EXHIBIT 3.2

                   Bylaws of CNL Health Care Properties, Inc.


 
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                                FORM OF BYLAWS OF
                        CNL HEALTH CARE PROPERTIES, INC.

         The Bylaws of CNL HEALTH CARE PROPERTIES, INC., a corporation organized
under the laws of the State of Maryland (the "Company"),  having The Corporation
Trust Incorporated as its resident agent located at 32 South Street,  Baltimore,
Maryland 21202, are as follows:
                                    ARTICLE I
                                     OFFICES

     SECTION 1. PRINCIPAL  OFFICE.  The principal office of the Company shall be
located at such place or places as the Board of Directors  may  designate in the
State of Maryland.

     SECTION 2. ADDITIONAL  OFFICES.  The Company may have additional offices at
such places as the Board of  Directors  may from time to time  determine  or the
business of the Company may require.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

     SECTION  1.  PLACE.  All  meetings  of  stockholders  shall  be held at the
principal  office of the Company or at such other place within the United States
as shall be stated in the notice of the meeting.

                  SECTION  2.  ANNUAL   MEETING.   An  annual   meeting  of  the
stockholders  for the election of Directors,  as such term is defined below, and
the  transaction of any business  within the powers of the Company shall be held
upon  reasonable  notice and not less than 30 days after  delivery of the annual
report.

                  SECTION  3.  SPECIAL  MEETINGS.  Subject  to the rights of the
holders  of any  series of  Preferred  Shares  (as such term is  defined  in the
Company's   Articles   of   Incorporation,   as  amended   (the   "Articles   of
Incorporation"))  to elect additional  Directors under specified  circumstances,
special  meetings of the  stockholders  may be called by (i) the chairman of the
Board of Directors; (ii) a majority of the Board of Directors;  (iii) a majority
of the  Independent  Directors  (as such term is  defined  herein);  or (iv) the
secretary at the request in writing of stockholders  holding  outstanding Equity
Shares (as such term is defined in the Articles of  Incorporation)  representing
at least  10% of all  votes  entitled  to be cast on any  issue  proposed  to be
considered at any such special  meeting,  not less than 15 nor more than 60 days
after such request is received. Written or printed notice of any special meeting
called pursuant to subsection (iv) will be provided to all  stockholders  within
ten days after any such request is  received,  stating the time and place of the
meeting specified in the request,  which shall be a time and place convenient to
the stockholders.

                  SECTION  4.  NOTICE.  Not less  than 15 nor more  than 60 days
before  each  meeting  of  stockholders,   the  secretary  shall  give  to  each
stockholder  entitled  to vote  at such  meeting,  and to each  stockholder  not
entitled to vote who is entitled  to notice of the  meeting,  written or printed
notice  stating the time and place of the meeting  and, in the case of a special
meeting or as otherwise may be required by statute or these Bylaws,  the purpose
for  which  the  meeting  is  called,  either  by  mail to the  address  of such
stockholder as it appears on the records of the Company,  or by presenting it to
such stockholder  personally or by leaving it at his residence or usual place of
business. If mailed, such

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notice  shall be deemed to be given when  deposited  in the United  States  mail
addressed  to the  stockholder  at his post office  address as it appears on the
records of the Company, with postage thereon prepaid.

                  SECTION 5. SCOPE OF NOTICE. Any business of the Company may be
transacted  at an annual  meeting of  stockholders  without  being  specifically
designated  in the notice,  except such business as is required by statute to be
stated in such notice.  No business shall be transacted at a special  meeting of
stockholders except as specifically designated in the notice.

                  SECTION  6.  QUORUM.  At  any  meeting  of  stockholders,  the
presence  in  person  or by  proxy  of  stockholders  holding  50% of  the  then
outstanding  shares shall constitute a quorum; but this section shall not affect
any requirement  under any statute,  any other provision of these Bylaws, or the
Articles  of  Incorporation  for the  vote  necessary  for the  adoption  of any
measure.  If,  however,  such quorum  shall not be present at any meeting of the
stockholders,  the  stockholders  entitled to vote at such  meeting,  present in
person or by proxy, shall have power to adjourn the meeting from time to time to
a date not more than 120 days after the  original  record  date  without  notice
other than  announcement  at the meeting.  At such adjourned  meeting at which a
quorum shall be present,  any business may be  transacted  which might have been
transacted at the meeting as originally notified.

                  SECTION  7.  VOTING.  A  majority  of all the votes  cast at a
meeting of  stockholders  duly called and at which a quorum is present  shall be
sufficient to elect a Director,  notwithstanding the concurrence of the Board of
Directors to such  action.  Each share may be voted for as many  individuals  as
there are  Directors to be elected and for whose  election the share is entitled
to be voted.  A majority  of the votes cast at a meeting  of  stockholders  duly
called and at which a quorum is present shall be sufficient to approve any other
matter which may properly  come before the meeting,  unless more than a majority
of the votes cast is  required by statute or by the  Articles of  Incorporation.
Unless otherwise  provided in the Articles of  Incorporation,  each Equity Share
owned of record on the  applicable  record date shall be entitled to one vote on
each matter  submitted  to a vote at a meeting of  stockholders.  The  Company's
Advisor  (as  such  term is  defined  in the  Articles  of  Incorporation),  the
Directors  and any  affiliates  are  prohibited  from voting on or consenting to
matters  submitted  to the  stockholders  regarding  the removal of the Advisor,
Directors  or any  affiliate or any  transaction  between the Company and any of
them,  nor will such shares be counted in  determining a quorum or a majority in
such circumstances.

                  SECTION 8. PROXIES.  A stockholder  may vote the Equity Shares
owned of record by him,  either in person or by proxy executed in writing by the
stockholder  or by his duly  authorized  attorney  in fact.  Such proxy shall be
filed with the secretary of the Company before or at the time of the meeting. No
proxy shall be valid after eleven months from the date of its execution,  unless
otherwise provided in the proxy.

