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                                                                     Exhibit 3.2

                              AMENDED AND RESTATED
                                    BYLAWS OF
                             MCG CAPITAL CORPORATION

                                    ARTICLE I

                                     Offices

      SECTION 1. Registered Office. The registered office of the Corporation in
                 -----------------
the State of Delaware shall be located at 1013 Centre Road, Wilmington, Delaware
19805. The name of the Corporation's registered agent at such address shall be
Corporation Service Company. The registered office and/or registered agent of
the Corporation may be changed from time to time by action of the Board of
Directors.

      SECTION 2. Other Offices. The Corporation may have an office or offices
                 -------------
other than said registered office at such place or places, either within or
without the State of Delaware, as the Board of Directors shall from time to time
determine or the business of the Corporation may require.

                                   ARTICLE II

                            Meetings of Stockholders

      SECTION 1. Place of Meetings. All meetings of the stockholders for the
                 -----------------
election of directors or for any other purpose shall be held at any such place,
either within or outside the State of Delaware, as shall be designated from time
to time by the Board of Directors and stated in the notice of meeting or in a
duly executed waiver of notice thereof.

      SECTION 2. Annual Meeting. An annual meeting of stockholders shall be held
                 --------------
each year and stated in a notice of meeting or in a duly executed waiver
thereof. The date, time and place of such meeting shall be determined by the
Chief Executive Officer of the Corporation; provided that if the Chief Executive
Officer does not act, the Board of Directors shall determine the date, time, and
place of such meeting. At such annual meeting, the stockholders shall elect, by
a plurality vote, a Board of Directors and transact such other business as may
properly be brought before the meeting.

      SECTION 3. Special Meetings. Special meetings of stockholders may be
                 ----------------
called for any purpose by the Board of Directors, the Chairman of the Board of
Directors or the Chief Executive Officer and may be held on such date and at
such time and place, either within or outside the State of Delaware, as shall be
stated in a notice of meeting or in a duly executed waiver of notice thereof.

      SECTION 4. Notice of Meetings. Except as otherwise expressly required by
                 ------------------
statute, written notice of each annual and special meeting of stockholders
stating the date, time and place of the meeting (and, in the case of a special
meeting, the purpose or purposes for which the meeting is called) shall be given
to each stockholder of record entitled to vote thereat not less than ten (10)
nor more than sixty (60) days before the date of the meeting. Business
transacted at any special meeting


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of stockholders shall be limited to the purposes stated in the notice. Notice
shall be given personally or by mail and, if by mail, shall be sent in a postage
prepaid envelope, addressed to the stockholder at his address as it appears on
the records of the Corporation. Notice by mail shall be deemed given at the time
when the same shall be deposited in the United States mail, postage prepaid.
Notice of any meeting shall not be required to be given to any person (a) who
attends such meeting, except when such person attends the meeting in person or
                      ------
by proxy for the express purpose of objecting (at the beginning of the meeting)
to the transaction of any business because the meeting is not lawfully called or
convened, or (b) who (either before or after the meeting) shall submit a signed
          --
written waiver of notice thereof either in person or by proxy. Neither the
business to be transacted at, nor the purpose of, an annual or special meeting
of stockholders need be specified in any written waiver of notice.

      SECTION 5. List of Stockholders. The officer who has charge of the stock
                 --------------------
ledger of the Corporation shall prepare and make, at least ten (10) days before
each meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, showing the address of and
the number of shares registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting: (i) on a reasonably accessible electronic network,
provided that the information required to gain access to such list is provided
with the notice of the meeting, or (ii) during ordinary business hours, at the
                                --
principal place of business of the Corporation. If the meeting is to be held at
a place, then the list shall be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.

      SECTION 6. Quorum; Adjournments. The holders of a majority of the voting
                 --------------------
power of the issued and outstanding stock of the Corporation entitled to vote
thereat (present in person or represented by proxy) shall constitute a quorum
for the transaction of business at all meetings of stockholders, except as
otherwise provided by statute or by the Certificate of Incorporation. If such
quorum shall not be present or represented by proxy at any meeting of
stockholders, then the stockholders entitled to vote thereat (present in person
or represented by proxy) shall have the power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented by proxy. At such adjourned meeting at which a
quorum shall be present or represented by proxy, any business may be transacted
which might have been transacted at the meeting as originally called. If the
adjournment is for more than thirty (30) days, or, if after adjournment a new
record date is set, then a notice of the adjourned meeting shall be given to
                    ----
each stockholder of record entitled to vote at the meeting.

      SECTION 7. Organization. At each meeting of stockholders, the Chairman of
                 ------------
the Board of Directors (if one shall have been elected, or, in his absence or if
one shall not have been elected, the Chief Executive Officer, or in the absence
of the Chief Executive Officer, the President, or in the absence of the
President, such officer as the Board of Directors may designate) shall act as
chairman of the meeting. The Secretary (or, in his absence or inability to act,
the person whom the chairman of the meeting shall appoint secretary of the
meeting) shall act as secretary of the meeting and keep the minutes thereof.


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      SECTION 8. Order of Business. The order of business at all meetings of the
                 -----------------
stockholders shall be as determined by the chairman of the meeting.

      SECTION 9. Voting. Except as otherwise provided by the Certificate of
                 ------
Incorporation or the General Corporation Law of the State of Delaware, each
stockholder of the Corporation shall be entitled at each meeting of stockholders
to one (1) vote for each share of capital stock of the Corporation standing in
his name on the record of stockholders of the Corporation:

            (a) on the date fixed pursuant to the provisions of Section 9 of
      Article V of these Bylaws as the record date for the determination of the
      stockholders who shall be entitled to notice of and to vote at such
      meeting; or
               --

            (b) if no such record date shall have been so fixed, then at the
      close of business on the day next preceding the day on which notice
      thereof shall be given, or, if notice is waived, at the close of business
      on the date next preceding the day on which the meeting is held.

