ARTICLES OF INCORPORATION
OF
CEDAR INCOME FUND, LTD.
----------------------
I, THE UNDERSIGNED, JAMES T. CUNNINGHAM, whose post-office
address is c/o Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New
York 10038, being at least eighteen years of age, do hereby form a corporation,
under and by virtue of the General Laws of the State of Maryland authorizing the
formation of corporations.
ARTICLE I
Name
The name of the Corporation shall be Cedar Income Fund, Ltd.
(the "Corporation").
ARTICLE II
Principal Office, Registered Office and Agent
The address of the Corporation's principal office in Maryland
is c/o The Corporation Trust, Incorporated, 300 East Lombard Street, Baltimore,
Maryland 21202. The address of the Corporation's principal office and registered
office in the State of Maryland is 300 East Lombard Street, Baltimore, Maryland
21202. The name of its registered agent at that office is The Corporation Trust,
Incorporated, a Maryland corporation.
ARTICLE III
Purposes
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Maryland as now or hereafter in force.
ARTICLE IV
Capital Stock
A. Authorized Shares. The total number of shares of all classes of
capital stock that the Corporation shall have authority to issue is 55 million
shares, consisting of 50 million shares of Common Stock with a par value of $.01
per share (the "Common Stock"), amounting in the aggregate to par value of
$500,000, and 5 million shares of Preferred Stock with a par value of $.01 per
share (the "Preferred Stock"), amounting in the aggregate to par value of
$50,000.
B. Common Stock
1. Dividend Rights. Subject to the preferential dividend
rights of the Preferred Stock, if any, as may be determined by the Board of
Directors of the Corporation pursuant to paragraph C of this Article IV, Holders
(as defined below) shall be entitled to receive such dividends as may be
declared by the Board of Directors of the Corporation. Upon the declaration of
dividends hereunder, Holders shall be entitled to share in all such dividends,
pro rata, in accordance with the relative number of shares of Common Stock held
by each such Holder.
2. Rights Upon Liquidation. Subject to the preferential rights
of the Preferred Stock, if any, as may be determined by the Board of Directors
of the Corporation pursuant to paragraph C of this Article IV, in the event of
any voluntary or involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of, the Corporation, each Holder shall be entitled to
receive, ratably with each other Holder, that portion of the assets of the
Corporation available for distribution to its stockholders as the number of
shares of the Common Stock held by such Holder bears to the total number of
shares of Common Stock then outstanding.
3. Voting Rights. Each Holder shall be entitled to vote on all
matters (on which a holder of Common Stock shall be entitled to vote), and shall
be entitled to one vote for each share of the Common Stock held by such Holder.
4. Restrictions on Ownership and Transfer to Preserve Tax
Benefit.
(a) Definitions
For the purposes of this Article IV, the following terms shall have the
following meanings:
"Act" shall mean the General Corporation Law of Maryland.
"Beneficial Ownership" shall mean ownership of Common Stock by
a Person who would be treated as an owner of such shares of Common
Stock either directly or constructively through the application of
Section 544 of the Code, as modified by Section 856(h) of the Code. The
terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned"
shall have the correlative meanings.
"Charitable Trust" shall mean the trust created pursuant to
subparagraph B(4)(c)(i) of this Article IV.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
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"Constructive Ownership" shall mean ownership of Common Stock
by a Person who would be treated as an owner of such shares of Common
Stock either directly or constructively through the application of
Section 318 of the Code, as modified by Section 856(d)(5) of the Code.
The terms "Constructive Owner," "Constructively Owns" and
"Constructively Owned" shall have the correlative meanings.
"Date of the Merger" shall mean the latter of the Merger and
the redemption of shares of Common Stock held by Cedar Bay Company in
exchange for Units.
"Existing Holder" shall mean (i) Cedar Bay Company and (ii)
any Person (other than another Existing Holder) to whom an Existing
Holder transfers Beneficial Ownership of Common Stock causing such
transferee to Beneficially Own Common Stock in excess of the Ownership
Limit.