                  SECTION 9. VOTING OF SHARES BY CERTAIN HOLDERS.  Equity Shares
registered in the name of a corporation,  partnership, trust or other entity, if
entitled  to be voted,  may be voted by the chief  executive  officer  or a vice
president,  a general partner,  trustee or other fiduciary thereof,  as the case
may be, or a proxy  appointed by any of the foregoing  individuals,  unless some
other person who has been appointed to vote such shares pursuant to a bylaw or a
resolution  of the  board of  directors  of such  corporation  or  other  entity
presents a certified copy of such bylaw or resolution, in which case such person
may vote such shares.  Any trustee or other fiduciary may vote shares registered
in his name as such fiduciary, either in person or by proxy.

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         Equity Shares of the Company  directly or indirectly  owned by it shall
not be voted at any  meeting and shall not be counted in  determining  the total
number of outstanding shares entitled to be voted at any given time, unless they
are held by it in a  fiduciary  capacity,  in which  case  they may be voted and
shall be counted in determining  the total number of  outstanding  shares at any
given time.

         The   Directors  may  adopt  by  resolution  a  procedure  by  which  a
stockholder  may  certify  in  writing to the  Company  that any  Equity  Shares
registered in the name of the stockholder are held for the account of a specific
person other than the stockholder.  The resolution shall set forth: the class of
stockholders  who  may  make  the  certification,  the  purpose  for  which  the
certification  may be made, the form of certification  and the information to be
contained  in it;  if the  certification  is with  respect  to a record  date or
closing of the share transfer  books,  the time after the record date or closing
of the share transfer books within which the  certification  must be received by
the Company;  and any other  provisions  with respect to the procedure which the
Directors consider necessary or desirable. On receipt of such certification, the
person specified in the certification shall be regarded as, for the purposes set
forth in the certification, the stockholder of record of the specified shares in
place of the stockholder who makes the certification.

                  SECTION 10.  INSPECTORS.  At any meeting of stockholders,  the
chairman of the  meeting  may,  or upon the  request of any  stockholder  shall,
appoint one or more persons as  inspectors  for such  meeting.  Such  inspectors
shall  ascertain  and  report  the number of Equity  Shares  represented  at the
meeting  based upon their  determination  of the validity and effect of proxies,
count all votes, report the results and perform such other acts as are proper to
conduct  the  election  and voting  with  impartiality  and  fairness to all the
stockholders.

         Each report of an inspector shall be in writing and signed by him or by
a majority of them if there is more than one  inspector  acting at such meeting.
If there is more  than one  inspector,  the  report of a  majority  shall be the
report of the  inspectors.  The report of the  inspector  or  inspectors  on the
number of shares  represented at the meeting and the results of the voting shall
be prima facie evidence thereof.

                  SECTION 11.  REPORTS TO STOCKHOLDERS.

                  (a) Not later  than 120 days  after  the close of each  fiscal
year of the  Company,  the  Directors  shall  deliver or cause to be delivered a
report of the business and  operations of the Company during such fiscal year to
the  stockholders,  containing (i) financial  statements  prepared in accordance
with generally accepted accounting  principles which are audited and reported on
by  independent  certified  public  accountants;  (ii) the ratio of the costs of
raising  capital  during the period to the capital  raised;  (iii) the aggregate
amount of  advisory  fees and the  aggregate  amount  of other  fees paid to the
Company's  Advisor and any affiliate of the Advisor by the Company and including
fees or charges  paid to the Advisor and any  affiliate  of the Advisor by third
parties doing  business with the Company;  (iv) the Operating  Expenses (as such
term is defined in the Articles of  Incorporation)  of the Company,  stated as a
percentage of, for a specified  period,  the average of the aggregate book value
of the assets of the Company invested, directly or indirectly, in Properties and
loans secured by real estate before  reserves for  depreciation  or bad debts or
other similar non-cash  reserves are subtracted,  computed by taking the average
of such values at the end of each month  during such period as a  percentage  of
the total revenues applicable to such period, less the total expenses applicable
to such period excluding  additions to reserves for  depreciation,  bad debts or
other  similar  non-cash  reserves,  and excluding the gain from the sale of the
Company's assets; (v) a report from the Independent Directors that the

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policies  being  followed  by  the  Company  are in the  best  interests  of its
stockholders and the basis for such determination;  (vi) separately stated, full
disclosure of all material terms, factors, and circumstances surrounding any and
all transactions  involving the Company,  Directors,  Advisors and any Affiliate
thereof  occurring  in the year for which the annual  report is made;  and (vii)
Distributions,   as  such  term  is  defined  in  the   Company's   Articles  of
Incorporation,  to the  stockholders  for the period,  identifying the source of
such Distributions,  and if such information is not available at the time of the
distribution, a written explanation of the relevant circumstances will accompany
the  Distributions  (with the statement as to the source of  Distributions to be
sent to stockholders  not later than 60 days after the end of the fiscal year in
which the  distribution  was made) and such further  information as the Board of
Directors may  determine is required  pursuant to any law or regulation to which
the Company is subject.  A signed copy of the annual report and the accountant's
certificate  shall be filed  by the  Directors  with  the  State  Department  of
Assessments and Taxation of Maryland,  and with such other governmental agencies
as may be required by law and as the Directors may deem appropriate. Such report
shall be submitted at the annual  meeting of  stockholders  and,  within 20 days
after such meeting, placed on file at the Company's principal office.

                  (b) Not later  than 45 days after the end of each of the first
three  quarterly  periods  of each  fiscal  year and upon  written  request by a
stockholder,  the  Directors  shall  deliver or cause to be delivered an interim
report to such requesting  stockholder containing unaudited financial statements
for such quarter and for the period from the beginning of the fiscal year to the
end of such quarter, and such further information as the Directors may determine
is required pursuant to any law or regulation to which the Company is subject.

