<PAGE>   1
             ==================================================

                              DECLARATION OF TRUST



                             _____________________


                               LIBERTE' INVESTORS
                (FORMERLY LOMAS & NETTLETON MORTGAGE INVESTORS)

                             _____________________



                                 JUNE 26, 1969

             ==================================================

                      (AS AMENDED AND RESTATED TO REFLECT
                    THE AMENDMENT, DATED SEPTEMBER 19, 1969;
                 THE SECOND AMENDMENT, DATED JANUARY 24, 1986;
                  THE THIRD AMENDMENT, DATED JANUARY 19, 1989;
                 THE FOURTH AMENDMENT, DATED DECEMBER 18, 1992;
                 THE FIFTH AMENDMENT, DATED MARCH 31, 1994 AND
                 THE SIXTH AMENDMENT, DATED NOVEMBER 22, 1995.)
<PAGE>   2



                              TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                            PAGE
<S>                <C>                                                                                      <C>
                                                        ARTICLE 1.
                                               NAME AND TITLE TO PROPERTY.

Section 1.1.       Name, title to property, definition of Trust Property  . . . . . . . . . . . . . . .     1
Section 1.2.       Massachusetts business trust, not partnership or other entity  . . . . . . . . . . .     2

                                                        ARTICLE 2.
                                                        TRUSTEES.

Section 2.1.       Definition of Trustees, number of Trustees, definition of Majority of Trustees   . .     2
Section 2.2.       Classes of Trustees, time and method of election, qualification  . . . . . . . . . .     3
Section 2.3.       Resignation of a Trustee, time and manner resignation takes effect, removal of
                   a Trustee        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4
Section 2.4.       Termination of office of Trustee because of bankruptcy, incompetence, death,
                   resignation or removal, manner of filling vacancy  . . . . . . . . . . . . . . . . .     4
Section 2.5.       Election of President, Secretary and Treasurer, appointment of other officers,
                   compensation of Trustees and officers  . . . . . . . . . . . . . . . . . . . . . . .     5
Section 2.6.       Adoption, amendment and repeal of by-laws  . . . . . . . . . . . . . . . . . . . . .     5
Section 2.7.       Meetings of Trustees, method of calling meetings, vote required to take action
                   by Trustees, quorum  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5
Section 2.8.       Committees of Trustees, delegation of powers and duties to committees,
                   Trustees, officers and employees   . . . . . . . . . . . . . . . . . . . . . . . . .     6
Section 2.9.       Preparation, contents and delivery of Annual Report and interim reports  . . . . . .     7
Section 2.10.      Acquisition and disposition of Shares by Trustees, officers, employees and agents  .     7
Section 2.11.      Operation of Board of Trustees, meetings   . . . . . . . . . . . . . . . . . . . . .     8
Section 2.12.      Actions taken by Trustees or committees by written authorization without
                   a meeting        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8



                                      i
</TABLE>

<PAGE>   3




<TABLE>
<S>                <C>                                                                                     <C>
                                                        ARTICLE 3.
                                                   POWERS OF TRUSTEES.

Section 3.1.       Exclusive power to manage Trust.   . . . . . . . . . . . . . . . . . . . . . . . . .     9
Section 3.2.       General investment power of Trustees, grant of discretionary power.  . . . . . . . .     9
Section 3.3.       Power to invest in Real Property.  . . . . . . . . . . . . . . . . . . . . . . . . .    10
Section 3.4.       Power to sell, rent, lease, subdivide, grant easements, make dedications, deal
                   in oil and gas rights, etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11
Section 3.5.       Power to borrow money.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11
Section 3.6.       Power to make commitments and guaranties.  . . . . . . . . . . . . . . . . . . . . .    12
Section 3.7.       Power to deal with banks and trust companies.  . . . . . . . . . . . . . . . . . . .    12
Section 3.8.       Power to pay taxes and assessments.  . . . . . . . . . . . . . . . . . . . . . . . .    12
Section 3.9.       Power to satisfy debts and claims.   . . . . . . . . . . . . . . . . . . . . . . . .    12
Section 3.10.      Power to collect claims, bring lawsuits, foreclose Mortgages, participate in
                   court actions, etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    13
Section 3.11.      Power to determine accounting methods.   . . . . . . . . . . . . . . . . . . . . . .    13
Section 3.12.      Power to determine fiscal year.  . . . . . . . . . . . . . . . . . . . . . . . . . .    14
Section 3.13.      Power to determine what is income or corpus.   . . . . . . . . . . . . . . . . . . .    14
Section 3.14.      Power to make appraisals and value Trust assets.   . . . . . . . . . . . . . . . . .    14
Section 3.15.      Power to appoint depositary for records.   . . . . . . . . . . . . . . . . . . . . .    15
Section 3.16.      Power to delegate conduct of business to Manager and others, approval of terms of
                   contracts with Manager.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
Section 3.17.      Power to purchase insurance against liability of Trustees and others acting for
                   the Trust.       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18
Section 3.18.      Power to pay pensions and adopt pension, profit-sharing or other thrift plans.   . .    18
Section 3.19.      Power to adopt and use seal.   . . . . . . . . . . . . . . . . . . . . . . . . . . .    18
Section 3.20.      Power to appoint a resident agent in Massachusetts.  . . . . . . . . . . . . . . . .    18
Section 3.21.      Power to do all things necessary and proper, presumption in favor of grant of
                   power to Trustees.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    19

                                                        ARTICLE 4.
                                                    INVESTMENT POLICY.

Section 4.1.       Definitions of various terms.  . . . . . . . . . . . . . . . . . . . . . . . . . . .    19
</TABLE>


                                       ii
<PAGE>   4




<TABLE>
<S>                <C>                                                                                     <C>
Section 4.2.       Primary policy and criteria to invest in Construction and Development Loans and
                   Intermediate Term Loans.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21
Section 4.3.       Secondary policy and criteria to invest in Long Term Loans and Warehouse Loans.  . .    22
Section 4.4.       Authorization to invest not more than 15% of capital, surplus and subordinated
                   debt in equities and entities owning interests in Real Property and Mortgage Loans
                   secured by other than First Mortgages.   . . . . . . . . . . . . . . . . . . . . . .    23
Section 4.5.       Authority to invest in Government obligations and other securities.  . . . . . . . .    23
Section 4.6.       Discretionary power of Trustees to modify investment policy and criteria.  . . . . .    24
Section 4.7.       Trustees' power to pursue any remedies permitted by law when obligor is in default
                   and other general powers when default arises.  . . . . . . . . . . . . . . . . . . .    24

                                                        ARTICLE 5.
                                              SHARES OF BENEFICIAL INTEREST.

Section 5.1.       Interest of beneficiaries divided into Shares evidenced by certificates, definition
                   of Shares and Shareholders.  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    24
Section 5.2.       Intention to create relationship only of Trustees and beneficiaries.   . . . . . . .    26
Section 5.3.       Right of Shareholder to receive certificate for number of Shares, signing of
                   certificates, transfer agent and registrar, facsimile signatures.  . . . . . . . . .    26
Section 5.4.       Right of Trustees to issue Shares without vote or other acquiescence of
                   Shareholders, right to issue fractional Shares.  . . . . . . . . . . . . . . . . . .    27
Section 5.5.       Register of Shareholders, only registered Shareholders to enjoy rights of
                   Shareholders.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    27
Section 5.6.       Trustees' powers to employ transfer agents and registrars, power to deposit blank
                   certificates with transfer agents.   . . . . . . . . . . . . . . . . . . . . . . . .    28
Section 5.7.       Restrictions on Transfer of Shares to preclude the application of the Internal
                   Revenue Code's Section 382 limitation and to preserve other tax attributes.  . . . .    28
Section 5.8.       Personal representatives and other successors in interest of Shareholders.   . . . .    33
Section 5.9.       Shares held jointly or in fiduciary capacity.  . . . . . . . . . . . . . . . . . . .    33

</TABLE>



                                      iii
<PAGE>   5




<TABLE>
<S>                <C>                                                                                     <C>
Section 5.10.      Trustees and agents entitled to act on the basis of information in the record.   . .    33
Section 5.11.      Replacement of lost or destroyed certificates.   . . . . . . . . . . . . . . . . . .    34
Section 5.12.      Payment of dividends.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    34
Section 5.13.      Trustees to furnish Shareholders with statement advising as to source of
                   funds distributed.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    34
Section 5.14.      Notice to Shareholders deemed served if mailed.  . . . . . . . . . . . . . . . . . .    35
Section 5.15.      Right of Trustees to purchase Shares on behalf of Trust, no dividends on Shares
                   held by Trust.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    35
Section 5.16.      Trustees' capacity to purchase Shares individually.  . . . . . . . . . . . . . . . .    35
Section 5.17.      Obligation of Shareholders to disclose information to Trustees regarding
                   ownership of Shares, power of Trustees to acquire Shares to comply with Internal
                   Revenue Code.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    35
Section 5.18.      Power of Trustees to issue Warrants, terms on which Warrants may be issued.  . . . .    36
Section 5.19.      Shareholders have no preemptive rights.  . . . . . . . . . . . . . . . . . . . . . .    37

                                                        ARTICLE 6.
                                                 RIGHTS OF SHAREHOLDERS.

Section 6.1.       Ownership of Trust Property and control of Trust exclusively in Trustees,
                   Shareholders have only beneficial interest.  . . . . . . . . . . . . . . . . . . . .    37
Section 6.2.       Shares are personal property, limitation of rights of personal representatives.  . .    37
Section 6.3.       Annual Meeting of Shareholders to be held after delivery of Annual Report,
                   calling special meetings of Shareholders.  . . . . . . . . . . . . . . . . . . . . .    37
Section 6.4.       Notice of Shareholders' meeting.   . . . . . . . . . . . . . . . . . . . . . . . . .    38
Section 6.5.       Quorum at Shareholders' meeting.   . . . . . . . . . . . . . . . . . . . . . . . . .    38
Section 6.6.       Action of Shareholders not binding on Trustees, with certain exceptions.   . . . . .    38
Section 6.7.       Determination of Shareholders eligible to vote, closing of transfer books.   . . . .    38
Section 6.8.       Right of Shareholders to vote by proxy, filing of proxy, voting rights of
                   various persons.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    39
Section 6.9.       Proxies, form of proxies, and proxy solicitation.  . . . . . . . . . . . . . . . . .    40

</TABLE>




                                       iv
<PAGE>   6




<TABLE>
<S>                <C>
Section 6.10.      Prohibition of sale, lease, exchange or other disposition of more than 50% of Trust
                   Property without Shareholders' approval, except as security for any borrowing.   . .    40
Section 6.11.      Right of Shareholders and securities administrators to inspect books.  . . . . . . .    40
Section 6.12.      Rights of Holders of Preferred Stock.  . . . . . . . . . . . . . . . . . . . . . . .    40

                                                        ARTICLE 7.
                           LIABILITY OF TRUSTEES, SHAREHOLDERS AND OFFICERS, AND OTHER MATTERS.

Section 7.1.       Exculpation of Trustees and officers.  . . . . . . . . . . . . . . . . . . . . . . .    41
Section 7.2.       Limitation of liability of Shareholders, Trustees and officers.  . . . . . . . . . .    41
Section 7.3.       Express exculpatory clauses in instruments.  . . . . . . . . . . . . . . . . . . . .    41
Section 7.4.       Indemnification and reimbursement of Trustees, officers, employees or agents.  . . .    42
Section 7.5.       Right of Trustees, Manager, officers, employees or agents to own property or to
                   engage in business.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    42
Section 7.6.       Transactions between the Trustees and the Trust.   . . . . . . . . . . . . . . . . .    43
Section 7.7.       Restriction of duties and liabilities.   . . . . . . . . . . . . . . . . . . . . . .    44
Section 7.8.       Persons dealing with Trustees or officers.   . . . . . . . . . . . . . . . . . . . .    45
Section 7.9.       Reliance.        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    45
Section 7.10.      No bond required of Trustees, Manager, officers, employees or agents.  . . . . . . .    45

                                                        ARTICLE 8.
                                            AMENDMENT OR TERMINATION OF TRUST.

Section 8.1.       Power to amend or terminate Trust.   . . . . . . . . . . . . . . . . . . . . . . . .    46
Section 8.2.       Power to organize corporation or other entity to take over Trust Property.   . . . .    47
Section 8.3.       Effect of Internal Revenue Code on power to amend or terminate.  . . . . . . . . . .    47
Section 8.4.       Power to organize other corporations or business trusts.   . . . . . . . . . . . . .    48
Section 8.5.       Disposition of Trust Property upon termination.  . . . . . . . . . . . . . . . . . .    48
Section 8.6.       Effect of Reorganization under Federal laws and Implementation of Plan of 
                   Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    48
</TABLE>


                                       v
<PAGE>   7




<TABLE>
<S>                <C>                                                                                     <C>
                                                        ARTICLE 9.
                                                      MISCELLANEOUS.

Section 9.1.       Laws of Massachusetts shall govern, recording of Declaration of Trust and
                   amendments.      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    50
Section 9.2.       Offices of the Trust.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    50
Section 9.3.       Execution in one or more counterparts.   . . . . . . . . . . . . . . . . . . . . . .    50
Section 9.4.       Certificate of Trustees or Secretary conclusive evidence in favor of third parties.     50
Section 9.5.       Third parties may rely on recorded Declaration of Trust.   . . . . . . . . . . . . .    51
Section 9.6.       Execution and effect of Restated Declaration of Trust.   . . . . . . . . . . . . . .    51
Section 9.7.       Inclusiveness of plural, singular, and genders, descriptive headings, etc. for
                   convenience only.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51
Section 9.8.       Severability.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    51

                                                       ARTICLE 10.
                                                    DURATION OF TRUST.
</TABLE>




                                       vi
<PAGE>   8





                              INDEX TO DEFINITIONS
<TABLE>
<CAPTION>
                                                                                                       SECTION
<S>                                                                                                       <C>
"Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Annual Meeting". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       6.3
"Annual Report" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.9
"Appraisal" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Chairman of the Board of Trustees" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.5
"Construction Loans"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Conventional Loans". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Declaration" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     Preamble
"Declaration of Trust". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     Preamble
"Development Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"FHA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"FHA Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"First Mortgage"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"First Mortgage Loans". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Gap Loan Commitments". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Initial Transferor". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Internal Revenue Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     Preamble
"Intermediate Term Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Liberte Investors" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       1.1
"Long Term Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Majority of Trustees". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.1
"Manager" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       3.16
"Mortgage". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Mortgage Loans". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Ownership Interest Percentage" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"President" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.5
"Prohibited Distributions". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Prohibited Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Purported Acquiror". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Registry". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.2
"Resale Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Restated Declaration of Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       9.6
"Sales Proceeds". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Secretary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.5
"Shareholders". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.1
"Shares". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.1


</TABLE>



                                      vii
<PAGE>   9




<TABLE>
<S>                                                                                                       <C>
"Takeout" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Transfer". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Transferee". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.7
"Treasurer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.5
"Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       1.1
"Trustees". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       2.1
"Trust Property". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       1.1
"VA". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"VA Loans". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.1
"Warehouse Loans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       4.3
"Warrants". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5.18

</TABLE>




                                      viii
<PAGE>   10




                              DECLARATION OF TRUST

                                       OF

                      LOMAS & NETTLETON MORTGAGE INVESTORS

                   This DECLARATION OF TRUST ("Declaration" or "Declaration of
Trust") made this 26th day of June, 1969, by Gene H. Bishop, N. Preston Breed,
James Callery, J. D. Francis, Jess Hay, H. O. Johnson, James H. Jones and
Albert N.  Rohnstedt;
                                  WITNESSETH:

                   WHEREAS, the Trustees desire to create a trust for the
purpose of investing in (1) notes, bonds and other obligations, secured by
Mortgages on Real Property and (2) in Real Property and other interests
therein; and

                   WHEREAS, the Trustees desire that the trust qualify as a
"real estate investment trust" under the provisions of Sections 856 through 858
of the Internal Revenue Code of 1954 and the Regulations issued thereunder, as
heretofore or hereafter amended (the "Internal Revenue Code"); and

                   WHEREAS, it is proposed that the beneficial interest in the
trust be divided into transferable shares evidenced by certificates of
beneficial interest as hereinafter provided;

                   Now, THEREFORE, the Trustees hereby declare that they will
hold all property of every type and description which they are acquiring or may
hereafter acquire as such Trustees, together with the proceeds thereof, in
trust, to manage and dispose of the same for the benefit of the holders from
time to time of the Shares being issued and to be issued hereunder and in the
manner and subject to the stipulations contained herein, which are:

                                   ARTICLE 1.

                          NAME AND TITLE TO PROPERTY.