"Existing Holder Limit" (i) for any Existing Holder who is an
Existing Holder by virtue of clause (i) of the definition thereof,
shall mean, initially, the percentage of Common Stock Beneficially
Owned by such Person immediately after the Merger, and after any
adjustment pursuant to subparagraph B(4)(i) of this Article IV, shall
mean such percentage of the outstanding Common Stock as so adjusted;
and (ii) for any Existing Holder who becomes an Existing Holder by
virtue of clause (ii) of the definition thereof, shall mean, initially,
the percentage of the outstanding Common Stock Beneficially Owned by
such Existing Holder at the time that such Existing Holder becomes an
Existing Holder, and after any adjustment pursuant to subparagraph
B(4)(i) of this Article IV, shall mean such percentage of the
outstanding Common Stock as so adjusted; provided, however, that the
Existing Holding Limits for all Existing Holders when combined shall
not exceed 85% of the Corporation's Common Stock. For purposes of
determining the Existing Holder Limit, the amount of Common Stock
outstanding at the time of the determination shall be deemed to include
the maximum number of shares that Existing Holders may beneficially own
with respect to options and rights to convert Units into Common Stock
pursuant to Section 8.6 of the Partnership Agreement and shall not
include shares that may be Beneficially Owned solely by other persons
upon exercise of options or rights to convert into Common Stock. From
the Date of the Merger and prior to the Restriction Termination Date,
the Secretary of the Corporation shall maintain and, upon request, make
available to each Existing Holder, a schedule which sets forth the then
current Existing Holder Limits for each Existing Holder.
"Holder" shall mean the record holder of shares of Common
Stock, or in the case of shares held by a Purported Record Transferee,
the Charitable Trust.
"IRS" shall mean the United States Internal Revenue Service.
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"Market Price" shall mean the last reported sales price
reported on the New York Stock Exchange of Common Stock on the trading
day immediately preceding the relevant date, or if the Common Stock is
not then traded on the New York Stock Exchange, the last reported sales
price of the Common Stock on the trading day immediately preceding the
relevant date as reported on any exchange or quotation system over
which the Common Stock may be traded, or if the Common Stock is not
then traded over any exchange or quotation system, then the market
price of the Common Stock on the relevant date as determined in good
faith by the Board of Directors of the Corporation.
"Merger" shall mean the merger of Cedar Income Fund, Ltd., an
Iowa corporation, with and into the Corporation, its wholly-owned
subsidiary.
"Ownership Limit" shall initially mean 3.5% of the outstanding
Common Stock of the Corporation, and after any adjustment as set forth
in subparagraph B(4)(i) of this Article IV, shall mean such greater
percentage.
"Partner" shall mean any Person owning Units.
"Partnership" shall mean Cedar Income Fund Partnership, L.P.,
a Delaware limited partnership.
"Partnership Agreement" shall mean the Agreement of Limited
Partnership of the Partnership, of which the Corporation is the sole
general partner, as such agreement may be amended from time to time.
"Person" shall mean an individual, corporation, partnership,
estate, trust, a portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the
Code, association, private foundation within the meaning of Section
509(a) of the Code, joint stock company or other entity and also
includes a group as that term is used for purposes of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended; but does not
include (i) Cedar Bay Company, and (ii) an underwriter which
participates in a public offering of the Common Stock provided that the
ownership of Common Stock by such underwriter would not result in the
Corporation failing to qualify as a REIT.
"Purported Transferee" shall mean, with respect to any
purported Transfer which results in a violation of subparagraph B(4)(b)
of this Article IV, the purported beneficial transferee or owner for
whom the Purported Record Transferee would have acquired or owned
shares of Common Stock, if such Transfer had been valid under such
subparagraph.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in a violation of subparagraph B(4)(b)
of this Article IV, the record holder of the Common Stock if such
Transfer had been valid under such subparagraph.
"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
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"Restriction Termination Date" shall mean the first day after
the Date of the Merger on which the Board of Directors of the
Corporation determines that it is no longer in the best interests of
the Corporation to attempt to, or continue to, qualify as a REIT.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Common Stock (including (i) the granting
of any option or entering into any agreement for the sale, transfer or
other disposition of Common Stock or (ii) the sale, transfer,
assignment or other disposition of any securities or rights convertible
into or exchangeable for Common Stock), whether voluntary or
involuntary, whether of record or beneficially or Beneficially or
Constructively (including but not limited to transfers of interests in
other entities which result in changes in Beneficial or Constructive
Ownership of Common Stock), and whether by operation of law or
otherwise.
"Trustee" shall mean the Corporation as trustee for the
Charitable Trust, and any successor trustee appointed by the
Corporation.
