ARTICLES OF INCORPORATION
 
                                    ARTICLE I
                                  INCORPORATOR
 
      The undersigned, Kenneth A. Hoxsie, whose address is c/o Hale and Dorr
LLP, 60 State Street, Boston, Massachusetts 02109, being at least eighteen years
of age, acting as incorporator, does hereby form a corporation under the General
Laws of the State of Maryland.
 
                                   ARTICLE II
                                      NAME
 
      The name of the corporation (hereinafter, the "Corporation") is
 
                        FRANKLIN STREET PROPERTIES CORP.
 
                                   ARTICLE III
                                    PURPOSES
 
      The purposes for which and any of which the Corporation is formed and the
business and objects to be carried on and promoted by it are:
 
      (1) To engage in business as a real estate investment trust, qualifying as
such under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended, or any successor statute (the "Code" and any references herein to
provisions of the Code shall include the successors to such provisions) and to
perform any and all activities and functions in connection therewith or related
thereto.
 
      (2) To engage in and perform any other activities or functions which may
awfully be performed by a business corporation organized under the General Laws
of the State of Maryland.
 
      The foregoing enumerated purposes and objects shall be in no way limited
or restricted by reference to, or inference from, the terms of any other clause
of this or any other Article of the Charter of the Corporation, and each shall
be regarded as independent; and they are intended to be and shall be construed
as powers as well as purposes and objects of the Corporation and shall be in
addition to and not in limitation of the general powers of corporations under
the General Laws of the State of Maryland.
 
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                                   ARTICLE IV
                          PRINCIPAL OFFICE IN MARYLAND
 
The present address of the principal office of the Corporation in the State of
Maryland is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. The Corporation may have such other offices or places of
business within or without the State of Maryland as the Board of Directors of
the Corporation may determine.
 
                                    ARTICLE V
                                 RESIDENT AGENT
 
The name and address of the resident agent of the Corporation is The Corporation
Trust Incorporated, 32 South Street, Baltimore, Maryland 21202. Said resident
agent is a Maryland corporation.
 
                                   ARTICLE VI
                             SHARES OF CAPITAL STOCK
 
Section 1. Authorized Shares of Capital Stock
 
      (a) Authorized Shares. The total number of shares of capital stock of all
classes that the Corporation has authority to issue is 200,000,000 shares,
consisting of
 
            (i) 20,000,000 shares of Preferred Stock, par value $.0001 per share
(the "Preferred Shares"), which may be issued in one or more classes as
described in Section 3 of this Article VI; and
 
            (ii) 180,000,000 shares of Common Stock, par value $.0001 per share
(the "Common Shares").
 
Each class of the Preferred Shares and the Common Shares shall each constitute a
separate class of capital stock of the Corporation.
 
      (b) Terminology and Aggregate Par Value. The Common Shares and the
Preferred Shares are collectively referred to herein as the "Equity Shares." The
aggregate par value of all of the Corporation's authorized shares having par
value is $20,000.
 
      (c) Increase or Decrease in Authorized Shares. The Board of Directors of
the Corporation may amend these Articles of Incorporation, without any vote or
consent of the stockholders, to increase or decrease the aggregate number of
Equity Shares or the number of Equity Shares of any class that the Corporation
has authority to issue.
 
Section 2. REIT-Related Restrictions and Limitations on the Equity Shares.
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      (a) Definitions. As used in this Article VI, the following terms shall
have the indicated meanings:
 
            "Acquire" shall mean the acquisition of Beneficial Ownership or
Constructive Ownership of Equity Shares by any means, including without
limitation a Transfer or the exercise of or right to exercise any rights under
any option, warrant, convertible security, pledge or other security interest or
similar right to acquire Equity Shares, but shall not include the acquisition of
any such rights unless, as a result, the acquiror would be considered a
Beneficial Owner or Constructive Owner, as defined below. The term "Acquisition"
shall have the correlative meaning.
 
            "Beneficial Ownership" shall mean ownership of Equity Shares by a
Person who is or would be treated as an owner of such Equity Shares under
Section 542(a)(2) of the Code either actually or constructively through the
application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code. The terms "Beneficially Own," "Beneficially Owned" and "Beneficial
Owner" shall have the correlative meanings.
 
            "Board" shall mean the Board of Directors of the Corporation.
 
            "Business Day" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in
Boston, Massachusetts are authorized or required by law, regulation or executive
order to close.
 
            "Charitable Beneficiary" shall mean one or more beneficiaries of the
Trust as determined pursuant to Section 2(e)(vi) of this Article VI.
 
            "Constructive Ownership" shall mean ownership of Equity Shares or
any other interest in an entity by a Person who is or would be treated as an
owner thereof either actually or constructively through the application of
Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructively Own," "Constructively Owned" and "Constructive Owner" shall have
the correlative meanings.
 
            "Market Price" shall mean the last reported sales price of the
Common Shares or Preferred Shares, as the case may be, on the trading day
immediately preceding the relevant date as reported on the principal exchange or
quotation system over or through which the Common Shares or Preferred Shares, as
the case may be, may be traded, or if not then traded over or through any
exchange or quotation system, then the fair market value of the Common Shares or
Preferred Shares, as the case may be, on the relevant date as determined in good
faith by the Board.
 
            "Merger Date" shall mean the effective date of the merger of
Franklin Street Partners Limited Partnership with and into the Corporation.
 
            "Ownership Limit" shall mean 9.8% of the number of shares or value
(whichever is more restrictive) of the outstanding Equity Shares. The number and
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value of Equity Shares of the Corporation shall be determined by the Board in
good faith, which determination shall be conclusive for all purposes hereof.
 
            "Person" shall mean an individual, corporation, partnership, limited
liability company, association, estate, trust (including a trust qualified under
Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set
aside for or to be used exclusively for the purposes described in Section 642(c)
of the Code, association, private foundation within the meaning of Section
509(a) of the Code, joint stock company or other entity.
 
            "Purported Beneficial Owner" shall mean, with respect to any
Acquisition or Transfer, the Person who would Beneficially Own or Constructively
Own Equity Shares but for the limitations set forth in Section 2(b)(i) of this
Article VI applicable to such Acquisition or Transfer. The Purported Beneficial
Owner and the Purported Record Owner may be the same Person.
 
            "Purported Record Owner" shall mean, with respect to any Acquisition
or Transfer, the Person who would have been the record holder of the Equity
Shares if such Acquisition or Transfer had not violated the provisions of
Section 2(b)(i) of this Article VI. The Purported Beneficial Owner and the
Purported Record Owner may be the same Person.
 
            "Restriction Termination Date" shall mean the effective date, as
specified in a resolution of the Board, that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT or
that the restrictions and limitations on Beneficial Ownership, Constructive
Ownership or Transfer of Equity Shares set forth in this Section 2 are no longer
required in order for the Corporation to qualify as a REIT. If no such effective
date is specified in such resolution, the Restriction Termination Date shall be
the date on which such resolution is adopted by the Board.
 
