SECOND
                      ARTICLES OF AMENDMENT AND RESTATEMENT
                                       OF
                        SUNSET FINANCIAL RESOURCES, INC.
 
         Sunset Financial Resources, Inc., a Maryland corporation (the
"Corporation"), with its principal Maryland office at c/o The Corporation Trust,
Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202, hereby
certifies that:
 
         FIRST: The amendments set forth in these Second Articles of Amendment
and Restatement ("Articles") were advised by the Board of Directors of the
Corporation and approved by the stockholders.
 
         SECOND: The Corporation desires to, and does hereby, amend and restate
its Articles of Amendment and Restatement as currently in effect.
 
         THIRD: The amendments set forth in these Articles, among other things,
modify certain provisions pertaining to the share transfer restrictions
contained in Article XI hereof.
 
         FOURTH: The amendments set forth in these amended and restated Articles
have not changed the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of any shares of stock originally authorized in the
original Articles of Amendment and Restatement.
 
         FIFTH: The following provisions are all the provisions of these
Articles currently in effect and as hereinafter amended and restated:
 
                                   ARTICLE I
 
                                      NAME
 
         The name of the corporation is Sunset Financial Resources, Inc.
(hereinafter, the "Corporation").
 
                                   ARTICLE II
 
                                    PURPOSES
 
         The purposes for which the Corporation is formed are to engage in any
lawful act or activity (including, without limitation or obligation, engaging in
business as a real estate investment trust under the Internal Revenue Code of
1986, as amended, or any successor statute (the "Code")) for which corporations
may be organized under the Maryland General Corporation Law as now or hereafter
in force (the "MGCL"). For purposes of these Articles, "REIT" means a real
estate investment trust under Sections 856 through 860 of the Code.
 
                                   ARTICLE III
 
                  PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
 
         The address of the principal office of the Corporation in the State of
Maryland is 300 East Lombard Street, Baltimore, Maryland 21202. The name of the
resident agent of the Corporation in the State of Maryland is Michael E. Jones
c/o The Corporation Trust, Incorporated, whose address is 300 East Lombard
Street, Baltimore, Maryland 21202.
 
                                   ARTICLE IV
 
                                      STOCK
 
         Section 4.1 Authorized Shares. The Corporation is authorized to issue
150,000,000 shares of stock, consisting of 100,000,000 shares of Common Stock,
$0.001 par value per share ("Common Stock"), and 50,000,000 shares of Preferred
Stock, $0.001 par value per share ("Preferred Stock"). The Board of Directors
may classify and reclassify any unissued shares of stock in accordance with this
Section 4.1, and Sections 4.3 and 4.4 below. The aggregate value of all
authorized shares of stock having par value is $150,000. The Board of Directors
by resolution may classify or reclassify any unissued shares of the Common Stock
or the Preferred Stock by setting or changing in any one or more respects, from
time to time, before issuance of such shares, the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption of such shares.
 
         Section 4.2 Common Stock.
 
         (a) Dividend Rights. Subject to the preferential dividend rights of the
Preferred Stock, if any, as may be determined by the Board of Directors pursuant
to Section 4.3, the holders of the shares of the Common Stock shall be entitled
to receive such dividends as may be declared by the Board of Directors.
 
         (b) Rights Upon Liquidation. Subject to the preferential rights of the
Preferred Stock, if any, as may be determined by the Board of Directors pursuant
to Section 4.3 and the preferential rights of the Capital Stock (as hereinafter
defined) that has been transferred to a Trust (as hereinafter defined) for the
benefit of a Charitable Beneficiary (as hereinafter defined), if any, 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 of shares of
the Common Stock shall be entitled to receive, ratably with each other holder of
Common Stock and Common Stock that has been transferred to a trust for the
benefit of a Charitable Beneficiary, that portion of the assets of the
Corporation available for distribution to the holders of Common Stock or Common
Stock that has been transferred to a trust for the benefit of a Charitable
Beneficiary that bears the same relation to the total amount of such assets of
the Corporation as the number of shares of Common Stock held by such holder
bears to the total number of shares of Common Stock then outstanding including
Common Stock that has been transferred to a trust for the benefit of a
Charitable Beneficiary then outstanding.
 
         (c) Voting Rights. The holders of the shares of the Common Stock shall
be entitled to vote on all matters (for which a common stockholder shall be
entitled to vote thereon) at all meetings of the stockholders of the Corporation
and shall be entitled to one vote for each share of the Common Stock entitled to
vote at such meeting, voting together with the holders of the Preferred Stock
who are entitled to vote at such meeting.
 
         Section 4.3 Preferred Stock. With respect to the Preferred Stock, the
Board of Directors shall have the power from time to time (a) to classify or
reclassify, in one or more series, any unissued shares of Preferred Stock and
(b) to reclassify any unissued shares of any series of Preferred Stock, in the
case of either (a) or (b) by setting or changing the number of shares
constituting such series and the designation, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption of such shares, and in such event, the
Corporation shall file for record with the State Department of Assessments and
Taxation of Maryland articles supplementary containing a description of the
stock as set or changed by the Board of Directors.
 
         Section 4.4 Authorization by Board of Stock Issuance. The Board of
Directors may authorize the issuance from time to time of shares of stock of the
Corporation of any class or series, whether now or hereafter authorized, or
securities or rights convertible into shares of its stock of any class or
series, whether now or hereafter authorized, for such consideration as the Board
of Directors may deem advisable (or without consideration in the case of a stock
split or stock dividend), subject to such restrictions or limitations, if any,
as may be set forth in the these Articles or the Bylaws of the Corporation (the
"Bylaws").
 
