EXHIBIT 3.2


                           AMENDED AND RESTATED BYLAWS

                                       OF

                          KONOVER PROPERTY TRUST, INC.

                                    ARTICLE I

                                  STOCKHOLDERS

SECTION 1.  MEETINGS OF STOCKHOLDERS.

        (A) ANNUAL MEETING. The annual meeting of the stockholders of the
Corporation for the election of directors and the receiving of reports shall be
held at such date and time as shall be determined by the Board of Directors.
Upon due notice, there may also be considered and acted upon at an annual
meeting any matter that could properly be considered and acted upon at a special
meeting.

        (B)    SPECIAL MEETINGS.

               (1) Special meetings of the stockholders of the Corporation for
        any purpose may be held on any day when called at any time by the
        holders of shares entitling them to exercise a majority of the voting
        power of the Corporation entitled to vote at such a meeting, the Board
        of Directors, the Chairman of the Board, the President or by a committee
        of the Board of Directors that has been duly designated by the Board of
        Directors and whose powers and authority, as provided in a resolution of
        the Board of Directors, include the power to call such meetings, but
        special meetings may not be called by any other person or persons.

               (2) In order that the Corporation may determine the stockholders
        entitled to request a special meeting, the Board of Directors may fix a
        record date to determine the stockholders entitled to make such a
        request (the "Request Record Date"). The Request Record Date shall not
        precede the date upon which the resolution fixing the Request Record
        Date is adopted by the Board of Directors and shall not be more than 10
        days after the date upon which the resolution fixing the Request Record
        Date is adopted by the Board of Directors. Any stockholder of record
        seeking to have stockholders request a special meeting shall, by sending
        written notice to the Secretary of the Corporation by certified or
        registered mail, return receipt requested, request the Board of
        Directors to fix a Request Record Date. The Board of Directors shall
        within 10 days after the date on which a valid request to fix a Request
        Record Date is received, adopt a resolution fixing the Request Record
        Date and shall make a public announcement of such Request Record Date,
        the Request Record Date shall be the 10th day after the first date on
        which a valid written request to set a Request Record Date is received
        by the Secretary. To be valid, such written request shall set forth the
        purpose or purposes for which the special meeting is to be held, shall
        be signed by one or more stockholders of record (or their duly
        authorized proxies or other representatives), shall bear the date of
        signature of each such stockholder (or proxy or other representative)
        and shall set forth all information relating to such stockholder that is
        required to be disclosed in solicitations of proxies for election of
        directors in an election contest, or is otherwise required, in each case
        pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
        amended (the "Exchange Act"), and Rule 14a-11 thereunder.

               (3) In order for a stockholder or stockholders to request a
        special meeting, a written request or requests for a special meeting by
        the holders of record as of the Request Record Date of at least a
        majority of the issued and outstanding shares of stock that would be
        entitled to vote at such a meeting must be delivered to the Corporation.
        To be valid, each written request by a stockholder for a special meeting
        shall set forth the specific purpose or purposes for which the special
        meeting is to be held (which purpose or purposes shall be limited to the
        purpose or purposes set forth in the written request to set a Request
        Record Date received by the Corporation pursuant to paragraph (2) of
        this Section 1(b)), shall be signed by one or more persons who as of the
        Request Record Date are stockholders of record (or their duly authorized
        proxies or other representatives),

                                       1
<PAGE>

        shall bear the date of signature of each such stockholder (or proxy or
        other representative) and shall set forth the name and address, as they
        appear in the Corporation's books, of each stockholder signing such
        request and the class and number of shares of the Corporation which are
        owned of record and beneficially by each such stockholder, shall be sent
        to the Secretary by certified or registered mail, return receipt
        requested, and shall be received by the Secretary within 60 days after
        the Request Record Date.

               (4) The Corporation shall not be required to call a special
        meeting upon stockholder request unless, in addition to the documents
        required by paragraph (3) of this Section 1(b), the Secretary receives a
        written agreement signed by each Soliciting Stockholder (as defined
        below), pursuant to which each Soliciting Stockholder, jointly and
        severally, agrees to pay the Corporation's costs of holding the special
        meeting, including the costs of preparing and mailing proxy materials
        for the Corporation's own solicitation, provided that if each of the
        resolutions introduced by any Soliciting Stockholder at such meeting is
        adopted, and each of the individuals nominated by or on behalf of any
        Soliciting Stockholder for election as a director at such meeting is
        elected, then the Soliciting Stockholders shall not be required to pay
        such costs. For purposes of this paragraph (4), the following terms
        shall have the meanings set forth below:

               (i) "Affiliate" of any Person (as defined herein) shall mean any
        Person controlling, controlled by or under common control with such
        first Person.

               (ii) "Participant" shall have the meaning assigned to such term
        in Rule 14a-11 promulgated under the Exchange Act.

               (iii) "Person" shall mean any individual, firm, corporation,
        partnership, limited liability company, joint venture, association,
        trust, unincorporated organization or other entity.

               (iv) "Proxy" shall have the meaning assigned to such term in Rule
        14a-1 promulgated under the Exchange Act.

               (v) "Solicitation" shall have the meaning assigned to such term
        in Rule 14a-11 promulgated under the Exchange Act.

               (vi) "Soliciting Stockholder" shall mean, with respect to any
        special meeting requested by a stockholder or stockholders, any of the
        following Persons:

                      (a) if the number of stockholders signing the request or
               requests of meeting delivered to the Corporation pursuant to
               paragraph (3) of this Section 1(b) is 10 or fewer, each
               stockholder signing any such request;

                      (b) if the number of stockholders signing the request or
               requests of meeting delivered to the Corporation pursuant to
               paragraph (3) of this Section 1(b) is more than 10, each Person
               who either (I) was a Participant in any Solicitation of such
               request or requests or (II) at the time of the delivery to the
               Corporation of the documents described in paragraph (3) of this
               Section 1(b) had engaged or intended to engage in any
               Solicitation of Proxies for use at such special meeting (other
               than a Solicitation of Proxies on behalf of the Corporation); or

                      (c) any Affiliate of a Soliciting Stockholder, if a
               majority of the directors then in office determine that such
               Affiliate should be required to sign the written notice described
               in paragraph (3) of this Section 1(b) and/or the written
               agreement described in this paragraph (4) in order to prevent the
               purposes of this Section 1(b) from being evaded.