                  SECTION 12.  NOMINATIONS AND STOCKHOLDER BUSINESS.

                  (a)  Annual Meetings of Stockholders.

     (1) With  respect to an annual  meeting  of  stockholders,  nominations  of
persons for election to the Board of  Directors  and the proposal of business to
be considered by the stockholders may be made only (i) by or at the direction of
the Board of  Directors  or (ii) by any  stockholder  of the  Company  who was a
stockholder  of record at the time of giving of notice,  who is entitled to vote
at the meeting and who  complied  with the notice  procedures  set forth in this
Section 12(a).

                           (2) For  nominations or other business to be properly
brought before an annual meeting by a  stockholder  pursuant to clause (ii) of
paragraph  (a)(1) of this Section 12, the stockholder  must have given timely
notice thereof in writing to the  secretary of the Company.  To be timely,  a
stockholder's  notice shall be delivered to the secretary at the principal
executive offices of the Company not less than 60 days nor more than 90 days
prior to the first  anniversary  of the preceding 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, notice by the stockholder to be timely must be so delivered
not earlier than the 90th day prior to such annual  meeting and not later than
the close of  business  on the later of the 60th day prior to such  annual
meeting  or the  tenth  day  following  the  day on  which  public announcement
of the date of such  meeting  is first  made.  Such  stockholder's notice shall
set forth:  (i) as to each person whom the stockholder  proposes to nominate for
election or re-election as a Director all  information  relating to such person
that is required to be  disclosed  in  solicitations  of proxies for election of
Directors,  or is  otherwise  required,  in each case  pursuant to Regulation
14A under the Securities  Exchange Act of 1934, as amended (including such
person's written consent to being named in the proxy statement as a nominee

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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, the name and
address of such stockholder,  as they appear on the Company's books, and of such
beneficial  owner and the class and  number of shares of the  Company  which are
owned beneficially and of record by such stockholder and such beneficial owner.

     (3) Notwithstanding  anything in the second sentence of Section 12(a)(2) to
the  contrary,  in the event that the number of  Directors  to be elected to the
Board of Directors is increased and there is no public  announcement  naming all
of the nominees for Director or specifying  the size of the  increased  Board of
Directors made by the Company at least 70 days prior to the first anniversary of
the preceding  year's annual meeting,  a  stockholder's  notice required by this
Section 12(a) shall also be considered timely, but only with respect to nominees
for any new positions created by such increase,  if it shall be delivered to the
secretary at the principal  executive  offices of the Company not later than the
close of  business  on the  tenth day  following  the day on which  such  public
announcement is first made by the Company.

                  (b) Special Meetings of Stockholders. Only such business shall
be conducted  at a special  meeting of  stockholders  as shall have been brought
before the meeting pursuant to the Company's  notice of meeting.  Nominations of
persons for election to the Board of Directors may be made at a special  meeting
of stockholders  at which Directors are to be elected  pursuant to the Company's
notice of meeting (i) by or at the  direction  of the Board of Directors or (ii)
provided  that the Board of Directors has  determined  that  Directors  shall be
elected at such  special  meeting,  by any  stockholder  of the Company who is a
stockholder  of record at the time of  giving  of  notice  provided  for in this
Section 12(b),  who is entitled to vote at the meeting and who complied with the
notice  procedures  set forth in this  Section  12(b).  In the event the Company
calls a special meeting of stockholders  for the purpose of electing one or more
Directors to the Board of Directors,  any such stockholder may nominate a person
or persons (as the case may be) for  election to such  position as  specified in
the Company's notice of meeting,  if the stockholder's  notice complies with the
requirements  of Section  12(a)(2)  and is  delivered  to the  secretary  at the
principal  executive  offices of the Company not earlier than the 90th day prior
to such special meeting and not later than the close of business on the later of
the 60th day prior to such special meeting or the tenth day following the day on
which public  announcement  is first made of the date of the special meeting and
of the nominees proposed by the Directors to be elected at such meeting.

                  (c)  General.

     (1) Only such persons who are nominated in accordance  with the  procedures
set forth in this  Section 12 shall be eligible to serve as  Directors  and only
such business shall be conducted at a meeting of stockholders as shall have been
brought  before the meeting in accordance  with the procedures set forth in this
Section 12. The  presiding  officer of the meeting shall have the power and duty
to determine  whether a nomination or any business proposed to be brought before
the meeting was made in accordance with the procedures set forth in this Section
12 and, if any proposed  nomination or business is not in  compliance  with this
Section  12,  to  declare  that  such   defective   nomination  or  proposal  be
disregarded.


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                           (2)  For  purposes  of  this   Section  12,   "public
announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable news service or in a document  publicly filed by the Company
with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

                           (3) Notwithstanding the foregoing  provisions of this
Section 12, a stockholder
also  shall  comply  with all  applicable  requirements  of state law and of the
Exchange  Act and the rules  and  regulations  thereunder  with  respect  to the
matters set forth in this Section 12. Nothing in this Section 12 shall be deemed
to affect any rights of  stockholders  to request  inclusion of proposals in the
Company's proxy statement pursuant to Rule 14a-8 under the Exchange Act.

     SECTION 13. VOTING BY BALLOT. Voting on any question or in any election may
be viva voce unless the presiding  officer shall order or any stockholder  shall
demand that voting be by ballot.

                  SECTION 14. NO STOCKHOLDER ACTION BY WRITTEN CONSENT.  Subject
to the  rights  of the  holders  of any  series  of  Preferred  Shares  to elect
additional  Directors  under  specific  circumstances,  any action  required  or
permitted to be taken by the  stockholders of the Company must be effected at an
annual or special meeting of stockholders and may not be effected by any consent
in writing by such stockholders.