         Section 4.5 Articles of Incorporation and Bylaws. All persons who shall
acquire stock in the Corporation shall acquire the same subject to the
provisions of these Articles and the Bylaws, as they may be amended from time to
time.
 
                                   ARTICLE V
 
                                    DIRECTORS
 
         Section 5.1 General. The business and affairs of the Corporation shall
be managed under the direction of the Board of Directors.
 
         Section 5.2 Number. The number of directors of the Corporation
initially shall be one (1), which number may be increased or decreased by the
Board of Directors, but shall never be less than the minimum number required by
the MGCL. The Board of Directors may increase the number of directors and may
fill any vacancy, whether resulting from an increase in the number of directors
or otherwise, on the Board of Directors occurring before the first annual
meeting of stockholders in the manner provided in the Bylaws. The names of the
current directors are:
 
         John Bert Watson
         Thomas G. Manuel
         Hugh H. Jones, Jr.
         George A. Murray
         Joseph P. Stingone
 
         Section 5.3 Nomination of Director Candidates. Advance notice of
nominations for the election of directors, other than by the Board of Directors
or a committee thereof, shall be given in the manner provided in the Bylaws.
 
         Section 5.4 Committees. The Board of Directors may establish such
committees as it deems appropriate, in its discretion.
 
         Section 5.5 Removal of Directors. Any director, or the entire Board of
Directors, may be removed from office at any time, with or without cause, by the
affirmative vote of at least two thirds of the votes entitled to be cast
generally by stockholders in the election of directors.
 
                                   ARTICLE VI
 
                             LIMITATION OF LIABILITY
 
         To the maximum extent that Maryland law in effect from time to time
permits limitation of the liability of directors and officers of a corporation,
no director or officer of the Corporation shall be liable to the Corporation or
its stockholders for money damages. Neither the amendment nor repeal of this
Article VI, nor the adoption or amendment of any other provision of these
Articles or the Bylaws inconsistent with this Article VI, shall apply to or
affect in any respect the applicability of the preceding sentence with respect
to any act or failure to act which occurred prior to such amendment, repeal or
adoption.
 
                                  ARTICLE VII
 
                     AMENDMENT OF ARTICLES OF INCORPORATION
 
         The Corporation reserves the right from time to time to make any
amendment to these Articles, now or hereafter authorized by law, including any
amendment altering the terms or contract rights, as expressly set forth in these
Articles, of any shares of Capital Stock. All rights and powers conferred by
these Articles on stockholders, directors and officers are granted subject to
this reservation.
 
                                  ARTICLE VIII
 
                               AMENDMENT OF BYLAWS
 
         The Bylaws may be altered, amended or repealed, and new bylaws adopted,
by the vote of a majority of the entire Board of Directors or by a vote of the
majority of the voting power of the Common Stock.
 
                                   ARTICLE IX
 
                                 INDEMNIFICATION
 
         The Corporation (a) shall indemnify its directors to the fullest extent
provided by the general laws of the State of Maryland now or hereafter enforced,
including the advance of expenses under the procedures provided by such laws and
(b) may indemnify its officers to the extent it shall deem appropriate and as
shall be authorized by the Board of Directors, consistent with law. The
foregoing shall not limit the authority of the Corporation to indemnify other
employees and agents consistent with law.
 
                                   ARTICLE X
 
                  INAPPLICABILITY OF CERTAIN MARYLAND STATUTES
 
         Section 10.1 Business Combination Act. Notwithstanding any other
provision of these Articles or any contrary provision of law, the Maryland
Business Combination Act, found in Title 3, subtitle 6 of the MGCL, as amended
from time to time, or any successor statute thereto, shall not apply to any
"business combination" (as defined in Section 3-601(e) of the MGCL, as amended
from time to time, or any successor statute thereto) of the Corporation and any
Person (as hereinafter defined).
 
         Section 10.2 Control Share Acquisition Act. Notwithstanding any other
provision of these Articles or any contrary provision of law, the Maryland
Control Share Acquisition Act, found in Title 3, subtitle 7 of the MGCL, as
amended from time to time, or any successor statute thereto shall not apply to
any acquisition of securities of the Corporation by any Person.
 
         Section 10.3 Unsolicited Takeovers. Notwithstanding any other provision
of these Articles or any contrary provision of law, Title 3, subtitle 8 of the
MGCL, as amended from time to time, or any successor statute thereto, shall not
apply to the Corporation.
 
                                   ARTICLE XI
 
                RESTRICTIONS ON TRANSFER AND OWNERSHIP OF SHARES
 
         Section 11.1 Definitions. For the purpose of this Article XI, the
following terms shall have the following meanings:
 
         Aggregate Stock Ownership Limit. The term "Aggregate Stock Ownership
Limit" shall mean not more than 9.8% of the aggregate value of the outstanding
shares of any class or series of Capital Stock. The value of the outstanding
shares of Capital Stock shall be determined by the Board of Directors of the
Corporation in good faith, which determination shall be conclusive for all
purposes hereof.
 
         Beneficial Ownership. The term "Beneficial Ownership" shall mean
ownership of Capital Stock by a Person, whether the interest in the shares of
Capital Stock is held directly or indirectly (including by a nominee), and shall
include interests that would be treated as owned through the application of
Section 544 of the Code, as modified by Section 856(h)(1)(B) of the
Code. The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned"
shall have the correlative meanings.
 
         Business Day. The term "Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law, regulation or
executive order to close.
 
         Capital Stock. The term "Capital Stock" shall mean all classes or
series of stock of the Corporation, including, without limitation, Common Stock
and Preferred Stock.
 