               (5) Except as provided in the following sentence, any special
        meeting shall be held at such hour and day as may be designated by
        whichever of the Board of Directors, Chairman, President or committee
        shall

                                       2
<PAGE>

        have called such meeting. In the case of any special meeting called by
        the Chairman or the Secretary upon the request of stockholders (a
        "Request Special Meeting"), such meeting shall be held at such hour and
        day as may by designated by the Board of Directors; provided, however,
        that the date of any Request Special Meeting shall be not more than 60
        days after the Meeting Record Date (as defined in Section 2(c)); and
        provided further that in the event that the directors then in office
        fail to designate an hour and date for a Request Special Meeting within
        10 days after the date that valid written requests for such meeting by
        the holders of record as of the Request Record Date of at least a
        majority of the issued and outstanding shares of stock that would be
        entitled to vote at such meeting are delivered to the Corporation (the
        "Delivery Date"), then such meeting shall be held at 2:00 p.m. local
        time on the 90th day after the Delivery Date or, if such 90th day is not
        a Business Day (as defined below), on the first preceding Business Day.
        In fixing a meeting date for any special meeting, the Board of
        Directors, Chairman, President or committee may consider such factors as
        they deem relevant within the good faith exercise of their business
        judgment, including, without limitation, the nature of the action
        proposed to be taken, the facts and circumstances surrounding any
        request of such meeting, and any plan of the Board of Directors to call
        an annual meeting or a special meeting for the conduct of related
        business.

               (6) The Corporation may engage regionally or nationally
        recognized independent inspectors of elections to act as an agent of the
        Corporation for the purpose of promptly performing a ministerial review
        of the validity of any purported written request or requests for a
        special meeting received by the Secretary. For the purpose of permitting
        the inspectors to perform such review, no purported request shall be
        deemed to have been delivered to the Corporation until the earlier of
        (i) five Business Days following receipt by the Secretary of such
        purported request and (ii) such date as the independent inspectors
        certify to the Corporation that the valid requests received by the
        Secretary represent at least a majority of the issued and outstanding
        shares of stock that would be entitled to vote at such meeting. Nothing
        contained in this paragraph (6) shall in any way be construed to suggest
        or imply that the Board of Directors or any stockholder shall not be
        entitled to contest the validity of any request, whether during or after
        such five-Business Day period, or to take any other action (including,
        without limitation, the commencement, prosecution or defense of any
        litigation with respect thereto, and the seeking of injunctive relief in
        such litigation).

               (7) For purposes of these by-laws, "Business Day" shall mean any
        day other than a Saturday, a Sunday or a day on which banking
        institutions in the State of North Carolina are authorized or obligated
        by law or executive order to close.

        (c) PLACE OF MEETINGS. Any meeting of the stockholders may be held at
such place within or without the State of Maryland as may be determined by the
Board of Directors and stated in the notice of said meeting, provided that if
the Board of Directors does not designate a location, such meeting shall be held
at the executive office of the Corporation in Cary, North Carolina.

        (d) NOTICE OF MEETING AND WAIVER OF NOTICE.

               (1) NOTICE. Written notice of the place, date and hour of every
        meeting of the stockholders, whether annual or special, shall be given
        to each stockholder of record entitled to vote at the meeting not less
        than 10 nor more than 90 days before the date of the meeting. Every
        notice of a special meeting shall state the purpose or purposes thereof.
        Such notice shall be given in writing to each stockholder entitled
        thereto by mail, addressed to the stockholder at his address as it
        appears on the records of the Corporation. Notice shall be deemed to
        have been given at the time when it was deposited in the mail.

               (2) RECORD HOLDER OF SHARES. The Corporation shall be entitled to
        recognize the exclusive right of a person registered on its books as the
        owner of shares to receive dividends and to vote as such owner, and to
        hold liable for calls and assessments a person registered on its books
        as the owner of shares, and shall not be bound to recognize any
        equitable or other claims to or interests in such share or shares on the
        part of any other person, whether or not the Corporation shall have
        express or other notice thereof, except as otherwise provided by the
        laws of Maryland.

                                       3
<PAGE>

               (3) WAIVER. Whenever any written notice is required to be given
        under the provisions of the Articles of Incorporation, these Bylaws, or
        by statute, a waiver thereof in writing, signed by the person or persons
        entitled to such notice, whether before or after the time stated
        therein, shall be deemed equivalent to the giving of such notice.
        Neither the business to be transacted at nor the purpose of any meeting
        of the stockholders need be specified in any written waiver of notice of
        such meeting. Attendance of a person, either in person or by proxy, at
        any meeting, shall constitute a waiver of notice of such meeting, except
        where a person attends a meeting for the express purpose of objecting to
        the transaction of any business because the meeting was not lawfully
        called or convened.

        (e) QUORUM, MANNER OF ACTING AND ADJOURNMENT. The holders of record of
shares entitled to cast a majority of the votes entitled to vote at any meeting,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business thereat, except as otherwise provided by statute, by the
Articles of Incorporation, or by these Bylaws. Whether or not a quorum is
present, the holders of shares entitled to cast a majority of the votes present
in person or represented by proxy at the meeting 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. At any such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting. When a quorum is present at any meeting, the vote of a
majority of the votes entitled to be cast by the holders of all issued and
outstanding shares present 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 the applicable statute or the Articles of Incorporation or
these Bylaws, a different vote is required, in which case such express provision
shall govern. Except upon those questions governed by the aforesaid express
provisions, the stockholders present in person or by proxy at a meeting at which
a quorum is at any time present or represented shall have the power to continue
to do business until adjournment, notwithstanding a subsequent reduction in the
number of shares present or represented to leave less than would constitute a
quorum.

        (f) ORGANIZATION OF MEETINGS.

               (1) PRESIDING OFFICER. Any "executive officer" of the
        Corporation, as that term is defined in section 3(f) of Article III of
        these Bylaws, may call meetings of the stockholders to order and act as
        chairman thereof.

               (2) MINUTES. The Secretary of the Corporation, or, in his absence
        or by his designation, an Assistant Secretary, or, in the absence of
        both, a person appointed by the chairman of the meeting, which person
        need not be an officer of the Corporation, shall act as secretary of the
        meeting and shall make and keep a record of the proceedings thereat.

               (3) STOCKHOLDERS' LIST. The officer who has charge of the stock
        ledger of the Corporation shall prepare and make, at least 10 days
        before every meeting of stockholders, a complete list of the
        stockholders entitled to vote at the meeting. The list shall be arranged
        in alphabetical order showing the address of each stockholder 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 10 days prior to the meeting either at a place within the city
        where the meeting is to be held, which place shall be specified in the
        notice of the meeting, or, if not so specified, at the place where the
        meeting is to be held. The list shall also 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.

               (4)    VOTING PROCEDURES AND INSPECTORS OF ELECTIONS.

                                       4
<PAGE>

               (A) The Board of Directors shall, in advance of any meeting of
        stockholders, appoint one or more inspectors to act at the meeting and
        make a written report thereof. The Board of Directors may designate one
        or more persons as alternate inspectors to replace any inspector who
        fails to act at such meeting. If no inspector or alternate is able to
        act at a meeting of stockholders, the chairman of the meeting shall
        appoint one or more inspectors to act at the meeting. Each inspector,
        before entering upon the discharge of his duties, shall take and sign an
        oath faithfully to execute the duties of inspector with strict
        impartiality and according to the best of his ability.

