Exhibit 3.2


                      AMERICAN MORTGAGE ACCEPTANCE COMPANY
                           AMENDED AND RESTATED BYLAWS

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.1.  Whenever used in these Bylaws,  unless the context  otherwise
requires,  the  terms  defined  in this  Article  I  shall  have  the  following
respective  meanings:

     (a) Acquired Guaranteed Mortgage Certificate. "Acquired Guaranteed Mortgage
Certificate" shall mean any mortgage-backed security guaranteed by Fannie Mae or
Freddie Mac which is backed by a conventional mortgage or mortgages and acquired
by or on behalf of the Trust other than in connection  with the  origination  of
the underlying Mortgage or Mortgages.

     (b) Acquired Insured  Mortgage.  "Acquired Insured Mortgage" shall mean any
Mortgage which is a fully funded mortgage loan insured by FHA and acquired by or
on  behalf  of  the  Trust  as a  whole  loan  or  a  beneficial  interest  or a
participating interest therein or by a purchase of mortgage-backed Securities or
pass-through certificates backed by indebtedness secured by FHA insured mortgage
loans.  Acquired Insured  Mortgage shall not include Ginnie Mae  mortgage-backed
Securities or pass-through  certificates  backed by  indebtedness  secured by an
Originated Insured Mortgage.

     (c) Acquired  Mortgage.  "Acquired  Mortgage" shall mean either an Acquired
Insured Mortgage or an Acquired Guaranteed Mortgage Certificate.

     (d) Acquisition Fees.  "Acquisition  Fees" shall mean the total of all fees
and commissions,  however  designated,  paid by any party in connection with the
origination or  acquisition  of Mortgages and other Mortgage  Investments by the
Trust. Included in the computation of such fees or commissions shall be any real
estate commission,  selection fee, development fee, nonrecurring management fee,
or any fee of a similar nature, however designated.

     (e) Additional Loan.  "Additional Loan" shall mean the non-interest bearing
loan  made to the  developer  or a  sponsor  of a  Development  (or the  general
partners or other principals of the owner of the Development) in connection with
a Mortgage Loan.

     (f) Additional  Mortgage  Investments.  "Additional  Mortgage  Investments"
shall mean all direct and indirect  investments  in real estate equity and debt,
which investments shall include,  without limitation,  Uninsured Mortgage Loans,
Construction  Loans,  Bridge Loans,  Mezzanine Loans,  Mortgage  Derivatives and
Subordinated Interests in CMBS.

     (g) Advisor.  "Advisor" shall mean the person(s) or entity  responsible for
directing or performing the day-to-day business affairs of the Trust,  including
a person or  entity  to which an  Advisor  subcontracts  substantially  all such
functions.

     (h)  Advisory  Agreement.  "Advisory  Agreement"  shall mean the  agreement
between the Trust and the Advisor  pursuant to which the Advisor will act as the
investment advisor and administrator of the Trust.

     (i) Affiliate. "Affiliate" shall mean (i) any Person directly or indirectly
controlling, controlled by or under common control with another Person, (ii) any
Person owning or controlling 10% or more of the outstanding voting Securities or
beneficial interests of such other Person, (iii) any officer,  director, trustee



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or general  partner of such Person and (iv) if such other  Person is an officer,
director,  trustee or partner of another entity,  then the entity for which that
Person acts in any such capacity.

     (j) Affiliated  Programs.  "Affiliated  Programs"  shall mean Aegis Realty,
Inc., Capital Mortgage Plus L.P., any similar programs organized by the Sponsor,
any successors to such programs or a combination of such programs.

     (k) Asset  Management  Fee.  "Asset  Management  Fee"  shall mean the Asset
Management  Fee  payable to the Advisor  under the  provisions  of the  Advisory
Agreement.

     (l) Average  Invested  Assets.  "Average  Invested  Assets"  shall mean the
average  of the  aggregate  Book Value of the assets of the Trust for any period
invested,  directly or indirectly, in Mortgage Investments,  before reserves for
depreciation or bad debts or other similar non-cash  reserves computed by taking
the average of such values at the end of each month during such period.

     (m) Book Value.  "Book Value" shall mean the value of an asset or assets of
the  Trust on the  books of the  Trust  before  provision  for  amortization  or
depreciation,  and before  deducting  any  indebtedness  or other  liability  in
respect  thereto,  except  that no asset  shall be  valued at more than its fair
value as determined by the Board of Trustees.

     (n) Code.  "Code" shall mean the Internal Revenue Code of 1986, as amended,
or corresponding provisions of subsequent revenue laws.

     (o) CMOs. "CMOs" shall mean collateralized mortgage obligations.

     (p) Common  Shares.  "Common  Shares"  shall mean any Shares  classified or
reclassified as such by the Trustees.

     (q) Competitive Commission. "Competitive Commission" shall have the meaning
ascribed to such term in Article VI, Section 6.6.

     (r) Consent Statement. "Consent Statement" shall mean the Consent Statement
sent to Shareholders dated February 11, 1999.

     (s) Debt Limitation.  "Debt Limitation" shall mean (i) 100% of Total Market
Value  (calculated  at the time debt is  incurred)  with  respect to Total Trust
Indebtedness and (ii) 50% of Total Market Value  (calculated at the time debt is
incurred) with respect to Permanent Trust Indebtedness.

     (t)  Declaration  of Trust.  "Declaration  of Trust"  shall  mean the Third
Amended and Restated Declaration of Trust of the Trust.

     (u)  Development.   "Development"  shall  mean  a  multi-family,  primarily
residential, rental project or health care facility.

     (v)  Electronic  Transmission.  "Electronic  Transmission"  shall  have the
meaning ascribed to such term in Section 2.3 hereof.

     (w) Excess Shares.  "Excess Shares" shall have the meaning ascribed to such
term in the Declaration of Trust.

     (x) Fannie  Mae.  "Fannie  Mae" shall mean the  Federal  National  Mortgage
Association.

     (y) FHA. "FHA" shall mean the Federal Housing Administration.



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     (z) Freddie Mac.  "Freddie  Mac" shall mean the Federal Home Loan  Mortgage
Corporation.

     (aa) Ginnie Mae. "Ginnie Mae" shall mean the Government  National  Mortgage
Association.

     (bb) HUD.  "HUD"  shall mean the United  States  Department  of Housing and
Urban Development.

     (cc) Independent Expert.  "Independent  Expert" shall mean a person with no
current or prior  business  or  personal  relationship  with the  Advisor or the
Trustees  and who is  engaged,  to a  substantial  extent,  in the  business  of
rendering opinions regarding the value of assets of the type held by the Trust.

     (dd) Independent Trustees.  "Independent  Trustees" shall mean the Trustees
who (i) are not affiliated, directly or indirectly, with the Advisor, whether by
ownership of,  ownership  interest in,  employment by, any material  business or
professional  relationship  with,  or service as an officer or  director  of the
Advisor, or its Affiliates,  (ii) do not serve as a director or trustee for more
than three other REITs  organized  by the  Sponsor,  and (iii)  perform no other
services  for the Trust  except  as  Trustees.  For this  purpose,  an  indirect
relationship  shall  include  circumstances  in which a member of the  immediate
family of a Trustee has one of the foregoing  relationships  with the Advisor or
the Trust.

     (ee)  Initial  Investment.  "Initial  Investment"  shall mean the  $200,000
investment in Shares which the Advisor has made pursuant to Article VI,  Section
6.7 of this Declaration of Trust.

     (ff) IRS.  "IRS"  shall  mean the  Internal  Revenue  Service of the United
States of America.

     (gg)  Mortgages.  "Mortgages"  shall  mean,  in a broad  sense,  beneficial
interests or participation interests in whole mortgages,  mortgage certificates,
mortgage-backed Securities, participation certificates backed by either a single
mortgage or a pool of mortgages or interests  in  pass-through  entities  which,
under the REIT Provisions of the Internal  Revenue Code,  would be considered to
be qualifying real estate assets for purposes of the Trust's  qualification as a
REIT (e.g., REMICs).

     (hh) Mortgage Investments. "Mortgage Investments" shall mean, collectively,
Original Mortgage Investments and Additional Mortgage Investments.

     (ii) Mortgage  Loan.  "Mortgage  Loan" shall mean the mortgage loan made to
the entity which owns a Development.

     (jj) Mortgage Prepayments, Sales or Insurance. "Mortgage Prepayments, Sales
or Insurance" shall mean any Trust  transaction  (other than the receipt of base
interest, Participating Interest Payments which were calculated on net cash flow
or other  measure of the net rentals or revenues from a  Development,  principal
payments when due on a Mortgage or other Mortgage  Investments,  the issuance of
Shares,  and payments by a borrower to the Advisor or an Affiliate in respect of
the Asset Management Fee in connection with a negotiated  prepayment) including,
without limitation, Participating Interest Payments calculated on the profits or
proceeds  realized  upon  the  refinancing,  sale  or  other  disposition  of  a
Development,  prepayments, sales, exchanges, foreclosures, or other dispositions
of Mortgages and other Mortgage  Investments held by the Trust or the receipt of
insurance proceeds from the FHA or of guarantee proceeds from Ginnie Mae, Fannie
Mae or Freddie  Mac or  otherwise  with  respect to any  Mortgage,  or any other
disposition of Trust assets.

     (kk) Net Assets or Net Asset Value. "Net Assets" or "Net Asset Value" shall
mean the Total  Assets of the Trust  (other  than  intangibles)  at cost  before
deducting  depreciation or other non-cash reserves less total liabilities of the
Trust, calculated at least quarterly on a basis consistently applied.



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     (ll) Net Income.  "Net Income" shall mean,  for any period,  total revenues
applicable  to such period,  less the expenses  applicable  to such period other
than additions to allowances or reserves for  depreciation,  amortization or bad
debts or other similar non-cash  reserves;  provided,  however,  that Net Income
shall not include the gain from Mortgage Prepayments, Sales or Insurance.

     (mm) Originated  Guaranteed Mortgage  Certificate.  "Originated  Guaranteed
Mortgage  Certificate"  shall mean any  mortgage-backed  security  guaranteed by
Fannie  Mae or  Freddie  Mac  which is  backed  by a  conventional  mortgage  or
mortgages originated by or on behalf of the Trust.