            "Transfer" shall mean any issuance, sale, transfer, gift,
assignment, devise or other disposition of, or any other event that would cause
a Person to Acquire Equity Shares or the right to vote or receive dividends on
Equity Shares, including (i) the granting of any option or entering into any
agreement for the sale, transfer or other disposition of Equity Shares or the
right to vote or receive dividends on Equity Shares, or (ii) the sale, transfer,
assignment or other disposition of any securities or rights convertible into or
exchangeable for Equity Shares, in each case whether voluntary or involuntary,
whether of record or Beneficially Owned or Constructively Owned, and whether by
operation of law or otherwise. A Transfer also includes any transfer of
interests in other entities, any change in the capital structure of the
Corporation and any change in the relationship between two or more Persons, that
results in a change in Beneficial Ownership or Constructive Ownership of Equity
Shares, whether by operation of law or otherwise. The terms "Transfers" and
"Transferred" shall have the correlative meanings.
 
            "Trust" shall mean the trust created pursuant to Section 2(e)(i) of
this Article VI.
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            "Trustee" shall mean the Person that is appointed by the Corporation
pursuant to Section 2(e)(i) of this Article VI to serve as trustee of the Trust,
and any successor thereto.
 
      (b) Ownership Limitation and Transfer Restrictions with Respect to Equity
Shares.
 
            (i) Merger Date and prior to the Restriction Termination Date:
 
                  (A) no Person shall Beneficially Own or Constructively Own
Equity Shares in excess of the Ownership Limit;
 
                  (B) no Person shall Acquire or Transfer Equity Shares to the
extent that such Acquisition or Transfer, if effective, would result in the
outstanding Equity Shares being beneficially owned by fewer than 100 Persons
(determined without reference to any rules of attribution); and
 
                  (C) no Person shall Acquire or Beneficially Own or
constructively Own Equity Shares to the extent such Acquisition, Beneficial
Ownership or Constructive Ownership, if effective, would result in the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code (without regard to whether the ownership interest is held during the last
half of a taxable year), or would otherwise result in the Corporation failing to
quality as a REIT (including without limitation Constructive Ownership that
would result in the Corporation owning, actually or constructively, an interest
in a tenant that is described in Section 856(d)(2)(B) of the Code if the income
derived by the Corporation from such tenant would cause the Corporation to fail
to satisfy any of the gross income requirements of Section 856(c) of the Code,
but not including beneficial ownership of Equity Shares by fewer than 100
Persons, which shall be governed by Section 2(b)(i)(B) above).
 
            (ii) If, after the Merger Date and prior to the Restriction
Termination Date:
 
                  (A) any Transfer or Acquisition (other than an event described
in Section 2(b)(ii)(B) of this Article VI) (whether or not such Transfer or
Acquisition is the result of a transaction entered into through the facilities
of any national securities exchange or automated inter-dealer quotation system)
occurs which, if effective, would result in any Person Beneficially Owning or
Constructively Owning Equity Shares in violation of Sections 2(b)(i)(A) or
2(b)(i)(C) of this Article VI, then (1) that number of Equity Shares being
Transferred or Acquired that otherwise would cause such Person to violate
Sections 2(b)(i)(A) or 2(b)(i)(C) of this Article VI (rounded up to the nearest
whole share) shall be automatically transferred to a Trust for the benefit of a
Charitable Beneficiary, as described in Section 2(e)(i) of this Article VI,
effective as of the close of business on the Business Day prior to the date of
such Transfer or Acquisition, and the Purported Beneficial Owner and Purported
Record Owner of such Equity Shares shall acquire no rights in such Equity
Shares, or (2) if the transfer to the Trust described in clause (1) of this
<PAGE>
 
sentence would not be effective for any reason to prevent such Person from
Beneficially Owning or Constructively Owning Equity Shares in violation of
Sections 2(b)(i)(A) or 2(b)(i)(C) of this Article VI, then the Acquisition or
Transfer of that number of Equity Shares that otherwise would cause such Person
to violate Sections 2(b)(i)(A) or 2(b)(i)(C) of this Article VI (rounded up to
the nearest whole share) shall be void ab initio and the Purported Beneficial
Owner and Purported Record Owner shall acquire no rights in such Equity Shares.
The transfer of Equity Shares to the Trust pursuant to clause (1) of the
preceding sentence shall occur automatically and without further action of the
Corporation, the Trustee or any other Person; or
 
                  (B) any Transfer or Acquisition (whether or not such Transfer
or Acquisition is the result of a transaction entered into through the
facilities of any national securities exchange or automated inter-dealer
quotation system) occurs which, if effective, would result in any Person
beneficially owning Equity Shares in violation of Section 2(b)(i)(B) of this
Article VI, then such Transfer or Acquisition shall be void ab initio, and the
Purported Beneficial Owner and the Purported Record Owner of the Equity Shares
purportedly subject to such Acquisition or Transfer shall acquire no rights in
such Equity Shares.
 
      (c) The Corporation's Right to Redeem Shares. Except with respect to
Equity Shares whose transfer to a Trust has been effected in accordance with
Section 2(b)(ii)(A) of this Article VI (which Equity Shares shall be subject to
Section 2(e) of this Article VI following such transfer), the Corporation shall
have the right, but not the obligation, to redeem any Equity Shares that are
Acquired or Transferred, or are attempted to be Acquired or Transferred, in
violation of Section 2(b) of this Article VI, at a price per share equal to the
lesser of (i) the Market Price per share of the class of Equity Shares that
created such violation or attempted violation on the date of such violation or
attempted violation (or, in the case of a devise or gift, the Market Price at
the time of such devise or gift) and (ii) the Market Price per share of the
class of Equity Shares to which such Equity Shares relate on the date the
Corporation, or its designee, gives notice of such redemption. The Corporation
shall have the right to redeem any Equity Shares described in this Section 2(c)
for a period of 90 days after the later of (i) the date of the Acquisition or
Transfer or attempted Acquisition or Transfer and (ii) the date the Board
determines in good faith that an Acquisition or Transfer or attempted
Acquisition or Transfer has occurred, if the Corporation does not receive a
notice of such Transfer pursuant to Section 2(d) of this Article VI.
 
      (d) Notice Requirements and General Authority of the Board of Directors to
Implement REIT-Related Restrictions and Limitations.
 
            (i) Notice Requirements. After the Merger Date and prior to the
Restriction Termination Date:
 
                  (A) Any Person who Acquires or Transfers, or attempts or
intends to Acquire or Transfer, Equity Shares in violation of Section 2(b)(i) of
this Article VI, and any Person who is a Purported Record Owner or a Purported
<PAGE>
 
Beneficial Owner of Equity Shares, shall immediately give written notice or, in
the event of a proposed, intended or attempted Acquisition or Transfer or other
event that would give rise to Beneficial Ownership or Constructive Ownership in
violation of Section 2(b)(i) of this Article VI, give at least 15 days' prior
written notice to the Corporation of such event, and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Acquisition or Transfer on the
Corporation's status as a REIT;
 
                  (B) Every Beneficial Owner or Constructive Owner of Equity
Shares and each Person (including the stockholder of record) who is holding
Equity Shares for a Beneficial Owner or Constructive Owner shall, on demand,
provide the Corporation in writing the information regarding their ownership of
such Equity Shares that the Corporation may be required to obtain pursuant to
regulations (as in effect from time to time) issued by the United States
Department of the Treasury under the Code. Each Beneficial Owner or Constructive
Owner of Equity Shares and each Person (including the stockholder of record) who
is holding Equity Shares for a Beneficial Owner or Constructive Owner shall
provide to the Corporation such additional information that the Corporation may
request in order to determine the effect, if any, of such Beneficial Ownership
or Constructive Ownership on the Corporation's status as a REIT, including
compliance with the Ownership Limit; and
 
                  (C) Each Person who is a Beneficial Owner or Constructive
Owner of Equity Shares and each Person (including the shareholder of record) who
is holding Equity Shares for a Beneficial Owner or Constructive Owner shall, on
demand, provide the Corporation in writing such information that the Corporation
may request in order to determine the Corporation's status as a REIT, to comply
with the requirements of any taxing authority or governmental agency, or to
determine any such compliance.
 