                                   ARTICLE III
                                    DIRECTORS

                  SECTION  1.  GENERAL  POWERS;  NUMBER;   QUALIFICATIONS.   The
business and affairs of the Company  shall be managed under the direction of its
Board of  Directors  (also  referred to herein as  "Director"  or  "Directors").
Notwithstanding  the other  requirements set forth herein and in the Articles of
Incorporation, a Director shall be an individual at least 21 years of age who is
not under legal  disability.  The number of Directors which shall constitute the
whole  board  shall not be less than three nor more than  fifteen.  Within  such
limits,  the actual number of directors  which shall  constitute the whole board
shall be as fixed from time to time by resolution of the Board of Directors.

                  SECTION 2. INDEPENDENT DIRECTORS;  QUALIFICATIONS.  A majority
of Directors of the Company  shall be  Independent  Directors.  To qualify as an
independent  director,  an individual  must not be and within the last two years
has not been directly or indirectly associated with the Advisor by virtue of (i)
ownership of an interest in the Advisor or its  Affiliates,  (ii)  employment by
the Advisor or its  Affiliates,  (iii)  service as an officer or director of the
Advisor  or its  Affiliates,  (iv)  performance  of  services,  other  than as a
Director,  for the  Company,  (v)  service as a director or trustee of more than
three real estate investment trusts advised by the Advisor,  or (vi) maintenance
of a material  business or professional  relationship with the Advisor or any of
its Affiliates.  A business or professional  relationship is considered material
if the gross  revenue  derived by the Director  from the Advisor and  Affiliates
exceeds five percent (5%) of either the  Director's  annual gross revenue during
either of the last two years or the  Director's net worth on a fair market value
basis.  An  indirect   relationship  shall  include  circumstances  in  which  a
Director's  spouse,  parents,  children,  siblings,  mothers- or fathers-in-law,
sons-  or  daughters-in-law,  or  brothers-  or  sisters-in-law  is or has  been
associated with the Advisor, any of its Affiliates, or the Company.

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                  SECTION 3. REGULAR MEETINGS.  A meeting of the Directors shall
be held  quarterly in person or by  telephone.  The  Directors  may provide,  by
resolution,  the time and place, either within or without the State of Maryland,
for the holding of regular  meetings of the Directors  without other notice than
such resolution.

                  SECTION 4. SPECIAL MEETINGS. Special meetings of Directors may
be called by or at the request of the chief  executive  officer or by a majority
of the  Directors  then in  office.  The person or  persons  authorized  to call
special  meetings of the Directors  may fix any place,  either within or without
the State of  Maryland,  as the place for  holding  any  special  meeting of the
Directors called by them.

                  SECTION 5.  NOTICE.  Notice of any annual,  regular or special
meeting shall be given by written notice  delivered  personally,  transmitted by
facsimile,  telegraphed  or mailed to each Director at his business or residence
address.  Personally  delivered,  facsimile  transmitted or telegraphed  notices
shall be given at least two days prior to the  meeting.  Notice by  facsimile or
telegraph shall be promptly  followed by mailed notice.  Notice by mail shall be
given at least five days prior to the meeting.  If mailed,  such notice shall be
deemed to be given when deposited in the United States mail properly  addressed,
with postage thereon prepaid. If given by telegram,  such notice shall be deemed
to be given when the telegram is delivered to the telegraph company. Neither the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting  of the  Directors  need be stated in the  notice,  unless  specifically
required by statute or these Bylaws.

                  SECTION 6. QUORUM.  A whole  number of  Directors  equal to at
least a majority  of the whole  Board of  Directors,  including  a  majority  of
Independent Directors,  shall constitute a quorum for transaction of business at
any meeting of the Directors;  provided,  that if less than a quorum are present
at said  meeting,  a majority of the  Directors  present may adjourn the meeting
from  time to time  without  further  notice;  and  provided  further,  that if,
pursuant  to the  Articles  of  Incorporation  or  these  Bylaws,  the vote of a
majority of a particular  group of  Directors  is required for action,  a quorum
must also include a majority of such group.

         The  Directors  present  at a meeting  which has been duly  called  and
convened may continue to transact  business until  adjournment,  notwithstanding
the withdrawal of enough Directors to leave less than a quorum.

                  SECTION 7. VOTING. The action of the majority of the Directors
present  at a meeting  at which a quorum is  present  shall be the action of the
Directors,  unless the  concurrence  of a particular  group of Directors or of a
greater  proportion  is required  for such  action by  applicable  statute,  the
Articles of Incorporation or these Bylaws.

                  SECTION 8. TELEPHONE MEETINGS.  Directors may participate in a
meeting by means of a conference telephone or similar  communications  equipment
if all  persons  participating  in the  meeting  can hear each other at the same
time.  Participation  in a meeting by these means shall  constitute  presence in
person at the meeting.

                  SECTION 9. INFORMAL  ACTION BY DIRECTORS.  Any action required
or permitted to be taken at any meeting of the  Directors may be taken without a
meeting,  if a consent in writing to such action is signed by each  Director and
such written consent is filed with the minutes of proceedings of the Directors.

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                  SECTION  10.  VACANCIES.  If for  any  reason  any or all  the
Directors  cease to be Directors,  such event shall not terminate the Company or
affect these Bylaws or the powers of the remaining  Directors hereunder (even if
fewer than three  Directors  remain).  Any vacancy created by an increase in the
number of Directors  shall be filled,  at any regular  meeting or at any special
meeting  called for that  purpose,  by a majority  of the  Directors.  Any other
vacancy shall be filled at any annual  meeting or at any special  meeting of the
stockholders  called  for that  purpose,  by a  majority  of the  Common  Shares
outstanding  and entitled to vote.  Any  individual so elected as Director shall
hold office for the unexpired term of the Director he is replacing. In the event
of  a  vacancy  among  the  Independent  Directors,  the  remaining  Independent
Directors shall nominate replacements for such position.