"Units" shall mean the units into which partnership interests
of the Partnership are divided, and as the same may be adjusted, as
provided in the Partnership Agreement.
(b) Restriction on Ownership and Transfers.
(i) Except as provided in subparagraph B(4)(k) of
this Article IV, from the Date of the Merger and prior to the
Restriction Termination Date, no Person (other than an Existing Holder)
shall Beneficially Own shares of Common Stock in excess of the
Ownership Limit, and no Existing Holder shall Beneficially Own shares
of Common Stock in excess of the Existing Holder Limit for such
Existing Holder.
(ii) Except as provided in subparagraph B(4)(k) of
this Article IV, from the Date of the Merger and prior to the
Restriction Termination Date, any Transfer that, if effective, would
result in any Person (other than an Existing Holder) Beneficially
Owning Common Stock in excess of the Ownership Limit shall be void ab
initio as to the Transfer of such shares of Common Stock which would be
otherwise Beneficially Owned by such Person in excess of the Ownership
Limit; and the Purported Transferee shall acquire no rights in such
shares of Common Stock.
(iii) Except as provided in subparagraph B(4)(k) of
this Article IV, from the Date of the Merger and prior to the
Restriction Termination Date, any Transfer that, if effective, would
result in any Existing Holder Beneficially Owning Common Stock in
excess of the applicable Existing Holder Limit shall be void ab initio
as to the Transfer of such shares of Common Stock which would be
otherwise Beneficially Owned by such Existing Holder in excess of the
applicable Existing Holder Limit; and such Existing Holder shall
acquire no rights in such shares of Common Stock.
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(iv) Except as provided in subparagraph B(4)(k) of
this Article IV, from the Date of the Merger and prior to the
Restriction Termination Date, any Transfer that, if effective, would
result in the Common Stock being beneficially owned by less than 100
Persons (determined without reference to any rules of attribution)
shall be void ab initio as to the Transfer of such shares of Common
Stock which would be otherwise beneficially owned by the transferee;
and the intended transferee shall acquire no rights in such shares of
Common Stock.
(v) Notwithstanding any other provisions contained in
this Article IV, from the Date of the Merger and prior to the
Restriction Termination Date, any Transfer or other event that, if
effective, would result in the Corporation being "closely held" within
the meaning of Section 856(h) of the Code, or would otherwise result in
the Corporation failing to qualify as a REIT (including, but not
limited to, a Transfer or other event that would result in the
Corporation owning (directly or Constructively) an interest in a tenant
that is described in Section 856(d)(2)(B) of the Code if the income
derived by the Corporation from such tenant would cause the Corporation
to fail to satisfy any of the gross income requirements of Section
856(c) of the Code), shall be void ab initio as to the Transfer of the
shares of Common Stock which would cause the Corporation to be "closely
held" within the meaning of Section 856(h) of the Code or would
otherwise result in the Corporation failing to qualify as a REIT; and
the intended transferee or owner or Constructive or Beneficial Owner
shall acquire or retain no rights in such shares of Common Stock.
(c) Effect of Transfer in Violation of Subparagraph (B)(4)(b).
(i) If, notwithstanding the other provisions
contained in this Article IV, at any time after the Date of the Merger
and prior to the Restriction Termination Date, there is a purported
Transfer, change in the capital structure of the Corporation, or other
event such that one or more of the restrictions on ownership and
transfers described in subparagraph B(4)(b) above has been violated,
then the shares of Common Stock being Transferred (or in the case of an
event other than a Transfer, the shares owned or Constructively Owned
or Beneficially Owned) which would cause one or more of the
restrictions on ownership or transfer to be violated (rounded up to the
nearest whole share) (the "Trust Shares"), shall automatically be
transferred to the Corporation, as Trustee of a trust (the "Charitable
Trust") for the exclusive benefit of The American Cancer Society (the
"Designated Charity"), an organization described in Section
170(b)(1)(A) and 170(c) of the Code. The Purported Transferee shall
have no rights in such Trust Shares.