            (ii) Board Authority to Prevent Violation of Section 2(b)(i). If the
Board or any duly authorized committee thereof shall at any time determine in
good faith that a Transfer or other event has taken place that results in a
violation of Section 2(b)(i) of this Article VI or that a Person intends to
Acquire, has attempted to Acquire or may Acquire Beneficial Ownership or
Constructive Ownership of any Equity Shares in violation of Section 2(b)(i) of
this Article VI (whether or not such violation is intended), the Board or a
committee thereof shall take such action as it deems advisable to refuse to give
effect to or to prevent such Acquisition, Transfer or other event, including,
but not limited to, causing the Corporation to redeem Equity Shares, refusing to
give effect to such Acquisition, Transfer or other event on the books of the
Corporation, or instituting proceedings to enjoin such Acquisition, Transfer or
other event; provided, however, that any Transfers or attempted Transfers (or,
in the case of an event other than a Transfer, Beneficial Ownership or
Constructive Ownership) in violation of Section 2(b)(i) of this Article VI shall
automatically result in the transfer to the Trust described above where the
conditions to such transfer have been satisfied, and, where applicable, such
Transfer (or other event) shall be void ab initio as provided above in Sections
2(b)(ii)(A) and 2(b)(ii)(B) irrespective of any action (or nonaction) by the
Board or a committee thereof.
<PAGE>
 
            (iii) Each certificate for Equity Shares shall bear substantially
the following legends:
 
      "The Corporation is authorized to issue capital stock of more than one
      class, consisting of Common Shares and one or more classes of Preferred
      Shares. The Board of Directors is authorized to determine the preferences,
      limitations and relative rights of any class of Preferred Shares before
      the issuance of any such Preferred Shares, or any class thereof. The
      Corporation will furnish, without charge, to any shareholder making a
      written request therefor, a written statement of the designations,
      relative rights, preferences, conversion and other rights, voting powers,
      restrictions, limitations as to dividends, and terms and conditions of
      redemption applicable to each class of shares. Requests for such written
      statement may be directed to the Secretary of the Corporation at the
      principal office of the Corporation."
 
      "The shares represented by this certificate are subject to restrictions on
      Beneficial Ownership, Constructive Ownership and Transfer for the purpose
      of the Corporation's maintenance of its status as a "real estate
      investment trust" (a "REIT") under the Internal Revenue Code of 1986, as
      amended, or any successor statute (the "Code"). Subject to certain further
      restrictions, and except as expressly provided in the Corporation's
      Charter, (i) no Person may Beneficially Own or Constructively Own shares
      of the Corporation's Common Shares or Preferred Shares in excess of 9.8%
      in value or number of shares (whichever is more restrictive) of the
      outstanding Common Shares or Preferred Shares, respectively, of the
      Corporation, (ii) no Person may Transfer or Acquire Equity Shares if such
      Transfer or Acquisition would result in the Corporation being owned by
      fewer than 100 Persons and (iii) no Person may Beneficially Own or
      Constructively Own Equity Shares that would result in the Corporation
      being "closely held" under Section 856(h) of the Code or otherwise cause
      the Corporation to fail to qualify as a REIT. Any Person who Beneficially
      Owns or Constructively Owns or attempts to Beneficially or Constructively
      Own Equity Shares which causes or will cause a Person to Beneficially Own
      or Constructively Own Equity Shares in violation of the above restrictions
      must immediately notify the Corporation. If some or all of the
      restrictions on transfer or ownership set forth in clauses (i) or (iii)
      are violated by a purported Transfer of the Equity Shares represented
      hereby, the Equity Shares represented hereby will be automatically
      transferred to a Trustee of a Trust for the benefit of one or more
      Charitable Beneficiaries. In addition, the Corporation may redeem Equity
      Shares represented hereby if a purported Transfer violates the
      restrictions described above. Furthermore, attempted Transfers in
      violation of the restrictions described above may be void ab initio. A
      Person who attempts to Beneficially or Constructively Own Equity Shares in
      violation of the restrictions described above shall have no claim, cause
      of action or any recourse whatsoever against a transferor of such Equity
      Shares. All capitalized terms in this legend have the meanings defined in
      the Charter of the Corporation, as the same may be amended from time to
<PAGE>
 
      time, a copy of which, including the restrictions on transfer and
      ownership, will be furnished, without charge, to each holder of Equity
      Shares who directs a request to the Secretary of the Corporation at the
      principal office of the Corporation."
 
            (iv) Absent a decision to the contrary by the Board (which the Board
may make in its sole and absolute discretion), the Equity Shares to be affected
by the remedies set forth in Sections 2(b)(ii) and 2(c) shall be as follows: (1)
if a Purported Beneficial Owner would have (but for the remedies set forth in
Sections 2(b)(ii) or 2(c), as applicable) Beneficially Owned or Constructively
Owned Equity Shares in violation of Section 2(b)(i) as a result of an
Acquisition of Equity Shares by such Purported Beneficial Owner, such remedies
(as applicable) shall apply first to the Equity Shares that, but for such
remedies, would have caused such violation and would have been directly owned by
such Purported Beneficial Owner, second to Equity Shares that, but for such
remedies, would have caused such violation but which would not have been
directly owned by such Purported Beneficial Owner, pro rata among the Persons
who actually attempted to Acquire such Equity Shares based upon the relative
value of what would have been the Purported Beneficial Owner's Beneficial
Ownership or Constructive Ownership interest in the Equity Shares such Person
attempted to acquire, third to other Equity Shares that are directly owned by
such Purported Beneficial Owner, and fourth to other Equity Shares that are
actually owned by such other Persons whose ownership of shares is attributed to
the Purported Beneficial Owner, pro rata among such Persons based upon the
relative value of the Purported Beneficial Owner's Beneficial Ownership or
Constructive Ownership interest in the Equity Shares so owned; and (2) if a
Purported Beneficial Owner would be in violation of Section 2(b)(i) as a result
of an event other than an Acquisition of Equity Shares by such Purported
Beneficial Owner, the remedies set forth in Sections 2(b)(ii) and 2(c) (as
applicable) shall apply first to Equity Shares that are directly owned by such
Purported Beneficial Owner and second to Equity Shares that are Beneficially or
Constructively Owned (but not directly owned) by such Person, pro rata among the
Persons who actually own such Equity Shares based upon the relative value of the
Purported Beneficial Owner's Beneficial Ownership or Constructive Ownership
interest in the Equity Shares so owned.
 
            (v) Subject to subparagraph f(iii) below, nothing contained in this
Article VI shall limit the authority of the Board to take such other action as
it deems necessary or advisable to protect the Corporation and the interests of
its stockholders by preserving the Corporation's status as a RETT.
 
