Amendment
No. 2 to Schedule 13D, dated October 3, 2000 and filed on October 3, 2000 with
the SEC, Amendment No. 3 to Schedule 13D, dated October 17, 2000 and filed on
October 17, 2000 with the SEC, Amendment No. 4 to Schedule 13D, dated October
24, 2000 and filed on October 24, 2000 with the SEC and Amendment No. 5 to
Schedule 13D, dated October 30, 2000 and filed on October 30, 2000 with the SEC
(together, the "Schedule 13D"). Except as amended by this amendment, there has
been no change in the information previously reported on the Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
On September 29, 2000, California Investment Fund, LLC (the "Fund")
and Dynex Capital, Inc. ("Dynex") entered into a letter of intent (as amended,
the "Letter of Intent") that provided for, among other things, a three-week
no-shop period (the "Exclusivity Period") regarding the Fund's proposed
acquisition of all of the equity of Dynex for $90 million in cash. A copy of the
Letter of Intent was attached as Exhibit A to the Fund's Amendment No. 2 to
Schedule 13D filed on October 3, 2000 with the SEC, and is specifically
incorporated herein by reference, and the description herein of such letter is
qualified in its entirety by reference to such letter.
Subsequent to entering into the Letter of Intent, the Fund and Dynex
entered into two separate agreements that extended the Exclusivity Period beyond
the date set forth in the Letter of Intent (the "First Extension Letter to
Letter of Intent" and the "Second Extension Letter to Letter of Intent"). A copy
of the First Extension Letter to Letter of Intent was attached as Exhibit A to
the Fund's Amendment No. 4 to Schedule 13D filed on October 24, 2000 with the
SEC and is specifically incorporated herein by reference, and the description
herein of such letter is qualified in its entirety by reference to such letter.
A copy of the Second Extension Letter to Letter of Intent was attached as
Exhibit A to the Fund's Amendment No. 5 to Schedule 13D filed on October 30,
2000 and is specifically incorporated herein by reference, and the description
herein of such letter is qualified in its entirety by reference to such letter.
On November 6, 2000, the Fund and Dynex agreed to further extend the
expiration date of the Exclusivity Period under the Letter of Intent until
November 10, 2000 (the "Third Extension Letter to Letter of Intent"). A copy of
the Third Extension Letter to Letter of Intent is attached hereto as Exhibit A
and is specifically incorporated herein by reference, and the description herein
of such letter is qualified in its entirety by reference to such letter. The
other terms and conditions of the Letter of Intent remained unchanged.
On November 7, 2000, the Fund, DCI Acquisition Corporation ("DCI"),
and Dynex entered into a definitive merger agreement (the "Merger Agreement")
pursuant to which DCI, a newly formed subsidiary of the Fund, will merge with
and into Dynex and Dynex will become a wholly owned subsidiary of the Fund for a
purchase price of $90 million in cash for all of the equity of Dynex (the
"Acquisition Transaction"). A copy of the Merger Agreement is attached hereto as
Exhibit B and is specifically incorporated herein by reference, and the
description herein of such agreement is qualified in its entirety by reference
to such agreement.
Under the terms of the Merger Agreement, the Fund will acquire all of
the common stock of Dynex for a price of $2.00 per share, all of the Series A
Preferred Stock of Dynex for a price of $12.07 per share, all of the Series B
Preferred Stock of Dynex for a price of $12.32 per share and all of the Series C
Preferred Stock of Dynex for a price of $15.08 per share, less any dividends
declared or paid on the preferred shares from the date of the Merger Agreement.
The Acquisition Transaction is subject to Dynex shareholder approval,
the receipt of certain regulatory approvals and certain customary conditions.
The Acquisition Transaction is also conditioned upon the Fund securing necessary
financing and the consent of the holders of Dynex's senior notes.
In connection with the Merger Agreement, the Fund, Dynex and U.S.
Trust Company, National Association (the "Escrow Agent") entered into an escrow
agreement dated November 7, 2000 (the "Escrow Agreement") pursuant to which the
Fund agreed to deposit on the date of the Merger Agreement the 572,178 shares of
common stock of Dynex that it owns into escrow (the "Escrowed Shares") and,
subject to certain conditions, to deposit the amount of $1,000,000 into escrow
on or prior to thirty days from the date of the Merger Agreement (the "Escrow
Fund").