(ii) The Corporation, as Trustee of the Charitable
Trust, may transfer the shares held in such trust to a Person whose
ownership of the shares will not result in a violation of the ownership
restrictions (a "Permitted Transferee"). If such a transfer is made,
the interest of the Designated Charity will terminate and proceeds of
the sale will be payable to the Purported Transferee and to the
Designated Charity. The Purported Transferee will receive the lesser of
(1) the price paid by the Purported Transferee for the shares or, if
the Purported Transferee did not give value for the shares, the Market
Price of the shares on the day of the event causing the shares to be
held in trust, and (2) the price per share received by the Corporation,
as Trustee, from the sale or other disposition of the shares held in
trust. The Designated Charity will receive any proceeds in excess of
the amount payable to the Purported Transferee. The Purported
Transferee will not be entitled to designate a Permitted Transferee.
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(iii) All stock held in the Charitable Trust will be
deemed to have been offered for sale to the Corporation or its designee
for a 90-day period, at the lesser of the price paid for that stock by
the Purported Transferee and the Market Price on the date that the
Corporation accepts the offer. This period will commence on the date of
the violative transfer, if the Purported Transferee gives notice to the
Corporation of the transfer, or the date that the Board of Directors of
the Corporation determines that a violative transfer occurred, if no
such notice is provided.
(iv) Any dividend or distribution paid prior to the
discovery by the Corporation that shares of Common Stock have been
transferred in violation of subparagraph B(4)(b) of this Article IV,
shall be repaid to the Corporation upon demand and shall be held in
trust for the Designated Charity. Any dividend or distribution declared
but unpaid shall be rescinded as void ab initio with respect to such
shares of stock.
(v) Subject to the preferential rights of the
Preferred Stock, if any, as may be determined by the Board of Directors
of the Corporation pursuant to paragraph C of this Article IV, in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of, or any distribution of the assets of, the Corporation,
the Designated Charity shall be entitled to receive, ratably with each
other holder of Common Stock, that portion of the assets of the
Corporation available for distribution to its stockholders as the
number of Trust Shares bears to the total number of shares of Common
Stock then outstanding (including the Trust Shares). The Corporation,
as Trustee, or if the Corporation shall have been dissolved, any
trustee appointed by the Corporation prior to its dissolution, shall
distribute to the Designated Charity, when determined (or if not
determined, or only partially determined, ratably to the other holders
of Common Stock who have been determined and the Designated Charity),
any such assets received in respect of the Trust Shares in any
liquidation, dissolution or winding up of, or any distribution of the
assets of, the Corporation.
(vi) The Purported Transferee will not be entitled to
vote any Common Stock it attempts to acquire, and any stockholder vote
will be rescinded if a Purported Transferee votes and the stockholder
vote would have been decided differently if such Purported Transferee's
vote was not counted.
(d) Remedies for Breach. If the Board of Directors or its
designees shall at any time determine in good faith that a Transfer or other
event has taken place in violation of subparagraph B(4)(b) of this Article IV or
that a Person intends to acquire or has attempted to acquire beneficial
ownership (determined without reference to any rules of attribution), Beneficial
Ownership or Constructive Ownership of any shares of the Corporation in
violation of subparagraph B(4)(b) of this Article IV, the Corporation shall
inform the Purported Transferee of its obligations pursuant to this Article IV,
including such Purported Transferee's obligations to pay over to the Charitable
Trust any and all dividends received with respect to the Trust Shares. In
addition, the Board of Directors or its designees shall take such action as it
deems advisable to refuse to give effect or to prevent such Transfer, including,
but not limited to, refusing to give effect to such Transfer on the books of the
Corporation or instituting proceedings to enjoin such Transfer and to recover
any dividend erroneously paid and declaring any votes erroneously cast to be
retroactively invalid; provided, however, that any Transfers (or, in the case of
events other than a Transfer, ownership or Constructive Ownership or Beneficial
Ownership) in violation of subparagraph B(4)(b) of this Article IV shall
automatically result in a transfer to the Charitable Trust as described in
subparagraph B(4)(c), irrespective of any action (or non-action) by the Board of
Directors.
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(e) Notice of Restricted Transfer. Any Person who acquires or
attempts to acquire shares in violation of subparagraph B(4)(b) of this Article
IV, or any Person who is a Purported Transferee, shall immediately give written
notice to the Corporation of such event and shall provide to the Corporation
such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer on the Corporation's
status as a REIT.
(f) Owners Required To Provide Information. From the Date of
the Merger and prior to the Restriction Termination Date each Person who is a
beneficial owner or Beneficial Owner or Constructive Owner of Common Stock and
each Person (including the stockholder of record) who is holding Common Stock
for a Beneficial Owner or Constructive Owner shall provide to the Corporation
such information that the Corporation may request, in good faith, in order to
determine the Corporation's status as a REIT.
