ARTICLES OF MERGER
THESE ARTICLES OF MERGER are dated as of December 31, 1996, by and
among Homeplex Mortgage Investments Corporation, a Maryland corporation
("Surviving Company"), and Monterey Homes Construction II, Inc., an Arizona
corporation ("MHC II") and Monterey Homes Arizona II, Inc., an Arizona
corporation ("MHA II", together with MHC II, the "Merged Companies"), such
corporations sometimes hereinafter being jointly referred to as the "Constituent
Corporations".
W I T N E S S E T H:
WHEREAS, Surviving Company, the Merged Companies, and the shareholders
of the Merged Companies, have entered into an Agreement and Plan of
Reorganization (the "Agreement") in which the parties thereto agreed, among
other things, that each of the Merged Companies would be merged with and into
Surviving Company (the "Merger");
NOW, THEREFORE, the following is adopted as and for the Articles of
Merger of the Constituent Corporations:
1. MHC II and MHA II were incorporated under the laws of the State of
Arizona on June_1, 1995 and own no interest in land in the State of Maryland.
2. On the effective date of the Merger (as defined in paragraph 16
hereof and sometimes referred to herein as the "Effective Date"), the Merged
Companies shall be merged with and into Surviving Company which shall be the
surviving corporation.
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3. Surviving Company shall be governed by the laws of the State of
Maryland and the registered office of Surviving Company in that state shall be
CT, Inc.
4. Upon the Merger becoming effective, the separate existence of the
Merged Companies shall cease, and Surviving Company shall succeed to and possess
all the properties, rights, privileges, powers, franchises and immunities, of a
public as well as of a private nature, and be subject to all the debts,
liabilities, obligations, restrictions, disabilities and duties of the Merged
Companies, all without further act or deed, as provided in the applicable
provisions of the Maryland Corporations and Associations Code and the Arizona
Business Corporation Act.
5. Except as amended by the provisions of paragraph 6 hereof, the
Articles of Incorporation and bylaws of Surviving Company as in effect on the
Effective Date shall be, from and after the Effective Date, the Articles of
Incorporation and bylaws of the surviving corporation until they are thereafter
amended.
6. The amendments to the Articles of Incorporation of Surviving Company
which are to be effected as part of the Merger are to (i) delete Article IX of
said charter in its entirety, (ii) renumber existing Article X of said charter
to Article IX, (iii) delete Articles I, VI and VIII of said charter and to
substitute the following new articles, (iv)_delete subparagraph (a) to Article_V
of said charter and to substitute the following subparagraph (a) to Article_V of
said charter, and (v) add the following subparagraph (e) to Article V of said
charter:
ARTICLE I
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NAME
----
The name of the corporation (which is hereinafter called the
"Corporation") is: Monterey Homes Corporation.
ARTICLE V
CAPITAL STOCK
-------------
(a) The total number of shares of stock of all classes which the
Corporation has authority to issue is sixteen million six hundred sixty-six
thousand six hundred sixty-seven (16,666,667) shares of capital stock, par value
three cents ($.03) per share, amounting in aggregate par value to Five Hundred
Thousand Dollars ($500,000). All of the authorized shares are classified as
Common Stock of the same class (the "Common Stock").