     (nn) Originated Insured Mortgage.  "Originated Insured Mortgage" shall mean
a Mortgage originated by or on behalf of the Trust or by another lender and sold
to the Trust prior to the time it has been fully funded,  the principal of which
(excluding  Participating Interest Payments and any Additional Loan) is eligible
for  insurance by FHA and others under  programs  administered  by HUD and shall
also include Ginnie Mae  mortgage-backed  Securities and Ginnie Mae pass-through
certificates backed by indebtedness secured by an Originated Insured Mortgage.

     (oo)  Originated  Mortgage.  "Originated  Mortgage"  shall  mean  either an
Originated Insured Mortgage or an Originated Guaranteed Mortgage Certificate.

     (pp) Original Mortgage  Investments.  "Original Mortgage Investments" shall
mean the  permanent  investments  of the Trust as described  in the  Prospectus,
including  investments in (i) Acquired  Mortgages,  (ii)  Originated  Mortgages,
(iii) other types of Mortgages  (including  interests in  pass-through  entities
such as regular  interests in REMICs  which,  under the REIT  Provisions  of the
Code,  are  considered to be  qualifying  real estate assets for purposes of the
Trust's  qualification  as a REIT),  (iv)  Additional  Loans and (v)  subject to
restrictions  imposed by certain provisions of the Code, CMOs  collateralized by
mortgages  insured by FHA or  mortgage  certificates  guaranteed  by Ginnie Mae,
Fannie Mae or Freddie Mac.

     (qq)  Participating  Interest Payments.  "Participating  Interest Payments"
shall mean interest payments to be paid in connection with Originated  Mortgages
or  Acquired  Mortgages  which  payments  are in  addition  to the base  rate of
interest on an Originated  Mortgage or Acquired Mortgage and are calculated as a
percentage  of the cash  flow,  rentals,  revenues  and/or  appreciation  of the
underlying project.

     (rr)  Permanent  Indebtedness.  "Permanent  Indebtedness"  shall  mean  all
indebtedness  of the  Trust  other  than  Working  Capital  Indebtedness,  trade
payables and subordinated Advisor fees.

     (ss) Person.  "Person"  shall mean and include  individuals,  corporations,
limited partnerships,  general partnerships,  limited liability companies, joint
stock companies or associations, joint ventures, companies, trusts, banks, trust
companies,  land trusts,  business  trusts or other entities and governments and
agencies and political subdivisions thereof.

     (tt) Preferred Shares.  "Preferred Shares" shall mean any Shares classified
or reclassified as such by the Trustees.

     (uu) Prospectus.  "Prospectus" shall mean the final prospectus of the Trust
in connection with the initial  registration of Shares filed with the Securities
and Exchange Commission on Form S-11, as amended.

     (vv) Real Estate  Investment  Trust  ("REIT")  Provisions  of the  Internal
Revenue Code.  "Real Estate  Investment Trust Provisions of the Internal Revenue
Code" shall mean part II, subchapter M, chapter 1 of the Code, as now enacted or
hereafter  amended,   or  successor   statutes,   other  sections  of  the  Code
specifically  applicable  to  REITs  and  regulations  and  rulings  promulgated
thereunder.



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     (ww) Reinvestment Plan. "Reinvestment Plan" shall mean the Trust's dividend
reinvestment  plan  pursuant  to which  Shareholders  can  elect  to have  their
distributions reinvested in additional shares.

     (xx) REIT.  "REIT" shall mean a corporation  or trust which  qualifies as a
real estate investment trust as defined in Sections 856 to 860 of the Code.

     (yy) REMIC.  "REMIC" shall mean a real estate mortgage  investment  conduit
described in sections 860A through 860G of the Code.

     (zz) Securities.  "Securities" shall mean any instruments commonly known as
"securities,"  including  stock,  shares,  voting  trust  certificates,   bonds,
debentures,  notes or other  evidences of  indebtedness,  secured or  unsecured,
convertible,  subordinated or otherwise, or any certificates of interest, shares
or participations,  or warrants,  options or rights to subscribe to, purchase or
acquire any of the foregoing.

     (aaa) Shareholder List.  "Shareholder List" shall have the meaning ascribed
to such term in Section 2.5 hereof.

     (bbb) Shareholders. "Shareholders" shall mean holders of the Shares.

     (ccc) Shares. "Shares" shall mean the beneficial interests of a Shareholder
in the Trust representing  undivided  beneficial  interests in the assets of the
Trust, which may be evidenced by certificates,  including,  without  limitation,
Common Shares and Preferred Shares.

     (ddd)  Sponsor.  "Sponsor"  shall mean any Person  directly  or  indirectly
instrumental in organizing,  wholly or in part, the Trust or any Person who will
manage or  participate  in the  management of the Trust and any Affiliate of any
such Person,  but does not include (i) any person whose only  relationship  with
the Trust is that of an  independent  asset manager and whose only  compensation
from the Trust is as such,  and (ii) wholly  independent  third  parties such as
attorneys,  accountants and underwriters  whose only compensation from the Trust
is for professional services.

     (eee) Total Assets of the Trust. "Total Assets of the Trust" shall mean the
value of all assets of the Trust as shown on the books of the Trust.

     (fff)  Total  Invested  Assets.  "Total  Invested  Assets"  shall  mean the
aggregate  original amount invested in Mortgage  Investments  reduced,  upon the
receipt of sales  proceeds,  FHA or other  insurance  or  guarantee  proceeds or
prepayments, by the original amount invested in the Mortgage Investment which is
not  reinvested,  except that in the case of a partial  payment,  Total Invested
Assets shall be reduced on a pro rata basis to the extent not reinvested.

     (ggg) Total Market  Value.  "Total  Market Value" shall mean the greater of
(i) the sum of (x) the aggregate market value of the Trust's  outstanding Shares
and (y) the Total Trust Indebtedness excluding  unconsolidated  subsidiaries and
(ii) the  aggregate  value of the Trust's  assets as  determined  by the Advisor
based upon third-party or management  appraisals and other criteria as the Board
of Trustees shall determine in its sole discretion.

     (hhh) Total Operating  Expenses.  "Total Operating Expenses" shall mean all
operating,  general and  administrative  expenses of the Trust as  determined by
generally accepted accounting  principles,  exclusive of the expenses of raising
capital,  interest payments,  taxes, non-cash expenditures (i.e.,  depreciation,
amortization,  bad debt reserve),  costs related directly to a specific Mortgage
Investment by the Trust, such as expenses for originating,  acquiring, servicing
or disposing of a Mortgage.

     (iii) Total Trust  Indebtedness.  "Total  Trust  Indebtedness"  shall mean,
collectively, Permanent Indebtedness and Working Capital Indebtedness.



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     (jjj) Trust. "Trust" shall mean American Mortgage Acceptance Company.

     (kkk)  Unimproved  Real Property.  "Unimproved  Real  Property"  shall mean
property which has the following three characteristics: (1) the property was not
acquired  for the purpose of producing  rental or other  operating  income,  (2)
there is no  development  or  construction  in process on such land,  and (3) no
development or construction on such land is planned in good faith to commence on
such land within one year.

     (lll) Working Capital  Indebtedness.  "Working Capital  Indebtedness" shall
mean  indebtedness  (i)  which has a term of no  longer  than five  years and is
utilized by the Trust to acquire and originate  Mortgage  Investments  which are
intended  to  be  pooled  as  part  of  an  issuance  of  CMOs  or  pass-through
certificates  sponsored by the Trust or its subsidiaries,  the proceeds of which
will be used to repay such  indebtedness,  or (ii) used to pay  distributions to
Shareholders and operating expenses,  including without limitation,  fees to the
Advisor.

                                   ARTICLE II

                             MEETING OF SHAREHOLDERS

     SECTION 2.1.  ANNUAL  MEETINGS.  Annual  meetings of  Shareholders  for the
election of Trustees and for such other  business as may be stated in the notice
of the  meeting  shall be held at such  place,  either  within  or  without  the
Commonwealth  of  Massachusetts,  and at such time and date not less than thirty
(30) days after delivery of the annual  report,  but in no event later than June
30 of each such year as the Board of Trustees, by resolution, shall determine.

     SECTION 2.2. OTHER MEETINGS. Meetings of Shareholders for any purpose other
than the  election  of  Trustees  may be held at such time and place,  within or
without the Commonwealth of  Massachusetts,  as shall be stated in the notice of
the meeting.

     SECTION 2.3. VOTING.  Each Shareholder  entitled to vote in accordance with
the terms and  provisions of the  Declaration  of Trust shall be entitled to one
vote for each Share held by such  Shareholder  (i) at a meeting,  in person,  by
written proxy or by a signed writing or consent directing the manner in which he
desires  that his vote be cast,  which  writing must be received by the Trustees
prior to such meeting or (ii) without a meeting,  by a signed writing or consent
directing the manner in which he desires his vote to be cast, which writing must
be  received  by the  Trustees  prior to the date  upon  which  the votes of the
Shareholders are to be counted. In connection with the foregoing, no proxy shall
be voted after six months  from its date  unless  such proxy is coupled  with an
interest  sufficient in law to support an  irrevocable  power and provides for a
longer  period and except that the Board of Trustees may prohibit the holders of
Excess Shares from voting the Excess Shares. Upon the demand of any Shareholder,
the vote for Trustees and upon any question before a meeting,  the vote shall be
by ballot.

     Any Shareholder's proxy or other writing or consent to vote at a meeting of
Shareholders   may  be  transmitted  by  facsimile  or  other  electronic  means
(including, without limitation, by telephone, email and internet) (collectively,
"ELECTRONIC  TRANSMISSION"),  provided that such  Electronic  Transmission  must
either be set forth, be submitted with, or provide for,  information  from which
the  Trust or its  agents  can  determine  with  reasonable  certainty  that the
Electronic Transmission was authorized by the Shareholder.