      (e) Transfers of Equity Shares in Trust
 
            (i) Ownership in Trust. Upon any purported Transfer or Acquisition
described in Section 2(b)(ii) of this Article VI that causes Equity Shares to be
transferred to a Trust, such Equity Shares shall be deemed to have been
transferred to the Trustee in his or her capacity as trustee of a Trust for the
exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the
Trustee shall be deemed to be effective as of the close of business on the
<PAGE>
 
Business Day prior to the purported Transfer or Acquisition that results in a
transfer to the Trust pursuant to Section 2(b)(ii) of this Article VI. The
Trustee shall be appointed by the Corporation, and shall be a Person
unaffiliated with the Corporation, any Purported Beneficial Owner or any
Purported Record Owner. Each Charitable Beneficiary shall be designated by the
Corporation as provided in Section 2(e)(vi) of this Article VI. The Corporation
shall notify the Trustee of a transfer of Equity Shares to the Trust as soon as
practicable following discovery by the Corporation of such transfer.
 
            (ii) Status of Equity Shares Held by the Trustee. Equity Shares held
by the Trustee shall be issued and outstanding shares of capital stock of the
Corporation. The Purported Beneficial Owner and Purported Record Owner shall
have no rights in the Equity Shares held by the Trustee. The Purported
Beneficial Owner and Purported Record Owner shall not benefit economically from
ownership of any Equity Shares held in trust by the Trust, shall have no rights
to dividends or other distributions and shall not possess any rights to vote or
other rights attributable to the Equity Shares held in the Trust. The Purported
Record Owner and the Purported Beneficial Owner shall surrender to the Trustee
any and all certificates representing Equity Shares that have been transferred
to the Trust, duly endorsed for transfer to the Trustee.
 
            (iii) Dividend and Voting Rights. The Trustee shall have all voting
rights and rights to dividends with respect to Equity Shares held in the Trust,
which rights shall be exercised for the exclusive benefit of the Charitable
Beneficiary. Any dividend or distribution with respect to such Equity Shares
paid to a Purported Beneficial Owner or Purported Record Owner prior to the
discovery by the Corporation that the Equity Shares have been transferred to the
Trustee shall be deemed to be held by the recipient thereof as agent for the
Trustee, and shall be paid to the Trustee upon demand, and any dividend or
distribution declared after the date of transfer to the Trustee but unpaid shall
be paid when due to the Trustee. Any dividends or distributions so paid to the
Trustee shall be held in trust for the Charitable Beneficiary. The Purported
Record Owner and Purported Beneficial Owner shall have no voting rights with
respect to Equity Shares held in the Trust and, subject to Maryland law,
effective as of the date the Equity Shares have been transferred to the Trustee,
the Trustee shall have the authority (at the Trustee's sole discretion) (1) to
rescind as void any vote cast by a Purported Record Owner or Purported
Beneficial Owner with respect to such Equity Shares prior to the discovery by
the Corporation that the Equity Shares have been transferred to the Trustee and
(2) to recast such vote in accordance with the desires of the Trustee acting for
the benefit of the Charitable Beneficiary; provided, however, that if the
Corporation has already taken irreversible corporate action, then the Trustee
shall not have the authority to rescind and recast such vote. Notwithstanding
the provisions of this Article VI, until the Corporation has received
notification that Equity Shares have been transferred into a Trust, the
Corporation shall be entitled to rely on its share transfer and other
stockholder records for purposes of preparing lists of stockholders entitled to
vote at meetings, determining the validity and authority of proxies and
otherwise conducting votes of stockholders.
<PAGE>
 
            (iv) Sale of Shares by Trustee. Within 20 days of receiving notice
from the Corporation that Equity Shares have been transferred to the Trust, the
Trustee of the Trust shall use best efforts to sell the Equity Shares held in
the Trust to a person, designated by the Trustee, whose ownership of the Equity
Shares will not violate the ownership limitations set forth in Section 2(b)(i)
of this Article VI. Upon such sale, the interest of the Charitable Beneficiary
in the Equity Shares sold shall terminate and the Trustee shall distribute the
net proceeds of the sale to the Purported Record Owner and to the Charitable
Beneficiary as provided in this Section 2(e)(iv). The Purported Record Owner
shall receive the lesser of (1) the price paid by the Purported Record Owner for
the Equity Shares or, if the Purported Record Owner did not give value for the
Equity Shares (through a gift, devise or other transaction), the Market Price of
the Equity Shares on the day of the event causing the Equity Shares to be held
in the Trust and (2) the price per share received by the Trustee from the sale
or other disposition of the Equity Shares held in the Trust (net of any
commissions and other expenses of sale). Any net sales proceeds in excess of the
amount payable to the Purported Record Owner shall be immediately paid to the
Charitable Beneficiary, together with any dividends or other distributions
thereon. If, prior to the discovery by the Corporation that Equity Shares have
been transferred to the Trustee, such Equity Shares are sold by a Purported
Record Owner then (X) such Equity Shares shall be deemed to have been sold on
behalf of the Trust, (Y) the proceeds of such sale shall be deemed to be held by
such Purported Record Owner or Purported Beneficial Owner as a agent for the
Trustee and (Z) to the extent that the Purported Record Owner received an amount
for such Equity Shares that exceeds the amount that such Purported Record Owner
was entitled to receive pursuant to this Section 2(e)(iv), such excess shall be
paid to the Trustee upon demand.
 
            (v) Purchase Right in Stock Transferred to the Trustee. Equity
Shares transferred to the Trustee shall be deemed to have been offered for sale
to the Corporation, or its designee, at a price per share equal to the lesser of
(1) the price paid by the Purported Record Owner for the Equity Shares in the
transaction that resulted in such transfer to the Trust (or, if the event which
resulted in the transfer to the Trust did not involve a purchase of such Equity
Shares, the Market Price of such Equity Shares on the day of the event which
resulted in the transfer of such Equity Shares to the Trust) and (2) the Market
Price on the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer until the Trustee has sold
the Equity Shares held in the Trust pursuant to Section 2(e)(iv) of this Article
VI. Upon such a sale to the Corporation, the interest of the Charitable
Beneficiary in the Equity Shares sold shall terminate and the Trustee shall
distribute the net proceeds of the sale to the Purported Record Owner (minus any
dividend or distribution paid to the Purported Record Owner that the Purported
Record Owner was obligated to pay to the Trustee but has not paid to the Trustee
at the time of the distribution of the proceeds) and any dividends or other
distributions held by the Trustee with respect to such Equity Shares, together
with any amounts described in the preceding parenthetical of this sentence, to
the Charitable Beneficiary.
<PAGE>
 
            (vi) Designation of Charitable Beneficiaries. By written notice to
the Trustee, the Corporation shall designate one or more nonprofit organizations
to be the Charitable Beneficiary(ies) of the interest in the Trust such that (1)
the Equity Shares held in the Trust would not violate the restrictions set forth
in Section 2(b)(i) of this Article VI in the hands of such Charitable
Beneficiary and (2) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
 
      (f) Exemptions.
 
            (i) The Board, in its sole and absolute discretion, may exempt a
Person from the limit set forth in Section 2(b)(i)(A) (but not from Sections
2(b)(i)(B) or (C)) of this Article VI, if the Board obtains such representations
and undertakings from such Person and any other Person as the Board may deem
appropriate; and such Person agrees in writing that any violation or attempted
violation of such representations or undertakings (or other action which is
contrary to the restrictions contained in Section 2(b) of this Article VI) will
result in the application of the remedies set forth in Sections 2(b)(ii) and
2(c) of this Article VI, to the extent necessary to prevent or cure such
violation or action, to the Equity Shares Beneficially or Constructively Owned
by such Person.
 