Pursuant to the terms of the Escrow Agreement, if the Fund is unable
to raise the necessary financing or to obtain the consent of the holders of
Dynex's senior notes within thirty days of the date of the Merger Agreement,
then the Fund has no obligation to deposit the Escrow Fund into escrow. The
Escrowed Shares and/or the Escrow Fund may be released to Dynex solely as a
result of (i) the Fund's failure to secure necessary financing for the
Acquisition Transaction or (ii) Dynex's termination of the Merger Agreement
because of a material breach by the Fund. If the Fund terminates the Merger
Agreement because of a failure to receive the necessary consent or waiver of the
holders of Dynex's senior notes and, in connection therewith, the Fund elects
not to purchase certain loans or participations of Dynex pursuant to the terms
of the Merger Agreement, the Escrowed Shares, but not the Escrow Fund, may be
released to Dynex. A copy of the Escrow Agreement is attached hereto as Exhibit
C and is specifically incorporated herein by reference, and the description
herein of such escrow agreement is qualified in its entirety by reference to
such agreement.
In connection with the Merger Agreement, the Fund and Dynex issued a
joint press release on November 8, 2000 announcing the signing of the Merger
Agreement (the "Press Release"). A copy of the Press Release is attached hereto
as Exhibit D and is specifically incorporated herein by reference, and the
description herein of such press release is qualified in its entirety by
reference to such press release.
There can be no assurance that the Acquisition Transaction will be
completed on the terms set forth in the Merger Agreement or otherwise.
Depending on the outcome of the Acquisition Transaction, the Fund
reserves the right to formulate other plans and/or make other proposals, and
take such actions with respect to its investments in Dynex, including any or all
of the actions set forth in the paragraphs (a) through (j) of Item 4 of Schedule
13D and any other actions as it may determine.
Except as stated in this response to Item 4 and in furtherance of a
closing the Acquisition Transaction pursuant to the terms of the Merger
Agreement, the Fund has no current plans or proposals with respect to Dynex or
its securities of the types enumerated in paragraphs (a) through (j) of Item 4
of Schedule 13D.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Other than the Merger Agreement and the exhibits thereto, including
the Escrow Agreement described herein, to the knowledge of the Fund, there are
no contracts, arrangements, understandings or relationships among the persons
named in Item 2 and between such persons and any person with respect to any
securities of Dynex, including but not limited to transfer or voting of any of
the securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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Exhibit A Third Extension Letter to Letter of Intent between the Fund
and Dynex, dated November 6, 2000.
Exhibit B Agreement and Plan of Merger, dated as of November 7, 2000,
by and among California Investment Fund, LLC, DCI
Acquisition Corporation, and Dynex Capital, Inc.
Exhibit C Escrow Agreement, dated as of November 7, 2000, by and among
California Investment Fund, LLC, Dynex Capital, Inc. and
U.S. Trust Company, National Association.
Exhibit D Joint Press Release of California Investment Fund, LLC and
Dynex Capital, Inc., dated as of November 8, 2000.
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Date: November 8, 2000 California Investment Fund, LLC,
a California limited liability company
By: /S/ Michael R. Kelly
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Michael R. Kelly
Its: Managing Member
Date: November 8, 2000 Michael R. Kelly
By: /S/ Michael R. Kelly
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Michael R. Kelly, as an Individual
Date: November 8, 2000 Richard Kelly
By: /S/ Richard Kelly
----------------------------------
Richard Kelly, as an Individual
EXHIBIT INDEX
Exhibit A Third Extension Letter to Letter of Intent between the Fund and
Dynex, dated November 6, 2000.
Exhibit B Agreement and Plan of Merger, dated as of November 7, 2000, by and
among California Investment Fund, LLC, DCI Acquisition Corporation,
and Dynex Capital, Inc.
Exhibit C Escrow Agreement, dated as of November 7, 2000, by and among
California Investment Fund, LLC, Dynex Capital, Inc. and U.S. Trust
Company, National Association.
Exhibit D Joint Press Release of California Investment Fund, LLC and Dynex
Capital, Inc., dated as of November 8, 2000.