                   SECTION 1.1.  Name, title to property, definition of Trust
Property.  The trust created by this Declaration of Trust is herein referred to
as the "Trust", and shall be known by the name "Liberte Investors".  So far as
may be practicable, legal and convenient, the





                                       1
<PAGE>   11




affairs of the Trust shall be conducted and transacted under that name, which
name shall not refer to the Trustees individually or personally or to the
beneficiaries or Shareholders of the Trust, or to any officers, employees, or
agents of the Trust.  Under circumstances in which the Trustees determine that
the use of the name "Liberte Investors" is not practicable, legal or
convenient, they may as appropriate use their names with suitable reference to
their trustee status, or some other suitable designation, or they may adopt
another name under which the Trust may hold property or operate in any state,
which name shall not, to the knowledge of the Trustees, refer to beneficiaries
or Shareholders of the Trust.  Legal title to all the property subject from
time to time to this Declaration of Trust (hereinafter called the "Trust
Property") shall be transferred to, vested in, and held by the Trustees, as
joint tenants with right of survivorship as Trustees of this Trust, except that
the Trustees shall have the power to cause legal title to any property of this
Trust to be held by and/or in the name of one or more of the Trustees, or any
other person as nominee, on such terms, in such manner, and with such powers as
the Trustees may determine, provided that the interest of the Trust therein is
appropriately protected.  The Trustees shall have the power to hold securities
in bearer form.

                   SECTION 1.2.  Massachusetts business trust, not partnership
or other entity.  The Trust shall be of the type commonly termed a
Massachusetts business trust and shall not be a general partnership, limited
partnership, joint stock association or corporation.  The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be solely in that
capacity in accordance with the rights conferred upon them hereunder.  Neither
the Trustees nor the Shareholders, nor any of them, shall for any purpose be,
or be deemed to be, partners or members of an association.

                                   ARTICLE 2.

                                   TRUSTEES.

                   SECTION 2.1.  Definition of Trustees, number of Trustees,
definition of Majority of Trustees.  The signatories to this Declaration of
Trust, so long as they shall continue in office in accordance with the terms
hereof, and all other persons who at the time in question have been duly
elected or appointed as trustees in accordance with the provisions hereof and
are then in office, are herein referred to as the "Trustees."  The number of
trustees shall be fixed by, or in the manner provided in, the by-laws, but in
no case less than three (3) nor more than seven (7).  At least a majority of
the Trustees shall be persons





                                       2
<PAGE>   12




who shall not be an officer, director or employee of the Manager or any parent
or subsidiary thereof and who shall not individually be the holder of more than
one-half per cent (1/2%) of any class of securities of the Manager or any
parent or subsidiary thereof, directly or indirectly through the members of the
immediate family thereof or corporations or other  entities in which such
Trustee shall own an equity interest of ten percent (10%) or more, provided,
that upon the death, resignation or removal of any Trustee who shall not be a
member of such majority, this requirement shall not be applicable for a period
of sixty (60) days.  A Trustee shall be an individual at least twenty-one (21)
years of age who is not under legal disability.  No increase or decrease in the
number of trustees shall be effected, except in a manner which will not result
in any class of trustees containing more than one more trustee than any other
class.  Whenever a vacancy in the number of trustees shall occur, until such
vacancy is filled as provided in Section 2.4, the Trustee or Trustees
continuing in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by this Declaration of Trust.  The term "Majority of the Trustees"
whenever used herein shall mean more than one-half (1/2) of the total number of
Trustees then in office when three or more Trustees are then in office, and
shall mean one Trustee if only one Trustee is at the time in office, and shall
mean both Trustees if only two Trustees are then in office.

                   SECTION 2.2.  Classes of Trustees, time and method of
election, qualification.  The trustees shall be divided into three classes,
each consisting of not less than one (1) nor more than four (4) individuals.
Of the three Trustees who shall continue to qualify as Trustees after the Fifth
Amendment to the Declaration of Trust becomes effective (all of whom have an
address in care of the principal executive offices of the Trust), one class of
Trustees shall consist of Edward W. Rose, III, who shall continue to serve
until the 1994 Annual Meeting of Shareholders and until his successor shall
have been elected and qualified; another class shall consist of Gene H. Bishop,
who shall continue to serve until the 1995 Annual Meeting of Shareholders and
until his successor shall have been elected and qualified; and a third class
shall consist of Robert Ted Enloe, III, who shall continue to serve until the
1996 Annual Meeting of Shareholders and until his successor shall have been
elected and qualified.  At each Annual Meeting of Shareholders commencing with
the first Annual Meeting of Shareholders, one class of trustees shall be
elected to hold office until the Annual Meeting of Shareholders that is
approximately three years following the Annual Meeting of Shareholders at which
they were elected and until their successors shall have been elected and
qualified.  Trustees may be reelected.  Election of trustees at an





                                       3
<PAGE>   13




Annual Meeting shall be determined by a plurality of the votes cast by the
holders of the Shares present in person or by proxy at such Annual Meeting.
Cumulative voting of Shares for the election of Trustees is expressly denied.
A Trustee so elected shall not become qualified unless and until a certificate
as to the due notification and holding of the meeting and accomplishment of the
vote, bearing his acceptance shall have been acknowledged by a person who had
been a Trustee prior to such election (which certificate shall, as soon as
reasonably practicable after its execution, be filed of record in the Registry
of Deeds of Suffolk County, or of such County as may be the location of the
principal office of the Trust in Massachusetts from time to time (hereinafter
called the "Registry")).  In the event of a change in the fiscal year of the
Trust with a resultant change in the date of the Annual Meeting, of
Shareholders, no election of Trustees shall be held if less than 183 days have
elapsed since the date of the last previous Annual Meeting of Shareholders.

                   SECTION 2.3.  Resignation of a Trustee, time and manner
resignation takes effect, removal of a Trustee.  Any Trustee may resign his
trusteeship by instrument in writing signed by him and delivered or mailed to
the President or Secretary, and such resignation shall take effect immediately
or at a later date according to the terms of the instrument.  The Trustees, by
action of two-thirds (2/3) of the Trustees then in office voting for such
removal (which action shall be taken only by vote at a meeting and not by
authorization without a meeting, anything in Section 2.12 to the contrary
notwithstanding), may remove any Trustee at any time with or without cause.
Any Trustee may be removed at any time by the vote of the holders of two-thirds
(2/3) of the outstanding Shares entitled to vote thereon.

                   SECTION 2.4.  Termination of office of Trustee because of
bankruptcy, incompetence, death, resignation or removal, manner of filling
vacancy.  The term of office of a Trustee shall terminate and a vacancy shall
occur in the event of the bankruptcy, adjudicated incompetence, death,
resignation or removal of a Trustee.  No such vacancy shall operate to annul or
terminate the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust.  In the case of a vacancy created in such a
manner, or created by an increase in the number of trustees, a Majority of the
Trustees continuing in office may fill such vacancy by appointing such person
as they, in their absolute discretion, shall see fit, or such vacancy may be
filled by the Shareholders at the next Annual Meeting of Shareholders. In the
case of a vacancy created by any cause,





                                       4
<PAGE>   14




other than one created by an increase in the number of Trustees, such vacancy
shall be filled for the unexpired portion of the term of the Trustee whose
place is being filled, which term may extend beyond the next succeeding Annual
Meeting of Shareholders.  Vacancies shall be filled in a manner consistent with
the requirements of Section 2.1 hereof.  The Trust Property shall vest in the
new Trustee jointly with the continuing or surviving Trustees upon the filing
of a certificate to that effect, bearing acceptance by the newly appointed
person and acknowledged by a person who had been a Trustee prior to such
appointment (which certificate shall, as soon as reasonably practicable after
its execution, be filed of record in the Registry).

                   SECTION 2.5.  Election of President, Secretary and
Treasurer, appointment of other officers, compensation of Trustees and
officers.  The Trustees may elect from among their number a Chairman of the
Board of Trustees and shall annually elect from among their number a President
of the Trust.  The Trustees shall also annually elect a Secretary and a
Treasurer of the Trust, who need not be Trustees.  The Trustees may elect or
appoint, from among their number or otherwise, or may authorize the President
to appoint, such other officers or agents, who shall have such powers duties
and responsibilities, and who shall hold office for such periods as may be
determined by the Trustees or by the by-laws.  The Trustees shall fix the
compensation of all officers, may receive reasonable compensation for their
general services as Trustees and officers hereunder, and may pay themselves or
any one or more of themselves such compensation for special services, legal or
otherwise, as they in good faith may deem reasonable.

                   SECTION 2.6.  Adoption, amendment and repeal of by-laws.  A
Majority of the Trustees may adopt and from time to time amend or repeal
by-laws for the conduct of the business of the Trust, and in such by-laws may
define the duties of the Trust's officers, employees and agents.

                   SECTION 2.7.  Meetings of Trustees, method of calling
meetings, vote required to take action by Trustees, quorum.  An annual meeting
of the Trustees shall be held without other notice than this Section 2.7,
immediately after and at the same place as, the Annual Meeting of Shareholders.
Other meetings of the Trustees may be called by the Chairman of the Board of
Trustees, if any, the President or any two Trustees.  Meetings of the Trustees
shall be held at such place as may be specified in or determined in accordance
with the by-laws, and the notice of a meeting shall state the place, as well as
the time,





                                       5
<PAGE>   15




thereof.  Notice of a meeting shall be given by certified or registered mail or
by telegram or delivered personally, or in the manner more specifically set
forth in the by-laws.  If notice is given by mail, it shall be mailed not later
than the fourth business day preceding the meeting and if by telegram or
personal delivery, such telegram shall be sent or delivery made not later than
the second business day preceding the meeting (excluding from such computation
both cases the day of the meeting itself.)

                   A Majority of the Trustees shall constitute a quorum for the
transaction of business at any meeting of the Trustees, but if less than such
Majority is present at a meeting, a majority of the Trustees present may
adjourn the meeting from time to time without further notice.  If a quorum is
once present to hold a meeting, it shall not be broken by the subsequent
withdrawal or departure of any Trustee.  The act of the majority of the
Trustees present at a meeting at which a quorum is present shall be the act of
the Trustees and shall have the same effect as if assented to by all, except
where any action is required by the terms of any provision of this Declaration
of Trust to be taken by a Majority of the Trustees or by two-thirds (2/3) of
the Trustees, the affirmative vote of such Majority or two-thirds (2/3), as the
case may be, shall constitute the act of the Trustees and shall have the same
effect as if assented to by all.

                   Any notice hereinabove in this Section 2.7 provided for may
be waived at any time, whether before or after the event, by written waiver, a
signed copy of which waiver shall be inserted in the minute book, together with
the minutes of the meeting.  The attendance of a Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Trustee attends a
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting has not been lawfully called or convened.

                   Any deed, Mortgage, evidence of indebtedness or other
instrument, agreement or document of any character, whether similar or
dissimilar, executed by one, or more of the Trustees, when authorized at a
meeting or by written authorization without a meeting in accordance with the
provisions of Section 2.12, shall be valid and binding upon the Trustees and
the Trust.

                   SECTION 2.8.  Committees of Trustees, delegation of powers
and duties to committees, Trustees, officers and employees.  The Board of
Trustees may, in its discretion, by resolution passed by a Majority of
Trustees, designate from among its members one or more committees which shall
consist of two or more Trustees.  The Board may designate one or more Trustees
as alternate members of any such committee, who may replace any absent or
disqualified member at any meeting of the committee.  Such





                                       6
<PAGE>   16




committees shall have and may exercise such powers as shall be conferred or
authorized by the resolution appointing them.  A majority of any such committee
may determine its action and fix the time and place of its meetings, unless the
Board of Trustees shall otherwise provide.  The Board of Trustees by resolution
passed by a Majority of Trustees, may at any time change the membership of any
such committee, fill vacancies in it, or dissolve it.  The by-laws, or a
majority of Trustees, may authorize any one or more of the Trustees, or any one
or more of the Officers or employees or agents of the Trust, on behalf of the
Trust, to exercise and perform any and all powers granted to the Trustees, and
to discharge any and all duties imposed upon the Trustees, and to do any acts
and to execute any instruments deemed by such person to be necessary or
appropriate to exercise such powers or to discharge such duties, and to
exercise his own sound judgment in so doing.

                   SECTION 2.9  Preparation, contents and delivery of Annual
Report and interim reports.  The Trustees shall cause to be prepared within 120
days after the end of every fiscal year, an Annual Report (herein referred to
as the "Annual Report") of the affairs of the Trust, including a statement of
the income and expenses of the Trust based on the books of account of the
Trust.  If, in the opinion of the Trustees, such statement fails to meet the
requirements of any governmental authority or agency having jurisdiction over
the Trust, or of any securities exchange on which the Shares are listed, the
Trustees shall in addition include in said Annual Report a statement of income
and expenses which will, in their sole discretion, meet such requirements.
Said Annual Report shall contain a balance sheet and statement of surplus, both
as of the end of the fiscal year, consistent with either of such statements of
income and expenses, as determined by the Trustees.  Said Annual Report shall
also include an opinion on the financial statements of an independent certified
public accountant based on an examination of the books and records of the Trust
not materially limited in scope and made in accordance with generally accepted
auditing standards and procedures.  A copy of the Annual Report shall be
forwarded to each Shareholder within 120 days after the end of each fiscal
year.  In addition, commencing after the close of the first full quarter of the
first full fiscal year of the Trust, the Trustees shall furnish to the
Shareholders within 60 days after the close of that quarter and of each quarter
thereafter, other than the last fiscal quarter of the fiscal year, an interim
report containing a current balance sheet, which may be unaudited, and a
summary statement of income and expenses of the Trust for such fiscal quarter,
which may be unaudited, and such other pertinent information regarding the
Trust and its activities in the quarter covered by the report as the Trustees
may deem appropriate.





                                       7
<PAGE>   17




                   SECTION 2.10.  Acquisition and disposition of Shares by
Trustees, officers, employees and agents.  Any Trustee, officer, employee or
agent of the Trust may acquire, hold and sell Shares or other securities issued
by the Trust for his personal account, either in his individual name, or in
a fiduciary capacity, jointly with other persons, as a member of a firm or
association or otherwise, without being thereby disqualified as a Trustee,
officer, employee or agent of the Trust, and while so holding any Shares for
his personal account shall be entitled to the same rights and privileges as
other Shareholders.  Any Trustee, officer, employee or agent of the Trust
(including any person, firm, corporation or other entity in which such Trustee,
officer, employee or agent may be interested as a partner, officer, director,
stockholder, employee or otherwise) may purchase as underwriter or otherwise,
and may make a market in, Shares or other securities issued by the Trust for
public offering, in accordance with a Registration Statement filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended; and the Trust may pay to any person, firm, corporation or other entity
(including any one or more Trustees, officers, employees or agents of the Trust
or in which he or they may be interested as a partner, officer, director,
stockholder, (employee, or otherwise) commissions or fees for any underwriting
of any such public offering of Shares or other securities by the Trust or for
the so-called "private placement" of Shares or other securities for the Trust,
and for the rendition of services to the Trust in connection with any Shares or
other securities offered by the Trust by private or public offering, if (a)
such interest or connection is disclosed or known to the Trustees and (b) a
majority of the disinterested Trustees make, approve or ratify the payment of
such commission or fees.

                   SECTION 2.11.  Operation of Board of Trustees, meetings.
The business and affairs of the Trust shall be managed by its Board of Trustees
which shall govern the business and affairs of the Trust in a manner similar to
a Board of Directors of a corporation organized and in good standing under the
Laws of the Commonwealth of Massachusetts.

                   The meetings of the Trustees may be held either within or
without the Commonwealth of Massachusetts.  Any Trustee may participate in a
meeting of the Board of Trustees, or any committee thereof, by conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other at the same time.  A trustee's
participation by such means shall constitute presence in person at any such
meeting.

                   The Trustees shall keep regular minutes of their meetings,
or of actions taken without a meeting, as herein provided.





                                       8
<PAGE>   18




                   SECTION 2.12.  Actions taken by Trustees or committees by
written authorization without a meeting.  Any action which could be taken at a
meeting of the Trustees or any committee thereof may be taken by a written
authorization without a meeting upon compliance with the provisions of this
Section 2.12.  Notice of a proposal to take any action by written authorization
without a meeting, specifying in reasonable detail the action proposed to be
taken by such written authorization, shall be given in the same manner as
notices of meetings.  Such a notice shall specify the date on which the
proposed action by written authorization is to be taken, which date shall be
not less than the fourth business day after the mailing of the notice if notice
is given by mail or the second business day if notice is given by telegram or
personal delivery (excluding in both cases for purposes of such computation the
day on which the notice is mailed, sent by telegram or delivered personally).
If prior to the date specified in such notice as the date on which the action
in question is proposed to be taken by written authorization, any two Trustees
(or in the case of a committee, any member of the committee) shall have given
to the other Trustee (or, in the case of a committee, to the other members of
the committee) by telegram or personal delivery, notice of the calling of a
meeting to consider the action proposed to be taken by written authorization
(which notice shall specify as the date of such meeting the second business day
following the telegraphing or personal delivery thereof), then the action in
question may not be taken by written authorization and shall be taken only if
approved at the meeting in accordance with the foregoing provisions relating to
the taking of action at meetings.  If no two Trustees (or in the case of a
committee, no member of the committee) give such notice of a calling of a
meeting, then the proposed action may be taken by an authorization signed (in
one or more, counterparts, which taken together shall be deemed to constitute a
single instrument) by a Majority of Trustees (or, in the case of a committee, a
majority of the Trustees who are members of such committee) unless the action
in question requires, by the terms of a provision of this Declaration of Trust,
approval of two-thirds (2/3) of the Trustees, which authorization (and one or
more counterparts as above provided) shall be filed with the minutes of the
proceedings of the Trustees or the committee, as the case may be.