               (B) The inspectors shall (i) determine those stockholders
        entitled to vote at the meeting, (ii) ascertain the number of shares
        outstanding and the voting power of each, (iii) determine the shares
        represented at a meeting and the validity of proxies and ballots, (iv)
        count all votes and ballots, (v) determine and retain for a reasonable
        period a record of the disposition of any challenges made to any
        determination by the inspectors, and (vi) certify their determination of
        the number of shares represented at the meeting and their count of all
        votes and ballots. The inspectors may appoint or retain other persons or
        entities to assist the inspectors in the performance of the duties of
        the inspectors.

               (C) The date and time of the opening and the closing of the polls
        for each matter upon which the stockholders will vote at a meeting shall
        be announced at the meeting. No ballot, proxies or votes, nor any
        revocations thereof or changes thereto, shall be accepted by the
        inspectors after the closing of the polls unless judicially determined
        otherwise upon application by a stockholder.

               (D) In determining the validity and counting of proxies and
        ballots, the inspectors shall be limited to an examination of the
        proxies, any envelopes submitted with those proxies, ballots and the
        regular books and records of the Corporation, except that the inspector
        may consider other reliable information for the limited purpose of
        reconciling proxies and ballots submitted by or on behalf of banks,
        brokers, their nominees or similar persons which represent more votes
        than the holder of proxy is authorized by the record owner to cast or
        more votes than the stockholder holds of record. If the inspectors
        consider other reliable information for the limited purpose permitted
        herein, the inspectors at the time they make their certification
        pursuant to clause (B) (vi) of this subsection 1(f) (4) shall specify
        the precise information considered by them, including the person or
        persons from whom they obtained the information, when the information
        was obtained, the means by which the information was obtained and the
        basis for the inspectors' belief that such information is accurate and
        reliable.

               (E) The provisions of subsections 1(f)(4)(A) through (D) of this
        Article I shall not apply at any time that the Corporation does not have
        a class of voting stock that is (i) listed on a national securities
        exchange, (ii) authorized for quotation on an interdealer quotation
        system, or (iii) held of record by more than 2,000 stockholders.

               (5) ORDER OF BUSINESS. Unless otherwise determined by the Board
        of Directors prior to the meeting, the chairman of any meeting of
        stockholders shall determine the order of business and shall have the
        authority in his discretion to regulate the conduct of any such meeting,
        including, without limitation, by imposing restrictions on the persons
        (other than stockholders of the Corporation or their duly appointed
        proxies) who may attend any such meeting of stockholders, whether any
        stockholder or his proxy may be excluded from any stockholders' meeting
        based upon any determination by the chairman of the meeting, in his sole
        discretion, that any such person has unduly disrupted or is likely to
        disrupt the proceedings thereat, and the circumstances in which any
        person may make a statement or ask questions at any meeting of
        stockholders.

        (g) VOTING. Except as otherwise provided by statute or the Articles of
Incorporation, every stockholder entitled to vote shall be entitled to cast the
vote per share to which such share is entitled, in person or by proxy, on each
proposal submitted to the meeting for each share held of record by him on the
record date for the determination of the stockholders entitled to vote at the
meeting. At any meeting at which a quorum is present, all questions and business
that may come before the meeting shall be determined by a majority of votes
cast, except when a greater proportion is required by law, the Articles of
Incorporation, or these Bylaws.

                                       5
<PAGE>

        (h) PROXIES. A person who is entitled to attend a meeting of
stockholders, to vote thereat, and execute consents, waivers and releases, may
be represented at such meeting or vote thereat, and execute consents, waivers
and releases and exercise any of his rights by proxy or proxies appointed by a
legally sufficient writing signed by such person, or by his duly authorized
attorney, as provided by the laws of the State of Maryland.

        (i) STOCKHOLDER PROPOSALS. For any stockholder proposal to be presented
in connection with an annual meeting of stockholders of the Corporation,
including any proposal relating to the nomination of a director to be elected to
the Board of Directors of the Corporation, the stockholders must have given
timely written notice thereof in writing to the Secretary of the Corporation. In
order for such notice to be timely, such notice must be received by the
Corporation not less than 90 nor more than 180 days prior to the anniversary of
the previous year's annual meeting; PROVIDED, HOWEVER, THAT IN THE EVENT THAT
THE DATE OF THE ANNUAL MEETING IS ADVANCED BY MORE THAN 30 DAYS OR DELAYED BY
MORE THAN 60 DAYS FROM SUCH ANNIVERSARY DATE OR IF THE CORPORATION HAS NOT
PREVIOUSLY HELD AN ANNUAL MEETING, NOTICE BY THE STOCKHOLDER TO BE TIMELY MUST
BE SO DELIVERED NOT EARLIER THAN THE CLOSE OF BUSINESS ON THE 180TH DAY PRIOR TO
SUCH ANNUAL MEETING AND NOT LATER THAN THE CLOSE OF BUSINESS ON THE LATER OF THE
90TH DAY PRIOR TO SUCH ANNUAL MEETING AND THE TENTH DAY FOLLOWING THE DAY ON
WHICH PUBLIC ANNOUNCEMENT OF THE DATE OF SUCH MEETING IS FIRST MADE BY THE
CORPORATION. IN NO EVENT SHALL THE PUBLIC ANNOUNCEMENT OF A POSTPONEMENT OR
ADJOURNMENT OF AN ANNUAL MEETING TO A LATER DATE OR TIME COMMENCE A NEW TIME
PERIOD FOR THE GIVING OF A STOCKHOLDER'S NOTICE AS DESCRIBED ABOVE. SUCH
STOCKHOLDER'S NOTICE SHALL SET FORTH (I) AS TO EACH PERSON WHOM THE STOCKHOLDER
PROPOSES TO NOMINATE FOR ELECTION OR REELECTION AS A DIRECTOR ALL INFORMATION
RELATING TO SUCH PERSON THAT IS REQUIRED TO BE DISCLOSED IN SOLICITATIONS OF
PROXIES FOR ELECTION OF DIRECTORS IN AN ELECTION CONTEST, OR IS OTHERWISE
REQUIRED, IN EACH CASE PURSUANT TO REGULATION 14A UNDER THE EXCHANGE ACT
(INCLUDING SUCH PERSON'S WRITTEN CONSENT TO BEING NAMED IN THE PROXY STATEMENT
AS A NOMINEE AND TO SERVING AS A DIRECTOR IF ELECTED); (II) AS TO ANY OTHER
BUSINESS THAT THE STOCKHOLDER PROPOSES TO BRING BEFORE THE MEETING, A BRIEF
DESCRIPTION OF THE BUSINESS DESIRED TO BE BROUGHT BEFORE THE MEETING, THE
REASONS FOR CONDUCTING SUCH BUSINESS AT THE MEETING AND ANY MATERIAL INTEREST IN
SUCH BUSINESS OF SUCH STOCKHOLDER AND OF THE BENEFICIAL OWNER, IF ANY, ON WHOSE
BEHALF THE PROPOSAL IS MADE; AND (III) AS TO THE STOCKHOLDER GIVING THE NOTICE
AND THE BENEFICIAL OWNER, IF ANY, ON WHOSE BEHALF THE NOMINATION OR PROPOSAL IS
MADE, (X) THE NAME AND ADDRESS OF SUCH STOCKHOLDER, AS THEY APPEAR ON THE
CORPORATION'S BOOKS, AND OF SUCH BENEFICIAL OWNER AND (Y) THE NUMBER OF SHARES
OF EACH CLASS OF STOCK OF THE CORPORATION WHICH ARE OWNED BENEFICIALLY AND OF
RECORD BY SUCH STOCKHOLDER AND SUCH BENEFICIAL OWNER.