            (ii) Nothing in Section 2(f)(i) of this Article VI shall be deemed
to require the Board to consider a request for exemption from the restrictions
in Section 2(b)(i)(A) of this Article VI. Prior to granting any exemption
pursuant to Section 2(f)(i) of this Article VI, the Board may require a ruling
from the Internal Revenue Service, an opinion of counsel, or both, in any case
in form and substance satisfactory to the Board in its sole and absolute
discretion, as it may deem necessary or advisable in order to determine or
ensure the Corporation's status as a REIT. Notwithstanding the receipt of any
ruling or opinion, the Board may impose such conditions or restrictions as it
deems appropriate in connection with granting such exemption. If a member of the
Board requests that the Board grant an exemption pursuant to Section 2(f)(i) of
this Article VI with respect to such member or to any other Person if such Board
member would be considered to be the Beneficial or Constructive Owner of Equity
Shares owned by such Person, such member of the Board shall not participate in
the decision of the Board as to whether to grant such exemption.
 
            (iii) Nothing in this Article VI shall preclude the settlement of a
transaction entered into through the facilities of any stock exchange on which
Equity Shares are listed for trading. The fact that the settlement of any
transaction is permitted shall not negate the effect of any other provision of
this Article VI, and any transferee in such a transaction shall be subject to
all of the provisions and limitations set forth in this Article VI.
 
            (iv) Section 2(b)(i)(A) of this Article VI shall not apply to the
Acquisition of Equity Shares or rights, options or warrants for, or securities
convertible into, Equity Shares by an underwriter in a public offering, provided
that such underwriter makes a timely distribution of such Equity Shares or
rights, options or warrants for, or securities convertible into, Equity Shares.
<PAGE>
 
Section 3. Preferred Shares.
 
      (a) Authority to Designate and Fix Rights and Restrictions of Preferred
Shares. The Board of Directors may authorize the issuance from time to time of
the Preferred Shares in one or more separately designated classes (hereinafter a
"class"). Prior to issuance of any shares of a class of Preferred Shares, by
resolution the Board of Directors shall
 
            (i) designate such class in order to distinguish it from all other
then outstanding classes of Preferred Shares;
 
            (ii) set the number of Preferred Shares to be included in such
class; and
 
            (iii) subject to the provisions of Sections 2 and 5 of this Article
VI, and to the express limitations, if any, of any other classes of which shares
are outstanding at the time, set the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of the redemption of the shares of such
class, provided that all shares of any class shall be alike in every particular,
except that shares of such class issued at different times may accumulate
dividends from different dates.
 
      (b) Amendment of Terms. Subject to the provisions of Sections 2 and 5 of
this Article VI and to the express limitations, if any, of any class of
Preferred Shares of which shares are outstanding at the time, by resolution the
Board of Directors may (i) increase or decrease (but not below the number of
Preferred Shares of such class then outstanding) the number of Preferred Shares
of any class; and (ii) alter the designation of, or classify or reclassify, any
unissued Preferred Shares of any class from time to time by setting or changing
the preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of such class.
 
Section 4. Common Shares.
 
      Subject to the provisions of Sections 2 and 5 of this Article VI, the
Common Shares shall have the following preferences, rights, powers,
restrictions, limitations and qualifications and such others as may be afforded
by law:
 
      (a) Voting Rights. Except as may otherwise by required by law, and subject
to action, if any, by the Board of Directors, pursuant to Section 3 of this
Article VI, granting to the holders of one or more classes of Preferred Shares
exclusive voting powers with respect to specified matters, each holder of Common
Shares shall have one vote in respect of each Common Share held of record on all
matters to be voted upon by the stockholders.
<PAGE>
 
      (b) Dividend Rights. After provision(s) with respect to preferential
dividends on any then outstanding classes of Preferred Shares, if any, fixed by
the Board of Directors pursuant to Section 3 of this Article VI, shall have been
satisfied, and after satisfaction of any other requirements, if any, including
with respect to redemption rights and preferences, in any such classes of
Preferred Shares, then and thereafter the holders of Common Shares shall be
entitled to receive, ratably in proportion to the number of Common Shares held
by them, such dividends as may be declared from time to time by the Board of
Directors out of funds legally available therefor. All distributions paid with
respect to the Common Shares shall be paid pro rata, with no preference to any
Common Share as compared with other Common Shares.
 
      (c) Liquidation Rights. In the event of the voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, after distribution in
full of the preferential amounts, if any, fixed pursuant to Section 3 of this
Article VI, to be distributed to the holders of any then outstanding Preferred
Shares, and subject to the right, if any, of the holders of any outstanding
Preferred Shares to participate further in any liquidating distributions, all of
the assets of the Corporation, if any, remaining, of whatever kind available for
distribution to stockholders after the foregoing distributions have been made
shall be distributed to the holders of the Common Shares, ratably in proportion
to the number of Common Shares held by them.
 
      (d) Purchase of Interests of Common Shares.
 
            (i) The Corporation shall use its best efforts to redeem Common
Shares on an annual basis from holders of Common Shares desiring to have such
Common Shares redeemed upon the terms and conditions set forth below.
 
            (ii) A holder of Common Shares wishing to have some or all of his or
her Common Shares redeemed by the Corporation must mail or deliver a written
request to the Corporation indicating his or her desire to have such Common
Shares redeemed for cash. Any such request must be received by the Corporation
on or before July 1 immediately preceding the January 1 date on which the
redemption is to be effective. The Corporation shall send the purchase price for
any Common Shares redeemed to the holder thereof no later than two Business Days
following such effective date. Any such request to have Common Shares redeemed
shall constitute an offer by the holder thereof to sell such Common Shares and
shall be irrevocable. If the Corporation does not have sufficient funds to
purchase all of the Common Shares so offered or is otherwise prohibited from
purchasing all of the Common Shares so offered, the Corporation will redeem
Common Shares in the order in which effective offers are received from offerors
to the extent that the Corporation has funds available therefor and is not
prohibited from redeeming Common Shares.
 
            (iii) The purchase price for any Common Shares redeemed by the
Corporation will equal 90% of the Fair Market Value of the Common Shares. "Fair
Market Value" of a Common Share shall mean the fair market value as determined
by the Board of Directors in its sole and absolute discretion, after
<PAGE>
 
consultation with an adviser selected by the Board of Directors. Any redemption
of Common Shares by the Corporation shall be effective as of January 1 of the
year following the year in which the corresponding offer was timely made
pursuant to Section 3(d)(ii). Any holder whose Common Shares are to be redeemed
shall execute and deliver such transfer and other documents and instruments as
the Corporation may reasonably request. Any Common Shares redeemed by the
Corporation shall be cancelled and shall be held in the treasury of the
Corporation.
 
            (iv) In fulfilling the Corporation's obligation to use best efforts
to redeem Common Shares for which offers have been timely made pursuant to
Section 3(d)(ii), the Board of Directors shall be authorized to take such steps
as it deems appropriate, in its sole discretion, including without limitation
the disposition of assets of the Corporation and incurring indebtedness on
behalf of the Corporation.
 
            (v) Notwithstanding anything herein to the contrary, no Common
Shares shall be redeemed by the Corporation pursuant to this Section 3(d) if:
 
                  (A) The Corporation is insolvent or such redemption would
render the Corporation insolvent;
 
                  (B) Such redemption would impair the capital or operations of
the Corporation;
 
                  (C) Such redemption would contravene any provision of federal
or state securities laws;
 
                  (D) Such redemption would result in the Corporation's failing
to qualify as a REIT; or
 
                  (E) The Board of Directors determines such redemption would
otherwise not be in the best interests of the Corporation.
 