Each stockholder entitled to vote at any meeting of stockholders may authorize
another person or persons to act for him by a proxy that is in writing or
transmitted as permitted by law, including, without limitation, electronically,
                                 ---------- ------- ----------
via telegram, internet, interactive voice response system, or other means of
electronic transmission executed or authorized by such stockholder or his
attorney-in-fact, but no proxy shall be voted after (3) three years from its
date, unless the proxy provides for a longer period. Any such proxy shall be
delivered to the secretary of the meeting at or prior to the time designated in
the order of business for so delivering such proxies. Any proxy transmitted
electronically shall set forth information from which it can be determined by
the secretary of the meeting that such electronic transmission was authorized by
the stockholder. When a quorum is present at any meeting, the vote of the
holders of a majority of the voting power of the issued and outstanding stock of
the Corporation entitled to vote thereon, present and voting, in person or
represented by proxy, shall decide any question brought before such meeting,
unless the question is one upon which by express provision of statute or of the
Certificate of Incorporation or of these Bylaws, a different vote is required,
in which case such express provision shall govern and control the decision of
such question. Unless required by statute, or determined by the chairman of the
meeting to be advisable, the vote on any question need not be by ballot. On a
vote by ballot, each ballot shall be signed by the stockholder voting, or by his
proxy, if there be such proxy, and shall state the number of shares voted and
the number of votes to which each share is entitled.

      SECTION 10. Inspectors. The Board of Directors may, in advance of any
                  ----------
meeting of stockholders, appoint one or more inspectors to act at such meeting
or any adjournment thereof. If any of the inspectors so appointed shall fail to
appear or act, then the chairman of the meeting shall, or if inspectors shall
               ----
not have been appointed, the chairman of the meeting may, appoint one or more
inspectors. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares of capital stock of the
Corporation outstanding and the voting power of each, the number of shares
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the


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right to vote, count and tabulate all votes, ballots or consents, determine the
results, and do such acts as are proper to conduct the election or vote with
fairness to all stockholders. On request of the chairman of the meeting, the
inspectors shall make a report in writing of any challenge, request or matter
determined by them and shall execute a certificate of any fact found by them. No
director or candidate for the office of director shall act as an inspector of an
election of directors. Inspectors need not be stockholders.

      SECTION 11. Advance Notice Provisions for Election of Directors. Only
                  ---------------------------------------------------
persons who are nominated in accordance with the following procedures shall be
eligible for election as directors of the Corporation. Nominations of persons
for election to the Board of Directors may be made at any annual meeting of
stockholders, or at any special meeting of stockholders called for the purpose
of electing directors as provided under Section 3 of this Article II, (a) by or
                                                -
at the direction of the Board of Directors (or any duly authorized committee
thereof) (subject to Section 13(a) of Article III of these Bylaws) or (b) by any
                             -----                                 --
stockholder of the Corporation (i) who is a stockholder of record on the date of
the giving of the notice provided for in this Section 11 and on the record date
                                                      --
for the determination of stockholders entitled to vote at such meeting and (ii)
                                                                       ---
who complies with the notice procedures set forth in this Section 11.
                                                                  --

      In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.

      To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation (a)
in the case of an annual meeting, not less than ninety (90) days prior to the
date of the anniversary of the previous year's annual meeting; provided,
however, that in the event the annual meeting is scheduled to be held on a date
more than thirty (30) days prior to or delayed by more than sixty (60) days
after such anniversary date, notice by the stockholder in order to be timely
must be so received not later than the later of the close of business ninety
(90) days prior to such annual meeting or the tenth (10th) day following the day
on which such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made and (b) in the case of a
                                                      ---
special meeting of stockholders called for the purpose of electing directors,
not later than the close of business on the tenth (10th) day following the day
on which notice of the date of the special meeting was mailed or public
disclosure of the date of the special meeting was made, whichever first occurs.

      To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of the person, (ii) the principal occupation or employment of the person, (iii)
the class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by the person and (iv) any other
                                                        ---
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder; and (b) as to the stockholder giving the
                                        ---
notice (i) the name and record address of such stockholder, (ii) the class or
series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iii) a description of


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all arrangements or understandings between such stockholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to appear in person or by proxy at
the meeting to nominate the persons named in its notice and (v) any other
                                                        ---
information relating to such stockholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder. Such notice
must be accompanied by a written consent of each proposed nominee to being named
as a nominee and to serve as a director if elected.

      No person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section 11.
                                                                             --
If the chairman of the meeting determines that a nomination was not made in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the nomination was defective and such defective nomination shall be
disregarded.

      SECTION 12. Advance Notice Provisions for Business to be Transacted at
                  ----------------------------------------------------------
Annual Meeting. No business may be transacted at an annual meeting of
--------------
stockholders, other than business that is either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors (or any duly authorized committee thereof), (b) otherwise properly
brought before the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (c) otherwise properly
                                                     --
brought before the annual meeting by any stockholder of the Corporation (i) who
is a stockholder of record on the date of the giving of the notice provided for
in this Section 12 and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (ii) who complies with the notice
                                        ---
procedures set forth in this Section 12.
                                     --

      In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.

      To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation not
less than ninety (90) days prior to the date of the anniversary of the previous
year's annual meeting; provided, however, that in the event the annual meeting
is scheduled to be held on a date more than thirty (30) days prior to or delayed
by more than sixty (60) days after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the later
of the close of business ninety (90) days prior to such annual meeting or the
tenth (10th) day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure of the date of the annual
meeting was made.

      To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of such stockholder, (iii) the class
or series and number of shares of capital stock of the Corporation which are
owned beneficially or of record by such stockholder, (iv) a description of all
arrangements or understandings between such


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stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a representation
                                                       ---
that such stockholder intends to appear in person or by proxy at the annual
meting to bring such business before the meeting.

      No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 12; provided, however, that, once business
                                     --
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 12 shall be deemed to preclude discussion by
                                    --
any stockholder of any such business. If the chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.