                  SECTION 11. COMPENSATION. Each Director is entitled to receive
$6,000  annually for serving on the Board of Directors,  as well as fees of $750
per meeting  attended  ($375 for each  telephonic  meeting in which the Director
participates),  including  committee  meetings.  The  Company  will  not pay any
compensation  to the  officers  and  Directors  of the Company who also serve as
officers  and  directors of the Advisor (as such term is defined in the Articles
of Incorporation).

                  SECTION 12.  ELECTION  AND  REMOVAL OF  DIRECTORS;  TERM.  The
stockholders may, at any time, remove any Director in the manner provided in the
Articles  of  Incorporation.  The term of service  for a  Director  is one year,
without limit on successive terms.

                  SECTION 13. LOSS OF DEPOSITS.  No Director shall be liable for
any loss which may occur by reason of the  failure of the bank,  trust  company,
savings and loan  association,  or other institution with which moneys or shares
have been deposited.

     SECTION 14.  SURETY  BONDS.  Unless  required by law, no Director  shall be
obligated to give any bond or surety or other  security for the  performance  of
any of his duties.

                  SECTION 15.  RELIANCE.  Each Director,  officer,  employee and
agent of the Company shall, in the performance of his duties with respect to the
Company,  be fully  justified and protected with regard to any act or failure to
act in reliance in good faith upon the books of account or other  records of the
Company,  upon an opinion of counsel or upon  reports made to the Company by any
of its officers or  employees or by the  advisers,  accountants,  appraisers  or
other  experts or  consultants  selected  by the  Directors  or  officers of the
Company, regardless of whether such counsel or expert may also be a Director.

                  SECTION 16. CERTAIN RIGHTS OF DIRECTORS,  OFFICERS,  EMPLOYEES
AND AGENTS. The Directors shall have no responsibility to devote their full time
to the affairs of the Company. Any Director,  officer,  employee or agent of the
Company, in his personal capacity or in a capacity as an affiliate, employee, or
agent of any other person, or otherwise,  may have business interests and engage
in business  activities similar to or in addition to those of or relating to the
Company,  subject to the adoption of any policies relating to such interests and
activities adopted by the Directors and applicable law.


                                        8

<PAGE>



                                   ARTICLE IV
                                   COMMITTEES

                  SECTION 1. NUMBER,  TENURE AND  QUALIFICATIONS.  The Directors
may, by  resolution  or  resolutions  passed by a majority  of the whole  Board,
appoint from among its members an Audit Committee and other committees, composed
of two or more  Directors  to serve at the  pleasure of the  Directors.  At such
time, if any, as the Shares become listed on a national  securities  exchange or
over-the-counter  market,  the Company will form a  Compensation  Committee.  At
least a majority  of the members of each  committee  of the  Company's  Board of
Directors,  or if a  committee  numbers  two or  less,  both  directors  must be
Independent Directors.

                  SECTION 2. POWERS.  The  Directors  may delegate to committees
appointed  under  Section 1 of this Article IV any of the powers of the Board of
Directors;  provided,  however, that the Directors may not delegate to committee
the power to declare dividends or other  Distributions,  elect Directors,  issue
Equity  Shares in the  Company  other  than as  provided  in the next  sentence,
recommend to the  stockholders any action which requires  stockholder  approval,
amend the Bylaws or approve any merger or share  exchange which does not require
stockholder  approval. If the Board of Directors has given general authorization
for the issuance of Equity Shares in the Company to a committee of the Board, in
accordance with a general formula or method specified by the Board by resolution
or by adoption of an option or other plan,  such  committee may fix the terms of
the Equity Shares subject to classification or reclassification and the terms on
which the shares may be issued,  including all terms and conditions  required or
permitted to be established or authorized by the Board of Directors.

                  SECTION 3. COMMITTEE PROCEDURES.  Each committee may fix rules
of procedure  for its business.  A majority of the members of a committee  shall
constitute a quorum for the transaction of business and the action of a majority
of those  present at a meeting  at which a quorum is present  shall be action of
the  committee.  In the  absence of any  member of any  committee,  the  members
thereof  present at any meeting,  whether or not they  constitute a quorum,  may
appoint another  Director to act in the place of such absent member,  subject to
the  requirements  of  Section 1 of this  Article  IV. Any  action  required  or
permitted  to be taken at a  meeting  of a  committee  may be  taken  without  a
meeting,  if a unanimous written consent which sets forth the action to be taken
is signed by each  member of the  committee  and filed  with the  minutes of the
proceedings  of such  committee.  The  members of a  committee  may  conduct any
meeting  thereof by means of a conference  telephone  or similar  communications
equipment if all persons participating in the meeting can hear each other at the
same time. Participation in a meeting by such means shall constitute presence in
person at the meeting.

                                    ARTICLE V
                                    OFFICERS

                  SECTION 1. GENERAL PROVISIONS. The officers of the Company may
consist of a chairman of the board, a chief executive  officer,  a president,  a
chief operating officer, one or more vice presidents,  a chief financial officer
and treasurer, a secretary, and one or more assistant secretaries, as determined
by the Directors.  In addition, the Directors may from time to time appoint such
other  officers  with such  powers and duties as they  shall deem  necessary  or
desirable.  The  officers  of the  Company  shall  be  elected  annually  by the
Directors at the first meeting of the Directors  held after each annual  meeting
of stockholders.  If the election of officers shall not be held at such meeting,
such  election  shall  be held as soon  thereafter  as may be  convenient.  Each
officer shall hold

                                        9

<PAGE>



office until his or her  successor is elected and  qualifies or until his or her
death,  resignation or removal in the manner  hereinafter  provided.  Any two or
more offices  except (i) chief  executive  officer and vice  president,  or (ii)
president  and vice  president,  may be held by the same  person,  although  any
person  holding more than one office in the Company may not act in more than one
capacity to execute,  acknowledge or verify an instrument  required by law to be
executed,   acknowledged  or  verified  by  more  than  one  officer.  In  their
discretion, the Directors may leave unfilled any office except that of the chief
executive officer, the president,  the treasurer and the secretary.  Election of
an officer or agent  shall not of itself  create  contract  rights  between  the
Company and such officer or agent.