(e) Simultaneously with the Effective Date of this amendment and
immediately after the Merger, the authorized shares of the Corporation's Common
Stock, par value $0.01 per share, and each share of such Common Stock issued and
outstanding immediately prior to the Effective Date (the "Old Common Stock")
shall automatically and without any action on the part of the holder thereof be
split and changed into one-third (1/3) of a share (the "Stock Split") of the
Corporation's Common Stock, par value $0.03 per share (the "New Common Stock"),
subject to the treatment of fractional share interests as described below (the
"Stock Split"). Each holder of a certificate or certificates which immediately
prior to the Effective Date represented outstanding shares of Old Common Stock
(the "Old Certificates", whether one or more) shall be entitled to receive upon
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surrender of such Old Certificates to the Corporation's Transfer Agent for
cancellation, a certificate or certificates (the "New Certificates", whether one
or more) representing the number of whole shares of the New Common Stock into
which and for which the shares of the Old Common Stock formerly represented by
such Old Certificates so surrendered, are split under the terms hereof. From and
after the Effective Date, Old Certificates shall represent only the right to the
number of shares of New Common Stock into which the Old Common Stock shall have
been split and the right to receive New Certificates therefor pursuant to the
provisions hereof. No certificates or scrip representing fractional share
interests in New Common Stock will be issued, and no such fractional share
interest will entitle the holder thereof to vote, or to any rights of a
shareholder of the Corporation. All fractional shares for one-half share or more
shall be increased to the next higher whole number of shares and all fractional
shares of less than one-half share shall be decreased to the next lower whole
number of shares, respectively. If more than one Old Certificate shall be
surrendered at one time for the account of the same stockholder, the number of
full shares of New Common Stock for which New Certificates shall be issued shall
be computed on the basis of the aggregate number of shares represented by the
Old Certificates so surrendered. In the event that the Corporation's Transfer
Agent determines that a holder of Old Certificates has not tendered all his
certificates for exchange, the Transfer Agent shall carry forward any fractional
share until all certificates of that holder have been presented for exchange
such that rounding for fractional shares to any one person shall not exceed one
share. If any New Certificate is to be issued in a name other than that in which
the Old Certificates surrendered for exchange are issued, the Old Certificates
so
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surrendered shall be properly endorsed and otherwise in proper form for
transfer, and the person or persons requesting such exchange shall affix any
requisite stock transfer tax stamps to the Old Certificates surrendered, or
provide funds for their purchase, or establish to the satisfaction of the
Transfer Agent that such taxes are not payable. From and after the Effective
Date the amount of capital represented by the shares of the New Common Stock
into which and for which the shares of the Old Common Stock are split under the
terms hereof shall be the same as the amount of capital represented by the
shares of Old Common Stock so split, until thereafter reduced or increased in
accordance with applicable law.
ARTICLE VI
DIRECTORS
---------
The number of directors of the Corporation shall be as set forth in the
Bylaws of the Corporation, but shall never be less than the minimum number
permitted by the General Laws of the State of Maryland now or hereinafter in
force. The directors shall be divided into two classes designated Class I and
Class II. Each Class shall consist of one-half of the directors or as close as
approximation thereto as possible. The Class I directors shall stand of election
at the 1996 annual meeting of shareholders and shall be elected for a two-year
term. The Class II directors shall stand for election at the 1996 annual meeting
of shareholders and shall be elected for a one-year term. At each annual meeting
of shareholders, commencing with the annual meeting to be held during fiscal
1997, each of the successors to the directors of the Class whose term shall have
expired at such annual meeting shall be elected for a term running until the
second annual meeting next succeeding
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his or her election and until his or her successor shall have been duly elected
and qualified.
ARTICLE VIII
RESTRICTION ON TRANSFER OF SHARES
---------------------------------
(a) In order to preserve the net operating loss carryovers, capital
loss carryovers and built-in losses (the "Tax Benefits") to which the
Corporation is entitled pursuant to the Internal Revenue Code of 1986, as
amended, or any successor statute (collectively the "Code") and the regulations
thereunder, the following restrictions shall apply until the earlier of (x) the
business day following the fifth anniversary of the effectiveness of this
Article VIII, (y) the repeal of Sections 382 and 383 of the Code (or successor
provisions) if the Board of Directors determines that the restrictions are no
longer necessary, or (z) the beginning of a taxable year of the Corporation to
which the Board of Directors determines that no Tax Benefits may be carried
forward, unless the Board of Directors shall fix an earlier or later date in
accordance with paragraph (i) of this Article VIII (such date is sometimes
referred to herein as the "Expiration Date"):
(i) No person (as herein defined), including the Corporation, shall
engage in any Transfer (as herein defined) with any person to the extent that
such Transfer, if effective, would cause the Ownership Interest Percentage (as
herein defined) of any person or Public Group (as herein defined) to increase to
4.9 percent or above, or from 4.9 percent or above to a greater Ownership
Interest Percentage, or would create a new Public Group; provided, however, that
the foregoing restriction on such Transfers shall not be applicable to the
Transfer of shares of Stock pursuant to (1) the exercise of any option that is
issued by the Corporation and is outstanding on the effective date of
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the amendment to the Amended and Restated Articles of Incorporation of the
Corporation which makes this Article VIII a part of such Amended and Restated
Articles of Incorporation, (2) the exercise of those certain options initially
covering 750,000 shares (prior to the Stock Split) of stock referred to in the
Stock Option Agreement dated December_21, 1995 between the Corporation and Alan
D. Hamberlin, (3) the issuance of the 800,000 shares (prior to the Stock Split)
of Contingent Stock referred to in the Agreement and Plan of Reorganization
dated as of September 13, 1996 (the "Agreement") or (4) the exercise of those
certain options initially covering an aggregate of 1,000,000 shares (prior to
the Stock Split) of stock referred to in those Stock Option Agreements dated
December 31, 1996 between the Corporation and each of William W. Cleverly and
Steven J. Hilton.