     SECTION 2.4. INSPECTORS OF ELECTION.  The Board of Trustees,  in advance of
any  Shareholders'  meeting or other  Shareholder  vote, may appoint one or more
inspectors to act at the meeting,  any adjournment thereof or in connection with
any other  Shareholder  vote.  If inspectors  are not so  appointed,  the person
presiding at a Shareholders' meeting or the Chairman of the Board where there is
no  meeting,  may,  and on the  request of any  Shareholder  entitled to vote in
connection with a particular question,  shall,  appoint two inspectors.  In case
any  person  appointed  fails to appear  or act,  the  vacancy  may be filled by



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appointment  made by the Board of Trustees in the case of a meeting,  in advance
of the  meeting or at that  meeting by the person  presiding  thereat or, in the
case of a vote  without a  meeting,  in  advance  of  counting  the  vote.  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.

     The inspectors  shall  determine the number of Shares  outstanding  and the
voting power of each, the Shares represented at the meeting, if applicable,  the
existence of a quorum,  if  applicable,  and the validity and effect of proxies,
and shall receive votes, ballots or consents,  hear and determine all challenges
and questions  arising in connection with the right to vote,  count and tabulate
all votes,  ballots or consents,  determine the result,  and do such acts as are
proper to conduct the  election or vote with  fairness to all  Shareholders.  On
request  of  the  person  presiding  at  the  meeting,  if  applicable,  or  any
Shareholder  entitled  to  vote  thereat  or in  connection  with  a  particular
solicitation,  the  inspectors  shall make a report in writing of any challenge,
question  or matter  determined  by them and execute a  certificate  of any fact
found by them.  Any  report or  certificate  made by them  shall be prima  facie
evidence of the facts stated and of the vote as certified by them.

     SECTION  2.5.  ACCESS  TO  RECORDS.  Any  Shareholder  and  any  designated
representative  thereof shall be permitted access to all records of the Trust at
all reasonable  times,  and may inspect and copy any of them.  Inspection of the
Trust books and records by a state  securities  administrator  shall be provided
upon  reasonable  notice and during normal  business  hours.  In addition,  with
respect to access to the list of Shareholders:

     (a) An alphabetical list of the names,  addresses,  and business  telephone
numbers of the Shareholders of the Trust along with the number of shares held by
each of them (the "SHAREHOLDER LIST") shall be maintained as a part of the books
and  records  of  the  Trust  and  shall  be  available  for  inspection  by any
Shareholder  or the  Shareholder's  designated  agent at the home  office of the
Trust at 625 Madison Avenue, New York, New York, 10022, or such other address as
may be designated by the Trust, upon the request of the Shareholder;

     (b) The  Shareholder  List shall be updated at least  quarterly  to reflect
changes in the information contained therein;

     (c) A copy of the  Shareholder  List  shall be  mailed  to any  Shareholder
requesting the Shareholder List within ten days of the request.  The copy of the
Shareholder List shall be printed in alphabetical  order, on white paper, and in
a readily  readable  type  size (in no event  smaller  than  10-point  type).  A
reasonable  charge for copy work may be charged by the Trust;

     (d)  The  purposes  for  which  a  Shareholder  may  request  a copy of the
Shareholder List include, without limitation,  matters relating to Shareholders'
voting rights under the Declaration of Trust,  and the exercise of Shareholders'
rights  under  federal  proxy laws;  and

     (e) If the Advisor or the  officers  or  Trustees  of the Trust  neglect or
refuse to exhibit, produce, or mail a copy of the Shareholder List as requested,
the  Sponsor  shall be liable  to any  Shareholder  requesting  the list for the
costs,  including  attorney's fees,  incurred by that Shareholder for compelling
the production of the Shareholder  List, and for actual damages  suffered by any
Shareholder by reason of such refusal or neglect. It shall be a defense that the
actual  purpose and reason for the requests for  inspection or for a copy of the
Shareholder List is to secure such list of Shareholders or other information for
the purpose of selling such list or copies  thereof,  or of using the same for a
commercial  purpose other than in the interest of the applicant as a Shareholder
relative  to the affairs of the Trust.  The Trust may  require  the  Shareholder
requesting the Shareholder  List to represent that the list is not requested for
a commercial  purpose unrelated to the Shareholder's  interest in the Trust. The
remedies provided hereunder to Shareholders requesting copies of the Shareholder
List  are in  addition  to,  and  shall  not in any way  limit,  other  remedies
available to Shareholders under federal law, or the laws of any state.



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     Subject to the foregoing, with respect to certain solicitations made by the
Trust, the Trust may, with the consent of the Shareholder,  mail  communications
on behalf of any  Shareholder  at his  expense who so requests in writing and is
entitled to vote on the same subject matter as the Trust's solicitation.

     SECTION  2.6.  QUORUM.  Except  as  otherwise  required  by  law  or by the
Declaration  of Trust,  the  presence,  in person or by proxy,  of  Shareholders
holding a majority  of the  outstanding  Shares of the Trust  entitled  to vote,
shall constitute a quorum at all meetings of the Shareholders.  In case a quorum
shall not be present at any meeting,  a majority in interest of the Shareholders
entitled  to vote  thereat,  present in person or by proxy,  shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the  meeting,  until the  requisite  amount of Shares  entitled to vote shall be
present.  At any such adjourned  meeting at which the requisite amount of Shares
entitled to vote shall be presented,  any business may be transacted which might
have been  transacted  at the  meeting  as  originally  noticed;  but only those
Shareholders  entitled to vote at the  meeting as  originally  noticed  shall be
entitled to vote at any adjournment or adjournments thereof.

     SECTION 2.7. SPECIAL MEETINGS.  Special meetings of the Shareholders may be
called by the  Chairman  of the Board,  by the  President,  by a majority of the
Trustees or by a majority of the  Independent  Trustees,  and shall be called by
any officer of the Trust upon  written  request of  Shareholders  holding in the
aggregate not less than 10% of the  outstanding  Shares of the Trust entitled to
vote at such  meeting.  The call of a special  meeting shall state the nature of
the business to be transacted  and that no other business shall be considered at
such meeting.

     Upon receipt of a written  request  either in person or by registered  mail
stating the purpose(s) of the meeting requested by Shareholders, the Trust shall
provide all  Shareholders,  within ten (10)  business days after receipt of said
request,  written  notice  (either  in person  or by mail) of a meeting  and the
purpose of such  meeting to be held on a date not less than twenty (20) nor more
than sixty (60) days after receipt of said request (or as soon thereafter as the
applicable  proxy rules may reasonably be complied with) for such meeting,  at a
time and place convenient to the Shareholders.

     The place, date and time of, as well as the record date for determining the
persons entitled to notice of and to vote at, any special meeting, including any
special meeting to be called at the request of the holders of 10% or more of the
Shares  outstanding,  shall be  determined  by the Board of Trustees;  provided,
however,  in the case of a special  meeting  to be called at the  request of the
holders  of 10% or more of the  Shares  outstanding,  if the  Board of  Trustees
declines or fails to make any such  determination  within ten  business  days of
such request, then the officer calling such special meeting shall at the time of
such call designate the place,  date and time of such special meeting as well as
the record  date for  determining  persons  entitled to notice of and to vote at
such meeting.

     SECTION 2.8. NOTICE OF ANNUAL AND SPECIAL MEETINGS CALLED BY CERTAIN OR ALL
OF THE TRUSTEES AND  SOLICITATION  OF CONSENT WITHOUT  MEETING.  Written notice,
stating the place,  date and time of the annual meeting or a special meeting not
called  at the  request  of the  Shareholders,  and the  general  nature  of the
business to be  considered  in the case of an annual  meeting,  or the  specific
nature of the business to be considered in the case of a special meeting,  shall
be given to each  Shareholder  entitled  to vote  thereat  at his  address as it
appears on the  records of the Trust,  not less than  twenty  (20) nor more than
sixty (60) days before the date of such  meeting.  In the case of a  Shareholder
vote without a meeting,  the date for  responding to such  solicitation  and the
counting  of the votes in  connection  therewith  must occur no later than sixty
(60) days and no sooner  than twenty  (20) days after  notice of such  requested
vote is given.

     SECTION 2.9. BUSINESS TRANSACTED. No business other than that stated in the
notice shall be transacted at any meeting  without the unanimous  consent of all
the Shareholders entitled to vote thereat.



                                       8
<PAGE>



                                  ARTICLE III

                                    TRUSTEES

     SECTION 3.1. NUMBER, TERM AND QUALIFICATIONS.  The number of Trustees shall
be as set forth in the Declaration of Trust. Unless otherwise fixed by the Board
of Trustees or the Shareholders,  the number of Trustees constituting the entire
Board of Trustees shall be five (5).

     A Trustee  shall be an individual at least 21 years of age who is not under
legal  disability.  A Trustee  shall not be required to devote his full business
time and effort to the Trust. A Trustee shall qualify as such when he has either
signed the  Declaration of Trust or agreed in writing to be bound by it. No bond
shall be required to secure the  performance of a Trustee unless the Trustees so
provide or as required by law.

     A  Trustee  must  have at least  three  (3)  years of  relevant  experience
demonstrating the knowledge and experience required to successfully  acquire and
manage Mortgage Investments. At least one Independent Trustee must have at least
three (3) years of relevant real estate experience.

     Nominations  for the  election  of  Trustees  may be made by the  Board  of
Trustees or a committee appointed by the Board of Trustees or by any Shareholder
entitled to vote in the election of Trustees generally. However, any Shareholder
entitled to vote in the election of Trustees  generally may nominate one or more
persons for  election as  Trustees at a meeting  only if written  notice of such
Shareholder's  intent to make such  nomination  or  nominations  has been given,
either by personal  delivery or by United States mail,  postage prepaid,  to the
Secretary of the Trust not later than (i) with respect to an election to be held
at an annual meeting of Shareholders,  ninety days prior to the anniversary date
of the  immediately  preceding  annual  meeting,  and (ii)  with  respect  to an
election to be held at a special  meeting of  Shareholders  for the  election of
Trustees,  the close of  business on the tenth day  following  the date on which
notice of such  meeting is first given to  Shareholders.  Each such notice shall
set forth:  (a) the name and address of the  Shareholder who intends to make the
nomination  and of the person or persons to be nominated;  (b) a  representation
that the  Shareholder  is a holder of record of Shares of the Trust  entitled to
vote at such  meeting and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice;  (c) a description of
all arrangements or understandings  between the Shareholder and each nominee and
any other person or persons  (naming  such person or persons)  pursuant to which
the nomination or nominations are to be made by the Shareholder;  (d) such other
information  regarding  each nominee  proposed by such  Shareholder  as would be
required to be included in a proxy  statement  filed pursuant to the proxy rules
of the Securities and Exchange  Commission,  had the nominee been nominated,  or
intended to be nominated,  by the Board of Trustees; and (e) the consent of each
nominee to serve as a Trustee of the Trust if so elected.  The presiding officer
of the meeting may refuse to  acknowledge  the nomination of any person not made
in compliance with the foregoing procedure.