                  SECTION 2.  REMOVAL AND  RESIGNATION.  Any officer or agent of
the  Company  may be removed by a majority  of the members of the whole Board of
Directors, with or without cause, if in their judgment the best interests of the
Company would be served thereby,  but such removal shall be without prejudice to
the  contract  rights,  if any,  of the person so  removed.  Any  officer of the
Company may resign at any time by giving  written  notice of his  resignation to
the Directors,  the chairman of the board,  the chief  executive  officer or the
secretary.  Any resignation shall take effect at any time subsequent to the time
specified  therein  or,  if the  time  when it  shall  become  effective  is not
specified therein, immediately upon its receipt. The acceptance of a resignation
shall not be  necessary  to make it  effective  unless  otherwise  stated in the
resignation.

     SECTION  3.  VACANCIES.  A  vacancy  in any  office  may be  filled  by the
Directors for the balance of the term.

                  SECTION 4.  CHAIRMAN OF THE BOARD.  The  chairman of the board
shall  preside over the meetings of the  Directors  and of the  stockholders  at
which he or she shall be present.  The chairman of the board shall  perform such
other duties as may be assigned to him or her by the Directors.  Except where by
law the signature of the chief  executive  officer or the president is required,
the  chairman of the board shall  possess the same power as the chief  executive
officer or the  president to sign deeds,  mortgages,  bonds,  contracts or other
instruments.

                  SECTION  5.  CHIEF  EXECUTIVE   OFFICER.   The  Directors  may
designate a chief  executive  officer  from among the elected  officers.  In the
absence  of such  designation,  the  chairman  of the  board  shall be the chief
executive  officer of the Company.  The chief executive officer shall in general
supervise  the  management  of the  business  affairs  of the  Company  and  the
implementation  of the policies of the Company,  as determined by the Directors.
He or she may execute any deed,  mortgage,  bond,  contract or other instrument,
except in cases where the execution thereof shall be expressly  delegated by the
Directors  or by these  Bylaws to some other  officer or agent of the Company or
shall be required by law to be otherwise executed;  and in general shall perform
all duties  incident  to the office of chief  executive  officer  and such other
duties as may be prescribed by the Directors from time to time.

                  SECTION 6. PRESIDENT. The president, subject to the control of
the Board of Directors and with the chief  executive  officer,  shall in general
supervise and control all of the business and affairs of the Company.  He or she
shall,  when  present  and in the  absence of the  chairman of the board and the
chief executive  officer,  preside at all meetings of the  stockholders  and the
Board of  Directors.  He or she may sign (i)  with the  secretary  or the  chief
financial  officer and treasurer,  certificates  for shares of the Company,  and
(ii) with the secretary or any other proper officer of the Company authorized by
the Board of Directors, deeds, mortgages, bonds, contracts, or other instru-

                                       10

<PAGE>



ments which the Board of Directors  has  authorized  to be  executed,  except in
cases where the signing and execution  thereof  shall be expressly  delegated by
the Board of Directors or by these Bylaws to some other  officer of agent of the
Company, or shall be required by law to be otherwise signed or executed;  and in
general  shall  perform all duties  incident to the office of president and such
other  duties  as may  be  prescribed  by the  chief  executive  officer  or the
Directors from time to time.

                  SECTION  7.  CHIEF  OPERATING  OFFICER.  The  chief  operating
officer,  under the direction of the chief executive officer, shall have general
management authority and responsibility for the day-to-day implementation of the
policies  of the  Company.  He or she may  execute  any  deed,  mortgage,  bond,
contract or other instrument,  except in cases where the execution thereof shall
be expressly delegated by the Directors or by these Bylaws to some other officer
or agent of the Company or shall be required  by law to be  otherwise  executed;
and in  general  shall  perform  all  duties  incident  to the  office  of chief
operating  officer and such other duties as may be  prescribed  by the Directors
from time to time.

                  SECTION  8.  VICE  PRESIDENTS.  In the  absence  of the  chief
executive officer, the president, the chief operating officer or in the event of
a vacancy in all such offices, the vice president (or in the event there be more
than one vice president, the vice presidents in the order designated at the time
of their  election or, in the absence of any  designation,  then in the order of
their election)  shall perform the duties of the chief executive  officer or the
president  and when so acting shall have all the powers of and be subject to all
the restrictions upon the chief executive  officer and the president;  and shall
perform  such other  duties as from time to time may be  assigned  to him by the
chief executive officer, by the president,  by the chief operating officer or by
the  Directors.  The  Directors  may  designate  one or more vice  presidents as
executive  vice  president  or  as  vice  president  for  particular   areas  of
responsibility.

                  SECTION  9.  SECRETARY.  The  secretary  shall:  (i)  keep the
minutes of the proceedings of the stockholders,  the Directors and committees of
the Directors in one or more books provided for that purpose;  (ii) see that all
notices are duly given in  accordance  with the  provisions  of the  Articles of
Incorporation,  these  Bylaws or as required by law;  (iii) be  custodian of the
trust  records and of the seal (if any) of the Company;  (iv) keep a register of
the post office  address of each  stockholder  which shall be  furnished  to the
secretary by such  stockholder;  (v) have general  charge of the share  transfer
books of the Company; and (vi) in general perform such other duties as from time
to time may be assigned  to him or her by the chief  executive  officer,  by the
president, by the chief operating officer or by the Directors.