(g) Remedies Not Limited. Nothing contained in this Article IV
shall limit the authority of the Board of Directors to take such other action as
it deems necessary or advisable to protect the Corporation and the interests of
its stockholders by preservation of the Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of subparagraph B(4) of this Article IV, including any
definition contained in subparagraph B(4)(a), the Board of Directors shall have
the power to determine the application of the provisions of this subparagraph
B(4) with respect to any situation based on the facts known to it.
(i) Modification of Ownership Limit or Existing Holder Limit.
Subject to the limitations provided in subparagraph B(4)(j), the Board of
Directors may from time to time increase the Ownership Limit or the Existing
Holder Limit and shall file Articles Supplementary with the State Department of
Assessment and Taxation of Maryland to evidence such increase.
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(j) Limitations on Modifications.
(i) From the Date of the Merger and prior to the
Restriction Termination Date, neither the Ownership Limit nor any
Existing Holder Limit may be increased (nor may any additional Existing
Holder Limit be created) if, after giving effect to such increase (or
creation), five Persons who are Beneficial Owners of Common Stock
(including all of the then Existing Holders) could (taking into account
the Ownership Limit and the Existing Holder Limit) Beneficially Own, in
the aggregate, more than 49% of the outstanding Common Stock.
(ii) Prior to the modification of any Existing Holder
Limit or Ownership Limit pursuant to subparagraph B(4)(i) of this
Article IV, the Board of Directors of the Corporation may require such
opinions of counsel, affidavits, undertakings or agreements as it may
deem necessary or advisable in order to determine or ensure the
Corporation's status as a REIT.
(iii) No Existing Holder Limit shall be reduced to a
percentage which is less than the Ownership Limit.
(iv) The Ownership Limit may not be increased to a
percentage which is greater than 9.9%.
(k) Exceptions.
(i) The Board of Directors, in its sole discretion,
may exempt a Person from the Ownership Limit or the Existing Holder
Limit, as the case may be, if such Person is not an individual for
purposes of Section 542(a)(2) of the Code and the Board of Directors
obtains such representations and undertakings from such Person as are
reasonably necessary to ascertain that no individual's Beneficial
Ownership of such shares of Common Stock will violate the Ownership
Limit or the applicable Existing Holder Limit, as the case may be, and
agrees that any violation of such representations or undertaking (or
other action which is contrary to the restrictions contained in this
subparagraph B(4) of this Article IV) or attempted violation will
result in such shares of Common Stock automatically being transferred
to the Charitable Trust.
(ii) Prior to granting any exception pursuant to
subparagraph B(4)(k)(i) of this Article IV, the Board of Directors may
require a ruling from the IRS, or an opinion of counsel, in either case
in form and substance satisfactory to the Board of Directors in its
sole discretion, as it may deem necessary or advisable in order to
determine or ensure the Corporation's status as a REIT.
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5. Legend. Each certificate for shares of Common Stock shall
bear legends substantially to the effect of the following:
"The Corporation is authorized to issue two classes of capital
stock which are designated as Common Stock and Preferred Stock. The Board of
Directors is authorized to determine the preferences, limitations and relative
rights of the Preferred Stock before the issuance of any Preferred Stock. The
Corporation will furnish, without charge, to any stockholder making a written
request therefor, a copy of the Corporation's charter and a written statement of
the designations, relative rights, preferences and limitations applicable to
each such class of stock. Requests for the Corporation's charter and such
written statement may be directed to Cedar Income Fund, Ltd., 44 South Bayles
Avenue, Port Washington, New York 11050, Attention: Secretary.
The shares of Common Stock represented by this certificate are
subject to restrictions on ownership and Transfer for the purpose of the
Corporation's maintenance of its status as a Real Estate Investment Trust under
the Code. No Person may Beneficially Own shares of Common Stock in excess of
3.5% (or such greater percentage as may be determined by the Board of Directors
of the Corporation) of the outstanding Common Stock of the Corporation (unless
such Person is an Existing Holder) with certain exceptions set forth in the
Corporation's charter. Any Person who attempts to Beneficially Own shares of
Common Stock in excess of the above limitations must immediately notify the
Corporation. All capitalized terms in this legend have the meanings defined in
the Corporation's charter. Transfers in violation of the restrictions described
above may be void ab initio.