                                   ARTICLE 3.

                              POWERS OF TRUSTEES.

                   SECTION 3.1.  Exclusive power to manage Trust.  The Trustees
shall have, without other or further authorization, continuing full, absolute
and exclusive power, control, and





                                       9
<PAGE>   19




authority over and management of the Trust Property and of the affairs of the
Trust, to the same extent as if the Trustees were the sole owners of such
property and the sole persons interested in such Trust in their own right,
subject only to the limitations herein expressly stated.  Such powers of the
Trustees may be exercised without the necessity of applying to any court or to
the Shareholders for leave to do so.  Without restricting or limiting the
generality of the foregoing, such powers of the Trustees shall include among
others the powers enumerated in the ensuing Sections of this Article 3.

                   SECTION 3.2.  General investment power of Trustees, grant of
discretionary power.  The Trustees shall have power, for such consideration as
they may deem proper, to invest in, purchase or otherwise acquire, for cash or
other property or through the issuance of Shares in the Trust or through the
issuance of notes, debentures, bonds or other obligations of the Trust, and
hold for investment, the entire or any participating interest in notes, bonds
or other obligations which are secured by Mortgages.  In connection with any
such investment, purchase or acquisition, the Trustees shall have the power to
acquire a share of rents, lease payments, or other gross income from, or a
share of the profits from, or a share in the equity or ownership of, Real
Property.  The Trustees shall also have power to invest in loans secured by the
pledge or transfer of Mortgage obligations.  The Trustees shall also have the
power to invest in and acquire other assets in accordance with Article 4
hereof.  The Trustees shall have power to enter into commitments to make any
investment, purchase, or acquisition authorized by this Article 3.  The
Trustees shall also have power to invest in, purchase or acquire, and hold for
investment, stocks, bonds, debentures, notes, certificates of indebtedness,
securities of every nature, or real, personal or mixed, tangible or intangible,
property and obligations secured thereby and interests therein and rights
thereto.  In the exercise of the powers given by this Article 3, the Trustees
shall not be limited to obligations maturing before the possible termination of
the Trust.  The Trustees shall not be bound or limited by any law now or
hereafter in force limiting the investments of trustees or other fiduciaries,
but they shall have full authority and power to make any and all investments,
within the limitations of this Article 3, that they, in their absolute
discretion, shall deem proper in order to accomplish the purposes of this
Trust, all to such extent as to them shall seem proper, and without liability
for loss (except as provided in Article 5 hereof), even though such investments
shall be of a character or in an amount not customarily considered proper for
the investment of trust funds or which do not or may not produce income.





                                       10
<PAGE>   20




                   SECTION 3.3.  Power to invest in Real Property.  The
Trustees shall have power to invest in or otherwise acquire Real Property and
personal property and any interests therein.  If the Trustees should at any
time invest in or otherwise acquire Real Property, the consideration paid for
such Real Property shall ordinarily be based upon the fair market value of the
property as determined by a real estate appraisal prepared by a qualified,
disinterested independent appraiser.  For purposes of the preceding sentence,
"invest in or otherwise acquire, Real Property" shall not include:

                          (a)     the acquisition of any Mortgage; or

                          (b)     the acquisition of any share in the equity or
                   ownership of Real Property acquired by the Trustees in
                   connection with any investment, purchase or acquisition of
                   the entire or any participating interest in notes, bonds or
                   other obligations which are secured by Mortgages; or

                          (c)     any acquisition of interests in Real Property
                   acquired as a result of or in connection with foreclosure of
                   any Mortgage, or conveyed to the Trustees in full or partial
                   satisfaction of indebtedness to the Trust.

                   SECTION 3.4.  Power to sell, rent, lease, subdivide, grant
easements, make dedications, deal in oil and gas rights, etc.  The Trustees
shall have power:

                          (a)     to sell, exchange, or otherwise dispose of
                   any Real Property or personal property, or mixed, tangible
                   or intangible property, or any interest therein at any time
                   held or acquired hereunder, free and clear from any and all
                   trusts, at public or private sale, for cash or on terms,
                   without advertisement, and subject to such restrictions,
                   stipulations, agreements and reservations as they shall deem
                   proper, including the power to take back notes, bonds,
                   debentures, Mortgages, certificates of indebtedness,
                   securities of every nature, or other thing of value for the
                   whole or any part of the purchase price of any of the Trust
                   Property sold or transferred by them, and to execute and
                   deliver any deed or other instrument in connection with the
                   foregoing; and

                          (b)     to rent, lease or hire from others or to
                   others for terms which may extend beyond the possible
                   termination of the Trust any property or rights to property,
                   real or personal, and to own, manage, use and hold such
                   property and such rights; and





                                       11
<PAGE>   21




                          (c)     to subdivide or improve Real Property and 
                   tear down, alter, or make improvements; and

                          (d)     to grant easements, give consents, and make
                   contracts relating to Real Property or its use; and

                          (e)     to release or dedicate any interest in Real 
                   Property; and

                          (f)     to develop, operate, pool, unitize, grant
                   production payments out of or lease or otherwise dispose of
                   mineral, oil, and gas properties and rights.

                   SECTION 3.5.  Power to borrow money.  The Trustees shall
have power to borrow or in any other manner raise such sum or sums of money or
other property as they shall deem advisable in any manner and on any terms, and
to evidence the same by notes, debentures, bonds, securities or other evidences
of indebtedness, which may mature at any time or times even beyond the possible
duration of the Trust, to reacquire such evidences of indebtedness, to enter
into other contracts on behalf of the Trust, and to execute and deliver any
Mortgage, pledge, or other instrument, whether similar or dissimilar, to secure
any such indebtedness or other obligations or contracts; and further, any such
notes, debentures, bonds, instruments or other obligations of the Trust may, at
the discretion of the Trustees, without vote of the Shareholders, be
convertible into Shares of the Trust at such time and on such terms as the
Trustees may prescribe.

                   SECTION 3.6.  Power to make commitments and guaranties.  The
Trustees shall have the power to make commitments to loan money to any natural
or legal person or to purchase any notes, debentures, bonds, or other
obligations, whether similar or dissimilar, of any natural or legal person from
any other person.  The Trustees shall have power to endorse, or guarantee, the
payment of any notes, debentures, bonds, or other obligations, whether similar
or dissimilar, of any natural or legal person; to make contracts by which they
guarantee, become surety for, or otherwise assume liability for the payment of
any such notes, debentures, bonds, obligations, or contracts; and to execute
and deliver any Mortgage, pledge or other instrument, whether similar or
dissimilar, to secure any such endorsement, guaranty or contract.

                   SECTION 3.7.  Power to deal with banks and trust companies.
The Trustees shall have power to deposit any monies or securities included in
the Trust Property with any one or more banks, trust companies, or other
banking institutions deemed by the Trustees to be responsible, regardless of
whether one or more of the Trustees or officers of the Trust shall





                                       12
<PAGE>   22




be an officer, employee, director or shareholder of such bank, trust company,
or other banking institution; such monies or securities to be subject to
withdrawal on notice or upon demand and in such manner as the Trustees may
determine, and the Trustees shall not be liable for any loss which may occur by
reason of the failure of the bank, trust company or other banking institution
with whom any monies or securities have been properly deposited to account for
the monies or securities so deposited.

                   SECTION 3.8.  Power to pay taxes and assessments.  The
Trustees shall have power to pay all taxes or assessments, of whatever kind or
nature, imposed upon or against the Trustees or any of them in connection with
the Trust Property, business or income of the Trust, or upon or against the
Trust Property, business or income of the Trust, or any part thereof, and for
the foregoing purposes to make such returns and do all such other acts and
things as may be deemed by the Trustees necessary and desirable.

                   SECTION 3.9.  Power to satisfy debts and claims.  The
Trustees shall have power to pay or satisfy any debts or claims upon any
evidence that the Trustees shall think sufficient, and to incur and to pay any
charges or expenses (including those incurred by others prior to the
organization of the Trust) which, in the opinion of the Trustees, shall be or
have been necessary or desirable for carrying out the purposes of this Trust.

                   SECTION 3.10.  Power to collect claims, bring lawsuits,
foreclose Mortgages, participate in court actions, etc.  The Trustees shall
have power to collect, and sue for, all sums of money or other property or
claims that are believed due to the Trust; to give receipts for all sums of
money or property received; to adjust the rate of interest at any time on any
sums that may be due or become due to the Trust; to receive and release, in
whole or in part, the collateral or security for the payment of any note,
debenture, bond, or other obligation, whether similar or dissimilar, that may
be owned by the Trust; to consent to the extension of the time for payment, or
to the renewal of any note, debenture, bond, or other obligation, whether
similar or dissimilar; and to engage or intervene in, prosecute, defend,
compromise, abandon, or adjust by arbitration or otherwise any action, suit,
proceeding, dispute, claim, demand, or thing relating to the Trust Property; to
foreclose any Mortgage or other security interest securing any note, debenture,
bond, obligation or contract, by virtue of which any sums of money are owed to
the Trust; to exercise any power of sale held by them, and to convey good title
thereunder free of any and all trusts, and in connection with any such
foreclosure or sale, to purchase or





                                       13
<PAGE>   23




otherwise acquire title to any property, whether or not such property meets the
requirements of this Article 3 with respect to investments; to acquire, accept,
or receive title to property in lieu of foreclosure or sale, whether or not
such property meets the requirements of this Article 3 with respect to
investments; to participate in any arrangement (including a reorganization or
composition) for enforcing or protecting the interests of the Trust as the
owner or holder of any stock, interest in property (real, personal, or mixed,
tangible or intangible), note, debenture, bond, or obligation of any
corporation, trust, association, or other organization and to that end to
transfer to and deposit with any corporation, committee, or other person any
such stock, interest in property, note, debenture, bond or obligation, and to
pay any assessment levied in connection with any such arrangement; and to
extend the time with or without security for the payment or delivery of any
debt or property and to execute and enter into any release, agreement, contract
or other instrument, whether similar or dissimilar.

                   SECTION 3.11.  Power to determine accounting methods.
Distributions of cash to Shareholders of the Trust, and taxes on the income of
the Trust, shall, to the maximum extent deemed by the Trustees, in their sole
discretion, to be reasonable and consistent with Section 857 of the Internal
Revenue Code, be based on the net cash income of the Trust as a real estate
investment trust.  In pursuance of this objective, the books of account of the
Trust shall be maintained on substantially a cash basis modified to the extent
deemed desirable by the Trustees.  The Trustees may also maintain such
accounting information as may be required to prepare financial statements on an
accrual basis in accordance with the requirements of Section 2.9 relating to
the Annual Report and interim reports.  The Trustees shall have the power to
determine the method or form in which the books of account of the Trust shall
be kept, and from time to time to change the method or form of keeping the
accounts.

                   SECTION 3.12.  Power to determine fiscal year.  The Trustees
shall have the power to determine the fiscal year of the Trust and from time to
time to change the fiscal year.

                   SECTION 3.13.  Power to determine what is income or corpus.
The Trustees shall have power to determine in their discretion whether items
should be charged or credited to income or corpus or allocated between income
and corpus in such manner as the Trustees may deem proper under all the
circumstances, including the power to amortize or elect not to amortize any
part or all of any premium or discount, to treat any part or all of the profit





                                       14
<PAGE>   24




resulting from the maturity or sale of any asset, whether purchased at a
premium or at a discount, as income or corpus or apportion the same between
income and corpus, to apportion the sales price of any asset between income and
corpus, to treat any dividend or other distribution on any investment as income
or corpus or apportion the same between income and corpus, to charge any
expense against income or corpus or apportion the same, and to provide or elect
not to provide a reasonable reserve against depreciation or obsolescence on any
asset subject to depreciation or obsolescence and a reasonable reserve for bad
debts, all as the Trustees may reasonably deem proper, equitable and just under
all the circumstances.

                   SECTION 3.14.  Power to make appraisals and value Trust
assets.  Subject to Section 3.3 hereof, the Trustees shall have power to
determine conclusively the value of any Real Property, security, or other
property of the Trust owned or hereafter to be acquired by the Trust or of any
services performed for the Trust.  In determining such value, the Trustees may
consider such other information as the Trustees, in their sole judgment, may
deem necessary or satisfactory.  The Trustees shall also have the power to
revalue any Real Property, security, or other property of the Trust from time
to time in accordance with appraisals made by one or more of the Trustees or
any one or more of qualified appraisers selected by them for such purpose as
they deem responsible and experienced, and to keep the books of the Trust and
render reports to the Shareholders of the Trust on the basis of the values so
determined; provided, that in the exercise of such powers, the standards for
determining value of any Real Property, security or other property which may be
employed shall be consistent with the provisions of Section 856(c)(6) of the
Internal Revenue Code.

                   SECTION 3.15.  Power to appoint depositary for records.  The
Trustees shall have power at any time to appoint a corporation authorized under
the laws of the United States or of any State to administer trusts as the
depositary of any or all instruments filed with or as part of the Trust's
records, and may at any time revoke its appointment by a signed instrument
delivered to it, with or without the appointment of a successor depositary.
While any depositary is acting, copies of any instrument deposited with it and
certified by the depositary to be correct, and certificates of the depositary
stating who the Trustees are at any time, may be relied on as sufficient
evidence of those facts by any person or corporation dealing with the Trustees
or the Trust.





                                       15
<PAGE>   25




                   SECTION 3.16.  Power to delegate conduct of business to
Manager and others, approval of terms of contracts with Manager.  The Trustees
are responsible for the general policies of the Trust and for such general
supervision of the business of the Trust conducted by officers, agents,
employees, investment advisers or independent contractors of the Trust as may
be necessary to insure that such business conforms to the provisions of this
Declaration of Trust.  However, the Trustees are not required personally to
conduct the business of the Trust and, consistent with their ultimate
responsibility as stated herein, the Trustees shall have power to appoint,
employ, or contract with any natural or legal person or persons (including one
or more of themselves or any corporation, partnership or trust in which one or
more of them may be directors, officers, stockholders, employees, partners or
trustees) as the Trustees may deem necessary or desirable to carry on and
supervise all or any part of the Trust Property and to transact all or any part
of the business of the Trust.  The Trustees may, therefore, employ or contract
with a corporation, partnership, trust or individual (herein referred to as the
"Manager") for such purpose, and the Trustees may grant or delegate such
authority to the Manager as the Trustees may, in their sole discretion, deem
necessary or desirable, without regard to whether such authority is normally
granted or delegated by trustees.

                   Under the supervision of the Trustees, the Manager may:

                          (a)     administer the day-to-day investment
                   operations of the Trust, and perform or supervise the
                   performance of such administrative functions necessary in
                   the management of the Trust as may be delegated to the
                   Manager by the Trustees;

                          (b)     serve as the Trust's investment advisor and
                   consultant in connection with policy decisions to be made by
                   the Trustees;

                          (c)     furnish reports to the Trustees and provide
                   research, economic and statistical data in connection with
                   or relative to the Trust's investments;

                          (d)     make recommendations to the Trustees in
                   respect to loans which the Trust shall have the right or
                   opportunity to make, purchase or otherwise acquire, either
                   entirely or in participation with others (including Manager
                   or any parent or subsidiary of Manager), and perform on
                   behalf of the Trust such investigation as to the credit risk
                   of the obligor and the value of the security for the loan as
                   the Manager shall deem appropriate under the particular
                   circumstances;

                          (e)     represent the Trust in the day-to-day
                   dealings with consultants, accountants, Mortgage
                   originators, corespondents, lenders, servicers, technical





                                       16
<PAGE>   26




                   advisors, attorneys, brokers, underwriters, corporate
                   fiduciaries, escrow agents, depositaries, custodians, agents
                   for collection, insurers, insurance agents, banks, builders,
                   developers, and other mortgagors and investment participants
                   and persons acting in any other capacity as may be deemed by
                   the Trustees to be necessary or desirable in connection with
                   or relative to the Trust's investments;

                          (f)     investigate, select and on behalf of the
                   Trust pay appropriate fees to, enter into appropriate
                   contracts with, employ or otherwise retain any person in
                   connection with Mortgage loans or other investments
                   purchased, sold or otherwise acquired or disposed of or
                   committed, negotiated or contemplated to be purchased, sold
                   or otherwise acquired or disposed of and substituted any
                   other person or itself for such other person or for itself;

                          (g)     administer and supervise loan closings, upon 
                   the request of the Trustees;

                          (h)     act, upon the request of the Trustees, as
                   attorney-in-fact or agent in acquisitions or dispositions of
                   the Trust's investments, in disbursing or collecting the
                   funds of the Trust, in paying the debts and fulfilling the
                   obligations of the Trust, in the execution of deeds,
                   Mortgages or other instruments in writing for or on behalf
                   of the Trust and in handling, prosecuting and settling any
                   claims of the Trust including the foreclosure or other
                   enforcement of any Mortgage or lien securing investments,
                   and exercise its own sound discretion in doing so;

                          (i)     upon request by the Trustees, negotiate on
                   behalf of the Trust with investment banking firms, brokers,
                   investors and others for the public or private sale of
                   Shares or notes, debentures, bonds or other obligations of
                   the Trust and obtain loans for the Trust, but in no event in
                   such a way that the Manager shall be acting as a broker,
                   dealer or underwriter of such securities;

                          (j)     upon request by the Trustees, invest or
                   reinvest any money or other property of the Trust;

                          (k)     provide, and assume the expenses of,
                   appraisals prepared by Manager or any of its employees,
                   office space and office equipment, use of accounting and
                   equipment when required, and necessary executive, clerical
                   and secretarial personnel for the performance of all of the
                   foregoing services performed or to be performed by Manager;
                   and





                                       17
<PAGE>   27




                          (l)     at all reasonable times and from time to
                   time, when requested by the Trustees, make reports to the
                   Trust of the performance by Manager and by others of the
                   foregoing services to the Trust.