                  SECTION 10. CHIEF FINANCIAL  OFFICER AND TREASURER.  The chief
financial  officer  and  treasurer  shall  have the  custody  of the  funds  and
securities of the Company and shall keep full and accurate  accounts of receipts
and disbursements in books belonging to the Company and shall deposit all moneys
and other valuable  effects in the name and to the credit of the Company in such
depositories as may be designated by the Directors.  The chief financial officer
shall  disburse  the funds of the  Company as may be  ordered by the  Directors,
taking  proper  vouchers for such  disbursements,  and shall render to the chief
executive  officer and Directors,  at their regular meetings of the Directors or
whenever they may require it, an account of all his or her transactions as chief
financial officer and of the financial condition of the Company.

         If required by the  Directors,  he or she shall give the Company a bond
in such sum and with such  surety or sureties  as shall be  satisfactory  to the
Directors for the faithful performance of the

                                       11

<PAGE>



duties of his or her office and for the  restoration to the Company,  in case of
his or her death,  resignation,  retirement  or removal from office,  all books,
papers,  vouchers,  moneys and other  property  of  whatever  kind in his or her
possession or under his or her control belonging to the Company.

     SECTION 11. ASSISTANT SECRETARIES.  The assistant secretaries,  in general,
shall perform such duties as shall be assigned to them by the  secretary,  or by
the chief executive officer, the president, or the Directors.

                  SECTION 12.  SALARIES.  The salaries of the officers  shall be
fixed from time to time by the Directors, and no officer shall be prevented from
receiving such salary by reason of the fact that he or she is also a Director.

                                   ARTICLE VI
                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

                  SECTION 1. CONTRACTS.  The Directors may authorize any officer
or agent to enter into any contract or to execute and deliver any  instrument in
the name of and on behalf of the  Company and such  authority  may be general or
confined to specific instances.  Any agreement,  deed, mortgage,  lease or other
document  executed by one or more of the  Directors or by an  authorized  person
shall be deemed valid and binding upon the  Directors  and upon the Company when
so authorized or ratified by action of the Directors.

                  SECTION 2.  CHECKS AND  DRAFTS.  All  checks,  drafts or other
orders for the payment of money, notes or other evidences of indebtedness issued
in the name of the Company shall be signed by such officer or officers, agent or
agents  of the  Company  and in  such  manner  as  shall  from  time  to time be
determined by the Directors.

                  SECTION 3.  DEPOSITS.  All funds of the Company not  otherwise
employed  shall be  deposited  from time to time to the credit of the Company in
such  banks,  trust  companies  or  other  depositories  as  the  Directors  may
designate.

                                   ARTICLE VII
                                  EQUITY SHARES

                  SECTION 1.  CERTIFICATES.  The  Company  will not issue  share
certificates.  A  stockholder's  investment will be recorded on the books of the
Company. A stockholder wishing to transfer his or her Shares will be required to
send only an executed  form to the  Company,  and the Company  will  provide the
required  form upon a  stockholder's  request.  The executed  form and any other
required  documentation  must be received  by the Company at least one  calendar
month prior to the last date of the current quarter.

                  SECTION 2.  TRANSFERS.  Transfers  of Equity  Shares  shall be
effective,  and the  transferee  of the Equity  Shares will be recognized as the
holder of such Shares as of the first day of the following  quarter on which the
Company receives properly executed documentation. Stockholders who are residents
of New York may not transfer fewer than 250 shares at any time.

         The  Company  shall be  entitled  to treat the  holder of record of any
Equity Shares as the holder in fact thereof and, accordingly, shall not be bound
to recognize any equitable or other claim to or

                                       12

<PAGE>



interest in such share 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 the State of Maryland.

                  SECTION 3. NOTICE OF ISSUANCE OR  TRANSFER.  Upon  issuance or
transfer of Equity  Shares,  the Company  shall send the  stockholder  a written
statement that complies with the requirements of Section 7.6(xii) of Articles of
Incorporation and reflects such investment or transfer. In addition such written
statement  shall  set forth  (i) the name of the  Company;  (ii) the name of the
stockholder or other person to whom it is issued or transferred; (iii) the class
of  shares  and  number  of  shares  purchased;  (iv) the  designations  and any
preferences,   conversions  and  other  rights,  voting  powers,   restrictions,
limitations  as to  distributions,  qualifications  and terms and  conditions of
redemption of the shares of each class which the Company is authorized to issue;
(v) the differences in the relative rights and preferences between the shares of
each series of shares to the extent they have been set;  (vi) the  authority  of
the Board of  Directors to set the relative  rights and  preferences;  (vii) the
restrictions  on  transferability  of the shares  sold or  transferred  (without
affecting  ss.  8-204 of the  Commercial  Law  Article of the  Maryland  General
Corporation Law (the "MGCL");  and (viii) any other information required by law.
The  Company,  alternatively,  may furnish  notice that a full  statement of the
information  contained  in the  foregoing  subsections  (i)  through  (viii) and
otherwise  complying with Section 7.6(xii) of the Articles of Incorporation will
be provided to any stockholder upon request and without charge.

                  SECTION 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
The Directors may set, in advance,  a record date for the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders, or
stockholders entitled to receive payment of any Distribution or the allotment of
any other rights,  or in order to make a determination  of stockholders  for any
other proper purpose. Such date, in any case, shall not be prior to the close of
business  on the day the record date is fixed and shall not be more than 90 days
and, in the case of a meeting of  stockholders,  not less than ten days,  before
the date on which the meeting or particular action requiring such  determination
of stockholders is to be held or taken.

         In the context of fixing a record date,  the Directors may provide that
the share transfer books shall be closed for a stated period but not longer than
20 days. If the share  transfer  books are closed for the purpose of determining
stockholders entitled to notice of or to vote at a meeting of stockholders, such
books shall be closed at least ten days before the date of such meeting.

         If no record date is fixed and the share  transfer books are not closed
for the determination of stockholders, (i) the record date for the determination
of  stockholders  entitled to notice of or to vote at a meeting of  stockholders
shall be at the close of  business  on the date on which  notice of  meeting  is
mailed or the 30th day before the  meeting,  whichever is the closer date to the
meeting, and (ii) the record date for the determination of stockholders entitled
to receive  payment of a Distribution  or an allotment of any other rights shall
be the close of business  on the day on which the  resolution  of the  Directors
declaring the Distribution or allotment of rights is adopted, but the payment or
allotment  of rights  may not be made more than 60 days  after the date on which
the resolution is adopted.