         Charitable Beneficiary. The term "Charitable Beneficiary" shall mean
one or more beneficiaries of a Trust as determined pursuant to Section 11.3.6,
provided that each such organization must be described in Section 501(c)(3) of
the Code and contributions to each such organization must be eligible for
deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
 
         Constructive Ownership. The term "Constructive Ownership" shall mean
ownership of Capital Stock by a Person, whether the interest in the shares of
Capital Stock is held directly or indirectly (including by a nominee), and shall
include interests that would be treated as owned through the application of
Section 318(a) 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.
 
         Excepted Holder. The term "Excepted Holder" shall mean a stockholder of
the Corporation for whom an Excepted Holder Limit is created by these Articles
or by the Board of Directors pursuant to Section 11.2.7.
 
         Excepted Holder Limit. The term "Excepted Holder Limit" shall mean,
provided that the affected Excepted Holder agrees to comply with the
requirements established by the Board of Directors pursuant to Section 11.2.7,
and subject to adjustment pursuant to Section 11.2.7(d), the percentage limit
established by the Board of Directors for such Exempted Holder pursuant to
Section 11.2.7.
 
         Initial Date. The term "Initial Date" shall mean the Initial Date
determined by the Board of Directors.
 
         Market Price. The term "Market Price" on any date shall mean, with
respect to any class or series of outstanding shares of Capital Stock, the
Closing Price for such Capital Stock on such date. The "Closing Price" on any
date shall mean the last sale price for such Capital Stock, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, for such Capital Stock, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if such Capital Stock
is not listed or admitted to trading on the NYSE, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such Capital Stock is listed
or admitted to trading or, if such Capital Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotation system that may then be
in use or, if such Capital Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in such Capital Stock selected by the Board of
Directors of the Corporation or, in the event that no trading price is available
for such Capital Stock, the fair market value of the Capital Stock, as
determined in good faith by the Board of Directors of the Corporation.
 
         NYSE. The term "NYSE" shall mean the New York Stock Exchange, Inc.
 
         Person. The term "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Sections 401(a) or
501(c)(17) of the Code), 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.
 
         Prohibited Owner. The term "Prohibited Owner" shall mean, with respect
to any purported Transfer (as hereinafter defined), any Person who, but for the
provisions of Section 11.2.1, would Beneficially Own or Constructively Own
shares of Capital Stock, and if appropriate in the context, shall also mean any
Person who would have been the record owner of the shares that the Prohibited
Owner would have so owned.
 
         Restriction Termination Date. The term "Restriction Termination Date"
shall mean the first day after the Initial Date on which 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 or that compliance with the
restrictions and limitations on Beneficial Ownership, Constructive Ownership and
Transfers of shares of Capital Stock set forth herein is no longer required in
order for the Corporation to continue to qualify as a REIT.
 
         Transfer. The term "Transfer" shall mean any issuance, sale, transfer,
gift, assignment, devise or other disposition, as well as any other event that
causes any Person to acquire Beneficial Ownership or Constructive Ownership, or
any agreement to take any such actions or cause any such events, of Capital
Stock or the right to vote or receive dividends on Capital Stock, including,
without limitation, (a) the granting or exercise of any option (or any
disposition of any option), (b) any disposition of any securities or rights
convertible into or exchangeable for Capital Stock or any interest in Capital
Stock or any exercise of any such conversion or exchange right and (c) Transfers
of interests in other entities that result in changes in Beneficial Ownership or
Constructive Ownership of Capital Stock, in each case, whether voluntary or
involuntary, whether owned of record, Constructively Owned or Beneficially Owned
and whether by operation of law or otherwise. The terms "Transferring" and
"Transferred" shall have the correlative meanings.
 
         Trust. The term "Trust" shall mean any trust provided for in Section
11.3.1.
 
         Trustee. The term "Trustee" shall mean the Person unaffiliated with the
Corporation or any Prohibited Owner that is appointed by the Corporation to
serve as trustee of a Trust.
 
         Section 11.2 Capital Stock.
 
         Section 11.2.1 Ownership Limitations. Subject to Section 11.4, during
the period commencing on the Initial Date and prior to the Restriction
Termination Date:
 
         (a)      Basic Restrictions.
 
                           (i) (1) No Person, other than an Excepted Holder,
                  shall Beneficially Own or Constructively Own shares of Capital
                  Stock in excess of the Aggregate Stock Ownership Limit and (2)
                  no Excepted Holder shall Beneficially Own or Constructively
                  Own shares of Capital Stock in excess of the Excepted Holder
                  Limit for such Excepted Holder.
 
                           (ii) No Person shall Beneficially Own or
                  Constructively Own shares of Capital Stock to the extent that
                  such Beneficial Ownership or Constructive Ownership of Capital
                  Stock would result in the Corporation being "closely held"
                  within the meaning of Section 856(h) of the Code (without
                  regard to whether the ownership interest is held during the
                  last half of a taxable year), or would otherwise result in the
                  Corporation failing to qualify as a REIT (including, but not
                  limited to, Beneficial Ownership or Constructive Ownership
                  that would result in the Corporation owning (actually or being
                  the Constructive Owner of) 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).
 
                           (iii) Subject to Section 11.4 as indicated above,
                  notwithstanding any other provision contained herein, any
                  Transfer of shares of Capital Stock that, if effective, would
                  result in the Capital Stock being Beneficially Owned by less
                  than 100 Persons (determined under the principles of Section
                  856(a)(5) of the Code) shall be void ab initio, and the
                  intended transferee shall acquire no rights in such shares of
                  Capital Stock.
 