     SECTION  3.2.   AUTHORITY  OF  TRUSTEES.   The  Trustees   shall  have  the
responsibilities and authority set forth in the Declaration of Trust.

     (a) SPECIFIC POWERS.  Subject only to the express limitations  contained in
the Declaration of Trust and in addition to any powers and authorities conferred
by the  Declaration  of Trust or which  the  Trustees  may have by virtue of any
present or future  statute or rule of law,  the  Trustees  without any action or
consent by the  Shareholders  shall have and may  exercise  at any time and from
time to time  the  following  powers  and  authorities  which  may or may not be
exercised by them in their sole judgment and  discretion  and in such manner and
upon such terms and conditions as they may from time to time deem proper:

          (i) To retain,  invest and  reinvest the capital or other funds of the
     Trust (including,  without limitation,  repayments and disposition proceeds
     from sales of the Trust's  Mortgage  Investments)  in  Mortgages  and other
     Mortgage Investments without regard to whether any such Mortgages and other
     Mortgage  Investments  may mature  before the possible  termination  of the



                                       9
<PAGE>



     Trust,  and to possess and exercise all the rights,  powers and  privileges
     appertaining to the ownership of the Trust assets.

          (ii) For such consideration as they deem proper to invest in, purchase
     or otherwise  acquire for cash or other  property  and hold for  investment
     Mortgages  secured by real property  located in the United States,  and, in
     connection with any such investment in Mortgages, acquire (i) the entire or
     any participating  interest in rents,  lease payments or other income from,
     or the entire or any  participating  interest in the profits  from,  or the
     entire or any  participating  interest in the equity or ownership  of, real
     property; and (ii) such investments, either directly or, subject to Article
     V, Section  5.1,  through  joint  ventures,  partnerships,  or other lawful
     combinations or associations.

          (iii) To sell, exchange, release, partition, assign, mortgage, pledge,
     hypothecate,  grant security  interests in,  encumber,  negotiate,  convey,
     transfer or otherwise  dispose of any and all of the assets of the Trust by
     deeds,  trust  deeds,  assignments,   bills  of  sale,  transfers,  leases,
     mortgages, financing statements,  security agreements and other instruments
     for any of such  purposes  executed and  delivered for and on behalf of the
     Trust  or the  Trustees  by  one  or  more  of  the  Trustees  or by a duly
     authorized officer, employee, agent or any nominee of the Trust.

          (iv) To issue authorized Shares or other  Securities,  all without the
     vote of or other action by the Shareholders, to such Persons for such cash,
     property or other consideration (including Securities issued or created by,
     or  interests in any Person) at such time or times and on such terms as the
     Trustees may deem  advisable  and to purchase or otherwise  acquire,  hold,
     cancel, reissue, sell and transfer the Shares or any of such Securities.

          (v) To enter into contracts,  obligations,  and other agreements for a
     term  extending  beyond the term of office of the  Trustees  and beyond the
     possible termination of the Trust or for a lesser term.

          (vi) To,  subject to Article V,  Section  5.9,  borrow  money and give
     negotiable  or  non-negotiable  instruments  therefor;  to enter into other
     obligations  on behalf  of the  Trust;  and to  assign,  convey,  transfer,
     mortgage,  subordinate,  pledge,  grant security  interests in, encumber or
     hypothecate the assets of the Trust to secure any of the foregoing.

          (vii) To lend money, whether secured or unsecured.

          (viii) To create reserve funds for any purpose.

          (ix) To incur and pay out of the Trust assets any charges or expenses,
     and  disburse  any  funds  of  the  Trust,   which  charges,   expenses  or
     disbursements  are,  in the  opinion  of  the  Trustees,  necessary  for or
     incidental to or desirable  for, and are incurred in connection  with,  the
     carrying out of any of the purposes of the Trust or the  conducting  of the
     business  of the  Trust,  including  without  limitation  taxes  and  other
     governmental  levies,  charges and  assessments of whatever kind or nature,
     imposed upon or against the Trustees in  connection  with the Trust or upon
     or  against  the  Trust  assets  or any  part  thereof,  and for any of the
     purposes herein.

          (x) To deposit funds or Securities  held by the Trust in banks,  trust
     companies, savings and loan associations and other depositories, whether or
     not such deposits will draw interest,  the same to be subject to withdrawal
     on such terms and in such manner and by such  Person or Persons  (including
     any one or more  Trustees,  officers,  agents  or  representatives)  as the
     Trustees may determine.

          (xi) To possess and  exercise  all the rights,  powers and  privileges
     appertaining  to the  ownership of all or any interests in, or mortgages or
     Securities issued or created by, any Person,  forming part of the assets of
     the Trust,  to the same  extent  that an  individual  might,  and,  without



                                       10
<PAGE>



     limiting  the  generality  of the  foregoing,  to vote or give any consent,
     request or  notice,  or waive any  notice,  either in person or by proxy or
     power of attorney,  with or without power of  substitution,  to one or more
     Persons, which proxies and powers of attorney may be for meetings or action
     generally  or for any  particular  meeting or action,  and may  include the
     exercise of discretionary powers.

          (xii) To enter into joint  ventures,  general or limited  partnerships
     and any other lawful  combinations or associations  with independent  third
     parties or, subject to Article V, Section 5.1, with Affiliated Programs.

          (xiii) To elect, appoint, engage or employ such officers for the Trust
     as the  Trustees may  determine,  who may be removed or  discharged  at the
     discretion of the  Trustees,  such officers to have such powers and duties,
     and to serve such terms and at such  compensation,  as may be prescribed by
     the Trustees;  to engage or employ any Persons as agents,  representatives,
     employees, or independent contractors (including,  without limitation, real
     estate  advisors,   investment  advisors,   transfer  agents,   registrars,
     underwriters,  accountants, attorneys at law, real estate agents, managers,
     appraisers, brokers, architects,  engineers, construction managers, general
     contractors  or  otherwise)  in  one  or  more   capacities,   and  to  pay
     compensation  from the Trust for  services  in as many  capacities  as such
     Person may be so engaged or employed;  and, except as prohibited by law and
     subject to the  supervision of the Trustees,  to delegate any of the powers
     and duties of the Trustees to the Advisor.

          (xiv) To determine the proper  accounting  treatment for Trust income,
     loss and capital.

          (xv) To  determine  from  time to time the value of all or any part of
     the Trust assets and of any Securities,  assets, or other  consideration to
     be furnished to or acquired by the Trust,  and from time to time to revalue
     all or any part of the Trust assets in accordance  with such  appraisals or
     other information as are, in the Trustees' sole judgment,  necessary and/or
     satisfactory.

          (xvi) To  collect,  sue for,  and  receive  all sums of money or other
     assets coming due to the Trust, and to engage in, intervene in,  prosecute,
     join, defend,  compound,  compromise,  abandon or adjust, by arbitration or
     otherwise,   any   actions,   suits,   proceedings,    disputes,    claims,
     controversies,  demands or other  litigation  relating  to the  Trust,  the
     assets  of the  Trust or the  Trust's  affairs,  to enter  into  agreements
     therefor, whether or not any suit is commenced or claim accrued or asserted
     and,  in advance of any  controversy,  to enter into  agreements  regarding
     arbitration, adjudication or settlement thereof.

          (xvii) To renew, modify, release, compromise,  extend, consolidate, or
     cancel, in whole or in part, any obligation to or of the Trust.

          (xviii)  To  purchase  and pay for out of the Trust  assets  insurance
     contracts and policies  insuring the Trust assets against any and all risks
     and insuring the Trust and/or any or all of the Trustees, the Shareholders,
     officers, employees, agents, investment advisors or independent contractors
     of the Trust  against any and all claims and  liabilities  of every  nature
     asserted by any Person arising by reason of any action alleged to have been
     taken  or  omitted  by  the  Trust  or  by  any  such  person  as  Trustee,
     Shareholder,  officer,  employee,  agent, investment advisor or independent
     contractor;  provided,  however, that the Trustees may purchase and pay for
     out of Trust assets insurance  contracts and policies insuring  independent
     contractors or agents,  only if such policies are  customarily  provided to
     independent  contractors or agents providing the services being rendered in
     the locality  where such services are being  rendered;  provided,  further,
     that  limitations  on the  acquisition  of insurance  contracts or policies
     shall  not  apply  to  the  Advisor,  unless  otherwise  restricted  in the
     Declaration of Trust.



                                       11
<PAGE>



          (xix) To adopt a fiscal  year for the Trust,  and from time to time to
     change such fiscal year.

          (xx) To  adopt  and use a seal  (but  the use of a seal  shall  not be
     required for the execution of instruments or obligations of the Trust).

          (xxi)  To make,  perform,  and  carry  out,  or  cancel  and  rescind,
     contracts of every kind for any lawful purpose  without limit as to amount,
     with any  Person,  firm,  trust,  association,  corporation,  municipality,
     county,  parish,  state,  territory,   government  or  other  municipal  or
     governmental  subdivisions.  These contracts shall be for such duration and
     upon such terms as the Trustees in their sole discretion shall determine.

          (xxii) To renew, modify, extend, consolidate or cancel, in whole or in
     part, the Reinvestment Plan.

          (xxiii) To acquire real property (or an interest therein) in the event
     of a Mortgage  foreclosure and perform all acts incidental to the ownership
     of real property including,  without  limitation,  entering into leases for
     space located therein.