                   The Trustees shall have broad discretion in determining the
duties, responsibilities and authority of the Manager.  The Trustees may
request the Manager to engage in certain other activities which complement the
investments of the Trust, including the placement or brokerage of long term
Mortgages or second Mortgages, and to provide services requested by the
mortgagors or prospective mortgagors to the Trust.

                   The Trustees shall have the power to determine the terms of
compensation of the Manager or any other such person or persons whom they may
employ or with whom they may contract; provided, however, that any
determination to appoint, employ or contract with any Trustee or any entity
with which a Trustee is affiliated by reason of a managerial or ownership
interest, shall be valid only if made, approved or ratified, after disclosure
of such relationship, by a majority of the Trustees not so affiliated.  The
Trustees may exercise broad discretion in allowing the Manager to administer
and regulate the operations of the Trust, to act as agent for the Trust, to
execute documents on behalf of the Trustees, and to make executive decisions
which conform to general policies and general principles previously established
by the Trustees.

                   The initial contract entered into by the Trustees with any
Manager may have an initial term of three full fiscal years (plus, in the case
of the first such contract entered into by the Trustees, any period between the
date of this Declaration and the last day of the month in which the closing of
the first public offering for sale of Shares is held).  The term of each
renewal or extension of any such contract with the same Manager shall not
exceed one year.  The Trustees shall not enter into any such contract with any
Trustee or any entity with which a Trustee is affiliated by reason of a
managerial or ownership interest, unless such contract is approved by a
majority of the Trustees not so affiliated.

                   SECTION 3.17.  Power to purchase insurance against liability
of Trustees and others acting for the Trust.  The Trustees shall have the power
to purchase and pay for out of Trust Property insurance contracts and policies
insuring the Trustees, officers, employees and agents of the Trust individually
against all claims and liabilities of every nature arising by reason of
holding, being or having held any such office or position, or by reason of any
action alleged to have been taken or omitted by any such person as Trustee,
officer,





                                       18
<PAGE>   28




employee or agent, including any action taken or omitted that may be determined
to constitute negligence.

                   SECTION 3.18.  Power to pay pensions and adopt pension,
profit-sharing or other thrift plans.  The Trustees shall have the power to pay
pensions for faithful service, as deemed appropriate by the Trustees, and to
adopt, establish and carry out pension, profit-sharing, Share bonus, Share
purchase, Share option, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions for any or all of the Trustees, officers,
employees and agents of the Trust.

                   SECTION 3.19.  Power to adopt and use seal.  The Trustees
shall have the power to adopt and use a seal for the Trust, but the seal shall
not be necessary to be placed on, and its absence shall not impair the validity
of, any document, instrument or other paper executed and delivered by or on
behalf of the Trust.

                   SECTION 3.20.  Power to appoint a resident agent in
Massachusetts.  The Trustees shall have the power to appoint a resident agent
in Massachusetts as the true and lawful attorney of the Trust upon whom all
lawful processes in any action or proceeding against the Trust may be served.
Such resident agent shall be either an individual who is a resident of and has
a business address in Massachusetts, a corporation organized under
Massachusetts law, or a corporation organized under the laws of any other state
of the United States which has an office in Massachusetts and has complied with
the reporting provisions of Massachusetts law with respect to foreign
corporations.  The Trustees have duly appointed as resident agent, Frederick
Goldstein, Esq., having an address at Lourie & Cutler, P.C., 60 State Street,
Boston, Massachusetts 02109.  Such appointment shall become effective upon the
filing of the Fifth Amendment to the Declaration of Trust.  The Trust may, by
vote of the Trustees, revoke any appointment of a resident agent or appoint a
new resident agent.  Any such revocation or appointment shall become effective
upon the amendment of this Declaration of Trust in accordance with the
provisions of Section 8.1. Any resident agent shall give notice of a change in
business address, or of its resignation as such, in a manner similar to that
prescribed for resident agents of corporations under the applicable provisions
of the Massachusetts Business Corporation Law.

                   SECTION 3.21.  Power to do all things necessary and proper,
presumption in favor of grant of power to Trustees.  The Trustees shall have
power to do all such things and execute all such instruments as they deem
necessary, proper or desirable in order to carry





                                       19
<PAGE>   29




out, promote or advance the purposes or provisions of this Declaration of Trust
or the by-laws, although such matters or things are not herein specifically
mentioned.  Any determination of the purposes of this Declaration made by the
Trustees in good faith shall be conclusive.  In construing the provisions of
this Declaration of Trust, the presumption shall be in favor of the grant of
power to the Trustees.

                                   ARTICLE 4.

                               INVESTMENT POLICY.

                   SECTION 4.1.  Definitions of various terms.  As used herein
the term:

                          "Real Property" shall mean land, rights in land, and
                   any buildings, structures, improvements, furnishings,
                   fixtures and equipment located on or used in connection with
                   land and rights in land, or interests therein, including
                   without limitation, leasehold interests, but does not
                   include Mortgages, Mortgage Loans, or interests therein;

                          "Mortgage" shall mean any interest in Real Property
                   which is collateral or security for a debt or other
                   obligation, such as, but not limited to, mortgages and deeds
                   of trust, or any participating interests therein;

                          "First Mortgage" shall mean a Mortgage which takes
                   priority, or precedence over all other charges or
                   encumbrances upon the same property, and which must be
                   satisfied before such other charges are entitled to
                   participate in the proceeds of any sale.  Such encumbered
                   property may include a lessee's interest.  However, such
                   priority shall not be deemed as abrogated by liens for
                   taxes, assessments which are not due or remain payable
                   without penalty, contracts (other than contracts for
                   repayment of borrowed monies) or leases, mechanics' and
                   materialmen's liens for work performed and materials
                   furnished which are not in default or are in good faith
                   being contested, and other claims normally deemed, in the
                   same local jurisdiction, not to abrogate the priority of a
                   first mortgage or such other claims, encumbrances, rights of
                   way, easements, encroachments or other irregularities as do
                   not materially impair or detract from the value of the
                   securities;





                                       20
<PAGE>   30




                          "Mortgage Loans" shall mean notes, debentures, bonds
                   and other evidences of indebtedness or obligations, whether
                   negotiable or non-negotiable, which are secured or
                   collateralized by Mortgages;

                          "First Mortgage Loans" shall mean Mortgage Loans
                   secured, or collateralized, at the time of acquisition
                   thereof by the Trust, by First Mortgages;

                          "Development Loans" shall mean Mortgage Loans
                   incurred to finance all or part of the cost of acquiring and
                   improving vacant land and developing it into sites suitable
                   for the construction of dwellings or other structures, or
                   suitable for other residential, commercial, industrial or
                   public uses;

                          "Construction Loans" shall mean Mortgage Loans
                   incurred to finance all or part of the cost of acquiring
                   and/or improving land and the construction or improvement of
                   dwellings or other buildings thereon;

                          "Long Term Loans" shall mean Mortgage Loans which
                   finance or refinance the purchase or ownership of developed
                   sites or of improved real estate and which provide for an
                   amortization of the loan over a period of seven years or
                   more;

                          "Intermediate Term Loans" shall mean Mortgage Loans
                   (which may be made pursuant to Gap Loan Commitments) which
                   finance or refinance the purchase or ownership of developed
                   sites or of improved real estate and which provide for
                   complete payment of the loan in less than seven years;

                          "FH" and "VA" shall mean respectively the Federal
                   Housing Administration and the Veterans Administration, and
                   any successors thereto;

                          "FHA Loans" shall mean Mortgage Loans (which may be
                   Construction, Development, Intermediate or Long Term Loans)
                   which are insured under the provisions of the National
                   Housing Act of 1934, as amended;

                          "VA Loans" shall mean Mortgage Loans (which may be
                   Construction, Development, Intermediate or Long Term Loans)
                   which are guaranteed under the provisions of the
                   Servicemen's Readjustment Act of 1944, as amended;





                                       21
<PAGE>   31





                          "Conventional Loans" shall mean Mortgage Loans (which
                   may be Construction, Development, Intermediate or Long Term
                   Loans) which are not insured by FHA or guaranteed by VA;

                          "Appraisal" shall mean the market value, as of the
                   date of the Appraisal, of Real Property in its existing
                   state or in a state to be created, as determined by the
                   Trustees or by a person having no economic interest in the
                   Real Property, who, in the sole judgment of the Trustees, is
                   properly qualified to make such a determination;

                          "Gap Loan Commitment" shall mean a commitment issued
                   for a fee under which the Trust agrees, prior or during the
                   course of construction, that if the conditions specified in
                   the Takeout are not fulfilled upon completion of
                   construction or within a period of time after completion of
                   construction, the Trust will make a Mortgage Loan of the
                   difference between the minimum amount specified in the
                   Takeout and the amount which would have been loaned if the
                   conditions had been fulfilled;

                          "Takeout" shall mean a commitment by a responsible
                   lender to provide a loan no later than the expiration of the
                   term of the Trust's Mortgage Loan, the proceeds of which
                   loan shall be sufficient to reimburse the Trust for its
                   Mortgage Loan.

Where two or more of the foregoing terms shall be combined in connection with
the description of a particular loan, such as "Conventional Construction First
Mortgage Loan", each term so combined shall in the context, be given its
separate meaning.

                   SECTION 4.2.  Primary policy and criteria to invest in
Construction and Development Loans and Intermediate Term Loans.  It shall be
the policy of the Trustees at the outset of operations to invest the assets of
the Trust, principally in entire or participating interests, in any of the
foregoing:

                          (a)     Conventional Development First Mortgage
                   Loans, which will normally have an original term not
                   exceeding 36 months and should be in an amount not exceeding
                   80% of the value of the property after completion of the





                                       22
<PAGE>   32




                   development financed by such loans, as such value is
                   determined by FHA, by VA or by Appraisal; or

                          (b)     Conventional Construction First Mortgage
                   Loans, which will normally have an original term not
                   exceeding 36 months and should be in an amount not exceeding
                   the lesser of either:

                                  (i)      85% of the value of the real
                          property after completion of the improvements
                          financed by such loans, as such value is determined
                          by FHA, by VA or by Appraisal; or

                                  (ii)     the value of the real property at
                          the time the loan is made, plus the cost of the
                          improvements determined in the same manner; or

                          (c)     FHA Development First Mortgage Loans; or

                          (d)     FHA Construction First Mortgage Loans; or

                          (e)     Intermediate Term First Mortgage Loans, which
                   should have an original term not exceeding 84 months and
                   should be in an amount not exceeding 75% of the value of the
                   real property and improvements as such value is determined
                   by FHA, by VA or by Appraisal; or

                          (f)     Mortgage Loans, which the Trust may be
                   required to make pursuant to its issuance of Gap Loan
                   Commitments;

provided, any of the loan to value ratios specified in this Section 4.2 may be
increased if, in the judgment of the Trustees, the loan is supported by credit
(either in the form of a Takeout commitment issued by a financially responsible
institution, other than the Trust, or in the form of the personal
responsibility of the obligors) adequate to justify a higher loan to value
ratio.

                   SECTION 4.3.  Secondary policy and criteria to invest in
Long Term Loans and Warehouse Loans.  It shall be the policy of the Trustees at
the outset of operations to invest the assets of this Trust primarily in
Mortgage Loans described in this preceding Section, and secondarily, in any of
the following:

                          (a)     Long Term FHA or VA First Mortgage Loans; or

                          (b)     Conventional Long Term First Mortgage Loans;
                   or

                          (c)     Warehouse Loans, which generally are loans
                   that are collateralized by an assignment, pledge or transfer
                   of FHA, VA or Conventional First Mortgage Loans.





                                       23
<PAGE>   33




                   SECTION 4.4.  Authorization to invest not more than 15% of
capital, surplus and subordinated debt in equities and entities owning
interests in Real Property and Mortgage Loans secured by other than First
Mortgages.  The Trustees may invest an amount not exceeding 15% of the total
capital, surplus and subordinated debt of the Trust, as appearing on the most
recent quarterly balance sheet of the Trust available to the Trustees at the
time of such investment, in the ownership of, or participations in the
ownership of:

                          (a)     Real Property or any interests in, relating
                   to or arising out of Real Property or the development
                   thereof or construction thereon,

                          (b)     any corporate or other entity principally
                   involved in owning, developing, improving, financing,
                   operating, managing or trading Real Property, and

                          (c)     Mortgage Loans secured by other than First
                   Mortgages, including Mortgage Loans which the Trust may be
                   required to make pursuant to its issuance of Gap Loan
                   Commitments.

                   For purposes of this Section 4.4, Real Property acquired by
                   the Trust (i) as a result of the foreclosure of a Mortgage
                   owned by the Trust, (ii) conveyed to the Trust in full or
                   partial satisfaction of indebtedness owed to the Trust, or
                   (iii) in connection with a First Mortgage (including,
                   without limitation, a share of rents, lease payments, or
                   other gross income from, or share in the equity or ownership
                   of Real Property) where no consideration, other than the 
                   making of such loan and the taking into account such
                   interest in determining the terms of such loan, is given by
                   the Trustees, shall not be included in computing the Trust's
                   investments in Real Property.

                   SECTION 4.5.  Authority to invest in Government obligations
and other securities.  To the extent that the Trust has assets not invested in
accordance with the foregoing Sections of Article 4, the Trustees may employ
such assets by investing them in:

                          (a)     Obligations of the United States Government 
                   or agencies thereof;

                          (b)     Obligations of any State or Territory of the
                   United States of America or any agencies thereof;

                          (c)     Evidences of deposits in, or obligations of,
                   banking institutions and savings institutions which are
                   members of the Federal Deposit Insurance Corporation or of
                   the Federal Home Loan Bank System;





                                       24
<PAGE>   34





                          (d)     Shares of other real estate investment trusts
                   to the extent permitted by the Internal Revenue Code;

                          (e)     Shares of ownership in corporate or other
                   entities to the extent permitted by the Internal Revenue
                   Code, but in no event in excess of 5% of the total assets of
                   the Trust; and

                          (f)     Bank time  deposits, commercial paper,
                   bankers' acceptances, loan participation certificates and
                   other similar instruments of bank credit.

                   SECTION 4.6.  Discretionary power of Trustees to modify
investment policy and criteria.  The Trustees may modify the policies and
criteria set forth in the preceding Section 4.2, Section 4.3, Section 4.41, and
Section 4.5 in their discretion, when they deem any modification of policy or
criteria advisable to further the interests of the Shareholders and creditors
of the Trust, as those interests may, from time to time, be interpreted by the
Trustees or when changed circumstances, availability of investments or changes
in the economic environment shall, in the sole opinion of the Trustees, make it
desirable to modify those policies and criteria.

                   SECTION 4.7.  Trustees' power to pursue any remedies
permitted by law when obligor is in default and other general powers when
default arises.  Notwithstanding any other provision in this Declaration of
Trust, when an obligor to the Trust is in default under the terms of any
obligation to the Trust, the Trustees shall have the power to enter into any
investment, commitment or obligation, which the Trustees, in their sole
judgment, may deem to be necessary or desirable, and, in addition, the Trustees
may pursue any remedies permitted by law which, in their sole judgment, are in
the interest of the Trust.

                                   ARTICLE 5.

                         SHARES OF BENEFICIAL INTEREST.

                   SECTION 5.1.  Interest of beneficiaries divided into Shares
evidenced by certificates, definition of Shares and Shareholders.  The interest
of the beneficiaries hereunder shall be divided into transferable Shares,
without par value, of two classes:  shares of beneficial interest and shares of
preferred stock.  Ownership of shares of each class shall be evidenced by
certificates in such form as shall be determined by the Trustees from time to
time.  All shares issued hereunder shall be, when issued, fully paid, and no
assessment shall ever be made upon the holders of such shares.





                                       25
<PAGE>   35





                 The number of shares of beneficial interest authorized
hereunder is unlimited.  All shares of beneficial interest shall have equal
non-cumulative voting, distribution, liquidation and other rights, and shall
have no preference, conversion, exchange, preemptive or redemption rights.  No
interest of beneficiaries in the Trust may be represented by "nonvoting equity
securities" within the meaning of Section 1123(a)(6) of the United States
Bankruptcy Code, 11 U.S.C. Section  1123(a)(6); this provision, included in
this Declaration of Trust in compliance with Section 1123(a)(6) of the United
States Bankruptcy Code, 11 U.S.C. Section  1123, shall have no force and effect
except to the extent required by such Section so long as such Section is in
effect and applicable to the Trust.