SECTION 2.   DETERMINATION OF STOCKHOLDERS OF RECORD.

        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 60 or less than 10 days before the date of such meeting, or
more than 60 days prior to any other action. If no record date is fixed:

        (a) The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders 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 shall be at the close of business on
the day next preceding the day on which notice is given.

        (b) The record date for determining stockholders 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.

        Notwithstanding anything to the contrary in these Bylaws, in the case of
any Request Special Meeting, (i) the record date for such meeting (the "Meeting
Record Date") shall be no later than the 30th day after the Delivery Date and

                                       6
<PAGE>

(ii) if the Board of Directors fails to fix the Meeting Record Date within 30
days after the Delivery Date, then the close of business on such 30th day shall
be the Meeting Record Date.

                                   ARTICLE II

                                    DIRECTORS

SECTION 1.   DEFINITIONS.

        For the purpose of this Article II, capitalized terms not otherwise
defined herein shall have the meaning set forth in the Stockholders Agreement by
and between Prometheus Southeast Retail, LLC and the Corporation dated February
24, 1998 (the "Stockholders Agreement").

SECTION 2.   GENERAL POWERS.

        The business and affairs, power and authority of the Corporation shall
be exercised, conducted and controlled by the Board of Directors, except where
the law, the Articles of Incorporation, or these Bylaws require any power or
action to be authorized or taken by the stockholders. In addition to the powers
and authorities expressly conferred by these Bylaws, the Board of Directors may
do all such lawful things and acts as are not by statute, the Articles of
Incorporation or these Bylaws directed or required to be done by the
stockholders.

SECTION 3.   NUMBER, NOMINATION AND ELECTION OF DIRECTORS.

        (a) NUMBER. The Board of Directors shall consist of not more than
fifteen members and, until the Final Threshold Date, not less than nine members.
Until the Preliminary Threshold Date, at least one-third of the Board of
Directors shall be designees (the "Investor Nominees") of Prometheus Southeast
Retail, LLC or its successor or assignee (the "Investor"). From and after the
Preliminary Threshold Date and until the Second Threshold Date, at least
two-ninths of the Board of Directors shall be Investor Nominees. From and after
the Second Threshold Date and until the Final Threshold Date, at least one-ninth
of the Board of Directors shall be Investor Nominees. The Board of Directors may
increase or decrease the number of the members of the Board of Directors within
the limitations set forth above. No reduction in the number of directors shall
of itself have the effect of shortening the term of any incumbent director.

        (b) ELECTION. The directors shall be elected at the annual meeting of
stockholders, or if not so elected, at a special meeting of stockholders called
for that purpose. At any meeting of stockholders at which directors are to be
elected (an "Election Meeting"), only persons nominated as candidates shall be
eligible for election, and the candidates receiving the greatest number of votes
entitled to be cast shall be elected.

        (c)    NOMINATIONS.

               (1) QUALIFICATION. Directors of the Corporation need not be
        stockholders or residents of Maryland. No person shall be appointed or
        elected a director of the Corporation unless:

                      (A) such person is elected to fill a vacancy in the Board
               of Directors pursuant to Section 4(c) of this Article II; or

                      (B) such person is nominated for election as a director of
               the Corporation in accordance with this section.

               (2) ELIGIBILITY TO MAKE NOMINATIONS. Nominations of candidates
        for election as directors at any Election Meeting may be made by the
        Board of Directors or a committee thereof.

                                       7
<PAGE>

               (3) PROCEDURE FOR NOMINATIONS. Nominations shall be made not
        fewer than 30 days prior to the date of an Election Meeting. At the
        request of the Secretary or, in his absence, an Assistant Secretary,
        each proposed nominee shall provide the Corporation with such
        information concerning himself as is required under the rules of the
        Securities and Exchange Commission (the "Commission") to be included in
        the Corporation's proxy statement soliciting proxies for the election of
        such nominee as a director.

               (4) SUBSTITUTION OF NOMINEES. In the event that a person is
        validly designated as a nominee in accordance with these Bylaws and
        shall thereafter become unable or unwilling to stand for election to the
        Board of Directors, the Board of Directors or a committee thereof may
        designate a substitute nominee upon delivery, not fewer than five days
        prior to the date of an Election Meeting, of a written notice to the
        Secretary setting forth such information regarding such substitute
        nominee as would have been required to be delivered to the Secretary
        pursuant to these Bylaws had such substitute nominee been initially
        proposed as a nominee. Such notice shall include a signed consent to
        serve as a director of the Corporation, if elected, of each such
        substitute nominee.

               (5) INVESTOR NOMINEES. No person shall be named as an Investor
        Nominee if (i) such person is not reasonably experienced in business,
        financial or real estate matters, (ii) such person has been convicted
        of, or pled nolo contendere to, a felony; (iii) the election of such
        person would violate any law, or (iv) any event required to be disclosed
        pursuant to Item 401(f) of Regulation S-K of the 1934 Act has occurred
        with respect to such person. The Board of Directors shall support the
        nomination of and the election of each Investor Nominee to the Board of
        Directors, and the Board of Directors shall exercise all authority under
        applicable law to cause each Investor Nominee to be elected to the Board
        of Directors.

               (6) COMPLIANCE WITH PROCEDURES. If the chairman of the Election
        Meeting determines that a nomination of any candidate for election as a
        director was not made in accordance with the applicable provisions of
        these Bylaws, he shall so declare to the meeting and such nomination
        shall be void.

        (d) CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman, if any is elected,
shall, subject to the to the provisions of these Bylaws, preside at all meetings
of the stockholders, of the Board of Directors and of the Executive Committee.

SECTION 4.   TERM OF OFFICE OF DIRECTORS.

        (A) TERM. Each director shall hold office until the annual meeting next
succeeding his election and until his successor is elected and qualified, or
until his earlier resignation, removal from office or death.

        (B) RESIGNATION. Any director of the Corporation may resign at any time
by giving written notice to the Chairman or to the President or the Secretary of
the Corporation. A resignation from the Board of Directors shall be deemed to
take effect immediately or at such other time as the director may specify.

        (C) VACANCY. If there shall be any vacancy in the Board of Directors for
any reason, including, but not limited to, death, resignation or as provided by
law, the Articles of Incorporation or these Bylaws (including any increase in
the authorized number of directors), the remaining directors shall constitute
the Board of Directors until such vacancy is filled. The remaining directors may
fill any vacancy in the Board of Directors for the unexpired term. In the event
that any Investor Nominee shall cease to serve as a Director for any reason
other than the fact that Investor no longer has a right to nominate a Director,
the vacancy resulting thereby shall be filled by an Investor Nominee designated
by Investor; provided, however, that any Investor Nominee so designated shall
satisfy the qualification requirements set forth in Section 3(c)(5).