         (b) Transfer in Trust. If any Transfer of shares of Capital Stock
occurs which, if effective, would result in any Person Beneficially Owning or
Constructively Owning shares of Capital Stock in violation of Section
11.2.1(a)(i), (ii) or (iii),
 
                           (i) then that number of shares of the Capital Stock
                  the Beneficial Ownership or Constructive Ownership of which
                  otherwise would cause such Person to violate Section
                  11.2.1(a)(i), (ii) or (iii) (rounded to the nearest whole
                  share) shall be automatically transferred to a Trust for the
                  benefit of a Charitable Beneficiary, as described in Section
                  11.3, effective as of the close of business on the Business
                  Day prior to the date of such Transfer, and such Person shall
                  acquire no rights in such shares; or
 
                           (ii) if the transfer to the Trust described in clause
                  (i) of this sentence would not be effective for any reason to
                  prevent the violation of Section 11.2.1(a)(i) or (ii), then
                  the Transfer of that number of shares of Capital Stock that
                  otherwise would cause any Person to violate Section
                  11.2.1(a)(i) or (ii) 
                  shall be void ab initio, and the intended transferee shall
                  acquire no rights in such shares of Capital Stock.
 
         Section 11.2.2 Remedies for Breach. If the Board of Directors of the
Corporation or any duly authorized committee thereof shall at any time determine
in good faith that a Transfer or any other event has taken place that results in
a violation of Section 11.2.1 or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership or Constructive Ownership of any
shares of Capital Stock in violation of Section 11.2.1 (whether or not such
violation is intended), the Board of Directors or a committee thereof shall take
such action as it deems advisable to refuse to give effect to or to prevent such
Transfer or other event, including, without limitation, causing the Corporation
to redeem shares, refusing to give effect to such Transfer on the books of the
Corporation or instituting proceedings to enjoin such Transfer or other event;
provided, however, that any Transfer or attempted Transfer or other event in
violation of Section 11.2.1 shall automatically result in the transfer to the
Trust described above, and, where applicable, and subject to Section 11.4, such
Transfer (or other event) shall be void ab initio as provided above irrespective
of any action (or non-action) by the Board of Directors or a committee thereof.
 
         Section 11.2.3 Notice of Restricted Transfer. Any Person who acquires
or attempts or intends to acquire Beneficial Ownership or Constructive Ownership
of shares of Capital Stock that will or may violate Section 11.2.1(a) or any
Person who would have owned shares of Capital Stock that resulted in a transfer
to the Trust pursuant to the provisions of Section 11.2.1(b) shall immediately
give written notice to the Corporation of such event, or in the case of such a
proposed or attempted transaction, give at least 15 days' prior written notice
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 on the
Corporation's status as a REIT.
 
         Section 11.2.4 Owners Required To Provide Information. From the Initial
Date and prior to the Restriction Termination Date:
 
         (a) every owner of more than 5% (or such lower percentage as required
by the Code or the Treasury Regulations promulgated thereunder) of the
outstanding shares of Capital Stock, within 30 days after the end of each
taxable year, shall give written notice to the Corporation stating the name and
address of such owner, the number of shares of Capital Stock Beneficially Owned
and a description of the manner in which such shares are held. Each such owner
shall provide to the Corporation such additional information as the Corporation
may request in order to determine the effect, if any, of such Beneficial
Ownership on the Corporation's status as a REIT and to ensure compliance with
the Aggregate Stock Ownership Limit; and
 
         (b) each Person who is a Beneficial or Constructive Owner of Capital
Stock and each Person (including the stockholder of record) who is holding
Capital Stock for a Beneficial or Constructive Owner shall provide to the
Corporation such information as the Corporation may request, in good faith, in
order to determine the Corporation's status as a REIT and to comply with
requirements of any taxing authority or governmental authority or to determine
such compliance.
 
         Section 11.2.5 Remedies Not Limited. Nothing contained in this Section
11.2 shall limit the authority of the Board of Directors of the Corporation to
take such other action as it deems necessary or advisable to protect the
Corporation and the interests of its stockholders in preserving the
Corporation's status as a REIT.
 
         Section 11.2.6 Ambiguity. In the case of an ambiguity in the
application of any of the provisions of this Section 11.2, Section 11.3 or any
definition contained in Section 11.1, the Board of Directors of the Corporation
shall have the power to determine the application of the provisions of this
Section 11.2 or Section 11.3 or any such definition with respect to any
situation based on the facts known to it. In the event Section 11.2 or 11.3
requires an action by the Board of Directors and these Articles fail to provide
specific guidance with respect to such action, the Board of Directors shall have
the power to determine the action to be taken so long as such action is not
contrary to the provisions of Sections 11.1, 11.2 or 11.3.
 
         Section 11.2.7 Exceptions.
 
         (a) Subject to Section 11.2.1(a)(ii), the Board of Directors of the
Corporation, in its sole discretion, may exempt a Person from the Aggregate
Stock Ownership Limit with respect to one or more classes or series of Capital
Stock and may establish or increase an Excepted Holder Limit for such Person if:
 
                           (i) the Board of Directors obtains such
                  representations and undertakings from such Person as are
                  reasonably necessary to ascertain that no individual's
                  Beneficial Ownership or Constructive Ownership of such shares
                  of Capital Stock will violate Section 11.2.1(a)(ii) or
                  otherwise adversely affect the Corporation's ability to
                  qualify as a REIT;
 