                 The number of shares of preferred stock authorized hereunder
is 10,000,000.  The preferred stock may be issued, from time to time, in one or
more series as determined by the Trustees.  Prior to issuance of a series, the
Trustees shall, by resolution, designate that series to distinguish it from
other series of preferred stock of the Trust, shall specify the number of
shares to be included in the series, and shall, subject to the express
provisions of any then outstanding series of preferred stock, fix the
preferences, voting powers, qualifications, and special or relative rights or
privileges of such series including, but not limited to, the following:

                          (a) the rights to which the holders of such series
                              shall be entitled, and the preferences, if any,
                              over any other series (or of any other series
                              over such series), upon the voluntary or
                              involuntary liquidation, dissolution or
                              termination of the Trust;

                          (b) the voting powers, if any, of the shares of such
                              series; and whether or not, and under what
                              conditions, the shares of such series shall be
                              entitled to vote separately as a single class,
                              for the election of one or more additional
                              Trustees of the Trust in case of divided
                              arrearages or other specified events, or upon
                              other matters;

                          (c) the dividend rate or rates on the shares of such
                              series and the divided preferences, if any, over
                              any other series (or of any other series over
                              such series), the terms and conditions upon which
                              dividends shall be payable, whether and upon what
                              conditions such dividends shall be cumulative
                              and, if cumulative, the date or dates from which
                              dividends shall accumulate;





                                       26
<PAGE>   36




                          (d) if the shares of such series shall be redeemable
                              by the Trust, and, if redeemable, the price or
                              prices, limitation and restrictions, and any
                              other terms and conditions with respect to such
                              redemptions;

                          (e) whether or not the shares of such series shall be
                              subject to the operation of a purchase,
                              retirement or sinking fund, and, if so, whether
                              and upon what conditions such purchase,
                              retirement or sinking fund shall be cumulative or
                              non-cumulative, the extent to which, and the
                              manner in which, such fund shall be applied to
                              the purchase or redemption of the shares of such
                              series for retirement by the Trust or to other
                              Trust purposes, and the terms and provisions
                              relative to the operation thereof; and

                          (f) whether or not the shares of such series shall be
                              convertible into, or exchangeable for, shares of
                              beneficial interest, or shares of any other
                              series of preferred stock and, if so convertible
                              or exchangeable, the price or prices or the rate
                              or rates of conversion or exchange and the
                              method, if any, of adjusting the same, and any
                              other terms and conditions of such conversion or
                              exchange.

                 Shares of beneficial interest and shares of preferred stock
are referred to in this Declaration of Trust collectively as "Shares".  The
owners of such Shares, who are the beneficiaries of Trust, are referred to in
this Declaration of Trust collectively as "Shareholders".

                 SECTION 5.2.  Intention to create relationship only of
Trustees and beneficiaries.  It is the intention of the Trustees to create only
the relationship of trustee and beneficiary between the Trustees and each
Shareholder from time to time, and to give to each Shareholder only such rights
and to impose upon him only such obligations as are conferred or imposed upon
him as a beneficiary hereunder.  It is not the intention of the Trustees to
create a general partnership, limited partnership, joint stock association,
corporation, association, bailment or any form of legal relationship other than
a trust.

                 Nothing in this Declaration of Trust or in the certificates
evidencing Shares shall be construed to make the holders of said certificates,
either by themselves or with the Trustees, partners or members of an
association.





                                       27
<PAGE>   37




                 SECTION 5.3.  Right of Shareholder to receive certificate for
number of Shares, signing of certificates, transfer agent and registrar,
facsimile signatures.  Every Shareholder shall be entitled to receive a
certificate specifying the number of Shares held by him.  Such certificates
shall be treated as negotiable and title thereto, and to the Shares represented
thereby, shall be transferred by delivery thereof to the same extent in all
respects as stock certificates, and the shares represented thereby, of a
Massachusetts business corporation.  Unless otherwise determined by the
Trustees, such certificates shall be signed by the President and Secretary, and
shall be countersigned by a transfer agent, and registered by a registrar, if
any.  There shall be filed with each transfer agent and registrar, if any, a
copy of the authorized form of certificate, certified by the President or
Secretary, and such form shall continue to be used unless and until the
Trustees approve some other form.  In case any one or more officers of the
Trust who shall have signed certificates shall cease to be such officer or
officers before the certificates so signed shall have been actually issued,
such certificates may nevertheless be issued with the same effect as though the
persons who signed such certificates had not ceased to be such officers of the
Trust.  If such certificate is countersigned (a) by a transfer agent other than
the Trust or its employee, or (b) by a registrar other than the Trust or its
employee, any other signature on the certificate may, in the discretion of the
Trustees, be in facsimile.

                 SECTION 5.4.  Right of Trustees to issue Shares without vote
or other acquiescence of Shareholders, right to issue fractional Shares.  The
Trustees, in their discretion, may from time to time without prior
authorization by the Shareholders issue Shares, including Shares held in the
treasury, to such party or parties and for such payment, property or other
consideration, at such time or times, and on such terms as the Trustees may
deem best, and may in such manner acquire other assets (including the
acquisition of assets subject to and in connection with the assumption of
liabilities).  In connection with any issuance of Shares, the Trustees, in
their discretion, may provide for the issuance of fractional Shares or may
provide for the issuance of scrip for fractions of Shares and determine the
terms of such scrip including, without limiting the generality of the
foregoing, the time within which any such scrip must be surrendered for
exchange into Shares and the rights, if any, of holders of scrip upon the
expiration of the time so fixed, the rights, if any, to receive proportional
distributions, and the rights, if any, to redeem scrip for cash or the Trustees
may, in their discretion, or if they see fit at the option of each holder,
provide in lieu of scrip for the adjustment of fractions in cash.  The
provisions of Section 5.3 hereinabove relative to certificates for Shares shall
apply so far as





                                       28
<PAGE>   38




appropriate to such scrip, except that such scrip may in the discretion of the
Trustees be signed by a transfer agent alone notwithstanding that there is then
a registrar for the Shares.

                 SECTION 5.5.  Register of Shareholders, only registered
Shareholders to enjoy rights of Shareholders.  A register shall be kept by or
on behalf of the Trustees under the direction of the Trustees which shall
contain the names and addresses of the Shareholders and the number of Shares
held by them, respectively, and the numbers of the certificates representing
such Shares and a record of all transfers thereof.  Only Shareholders whose
certificates are so recorded shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders.  No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein provided, until he has
given his address to a transfer agent or such other officer or agent of the
Trustees as shall keep the said register for entry thereon.

                 SECTION 5.6.  Trustees' powers to employ transfer agents and
registrars, power to deposit blank certificates with transfer agents.  The
Trustees shall have power to employ in the City of Boston, Massachusetts and/or
in any other city transfer agents, and/or registrars.  The transfer agents may
keep the register required by Section 5.5 and record therein the original
issues and transfers, if any, of the Shares and countersign certificates for
Shares issued to the persons entitled to the same.  Any such transfer agents
and registrars shall perform the duties usually performed by transfer agents
and registrars of certificates of stock in a corporation, except as modified by
the Trustees.  In accordance with the usual custom of corporations leaving a
transfer agent, signed certificates for Shares in blank may be deposited with
any transfer agent of the Trust, to be used by the transfer agent in accordance
with the authority conferred upon it as occasion may require, and in so doing
the signers of such certificates shall not be responsible for any loss
resulting therefrom.

                 SECTION 5.7.  Restrictions on Transfer of Shares to preclude
the application of the Internal Revenue Code's Section 382 limitation and to
preserve other tax attributes. (a) In order to preserve the Trust's net
operating loss carry forwards and other tax attributes under the Internal
Revenue Code, the following restrictions upon transfer of the Trust's Shares
shall apply until the Trustees determine otherwise:





                                       29
<PAGE>   39




                          (i) (1)     No person other than the Trust shall
                 transfer any Shares of the Trust to any person to the extent
                 that such transfer (whether or not such transfer is the result
                 of a transaction entered into through the facilities of the
                 New York Stock Exchange), if effective, would cause the
                 Ownership Interest Percentage of the transferee or any other
                 person to increase to 5 percent or above, or from 5 percent or
                 above to a greater Ownership Interest Percentage.

                          (i) (2)     For purposes of Section 5.7, the
                 following terms shall have the following meanings:

                          (a) "Initial Transferor" shall mean a person who
                              attempts to make a transfer of Shares described
                              in subparagraph (a)(i)(1);

                          (b) "Ownership Interest Percentage" of a person shall
                              be the sum of such person's direct ownership
                              interest in the Trust as determined under
                              Treasury Regulation Section 1.382-2T(f)(8) or
                              any successor regulation and such person's
                              indirect ownership interest in the Trust as
                              determined under Treasury Regulation Section
                              1.382-2T(f)(15) or any successor regulation,
                              except that, for purposes of determining a
                              person's direct ownership interest in the Trust,
                              any ownership interest in the Trust described in
                              Treasury Regulation Section
                              1.382-2T(f)(18)(iii)(A) or any successor
                              regulation shall be treated as shares of
                              beneficial interest in the Trust, and for
                              purposes of determining a person's indirect
                              ownership interest in the Trust, Treasury
                              Regulations Sections 1.382-2T(g)(2), 1.382-
                              2T(h)(2)(i)(A), 1.382-2T(h)(2)(iii) and
                              1.382-2T(h)(6)(iii) or any successor regulations
                              shall not apply and any Shares that would be
                              attributed to such person pursuant to the option
                              attribution rule of Treasury Regulation Section
                              1.382-4(d) or any successor regulation if to do
                              so would result in an "ownership change" within
                              the meaning of Section 382 of the Internal
                              Revenue Code shall be attributed to such person
                              without regard to whether such attribution
                              results in an "ownership change" within the
                              meaning of Section 382 of the Internal Revenue
                              Code;





                                       30
<PAGE>   40




                          (c) "person" shall include any individual,
                              corporation, estate, trust, association, company,
                              partnership, joint venture, or similar
                              organization, including, without limitation, any
                              "entity" within the meaning of Treasury
                              Regulation Section 1.382-3(a);

                          (d) "Prohibited Distributions" shall mean any
                              dividends or other distributions paid by the
                              Trust with respect to the Prohibited Shares that
                              were received by the Purported Acquiror;

                          (e) "Prohibited Shares" shall mean each Share of the
                              Trust the transfer of which is restricted by
                              subparagraph (a) (i) (1);

                          (f) "Purported Acquiror" shall mean the person to
                              whom the Initial Transferor attempts to make a
                              transfer of Shares described in subparagraph (a)
                              (i) (1) or of the ownership of a Higher Tier
                              Entity (as defined in subparagraph (i) below);

                          (g) "Resale Proceeds" shall mean the proceeds of sale
                              of Prohibited Shares received by the Purported
                              Acquiror to an unrelated party in an arm's-length
                              transaction;

                          (h) "Sales Proceeds" shall mean the proceeds of sale
                              of Prohibited Shares received by a designated
                              agent of the Trust;

                          (i) "transfer" shall include any means of conveying
                              legal or beneficial ownership of Shares, whether
                              such means is direct or indirect, voluntary or
                              involuntary, including without limitation, the
                              transfer of ownership of any entity which,
                              directly or indirectly owns Shares (a "Higher
                              Tier Entity");

                          (j) "transferee" shall mean any person to whom shares
                              are transferred;

                              (ii)    Any transfer of Shares of the Trust that
                          would otherwise be prohibited pursuant to
                          subparagraph (a)(i) shall nonetheless be permitted if
                          information relating to a specific proposed
                          transaction is presented to the Trustees and the
                          Trustees determine (x) that such transaction will not
                          create a substantial risk of loss of the Trust's
                          status as a real estate investment





                                       31
<PAGE>   41




                          trust, or (y) that the overall economic benefits of
                          such transaction to the Trust and its Shareholders
                          outweigh the detriments, if any, of such transfer.

                 (b)      Unless approval of the Trustees is obtained as
provided in subparagraph (a)(ii) of this Section 5.7, any attempted transfer of
Shares of the Trust in excess of the number of Shares that could be transferred
to the transferee without restriction under subparagraph (a)(i)(1) of this
Section 5.7 shall not be effective to transfer ownership of such Prohibited
Shares to the Purported Acquiror, who shall not be entitled to any rights as a
shareholder of the Trust with respect to the Prohibited Shares (including,
without limitation, the right to vote or to receive dividends with respect
thereto).  Subject to the Trust's election to apply subparagraph (b)(i) below,
all rights with respect to the Prohibited Shares shall remain the property of
the Initial Transferor.  A Purported Acquiror shall be deemed to have consented
to all the provisions of this Section 5.7 and to have agreed to act as provided
in the following subparagraph (b)(i) if the Trust so demands.

                          (i) Upon demand by the Trust, the Purported Acquiror
                 shall transfer any certificate or other evidence of ownership
                 of the Prohibited Shares within the Purported Acquiror's
                 possession or control, along with any Prohibited
                 Distributions, to an agent designated by the Trust (the
                 "Agent").  If the Purported Acquiror has sold the Prohibited
                 Shares to an unrelated party in an arm's-length transaction
                 after purportedly acquiring them, the Purported Acquiror shall
                 be deemed to have sold the Prohibited Shares as agent for the
                 Initial Transferor, and in lieu of transferring the Prohibited
                 Shares and Prohibited Distributions to the Agent, shall
                 transfer to the Agent the Prohibited Distributions and the
                 Resale Proceeds except to the extent that the Agent grants
                 written permission to the Purported Acquiror to retain a
                 portion of the Resale Proceeds not exceeding the amount that
                 would have been payable by the Agent to the Purported Acquiror
                 pursuant to the following subparagraph (b)(ii) if the
                 Prohibited Shares had been sold by the Agent rather than by
                 the Purported Acquiror.  Any purported transfer of the
                 Prohibited Shares by the Purported Acquiror other than a
                 transfer described in one of the two preceding sentences shall
                 not be effective to transfer any ownership of the Prohibited
                 Shares.

                          (ii)        The Agent shall sell in an arm's-length
                 transaction through the facilities of a national securities
                 exchange or an over-the-counter market, if





                                       32
<PAGE>   42




                 possible) any Prohibited Shares transferred to the Agent by
                 the Purported Acquiror, and the Sales Proceeds, or the Resale
                 Proceeds, if applicable, shall be allocated to the Purported
                 Acquiror up to the following amount:  (x) where applicable,
                 the purported purchase price paid or value of consideration
                 surrendered by the Purported Acquiror for the Prohibited
                 Shares, and (y) where the purported transfer of the Prohibited
                 Shares to the Purported Acquiror was by gift, inheritance, or
                 any similar purported transfer, the fair market value of the
                 Prohibited Shares at the time of such purported transfer.
                 Subject to the succeeding provisions of this subparagraph
                 (b)(ii), any Resale Proceeds or Sales Proceeds in excess of
                 the amount allocable to the Purported Acquiror pursuant to the
                 preceding sentence, together with any Prohibited
                 Distributions, shall be the property of the Initial
                 Transferor.  If the identity of the Initial Transferor cannot
                 be determined by the Agent through inquiry made to the
                 Purported Acquiror, the Agent shall publish appropriate notice
                 (in The Wall Street Journal, if possible) for seven
                 consecutive business days in an attempt to identify the
                 Initial Transferor in order to transmit any Resale Proceeds or
                 Sales Proceeds or Prohibited Distributions due to the Initial
                 Transferor pursuant to this subparagraph (b)(ii).  The Agent
                 may also take, but is not required to take, other reasonable
                 actions to attempt to identify the Initial Transferor.  If
                 after 90 days following the final publication of such notice
                 the Initial Transferor has not been identified, any amounts
                 due to the Initial Transferor pursuant to this subparagraph
                 (b)(ii) may be paid over to a court or governmental agency, if
                 applicable law permits, or otherwise shall be transferred to
                 an entity designated by the Trust that is described in Section
                 501(c)(3) of the Internal Revenue Code.  In no event shall any
                 such amounts due to the Initial Transferor inure to the
                 benefit of the Trust or the Agent, but such amounts may be
                 used to cover expenses (including but not limited to the
                 expenses of publication) incurred by the Agent in attempting
                 to identify the Initial Transferor.

                 (c)      Upon a determination by the Trustees that there has
been or is threatened a purported transfer of Prohibited Shares to a Purported
Acquiror, the Trustees may take such action in addition to any action permitted
by this Section 5.7 as advisable to give effect to the provisions of this
Section 5.7 including, without limitation, refusing to give effect on the books
of this Trust to such purported transfer or instituting proceedings to enjoin
such purported transfer.





                                       33
<PAGE>   43




                 (d)      The Trust may require as a condition to the
registration of the transfer of any Shares that the proposed transferee furnish
to the Trust all information reasonably requested by the Trust with respect to
all the proposed transferee's direct or indirect ownership interests in Shares
of the Trust.

                 (e)      All certificates evidencing ownership of Shares of
this Trust shall be subject to the restrictions on transfer contained in this
Section 5.7 and shall bear (or be deemed to bear) a conspicuous legend
referencing the restrictions set forth in this Section 5.7.

                 (f)      Nothing contained in this Section 5.7 shall limit the
authority of the Trustees to take such other action to the extent permitted by
law as it deems necessary or advisable to protect the Trust and the interests
of the holders of its securities in preserving the Trust's real estate
investment trust status.