SECTION 5.   MEETINGS OF DIRECTORS.

                                       8
<PAGE>

        (a) MEETINGS. Meetings of the Board of Directors may be held at any time
upon call by the Chairman or by the President or by any two directors. Unless
otherwise indicated in the notice thereof, any business may be transacted at any
such meeting.

        (b) PLACE OF MEETING. Any meeting of directors may be held at such place
within or without the State of Maryland as may be designated in the notice of
such meeting.

        (C) NOTICE OF MEETING AND WAIVER OF NOTICE. No notice of regular
meetings of the Board of Directors need be given. Special meetings of the Board
of Directors may be called by the Chairman, or by the President on notice to
each director, given either in person or by mail, telephone, telegram, telex or
similar medium of communication; special meetings shall be called on like notice
by the Chairman, the President or the Secretary, on the written request of two
directors. At least 24 hours notice of special meetings shall be given to each
director.

SECTION 6.  QUORUM AND VOTING.

        Except as otherwise provided in the Articles of Incorporation, at any
meeting of directors, not less than one-half (1/2) of the directors then in
office (or, in the event that the directors then in office are an uneven number,
the nearest full number of directors less than one-half (1/2) of such number) is
necessary to constitute a quorum for such meeting, except that any meeting duly
called, whether a quorum is present or otherwise, may, by vote of a majority of
the directors present, be adjourned from time to time. At any meeting at which a
quorum is present, all acts, questions and business which may come before the
meeting shall be determined by a majority of votes cast by the directors present
at such meeting, unless the vote of a greater number is required by statute, the
Articles of Incorporation or these Bylaws.

SECTION 7.  ACTION OF BOARD OF DIRECTORS WITHOUT A MEETING.

        Any action that may be authorized or taken at a meeting of the Board of
Directors may be authorized or taken without a meeting if approved and
authorized by a writing or writings, signed by all of the directors, which are
filed with the minutes of proceedings of the Board of Directors.

SECTION 8.  COMPENSATION.

        The Board of Directors is authorized to fix a reasonable salary for
directors or a reasonable fee for attendance at any meeting of the Board of
Directors, the Executive or Audit Committee, or other committees appointed by
the Board of Directors, or any combination of salary and attendance fee. In
addition, directors may be reimbursed for any expenses incurred by them in
traveling to and from such meetings.

SECTION 9.  COMMITTEES.

        (a) APPOINTMENT. The Board of Directors, by resolution passed by a
majority of the whole Board of Directors, may, from time to time, appoint one or
more of its members to act as a committee of the Board of Directors, provided,
however, that each of the Executive Committee, the compensation committee, the
audit committee, any special committee(s) of the Board of Directors, and any
other Key Committees shall (A) until the Preliminary Threshold Date, be
comprised of members, at least one-third of whom are Investor Nominees, (B)
until the Second Threshold Date, be comprised of members, at least two-ninths of
whom are Investor Nominees, and (C) until the Final Threshold Date, be comprised
of members, at least one-ninth of whom are Investor Nominees. A committee shall
have and exercise the powers of the Board of Directors in the direction of the
management of the business and affairs of the Corporation to the extent provided
in the resolution appointing such committee. Each committee shall have such name
as may be determined by the Board of Directors. A committee shall keep minutes
of its proceedings and shall report its proceedings to the Board of Directors
when required or when requested by a director to do so. Each such committee and
each member thereof shall serve at the pleasure of the Board of Directors.
Vacancies occurring in any such committee may be filled by the Board of
Directors.

                                       9
<PAGE>

        Notwithstanding the foregoing, if none of the Directors who are Investor
Nominees would be considered "independent" of the Company, "disinterested,"
"non-employee directors" and "outside directors" (i) for purposes of any
applicable rule of the New York Stock Exchange or any other securities exchange
or other self-regulating organization (such as the National Association of
Securities Dealers) requiring that members of the audit committee of the Board
of Directors be independent of the Corporation, (ii) for purposes of any law or
regulation that requires in order to obtain or maintain favorable tax,
securities, corporate law or other material legal benefits with respect to any
plan or arrangement for employee compensation or benefits, that the members of
the committee of the Board of Directors charged with responsibility for such
plan or arrangement be "independent" of the Corporation, "disinterested,"
"non-employee directors" or "outside directors," or (iii) for purposes of any
special committee formed in connection with any transaction or potential
transaction involving the Corporation and any of Investor, its Affiliates or any
Group of which Investor is a member or such other transaction or potential
transaction which would involve an actual or potential conflict of interest on
the part of the Directors who are Investor Nominees, then a Director who is an
Investor Nominee shall not be required to be appointed to any such committee;
provided, however, that the committees of the Board of Directors shall be
organized such that, to the extent practicable, the only items to be considered
by a Key Committee on which no Director who is an Investor Nominee may serve
will be those items which prevent the Director who is an Investor Nominee from
serving on such Key Committee. Any members of any Key Committee who are Investor
Nominees shall, in the event of any vacancy in such membership, be replaced by a
Director who is an Investor Nominee elected by a majority of the Directors who
are Investor Nominees.

        (b) EXECUTIVE COMMITTEE. Until the Final Threshold Date, there shall be
an Executive Committee of the Board of Directors, the members of which shall
hold office during the pleasure of the Board of Directors, and may be removed at
any time, with or without cause, by action thereof. During the intervals between
meetings of the Board of Directors, the Executive Committee shall possess and
may exercise all of the powers and authority of the Board of Directors in the
management and control of the business and affairs of the Corporation to the
maximum extent permitted by law. All action taken by the Executive Committee
shall be reported to the Board of Directors. Each of the Chairman and the
President shall be a member of the Executive Committee, unless such person is
not a director or shall decline in writing.

        (c) COMMITTEE ACTION. Unless otherwise provided by the Board of
Directors, a majority of the members of any committee appointed by the Board of
Directors pursuant to this section shall constitute a quorum at any meeting
thereof, and the act of a majority of the members present at a meeting at which
a quorum is present shall be the act of such committee. Action may also be taken
by any such committee without a meeting by a writing or writings, signed by all
of its members, which is filed with the minutes of proceedings of the committee.
Any such committee shall appoint one of its own number as chairman (provided
that the Chairman or the President, if the Chairman declines or is not a member
of the Executive Committee, shall be the chairman of any Executive Committee),
who shall preside at all meetings and may appoint a Secretary (who need not be a
member of the committee) who shall hold office during the pleasure of such
committee. Meetings of any such committee may be held without notice of the
time, place or purposes thereof and may be held at such times and places within
or without the State of Maryland, as the committee may from time to time
determine, at the call of the chairman of the committee or any two members
thereof. Any such committee may prescribe such other rules as it shall determine
for calling and holding meetings and its method of procedure, subject to any
rules prescribed by the Board of Directors.