                           (ii) such Person does not, and represents that it
                  will not, actually own or Constructively Own an interest in a
                  tenant of the Corporation (or a tenant of any entity owned or
                  controlled by the Corporation) that would cause the
                  Corporation to actually own or Constructively Own more than a
                  9.9% interest (as set forth in Section 856(d)(2)(B) of the
                  Code) in such tenant and the Board of Directors obtains such
                  representations and undertakings from such Person as are
                  reasonably necessary to ascertain this fact (for this purpose,
                  a tenant from whom the Corporation (or an entity owned or
                  controlled by the Corporation) derives (and is expected to
                  continue to derive) a sufficiently small amount of revenue
                  such that, in the opinion of the Board of Directors of the
                  Corporation, rent from such tenant would not adversely affect
                  the Corporation's ability to qualify as a REIT, shall not be
                  treated as a tenant of the Corporation); and
 
                           (iii) such Person agrees that any violation or
                  attempted violation of such representations or undertakings
                  (or other action which is contrary to the restrictions
                  contained in Sections 11.2.1 through 11.2.6) will result in
                  such shares of Capital Stock being automatically transferred
                  to a Trust in accordance with Sections 11.2.1(b) and 11.3.
 
         (b) Prior to granting any exception pursuant to Section 11.2.7(a), the
Board of Directors of the Corporation may require a ruling from the Internal
Revenue Service, 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. Notwithstanding the receipt of any ruling or opinion, the Board of
Directors may impose such conditions or restrictions as it deems appropriate in
connection with granting such exception.
 
         (c) Subject to Section 11.2.1(a)(ii), an underwriter which participates
in a public offering or a private placement of Capital Stock (or securities
convertible into or exchangeable for Capital Stock) may Beneficially Own or
Constructively Own shares of Capital Stock (or securities convertible into or
exchangeable for Capital Stock) in excess of the Aggregate Stock Ownership
Limit, but only to the extent necessary to facilitate such public offering or
private placement.
 
         (d) The Board of Directors may only reduce the Excepted Holder Limit
for an Excepted Holder: (1) with the written consent of such Excepted Holder at
any time, or (2) pursuant to the terms and conditions of the agreements and
undertakings entered into with such Excepted Holder in connection with the
establishment of the Excepted Holder Limit for that Excepted Holder. No Excepted
Holder Limit with respect to a class or series of Capital Stock shall be reduced
to a percentage that is less than the Aggregate Stock Ownership Limit.
 
         Section 11.2.8 Legend. Each certificate for shares of Capital Stock
shall bear substantially the following legend:
 
                  The shares represented by this certificate are subject to
                  restrictions on Beneficial Ownership and Constructive
                  Ownership and Transfer for the purpose of the Corporation's
                  maintenance of its status as a Real Estate Investment Trust
                  under the Internal Revenue Code of 1986, as amended (the
                  "Code"). Subject to certain further restrictions and except as
                  expressly provided in the Corporation's Articles of
                  Incorporation, (i) no Person may Beneficially Own or
                  Constructively Own shares of any class or series of the
                  Corporation's Capital Stock in excess of 9.8% of the aggregate
                  value of the outstanding shares of any such class or series of
                  Capital Stock unless such Person is an Excepted Holder (in
                  which case the Excepted Holder Limit shall be applicable);
                  (ii) no Person may Beneficially Own or Constructively Own
                  Capital Stock that would result in the Corporation being
                  "closely held" under Section 856(h) of the Code or otherwise
                  cause the Corporation to fail to qualify as a REIT; and (iii)
                  no Person may Transfer shares of Capital Stock if such
                  Transfer would result in the Capital Stock of the Corporation
                  being owned by fewer than 100 Persons. Any Person who
                  Beneficially Owns or Constructively Owns or attempts to
                  Beneficially Own or Constructively Own shares of Capital Stock
                  which causes or will cause a Person to Beneficially Own or
                  Constructively Own shares of Capital Stock in excess or in
                  violation of the above limitations must immediately notify the
                  Corporation. If any of the restrictions on transfer or
                  ownership are violated, the shares of Capital Stock
                  represented hereby will be automatically transferred to a
                  Trustee of a Trust for the benefit of one or more Charitable
                  Beneficiaries. In addition, upon the
                  occurrence of certain events, attempted Transfers in violation
                  of the restrictions described above may be void ab initio. All
                  capitalized terms in this legend have the meanings defined in
                  the Articles of Incorporation of the Corporation, as the same
                  may be amended from time to time, a copy of which, including
                  the restrictions on transfer and ownership, will be furnished
                  to each holder of Capital Stock of the Corporation on request
                  and without charge.
 
         Instead of the foregoing legend, the certificate may state that the
Corporation will furnish a full statement about certain restrictions on
transferability to a stockholder on request and without charge.
 
         Section 11.3 Transfer of Capital Stock in Trust.
 
         Section 11.3.1 Ownership in Trust. Upon any purported Transfer or other
event described in Section 11.2.1(b) that would result in a transfer of shares
of Capital Stock to a Trust, such shares of Capital Stock shall be deemed to
have been transferred to a Trustee as trustee of such Trust for the exclusive
benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee
shall be deemed to be effective as of the close of business on the Business Day
prior to the purported Transfer or other event that results in the transfer to
the Trust pursuant to Section 11.2.1(b). The Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with the Corporation or any
Prohibited Owner. Each Charitable Beneficiary shall be designated by the
Corporation as provided in Section 11.3.6.
 
         Section 11.3.2 Status of Shares Held by the Trustee. Shares of Capital
Stock held by the Trustee shall be issued and outstanding shares of Capital
Stock of the Corporation. The Prohibited Owner shall have no rights in the
shares held by the Trustee. The Prohibited Owner shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights
to dividends or other distributions and shall not possess any rights to vote or
other rights attributable to the shares held in the Trust.
 