For purposes of this Article VIII:
(A) "person" refers to any individual, corporation, estate,
trust, association, company, partnership, joint venture, or other
entity or organization, including, without limitation, any "entity"
within the meaning of Treasury Regulation Section 1.382-3(a);
(B) a person's "Ownership Interest Percentage" shall be the
sum of such person's direct ownership interest in the Corporation as
determined under Treasury Regulation Section 1.382-2T(f)(8) or any
successor regulation and such person's indirect ownership interest in
the Corporation as determined under Treasury Regulation Section
1.382-2T(f)(15) or any successor regulation, except that, for purposes
of determining a person's direct ownership interest in the Corporation,
any ownership interest in the Corporation described in Treasury
Regulation Section 1.382-2T(f)(18)(iii)(A) or any successor regulation
shall be
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treated as stock of the Corporation, and for purposes of determining a
person's indirect ownership interest in the Corporation, Treasury
Regulations Sections 1.382-2T(g)(2), 1.382-2T(h)(2)(i)(A),
1.382-2T(h)(2)(iii) and 1.382-2T(h)(6)(iii) or any successor
regulations shall not apply and any Option Right to acquire Stock shall
be considered exercised;
(C) "Transferee" means any person to whom Stock is
Transferred;
(D) "Stock" shall mean shares of stock of the Corporation
(other than stock described in Section 1504(a)(4) of the Code or any
successor statute, or stock that is not described in Section 1504(a)(4)
solely because it is entitled to vote as a result of dividend
arrearages), any Option Rights to acquire Stock, and all other
interests that would be treated as stock of the Corporation pursuant to
Treasury Regulation Section 1.382-2T(f)(18) (or any successor
regulation);
(E) "Public Group" shall mean a group of individuals, entities
or other persons described in Treasury Regulation Section
1.382-2T(f)(13) or any successor regulation;
(F) "Option Right" shall mean any option, warrant, or other
right to acquire, convert into or exchange or exercise for, or any
similar interests in, shares of Stock;
(G) "Transfer" shall mean any issuance, sale, transfer, gift,
assignment, devise or other disposition, as well as any other event,
that causes a person to acquire or increase an Ownership Interest
Percentage in the Corporation, or any agreement to take any such
actions or cause any such events, including (a) the granting or
exercise of any Option Right with respect to Stock, (b) the disposition
of any securities or rights convertible into or
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exchangeable or exercisable for Stock or any interest in Stock or any
exercise of any such conversion or exchange or exercise right, and (c)
transfers of interests in other entities that result in changes in
direct or indirect ownership of Stock, in each case, whether voluntary
or involuntary, of record, and by operation by law or otherwise;
(H) "Optionee" means any person holding an Option Right to
acquire Stock.
(ii) Any Transfer that would otherwise be prohibited pursuant to the
preceding subparagraph may nonetheless be permitted if information relating to a
specific proposed transaction is presented to the Board of Directors and the
Board (including a majority of the Independent Directors, as such term is
defined in the Agreement) determines in its discretion (x) based upon an opinion
of legal counsel or independent public accountants selected by the Board, that
such transaction will not jeopardize or create a material limitation on the
Corporation's then current or future ability to utilize its Tax Benefits, taking
into account both the proposed transaction and potential future transactions, or
(y) that the overall economic benefits of such transaction to the Corporation
outweigh the detriments of such transaction. Nothing in this subparagraph shall
be construed to limit or restrict the Board of Directors in the exercise of its
fiduciary duties under applicable law.