          (xxiv) To cause the Trust to  repurchase  Shares from time to time out
     of surplus  funds of the Trust,  if any,  to further  the  business  of the
     Trust;

          (xxv) To list the Shares on the American  Stock  Exchange or any other
     exchange or market;

          (xxvi) To, in connection  with the  leveraging of the Trust's  assets,
     cause the Trust to form and  invest in  subsidiaries  and other  investment
     vehicles and transfer  any or all of the Trust's  assets to such  entities;
     provided,  however,  that such entities shall be operated in a manner which
     is consistent with the provisions of this Trust Agreement;

          (xxvii) To adopt,  implement  and from time to time amend these Bylaws
     in manner consistent with the provisions of the Declaration of Trust; and

          (xxviii)  To do all other such acts and things as are  incident to the
     foregoing,  and to exercise  all powers  which are  necessary  or useful to
     carry on the  business  of the Trust,  to promote any of the  purposes  for
     which  the  Trust  is  formed,  and to  carry  out  the  provisions  of the
     Declaration of Trust and these Bylaws.

     (b) ADDITIONAL POWERS.  The Trustees shall  additionally have and exercise
all the powers  conferred by the laws of  Massachusetts  upon business trusts or
real estate investment  trusts formed under such laws,  insofar as such laws are
not in conflict with the provisions of the Declaration of Trust or these Bylaws.

     (c)  BUSINESS   OPPORTUNITIES  WITH  AFFILIATED   PROGRAMS.   The  Trustees
(including the Independent  Trustees) shall periodically  monitor the allocation
of Mortgage  Investments  among the Trust and the Affiliated  Programs to insure
that the allocation  method  described in the Prospectus is being applied fairly
to the Trust.

     (d) SUITABLE INVESTMENT  OPPORTUNITIES.  Before any Trustee,  including any
Independent  Trustee,  may take advantage of an investment  opportunity  that is
suitable  for the Trust for their own  account  or present  or  recommend  it to
others, they shall present such investment  opportunity to the Trust if (i) such
opportunity is within the Trust's investment objectives and policies,  (ii) such
opportunity is of a character  which could be taken by the Trust,  and (iii) the
Trust has the financial resources to take advantage of such opportunity.



                                       12
<PAGE>



     SECTION 3.3.  RESIGNATIONS.  Any Trustee or other officer may resign at any
time. Such  resignation  shall be made in writing,  and shall take effect at the
time specified therein, and if no time is specified,  at the time of its receipt
by the Chairman of the Board or Secretary. The acceptance of a resignation shall
not be necessary to make it effective.

     SECTION 3.4.  REMOVAL OF  TRUSTEES.  Any one or more of the Trustees may be
removed, but only for cause, by action of a majority of the Board of Trustees or
as set forth in the Declaration of Trust. A special meeting of the  Shareholders
for the purpose of removing a Trustee shall be called by an officer of the Trust
in accordance with the provisions of Article III, Section 3.7.

     SECTION 3.5.  NEWLY  CREATED  TRUSTEESHIPS  AND  VACANCIES.  Newly  created
trusteeships  resulting  from an increase in the number of Trustees or vacancies
occurring in the Board of Trustees for any reason except the removal of Trustees
by  Shareholders  may be filled by vote of a majority  of the  Trustees  then in
office,  although less than a quorum exists.  Vacancies occurring as a result of
the  removal of  Trustees  by  Shareholders  shall be filled as set forth in the
Declaration  of Trust.  A Trustee  elected to fill a vacancy shall be elected to
hold office for the unexpired term of his predecessor.  The Independent Trustees
shall  nominate  replacements  for  vacancies  among the  Independent  Trustees'
positions.  Upon the  resignation  or removal of any Trustee,  or his  otherwise
ceasing to be a Trustee,  he shall  execute and deliver  such  documents  as the
remaining  Trustees  shall require for the conveyance of any Trust property held
in his name, shall account to the remaining  Trustee or Trustees as they require
for all property which he holds as Trustee and shall  thereupon be discharged as
Trustee.  Upon the incapacity or death of any Trustee,  his legal representative
shall  perform the acts set forth in the  preceding  sentence and the  discharge
mentioned   therein  shall  run  to  such  legal   representative   and  to  the
incapacitated  Trustee,  or the estate of the deceased Trustee,  as the case may
be.  Notwithstanding  anything to the  contrary  contained  in this Article III,
Section 3.5, the filling of vacancies or newly created trusteeships on the Board
of Trustees shall be subject to compliance with the  requirements of Section 3.1
of this Article III and the Declaration of Trust.

     SECTION  3.6.  SUCCESSOR  AND  ADDITIONAL  TRUSTEES.  The right,  title and
interest  of the  Trustees  in and to the assets of the Trust shall also vest in
successor  and  additional  Trustees  upon their  qualification,  and they shall
thereupon have all the rights and obligations of Trustees hereunder. Such right,
title and  interest  shall  vest in the  Trustees  whether  or not  conveyancing
documents  have been  executed  and  delivered  pursuant  to Section 3.5 of this
Article III or otherwise.

     SECTION 3.7.  ACTIONS BY  TRUSTEES.  The Trustees may act with or without a
meeting.  A quorum for all meetings of the  Trustees  shall be a majority of the
number of incumbent  Trustees,  provided that at least a majority of such number
are  Independent  Trustees.   Unless  specifically  provided  otherwise  in  the
Declaration of Trust or these Bylaws, any action of the Trustees may be taken at
a meeting by vote of a majority  of the  Trustees  present at such  meeting if a
quorum is present. Any agreement,  deed, mortgage,  lease or other instrument or
writing  executed  by any  one or  more  of the  Trustees  or by any one or more
authorized  persons  shall be valid and binding  upon the  Trustees and upon the
Trust when authorized by action of the Trustees.

     SECTION 3.8. ACTION WITHOUT MEETING. Any action required or permitted to be
taken at any  meeting of the Board of Trustees  may be taken  without a meeting,
provided prior to such action a written  consent thereto is signed by a majority
of the Board of  Trustees,  and  provided,  further,  at least a majority of the
consenting Trustees are Independent Trustees.  Any such written consent shall be
filed with the minutes of proceedings of the Trustees.

     SECTION 3.9.  COMPENSATION.  Independent  Trustees may receive  fixed sums,
Common  Shares in the Trust or other  compensation  per year  and/or per meeting
and/or for any service or activity  they  perform or engage in as  Trustees,  as
determined  by resolution  of the Board of Trustees.  Additionally,  Independent
Trustees  shall be  reimbursed  for  travel  expenses  and  other  out-of-pocket
disbursements    incurred   in   connection   with   attending   any   meetings.
Non-Independent  Trustees  shall not  receive any  compensation  from the Trust.
Nothing  herein  contained  shall be construed  to preclude any  non-Independent



                                       13
<PAGE>



Trustee  from  serving the Trust in any other  capacity as an officer,  agent or
otherwise,  and receiving compensation therefor.  Independent Trustees shall not
perform any services for the Trust except as Trustees.

     SECTION  3.10.  TELEPHONIC  MEETING.  All or any one or more  Trustees  may
participate  in a meeting of the Trustees or any  committee  thereof by means of
conference telephone or similar  communications  equipment by means of which all
participants can hear each other and participation in a meeting pursuant to such
communication shall constitute presence in person at such meeting.

     SECTION 3.11.  EXECUTIVE  COMMITTEE.  The Trustees may appoint an executive
committee  from  among  their  number  consisting  of three or more  members,  a
majority of whom shall be  Independent  Trustees,  which shall have such powers,
duties and  obligations  as the Trustees  may deem  necessary  and  appropriate,
including,  without limitation, the power to conduct the business and affairs of
the Trust  during  periods  between  meetings  of the  Trustees.  The  Executive
Committee shall report its activities periodically to the Trustees.

                                   ARTICLE IV

                                    OFFICERS

     SECTION 4.1. OFFICERS.  The officers of the Trust may consist of a Chairman
of the Board, a President, a Treasurer and a Secretary,  and shall be elected by
the Board of Trustees and shall hold office until their  successors  are elected
and  qualified.  In  addition,  the  Board of  Trustees  may  elect  one or more
Vice-Presidents  and such Assistant  Secretaries and Assistant  Treasurers as it
may deem  proper.  None of the  officers  of the  Trust  need be  Trustees.  The
officers  shall be elected at the first  meeting of the Board of Trustees  after
each annual meeting. More than one office may be held by the same person.

     SECTION 4.2. OTHER  OFFICERS AND AGENTS.  The Board of Trustees may appoint
such officers and agents as it may deem advisable,  who shall hold their offices
for such terms and shall exercise such power and perform such duties as shall be
determined from time to time by the Board of Trustees.

     SECTION 4.3.  CHAIRMAN OF THE BOARD. The Chairman of the Board of Trustees,
if one is elected,  shall be the chief executive  officer of the Trust and shall
preside at all meetings of the Board of Trustees. He shall have and perform such
other  duties  as from  time to time  may be  assigned  to him by the  Board  of
Trustees.

     SECTION 4.4. PRESIDENT.  The President shall be the chief operating officer
of the Trust and shall have the  general  powers and duties of  supervision  and
management usually vested in the office of President of a corporation.  He shall
preside at all  meetings  of the  Shareholders  if present  thereat,  and in the
absence or  non-election  of the  Chairman of the Board,  at all meetings of the
Board of Trustees, and shall have general supervision,  direction and control of
the  business of the Trust.  Unless the Board of Trustees  shall  authorize  the
execution thereof in some other manner, he shall execute bonds,  mortgages,  and
other  contracts on behalf of the Trust,  and shall cause the seal to be affixed
to any instrument requiring it and when so affixed the seal shall be attested by
the signature of the Secretary or the Treasurer or an Assistant  Secretary or an
Assistant Treasurer.

     SECTION 4.5. VICE-PRESIDENT. Each Vice-President shall have such powers and
shall perform such duties as shall be assigned to him by the Board of Trustees.

     SECTION 4.6.  TREASURER.  The Treasurer shall have custody of the funds and
Securities  of the Trust and shall keep a full and accurate  account of receipts
and  disbursements  in books belonging to the Trust. He shall deposit all moneys
and  other  valuables  In the  name  and to the  credit  of the  Trust  in  such
depositories as may be designated by the Board of Trustees.