In addition, upon the occurrence of certain events, if the
restrictions on ownership are violated, the shares of Common Stock represented
hereby may be automatically exchanged for Trust Shares which will be held in
trust by the Corporation. The Corporation has an option to acquire Trust Shares
under certain circumstances. The Corporation will furnish to the holder hereof
upon request and without charge a complete written statement of the terms and
conditions of the Trust Shares. Requests for such statement may be directed to
Cedar Income Fund, Ltd., 44 South Bayles Avenue, Port Washington, New York
11050, Attention: Secretary."
6. Severability. If any provision of this Article IV or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provisions shall
be affected only to the extent necessary to comply with the determination of
such court.
C. Preferred Stock. The Board of Directors of the Corporation, by
resolution, is hereby expressly vested with authority to provide for the
issuance of the shares of Preferred Stock in one or more classes or one or more
series, with such voting powers, full or limited, or no voting powers, and with
such designations, preferences and relative, participating, optional and other
special rights, and qualifications, limitations or restrictions thereof, if any,
as shall be stated and expressed in the resolution or resolutions providing for
such issue adopted by the Board of Directors. Except as otherwise provided by
law, the holders of the Preferred Stock of the Corporation shall only have such
voting rights as are provided for or expressed in the resolutions of the Board
of Directors relating to such Preferred Stock adopted pursuant to the authority
contained in the Articles of Incorporation. Before issuance of any such shares
of Preferred Stock, the Corporation shall file Articles Supplementary with the
State Department of Assessment and Taxation of Maryland in accordance with the
provision of Section 2-208 of the Act.
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D. Reservation of Shares. Pursuant to the obligations of the
Corporation under the Partnership Agreement to issue shares of Common Stock in
exchange for Units, the Board of Directors is hereby required to reserve a
sufficient number of authorized but unissued shares of Common Stock to permit
the Corporation to issue shares of Common Stock in exchange for Units that may
be exchanged for shares of Common Stock pursuant to the Partnership Agreement.
E. Preemptive Rights. No holder of shares of capital stock of the
Corporation shall, as such holder, have any preemptive or other right to
purchase or subscribe for any shares of Common Stock or any class of capital
stock of the Corporation which the Corporation may issue or sell.
F. Control Shares. Pursuant to Section 3-702(b) of the Act, the terms
of Subtitle 7 of Title 3 of the Act shall be inapplicable to any acquisition of
a Control Share (as defined in the Act) that is not prohibited by the terms of
Article IV.
G. Business Combinations. Pursuant to Section 3-603(e)(1)(iii) of the
Act, the terms of Section 3-602 of such law shall be inapplicable to the
Corporation.
ARTICLE V
Board of Directors
A. Management. The management of the business and the conduct of the
affairs of the Corporation shall be vested in its Board of Directors.
B. Number. The number of directors which will constitute the entire
Board of Directors shall be fixed by, or in the manner provided in, the By-Laws
but shall in no event be less than three. The names of the directors who shall
act until the first annual meeting or until their successors are duly chosen and
qualified are Leo S. Ullman, J.A.M.H. der Kinderen and Everett B. Miller III.
C. Classification. The directors shall be classified, with respect to
the time for which they severally hold office, into three classes, as nearly
equal in number as possible, as shall be provided in the By-Laws of the
Corporation, one class to be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1999, another class to be
originally elected for a term expiring at the annual meeting of stockholders to
be held in 2000, and another class to be originally elected for a term expiring
at the annual meeting of stockholders to be held in 2001, with each class to
hold office until its successors are elected and qualified. At each annual
meeting of the stockholders of the Corporation, the date of which shall be fixed
by or pursuant to the By-Laws of the Corporation, the successors of the class of
directors whose terms expire at that meeting shall be elected to hold office for
a term expiring at the annual meeting of stockholders held in the third year
following the year of their election. No election of directors need be by
written ballot. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
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D. Vacancies. Newly created directorships resulting from any increase
in the number of directors may be filled by the Board of Directors, or as
otherwise provided in the By-Laws, and any vacancies on the Board of Directors
resulting from death, resignation, removal or other cause shall only be filled
by the affirmative vote of a majority of the remaining directors then in office,
even though less than a quorum of the Board of Directors, or by a sole remaining
director, or as otherwise provided in the By-Laws. Any director elected in
accordance with the preceding sentence shall hold office until the next annual
meeting of the Corporation, at which time a successor shall be elected to fill
the remaining term of the position filled by such director.