                                   ARTICLE III

                               Board of Directors

      SECTION 1. General Powers. The business and affairs of the Corporation
                 --------------
shall be managed by or under the direction of the Board of Directors. The Board
of Directors may exercise all such authority and powers of the Corporation and
do all such lawful acts and things as are not by statute or the Certificate of
Incorporation directed or required to be exercised or done by the stockholders.

      SECTION 2. Number and Election. Subject to the Certificate of
                 -------------------
Incorporation, the number of directors which shall constitute the Board of
Directors shall initially be nine (9) but may be increased or decreased from
time to time by the Board of Directors; provided, however, that (i) the number
of directors shall not be fewer than five (5) or greater than eleven (11) and
(ii) no decrease in the number of directors shall shorten the term of any
incumbent director. Subject to the Certificate of Incorporation, any amendment
to this Section 2 to fix the number of directors at more than eleven (11), or to
                -
fix the number of directors at less than seven (7), shall require the
affirmative vote of 75% of the entire Board of Directors so long as any of GS
Capital Partners II, L.P., Vestar Capital Partners IV, L.P. or Soros Private
Equity Partners LLC (in each case, together with its affiliates, the
"Institutional Investors") continues to own beneficially at least 5% of the
Corporation's outstanding shares of Common Stock at all times. Except as
otherwise provided by the Bylaws, the directors shall be elected at the annual
meeting of stockholders.

      SECTION 3. Place of Meetings. Meetings of the Board of Directors shall be
                 -----------------
held at such place or places, within or outside the State of Delaware, as the
Board of Directors from time to time may determine or as shall be specified in
the notice of any such meeting.

      SECTION 4. Annual Meetings. The Board of Directors shall meet for the
                 ---------------
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of stockholders
(which, if required by law, shall be on the same day and at the same place where
such annual meeting of stockholders shall be held). In the event such annual
meeting is not so held, the annual meeting of the Board of Directors may be held
at such other time


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or place (within or outside the State of Delaware) as shall be specified in a
notice thereof given as hereinafter provided in Section 7 of this Article III.
                                                        -

      SECTION 5. Regular Meetings. Regular meetings of the Board of Directors
                 ----------------
shall he held at such time and place as the Board of Directors may fix. If any
day fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held on that
                       ----
day shall be held at the same hour on the next succeeding business day.

      SECTION 6. Special Meetings. Special meetings of the Board of Directors
                 ----------------
may be called by the Chairman of the Board of Directors (if one shall have been
elected), by two or more directors of the Corporation or by the Chief Executive
Officer.

      SECTION 7. Notice of Meetings. Notice of regular meetings of the Board of
                 ------------------
Directors need not be given except as otherwise required by law or these Bylaws.
Notice of each special meeting of the Board of Directors, and of each regular
and annual meeting of the Board of Directors for which notice shall be required,
shall be given by the Secretary as hereinafter provided in this Section 7, in
which notice shall be stated the time and place of the meeting. Except as
otherwise required by these Bylaws, such notice need not state the purposes of
such meeting. Notice of any special meeting, and of any regular or annual
meeting for which notice is required, shall be given to each director at least
(a) twelve (12) hours before the meeting if by telephone or by being personally
delivered or sent by telex, telecopy, email or similar means or (b) three (3)
                                                             --
days before the meeting if delivered by mail to the director's residence or
usual place of business. Such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage prepaid, or when
transmitted if sent by telex, telecopy, or similar means. Neither the business
to be transacted at, nor the purpose of, any special meeting of the Board of
Directors need be specified in the notice or waiver of notice of such meeting.
Any director may waive notice of any meeting by a writing signed by the director
entitled to the notice and filed with the minutes or corporate records.

      SECTION 8. Waiver of Notice and Presumption of Assent. Any member of the
                 ------------------------------------------
Board of Directors or any committee thereof who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting except when such
member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such member shall be conclusively presumed to have assented
to any action taken unless his or her dissent shall be entered in the minutes of
the meeting or unless his or her written dissent to such action shall be filed
with the person acting as the secretary of the meeting before the adjournment
thereof or shall be forwarded by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to any member who voted in favor of such action.

      SECTION 9. Quorum and Manner of Acting. A majority of the entire Board of
                 ---------------------------
Directors shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, and, except as otherwise expressly required
by statute or the Certificate of Incorporation or these Bylaws, the act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board of Directors. In the absence of a quorum at any
meeting of the Board of Directors, a majority of the directors present thereat
may adjourn such meeting to another time and place. Notice of the time and place
of any such adjourned meeting shall be given to all of the


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directors unless such time and place were announced at the meeting at which the
adjournment was taken, in which case such notice shall only be given to the
directors who were not present thereat. At any adjourned meeting at which a
quorum is present, any business may be transacted which might have been
transacted at the meeting as originally called. The directors shall act only as
a Board of Directors and the individual directors shall have no power as such.

      SECTION 10. Organization. At each meeting of the Board of Directors, the
                  ------------
Chairman of the Board of Directors, if one shall have been elected, or, in the
absence of the Chairman of the Board of Directors or if one shall not have been
elected, the Chief Executive Officer (or, in his absence, another director
chosen by a majority of the directors present) shall act as chairman of the
meeting and preside thereat. The Secretary or, in his absence, any person
appointed by the chairman of the meeting, shall act as secretary of the meeting
and keep the minutes thereof.

      SECTION 11. Resignations; Newly Created Directorships; Vacancies; and
                  ---------------------------------------------------------
Removals. Any director of the Corporation may resign at any time by giving
--------
notice in writing or by electronic transmission of his resignation to the
Corporation. Any such resignation shall take effect at the time specified
therein or, if the time when it shall become effective shall not be specified
therein, immediately upon its receipt. Unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Newly created directorships resulting from any increase in the number of
directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal or any other cause shall be
filled as provided in the Certificate of Incorporation. Any director may be
removed as provided in the Certificate of Incorporation.