            (vi) If the Corporation is unable to redeem some or all of the
Common Shares offered for redemption, the Corporation shall use its best efforts
to arrange for a purchase of such Common Shares by a third party or parties,
each of whom shall be an "accredited investor" within the meaning of Rule 501(a)
of Regulation D promulgated under the Securities Act of 1933, as amended, and
shall have a pre-existing relationship with the Corporation (an "Accredited
Investor"); provided, however, that no such purchase shall be effected if it
would not be permitted under the terms of Section 3(d)(v). In addition, the
Corporation shall have the right to satisfy its obligations under Section
3(d)(i) by arranging for the purchase of Common Shares by any such Accredited
Investor or Investors for the price set forth in Section 3(d)(iii).
 
            (vii) Any request for redemption of Common Shares by a holder
thereof pursuant to Section 3(d)(ii) shall be binding on such holder's
successors, heirs and assigns.
<PAGE>
 
            (viii) The Corporation shall not be obligated to effect any
redemptions pursuant to this Section 3(d) during any period that the Common
Shares are listed for trading on a national securities exchange or the NASDAQ
National Market System.
 
Section 5. General Provisions.
 
      (a) Interpretation and Ambiguities. In addition to the other powers set
forth in this Article VI, the Board shall have the power to interpret and to
construe the provisions of this Article VI, and in the case of an ambiguity in
the application of any of the provisions of this Article VI, including any
definition contained in Section 1, the Board shall have the power to determine
the application of the provisions of this Article VI with respect to any
situation based on the facts known to it, and any such interpretation,
construction and determination shall be final and binding on all interested
parties, including the stockholders.
 
      (b) Severability. If any provision of this Article VI or any application
of any such provision is determined to be void, invalid or unenforceable by any
court having jurisdiction over the issue, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court.
 
                                   ARTICLE VII
                               BOARD OF DIRECTORS
 
      The business and affairs of the Corporation shall be managed by a Board of
Directors which may exercise all of the powers of the Corporation except those
conferred on, or reserved to, the stockholders by law.
 
Section 1. Authorized Number and Initial Directors.
 
      The number of directors of the Corporation initially shall be six (6),
which number may be increased or decreased pursuant to the By-Laws of the
Corporation but in no event shall be less than the minimum number required by
the General Laws of the State of Maryland. Each director shall hold office until
the next annual meeting of the stockholders of the Corporation and until his or
her successor shall have been elected and qualified or until his or her earlier
death, resignation, retirement or removal. The names and the respective Classes
(as defined in Section 2 below) of the directors who will serve until the first
annual meeting of stockholders of the Corporation and until their successors are
elected and qualified are as follows:
 
      Janet P. Notopoulos           Class I
      R. Scott MacPhee              Class I
      Barbara J. Corinha            Class II
      William W. Gribbell           Class II
      George J. Carter              Class III
      Richard R. Norris             Class III
<PAGE>
 
Section 2. Classified Board.
 
      The directors of the Corporation shall be and are hereby divided into
three Classes, designated "Class I," "Class II" and "Class III," respectively.
The number of directors in each Class shall be as nearly equal in number as
possible. Each director shall be elected by the stockholders and shall serve for
a term ending on the date of the third Annual Meeting of Stockholders following
the Annual Meeting at which such director was elected; provided, however, that
each initial director in Class I shall serve for a term ending on the date of
the Annual Meeting held in 2004; each initial director in Class II shall serve
for a term ending on the date of the Annual Meeting held in 2003; and each
initial director in Class III shall serve for a term ending on the date of the
Annual Meeting held in 2002.
 
Section 3. Effect of Increases and Decreases in the Authorized Number of
Directors.
 
      In the event of any increase or decrease in the authorized number of
directors:
 
      (a) Each director then serving shall nevertheless continue as a director
of the Class of which such director is a member until the expiration of such
director's term or such director's prior death, retirement, resignation or
removal; and
 
      (b) The newly created or eliminated directorships resulting from any
increase or decrease shall be apportioned by the Board of Directors among the
three Classes so as to keep the number of directors in each Class as nearly
equal as possible.
 
Section 4. Removal of Directors.
 
      A director may be removed from office only for cause based on a material
breach of his duties or obligations to the Corporation, and then only by the
affirmative vote of the holders of at least two-thirds of the votes entitled to
be cast in the election of directors.
 
Section 5. Filling Vacancies.
 
      Should a vacancy on the Board of Directors occur or be created (whether
arising through death, retirement, resignation or removal) other than through an
increase in the number of authorized directors, such vacancy shall be filled by
the affirmative vote of a majority of the remaining directors, even though less
than a quorum of the Board of Directors. A vacancy on the Board of Directors
resulting from an increase in the number of directors shall be filled by the
affirmative vote of a majority of the entire Board of Directors. A director so
elected to fill a vacancy shall serve for the remainder of the term of the Class
to which such director was elected.
<PAGE>
 
                                  ARTICLE VIII
            PROVISIONS FOR DEFINING, LIMITING AND REGULATING CERTAIN
                      POWERS OF THE CORPORATION AND OF THE
                           SHAREHOLDERS AND DIRECTORS
 
The following provisions are hereby adopted for the purposes of defining,
limiting and regulating the powers of the Corporation and of the directors and
stockholders:
 
Section 1. Powers of Board of Directors.
 
      The Board of Directors shall have the power from time to time and in its
sole discretion (a) to determine in accordance with sound accounting practice
what constitutes annual or other net profits, earnings, surplus or net assets in
excess of capital; (b) to fix and vary from time to time the amount to be
reserved as working capital, or determine that retained earnings or surplus
shall remain in the hands of the Corporation; (c) to set apart out of any funds
of the Corporation such reserve or reserves in such amount or amounts and for
such proper purposes as it shall determine and to abolish or redesignate any
such reserve or any part thereof; (d) to borrow or raise money upon any terms
for any corporate purposes; (e) to distribute and pay distributions or dividends
in stock, cash or other securities or property, out of surplus or any other
funds or amounts legally available therefor, at such times and to the
stockholders of record on such dates as it may, from time to time, determine;
and (f) to determine whether and to what extent and at what times and places and
under what conditions and regulations the books, accounts and documents of the
Corporation shall be open to the inspection of stockholders, except as otherwise
provided by statute or by the By-Laws of the Corporation, and, except as so
provided, no stockholder shall have the right to inspect any book, account or
document of the Corporation unless authorized so to do by resolution of the
Board of Directors.
 
Section 2. Limitation of Liability.
 
      The liability of the directors and officers of the Corporation to the
Corporation or its stockholders for money damages shall be limited to the
fullest extent permitted under the General Laws of the State of Maryland now or
hereafter in force, including, but not limited to, Section 5-349 of the Courts
and Judicial Proceedings Article of the Annotated Code of Maryland, or any
successor provision of law of similar import, and the directors and officers of
the Corporation shall have no liability whatsoever to the Corporation or its
stockholders for money damages except to the extent which such liability cannot
be limited or restricted under the General Laws of the State of Maryland now or
hereafter in force. Neither the amendment nor repeal of the foregoing sentence
of this Section 2 of Article VIII nor the adoption nor amendment of any other
provision of the Charter or By-Laws of the Corporation inconsistent with the
foregoing sentence shall apply to or affect in any manner the applicability of
the foregoing sentence with respect to any act or omission of any director or
officer occurring prior to any such amendment, repeal or adoption.
<PAGE>
 
Section 3. Indemnification.
 