(b) Unless approval of the Board of Directors is obtained as provided
in subparagraph (a)(ii) of this Article VIII, any attempted Transfer that is
prohibited pursuant to subparagraph (a)(i) of this Article VIII, to the extent
that the amount of Stock subject to such prohibited Transfer exceeds the amount
that could be Transferred without restriction under subparagraph (a) (i) of this
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Article VIII (such excess hereinafter referred to as the "Prohibited
Interests"), shall be void ab initio and not effective to transfer ownership of
the Prohibited Interests with respect to the purported acquiror thereof (the
"Purported Acquiror"), who shall not be entitled to any rights as a shareholder
of the Corporation with respect to the Prohibited Interests (including, without
limitation, the right to vote or to receive dividends with respect thereto), or
otherwise as the holder of the Prohibited Interests. All rights with respect to
the Prohibited Interests shall remain the property of the person who initially
purported to Transfer the Prohibited Interests to the Purported Acquiror (the
"Initial Transferor") until such time as the Prohibited Interests are resold as
set forth in subparagraph (b)(i) or subparagraph (b)(ii) of this Article VIII.
(i) Upon demand by the Corporation, the Purported Acquiror shall
Transfer any certificate or other evidence of purported ownership of the
Prohibited Interests within the Purported Acquiror's possession or control,
along with any dividends or other distributions paid by the Corporation with
respect to the Prohibited Interests that were received by the Purported Acquiror
(the "Prohibited Distributions"), to an agent designated by the Corporation (the
"Agent"). If the Purported Acquiror has sold the Prohibited Interests to an
unrelated party in an arms-length transaction after purportedly acquiring them,
the Purported Acquiror shall be deemed to have sold the Prohibited Interests as
agent for the Initial Transferor, and in lieu of Transferring the Prohibited
Interests to the Agent shall Transfer to the Agent the Prohibited Distributions
and the proceeds of such sale (the "Resale Proceeds") except to the extent that
the Agent grants written permission to the Purported Acquiror to retain a
portion of the Resale Proceeds not exceeding the amount that would
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have been payable by the Agent to the Purported Acquiror pursuant to the
following subparagraph (b)(ii) if the Prohibited Interests had been sold by the
Agent rather than by the Purported Acquiror. Any purported Transfer of the
Prohibited Interests by the Purported Acquiror other than a Transfer described
in one of the two preceding sentences shall not be effective to Transfer any
ownership of the Prohibited Interests.
(ii) The Agent shall sell in an arms-length transaction (on the New
York Stock Exchange, if possible) any Prohibited Interests transferred to the
Agent by the Purported Acquiror, and the proceeds of such sale (the "Sales
Proceeds"), or the Resale Proceeds, if applicable, shall be allocated to the
Purported Acquiror up to the following amount: (x) where applicable, the
purported purchase price paid or value of consideration surrendered by the
Purported Acquiror for the Prohibited Interests, and (y) where the purported
Transfer of the Prohibited Interests to the Purported Acquiror was by gift,
inheritance, or any similar purported Transfer, the fair market value of the
Prohibited Interests at the time of such purported Transfer. Subject to the
succeeding provisions of this subparagraph, any Resale Proceeds or Sales
Proceeds in excess of the amount allocable to the Purported Acquiror pursuant to
the preceding sentence, together with any Prohibited Distributions, shall be the
property of the Initial Transferor. If the identity of the Initial Transferor
cannot be determined by the Agent through inquiry made to the Purported
Acquiror, the Agent shall publish appropriate notice (in The Wall Street
Journal, if possible) for seven consecutive business days in an attempt to
identify the Initial Transferor in order to transmit any Resale Proceeds or
Sales Proceeds or Prohibited Distributions due to the Initial Transferor
pursuant to this subparagraph. The
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Agent may also take, but is not required to take, other reasonable actions to
attempt to identify the Initial Transferor. If after ninety (90) days following
the final publication of such notice the Initial Transferor has not been
identified, any amounts due to the Initial Transferor pursuant to this
subparagraph may be paid over to a court or governmental agency, if applicable
law permits, or otherwise shall be transferred to an entity designated by the
Corporation that is described in Section 501(c)(3) of the Code. In no event
shall any such amounts due to the Initial Transferor inure to the benefit of the
Corporation or the Agent, but such amounts may be used to cover expenses
(including but not limited to the expenses of publication) incurred by the Agent
in attempting to identify the Initial Transferor.
(c) Within thirty (30) business days of learning of a purported
Transfer of Prohibited Interests to a Purported Acquiror, the Corporation
through its Secretary shall demand that the Purported Acquiror surrender to the
Agent the certificates representing the Prohibited Interests, or any Resale
Proceeds, and any Prohibited Distributions, and if such surrender is not made by
the Purported Acquiror within thirty (30) business days from the date of such
demand the Corporation shall institute legal proceedings to compel such
Transfer; provided, however, that nothing in this paragraph (c) shall preclude
the Corporation in its discretion from immediately bringing legal proceedings
without a prior demand, and also provided that failure of the Corporation to act
within the time periods set out in this paragraph (c) shall not constitute a
waiver of any right of the Corporation under this Article VIII.