      SECTION 12. Compensation. The Board of Directors shall have authority to
                  ------------
fix the compensation, including fees and reimbursement of expenses, of directors
for services to the Corporation in any capacity.

      SECTION 13. Committees. The following Committees of the Board of Directors
shall be established by the Board of Directors in addition to any additional
Committee the Board of Directors may in its discretion establish as described in
subsection (c) below:

            (a) Nominating Committee. The Nominating Committee shall consist of
                --------------------
      six directors. At least three of its members shall not be "interested
      persons" as defined in the Investment Company Act of 1940
      ("Non-Interested"), and at least three of such members shall constitute a
                          ---
      subcommittee of the Nominating Committee. A majority of the members of the
      entire Nominating Committee shall constitute a quorum, and the actions of
                                                             ---
      a majority of those present at a meeting at which a quorum is present
      shall be actions of the Committee. A majority of the members of the
      subcommittee of the Nominating Committee shall constitute a quorum, and
                                                                          ---
      the actions of a majority of those present at a subcommittee meeting at
      which a quorum is present shall be actions of the subcommittee. The
      Nominating Committee shall nominate to the Board of Directors for its
      consideration nominees for election to the Board of Directors to replace
      those Directors whose terms expire at the annual meeting of stockholders
      next ensuing and to fill any vacancies on the Board of Directors;
      provided, however, that only the subcommittee of the Nominating Committee
      shall select for nomination and nominate to the Board of Directors for its
      consideration


                                     - 8 -

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      Non-Interested nominees for election to the Board of Directors and shall
      select the Non-Interested nominees from among the directors to serve on
      the Nominating Committee and the subcommittee. The Nominating Committee
      shall be responsible for identifying to the Board of Directors
      replacements for Messrs. Mitchell, Merrick, Tunney or Saville, if at any
      time any such officer is no longer employed by the Corporation. As long as
      an Institutional Investor continues to own beneficially at least 5% of the
      Corporation's outstanding shares of Common Stock at all times, then the
                                                                     ----
      Nominating Committee (or the subcommittee in the case of any director who
      is not an interested person of the Corporation) also shall be required to
      consider at least one person designated by such investor to serve as a
      director. Any amendment to this Section 13(a) shall require the
                                              -----
      affirmative vote of at least 75% of the entire Board of Directors so long
      as any Institutional Investor continues to own beneficially at least 5% of
      the Corporation's outstanding shares of Common Stock at all times.

            (b) Compensation Committee. There shall be a Compensation Committee
                ----------------------
      composed of three directors. A majority of the entire members of the
      Compensation Committee shall constitute a quorum and the actions of a
      majority of those present at a meeting at which a quorum is present shall
      be the actions of the Committee. As long as an Institutional Investor
      continues to own beneficially at least five percent of the Corporation's
      outstanding shares of Common Stock at all times, then such investor shall
      be entitled to nominate to the Board of Directors for consideration one
      nominee to the Compensation Committee, provided that such nominee
      satisfies any applicable statutory and regulatory qualification standards
      for such position. The Compensation Committee shall have the power to set
      the salaries, compensation, benefits, stock options and other related
      matters of all officers of the Corporation and shall administer the
      Corporation's restricted stock arrangements and related agreements with
      officers and other employees. Any amendment to this Section 13(b) shall
                                                                  -----
      require the affirmative vote of at least 75% of the entire Board of
      Directors so long as any Institutional Investor continues to own
      beneficially at least 5% of the Corporation's outstanding shares of Common
      Stock at all times.

            (c) Other Committees. The Board of Directors, by resolution passed
                ----------------
      by a majority of the entire Board of Directors, may designate one or more
      additional committees (including an executive committee, an investment
      committee and/or a valuation committee), each committee to consist of one
      or more of the directors of the Corporation. Subject to subsections (a)
      and (b) of this Section 13, the Board of Directors may designate one or
                              --
      more directors as alternate members of any committee, who may replace any
      absent or disqualified member at any meeting of the committee. Except to
      the extent restricted by statute or the Certificate of Incorporation, each
      such committee, to the extent provided in the resolution creating it,
      shall have and may exercise all the powers and authority of the Board of
      Directors and may authorize the seal of the Corporation to be affixed to
      all papers which require it. Each such committee shall serve at the
      pleasure of the Board of Directors and shall have such name as may be
      determined from time to time by resolution adopted by the Board of
      Directors. Each committee shall keep regular minutes of its meetings and
      report the same to the Board of Directors.

      SECTION 14. Committee Rules. Each committee of the Board of Directors may
                  ---------------
fix its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be


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provided by a resolution of the Board of Directors designating such committee or
in these Bylaws. Unless otherwise provided in such a resolution or in these
Bylaws, the presence of at least a majority of the members of the committee
shall be necessary to constitute a quorum. Unless otherwise provided by
resolution or in these Bylaws, in the event that a member and that member's
alternate, if alternates are designated by the Board of Directors as provided in
Section 13(c) of this Article III, of such committee is or are absent or
disqualified, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in place of any such absent or disqualified member.

      SECTION 15. Action by Written Consent. Unless restricted by the
                  -------------------------
Certificate of Incorporation, any action required or permitted to be taken by
the Board of Directors or any committee thereof may be taken without a meeting
if all members of the Board of Directors or such committee, as the case may be,
consent thereto in writing or by electronic transmission, and the writing or
writings are filed with the minutes of the proceedings of the Board of Directors
or such committee, as the case may be. Such filing shall be in paper form if the
minutes are maintained in paper form and shall be in electronic form if the
minutes are maintained in electronic form.

      SECTION 16. Telephonic and Other Meetings. Unless restricted by the
                  -----------------------------
Certificate of Incorporation, any one or more members of the Board of Directors
or any committee thereof may participate in a meeting of the Board of Directors
or such committee by means of a conference telephone or other communications
                                                     --
equipment by means of which all persons participating in the meeting can hear
each other. Participation by such means shall constitute presence in person at a
meeting.