                 (g)      The Trustees shall have the power to resolve (1) any
ambiguity in the terms of this Section 5.7 and (2) based on the known facts and
making a "worst-case" assumption about such facts as are not known, any
uncertainty as to the application of this Section 5.7 in a particular factual
situation.

                 (h)      Nothing contained in this Section 5.7 shall
independently require the Trustees to preserve the Trust's status as a real
estate investment trust.

                 SECTION 5.8.  Personal representatives and other successors in
interest of Shareholders.  Any person becoming entitled to any Shares as a
consequence of  the death, bankruptcy or incompetence of any Shareholder, or
otherwise by operation of law, shall be recorded as the holder of such Shares
and receive a new certificate therefor upon production of the proper evidence
thereof and delivery of the existing certificate to the Trustees or a transfer
agent of the Trust.  But until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereof and
neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of death, bankruptcy,
incompetence or otherwise.

                 SECTION 5.9.  Shares held jointly or in fiduciary capacity.
The Trustees may treat two or more persons holding any Share as joint tenants
of the entire interest therein unless their ownership is expressly otherwise
recorded on the register of the Trust, but no entry, shall be made in the
register or on any certificate that any person is in any other manner





                                       34
<PAGE>   44




entitled to any future, limited or contingent interest in any Share; provided,
however, that any person recorded as a holder of any Share may, subject to the
provisions hereinafter contained, be described in the register or in any
certificate as a fiduciary of any kind and any customary words may be added to
the description of the holder to identify the nature of such fiduciary
relationship.

                 SECTION 5.10.  Trustees and agents entitled to act on the
basis of information in the record.  The Trustees, the Shareholders, any
officer, transfer agent or other agent of the Trust or of the Trustees, shall
not be bound to see to the execution of any trust, express, implied or
constructive, or of any charge, pledge, or equity to which any of the Shares or
any interests therein are subject, or to ascertain or inquire whether any sale
or transfer of any such Shares or interests therein by any such Shareholder or
his personal representatives is authorized by such trust, charge, pledge, or
equity, or to recognize any person as having any interest therein except for
the person recorded as Shareholder.  The receipt of the person in whose name
any Share, is recorded, or, if such Share is recorded in the names of more than
one person, the receipt of any one of such persons, or the receipt of the duly
authorized agent of any such person, shall be a sufficient discharge for all
dividends and other money and for all shares, notes, debentures, bonds,
obligations, scrip, and other property payable, issuable or deliverable in
respect of any such Share and from all liability to see to the application
thereof.

                 SECTION 5.11.  Replacement of lost or destroyed certificates.
In case of the loss, mutilation or destruction of any certificate for Shares
hereunder, the Trustees may issue or cause to be issued a new certificate in
accordance with the by-laws or upon such terms as they may see fit.

                 SECTION 5.12.  Payment of dividends.  Subject to the rights of
holders of preferred stock, the Trustees may from time to time declare and pay
to holders of shares of beneficial interest, in proportion to their respective
ownership of shares, out for the earnings, profits or surplus in the hands of
the Trustees, such dividends or other distribution as they may see fit.  The
declaration and payment of such dividends or other distributions and the
determination of earnings, profits and surplus available for dividends or other
distributions and the determination of earnings, profits and surplus available
for dividends and other purposes shall lie wholly in the discretion of the
Trustees.  No holder of shares of beneficial interest shall be entitled to
receive or be paid any dividends or to





                                       35
<PAGE>   45




receive any distribution of earnings, profits or surplus except as determined
by the Trustees in the exercise of said discretion.  The Trustees may, in
addition, from time to time in their discretion, declare and pay as dividends
or other distributions such additional amounts, whether or not out of earnings,
profits and surplus available therefor, including any amounts sufficient to
enable the Trust to avoid or reduce its liability for Federal income taxes,
inasmuch as the computations of net income and gains for Federal income tax
purposes may vary from the computations thereof on the books of the Trust.  Any
or all such dividends or other distributions may be made, in whole or in part,
in cash, property or other assets of the Trust, or in senior or subordinated,
secured or unsecured, evidences of indebtedness of the Trust, as the Trustee
may in their sole discretion from time to time determine.

                 SECTION 5.13.  Trustees to furnish Shareholders with statement
advising as to source of funds distributed.  In connection with each
distribution to Shareholders, the Trustees shall furnish the Shareholders with
a statement in writing advising as to the source of the funds so distributed
or, if the source thereof has not then been determined, the communication shall
so state, and in such event, the statement as to source shall be forwarded to
Shareholders not later than sixty (60) days after the close of the fiscal year
in which the distribution was made.

                 SECTION 5.14.  Notice to Shareholders deemed served if mailed.
Any and all notices to which any Shareholder hereunder may be entitled and any
and all communications shall be deemed duly served or given if mailed, postage
prepaid, addressed to any Shareholder of record at his last known address as
recorded on the register of the Trust, or at such other address or shall be
furnished in writing by him to the Trust for such purpose.

                 SECTION 5.15.  Right of Trustees to purchase Shares on behalf
of Trust, no dividends on Shares held by Trust.  The Trustees may, on behalf of
the Trust, at any time purchase or otherwise acquire outstanding Shares in the
Trust for such consideration and on such terms as they may deem proper.  Shares
so purchased or acquired by the Trustees on behalf of the Trust shall not, so
long as they belong to the Trust, receive dividends or distributions, or be
entitled to any voting rights or be deemed outstanding for any purpose
hereunder.  Such Shares may in the discretion of the Trustees be cancelled or
such Shares





                                       36
<PAGE>   46




may in the discretion of the Trustees be transferred at such times, to such
parties, and for such consideration as the Trustees may determine.

                 SECTION 5.16.  Trustees' capacity to purchase Shares
individually.  The Trustees, or any of them, may in their individual
capacities, purchase and otherwise acquire or sell and otherwise dispose of
Shares issued hereunder.

                 SECTION 5.17.  Obligation of Shareholders to disclose
information to Trustees regarding ownership of Shares, power of Trustees to
acquire Shares to comply with Internal Revenue Code.  The Shareholders shall
upon demand disclose to the Trustees in writing such information with respect
to direct and indirect ownership of Shares as the Trustees deem necessary to
comply with the provisions of the Internal Revenue Code, or to comply with the
requirements of any other taxing authority.  If the Trustees shall, at any time
and in good faith, be of the opinion that direct or indirect ownership of
Shares of the Trust has or may become concentrated to an extent which is
contrary to the requirements of Section 856 (a) (5) and (6) of the Internal
Revenue Code, then the Trustees shall have the power (i) to call for redemption
a number of such concentrated Shares sufficient, in the opinion of the
Trustees, to maintain or bring the direct or indirect ownership of Shares of
the Trust into conformity with the requirements of said Section 856 (a) (5) and
(6) and (ii) to refuse to transfer Shares to any person whose acquisition of
the Shares in question would in the opinion of the Trustees result in a
violation of said Section 856 (a) (5) or (6).  The redemption price shall be
equal to the fair market value of the Shares as reflected in the latest bid
quotation for the Shares (if then traded over-the-counter) or the closing sale
price (if then listed on a national securities exchange) as of the business day
preceding the day on which notice of redemption is sent, or, if no quotations
or closing sale price for the Shares are available, as determined in good faith
by the Trustees.  From and after the date fixed for redemption by the Trustees,
the holder of any Shares so called for redemption shall cease to be entitled to
dividends, voting rights and other benefits with respect to such Shares
excepting only the right to payment of the redemption price.  For the purpose
of this Section 5.17, the term "individual" shall be construed as provided in
Section 542 (a) (2) of the Internal Revenue Code, or any successor provision,
and "ownership" of Shares shall be determined as provided in Section 544 of the
Internal Revenue Code.

                 SECTION 5.18.  Power of Trustees to issue Warrants, terms on
which Warrants may be issued.  The Trustees, in their discretion, may from time
to time without prior





                                       37
<PAGE>   47




authorization by the Shareholders issue share purchase warrants (herein
referred to as "Warrants") which shall entitle the holders thereof to subscribe
to Shares and/or fractional shares or scrip at such time or times and on such
terms as the Trustees may prescribe including, without limiting the generality
of the foregoing, the times within which any such Warrants must be exercised
and the consideration to be paid for such Shares.  Warrants may be issued to
such parties and for such consideration as the Trustees may from time to time
determine (including the issuance of detachable or non-detachable Warrants as
an inducement to persons acquiring or underwriting notes, debentures, bonds,
instruments or other obligations or Shares of the Trust); provided, however,
that the exercise price of such Warrants shall not be less than the fair market
value (determined as provided in Section 5.17) of the Shares on the date on
which the Trustees establish said exercise price, and provided further that no
Warrants or options shall be issued to any Trustees or to any directors,
officers or employees of the Manager or any parent or subsidiary thereof or
employees of the Trust except to such persons in their capacity as a security
holder of the Trust as part of a ratable issue to all security holders.  The
provisions of this Article 5 relative to certificates for Shares shall apply so
far as appropriate to such Warrants, except that such Warrants may, in the
discretion of the Trustees, be signed by a transfer agent alone notwithstanding
that there is then a registrar for the Shares.

                 SECTION 5.19.  Shareholders have no preemptive rights.
Shareholders shall have no preemptive rights with respect to any Shares,
Warrants, evidences of indebtedness (convertible or otherwise) or other
securities of the Trust sold, offered or issued at any time, and no offering of
any such securities need be made to Shareholders or any of them.

                                   ARTICLE 6.

                            RIGHTS OF SHAREHOLDERS.

                 SECTION 6.1.  Ownership of Trust Property and control of Trust
exclusively in Trustees, Shareholders have only beneficial interest.  The
ownership of all Trust Property and the control of the affairs of the Trust are
vested exclusively in the Trustees, and the Shareholders shall have no interest
therein other than the beneficial interest conferred by their Shares issued
hereunder, and they shall have no right to call for any partition or division
of any property, profits, rights or interests.





                                       38
<PAGE>   48





                 SECTION 6.2.  Shares are personal property, limitation of
rights of personal representatives.  The Shares issued hereunder shall be
personal property giving only the rights in this Declaration of Trust and in
the certificates therefor specifically set forth.  The death of a Shareholder
during the continuance of this Trust shall not terminate the Trust nor give his
legal representatives a right to an accounting or to take any action in the
courts or otherwise against other Shareholders or the Trustees or the property
held hereunder, but shall simply entitle the legal representatives of the
deceased Shareholder to demand and receive a new certificate for Shares in
place and upon surrender of the certificate held by the deceased Shareholder,
and upon the acceptance of which new certificate such legal representatives
shall succeed to all the rights of the deceased Shareholder under this Trust.

                 SECTION 6.3.  Annual Meeting of Shareholders to be held after
delivery of Annual Report, calling special meetings of Shareholders.  The
Annual Meeting of Shareholders shall be held after delivery to the Shareholders
of the Annual Report described in Section 2.9 and within six months from the
end of each fiscal year, at a place and on a date to be fixed, from time to
time, by the by-laws or by resolution of the Trustees.  The first Annual
Meeting of Shareholders shall be held after the Trust's first full fiscal year.
Special meetings of the Shareholders may be called by either the Chairman of
the Board of Trustees, the President, or a Majority of the Trustees, and shall
be called by the President upon the written request (specified in the purpose
or purposes of the meeting) of the holders of record of at least twenty-five
per cent (25%) of the Shares issued and outstanding and entitled to vote, at
such times and at such place as may be stated in the notice thereof.  The
notice of such a special meeting shall specify the purpose or purposes for
which it has been called.

                 SECTION 6.4.  Notice of Shareholders' meeting.  Notice of all
meetings of the Shareholders shall be mailed or delivered at least ten (10)
days and not more than fifty (50) days before the meeting by a Trustee or
Trustees or an officer or agent of the Trust to each Shareholder at his last
known address as recorded on the register of the Trust, or at such other
address as shall be furnished in writing by him to the Trust for such purpose.
No business shall be transacted at any Special Meeting of Shareholders unless
notice of such business has been given in the call for the meeting.  Any
adjourned meeting may be held as adjourned without further notice.





                                       39
<PAGE>   49




                 SECTION 6.5.  Quorum at Shareholders' meeting.  The presence
in person or by proxy of the holders of a majority of the Shares issued,
outstanding, and entitled to vote, shall be necessary to constitute a quorum at
all Shareholders' meetings for the transaction of business.  If a quorum is
once present to hold a meeting, it is not broken by the subsequent withdrawal
or departure of any Shareholder.  If a quorum shall not be present, a majority
of the Shareholders entitled to vote thereat, present in person or represented
by proxy, shall have power to adjourn from time to time the meeting until a
quorum shall be present or represented.  At any adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed.

                 SECTION 6.6.  Action of Shareholders not binding on Trustees,
with certain exceptions.  No action taken by the Shareholders at any meeting
other than an action of the type specified in Section 2.2 relative to election
of Trustees, Section 2.3 relative to removal of Trustees, Section 8.1 relative
to amendment of this Declaration of Trust, or Section 8.2 relative to the
organization and transfer of the Trust Property to another entity (and then
only if such action is taken by the percentage of Shares in each case therein
specified) shall in any way bind the Trustees.

                 SECTION 6.7.  Determination of Shareholders eligible to vote,
closing of transfer books.  In order that the Trust may determine the
Shareholders entitled to notice of or to vote at any meeting of Shareholders or
any adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of shares or for the
purpose of any other lawful action, the Trustees may fix, in advance, a record
date, which shall not be more than sixty nor less than ten days before the date
of such meeting, nor more than sixty, days prior to any other action.

                 If no record date is fixed:

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





                                       40
<PAGE>   50




                          (b) The record date for determining Shareholders for
                 any other purpose shall be at the close of business on the day
                 on which the Board of Trustees adopts the resolution relating
                 thereto.

                 A determination of Shareholders of record entitled to notice
of or to vote at a meeting of Shareholders shall apply to any adjournment of
the meeting; provided however, that the Trustees may fix a new record date for
the adjourned meeting.

                 Any Shareholder who was a Shareholder at the time so fixed
shall be entitled to receive notice of and to vote at such meeting or any
adjournment thereof or to receive such dividend even though he has since that
date disposed of his Shares, and no Shareholder becoming a Shareholder after
said date shall be so entitled to receive of or to vote at said meeting or any
adjournment thereof or to receive such dividend.

                 SECTION 6.8.  Right of Shareholders to vote by proxy, filing
of proxy, voting rights of various persons.  At any meeting of the
Shareholders, any Shareholder entitled to vote thereat may vote by proxy,
provided that no proxy shall be voted at any meeting unless it shall have been
filed before the time set for the commencement of the meeting, or at such time
prior to the commencement of the meeting as may be fixed by the by-laws of the
Trust, with the Secretary, or with such other officer or agent of the Trust as
the Secretary may direct.  Only Shareholders of record as determined in Section
6.7 shall be entitled to vote and each full Share shall be entitled to one
vote.  Fractional Shares shall not be entitled to any vote.  When any full
Share is held jointly by several persons, any one of them may vote at any
meeting in person or by proxy in respect of such Share, but if more than one of
them shall be present at such meeting in person or by proxy in respect of such
Share, and such joint owners or their proxies so present disagree as to any
vote to be cast, such vote shall not be received in respect of such Share.  If
the holder of any such Share is a minor or a person of unsound mind, and
subject to guardianship or to the legal control of any other person as regards
the charge or management of such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote may be given in
person or by proxy.

                 SECTION 6.9.  Proxies, form of proxies, and proxy
solicitation.  Whenever the vote or consent of Shareholders is required or
permitted under this Declaration, such vote or consent may be given either
directly by the Shareholder or by a proxy in the form prescribed in the
by-laws.  The proxy may be given to one or more persons, or any of





                                       41
<PAGE>   51




them, with power to permit substitution, and may be for meetings or action
generally or for any particular meeting or action, and may include the exercise
of discretionary powers.  Each proxy to vote shall be in writing and signed by
the Shareholder or by his duly authorized representative.  The Trustees may
solicit proxies from the Shareholders or any of them in any matter requiring or
permitting the Shareholders' vote or consent.

                 SECTION 6.10.  Prohibition of sale, lease, exchange or other
disposition of more than 50% of Trust Property without Shareholders' approval,
except as security for any borrowing.  The affirmative vote or consent of the
majority of all outstanding Shares shall be required to approve the principal
terms of the transaction and the nature and amount of the consideration
involving any sale, lease, exchange or other disposition of more than 50% of
the Trust Property.  The vote or consent of Shareholders shall not be required
for the pledging, hypothecating, granting security interests in, mortgaging, or
encumbering of all or any part of the Trust Property, or for the sale, lease,
exchange or other disposition of less than 50% of the Trust Property.

                 SECTION 6.11.  Right of Shareholders and securities
administrators to inspect books.  Shareholders and any Federal or state
securities or "blue sky" administrator or other similar authority shall have
the right, at reasonable times during business hours and for proper purposes,
to inspect the books of account of the Trust and the records of the meetings of
Shareholders and Trustees at the office of the Trust in Dallas, Texas, or at
such other office at which such books and records are normally kept in the
regular course of business of the Trust.