      (A) Actions, Suits and Proceedings. The Corporation shall indemnify each
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise, whether or not by or in
the right of the Corporation, by reason of the fact that he is or was, or has
agreed to become, a director or officer of the Corporation, or is or was
serving, or has agreed to serve, at the request of the Corporation, as a
director, officer, partner, trustee, employee or agent of, or in a similar
capacity with, another corporation, partnership, joint venture, trust or other
enterprise (including any employee benefit plan) (all such persons being
referred to hereafter as an "Indemnitee"), or by reason of any action alleged to
have been taken or omitted in such capacity, against all expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with such
action, suit or proceeding and any appeal therefrom, unless (I) (a) the act or
omission of the Indemnitee was material to the matter giving rise to the
proceeding and (b)(i) was committed in bad faith or (ii) was the result of
active and deliberate dishonesty or (II) the Indemnitee actually received an
improper personal benefit in money, property or services or (III) with respect
to any criminal proceeding, the Indemnitee had reasonable cause to believe that
the act or omission was unlawful; provided, however, that if the action, suit or
proceeding was one by or in the right of the Corporation, no indemnification
shall be made in respect of any such action, suit or proceeding in which the
Indemnitee shall have been adjudged liable to the Corporation. The termination
of any action, suit or proceeding by judgment, order or settlement shall not, of
itself, create a presumption that the person did not meet the requisite standard
of conduct set forth in this Subsection A. The termination of any proceeding by
conviction, or a plea of nolo contendere or its equivalent, or an entry of an
order of probation prior to judgment creates a rebuttable presumption that the
Indemnitee did not meet the requisite standard of conduct. Notwithstanding the
foregoing, the Corporation shall not indemnify an Indemnitee in respect of any
action, suit or proceeding charging improper personal benefit to the Indemnitee,
whether or not involving action in the Indemnitee's official capacity, in which
the Indemnitee was adjudged to be liable on the basis that personal benefit was
improperly received. Notwithstanding anything to the contrary in this Section,
except as set forth in Subsection F below, the Corporation shall not indemnify
an Indemnitee seeking indemnification in connection with a proceeding (or part
thereof) initiated by the Indemnitee unless the initiation thereof was approved
by the Board of Directors of the Corporation. Notwithstanding anything to the
contrary in this Section, the Corporation shall not indemnify an Indemnitee to
the extent such Indemnitee is reimbursed from the proceeds of insurance, and in
the event the Corporation makes any indemnification payments to an Indemnitee
and such Indemnitee is subsequently reimbursed from the proceeds of insurance,
such Indemnitee shall promptly refund such indemnification payments to the
Corporation to the extent of such insurance reimbursement.
<PAGE>
 
      (B) Indemnification for Expenses of Successful Party. Notwithstanding the
other provisions of this Section, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Subsection A of this Section, or in defense of any
claim, issue or matter therein, or on appeal from any such action, suit or
proceeding, he shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by him or on his behalf in connection
therewith. Without limiting the foregoing, if any action, suit or proceeding is
disposed of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
guilty or nolo contendere by, or the entry of an order of probation prior to
judgment with respect to, the Indemnitee, (iv) an adjudication that the
Indemnitee acted in bad faith or that his action was the result of active and
deliberate dishonesty, an adjudication that the Indemnitee received an improper
personal benefit in money, property or services, and (vi) with respect to any
criminal proceeding, an adjudication that the Indemnitee had reasonable cause to
believe his conduct was unlawful, the Indemnitee shall be considered for the
purposes hereof to have been wholly successful with respect thereto.
 
      (C) Notification and Defense of Claim. As a condition precedent to his
right to be indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be sought. With respect to any
action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as provided below in this Subsection C. The Indemnitee shall have the
right to employ his own counsel in connection with such claim, but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this Section 3. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
 
      (D) Advance of Expenses. Subject to the provisions of Subsection E below,
in the event that the Corporation does not assume the defense pursuant to
Subsection C of this Section of any action, suit, proceeding or investigation of
<PAGE>
 
which the Corporation receives notice under this Section, any expenses
(including attorneys' fees) incurred by an Indemnitee in defending a civil or
criminal action, suit, proceeding or investigation or any appeal therefrom shall
be paid by the Corporation in advance of the final disposition of such matter;
provided, however, that the payment of such expenses incurred by an Indemnitee
in advance of the final disposition of such matter shall be made only upon
receipt of (i) a written affirmation by the Indemnitee of the Indemnitee's good
faith belief that the standard of conduct necessary for indemnification has been
met and (ii) an undertaking by or on behalf of the Indemnitee to repay all
amounts so advanced in the event that it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the Corporation as authorized in
this Section. Such undertaking need not be secured and shall be accepted without
reference to the financial ability of the Indemnitee to make such repayment.
 
      (E) Procedure for Indemnification. In order to obtain indemnification or
advancement of expenses pursuant to Subsections A, B or D of this Section, the
Indemnitee shall submit to the Corporation a written request, including in such
request such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification or advancement of expenses. Any
such indemnification or advancement of expenses shall be made promptly, and in
any event within 60 days after receipt by the Corporation of the written request
of the Indemnitee, unless with respect to requests under Subsections A or D the
Corporation determines within such 60-day period that the Indemnitee did not
meet the applicable standard of conduct set forth in Subsection A. Such
determination shall be made in each instance by (a) a majority vote of a quorum
of the Board of Directors of the Corporation, consisting of directors, not, at
the time, parties to the proceeding ("disinterested directors"), or, if such a
quorum cannot be obtained, then by a majority vote of a committee of the
directors, consisting solely of two or more disinterested directors, who are
duly designated to act in the matter by a majority vote of the full Board of
Directors, in which the directors who are parties may participate, (b) a
majority vote of a quorum of the outstanding shares of stock of all classes
entitled to vote for directors, voting as a single class, which quorum shall
consist of stockholders who are not at that time parties to the action, suit or
proceeding in question, (c) special legal counsel (who may, to the extent
permitted by law, be regular legal counsel to the Corporation) selected by a
majority vote of a quorum of the directors consisting of disinterested
directors, or by a majority vote of a committee consisting of two or more
disinterested directors, who are duly designated to act in the matter by a
majority vote of the full Board of Directors, in which the directors who are
parties may participate, or, if the requisite quorum of the full Board of
Directors cannot be obtained therefor and the committee cannot be established,
by a majority vote of the full Board of Directors, in which directors who are
parties may participate, or (d) a court of competent jurisdiction.
 
      (F) Remedies. The right to indemnification or advances as granted by this
Section shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
<PAGE>
 
Subsection E. Unless otherwise required by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advancement of expenses under
this Section shall be on the Corporation. Neither the failure of the Corporation
to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Subsection E that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
The Indemnitee's expenses (including attorneys' fees) incurred in connection
with successfully establishing his right to indemnification, in whole or in
part, in any such proceeding shall also be indemnified by the Corporation.
 
      (G) Subsequent Amendment. No amendment, termination or repeal of this
Section or of the relevant provisions of the General Corporation Law of Maryland
or any other applicable laws shall affect or diminish in any way the rights of
any Indemnitee to indemnification under the provisions hereof with respect to
any action, suit, proceeding or investigation arising out of or relating to any
actions, transactions or facts occurring prior to the final adoption of such
amendment, termination or repeal.
 