(d) Upon a determination by the Board of Directors that there has been
or is threatened
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a purported Transfer of Prohibited Interests to a Purported Acquiror, the Board
of Directors may take such action in addition to any action required by the
preceding paragraph as it deems advisable to give effect to the provisions of
this Article VIII, including, without limitation, refusing to give effect on the
books of this Corporation to such purported Transfer or instituting proceedings
to enjoin such purported Transfer.
(e) In the event of any Transfer which does not involve a Transfer of
"securities" of the Corporation within the meaning of the Maryland Corporations
and Associations Code, as amended ("Securities"), but which would cause a person
or Public Group (the "Prohibited Party") to violate a restriction provided for
in subparagraph (a) of this Article VIII, the application of subparagraphs (b)
and (c) of this Article VIII shall be modified as described in this paragraph
(e). In such case, the Prohibited Party and/or any person or Public Group whose
ownership of the Corporation's Securities is attributed to the Prohibited Party
pursuant to Section 382 of the Code and the Treasury Regulations thereunder
(collectively, the "Prohibited Party Group") shall not be required to dispose of
any interest which is not a Security, but shall be deemed to have disposed of,
and shall be required to dispose of, sufficient Securities (which Securities
shall be disposed of in the inverse order in which they were acquired by members
of the Prohibited Party Group), to cause the Prohibited Party, following such
disposition, not to be in violation of subparagraph (a) of this Article VIII.
Such disposition shall be deemed to occur simultaneously with the Transfer
giving rise to the application of this provision, and such amount of Securities
which are deemed to be disposed of shall be considered Prohibited Interests and
shall be disposed of through the Agent as provided in
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subparagraphs (b) and (c) of this Article VIII, except that the maximum
aggregate amount payable to the Prohibited Party Group in connection with such
sale shall be the fair market value of the Prohibited Interests at the time of
the prohibited Transfer. All expenses incurred by the Agent in disposing of the
Prohibited Interests shall be paid out of any amounts due the Prohibited Party
Group.
(f) The Corporation may require as a condition to the registration of
the transfer of any shares of its Stock that the proposed Transferee furnish to
the Corporation all information reasonably requested by the Corporation with
respect to all the proposed Transferee's direct or indirect ownership interests
in, or options to acquire, Stock.
(g) All certificates evidencing ownership of shares of Stock that are
subject to the restrictions on Transfer contained in this Article VIII shall
bear a conspicuous legend referencing the restrictions set forth in this Article
VIII.
(h) Any person who knowingly violates the restrictions on Transfer set
forth in this Article VIII will be liable to the Corporation for any costs
incurred by the Corporation as a result of such violation.
(i) Nothing contained in this Article VIII shall limit the authority of
the Board of Directors to take such other action to the extent permitted by law
as it deems necessary or advisable to protect the Corporation and the interests
of the holders of its securities in preserving the Tax Benefits. Without
limiting the generality of the foregoing, in the event of a change in law or
Treasury Regulations making one or more of the following actions necessary or
desirable, the Board
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of Directors may (i) accelerate or extend the Expiration Date, (ii) modify the
Ownership Interest Percentage in the Corporation specified in the first sentence
of subparagraph (a)(i), or (iii) modify the definitions of any terms set forth
in this Article VIII; provided that the Board of Directors shall determine in
writing that such acceleration, extension, change or modification is reasonably
necessary or advisable to preserve the Tax Benefits under the Code and the
regulations thereunder or that the continuation of these restrictions is no
longer reasonably necessary for the preservation of the Tax Benefits, which
determination shall be based upon an opinion of legal counsel or independent
public accountants to the Corporation.
(j) The Corporation and the Board of Directors shall be fully protected
in relying in good faith upon the information, opinions, reports or statements
of the chief executive officer, the chief financial officer, or the chief
accounting officer of the Corporation or of the Corporation's legal counsel,
independent auditors, transfer agent, investment bankers, and other employees
and agents in making the determinations and findings contemplated by this
Article VIII, and neither the Corporation nor the Board of Directors shall be
responsible for any good faith errors made in connection therewith.