         Section 11.3.3 Dividend and Voting Rights. The Trustee shall have all
voting rights and rights to dividends or other distributions with respect to
shares of Capital Stock held in the Trust, which rights shall be exercised for
the exclusive benefit of the Charitable Beneficiary. Any dividend or other
distribution paid prior to the discovery by the Corporation that the shares of
Capital Stock have been transferred to the Trustee shall be paid by the
recipient of such dividend or distribution to the Trustee upon demand, and any
dividend or other distribution authorized but unpaid shall be paid when due to
the Trustee. Any dividend or distribution so paid to the Trustee shall be held
in trust for the Charitable Beneficiary. The Prohibited Owner shall have no
voting rights with respect to shares held in the Trust and, subject to Maryland
law, effective as of the date that the shares of Capital Stock have been
transferred to the Trustee, the Trustee shall have the authority (at the
Trustee's sole discretion) (i) to rescind as void any vote cast by a Prohibited
Owner prior to the discovery by the Corporation that the shares of Capital Stock
have been transferred to the Trustee and (ii) to recast such vote in accordance
with the desires of the Trustee acting for the benefit of the Charitable
Beneficiary; provided, however, that if the Corporation has already taken
irreversible corporate action, then the Trustee shall not have the authority to
rescind and recast such vote. Notwithstanding the provisions of this Article XI,
until the Corporation has received notification that shares of Capital Stock
have been transferred into a Trust, the Corporation shall be entitled to rely on its share
transfer and other stockholder records for purposes of preparing lists of
stockholders entitled to vote at meetings, determining the validity and
authority of proxies and otherwise conducting votes of stockholders.
 
         Section 11.3.4 Sale of Shares by Trustee. Within 20 days of receiving
notice from the Corporation that shares of Capital Stock have been transferred
to the Trust, the Trustee of the Trust shall sell the shares held in the Trust
to a Person, designated by the Trustee, whose ownership of the shares will not
violate the ownership limitations set forth in Section 11.2.1(a) or otherwise
adversely affect the Corporation's ability to qualify as a REIT. Upon such sale,
the interest of the Charitable Beneficiary in the shares sold shall terminate,
and the Trustee shall distribute the net proceeds of the sale to the Prohibited
Owner and to the Charitable Beneficiary as provided in this Section 11.3.4. The
Prohibited Owner shall receive the lesser of (1) the price paid by the
Prohibited Owner for the shares or, if the Prohibited Owner did not give value
for the shares in connection with the event causing the shares to be held in the
Trust (e.g., in the case of a gift, devise or other such transaction), the
Market Price of the shares on the day of the event causing the shares to be held
in the Trust and (2) the price per share received by the Trustee from the sale
or other disposition of the shares held in the Trust. Any net sales proceeds in
excess of the amount payable to the Prohibited Owner shall be immediately paid
to the Charitable Beneficiary. If, prior to the discovery by the Corporation
that shares of Capital Stock have been transferred to the Trustee, such shares
are sold by a Prohibited Owner, then (i) such shares shall be deemed to have
been sold on behalf of the Trust and (ii) to the extent that the Prohibited
Owner received an amount for such shares that exceeds the amount that such
Prohibited Owner was entitled to receive pursuant to this Section 11.3.4, such
excess shall be paid to the Trustee upon demand.
 
         Section 11.3.5 Purchase Right in Stock Transferred to the Trustee.
Shares of Capital Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation shall have
the right to accept such offer until the Trustee has sold the shares held in the
Trust pursuant to Section 11.3.4. Upon such a sale to the Corporation, the
interest of the Charitable Beneficiary in the shares sold shall terminate, and
the Trustee shall distribute the net proceeds of the sale to the Prohibited
Owner.
 
         Section 11.3.6 Designation of Charitable Beneficiaries. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust such
that (i) the shares of Capital Stock held in the Trust would not violate the
restrictions set forth in Section 11.2.1(a) in the hands of such Charitable
Beneficiary and (ii) each such organization must be described in Section
501(c)(3) of the Code and contributions to each such organization must be
eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the
Code.
 
         Section 11.4 NYSE Transactions. Nothing in this Article XI shall
preclude the settlement of any transaction entered into through the facilities
of the NYSE or any other national securities exchange or automated inter-dealer
quotation system.
 
         Section 11.5 Enforcement. The Corporation is authorized specifically to
seek equitable relief, including injunctive relief, to enforce the provisions of
this Article XI.
 
         Section 11.6 Non-Waiver. No delay or failure on the part of the
Corporation or the Board of Directors in exercising any right hereunder shall
operate as a waiver of any right of the Corporation or the Board of Directors,
as the case may be, except to the extent specifically waived in writing.
 
                                  ARTICLE XII
 
             ERISA RESTRICTIONS ON TRANSFER AND OWNERSHIP OF SHARES
 
         Section 12.1 Definitions. For the purpose of this Article XII, the
following terms shall have the following meanings:
 
         Benefit Plan Investor. The term "Benefit Plan Investor" shall mean (i)
an employee benefit plan (as defined by Section 3(3) of ERISA (as hereinafter
defined)), whether or not it is subject to Title I of ERISA; (ii) a plan as
described in Section 4975(e)(1) of the Code; (iii) an entity whose underlying
assets include the assets of any plan described in clause (i) or (ii) by reason
of the plan's investment in such entity (including but not limited to an
insurance company general account); or (iv) an entity that otherwise constitutes
a "benefit plan investor" within the meaning of the Plan Asset Regulation (as
hereinafter defined).
 