         When a determination of stockholders entitled to vote at any meeting of
stockholders  has been made as  provided in this  Section 4, such  determination
shall apply to any adjournment thereof,  except where the determination has been
made through the closing of the transfer  books and the stated period of closing
has expired.


                                       13

<PAGE>



                  SECTION 5. SHARE  LEDGER.  The Company  shall  maintain at its
principal office or at the office of its counsel, accountants or transfer agent,
an original or  duplicate  share  ledger,  in written  form or in any other form
which can be  converted  within a  reasonable  time into written form for visual
inspection,  containing the name and address of each  stockholder and the number
of shares of each class held by such stockholder.

                  SECTION 6. FRACTIONAL SHARES; ISSUANCE OF UNITS. Directors may
issue fractional  shares or provide for the issuance of scrip, all on such terms
and under  such  conditions  as they may  determine.  Notwithstanding  any other
provision of the Articles of  Incorporation  or these Bylaws,  the Directors may
issue units  consisting  of different  securities  of the Company.  Any security
issued in a unit shall have the same characteristics as any identical securities
issued  by the  Company,  except  that  the  Directors  may  provide  that for a
specified  period  securities  of  the  Company  issued  in  such  unit  may  be
transferred on the books of the Company only in such unit.

         Before  issuance of any shares  classified or reclassified or otherwise
issued in a unit, the Board of Directors will file articles  supplementary  with
the Maryland  State  Department of  Assessments  and Taxation that describe such
shares,  including (a) the  preferences,  conversion  and other  rights,  voting
powers, restrictions, limitations as to distributions, qualifications, and terms
and conditions of redemption,  as set or changed by the Board of Directors;  and
(b) a statement  that the shares have been  classified  or  reclassified  by the
Board of Directors  pursuant to its authority under the Company's  charter.  The
articles supplementary will be executed in the manner provided by Title 7 of the
Maryland General Corporation Law (the "MGCL").

                                  ARTICLE VIII
                                 ACCOUNTING YEAR

         The  Directors  shall  have the  power,  from time to time,  to fix the
fiscal year of the Company by a duly adopted resolution.

                                   ARTICLE IX
                                  DISTRIBUTIONS

     SECTION 1. DECLARATION. Distributions upon the Equity Shares of the Company
may be  declared  by the  Directors,  subject to the  provisions  of law and the
Articles of  Incorporation.  Distributions may be paid in cash or other property
of  the  Company,  subject  to  the  provisions  of  law  and  the  Articles  of
Incorporation.

                  SECTION 2. CONTINGENCIES. Before payment of any Distributions,
there  may be  set  aside  out  of  any  funds  of  the  Company  available  for
Distributions  such sum or sums as the Directors may from time to time, in their
absolute discretion,  think proper as a reserve fund for the contingencies,  for
equalizing  Distributions,  for  repairing  or  maintaining  any property of the
Company or for such other purpose as the Directors  shall determine to be in the
best  interest of the Company,  and the Directors may modify or abolish any such
reserve in the manner in which it was created.


                                                        14

<PAGE>



                                    ARTICLE X
                                INVESTMENT POLICY

         Subject  to  the  provisions  of the  Articles  of  Incorporation,  the
Directors may from time to time adopt,  amend, revise or terminate any policy or
policies  with  respect  to  investments  by the  Company  as  they  shall  deem
appropriate in their sole  discretion.  In addition,  the Independent  Directors
shall review the Company's  investment  policies at least  annually to determine
that the policies are in the best interests of the stockholders.

                                   ARTICLE XI
                                      SEAL

     SECTION 1. SEAL.  The Directors may authorize the adoption of a seal by the
Company.  The seal shall have inscribed  thereon the name of the Company and the
year of its  organization.  The Directors  may  authorize one or more  duplicate
seals and provide for the custody thereof.

                  SECTION 2. AFFIXING SEAL.  Whenever the Company is required to
place 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 Company.

                                   ARTICLE XII
                                WAIVER OF NOTICE

         Whenever any notice is required to be given pursuant to the Articles of
Incorporation or these Bylaws or pursuant to applicable law, 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 need be set forth in the waiver of notice,  unless specifically required
by statute.  The  attendance  of any person at any meeting  shall  constitute  a
waiver of notice of such meeting, except where such person attends a meeting for
the express  purpose of  objecting  to the  transaction  of any  business on the
ground that the meeting is not lawfully called or convened.

                                  ARTICLE XIII
                               AMENDMENT OF BYLAWS

                  SECTION 1. AMENDMENTS. These Bylaws may be amended or repealed
by either the  affirmative  vote of a majority of all Equity Shares  outstanding
and entitled to vote generally in the election of Directors,  voting as a single
group or by an  affirmative  vote of a majority of the  Directors  (including  a
majority of the  Independent  Directors),  provided that such amendments are not
inconsistent with the Articles of  Incorporation,  and further provided that the
Directors may not amend these Bylaws, without the affirmative vote of a majority
of the Equity Shares,  to the extent that such amendments  adversely  affect the
rights, preferences and privileges of Stockholders.

                  SECTION 2.  LOCATION  OF BYLAWS.  The  original or a certified
copy of these Bylaws,  including any  amendments  thereto,  shall be kept at the
Company's  principal office,  as determined  pursuant to Article I, Section 1 of
these Bylaws.

                                       15

<PAGE>



         The foregoing are certified as the Bylaws of the Company adopted by the
Directors   (including  a  majority  of  the   Independent   Directors)   as  of
September 15, 1998.


                                         /s/ Lynn E. Rose
                                         ---------------------------
                                         Secretary


                                       16