                                       14
<PAGE>



     The  Treasurer  shall  disburse the funds of the Trust as may be ordered by
the Board of Trustees, the Chairman of the Board or the President, taking proper
vouchers for such  disbursements.  He shall render to the  President or Board of
Trustees at the regular meetings of the Board of Trustees,  or whenever they may
request it, an account of all his transactions as Treasurer and of the financial
condition of the Trust. If required by the Board of Trustees,  he shall give the
Trust a bond, at the Trust's expense,  for the faithful  discharge of his duties
in such amount and with such surety as the Board of Trustees shall prescribe.

     SECTION 4.7.  SECRETARY.  The  Secretary  shall give, or cause to be given,
notice of all  meetings of  Shareholders  and  Trustees;  and all other  notices
required by law, these Bylaws or the  Declaration  of Trust,  and in case of his
absence or  refusal  or  neglect  to do so, any such  notice may be given by any
person thereunto directed by the Chairman of the Board, the President, or by the
Trustees  or  Shareholders,  upon  whose  requisition  the  meeting is called as
provided in the  Declaration of Trust and these Bylaws.  He shall record all the
proceedings  of the  meetings  of the Trust and of Trustees in a book to be kept
for that purpose.  He shall keep in safe custody the seal of the Trust, and when
authorized by the Board of Trustees,  affix the same to any instrument requiring
it,  and when so  affixed,  it  shall be  attested  by his  signature  or by the
signature of any assistant secretary.

     SECTION 4.8.  ASSISTANT  TREASURERS  AND ASSISTANT  SECRETARIES.  Assistant
Treasurers  and Assistant  Secretaries,  if any, shall be elected and shall have
such  powers  and  shall  perform  such  duties  as shall be  assigned  to them,
respectively, by the Board of Trustees.

                                    ARTICLE V

                                INVESTMENT POLICY

     SECTION 5.1.  GENERAL  STATEMENT OF POLICY.  The Trust intends to invest in
Mortgage  Investments  including:  (i) Original  Mortgage  Investments  and (ii)
Additional Mortgage  Investments.  Additional  Mortgage  Investments (other than
uninsured  Mortgage Loans originated with the intent of later  securitizing such
Mortgage  Loans)  may not  comprise,  in the  aggregate,  more  than  60% of the
Mortgage Investments made by the Trust after the date the Proposals are adopted.
The Trust will seek to obtain Originated  Mortgages with Participating  Interest
Payments and, to a lesser extent, Acquired Mortgages with Participating Interest
Payments.  The Trust  shall  have the right to acquire  or  originate  Mortgages
without  first  obtaining a real  property  appraisal,  unless a majority of the
Independent Trustees determine that such an appraisal is necessary; if obtained,
any real property appraisals will be maintained in the Trust's books and records
for at least five years. The foregoing investments are intended to be structured
to comply with the Real  Estate  Investment  Trust  Provisions  of the Code.  In
addition to the investments  referred to above, the Trust may, in the discretion
of the Board of Trustees  or the  Advisor,  make the  investments  described  in
Section  5.2 below or such other  investments  that the Board of Trustees or the
Advisor deem in good faith to be consistent  with the investment  objectives and
policies of the Trust as set forth in the Consent Statement.

     The Trust may make  commitments  to make  investments  consistent  with the
foregoing  policies.  The  Trust  may  also  participate  in joint  ventures  in
Mortgages with  Affiliated  Programs  (subject to the terms of this Section 5.1)
and in investments with other  unaffiliated  investors,  including  unaffiliated
investors having investment  policies similar to those of the Trust, on the same
or different terms. The Advisor may act as advisor to other investors, including
investors who have the same investment policies as the Trust.

     The Independent  Trustees shall review the investment policies of the Trust
with  sufficient  frequency and at least annually to determine that the policies
being followed by the Trust are in the best interests of its Shareholders.  Such
determination  by the  Independent  Trustees  and the  basis  therefor  shall be
recorded in the minutes of the meeting of Trustees.



                                       15
<PAGE>



     The Trust may not enter into  transactions with a Sponsor,  the Advisor,  a
Trustee or an Affiliate thereof, except as (i) specified below or (ii) otherwise
permitted by Sections 5.7 and 5.8 of this Article V.

     The Trust may invest in a joint venture with an Affiliated Program provided
(i) the  Affiliated  Program has similar  investment  objectives to those of the
Trust,  (ii) such joint  venture is  approved  by a  majority  of the  Trustees,
including a majority of the Independent  Trustees,  not otherwise  interested in
such  transaction,  as being  fair and  reasonable  to the  Trust  and (iii) the
Trust's  participation in such joint venture is on substantially  the same terms
and  conditions as those received by the other joint  venturers.  In the case of
participation with Affiliated Programs,  the cost of generating such investments
will be shared ratably by the participating Affiliated Program and the Trust.

     The Advisor or an Affiliate may purchase  Mortgages or interests therein in
its own name or in the name of a nominee,  a trust or a corporate  "nominee"  or
otherwise and hold title thereto for the purpose of facilitating the acquisition
of such  Mortgages by the Trust or any other purpose  related to the business of
the Trust;  provided that in the event of the  acquisition of such a Mortgage by
the Trust from the Advisor or its Affiliates, (i) the purchase price paid by the
Trust may not exceed the purchase  price paid by the Advisor or its  Affiliates,
including  expenses  of  acquisition,  appropriately  reduced (a) to reflect the
results of any interest rate hedges  placed by the Advisor or its  Affiliates on
such Mortgages up to the date of  acquisition by the Trust,  (b) by any mortgage
payments  received  or  accrued to the date of  acquisition  by the Trust to the
extent not paid over to the Trust and (c) by all closing  costs and  Acquisition
Fees paid by the Trust and (ii) no  compensation  or other benefit may accrue to
the Advisor or its Affiliates  except as otherwise  permitted  herein and except
that they may be reimbursed for the costs incurred to carry the Mortgage  (which
could include the  transactional  costs  associated with interest rate hedges on
such Mortgages including,  but not limited to, commodity brokerage  commissions,
exchange fees,  etc.).  If the Advisor or an Affiliate has borrowed the funds to
make or acquire such  Mortgage,  the carrying  costs  payable by the Trust shall
include the lesser of interest at the rate  charged or the rate which would have
been charged for a comparable loan by an unrelated lending  institution;  if the
Advisor or such  Affiliate has used its own funds to finance the  Mortgage,  the
carrying  costs  payable by the Trust  shall  include  interest at a rate not in
excess of that which would have been charged by an unrelated lending institution
to the Advisor or such  Affiliate for short-term  borrowings.  The Advisor or an
Affiliate  may  purchase  other  Mortgage  Investments  upon  similar  terms and
conditions.

     The  general  purpose of the Trust is to acquire  assets and to seek income
which qualifies under the Real Estate  Investment  Trust ("REIT")  Provisions of
the Code.  The Board of Trustees  shall  endeavor to make  Mortgage  Investments
(including  investments  yielding "qualified temporary investment income" within
the meaning of Section  856(c)(6)(D)  of the Code) in such a manner as to comply
with the  requirements  of the REIT  Provisions  of the Code with respect to the
composition  of the  Trust's  investments  and  the  derivation  of its  income;
provided,  however,  that for a period of time  during  which the  portfolio  of
investments  is  being  developed,   the  Trust's  assets  may  be  invested  in
investments  with income which does not qualify under the REIT Provisions of the
Code;  and provided  further,  however,  that up to seven percent of the Trust's
assets may be invested in Additional Loans,  which are unsecured loans and which
therefore do not qualify as real estate assets under the REIT  provisions of the
Code.

     The investment objectives of the Trust are to: (i) preserve and protect the
Trust's invested capital, by investing  principally in Mortgage Investments (ii)
provide quarterly  distributions which may be increased over time as a result of
Participating Interest Payments, when obtainable, on Originated Mortgages, based
on the cash flow or revenues of the  underlying  Development;  and (iii) provide
appreciation by investing in Acquired Mortgages which present the possibility of
early disposition or prepayment and investing in Originated  Mortgages and, to a
lesser extent,  Acquired  Mortgages  which may generate  Participating  Interest
Payments,  when  obtainable,  based on the  increased  value  of the  underlying
Development upon its refinancing, sale or other disposition.

     SECTION 5.2. SPECIFIC INVESTMENTS. In addition to Mortgage Investments, the
Trust may  invest  (through  a cash  management  account  maintained  at a trust



                                       16
<PAGE>



company or otherwise) its assets in investments such as: (a) Securities  issued,
insured or guaranteed by the United  States  government or government  agencies,
(b)  savings  accounts,  (c)  certificates  of  deposit,  (d) bank money  market
accounts,  (e) bankers'  acceptances or commercial  paper rated A-1 or better by
Moody's Investors Service,  Inc., (f) money market funds (including money market
funds sponsored by the Sponsor or its Affiliates) having assets in excess of $50
million,  (g) other short-term highly liquid investments with banks having a net
worth of at least $50 million,  (h) investments which yield "qualified temporary
investment  income" within the meaning of Section  856(c)(6)(D) of the Code, and
(i) any combination of the foregoing investments.

     SECTION  5.3.  REAL  PROPERTY.  To the  extent  the Trust  invests  in real
property,  a majority of the Trustees shall determine the consideration paid for
such  real  property,  based on the fair  market  value  of the  property.  If a
majority  of the  Independent  Trustees  determine,  or if the real  property is
acquired from the Advisor, a Trustee, the Sponsors,  or Affiliates thereof, such
fair market value shall be  determined  by a qualified  independent  real estate
appraiser selected by the Independent Trustees.

     SECTION 5.4. RESERVES.  The Trust may retain, as a permanent  reserve,  any
amounts which the Board of Trustees deems  reasonable,  in cash and in the types
of investments described above in Section 5.2 of this Article.

     SECTION 5.5. CHANGES IN INVESTMENT POLICIES AND OBJECTIVES.  Subject to the
investment  restrictions  in Section 5.6 and 5.7 of this Article,  a majority of
the  Independent  Trustees may alter any or all the  above-described  investment
policies if they determine such change to be in the best interests of the Trust.
Subject to the preceding  terms,  the Board of Trustees shall endeavor to invest
the Trust's assets in accordance with the investment  policies set forth in this
Article.