                 SECTION 6.12.  Rights of Holders of Preferred Stock.  The
holders of shares of preferred stock shall, under the provisions of this
Article 6, be treated as Shareholders, and holders of outstanding Shares of the
Trust, only to the extent that such rights (if any) have been granted to the
holders of shares of such stock of the series they possess.

                                   ARTICLE 7.

                    LIABILITY OF TRUSTEES, SHAREHOLDERS AND
                          OFFICERS, AND OTHER MATTERS.

                 SECTION 7.1.  Exculpation of Trustees and officers.  No
Trustee or officer of the Trust shall be liable to the Trust or to any other
Trustee or to any Shareholder for any act or omission of any other Trustee or
of any Manager, officer, employee or agent of the





                                       42
<PAGE>   52




Trust or be held to any personal liability whatsoever in tort, contract or
otherwise in connection with the affairs of this Trust except only that arising
from his own willful misfeasance, bad faith, gross negligence, or reckless
disregard of duty.

                 SECTION 7.2.  Limitation of liability of Shareholders,
Trustees and officers.  The Trustees and officers in incurring any debts,
liabilities or obligations, or in taking or omitting any other actions for or
in connection with the Trust are, and shall be deemed to be, acting as Trustees
or officers of the Trust and not in their own individual capacities.  Except to
the extent provided in Section 7.1, no Trustee or officer shall, nor shall any
Shareholder, be liable for any debt, claim, demand, judgment, decree, liability
or obligation of any kind of, against or with respect to the Trust, arising out
of any action taken or omitted for or on behalf of the Trust, and the Trust
shall be solely liable therefor and resort shall be had solely to the Trust
Property for the payment or performance thereof.  Each Shareholder shall be
entitled to pro rata indemnity from the Trust Property if, contrary to the
provisions hereof, such Shareholder shall be held to personal liability.

                 SECTION 7.3.  Express exculpatory clauses in instruments.  As
far as practicable, the Trustees shall cause any written instrument creating an
obligation of the Trust to include a reference to this Declaration to provide
that neither the Shareholders nor the Trustees nor the officers shall be liable
thereunder and that the other parties to such instrument shall look solely to
the Trust Property for the payment of any claim thereunder or for the
performance thereof; however, the omission of such provision from any such
instrument shall not render the Shareholders or any Trustee or officer liable
nor shall the Trustees or any officer of the Trust be liable to anyone for such
omission.  The Trustees shall, at all times, maintain insurance for the
protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to
cover probable tort liability, and such other insurance as the Trustees in
their sole judgment shall deem advisable.

                 SECTION 7.4.  Indemnification and reimbursement of Trustees,
officers, employees or agents.  Any Trustee, officer, employee or agent of the
Trust who is made a party to any action, suit or proceeding or against whom a
claim or liability is asserted by reason of the fact that he, his testator or
intestate was or is a Trustee, officer, employee or agent, or active in any
such capacity on behalf of the Trust, shall be indemnified and held harmless by
the Trust against judgments, fines, amounts paid on account thereof (whether in





                                       43
<PAGE>   53




settlement or otherwise) and reasonable expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense of such
action, suit, proceeding, claim or alleged liability or in connection with any
appeal therein, whether or not the same proceeds to judgment or is settled or
otherwise brought to a conclusion; provided, however, that no such
indemnification or reimbursement shall be made for any claim, obligation or
liability which arose out of such Trustee's, officer's, employee's or agent's
willful misfeasance, bad faith, gross negligence or reckless disregard of duty;
and provided further that such Trustee, officer, employee or agent of the Trust
shall give prompt notice thereof, execute such documents and take such action
as will permit the Trust to conduct the defense or settlement thereof and
cooperates therein.  In the event of a settlement approved by the Trustees of
any such claim, alleged liability, action, suit or proceeding, indemnification
and reimbursement shall be provided except as to such matters covered by the
settlement which the Trust is advised by its counsel arose from the Trustee's,
officer's, or employee's or agent's willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.  Such rights of indemnification and
reimbursement shall be satisfied only out of the Trust Property.  Expenses
incurred in defending any action, suit or proceeding may be paid by the Trust
in advance of final disposition of such action, suit or proceeding as
authorized by the Trustees in a specific case upon receipt of an undertaking by
or on behalf of the Trustee, officer, employee or agent to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Trust as provided in this Section 7.4.  The rights accruing to any
person under these provisions shall not exclude any other right to which he may
be lawfully entitled, nor shall anything contained herein restrict the right of
the Trust to indemnify or reimburse such person in any proper case even though
not specifically provided for herein, nor shall anything contained herein
restrict such right of a Trustee, officer, employee or agent to contribution as
may be available under applicable law.

                 SECTION 7.5.  Right of Trustees, Manager, officers, employees
or agents to own property or to engage in business.  Any Trustee, Manager,
officer, employee or agent of the Trust may acquire, hold and dispose of any
Real Property Mortgage Loan, or other property similar or dissimilar or in any
other real estate investment trust for his own individual account and may
exercise all rights of a shareholder or owner of such property as if he were
not a Trustee, Manager, officer, employee or agent, as the case may be.  Any
Trustee, Manager, officer, employee or agent of the Trust may have personal
business interests of any nature and may continue such activities for his own
account; and any





                                       44
<PAGE>   54




Trustee, Manager, officer, employee or agent may be interested as a partner,
officer, director, stockholder, employee or otherwise, in any firm or
corporation that may be engaged by the Trust and may receive compensation from
such firm or corporation in such capacities, as well as compensation as Trustee
hereunder.  None of these activities shall be deemed to conflict with the
duties of Trustee, Manager, officer, employee or agent to the Trust.  The
failure to present the Trust any opportunity which a Trustee, Manager, officer,
employee or agent of the Trust may receive in any capacity other than as
Trustee, Manager, officer, employee or agent, shall not make such Trustee,
Manager, officer, employee or agent liable to the Trust, to the Trustees or to
any Shareholder in any way whatsoever.

                 SECTION 7.6.  Transactions between the Trustees and the Trust.
Except as prohibited by this Declaration, and in the absence of fraud, a
contract, act or other transaction in which the Trust has any interest or which
is between the Trust and any other person, firm, corporation or other entity,
shall be valid even though (i) one or more of the Trustees, officers, employees
or agents of the Trust, or the Manager of the Trust, are directly or indirectly
interested in or connected with such contract, act or transaction, or any
trustee, partners, directors, shareholders, employees or officers of such other
person, firm, corporation or other entity, or (ii) one or more of the Trustees,
officers, employees or agent of the Trust, or the Manager 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.  No Trustee, officer, employee or agent of the Trust, and no
Manager of the Trust, shall be under any disability from or have any liability
as a result of entering into any such contract, act or transaction, provided
that (a) such interest or connection is disclosed or known to the Trustees and
such contract, act or other transaction has been authorized, ratified or
otherwise approved by the affirmative vote of a majority of the Trustees not
interested therein, or (b) such interest or connection is disclosed or known to
the Shareholders, and such contract, act or transaction is approved by the
Shareholders.

                 Notwithstanding any other provisions of this Declaration, no
Trustee may borrow money from the Trust nor may any Trustee, Manager, officer
or employee of the Trust, acting in his individual capacity, directly or
indirectly, purchase or otherwise acquire from, or sell or otherwise transfer
to, the Trust any property whatsoever, other than Shares and instruments
evidencing debt securities issued by the Trust.  No Trustee, Manager, officer
or employee of the Trust shall receive a commission or other remuneration,
directly or indirectly, in connection with the disposal or acquisition of
assets of the Trust.  Nor may





                                       45
<PAGE>   55




the Trustees lend any of the assets or property of the Trust to any Trustee,
Manager, officer or employee of the Trust in his individual capacity.  The
Trustees shall not knowingly, directly or indirectly, purchase or otherwise
acquire any property whatsoever from, or sell or otherwise transfer any
property whatsoever to, or lend any of the assets or property of the Trust to,
any person, firm, organization or other entity with which a Trustee in his
individual capacity is affiliated by reason of being a director, officer,
partner, trustee or holder of more than one percent (1%) of the outstanding
capital stock of such person, firm, organization or other entity unless such
transaction has been authorized, ratified or otherwise approved by the
affirmative vote of a majority of the Trustee not so affiliated.  This Section
7.6 shall not prevent the sale to a Trustee of Shares, notes, bonds, debentures
or other securities issued by the Trust in a public offering in accordance with
a Registration Statement filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and the payment of reasonable
commissions and fees therefor, nor shall it prevent the payment to a Trustee of
reasonable commissions or fees for the so-called "private placement" of such
securities with investors.  The Trustees are not restricted by this Section 7.6
from forming a corporation, partnership, trust or other business association
owned by the Trustees or by their nominees for the purpose of holding title to
property of the Trust or managing property of the Trust, provided the Trustees'
motive for the formation of such business association is not for their own
enrichment.

                 All transactions with one or more of the Trustees, officers,
employees or agents of the Trust or the Manager of the Trust or any parent or
subsidiary thereof shall be on terms fair and reasonable to the Shareholders
and at least as favorable to the Trust as similar arrangements for comparable
transactions to which the Trust is aware with organizations unaffiliated with
the Trust or with said companies.  Any mortgages purchased from any of such
persons will be at a price not more than the fair market value thereof on the
basis of prevailing interest rates for mortgages on similar properties, and any
other properties so purchased will be at a price not more than the fair value
thereof as determined by an independent appraisal.

                 SECTION 7.7.  Restriction of duties and liabilities.  To the
extent that the nature of this Trust (that is, a business trust) will permit,
the duties and liabilities of Shareholders, Trustees and officers shall in no
event be greater than the duties and liabilities of shareholders, directors and
officers of a Massachusetts corporation.  The Shareholders, Trustees and
officers shall in no event have any greater duties or liabilities than those
imposed by applicable law as shall be in effect from time to time.





                                       46
<PAGE>   56




                 SECTION 7.8.  Persons dealing with Trustees or officers.  Any
act of the Trustees or officers purporting to be done in their capacities as
such, shall, as to any persons dealing with such Trustees or officers, be
conclusively deemed to be within the purposes of this Trust and within the
powers of the Trustees and officers.  No person dealing with the Trustees or
any of them, or with the authorized officers or agents of the Trust, shall be
bound to see to the application of any funds or property passing into their
hands or control.  The receipt of the Trustees or any of them, or of authorized
officers or agents of the Trust, for moneys or other consideration, shall be
binding upon the Trust.

                 SECTION 7.9.  Reliance.  The Trustees and officers may consult
with counsel, surveyors, engineers, brokers, auctioneers, appraisers,
accountants or other persons deemed by the Trustees to be competent (any of
which may be a firm in which one or more of the Trustees or officers is or are
members or be otherwise interested) and the advice or opinion of such person
shall be full and complete personal protection to all of the Trustees and
officers in respect of any action taken or suffered by them in good faith and
in reliance on or in accordance with such advice or opinion.  In discharging
their duties, Trustees and officers, when acting in good faith, may rely upon
financial statements of the Trust represented to them to be correct by the
President or the officer of the Trust having charge of its books of account, or
stated in a written report by an independent certified public accountant to
fairly present the final position of the Trust.  The Trustees may rely, and
shall be personally protected in acting, upon any instrument or other document
believed by them to be genuine.

                 SECTION 7.10.  No bond required of Trustees, Manager,
officers, employees or agents.  No Trustee, Manager, officer, employee or agent
of the Trust shall be required to furnish a bond or other security for the
performance of his duties, responsibilities or other obligations to the Trust,
unless required by any applicable state or federal law or regulation.  However,
the Trustees may, in their sole discretion, require a bond or other security of
any Trustee, Manager, officer, employee or agent to insure the faithful
performance of his particular duties, responsibilities or other obligations to
the Trust.  The premium or cost of any such bond or other security may be paid
by the Trust.





                                       47
<PAGE>   57





                                   ARTICLE 8.

                       Amendment or Termination of Trust.

                 SECTION 8.1.  Power to amend or terminate Trust.  The
provisions of this Declaration of Trust may be amended or altered (except as to
the limitations of the personal liability of Trustees and Shareholders and the
prohibition of assessment upon Shareholders), or the Trust may be terminated,
by written instrument signed by at least two-thirds (2/3) of the Trustees and
consented to by the holders of at least two-thirds (2/3) of the Shares then
outstanding hereunder and entitled to vote, either in writing or by a vote at a
meeting of Shareholders; provided, however, that the Trustees may, from time to
time, by written instrument signed by at least two-thirds (2/3) of the Trustees
amend or alter the provisions of this Declaration of Trust, without the vote or
assent of the Shareholders, to the extent deemed by the Trustees in good faith
to be necessary to meet the requirements for qualification as a real estate
investment trust under Sections 856, 857 and 858, of the Internal Revenue Code,
and any interpretations of the statutory provisions or regulations made by the
Internal Revenue Service or any court; and further provided, that the Trustees
may also, from time to time, by written instrument signed by at least
two-thirds (2/3) of the Trustees, amend or alter the provisions of this
Declaration of Trust without the vote or assent of the Shareholders, (i) to
modify the Ownership Interest Percentage in the Trust specified in Section
5.7(a)(i)(1), (ii) to modify the definitions of any terms set forth in Section
5.7, or (iii) to amend the provisions of Section 3.20, relating to the Trust's
resident agent in Massachusetts, to comply with applicable Massachusetts law.
In addition, since the Trust has obtained the permission of Lomas & Nettleton
Financial Corporation to use the name "Lomas & Nettleton", which name is well
recognized in the mortgage banking and financial community, and anticipates
contracting with, and the employment of, Lomas & Nettleton Financial
Corporation or one of its subsidiaries as the Manager, the Trustees may,
without the vote or assent of the Shareholders, and, upon receipt of the
written request of Lomas & Nettleton Financial Corporation shall, amend or
change the name of the Trust so that it thereafter will not include "Lomas &
Nettleton", "L & N" or any approximation thereof, if (a) the Trustees fail to
enter into a contract or agreement with Lomas & Nettleton Financial Corporation
or one of its subsidiaries as Manager, or (b) having entered into such a
contract or agreement, Lomas & Nettleton Financial Corporation or one of its
subsidiaries shall thereafter cease to serve as Manager either for failure of
either party to renew or extend such contract or agreement or for any other
cause whatsoever.  No amendment, alteration or termination





                                       48
<PAGE>   58




shall become effective unless and until the instrument effecting such change
shall have been acknowledged by one or more of the Trustees executing such
instrument and recorded in the Registry and, if in accordance with the
foregoing provisions of this Section 8.1, the consent of Shareholders in
writing or by a vote at a meeting is required in order to effectuate such
change, unless and until a certificate signed and acknowledged by a Trustee as
to the accomplishment of such consent shall have been recorded in the Registry
with such instrument.

                 SECTION 8.2.  Power to organize corporation or other entity to
take over Trust Property.  By written instrument signed by at least two-thirds
(2/3) of the Trustees and consented to by at least two-thirds (2/3) of the
Shares then outstanding hereunder and entitled to vote, either in writing or by
a vote at a meeting of Shareholders, a corporation, association, trust or other
organization (or one or more of such entities) may be organized to take over
the Trust property and carry on the affairs of the Trust.  The Trust property
may be sold, conveyed or transferred to any such corporation, association,
trust or organization, or to any existing corporation, association, trust or
other organization, in exchange for the shares or securities thereof, or
beneficial interest therein, and such transferee may be caused to assume the
liabilities of the Trust, to deliver such shares, securities or beneficial
interests ratably to the Shareholders in redemption of their Shares, and this
Trust may be terminated; provided, however, that no such sale, conveyance or
transfer of the Trust Property shall be made to any corporation, association,
trust or other organization unless (i) it utilizes its best efforts to continue
to qualify for benefits under the federal income tax laws which are
substantially equal to the benefits for which this Trust qualifies at such
time, if that is appropriate, (ii) it has a purpose substantially the same as
the purpose of this Trust, and (iii) its shares, securities, or beneficial
interests which will be issued in exchange for such property constitute an
investment substantially equal in quality and substantially the same in type as
an investment in the Shares hereof.

                 SECTION 8.3.  Effect of Internal Revenue Code on power to
amend or terminate.  The provisions of Sections 2.2, 2.3, 8.1 and 8.2 giving
the Shareholders the right to elect and remove Trustees and the right to amend
and terminate the Trust shall be subject to the requirements of the Internal
Revenue Code.  If any provision granting or limiting such Shareholders' rights
shall conflict with the requirements of Sections 856, 857 or 858 of the
Internal Revenue Code, such provision shall be deemed to be void and without
any force or effect ab initio, but any action taken pursuant to any such
provision shall have been





                                       49
<PAGE>   59




validly taken upon the vote of the Trustees required hereunder.  In the event
that the provision relating to the election of Trustees by the Shareholders of
the Trust shall be deemed to be without force or effect, the Trustees then in
office shall be deemed to be qualified and acting Trustees until such time as
the successor Trustees have been named and qualified; provided, however, that
at the next meeting of Shareholders after the Trustees shall have notified the
Shareholders that any or all of the Shareholders' rights under Sections 2.2,
2.3, 8.1 or 8.2 created such a conflict and therefore shall be without force
and effect, there shall be submitted to the Shareholders for their approval or
disapproval by a majority of those voting, the question as to whether such
Shareholders' right or rights should be continued.