      (H) Other Rights. The indemnification and advancement of expenses provided
by this Section shall not be deemed exclusive of any other rights to which an
Indemnitee seeking indemnification or advancement of expenses may be entitled
under any law (common or statutory), agreement or vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in any other capacity while holding office for the Corporation,
and shall continue as to an Indemnitee who has ceased to be a director or
officer, and shall inure to the benefit of the estate, heirs, executors and
administrators of the Indemnitee. Nothing contained in this Section shall be
deemed to prohibit, and the Corporation is specifically authorized to enter
into, agreements with officers and directors providing indemnification rights
and procedures different from those set forth in this Section. In addition, the
Corporation may, to the extent authorized from time to time by its Board of
Directors, grant indemnification rights to other employees or agents of the
Corporation or other persons serving the Corporation and such rights may be
equivalent to, or greater or less than, those set forth in this Section.
 
      (I) Partial Indemnification. If an Indemnitee is entitled under any
provision of this Section to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with any action, suit, proceeding or investigation and any appeal
therefrom but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify the Indemnitee for the portion of such expenses
(including attorneys' fees), judgments, fines or amounts paid in settlement to
which the Indemnitee is entitled.
<PAGE>
 
      (J) Insurance. The Corporation may purchase and maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or any such person who, while a director, officer, employee or agent
of the Corporation, is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise
(including any employee benefit plan) against any expense, liability or loss
asserted against and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the General
Corporation Law of Maryland.
 
      (K) Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Section with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.
 
      (L) Savings Clause. If this Section or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent permitted by any applicable portion of this
Section that shall not have been invalidated and to the fullest extent permitted
by applicable law.
 
      (M) Definitions. Terms used herein and defined in Section 2-418(a) of the
General Corporation Law of Maryland shall have the respective meanings assigned
to such terms in such Section 2-418(a).
 
      (N) Subsequent Legislation. If the General Corporation Law of Maryland is
amended after adoption of this Section to expand further the indemnification
permitted to Indemnitees, then the Corporation shall indemnify such persons to
the fullest extent permitted by the General Corporation Law of Maryland, as so
amended.
 
Section 4. Board Authorization of Share Issuance.
 
      The Board of Directors of the Corporation shall have the power in its sole
discretion and without limitation, to authorize the issuance at any time and
from time to time of shares of stock of the Corporation, with or without par
value, of any class now or hereafter authorized and of securities convertible
into or exchangeable for shares of the stock of the Corporation, with or without
par value, of any class now or hereafter authorized, for such consideration
(irrespective of the value or amount of such consideration) and in such manner
and by such means as said Board of Directors may deem advisable.
<PAGE>
 
Section 5. Classification or Reclassification of Shares.
 
      The Board of Directors shall have the power in its sole discretion and
without limitation to classify or reclassify, by articles supplementary, any
unissued shares of stock, whether now or hereafter authorized, by setting,
altering or eliminating in any one or more respects, from time to time before
the issuance of such shares, any feature of such shares, including but not
limited to the designation, preferences, conversion or other rights, voting
powers, qualifications and terms and conditions of redemption of, and
limitations as to dividends and any restrictions on, such shares.
 
Section 6. Voting Requirements.
 
      Notwithstanding any provision of law to the contrary, except as provided
in Article IX, the affirmative vote of the holders of a majority of the shares
of capital stock issued and outstanding and entitled to vote on any proposed
amendment of the Charter of the Corporation shall be sufficient, valid and
effective, after due authorization, approval and advice by the Board of
Directors, to approve and authorize such amendment. Notwithstanding any
provision of the law to the contrary, the affirmative vote of the holders of a
majority of the shares of capital stock issued and outstanding and entitled to
vote on any transaction for which approval of the stockholders is required by
Section 3-105 of the General Corporation Law of Maryland, or any successor
provision of law of similar import, in addition to any vote of the holders of
Preferred Shares required by the terms of then outstanding Preferred Shares,
shall be sufficient to give the approval required by Section 3-105 or such
successor provision.
 
Section 7. REIT Qualification.
 
      The Board of Directors shall use its reasonable best efforts to cause the
Corporation and its shareholders to qualify for U.S. federal income tax
treatment in accordance with the provisions of the Code applicable to a REIT. In
furtherance of the foregoing, the Board of Directors shall use its reasonable
best efforts to take such actions as are necessary, and may take such actions as
in its sole judgment and discretion are desirable, to preserve the status of the
Corporation as a REIT, provided, however, that if the Board of Directors
determines in its discretion that it is no longer in the best interests of the
Corporation to continue to have the Corporation qualify as a REIT, the Board of
Directors may revoke or otherwise terminate the Corporation's REIT election
pursuant to Section 856(g) of the Code.
 
      The enumeration and definition of particular powers of the Board of
Directors included in this Article VIII shall in no way be limited or restricted
by reference to or inference from the terms of any other clause of this or any
other Article of the Charter of the Corporation, or construed as or deemed by
inference or otherwise in any manner to exclude or limit any powers conferred
upon the Board of Directors under the General Laws of the State of Maryland now
or hereafter in force.
<PAGE>
 
                                   ARTICLE IX
                                   AMENDMENTS
 
      (a) Right to Amend Articles. Subject to the provisions hereof, the
Corporation reserves the right at any time, and from time to time, to amend,
alter, repeal, or rescind any provision contained herein, including but not
limited to the provisions setting forth the contract and other rights of the
issued and outstanding stock of the Corporation of any class, in the manner now
or hereafter prescribed by law, and other provisions authorized by the laws of
the State of Maryland at the time in force may be added or inserted, in the
manner now or hereafter prescribed by law; and all contract or other rights,
preferences and privileges of whatsoever nature conferred upon shareholders,
directors, officers, employees or any other persons whomsoever by and pursuant
to these Articles of Incorporation, in its present form or as hereafter amended,
are granted subject to this reservation.
 
      (b) Certain Amendments Requiring Special Shareholder Vote. Any provision
of law, these Articles of Incorporation, including, without limitation, Article
VIII, Section 7, or the By-Laws of the Corporation to the contrary
notwithstanding:
 
            (i) no term or provision of these Articles of Incorporation may be
added, amended or repealed in any respect that would, in the determination of
the Board of Directors, cause the Corporation not to qualify as a REIT under the
Code unless the Board of Directors shall have determined in accordance with
Section 8 of Article VIII that it is no longer in the best interests of the
Corporation to continue to have the Corporation qualify as a REIT;
 
            (ii) Article VII, Section 2 (classification of directors) and
Section 5 (removal of directors); Article VII, Section 2 (limitation of
liability of officers and directors) and Section 3 (indemnification of officers
and directors); and this Article IX shall not be amended or repealed nor shall
any provision be adopted which is inconsistent with any of the foregoing; and
 
            (iii) no provisions imposing cumulative voting in the election of
directors may be added to these Articles of Incorporation; unless in each such
case, in addition to any vote of the holders of Preferred Shares required by the
terms of then outstanding Preferred Shares, such action is approved by the
affirmative vote of the holders of not less than eighty percent (80%) of the
shares of capital stock of the Corporation issued and outstanding and entitled
to vote on the matter.
 
      IN WITNESS WHEREOF, I have signed these Articles of Incorporation,
acknowledging the same to be my act on this 4th day of October, 2001.
 
 
                              /s/ Kenneth A. Hoxsie