      SECTION 17. Board Action Requirements. Notwithstanding applicable law, the
                  -------------------------
following actions by the Corporation shall require the approval of the Board of
Directors.

            (a) To sell, lease, transfer or otherwise dispose of any assets
      having a value, individually or in the aggregate, in excess of $2,500,000,
      excluding (1) any such transaction with a direct or indirect subsidiary of
      ---------
      the Corporation, (2) loan syndications, participations, assignments and
      other sales in the ordinary course of business, (3) exercises or sales of
      options, warrants or equity investments that either are required by the
      terms of the investment itself or are approved by the Credit Committee of
                                     --
      the Corporation (if such transaction is within the then-existing dollar
      threshold of authority of the Credit Committee) or are approved by the
      Investment Committee of the Board of Directors, and (4) dispositions of
                                                      ---
      foreclosed property and/or workout subsidiaries that either are approved
      by the Credit Committee of the Corporation (if such transaction is within
      the then-existing dollar threshold of authority of the Credit Committee)
      or are approved by the Investment Committee of the Board of Directors;
      --

            (b) To purchase or otherwise acquire capital stock or all or a
      substantial portion of the business or assets of any person or to enter
      into any joint venture (whether or not structured as a partnership) with
      any person, in any such instance in a transaction valued in excess of
      $2,500,000, excluding (1) any such transaction with a direct or indirect
                  ---------
      subsidiary of the Corporation, (2) equity, options, warrants and/or other
      equity arrangements that are


                                     - 10 -

<PAGE>

      granted or earned in connection with either an extension of credit to a
      borrower or the provision of advisory or consulting services to a person
      by the Corporation in the course of its business, (3) purchases of equity,
      options, warrants and/or other equity arrangements in the ordinary course
      of the Corporation's business that have been approved by the Investment
      Committee of the Board of Directors, (4) exercises of warrants, options or
      other equity investments previously approved by the Investment Committee
      whose exercise has been approved by the Credit Committee, and (5) equity
                                                                ---
      and assets acquired in connection with a pursuit of remedies against or
      workout with a borrower or other portfolio investment;

            (c) To register or grant any rights to register any Securities with
      the Securities and Exchange Commission in connection with any public
      offering of such securities except pursuant to the Amended and Restated
                                  ------
      Registration Rights Agreement;

            (d) To create, incur or assume any indebtedness (which shall include
      for purposes hereof capitalized lease obligations and guarantees of
      indebtedness for borrowed money) in excess of $2,500,000, other than such
                                                                ----- ----
      indebtedness as is included in an annual budget approved by the Board of
      Directors;

            (e) To create or incur liens or encumbrances on any assets in excess
      of $2,500,000, other than such liens or encumbrances in connection with
                     ----- ----
      (1) transactions otherwise approved by the Board of Directors and/or (2)
      secured indebtedness that is included in an annual budget approved by the
      Board of Directors;

            (f) To approve or amend in any material respect the credit
      guidelines or the loan approval process of the Corporation;

            (g) To enter into, assume or become bound by any agreement or to
      enter into any transaction involving the expenditure or incurrence of
      liabilities exceeding $2,500,000, other than such agreements and
                                        ----- ----
      transactions in connection with expenditures and liabilities that are
      included in an annual budget approved by the Board of Directors;

            (h) To enter into any transactions with a director, executive
      officer or any affiliate thereof, excluding such transactions with
                                        ---------
      executive officers that are related to the compensation of such officer
      and are approved by the Compensation Committee of the Board of Directors;
      and

            (i) To approve the annual budget for the operation of the
      Corporation.

By an affirmative vote of at least 75% of the voting power of the Board of
Directors, the authority to approve one or more of the actions set forth in this
Section 17, in whole or in part, from time to time may be delegated to a
        --
committee of the Board of Directors (unless otherwise prohibited by applicable
law). Any amendment to, waiver of or repeal of this Section 17 shall require the
                                                            --
affirmative vote of at least 75% of the voting power of the Board of Directors.


                                     - 11 -

<PAGE>

                                   ARTICLE IV

                                    Officers

      SECTION 1. Number and Qualifications. The officers of the Corporation
                 -------------------------
shall be elected by the Board of Directors and shall include the Chief Executive
Officer, the President, the Chief Financial Officer, the Chief Operating
Officer, the Chief Credit Officer, the General Counsel, the Treasurer and the
Secretary. The Corporation, at the discretion of the Board of Directors, may
also have such other officers as are desired, including a Chairman of the Board
of Directors, one or more Vice Presidents, one or more Assistant Treasurers, one
or more Assistant Secretaries, and such other officers as may be necessary or
desirable for the business of the Corporation. If there are two or more Vice
Presidents, then one or more may be designated as Executive Vice President,
            ----
Senior Vice President, Assistant Vice President or other similar or dissimilar
title. At the time of the election of officers, the directors may by resolution
determine the order of their rank. Any number of offices may be held by the same
person, and no officer (except the Chairman of the Board of Directors, if any)
        ---
need be a director. In its discretion, the Board of Directors may choose not to
fill any office for any period as it may deem advisable, except that the offices
of Chief Executive Officer and Secretary shall be filled as expeditiously as
possible.

      SECTION 2. Election and Term of Office. The officers of the Corporation
                 ---------------------------
shall be elected annually by the Board of Directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as is
convenient. The Chairman of the Board of Directors (if one is elected) and Chief
Executive Officer shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting of
stockholders or as soon thereafter as is convenient. Vacancies may be filled or
new offices created and filled at any meeting of the Board of Directors. Each
officer shall hold office until his successor shall have been duly elected and
shall have qualified, or until his death, or until he shall have resigned or
have been removed, as hereinafter provided in these Bylaws.