                 SECTION 8.4.  Power to organize other corporations or business
trusts.  By written instrument signed by at least two-thirds (2/3) of the
Trustees and without the vote or assent of the Shareholders, the Trustees may
cause the Trust to organize, or cause to be organized, one or more corporations
or business trusts, under the Business Corporation Law of the Commonwealth of
Massachusetts or of the applicable laws of any other state, all of the
outstanding shares of each of which shall be owned by the Trust, for any
appropriate purpose of the Trust that they deem in its best interests.

                 SECTION 8.5.  Disposition of Trust Property upon termination.
Upon the termination of the Trust, the Trustees may sell and convert into money
the whole of the Trust Property, or any part thereof, and, after paying,
retiring, or providing for the payment of, all known liabilities and
obligations of the Trust and providing for indemnity against any other
outstanding liabilities and obligations, shall divide the proceeds thereof
among, and distribute in kind, at valuations made by them which shall be
conclusive, all other property then held by them in trust hereunder to, the
Shareholders ratably according to the respective number of Shares held by them.
In making any sale under this provision the Trustees shall have power to sell
by public auction or private contract and to buy in or rescind or vary any
contract of sale and to resell without being answerable for loss and, for said
purposes, to do all things, including the execution and delivery of
instruments, as may by their performance thereof be shown to be in their
judgment necessary or desirable in connection therewith.  The powers of sale
and all other powers herein given to the Trustees shall continue as to all
property at any time remaining in their hands or ownership, even though all
times herein fixed for distribution of Trust Property may have passed.





                                       50
<PAGE>   60




                 SECTION 8.6.  Effect of Reorganization under Federal laws and
Implementation of Plan of Reorganization.  (a) If, pursuant to the provisions
of any applicable statute of the United States relating to reorganizations, a
plan of reorganization of the Trust has been or shall be confirmed by the
decree or order of a court of competent jurisdiction, the Trust may put into
effect and carry out the plan and the decrees and orders of the court relative
thereto and may take any proceeding and do any act provided in the plan or
directed by such decrees and orders, without further action by its Trustees or
Shareholders.  Such power and authority may be exercised, and such proceedings
and acts may be taken, as may be directed by such decrees or orders, by the
trustee or trustees for the Trust appointed by the court in the reorganization
proceedings (or a majority thereof), or if none be appointed and acting, and
the Trust is the debtor in possession, by designated officers of the Trust, or
by a master or other representative appointed by the court, with like effect as
if exercised and taken by unanimous action of the Trustees and Shareholders of
the Trust.

                 (b)      In accordance with any such plan of reorganization,
the Trust may organize, cause to be organized, or utilize one or more entities
or corporations under the Business Corporation Law of the Commonwealth of
Massachusetts or any other state of the United States, all of the outstanding
shares of which initially shall be owned by the Trust.

                 (c)      The Trust may, in the manner provided in subsection
(a), but without limiting its generality or effect, alter, amend or repeal its
by-laws; constitute or reconstitute the Board of Trustees, and name, constitute
or appoint Trustees and officers in place of or in addition to all or some of
the Trustees or officers then in office; amend this Declaration of Trust
without the vote or assent of the Trustees and/or the Shareholders, and make
any change in its authorized and issued shares of beneficial interest, or make
any other amendment, change or alteration, or provision, authorized by such
plan or necessary for its implementation, or transfer all or part of its
assets.  In no such case, however, shall any Shareholder have any right to
demand payment for such Shareholder's shares of beneficial interest.

                 (d)      Any amendment made to the Declaration of Trust
pursuant to the foregoing provisions of this section shall be signed under the
penalties of perjury by the person or persons authorized by the court, in
accordance with the provisions of subsection (a), and filed with the state
secretary, recorded in the Registry, and filed with the clerk of the City of
Boston.  The amendment shall become effective when it has been so filed and
recorded,





                                       51
<PAGE>   61




unless said amendment specifies a later effective date and not more than thirty
days after such filing, in which even the amendment shall become effective on
such later date.

                                   ARTICLE 9.

                                 MISCELLANEOUS.

         SECTION 9.1.  Laws of Massachusetts shall govern, recording of
Declaration of Trust and amendments.  This Declaration of Trust is executed by
the Trustees and is delivered in the Commonwealth of Massachusetts and with
reference to the laws thereof, and the rights of all parties and the
construction and effect of every provision hereof shall be subject to and
construed according to the laws of said Commonwealth.  This Declaration of
Trust and any amendment hereof shall, as soon as reasonably practicable after
its execution, be recorded in the Registry and in all other offices in which
such recording may be required from time to time by the laws of the
Commonwealth of Massachusetts and in the office of the county recorder of any
county where land and/or improvements thereon owned by the Trust are located.

         SECTION 9.2.  Offices of the Trust.  The principal office of the Trust
in Massachusetts shall be in Boston, Massachusetts, unless changed by the
Trustees to another location in Massachusetts.  The Trust may maintain its
executive office at Dallas, Texas or elsewhere as the Trustees may from time to
time determine.

         SECTION 9.3.  Execution in one or more counterparts.  This Declaration
of Trust and any amendment hereof may be simultaneously executed in several
counterparts, each of which so executed shall be deemed to be an original, and
such counterparts together shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such counterpart.

         SECTION 9.4.  Certificate of Trustees or Secretary conclusive evidence
in favor of third parties.  Any certificate signed by a person who, according
to the records in the Registry, appears to be a Trustee hereunder, shall be
conclusive evidence as to the matters so certified in favor of any person
dealing with the Trust or anyone or more of them, and the successors or assigns
of such person, which certificate may certify to any matter relating to the
affairs of the Trust, including but not limited to any of the following:  a
vacancy among the Trustees; the number or identity of Trustees; this
Declaration of Trust and any amendments thereto, or any Restated Declaration of
Trust and any amendments





                                       52
<PAGE>   62




thereto, or that there are no amendments to this Declaration of Trust or any
Restated Declaration of Trust; a copy of the by-laws of the Trust; the due
authorization of the execution of any instrument or writing; the form of any
vote passed at a meeting of Trustees or Shareholders; the fact that the number
of Trustees present at any meeting or executing any written instrument
satisfies the requirements of this Declaration of Trust; the form of any by-law
adopted by or the identity of any officer elected by the Trustees; or the
existence or non-existence of any fact or facts which in any manner relate to
the affairs of the Trust.  In addition, the Secretary or any Assistant
Secretary of the Trust or any other officer of the Trust designated by the
by-laws or by action of the Trustees may sign any such certificate, and such
certificate shall be conclusive evidence as to matters so certified in favor of
any person dealing with the Trust, and the successors and assigns of such
person.

         SECTION 9.5.  Third parties may rely on recorded Declaration of Trust.
If this Declaration of Trust is filed or recorded in any recording office other
than the Registry, anyone dealing with real estate so located that instruments
affecting the same should be filed or recorded in such recording office may
rely conclusively upon any certificate of the kind described in Section 9.4
hereof which is signed by a person who according to the records in such
recording office appears to be a Trustee hereunder.

         SECTION 9.6.  Execution and effect of Restated Declaration of Trust.
A Restated Declaration of Trust containing this original Declaration of Trust,
as amended to the time of execution of the Restated Declaration of Trust, may
be executed at any time or from time to time by a majority of Trustees and
recorded in the Registry, and such Restated Declaration of Trust shall
thereafter be effective and may thereafter be referred to in lieu of the
original Declaration of Trust and the various amendments thereto.

         SECTION 9.7.  Inclusiveness of plural, singular, and genders,
descriptive headings, etc. for convenience only.  In the construction of this
Declaration of Trust whether or not so expressed, words used in the singular or
in the plural respectively include both the plural and singular.  Words
denoting males includes females and words denoting persons include individuals,
firms, associations, companies (joint stock or otherwise), trusts and
corporations unless a contrary intention is to be inferred from or required by
the subject matter or context.  The cover, title, headings of different parts
hereof, the table of contents, the index of definitions and the marginal notes,
if any, are inserted only for the





                                       53
<PAGE>   63




convenience of reference and are not to be taken to be any part hereof or to
control or affect the meaning, construction, interpretation or effect hereof.

         SECTION 9.8.  Severability.  If any provisions of this Declaration of
Trust shall be invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or
render invalid or unenforceable any other provision of this Declaration, and
this Declaration shall be carried out, if possible, as if any such invalid or
unenforceable provision were not contained herein.

                                  ARTICLE 10.

                               Duration of Trust.

         Subject to possible earlier termination in accordance with the
provisions of Article 8 hereof, the Trust created hereby shall terminate on the
expiration of twenty (20) years after the death of the last survivor of the
initial Trustees and the following named persons:





                                       54
<PAGE>   64





<TABLE>
<CAPTION>
                                                                            PARENT OR GUARDIAN AND
                  NAME                              DATE OF BIRTH             PRESENT RESIDENCE
                  ----                              -------------             -----------------
             <S>                                 <C>                        <C>
             Deborah Anne Hay                    December 8, 1952           Jess T. Hay
                                                                            6341 Annapolis Lane
                                                                            Dallas, Texas





             Patricia Lynn Hay                   October 26, 1956           Jess T. Hay
                                                                            6341 Annapolis Lane
                                                                            Dallas, Texas





             Charles Beebe                       March 27, 1957             Albert N. Rohnstedt
                                                                            21 Clovercrest Road
                                                                            Weatherford, Conn.





             Mary Rebecca Enloe                  October 5, 1966            Robert Ted Enloe, III
                                                                            7736 Southwestern
                                                                            Dallas, Texas





             Sara Elizabeth Enloe                March 28, 1968             Robert Ted Enloe, III
                                                                            7736 Southwestern
                                                                            Dallas, Texas





             Mary Lois French                    August 9, 1957             Joseph J. French, Jr.
                                                                            4440 Fairfax
                                                                            Dallas, Texas





             Joseph J. French, III               October 4, 1959            Joseph J. French, Jr.
                                                                            4440 Fairfax
                                                                            Dallas, Texas





             Elizabeth Carol French              February 9, 1963           Joseph J. French, Jr.
                                                                            4440 Fairfax
                                                                            Dallas, Texas





             Charles Robert French               June 3, 1966               Joseph J. French, Jr.
                                                                            4440 Fairfax
                                                                            Dallas, Texas





             John Flaherty Sexton                November 3, 1964           John F. Sexton
                                                                            4831 Sugar Mill Road
                                                                            Dallas, Texas





             Erin Susanne Sexton                 February 14, 1968          John F. Sexton
                                                                            4831 Sugar Mill Road
                                                                            Dallas, Texas





             Maurice E. Purnell, III             February 27, 1968          Maurice E. Purnell, Jr.
                                                                            4507 Arcady
                                                                            Dallas, Texas


</TABLE>



                                       55
<PAGE>   65




<TABLE>
<CAPTION>
                                                                            PARENT OR GUARDIAN AND
                  NAME                              DATE OF BIRTH             PRESENT RESIDENCE
                  ----                              -------------             -----------------
             <S>                                 <C>                        <C>
             James Bert Jones                    January 12, 1963           James H. Jones
                                                                            New Orleans, Louisiana





             Cliff Ownbey Jones                  May 18, 1965               James H. Jones
                                                                            New Orleans, Louisiana





             Lee Christopher Jones               February 28, 1967          James H. Jones
                                                                            New Orleans, Louisiana





             Seth Thomas Kelly                   June 21, 1965              David Kelly, Jr.
                                                                            241 Avon Mountain Road
                                                                            Avon, Connecticut





             Kimberly Potter Kelly               May 24, 1963               David Kelly, Jr.
                                                                            241 Avon Mountain Road
                                                                            Avon, Connecticut





             Katharine Houghton Kelly            November 19, 1960          David Kelly, Jr.
                                                                            241 Avon Mountain Road
                                                                            Avon, Connecticut





             Sprague Callery                     September 10, 1967         James Callery
                                                                            22 Wooddale Road
                                                                            Greenwich, Connecticut





             Virginia Roberdeau Callery          June 3, 1969               James Callery
                                                                            22 Wooddale Road
                                                                            Greenwich, Connecticut
</TABLE>

                   IN WITNESS WHEREOF, Gene H. Bishop, N. Preston Breed, James
Callery, J.D. Francis, Jess Hay, H.O.  Johnson, James H. Jones and Albert N.
Rohnstedt have each signed and sealed these presents all on the day and year
first above written.

                                              /s/ Gene H. Bishop                
                                       ------------------------------------
                                                 Gene H. Bishop

                                             /s/ N. Preston Breed            
                                       ------------------------------------
                                                 N. Preston Breed





                                       56
<PAGE>   66





                                                /s/ James Callery       
                                       ------------------------------------
                                                    James Callery

                                               /s/ J. D. Francis       
                                       ------------------------------------
                                                   J. D. Francis

                                                  /s/ Jess Hay 
                                       ------------------------------------
                                                      Jess Hay

                                               /s/ H. O. Johnson                
                                       ------------------------------------
                                                   H. O. Johnson

                                               /s/ James H. Jones               
                                       ------------------------------------
                                                   James H. Jones

                                            /s/ Albert N. Rohnstedt           
                                       ------------------------------------
                                                Albert N. Rohnstedt





                                       57
<PAGE>   67
  


                        COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss.:
                                                                   June 26, 1969

                   Then personally appeared the above-named GENE H. BISHOP and
acknowledged the foregoing instrument to be his free act and deed.

                   Before me,

                                           /s/ Warren Christie Muffett      
                                       ------------------------------------
                                                  Notary Public

                                My commission expires: WARREN CHRISTIE MUFFETT, 
                                                       Notary Public 
                                                       MY COMMISSION EXPIRES 
                                                       MAY 24, 1974

                        COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.:
                                                                   June 26, 1969

                   Then personally appeared the above-named N. PRESTON BREED
and acknowledged the foregoing instrument to be his free act and deed.

                   Before me,

                                           /s/ Warren Christie Muffett       
                                       ------------------------------------
                                                     Notary Public

                                My commission expires: WARREN CHRISTIE MUFFETT, 
                                                       Notary Public 
                                                       MY COMMISSION EXPIRES 
                                                       MAY 24, 1974





                                       58
<PAGE>   68



                        COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.:
                                                                   June 26, 1969

                   Then personally appeared the above-named JAMES CALLERY and
acknowledged the foregoing instrument to be his free act and deed.

                   Before me,

                                            /s/ Warren Christie Muffett
                                       ------------------------------------
                                                 Notary Public

                                My commission expires: WARREN CHRISTIE MUFFETT, 
                                                       Notary Public 
                                                       MY COMMISSION EXPIRES 
                                                       MAY 24, 1974

                        COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.:
                                                                   June 26, 1969

                   Then personally appeared the above-named J. D. FRANCIS and
acknowledged the foregoing instrument to be his free act and deed.

                   Before me,

                                           /s/ Warren Christie Muffett   
                                       ------------------------------------
                                                  Notary Public

                                My commission expires: WARREN CHRISTIE MUFFETT,
                                                       Notary Public 
                                                       MY COMMISSION EXPIRES 
                                                       MAY 24, 1974





                                       59
<PAGE>   69
  


                        COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.:
                                                                   June 26, 1969

                   Then personally appeared the above-named JESS HAY and
acknowledged the foregoing instrument to be his free act and deed.

                   Before me,

                                           /s/ Warren Christie Muffett      
                                       ------------------------------------
                                                  Notary Public

                                My commission expires: WARREN CHRISTIE MUFFETT,
                                                       Notary Public 
                                                       MY COMMISSION EXPIRES 
                                                       MAY 24, 1974

                        COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.:
                                                                   June 26, 1969

                   Then personally appeared the above-named H. O. JOHNSON and
acknowledged the foregoing instrument to be his free act and deed.

                   Before me,

                                          /s/ Warren Christie Muffett        
                                       ------------------------------------
                                                 Notary Public

                                My commission expires: WARREN CHRISTIE MUFFETT,
                                                       Notary Public 
                                                       MY COMMISSION EXPIRES 
                                                       MAY 24, 1974





                                       60
<PAGE>   70



                        COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss.:
                                                                   June 26, 1969

                   Then personally appeared the above-named ALBERT N. ROHNSTEDT
and acknowledged the foregoing instrument to be his free act and deed.

                   Before me,

                                           /s/ Warren Christie Muffett      
                                       ------------------------------------
                                                   Notary Public

                                My commission expires: WARREN CHRISTIE MUFFETT, 
                                                       Notary Public 
                                                       MY COMMISSION EXPIRES 
                                                       MAY 24, 1974





                                       61
<PAGE>   71
  


STATE OF TEXAS     )  SS.
COUNTY OF DALLAS   )

                   Before me, the undersigned authority, on this day personally
appeared JAMES H. JONES, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledges to me that he executed the same
for the purposes and considerations therein expressed and as his free act and
deed.

                   Subscribed and sworn to before me this _______ day of June, 
1969.

                                         /s/   
                                       ------------------------------------
                                             Notary Public in and for
                                                Dallas County, Texas

                                My commission expires:





                                       62