E. Removal. Any director may be removed from office only for cause and
only by the affirmative vote of the holders of a majority of the combined voting
power of the then outstanding shares entitled to vote in the election of
directors. For purposes of this subparagraph E of Article V "cause" shall mean
the willful and continuous failure of a director to substantially perform such
director's duties to the Corporation (other than any such failure resulting from
temporary incapacity due to physical or mental illness) or the willful engaging
by a director in gross misconduct materially and demonstrably injurious to the
Corporation.
F. By-Laws. The power to adopt, alter and/or repeal the By-Laws of the
Corporation is vested exclusively in the Board of Directors.
G. Powers. The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the charter of the Corporation, or construed as or
deemed by inference or otherwise in any manner to exclude or limit the powers
conferred upon the Board of Directors under the General Corporation Law of
Maryland as now or hereafter in force.
ARTICLE VI
Liability
The liability of the directors and officers of the Corporation
to the Corporation and its stockholders for money damages is hereby limited to
the fullest extent permitted by Section 5-349 of the Courts and Judicial
Proceedings Code of Maryland (or its successor) as such provisions may be
amended from time to time.
12
ARTICLE VII
Indemnification
The Corporation shall indemnify (A) its directors and
officers, whether serving the Corporation or at its request any other entity, to
the full extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of expenses under the
procedures and to the full extent permitted by law and (B) other employees and
agents to such extent as shall be authorized by the Board of Directors or the
Corporation's By-Laws and be permitted by law. The foregoing rights of
indemnification shall not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of Directors may take such
action as is necessary to carry out these indemnification provisions and is
expressly empowered to adopt, approve and amend from time to time such By-Laws,
resolutions or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No amendment of the
charter of the Corporation shall limit or eliminate the right to indemnification
provided hereunder with respect to acts or omissions occurring prior to such
amendment or repeal.
ARTICLE VIII
Existence
The Corporation is to have perpetual existence.
IN WITNESS WHEREOF, the undersigned incorporator of Cedar
Income Fund, Ltd. who executed the foregoing Articles of Incorporation hereby
acknowledges the same to be his act and further acknowledges that, to the best
of his knowledge the matters and facts set forth therein are true in all
material respects under the penalties of perjury.
Dated the 11th day of June, 1998.
/s/ James T. Cunningham
--------------------------
JAMES T. CUNNINGHAM
13
CERTIFICATE OF CORRECTION
TO
THE ARTICLES OF INCORPORATION
OF
CEDAR INCOME FUND, LTD.,
a Maryland Corporation
Pursuant to the provisions of Section 1-207 of the Maryland General
Corporation Law, the undersigned executes the following Certificate of
Correction:
1. The title of the document being corrected is the "Articles of Incorporation
of Cedar Income Fund, Ltd." (the "Articles").
2. The name of the sole party to the Articles is James T. Cunningham, as sole
incorporator of Cedar Income Fund, Ltd., a Maryland corporation.
3. The date that the Articles were filed with the State of Maryland Department
of Assessments and Taxation is June 12, 1998.
4. The erroneous provision of the Articles to be corrected is the proviso
beginning on the 11th line of the definition of the term "Existing Holder
Limit" contained in Article IV paragraph B.4.(a) of the Articles (the
"Proviso") which currently reads as follows:
"provided, however, that the Existing Holding Limits for all
Existing Holders when combined shall not exceed 85% of the
Corporation's Common Stock."
5. The foregoing erroneous Proviso is hereby corrected to read as follows:
"provided, however, that the Existing Holder Limits for all
Existing Holders when combined shall not exceed 35% of the
Corporation's Common Stock."
IN WITNESS WHEREOF, the undersigned sole incorporator of Cedar Income
Fund, Ltd., who executes the foregoing Certificate of Correction, hereby
acknowledges the same to be his act and further acknowledges that, to the best
of his knowledge, the matters and facts set forth herein are true in all
material respects under the penalties of perjury.
Dated the 24th day of July, 1998.
/s/ James T. Cunningham
-------------------------
JAMES T. CUNNINGHAM