      SECTION 3. Resignations. Any officer of the Corporation may resign at any
                 ------------
time by giving written notice of his resignation to the Corporation. Any such
resignation shall take effect at the time specified therein or, if the time when
it shall become effective shall not be specified therein, immediately upon
receipt. Unless otherwise specified therein, the acceptance of any such
resignation shall not be necessary to make it effective.

      SECTION 4. Removal. Any officer of the Corporation may be removed, either
                 -------
with or without cause, at any time, by the Board of Directors at any meeting
thereof.

      SECTION 5. Vacancies. Any vacancy occurring in any office because of
                 ---------
death, resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term by the Board of
Directors then in office.

      SECTION 6. Compensation. The compensation of the officers of the
                 ------------
Corporation for their services as such officers shall be fixed from time to time
by the Board of Directors or, in accordance with Section 13(b) of Article III,
                                                         -----
by the Compensation Committee thereof. An officer of the Corporation shall not
be prevented from receiving compensation by reason of the fact that he is also a
director of the Corporation.


                                     - 12 -

<PAGE>

      SECTION 7. Chairman of the Board. The Chairman of the Board of Directors
                 ---------------------
(if such an officer be elected) shall, if present, preside at all meetings of
the Board of Directors and exercise and perform such other powers and duties as
from time to time may be assigned to him by the Board of Directors or prescribed
by these Bylaws. If there is no Chief Executive Officer, then the Chairman of
                                                         ----
the Board of Directors shall also be the Chief Executive Officer of the
Corporation and shall have the powers and duties prescribed in Section 8 of this
                                                                       -
Article IV.

      SECTION 8. Chief Executive Officer. The Chief Executive Officer shall be
                 -----------------------
the chief executive officer of the Corporation and shall have the powers and
                                               ---
perform the duties incident to that position. He shall, in the absence of the
Chairman of the Board of Directors, or if a Chairman of the Board of Directors
shall not have been elected, preside at each meeting of the Board of Directors
or the stockholders. He shall have the right to attend the meetings of the Board
of Directors and all committees of the Board of Directors. Subject to the powers
of the Board of Directors, he shall be in the general and active charge of the
entire business and affairs of the Corporation, including authority over its
officers, agents and employees, and shall have such other duties as may from
time to time be assigned to him by the Board of Directors. The Chief Executive
Officer shall be responsible for implementing all orders and resolutions of the
Board of Directors, and shall execute bonds, mortgages and other contracts
required to be executed under the seal of the Corporation, except when required
                                                           ------
or permitted by law to be otherwise signed and executed and except when the
                                                        --- ------
signing and execution thereof shall be expressly delegated by the Board of
Directors or the Chief Executive Officer to some other officer or agent of the
Corporation. The Chief Executive Officer, from time to time, may also designate
one or more of the Vice Presidents to act as managing directors in connection
with originating and administering the investments of the Corporation.

      SECTION 9. President. The President shall perform all duties incident to
                 ---------
the office of President and shall have general charge of the business and
affairs of the Corporation. The President shall report to the Chief Executive
Officer and shall have such other duties as may from time to time be assigned to
him by the Board of Directors or the Chief Executive Officer or as may be
provided in these Bylaws. At the written request of the Chief Executive Officer,
or in his absence or in the event of his inability to act, the President shall
perform the duties of the Chief Executive Officer, and, when so acting, shall
have the powers of and be subject to the restrictions placed upon the Chief
Executive Officer in respect of the performance of such duties.

      SECTION 10. Chief Operating Officer. The Chief Operating Officer shall
                  -----------------------
perform all duties incident to such office and shall be responsible for the
general direction of the operations of the business. The Chief Operating Officer
shall report to the Chief Executive Officer and shall have such other duties as
                                            ---
may be assigned to him by the Board of Directors, or the Chief Executive Officer
or as may be provided in these Bylaws.

      SECTION 11. Vice President. Each Vice President shall perform all such
                  --------------
duties as from time to time may be assigned to him by the Board of Directors,
the President or the Chief Executive Officer. At the written request of the
President, or in the absence or disability of the President, the Vice Presidents
(in order of their rank as fixed by the Board of Directors, or if not ranked,
the Vice President designated by the Board of Directors) shall perform the
duties of the President, and when


                                     - 13 -

<PAGE>

so acting shall have all the powers of and be subject to all the restrictions
placed upon the President in respect of the performance of such duties.

      SECTION 12. Chief Financial Officer; Treasurer. The Chief Financial
                  ----------------------------------
Officer:

            (a) Shall have charge and custody of, and be responsible for, all
      the funds and securities of the Corporation;

            (b) Shall keep full and accurate accounts of receipts and
      disbursements in books belonging to the Corporation;

            (c) Shall deposit all moneys and other valuables to the credit of
      the Corporation in such depositories as may be designated by the Board of
      Directors or pursuant to its direction;

            (d) Shall receive, and give receipts for, moneys due and payable to
      the Corporation from any source whatsoever;

            (e) Shall disburse the funds of the Corporation and supervise the
      investments of its funds, taking proper vouchers therefore;

            (f) Shall render to the Board of Directors, whenever the Board of
      Directors may require, an account of the financial condition of the
      Corporation; and
                   ---

            (g) Shall in general, perform all duties incident to the office of
      Chief Financial Officer and such other duties as from time to time may be
      assigned to him by the Board of Directors, the Chief Executive Officer or
      the President.

The Chief Financial Officer may also be the Treasurer of the Corporation if so
determined by the Board of Directors. The Treasurer shall assist the Chief
Financial Officer in the performance of his duties and shall perform such other
                                                   ---
duties as may be required by law or as from time to time may be assigned to such
officer by the Board of Directors, the Chief Executive Officer or the President.

      SECTION 13. Chief Credit Officer. The Chief Credit Officer shall perform
                  --------------------
the duties, undertake the responsibilities and exercise the authority
customarily performed, undertaken and exercised by persons situated in a similar
executive capacity and shall also have such other duties as from time to time
                   ---
may be assigned to such officer by the Board of Directors or the Chief Executive
Officer.