     SECTION 5.6. UNINVESTED ASSETS. To the extent that the Trust has assets not
otherwise invested in accordance with Section 5.1 of this Article,  the Board of
Trustees may invest such assets in the types of  investments  in which the Trust
is permitted to invest pursuant to Section 5.2 of this Article.

     SECTION 5.7. RESTRICTIONS. The Board of Trustees shall not:

     (a) invest in any foreign currency or bullion;

     (b) invest in  commodities  or  commodities  futures  contracts  other than
interest rate futures, when used solely for hedging purposes;

     (c) invest in real estate contracts of sale,  unless such contracts of sale
are in recordable form and are appropriately  recorded in the chain of title and
unless such investment is held as security for Mortgages made or acquired by the
Trust;

     (d) engage in any short sale;

     (e) invest in any security in any entity holding investments or engaging in
activities prohibited by the Declaration of Trust and these Bylaws;

     (f) issue "redeemable equity securities" (as defined in Section 2(a)(32) of
the  Investment  Company  Act  of  1940),  "face  amount   certificates  of  the
installment type" as defined in Section 2(a)(15)  thereof,  or "periodic payment
plan certificates" as defined in Section 2(a)(27) thereof;

     (g) invest more than 10% of its total assets in Unimproved Real Property or
mortgage loans on Unimproved Real Property;

     (h) issue  options or warrants to purchase its Shares to any Person  unless
(i) the exercise  price equals or exceeds the fair market value of the Shares on
the  date of grant  and  (ii) the  consideration  received  (which  may  include



                                       17
<PAGE>



services), in the judgment of the Independent Trustees, has a market value equal
or exceeding the value of such options or warrants on the date of grant;

     (i) issue  options or  warrants to purchase  its Shares to the  Advisor,  a
Trustee, a Sponsor or an Affiliate thereof,  unless such options or warrants (i)
are issued on the same terms as such options or warrants are sold to the general
public,  (ii) do not exceed an amount equal to 10% of the outstanding  Shares of
the Trust on the date of grant or (iii)  issued  pursuant to a plan  approved by
the Shareholders;

     (j)  commingle  the Trust  funds with those of any other  person or entity,
except that the use of a zero balance or clearing account shall not constitute a
commingling  of Trust  funds  and that  funds of the  Trust  and  funds of other
entities  sponsored by a Sponsor or its  Affiliates may be held in an account or
accounts  established  and  maintained  for the  purpose of making  computerized
disbursements  and/or  short-term  investments  provided  the  Trust  funds  are
protected  from  claims of such  other  entities  and  creditors  of such  other
entities;

     (k) except for investments  permitted by the Consent  Statement,  invest in
the equity Securities of any non-governmental  issuer,  including other REITs or
limited partnerships for a period in excess of 18 months; and provided, further,
that all joint ventures with affiliates of the Advisor,  a Trustee, a Sponsor or
Affiliate thereof must comply with the provisions of Section 5.1 of this Article
V;

     (l) make or  invest  in any  mortgage  loans  that are  subordinate  to any
mortgage or equity  interest of the Advisor,  Sponsor,  a Trustee or  Affiliates
thereof;  provided,  however,  that the  foregoing  shall not prohibit  loans to
subsidiaries of the Trust; or

     (m) sell  property to the  Sponsor,  the  Advisor,  a Trustee or  Affiliate
thereof,  except in connection  with a joint venture with an Affiliated  Program
permitted  under  Article V,  Section  5.1 if the Trust is required to grant the
Affiliated Program a right of first refusal.

     SECTION 5.8. TRANSACTIONS BETWEEN THE TRUST AND AFFILIATED PERSONS.  Except
for joint  ventures  with  Affiliated  Programs  as  provided  for in Article V,
Section  5.1, or  advisory  arrangements  with the  Advisor as  provided  for in
Article VI of the Declaration of Trust, any transaction  between the Trust and a
Sponsor,  the Advisor, a Trustee or Affiliates thereof shall require approval by
a majority of the Trustees,  including a majority of the  Independent  Trustees,
not otherwise  interested in such  transaction,  as being fair and reasonable to
the Trust and on terms and conditions not less favorable to the Trust than those
available from unaffiliated third parties.

     In the absence of fraud, no contract,  act or other transaction between the
Trust  and any  other  Person,  or in which  the  Trust is  interested,  that is
described in the preceding  paragraph,  shall be invalid,  void or voidable even
though (a) one or more of the Trustees or officers  are  directly or  indirectly
interested in, or connected with, or are trustees, partners, directors, officers
or retired officers of such other Person,  or (b) one or more of the Trustees or
officers of the Trust,  individually  or jointly with others,  is a party or are
parties to or directly or  indirectly  interested  in, or connected  with,  such
contract, act or transaction.

     SECTION 5.9.  TRUST'S  RIGHT TO BORROW  FUNDS.  The Trust is  authorized to
incur indebtedness up to the Debt Limitation.

     The Trust shall not borrow funds from the Sponsor,  the Advisor,  a Trustee
or Affiliate thereof unless a majority of the Trustees,  including a majority of
the Independent  Trustees,  not otherwise interested in such transaction approve
the  transaction as being fair and reasonable and no less favorable to the Trust
than  loans  between   unaffiliated   lenders  and  borrowers   under  the  same
circumstances.



                                       18
<PAGE>



                                   ARTICLE VI

                                     ADVISOR

     SECTION  6.1.  EMPLOYMENT.  The Board of Trustees  may retain an Advisor in
accordance with the provisions of the Declaration of Trust and these Bylaws.

     SECTION 6.2.  TERM. The Board of Trustees shall not enter into any Advisory
Agreement  with the Advisor  unless such contract has a term of no more than one
year. It shall be the duty of the Board of Trustees to evaluate the  performance
of the Advisor before entering into or renewing any Advisory  Agreement with the
Advisor.  The criteria  used by the Board of Trustees in its  evaluation  of the
Advisor  shall be  reflected  in the  minutes of the  meeting of  Trustees.  The
Advisory Agreement with the Advisor shall be terminable (i) without cause by the
Advisor or (ii) with or without cause by a majority of the Independent Trustees,
each  without  penalty,  and each  upon 60 days'  prior  written  notice  to the
non-terminating party. In the event of the termination of the Advisory Agreement
with the  Advisor,  the  Advisor  will  cooperate  with the  Trust  and take all
reasonable  steps requested to assist the Board of Trustees in making an orderly
transition  of the advisory  function.  The Trustees  shall  determine  that any
successor  Advisor  possesses  sufficient  qualifications  (a)  to  perform  the
advisory function for the Trust and (b) to justify the compensation provided for
in its Advisory Agreement.

     SECTION 6.3.  COMPENSATION.  The Independent  Trustees shall determine from
time to time but at  least  annually  that  the  compensation  which  the  Trust
contracts  to pay to the  Advisor is  reasonable  in  relation to the nature and
quality  of the  services  performed  and that such  compensation  is within the
limits  prescribed  by the NASAA  Statement  of  Policy  regarding  Real  Estate
Investment  Trusts in  effect  on the  effective  date of the  Prospectus.  Each
determination made by the Independent  Trustees concerning the reasonableness of
the  compensation  paid to the  Advisor  shall be recorded in the minutes of the
meeting of  Trustees  and shall be based on the factors set forth below and such
other factors as the Independent Trustees deem relevant:

     (a) the size of the advisory fee in relation to the size,  composition  and
profitability of the portfolio of the Trust;

     (b) the success of the Advisor in  generating  opportunities  that meet the
investment objectives of the Trust;

     (c) the rates  charged to other REITs and to investors  other than REITs by
advisors performing similar services;

     (d) additional  revenues realized by the Advisor and its Affiliates through
their relationship with the Trust,  including loan administration,  underwriting
or broker  commissions,  servicing,  engineering,  inspection  and  other  fees,
whether paid by the Trust or by others with whom the Trust does business;

     (e) the quality and extent of service and advice furnished by the Advisor;

     (f) the  performance  of the investment  portfolio of the Trust,  including
income,   conservation  or   appreciation  of  capital,   frequency  of  problem
investments and competence in dealing with distress situations; and

     (g) the  quality  of the  portfolio  of the  Trust in  relationship  to the
investments generated by the Advisor for its own account.

     The  Independent  Trustees shall review the  performance of the Advisor and
the compensation paid to it by the Trust to determine that the provisions of the
contract  with the Advisor are being  carried  out.  The  compensation  that any
Advisor  employed  by the Trust  shall be  entitled  to receive  for  serving as



                                       19
<PAGE>



investment  advisor shall consist of the Asset  Management  Fee,  payable as set
forth in the Advisory  Agreement.  The Advisor shall also be entitled to receive
reimbursement  for all  operating  expenses  described  in  Section  6.5 of this
Article. The Advisor shall also receive from the Trust, for services rendered to
the Trust,  the  additional  compensation  set forth in the Advisory  Agreement,
which compensation shall include, but shall not be limited to, acquisition fees,
property management fees, mortgage servicing fees, incentive fees and Shares.

     In the case of multiple Advisors,  incentive fees paid to such Advisors and
Affiliates  thereof shall be  distributed by a  proportional  method  reasonably
designed to reflect the value  added to the  Trust's  assets by each  respective
Advisor or Affiliate.

     The  Independent  Trustees  shall  determine from time to time but at least
annually  that the total fees and expenses of the Trust are  reasonable in light
of the investment  experience of the Trust, its Net Asset Value, its Net Income,
and the fees and expenses of other comparable advisors in real estate. Each such
determination shall be recorded in the minutes of the meeting of Trustees.

     SECTION 6.4. OTHER ACTIVITIES OF ADVISOR. The Advisor shall not be required
to administer the  investment  activities of the Trust as its sole and exclusive
function.  The Advisor may have other business interests and may engage in other
activities similar or in addition to those relating to the Trust,  including the
rendering  of services  and advice to other  Persons  (including  REITS) and the
management of other  investments  (including  investments of the Advisor and its
Affiliates).  The Board of  Trustees  may request the Advisor to engage in other
activities  which  complement the Trust's  investments  and to provide  services
requested by the  borrowers or  prospective  borrowers  from the Trust,  and the
Advisor may receive compensation or commissions therefor from the Trust or other
Persons.