7. The authorized share structure of each of the Constituent
Corporations is as follows:
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Surviving Company
-----------------
(after giving effect
MHC II MHA II to the Stock Split)
------ ------
Total number of shares of
all classes: 2,000,000 2,000,000 16,666,667
Number and par value of
shares of each class: 2,000,000 2,000,000 16,666,667
shares of shares of shares of
common stock, common stock, common stock,
$.00017 par $.0007 par $.03 par value
value value
Number of shares without
par value of each class: - - -
Aggregate par value of all
shares with par value: $340 $1,400 $500,000
8. The manner and basis of the conversion of the shares of the Merged
Companies shall be in accordance with the Agreement, including, but not limited
to, the following:
(a) Upon the Merger becoming effective, each share of common
stock of each Merged Company (the "Merged Companies Common Stock") issued and
outstanding on the Effective Date, by reason of the Merger and without any
action on the part of the holders thereof, shall be converted into the Merger
Consideration Per Share (as defined below), except that any shares of the Merged
Companies Common Stock owned by Surviving Corporation or held in the treasury of
any of the Merged Companies shall be cancelled and all rights in respect thereof
shall cease to exist and no securities, cash or other property shall be issued
in respect thereof. The term
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"Merger Consideration Per Share" shall mean for each Merged Company an amount
equal to the Merger Consideration (as defined below) divided by the number of
issued and outstanding shares of common stock of such Merged Company. The term
"Merger Consideration" shall mean for each Merged Company (i) a number of shares
of Old Common Stock of Surviving Company (the "Surviving Company Common Stock")
equal to (x) the book value of such Merged Company as of the Effective Date
multiplied by (y) a factor of 3.0 and divided by (z) the fully diluted book
value per share of the Surviving Company Old Common Stock as of the Effective
Date; provided, however, in the event the sum of the Merged Companies book
values used in clause (x) above is more or less than $2,500,000, the excess or
shortfall shall be distributed or contributed in cash as set forth in Section
1.3(b) of the Agreement, and (ii) a pro rata portion of the Contingent Stock
upon the terms and conditions as set forth in Section 1.3(f) of the Agreement.
In addition, the Surviving Company shall pay to or receive from the shareholders
of the Merged Companies in cash the Adjustment Amount as such term is defined in
Section 1.3(b) of the Agreement.
(b) Certificates for fractional shares of Surviving Company
Common Stock shall not be issued. The total number of shares of Surviving
Company Common Stock that any person shall have a right to receive under these
Articles of Merger will be rounded up to the nearest whole share of Surviving
Company Common Stock.
(c) After the Effective Date, each holder other than Surviving
Company of an outstanding certificate or certificates theretofore representing
shares of the Merged Companies Common Stock (the "Merged Companies Stock
Certificates"), upon surrender thereof to such bank,
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trust company or other person including Surviving Company as shall be designated
by the Surviving Company (the "Exchange Agent"), shall be entitled to receive in
exchange therefor a certificate or certificates representing the number of whole
shares of Surviving Company Common Stock into which the shares of the Merged
Companies Common Stock theretofore represented by such surrendered certificate
or certificates shall have been converted. Until so surrendered, each Merged
Companies Stock Certificate, shall be deemed for all purposes, other than the
payment of dividends or other distributions, if any, in respect of Surviving
Company Common Stock, to represent the appropriate number of whole shares of
Surviving Company Common Stock into which the shares of the Merged Companies
Common Stock theretofore represented thereby shall have been converted. No
dividend or other distribution, if any, payable to holders of shares of
Surviving Company Common Stock shall be paid to the holders of certificates
theretofore representing shares of the Merged Companies Common Stock; provided,
however, that upon surrender and exchange of such the Merged Companies Stock
Certificates there shall be paid to the record holders of the stock certificate
or certificates, issued in exchange therefor, the amount, without interest
thereon, of dividends and other distributions, if any, which theretofore but
subsequent to the Effective Date have become payable with respect to the number
of whole shares of Surviving Company Common Stock into which the shares of the
Merged Companies Common Stock theretofore represented thereby shall have been
converted.
(d) All issued shares of Surviving Company Common Stock,
whether outstanding or reacquired immediately prior to the Effective Date, shall
continue unchanged as shares of
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common stock of Surviving Company, except as otherwise changed pursuant to the
Stock Split.