SECTION 10.  CONFERENCE TELEPHONE MEETINGS.

        One or more directors may participate in a meeting of the Board, or of a
committee of the Board of Directors, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this section
shall constitute presence in person at such meeting.

SECTION 11.  SUPERMAJORITY BOARD APPROVAL.

                                       10
<PAGE>

        Until the Approval Rights Termination Date, if any, notwithstanding the
fact that a vote of the Board of Directors or the Executive Committee may not be
required under applicable law, the Corporation shall not, and shall not permit
any of its Subsidiaries without the affirmative vote of over sixty-seven percent
(67%) of all of the Directors ("Supermajority Board Approval") to:

        (a) acquire, whether by merger, consolidation, purchase of stock or
assets or other business combination, (i) in a single transaction or group of
related transactions, any business or assets having an aggregate purchase price
in excess of twenty-five percent (25%) of Total Enterprise Value as measured at
the beginning of the fiscal year in which such acquisition is consummated, or
(ii) during any one fiscal year, businesses or assets having an aggregate
purchase price in excess of fifty percent (50%) of Total Enterprise Value as
measured at the beginning of such fiscal year;

        (b) sell or dispose of any assets, whether by merger, consolidation,
sale of stock or assets or other business combination, during any one fiscal
year, having an aggregate value in excess of twenty-five percent (25%) of Total
Enterprise Value as measured at the beginning of such fiscal year;

        (c) directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to, any indebtedness if, after giving pro forma effect to such
indebtedness, the Corporation's ratio of (i) total indebtedness to (ii) Total
Enterprise Value, expressed as a percentage, would be greater than 65%;

        (d) make any payment to, or sell, lease, transfer or otherwise dispose
of any of its properties or assets to, or purchase any property or assets from,
or enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any of its Affiliates;

        (e) issue Stock or options, rights or warrants or other commitments to
purchase or securities convertible into (or exchangeable or redeemable for)
shares of Stock, including, without limitation, OP Units (such options, rights,
warrants, other commitments or securities, "Stock Equivalents"); provided,
however, that Supermajority Board Approval shall not be required for any
issuance of Stock or Stock Equivalents as long as the sum of (i) all shares of
Stock issued by the Corporation during the applicable fiscal year and (ii)
shares of Stock into which Stock Equivalents issued by the Corporation and each
of its Subsidiaries during the applicable fiscal year are convertible, does not
exceed fifty percent (50%) of all shares of Stock outstanding, on a Fully
Diluted basis, on the first day of such fiscal year; provided, further, that in
connection with any issuance by the Corporation of Stock or issuance by the
Corporation or any of its Subsidiaries of any Stock Equivalents, Investor shall
be entitled, to the extent so provided in Section 4.1 of the Stock Purchase
Agreement, to a participation right on the terms set forth in Section 4.1 of the
Stock Purchase Agreement. Notwithstanding the first sentence of this Section
11(e), (i) Stock issued to the Corporation or a wholly owned Subsidiary thereof
and (ii) Stock and Stock Equivalents issued to directors or employees of the
Corporation or a Subsidiary of the Corporation in connection with any employee
benefit plan approved by the stockholders of the Corporation, shall not be
subject to Supermajority Board Approval;

        (f) change or amend any provision of the Corporation's Charter or bylaws
in a manner that would be materially adverse to Investor;

        (g) pursuant to or within the meaning of any bankruptcy law: (i)
commence a voluntary case, (ii) consent to the entry of an order for relief
against it in an involuntary case, (iii) consent to the appointment of a
custodian of it or for all or substantially all of its property; (iv) make a
general assignment for the benefit of its creditors;

        (h) in the case of the Corporation, (1) terminate its eligibility for
treatment as a real estate investment trust, as defined in the Code, or (2) take
any action or fail to take any action which would reasonably be expected to,
alone or in conjunction with any other factors, result in the loss of such
eligibility, unless in the case of a failure to take action, such action is
initiated within thirty days and such action is completed within the period
required under the Code in order to maintain such eligibility; or

                                       11
<PAGE>

        (i) subject to the right of the Corporation to terminate the Stock
Purchase Agreement pursuant of Section 9.1(b)(iii) thereof, allow the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than Investor, becomes the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of
stock having more than 15% of the voting power of the Company.


                                   ARTICLE III

                                    OFFICERS

SECTION 1.   GENERAL PROVISIONS.

        The Board of Directors at such time as it determines may elect such
executive officers, as defined in Section 3(f) of this Article III, as the Board
of Directors deems necessary. The Board of Directors may assign such additional
titles to one or more of the officers as they shall deem appropriate. Any two or
more executive offices may be held by the same person. Other officers may be
appointed in the manner provided for in these Bylaws. The election or
appointment of an officer for a given term, or a general provision in the
Articles of Incorporation or in these Bylaws with respect to term of office,
shall not be deemed to create any contract rights.

SECTION 2.   TERM OF OFFICE, REMOVAL, AND VACANCIES.

        (a) TERM. Each officer of the Corporation shall hold office during the
pleasure of the Board of Directors and until his successor is elected and
qualified, unless he sooner dies or resigns or is removed.

        (b) REMOVAL. Subject to the terms of any agreement relating to the
employment or service of any officer of the Corporation, the Board of Directors
by a vote of two-thirds of the members present at a meeting at which a quorum is
present may remove any executive officer at any time, with or without cause, and
the Board of Directors by a vote of a majority of its members present at a
meeting at which a quorum is present may remove any other officer at any time,
with or without cause.

        (c) VACANCIES. Any vacancy in any executive office may be filled by the
Board of Directors.

SECTION 3.   POWERS AND DUTIES.

        (a) IN GENERAL. Subject to the specific provisions of these Bylaws, all
officers, as between themselves and the Corporation, shall respectively have
such authority and perform such duties as are customarily incident to their
respective offices, and as may be specified from time to time by the Board of
Directors, regardless of whether such authority and duties are customarily
incident to such office. In the absence of any officer of the Corporation, or
for any other reason the Board of Directors may deem sufficient, the Board of
Directors may delegate from time to time the powers or duties of such officer,
or any of them, to any other officer or to any Director.

        (b) PRESIDENT. The President shall, in the absence of the Chairman or
upon the determination of the Board of Directors, preside at all meetings of the
stockholders. The President shall be the chief executive officer of the
Corporation and shall have general supervision over its property, business and
affairs, and shall perform all the duties usually incident to such office,
subject to the direction of the Board of Directors. He may execute all
authorized deeds, mortgages, bonds, contracts and other obligations in the name
of the Corporation and, subject to the provisions of these Bylaws, shall have
such other powers and duties as may be prescribed by the Board of Directors.

        (c) VICE PRESIDENTS. The Vice Presidents shall have such powers, duties
and titles as may be prescribed by the Board of Directors or as may be delegated
by the President.