     The Advisor shall seek out and present to the Trust whether through its own
efforts,  or those of third  parties  retained by it,  investment  opportunities
consistent  with the  investment  policies and  objectives of the Trust and such
investment  policies as the Trustees may adopt from time to time. Except for the
allocation  of  investment  opportunities  between the Trust and the  Affiliated
Programs as set forth in the  Prospectus,  the  Advisor  shall be  obligated  to
present an investment  opportunity to the Trust if (i) such  opportunity is of a
character which could be taken by the Trust, (ii) such opportunity is compatible
with the Trust's investment  objectives and policies and (iii) the Trust has the
financial resources to take advantage of such opportunity before the Advisor may
take advantage of such  opportunity  for its own account or present or recommend
it to others.  Subject  to the  limitations  contained  in this  Paragraph,  the
Advisor  shall be  protected  in taking for its own account or  recommending  to
others any such particular investment opportunity.

     SECTION  6.5.  LIMITATION  ON TOTAL  OPERATING  EXPENSES.  The annual Total
Operating  Expenses  of the Trust may not exceed the  greater  of: (i) 2% of the
Average Invested Assets of the Trust or (ii) 25% of the Trust's Net Income.  The
Independent  Trustees have the fiduciary  responsibility of limiting the Trust's
annual Total  Operating  Expenses to amounts that do not exceed the  limitations
described above. The Independent Trustees may, however,  determine that a higher
level of Total  Operating  Expenses  is  justified  for such  period  because of
unusual or non-recurring  expenses. Any such finding by the Independent Trustees
and the  reasons in support  thereof  shall be  recorded  in the  minutes of the
meeting of Trustees.  Within 60 days after the end of any fiscal  quarter of the
Trust for which Total  Operating  Expenses (for the 12 months then ended) exceed
2% of the Average Invested Assets of the Trust or 25% of the Trust's Net Income,
whichever is greater,  the Trust will send to Shareholders a written  disclosure
of such fact.  If the  Independent  Trustees  determine  that such higher  Total
Operating  Expenses  are  justified,   such  disclosure  will  also  contain  an
explanation  of  the  Independent  Trustees'   conclusion.   In  the  event  the
Independent  Trustees do not determine that such excess  expenses are justified,
the Advisor will  reimburse the Trust for the excess amount within 60 days after
the end of such period.

     SECTION 6.6. LIMITATION ON REAL ESTATE COMMISSIONS. If the Trust forecloses
on a property  servicing a Mortgage and sells such  property,  the Trust may pay
real estate  brokerage  fees which are  reasonable,  customary and  competitive,



                                       20
<PAGE>



taking  into   consideration  the  size,  type  and  location  of  the  property
("Competitive  Commission"),  which shall not in the aggregate exceed the lesser
of the Competitive  Commission or an amount equal to 6% of the gross sales price
of the property.  The amount of such fees payable to the Advisor,  a Trustee,  a
Sponsor or an Affiliate  thereof  shall not exceed the lesser of (i) one-half of
the  Competitive  Commission or (ii) three percent of the gross sales price of a
property and shall be paid only if such person provides a substantial  amount of
services in the sales effort.

     SECTION 6.7. INITIAL INVESTMENT BY AFFILIATES OF THE ADVISOR.  Prior to the
initial public offering of Shares  pursuant to the Prospectus,  the Advisor made
an Initial  Investment  of  $200,000  in the Trust by  acquiring  10,000  Common
Shares.  The Advisor may only sell Common  Shares  represented  by this  Initial
Investment through the market on which the Common Shares are normally traded.

                                   ARTICLE VII

                             SHARES AND SHAREHOLDERS

     SECTION 7.1.  CERTIFICATES;  SHARE LEDGER. The ownership of Shares shall be
recorded  on the books of the Trust or of a transfer  or  similar  agent for the
Trust. Certificates evidencing the Shares shall be issued to Shareholders within
a reasonable  time after a written  request for such  certificate is received by
the Trust. The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates,  including requiring the Shareholder  requesting
such issuance to pay the reasonable  expenses incurred in connection  therewith,
the use of facsimile signatures, the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar  agent
shall be  conclusive  as to who are the  Shareholders  and as to the  number  of
Shares of the Trust held from time to time by each such Shareholder.

     No  certificates  for  Shares  shall be issued in place of any  certificate
alleged to have been lost,  destroyed or wrongfully taken, except, if and to the
extent required by the Board of Trustees, upon:

          (i) production of evidence of loss, destruction or wrongful taking;

          (ii) delivery of a bond  indemnifying the Trust and its agents against
     any claim that may be made  against  it or them on  account of the  alleged
     loss,  destruction  or wrongful  taking of the replaced  certificate or the
     issuance of the new certificate;

          (iii) payment of the expenses of the Trust and its agents  incurred in
     connection with the issuance of the new certificate; and

          (iv)  compliance  with such other  reasonable  requirements  as may be
     imposed.

     SECTION  7.2.  TRANSFERS  OF SHARES.  Except as  otherwise  provided in the
Declaration of Trust,  Shares shall be  transferable on the records of the Trust
upon  presentment  to the  Trust or a  transfer  agent of such  evidence  of the
payment of transfer  taxes and  compliance  with other  provisions of law as the
Trust or its transfer agent may require.

     SECTION  7.3.  DISTRIBUTION  REINVESTMENT  PLAN.  The  Trustees may adopt a
distribution  reinvestment plan on such terms and conditions they shall approve,
which plan may be amended from time to time by the Trustees,  provided, however,
that such plan shall, at a minimum, provide for the following:



                                       21
<PAGE>



     (a) All material information  regarding the distribution to the Shareholder
and the effect of reinvesting such distribution,  including the tax consequences
thereof, shall be provided to the Shareholder at least annually; and

     (b) Each Shareholder  participating  in the Reinvestment  Plan shall have a
reasonable  opportunity to withdraw from the Reinvestment Plan at least annually
after receipt of the information required in subparagraph (a) above.

     SECTION 7.4. REPORTS. The Trust will mail or deliver, within 120 days after
the end of each fiscal year, to  Shareholders  as of a record date after the end
of the  Trust's  fiscal  year and each other  Person who  becomes a  Shareholder
between such record date and the date of mailing or delivery,  an annual  report
of the affairs of the Trust,  including annual financial statements of the Trust
(balance sheet,  statement of income or loss, statement of Shareholders' equity,
and statement of cash flows)  accompanied  by a report  containing an opinion of
independent  certified public accountants.  Such information will be prepared on
an accrual basis in accordance with generally  accepted  accounting  principles.
The Trust shall also include in its annual  report (i) the ratio of the costs of
raising capital during the period to the capital raised, (ii) full disclosure of
all  material  terms,   factors  and   circumstances   describing  any  and  all
transactions with the Advisor, a Trustee, a Sponsor or Affiliates thereof and of
fees,  commissions,  compensation  and other  benefits  paid or  accrued  to the
Advisor,  a  Trustee,  a Sponsor  or  Affiliates  thereof  for the  fiscal  year
completed,  showing the aggregate  amount paid or accrued to each  recipient and
the services  performed for such year (including fees or charges paid or accrued
to the Advisor,  a Trustee,  the Sponsor or Affiliates  thereof by third parties
doing  business  with the Trust) and (iii) a statement on  distributions  to the
Shareholders and their sources.  The Independent Trustees shall have the duty to
examine  and  comment  in  the  annual  report  on  the  fairness  of  any  such
transactions with the Advisor, a Trustee, the Sponsor or Affiliates thereof. The
Trustees,  including the Independent  Trustees,  shall take reasonable  steps to
insure  that the  requirements  of this  Section 5.9 are  satisfied  on a timely
basis.

                                  ARTICLE VIII

                               AMENDMENT OF BYLAWS

     The Board of Trustees  shall have the  exclusive  power to adopt,  alter or
repeal any provision of these Bylaws and to make new Bylaws.

                                   ARTICLE IX

                                  MISCELLANEOUS

     SECTION  9.1.  SEAL.  The trust  seal shall be  circular  in form and shall
contain the name of the Trust,  the year of its  creation  and the words  "TRUST
SEAL  MASSACHUSETTS." Said seal may be used by causing it or a facsimile thereof
to be impressed or affixed or otherwise reproduced.

     SECTION 9.2.  FISCAL YEAR. The fiscal year of the Trust shall be determined
by resolution of the Board of Trustees.

     SECTION 9.3. CHECKS. All checks,  drafts or other orders for the payment of
money, notes or other evidences of indebtedness  issued in the name of the Trust
shall be signed by such  officer or  officers,  or agent or agents of the Trust,
and in such manner,  as shall be  determined  from time to time by resolution of
the Board of Trustees.

     SECTION 9.4.  NOTICE AND WAIVER OF NOTICE.  Whenever any notice is required
by the Declaration of Trust or these Bylaws to be given, except as otherwise set
forth herein or the  Declaration of Trust,  personal  notice is not meant unless
expressly stated, and any notice so required shall be deemed to be sufficient if
given by  depositing  the  same in the  United  States  mail,  postage  prepaid,
addressed  to the person  entitled  thereto at his  address as it appears on the
records of the Trust,  and such notice shall be deemed to have been given on the



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day of such mailing.  Shareholders not entitled to vote shall not be entitled to
receive notice of any meetings or solicitation of Shareholder  consent without a
meeting except as otherwise provided by statute.

     Whenever  any notice is required to be given  under the  provisions  of any
law, or under the  provisions of the  Declaration  of Trust or these  Bylaws,  a
waiver  thereon in writing  signed by the  person or  persons  entitled  to said
notice,  whether before or after the time stated therein, shall be deemed proper
notice.

     SECTION 9.5. SUCCESSORS IN INTEREST. These Bylaws shall be binding upon and
inure to the benefit of the undersigned Trustees and their successors,  assigns,
heirs,  distributees and legal  representatives,  and every  Shareholder and his
successors, assigns, heirs, distributees and legal representatives.

     SECTION 9.6.  SEVERABILITY.  If any provision of these Bylaws shall be held
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  attach only to such  jurisdiction  and shall not in any
manner affect or render  invalid or  unenforceable  such  provision in any other
jurisdiction or any other provision of these Bylaws in any jurisdiction.



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