      SECTION 14. General Counsel. The General Counsel shall be the chief legal
                  ---------------
officer of the Corporation, shall perform all duties incident to such office,
and shall be responsible for the general legal affairs of the business. The
---
General Counsel shall report to the Chief Executive Officer and shall have such
other duties as from time to time may be assigned to such officer by the Board
of Directors or the Chief Executive Officer. At the election of the Board of
Directors, one or more associate and/or assistant general counsels may be
elected to assist the General Counsel in performing the duties of such office.


                                     - 14 -

<PAGE>

      SECTION 15. Secretary. The Secretary:
                  ---------

            (a) Shall keep or cause to be kept in one or more books provided for
      the purpose, the minutes of all meetings of the Board of Directors, the
      committees of the Board of Directors and the stockholders;

            (b) Shall verify all notices are duly given in accordance with the
      provisions of these Bylaws and as required by law;

            (c) Shall be custodian of the records and the seal of the
      Corporation and affix and attest the seal to all certificates for shares
      of the Corporation (unless the seal of the Corporation on such
      certificates shall be a facsimile, as hereinafter provided) and affix and
      attest the seal to all other documents to be executed on behalf of the
      Corporation under its seal;

            (d) Shall verify that the books, reports, statements, certificates
      and other documents and records required by law to be kept and filed are
      properly kept and filed; and
                               ---

            (e) Shall, in general, perform all duties incident to the office of
      Secretary and such other duties as from time to time may be assigned to
      him by the Board of Directors, the Chief Executive Officer or the
      President.

      SECTION 16. The Assistant Treasurer. The Assistant Treasurer, or if there
                  -----------------------
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors (or, if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer or in the event of his
inability to act or his failure to act (in violation of a duty to act or in
contravention of direction to act by the Board of Directors), perform the duties
and exercise the powers of the Treasurer and shall perform such other duties as
from time to time may be assigned by the Board of Directors, the Chief Executive
Officer, the President, the Chief Financial Officer or the Treasurer.

      SECTION 17. The Assistant Secretary. The Assistant Secretary, or if there
                  -----------------------
be more than one, the Assistant Secretaries in the order determined by the Board
of Directors (or if there be no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of his
inability to act or his failure to act (in violation of a duty to act or in
contravention of direction to act by the Board of Directors), perform the duties
and exercise the powers of the Secretary and shall perform such other duties as
from time to time may be assigned by the Board of Directors, the Chief Executive
Officer, the President or the Secretary.

      SECTION 18. Other Officers, Assistant Officers and Agents. Officers,
                  ---------------------------------------------
assistant officers and agents, if any, other than those whose duties are
provided for in these Bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the Board of Directors.

      SECTION 19. Officers' Bonds or Other Security. If required by the Board of
                  ---------------------------------
Directors, any officer of the Corporation shall give a bond or other security
for the faithful performance of his duties, in such amount and with such surety
as the Board of Directors may require.


                                     - 15 -

<PAGE>

      SECTION 20. Absence or Disability of Officers. In the case of the absence
                  ---------------------------------
or disability of any officer of the Corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the Board of Directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any other
person whom it may select.

                                    ARTICLE V

                      Stock Certificates and Their Transfer

      SECTION 1. Stock Certificates. The Board of Directors may issue stock
                 ------------------
certificates, or may provide by resolution or resolutions that some or all of
any or all classes or series of stock of the Corporation shall be uncertificated
shares of stock. Notwithstanding the adoption of such a resolution by the Board
of Directors, every holder of stock represented by a certificate and, upon
request, every holder of uncertificated shares shall be entitled to have a
certificate, signed by, or in the name of the Corporation by, the Chairman of
the Board or, the Chief Executive Officer, the President or a Vice-President and
by the Chief Financial Officer, Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Corporation, certifying the number of
shares owned by him or her in the Corporation. A certificate representing shares
issued by the Corporation shall, if the Corporation is authorized to issue more
than one class or series of stock, set forth upon the face or back of the
certificate, or shall state that the Corporation will furnish to any stockholder
upon request and without charge, a full statement of the designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. The Corporation shall furnish to
any holder of uncertificated shares, upon request and without charge, a full
statement of the designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
Any request by a holder for a certificate shall be in writing and directed to
the Secretary of the Corporation.

      SECTION 2. Facsimile Signatures. Any or all of the signatures on a
                 --------------------
certificate may be a facsimile, engraved or printed. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.

      SECTION 3. Lost Certificates. The Board of Directors may direct a new
                 -----------------
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen, or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen, or
destroyed certificate or certificates, or his legal representative, to give the
Corporation a bond in such sum as it may direct sufficient to indemnify it
against any claim that may be made against the Corporation on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.


                                     - 16 -

<PAGE>

      SECTION 4. Transfers of Stock. Upon surrender to the Corporation or the
                 ------------------
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its records; provided, however, that the Corporation shall be
entitled to recognize and enforce any lawful restriction on transfer. Whenever
any transfer of stock shall be made for collateral security, and not absolutely,
it shall be so expressed in the entry of transfer if, when the certificates are
presented to the Corporation for transfer, both the transferor and the
transferee request the Corporation to do so.

      SECTION 5. Transfer Agents and Registrars. The Board of Directors may
                 ------------------------------
appoint, or authorize any officer or officers to appoint, one or more transfer
agents and one or more registrars.

      SECTION 6. Regulations. The Board of Directors may make such additional
                 -----------
rules and regulations, not inconsistent with these Bylaws, as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of stock of the Corporation.

      SECTION 7. Fixing the Record Date. In order that the Corporation may
                 ----------------------
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. If no record date is fixed by the Board of Directors,
the record date for determining stockholders entitled to notice of or to vote at
a meeting of stockholders shall be the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.

      SECTION 8. Registered Stockholders. The Corporation shall be entitled to
                 -----------------------
recognize the exclusive right of a person registered on its records as the owner
of shares of stock to receive dividends and to vote as such owner, shall be
entitled to hold liable for calls and assessments a person registered on its
records as the owner of shares of stock, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares of stock on the
part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Delaware.