9. The terms and conditions of the Merger and the Agreement were
advised, authorized, and approved by Surviving Company in the manner and by the
vote required by its Articles of Incorporation and the provisions of the
Maryland Corporations and Associations Code, and the said Merger and Agreement
approved in the manner hereinafter set forth.
10. The Merger and the Agreement were duly advised and approved by the
Board of Directors of Surviving Company in the following manner. Said Board of
Surviving Company adopted a resolution declaring that the Merger of the Merged
Companies into Surviving Company is advisable upon the terms and conditions set
forth in the Agreement. Said resolution of the Board of Directors was adopted at
a meeting duly held on September 5, 1996, at which a quorum was present, and at
which the Board acted by at least a majority of its members present thereat.
11. The Board of Directors of Surviving Company directed the Secretary
of the corporation to prepare a written notice of the time, place, and purpose
of a meeting of shareholders of Surviving Company to take action upon the
proposed Merger and the Agreement and to furnish a copy of said notice to all of
the shareholders of Surviving Company entitled to vote upon the proposed Merger
and the Agreement.
12. The Merger and the Agreement were duly approved by the shareholders
of Surviving Company in the following manner. At a meeting of shareholders duly
held on December 23, 1996, pursuant to notice duly given, the shareholders
approved the same by the affirmative vote of at least a majority of all shares
outstanding.
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13. The terms and conditions of the Merger herein set forth were duly
advised, authorized, and approved, in respect of the Merged Companies, in the
manner and by the vote required by the Articles of Incorporation of said
corporations and by the laws of the State of Arizona, which is the state of
incorporation of said corporations.
14. The Merger and the Agreement were duly advised and unanimously
approved by the respective Board of Directors of each of the Merged Companies at
a meeting held pursuant to notice on July 31, 1996.
15. The Merger and the Agreement were duly approved by the shareholders
of the Merged Companies by unanimous written consent dated September_9, 1996.
16. Subject to and in accordance with the laws of the States of
Maryland and Arizona, the conditions precedent contained in the Agreement and
the other obligations of the parties set forth in the Agreement, the effective
date of the Merger (the "Effective Date") for purposes of state law shall be
such date and time the Articles of Merger are filed with the Secretary of State
of the State of Maryland and the Corporation Commission of the State of Arizona.
17. Notwithstanding anything herein to the contrary, the Merger may be
terminated at any time on or before the Effective Date as provided in the
Agreement. In the event of the termination of the Merger, these Articles of
Merger shall become void and of no effect without any liability to the
Constituent Corporations or to the directors, officers, representatives or
agents of any of them except for the obligations the Constituent Corporations to
pay certain fees and expenses as provided for in the Agreement.
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18. These Articles of Merger may be modified at any time in any respect
by the mutual consent of the Constituent Corporations, notwithstanding prior
approval by the respective shareholders. Any such modification may be approved
for any such corporation by its Board of Directors, without further shareholder
approval, except that the value and method of calculating the Merger
Consideration to be issued in exchange for the shares of the Merged Companies
Common Stock may not be increased or materially altered without the consent of
the shareholders of Surviving Company and may not be decreased or materially
altered without the consent of the shareholders of the Merged Companies given,
in each case, by the same vote as is required under applicable state law for
approval of the Merger; provided, however, no consent of the shareholders of the
Constituent Corporations shall be required to substitute cash in place of
Surviving Company Common Stock.
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IN WITNESS WHEREOF, each of the Constituent Corporations has caused
these Articles of Merger to be executed under the penalty of perjury on the 31st
day of December, 1996.
HOMEPLEX MORTGAGE INVESTMENTS
CORPORATION
By: /s/ Alan D. Hamberlin
Name: Alan D. Hamberlin
Title: Chairman and Chief Executive Officer
Attested to:
By: /s/ Jay R. Hoffman
Name: Jay R. Hoffman
Title: President, Secretary and Treasurer
MONTEREY HOMES CONSTRUCTION II, INC.
By: /s/ William W. Cleverly
Name: William W. Cleverly
Title: President
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Attested to:
By: /s/ Steven J. Hilton
Name: Steven J. Hilton
Title: Secretary and Treasurer
MONTEREY HOMES ARIZONA II, INC.
By: /s/ Larry W. Seay
Name: Larry W. Seay
Title: Chief Financial Officer
Attested to:
By: /s/ Steven J. Hilton
Name: Steven J. Hilton
Title: Secretary and Treasurer