         ERISA. The term "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
 
         Fair Market Value. The term "Fair Market Value" shall mean the fair
market value of a Benefit Plan Investor's equity interest in the Corporation as
determined in good faith at the sole discretion of the Chief Executive Officer
or the Board of Directors of the Corporation.
 
         Initial Date. The term "Initial Date" shall mean the Initial Date as
determined by the Board of Directors.
 
         Plan Asset Regulation. The term "Plan Asset Regulation" shall mean the
plan asset regulation promulgated by the U.S. Department of Labor under ERISA at
29 C.F.R. 2510.3-101.
 
         Shares-in-Trust. The term "Shares-in-Trust" shall mean shares of
Capital Stock automatically transferred to a Trustee of a Trust for the benefit
of one or more Charitable Beneficiaries as set forth in Article XI of these
Articles.
 
         25% Threshold. The term "25% Threshold" shall mean ownership by Benefit
Plan Investors, in the aggregate, of 25 percent or more of the value of any
class of equity interest in the Corporation (calculated by excluding the value
of any interest held by any Person, other than a Benefit Plan Investor, who has
discretionary authority or control with respect to the assets of the Corporation
or any Person who provides investment advice to the Corporation for a fee
(direct or indirect) with respect to such assets, or any affiliate of such
Person).
 
         Section 12.2 Ownership Limitations. Commencing on the Initial Date and
terminating as provided in Section 12.5, no Benefit Plan Investor may directly
or indirectly acquire shares of Capital Stock without the Corporation's prior
written consent (which consent may be withheld in the Corporation's sole and
absolute discretion). Prior to shares of Capital Stock qualifying as a class of
"publicly-offered securities" or the availability of another exception to the
"look-through" rule (i.e., the provisions of paragraph (a)(2) of the Plan Asset
Regulation), transfers of shares of Capital Stock to Benefit Plan Investors that
would increase aggregate Benefit Plan Investor ownership of shares of Capital
Stock to a level that would meet or exceed the 25% Threshold will be void ab
initio. In addition, in the event that the aggregate number of shares of Capital
Stock owned by Benefit Plan Investors, but for the operation of this sentence,
would meet or exceed the 25% Threshold, (i) shares of Capital Stock held by
Benefit Plan Investors shall be deemed to be Shares-in-Trust, pro rata, to the
extent necessary to reduce aggregate Benefit Plan Investor ownership of shares
of Capital Stock below the 25% Threshold, (ii) such number of shares of Capital
Stock (rounded up, in the case of each holder, to the nearest whole share) shall
be transferred automatically and by operation of law to a Trust (as described in
Article XI of these Articles) to be held in accordance with this Article XII and
otherwise in accordance with applicable provisions of Article XI of these
Articles, provided that any references therein to ownership limitations shall be
deemed references to the ownership limitations set forth in this Section 12.2,
and (iii) the Benefit Plan Investors previously owning such Shares-in-Trust
shall submit such number of shares of Capital Stock for registration in the name
of the Trust. Such transfer to a Trust and the designation of shares of Capital
Stock as Shares-in-Trust shall be effective as of the close of business on the
business day prior to the date of the event that otherwise would have caused
aggregate Benefit Plan Investor ownership of shares of Capital Stock to meet or
exceed the 25% Threshold.
 
         Section 12.3 Transfers to Non-Benefit Plan Investors. During the period
prior to the discovery of the existence of the Trust, any transfer of shares of
Capital Stock by a Benefit Plan Investor to a non-Benefit Plan Investor shall
reduce the number of Shares-in-Trust on a one-for-one basis, and to that extent
such shares shall cease to be designated as Shares-in-Trust and shall be
returned, effective at exactly the time of the transfer to the non-Benefit Plan
Investor, automatically and without further action by the Corporation or the
Benefit Plan Investor, to all Benefit Plan Investors (or the transferee, if
applicable), pro rata, in accordance with the Benefit Plan Investors' prior
holdings. After the discovery of the existence of the Trust, but prior to the
redemption of all discovered Shares-in-Trust and/or the submission of all
discovered Shares-in-Trust for registration in the name of the Trust, any
transfer of shares of Capital Stock by a Benefit Plan Investor to a non-Benefit
Plan Investor shall reduce the number of Shares-in-Trust on a one-for-one basis,
and to that extent such shares shall cease to be designated as Shares-in-Trust
and shall be returned, automatically and without further action by the
Corporation or the Benefit Plan Investor, to the transferring Benefit Plan
Investor (or its transferee, if applicable).
 
         Section 12.4 Corporation's Right to Redeem Shares-in-Trust. In the
event that any shares of Capital Stock are deemed "Shares-in-Trust" pursuant to
this Article XII, the holder shall cease to own any right or interest with
respect to such shares, and the Corporation will have the right to redeem such
Shares-in-Trust for an amount equal to their Fair Market Value, which proceeds
shall be payable to the purported owner.
 
         Section 12.5 Termination. This Article XII shall cease to apply and all
Shares-in-Trust shall cease to be designated as Shares-in-Trust and shall be
returned, automatically and by operation of law, to their purported owners, all
of which shall occur at such time as shares of Capital Stock qualify as a class
of "publicly-offered securities" or if the Corporation determines that another
exception to the "look-through" rule under the Plan Asset Regulation applies.
 
         IN WITNESS WHEREOF, I have signed these Second Articles of Amendment
and Restatement and acknowledge the same to be my act on this ___ day of
January, 2004.
 
 
 
                                      By: /s/ JOHN BERT WATSON
                                          -------------------------------------
                                          John Bert Watson
                                          President and Chief Executive Officer
 
 

SUNSET FINANCIAL RESOURCES, INC.

ARTICLES OF AMENDMENT

(changing its name to Alesco Financial Inc.)