                                   ARTICLE VI

                               General Provisions

      SECTION 1. Dividends. Subject to the provisions of statutes and the
                 ---------
Certificate of Incorporation, dividends upon the shares of capital stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting. Dividends may be paid in cash, in property or


                                     - 17 -

<PAGE>

in shares of stock of the Corporation, unless otherwise provided by statute or
the Certificate of Incorporation.

      SECTION 2. Reserves. Before payment of any dividend, there may be set
                 --------
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors may, from time to time, in its absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation or for such other purpose as the Board of Directors may think
conducive to the interests of the Corporation. The Board of Directors may modify
or abolish any such reserves in the manner in which it was created.

      SECTION 3. Seal. The seal of the Corporation shall be in such form as
                 ----
shall be approved by the Board of Directors, which form may be changed by
resolution of the Board of Directors.

      SECTION 4. Fiscal Year. The fiscal year of the Corporation shall end on
                 -----------
December 31 of each fiscal year and may thereafter be changed by resolution of
the Board of Directors.

      SECTION 5. Checks, Notes, Drafts, Etc. All checks, notes, drafts or other
                 ---------------------------
orders for the payment of money of the Corporation shall be signed, endorsed or
accepted in the name of the Corporation by such officer, officers, person or
persons as from time to time may be designated by the Board of Directors or by
an officer or officers authorized by the Board of Directors to make such
designation.

      SECTION 6. Execution of Contracts, Deeds, Etc. The Board of Directors may
                 ----------------------------------
authorize any officer or officers, agent or agents, in the name and on behalf of
the Corporation to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such authority
may be general or confined to specific instances.

      SECTION 7. Loans. The Corporation may lend money to, or guarantee any
                 -----
obligation of, or otherwise assist any officer or other employee of the
Corporation or of its subsidiary, including any officer or employee who is a
director of the Corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the Corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the Board
of Directors shall approve, including, without limitation, a pledge of shares of
stock of the Corporation. Nothing in this section contained shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the Corporation at
common law or under any statute.

      SECTION 8. Voting of Equity in Other Entities. Unless otherwise provided
                 ----------------------------------
by resolution of the Board of Directors or in these Bylaws, the Chairman of the
Board of Directors or the Chief Executive Officer from time to time, may (or may
appoint one or more officers, attorneys or agents to) cast the votes that the
Corporation may be entitled to cast as an equity owner or otherwise in any other
entity, any of whose equity or securities may be held by the Corporation, at
meetings of the holders of the equity or other securities of such other entity.
If an officer, attorney or agent is appointed, then the Chairman of the Board of
                                               ----
Directors or the Chief Executive Officer may instruct such person so appointed
as to the manner of casting such votes or giving such consent. The Chairman of
the Board of Directors or the Chief Executive Officer may (or may instruct the
officer,


                                     - 18 -

<PAGE>

attorney or agent appointed to) execute or cause to be executed in the name and
on behalf of the Corporation and under its seal or otherwise, such written
proxies, consents, waivers or other instruments as may be necessary or proper in
the circumstances. Notwithstanding anything herein to the contrary, any vote
regarding the election of directors of operating subsidiaries of the Corporation
(excluding portfolio companies and workout subsidiaries and, for the avoidance
of doubt, financing vehicle subsidiaries) shall require the affirmative vote of
at least 75% of the voting power of the Board of Directors.

      SECTION 9. Inspection of Books and Records. Any stockholder of record, in
                 -------------------------------
person or by attorney or other agent, shall, upon written demand under oath
stating the purpose thereof, have the right during the usual hours for business
to inspect for any proper purpose the Corporation's stock ledger, a list of its
stockholders, and its other books and records, and to make copies or extracts
therefrom. A proper purpose shall mean any purpose reasonably related to such
person's interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right of inspection, the demand under
oath shall be accompanied by a power of attorney or such other writing which
authorizes the attorney or other agent to so act on behalf of the stockholder.
The demand under oath shall be directed to the Corporation at its registered
office in the State of Delaware or at its principal place of business.

      SECTION 10. References to Days. For purposes of these Bylaws, all
                  ------------------
references herein to "days" shall mean calendar days unless otherwise expressly
indicated to mean business days. Any period of time referenced herein that is
scheduled to end on a day that is not a calendar day and any event that is
                                                     ---
scheduled to occur on a day that is not a calendar day, unless otherwise
expressly indicated, shall instead end or occur on the next succeeding business
day.

      SECTION 11. Inconsistent Provisions. In the event that any provision of
                  -----------------------
these Bylaws is or becomes inconsistent with any provision of the Certificate of
Incorporation, the General Corporation Law of the State of Delaware or any other
applicable law, the provision of these Bylaws shall not be given any effect to
the extent of such inconsistency but shall otherwise be given full force and
effect.

      SECTION 12. Bylaws of Subsidiaries. The bylaws of all wholly-owned
                  ----------------------
operating subsidiaries of the Corporation (excluding portfolio companies and
                                           ---------
workout subsidiaries and, for the avoidance of doubt, financing vehicle
subsidiaries) shall include the provisions set forth in Section 17 of Article
                                                                --
III of these Bylaws; provided that the Corporation shall have six months from
                     -------- ----
the date of the adoption of these Amended and Restated Bylaws to amend the
bylaws of the Corporation's wholly-owned operating subsidiaries existing on such
date to comply with this Section 12. Any amendment to, waiver of or repeal of
                                 --
this Section 12 shall require the affirmative vote of at least 75% of the voting
power of the Board of Directors.

                                   ARTICLE VII

                                   Amendments

      Except as otherwise provided in these Bylaws, these Bylaws may be amended
or repealed or new Bylaws adopted only in accordance with Article V of the
                                                                  -
Certificate of Incorporation.


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