                                       12
<PAGE>

        (d) SECRETARY. The Secretary shall attend and shall keep the minutes of
all meetings of the stockholders and the Board of Directors (and perform similar
duties for the committees of the Board of Directors when required). He shall
keep such books as may be required by the Board of Directors, shall have charge
of the seal, if any, of the Corporation and shall be permitted, subject to the
provisions of these Bylaws, to give notices of stockholders' and directors'
meetings required by law or by these Bylaws, or otherwise, and have such other
powers and duties as may be prescribed by the Board of Directors.

        (e) TREASURER. The Treasurer shall receive and have charge of all money,
bills, notes, bonds, stock in other corporations and similar property belonging
to the Corporation, and shall do with the same as shall be ordered by the Board
of Directors. He shall disburse the funds and pledge the credit of the
Corporation as may be directed by the Board of Directors. He shall keep accurate
financial accounts and hold the same open for inspection and examination by the
directors. On the expiration of his term of office, he shall turn over to his
successors, or the Board of Directors, all property, books, papers and money of
the Corporation in his hands, and shall possess such other powers and duties as
may be prescribed by the Board of Directors.

        (f) EXECUTIVE OFFICERS. The officers referred to in subparagraphs (b),
(c), (d) and (e) of this section, and such other officers as the Board of
Directors may by resolution identify as such shall be executive officers of the
Corporation and may be referred to as such.

        (g) OTHER OFFICERS. The Assistant Vice Presidents, Assistant
Secretaries, Assistant Treasurers, if any, and any other subordinate officers
shall be appointed and removed by the President or the Board of Directors at
whose pleasure each shall serve and shall have such powers and duties as they
may prescribe.

SECTION 4.   COMPENSATION.

        The Board of Directors is authorized to determine or to provide the
method of determining the compensation of all officers.

SECTION 5.   BONDS.

        If required by the Board of Directors, any and every officer or agent
shall give the Corporation a bond in a sum and with one or more sureties
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.

                                   ARTICLE IV

                         SECURITIES HELD BY CORPORATION

SECTION 1.   TRANSFER OF SECURITIES OWNED BY THE CORPORATION.

        All endorsements, assignments, transfers, share powers or other
instruments of transfer of securities standing in the name of the Corporation
shall be executed for and in the name of the Corporation by the President or by
any Vice President, or by the Secretary or Treasurer or by any additional person
or Persons as may be thereunto authorized by the Board of Directors.

SECTION 2.   VOTING SECURITIES HELD BY THE CORPORATION.

        The President, any Vice President, or the Secretary or Treasurer, in
person or by another person thereunto authorized by the Board of Directors, in
person or by proxy or proxies appointed by him, shall have full power and

                                       13
<PAGE>

authority on behalf of the Corporation to vote, act and execute consents,
waivers and releases with respect to any securities issued by other corporations
which the Corporation may own.

                                    ARTICLE V

                               SHARE CERTIFICATES

SECTION 1.   TRANSFER AND REGISTRATION OF CERTIFICATES.

        The Board of Directors shall have authority to make such rules and
regulations, not inconsistent with law, the Articles of Incorporation or these
Bylaws, as it deems expedient concerning the issuance, transfer and registration
of certificates for shares and the shares represented thereby.

SECTION 2.   CERTIFICATES FOR SHARES.

        Each holder of shares is entitled to one or more certificates for shares
of the Corporation in such form not inconsistent with law and the Articles of
Incorporation as shall be approved by the Board of Directors. Each such
certificate shall be signed by the President or any Vice President, and by the
Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of
the Corporation, which certificate shall certify the number and class of shares
held by such stockholder in the Corporation, but no certificates for shares
shall be executed or delivered until such shares are fully paid. Any or all of
the signatures upon such 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, any share certificate shall have ceased to be
such officer, transfer agent or registrar, before the certificate is issued, it
may be issued with the same effect as if he were such officer, transfer agent or
registrar at the date of its issue.

SECTION 3.   TRANSFER AGENTS, REGISTRARS AND DIVIDEND DISBURSING AGENTS.

        The Board of Directors may from time to time by resolution appoint one
or more incorporated transfer agents and registrars (which may or may not be the
same corporation) for the shares of the Corporation, and the Board of Directors
from time to time by resolutions may appoint a dividend disbursing agent to
disburse any and all dividends authorized by the Board of Directors payable upon
the shares of the Corporation.

SECTION 4.   TRANSFERS.

        Subject to restrictions on the transfer of stock, upon surrender to the
Corporation or the duly appointed transfer agent of the Corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignation 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 books. No transfer shall
be made which would be inconsistent with the applicable provisions of the
Uniform Commercial Code.

SECTION 5.   LOST, STOLEN OR DESTROYED CERTIFICATES.

        The Corporation may issue a new certificate for shares in place of any
certificate or certificates heretofore issued by the Corporation alleged to have
been lost, stolen or destroyed upon the making of an affidavit of that fact by
the person claiming the certificate of stock to have been lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors or any duly authorized executive officer may, in its or his
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 representatives, to attest the same in such manner as it shall require and
to indemnify the Corporation, its directors, officers, employees, agents and
representatives, and in connection therewith to give the Corporation a bond in
such sum and containing such terms as the Board of Directors or such executive
officer may direct, against any claim that may be made against the Corporation
with respect to the certificate or certificates alleged to have been lost,
stolen or destroyed or the issuance of the new certificate.


                                       14
<PAGE>

SECTION 6.   PROTECTION OF THE CORPORATION.

        The Corporation may treat a fiduciary as having capacity and authority
to exercise all rights of ownership in respect of shares of record in the name
of the decedent holder, person, firm or corporation in conservation,
receivership or bankruptcy, minor, incompetent person, or person under
disability, as the case may be, for whom he is acting, or a fiduciary acting as
such, and the Corporation, its transfer agent and registrar, upon presentation
of evidence of appointment of such fiduciary shall be under no duty to inquire
as to the powers of such fiduciary and shall not be liable to any firm, person
or corporation for loss caused by any act done or omitted to be done by the
Corporation or its transfer agent or registrar in reliance thereon.

                                   ARTICLE VI

   INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER AUTHORIZED REPRESENTATIVES

SECTION 1. INDEMNIFICATION OF AUTHORIZED REPRESENTATIVES IN THIRD-PARTY
PROCEEDINGS.

        The Corporation shall indemnify any person who was or is an "authorized
representative" of the Corporation (which shall mean for purposes of this
Article a director or officer of the Corporation, or a person serving at the
request of the Corporation as a director, officer, employee, agent or trustee,
of another corporation, partnership, joint venture, trust or other enterprise,
including employee benefit plans) and who was or is a "party" (which shall
include, for purposes of this Article, the giving of testimony or similar
involvement) or is threatened to be made a party to any "third-party proceeding"
(which shall mean for purposes of this Article any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative, other than an action by or in the right of the Corporation) by
reason of the fact that such person was or is an authorized representative of
the Corporation, from and against expenses (which shall include, for purposes of
this Article, attorneys' fees), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such third-party proceeding if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
the Corporation and, with respect to any criminal third-party proceedings (which
could or does lead to a criminal third-party proceeding) had no reasonable cause
to believe such conduct was unlawful. The termination of any third-party
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the authorized representative did not act in good faith and in a manner which
such person reasonably believed to be in, or not opposed to, the best interests
of the Corporation, and, with respect to any criminal third-party proceeding,
had reasonable cause to believe that such conduct was unlawful.