Sunset Financial Resources, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST:    Article I of the charter of the Corporation (the “Charter”) is hereby amended to change the name of the Corporation to:

Alesco Financial Inc.

SECOND:    The foregoing amendment to the Charter was approved by the Board of Directors of the Corporation and was limited to a change expressly authorized by Section 2-605(a)(1) of the Maryland General Corporation Law without action by the stockholders.

THIRD:    The undersigned Chief Executive Officer of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Chief Executive Officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed in its name and on its behalf by its Chief Executive Officer and attested by its Secretary as of the 6th day of October, 2006.

 

 

 

 

 

 

 

 

 

 

ATTEST:

 

 

 

SUNSET FINANCIAL RESOURCES, INC.

 

 

 

 

 

By:

 

/s/ Daniel Munley

 

 

 

By:

 

/s/ James J. McEntee, III

 

 

Daniel Munley

Secretary

 

 

 

 

 

James J. McEntee, III

Chief Executive Officer

 
 
 

ALESCO FINANCIAL INC.

ARTICLES OF AMENDMENT

THIS IS TO CERTIFY THAT:

FIRST: The charter of Alesco Financial Inc., a Maryland corporation (the “Corporation”), is hereby amended to provide that every ten shares of the common stock, $0.001 par value per share (the “Common Stock”), of the Corporation, which were issued and outstanding immediately prior to the filing of these Articles of Amendment shall be combined into one issued and outstanding share of Common Stock, $0.01 par value per share, and that no fractional shares of Common Stock of the Corporation will be or remain issued upon such amendment and each stockholder otherwise entitled to a fractional share shall be entitled to receive in lieu thereof cash, without interest, upon the surrender of such stockholder’s fractional shares, in an amount equal to the proceeds attributable to the sale of such fractional shares following the aggregation and sale by the Corporation’s exchange agent of all fractional shares otherwise issuable.

SECOND: The amendment to the charter of the Corporation as set forth above has been duly approved by a majority of the Board of Directors of the Corporation as required by the Maryland General Corporation Law (the “MGCL”). Pursuant to Section 2-309(e)(2) of the MGCL, no stockholder approval was required.

THIRD: There has been no increase in the authorized stock of the Corporation effected by the amendment to the charter of the Corporation as set forth above.

FOURTH: The undersigned Chief Executive Officer and President acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Chief Executive Officer and President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

FIFTH: These Articles of Amendment shall become effective at 4:10 p.m. on December 16, 2009.

 

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed in its name and on its behalf by its Chief Executive Officer and President and attested to by its Chief Financial Officer and Treasurer on this 16th day of December, 2009.

 

ALESCO FINANCIAL INC.

By:

 

/s/ JAMES J. McENTEE, III

 

Name: James J. McEntee, III

 

Title: Chief Executive Officer and President

 

ATTEST:

By:

 

/s/ JOHN J. LONGINO

 

Name: John J. Longino

 

Title: Chief Financial Officer and Treasurer

 
 
 

 

ALESCO FINANCIAL INC.

ARTICLES OF AMENDMENT

THIS IS TO CERTIFY THAT:

FIRST: The charter of Alesco Financial Inc., a Maryland corporation (the “Corporation”), is hereby amended to decrease the par value of the shares of common stock of the Corporation issued and outstanding immediately prior to the filing of these Articles of Amendment from $0.01 per share to $0.001 per share.

SECOND: The amendment to the charter of the Corporation as set forth above has been duly approved by a majority of the entire Board of Directors of the Corporation as required by law. The amendment set forth herein is limited to a change expressly authorized by Section 2-605(a)(2) of the Maryland General Corporation Law to be made without action by the stockholders of the Corporation.

THIRD: There has been no increase in the authorized stock of the Corporation effected by the amendment to the charter of the Corporation as set forth above.

FOURTH: The undersigned Chief Executive Officer and President acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Chief Executive Officer and President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

FIFTH: These Articles of Amendment shall become effective at 4:15 p.m. on December 16, 2009.

 

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed in its name and on its behalf by its Chief Executive Officer and President and attested to by its Chief Financial Officer and Treasurer on this 16th day of December, 2009.

 

ALESCO FINANCIAL INC.

By:

 

/s/ JAMES J. McENTEE, III

 

Name: James J. McEntee, III

 

Title: Chief Executive Officer and President

 

ATTEST:

By:

 

/s/ JOHN J. LONGINO

 

Name: John J. Longino

 

Title: Chief Financial Officer and Treasurer

 
 

 

 

 

ALESCO FINANCIAL INC.

ARTICLES OF AMENDMENT

(changing its name to Cohen & Company Inc.)

Alesco Financial Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: Article I of the charter of the Corporation (the “Charter”) is hereby amended to change the name of the Corporation to:

Cohen & Company Inc.

SECOND: The foregoing amendment to the Charter was approved by the Board of Directors of the Corporation and was limited to a change expressly authorized by Section 2-605(a)(1) of the Maryland General Corporation Law without action by the stockholders.

THIRD: These Articles of Amendment are effective as of December 16, 2009 at 4:25 p.m. Eastern Time.

FOURTH: The undersigned President of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned President acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be executed in its name and on its behalf by its President and attested by its Senior Vice President, General Counsel and Secretary as of the 16th day of December, 2009.

 

ATTEST:

 

 

ALESCO FINANCIAL INC.

/s/ RACHAEL FINK

 

 

/s/ CHRISTOPHER RICCIARDI

Rachael Fink

 

 

Christopher Ricciardi

Senior Vice President, General Counsel and Secretary

 

 

President