SECTION 2. INDEMNIFICATION OF AUTHORIZED REPRESENTATIVES IN CORPORATE
PROCEEDINGS.

        The Corporation shall indemnify any person who was or is an authorized
representative of the Corporation and who was or is a party or is threatened to
be made a party to any "corporate proceeding" (which shall mean, for purposes of
this Article, any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor or investigative
proceeding by the Corporation) by reason of the fact that such person was or is
an authorized representative of the Corporation, against expenses actually and
reasonably incurred by such person in connection with the defense or settlement
of such corporate proceeding if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
the Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the court in which
such corporate proceeding was pending shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such authorized representative is fairly and reasonably entitled to
indemnity for such expenses that such court shall deem proper.


                                       15
<PAGE>


SECTION 3.   MANDATORY INDEMNIFICATION OF AUTHORIZED REPRESENTATIVES.

        To the extent that an authorized representative of the Corporation has
been successful on the merits or otherwise in defense of any third-party or
corporate proceedings or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses actually and reasonably incurred by
such person in connection therewith.

SECTION 4.   DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.

        Any indemnification under Section 1, 2 or 3 of this Article VI (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the authorized
representative is proper in the circumstances because such person has either met
the applicable standard of conduct set forth in Section 1 or 2 or has been
successful on the merits or otherwise as set forth in Section 3 and that the
amount requested has been actually and reasonably incurred. Such determination
shall be made:

        (1) by the Board of Directors by a majority of a quorum consisting of
directors who were not parties to such third-party or corporate proceedings; or

        (2) if such a quorum is not obtainable, or, even if obtainable, a
majority vote of such a quorum so directs, by independent legal counsel in a
written opinion; or

        (3) by the stockholders.

SECTION 5.   ADVANCING EXPENSES.

        Expenses actually and reasonably incurred in defending a third-party or
corporate proceeding shall be paid on behalf of an authorized representative by
the Corporation in advance of the final disposition of such third-party or
corporate proceeding upon receipt of an undertaking by or on behalf of the
authorized representative to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the Corporation
as authorized in this Article VI.

SECTION 6.   EMPLOYEE BENEFIT PLANS.

        For purposes of this Article, the Corporation shall be deemed to have
requested an authorized representative to serve an employee benefit plan where
the performance by such person of duties to the Corporation also imposes duties
on, or otherwise involves services by, such person to the plan or participants
or beneficiaries of the plan; excise taxes assessed on an authorized
representative with respect to an employee benefit plan pursuant to applicable
law shall be deemed "fines"; and action taken or omitted by such person with
respect to an employee benefit plan in the performance of duties for a purpose
reasonably believed to be in the interest of the participants and beneficiaries
of the plan shall be deemed to be for a purpose that is not opposed to the best
interests of the Corporation.

SECTION 7.   SCOPE OF ARTICLE.

        The indemnification of and the advancement of expenses to authorized
representatives, provided by, or granted pursuant to, this Article, shall (i)
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any statute,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in an official capacity and as to action in other capacities, (ii)
continue as to a person who has ceased to be an authorized representative, and
(iii) inure to the benefit of the heirs, personal representatives, executors,
and administrators of such person.


                                       16
<PAGE>

SECTION 8.   RELIANCE ON PROVISIONS.

        Each person who shall act as an authorized representative of the
Corporation shall be deemed to be doing so in reliance upon rights of
indemnification provided by this Article VI.

SECTION 9.   INSURANCE.

        The Corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, trustee or
agent of or for the Corporation, or is or was serving at the request or with the
prior approval of the Corporation as a director, officer, employee, trustee or
agent of another corporation, partnership, joint venture, trust or other
enterprise (including employee benefit plans), against any liability asserted
against him and incurred by him in any capacity or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of these Bylaws.

                                   ARTICLE VII

                                     GENERAL

SECTION 1.   CONTRACTS, CHECKS, ETC.

        All contracts, agreements, checks, drafts, notes, bonds, bills of
exchange and orders for the payment of money shall be signed or endorsed by the
persons whom the Board of Directors prescribes therefor.

SECTION 2.   FISCAL YEAR.

        The fiscal year of the Corporation shall commence on January 1 of each
year and end on December 31 of the following year, unless otherwise determined
by the Board of Directors.

SECTION 3.   FORM OF NOTICES.

        Whenever notice is required to be given to any director or officer or
stockholder, such notice may be given either in person or by mail, telephone or
telegram, facsimile transmission, telex or similar medium of communication,
except as expressly provided otherwise in these Bylaws. Except as provided in
Article II, Section 4(c), if mailed, the notice will be deemed given when
deposited in the United States mail, postage prepaid, addressed to the
stockholder, officer or director at such address as appears on the books of the
Corporation. If given in person or by telephone, notice will be deemed given
when communicated. If given by telegram, facsimile transmission, telex or
similar medium of communication, notice will be deemed given when properly
dispatched.

SECTION 4.   SEAL.

        The Corporation may, but shall not be required to, have a corporate
seal, which shall have inscribed thereon the name of the Corporation, the year
of its organization and the words "Incorporated Maryland." The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise. The Secretary shall have custody of the corporate seal of the
Corporation and shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the Secretary's
signature. The Board of Directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing by his
signature. Whenever the Corporation is permitted or required to affix its seal
to a document, it shall be sufficient to meet the requirements of any law, rule
or regulation relating to a seal to place the word "(SEAL)" adjacent to the
signature of the person authorized to execute the document on behalf of the
Corporation.


                                       17
<PAGE>


SECTION 5.   CONSISTENCY WITH ARTICLES OF INCORPORATION.

        If any provision of these Bylaws shall be inconsistent with the
Corporation's Articles of Incorporation (and as it may be amended from time to
time), the Articles of Incorporation (as so amended at the time) shall govern.

                                  ARTICLE VIII

                                   AMENDMENTS

        Except as otherwise provided in the Articles of Incorporation, these
Bylaws may be altered, amended, or repealed or new bylaws may be adopted by the
affirmative vote of the directors of the Corporation or by the affirmative vote
of the holders of a majority of the shares of the Corporation entitled to vote
in the election of directors, voting as one class at any regular meeting of the
stockholders or of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if notice of such alteration,
amendment, repeal or adoption of new bylaws be contained in the notice of such
special meeting.

                                   ARTICLE IX

               APPLICABILITY OF THE MARYLAND CONTROL SHARES ACQUISITION STATUTE

        The Maryland Control Shares Acquisition Statute shall not apply to the
voting rights of stock acquired pursuant to the Stock Purchase Agreement by and
between the Corporation and Prometheus Southeast Retail LLC dated as of February
24, 1998, and any amendment thereto.

                                       18