<PAGE>

                                                                  Exhibit 3.c

                             KEYSTONE PROPERTY TRUST

              ARTICLES SUPPLEMENTARY CLASSIFYING AND DESIGNATING A
                          SERIES OF PREFERRED SHARES AS
                      SERIES B CONVERTIBLE PREFERRED STOCK
                           AND FIXING DISTRIBUTION AND
                   OTHER PREFERENCES AND RIGHTS OF SUCH SERIES

     KEYSTONE PROPERTY TRUST, a Maryland statutory real estate investment
trust, having its principal office in the State of Maryland in the City of
Baltimore (the "TRUST"), hereby certifies to the State Department of
Assessments and Taxation of Maryland (the "DEPARTMENT") that:

     Pursuant to authority expressly vested in the Board of Trustees by
Article IV of the Declaration of Trust, the Board of Trustees adopted
resolutions reclassifying 4,200,000 Common Shares, par value $.001 per share,
into 4,200,000 shares of Series B Convertible Preferred Stock, par value
$.001 per share, and determined the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption, number of shares and dividend rate.

     The preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption, number of shares and dividend rate of the Series B
Convertible Preferred Stock are as follows:

     SECTION 1. NUMBER OF SHARES AND DESIGNATION. This series of Preferred
Shares shall be designated as Series B Convertible Preferred Stock, par value
$.001 per share (the "SERIES B PREFERRED SHARES"), and the number of
Preferred Shares which shall constitute such series shall be 4,200,000 shares
which number may be decreased (but not below the number thereof then
outstanding) from time to time by the Board of Trustees.

     SECTION 2. DEFINITIONS. For purposes of the Series B Preferred Shares,
the following terms shall have the meanings indicated:

         "ACT" shall mean the Securities Act of 1933, as amended.

         "ANNUAL DIVIDEND RATE" shall have the meaning set forth in Section
3(a).

     "AVAILABLE INCOME I" means the amount of consolidated net income (or
loss) of the Trust and its subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting
principles (i) plus amounts which have been deducted for (a) interest on
indebtedness of the Trust and its subsidiaries, (b) provision for taxes of
the Trust and its subsidiaries based on income, (c) amortization of debt
discount, (d) depreciation and


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amortization, (e) the effect of any noncash charge resulting from a change in
accounting principles in determining consolidated net income for such period,
(f) amortization of deferred charges and (g) provisions for or realized
losses on properties, (ii) less amounts which have been included for gains on
properties and (iii) adjusted to eliminate the effect of the "straight
lining" of rents.

         "AVAILABLE INCOME II" means the amount of consolidated net income
(or loss) of the Trust and its subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting
principles (i) plus amounts which have been incurred for (a) interest on
indebtedness of the Trust and its subsidiaries, (b) provision for taxes of
the Trust and its subsidiaries based on income, (c) amortization of debt
discount, (d) depreciation and amortization, (e) the effect of any noncash
charge resulting from a change in accounting principles in determining
consolidated net income for such period, (f) amortization of deferred charges
and (g) provisions for or realized losses on properties, (ii) less amounts
which have been included for gains on properties and (iii) adjusted to
eliminate the effect of the "straight lining" of rents.

         "BOARD OF TRUSTEES" shall mean the Board of Trustees of the Trust or
any committee authorized by such Board of Trustees to perform any of its
responsibilities with respect to the Series B Preferred Shares.

         "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York,
New York are not required to be open.

         "CHANGE IN CONTROL" shall mean (i) any merger or consolidation of
the Trust in which one or more entities which are not affiliates of the Trust
acquire more than 50% of the Trust's outstanding voting equity securities or
as a result of which shareholders of the Trust immediately before such merger
or consolidation hold, immediately after such merger or consolidation, less
than 50% of the surviving entity's outstanding common shares; (ii) any sale,
exchange or other transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Trust; (iii) any Person together with
all "affiliates" and "associates" (as such terms are defined in Rule 12b-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
of such Person, becoming the "beneficial owner" (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Trust representing 50% or more of either (A) the combined voting power of
the Trust's then outstanding securities having the right to vote in an
election of the Board of Trustees or (B) the then outstanding shares of all
classes of shares of the Trust (in each such case other than as a result of
the acquisition of securities directly from the Trust), PROVIDED, HOWEVER,
that a Change in Control shall not be deemed to have occurred if such Person
is a Qualified Entity; and (iv) individuals who, as of the initial Issue Date
constitute the members of the Board of Trustees (the "Incumbent Trustees")
cease for any reason, including, without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at least a
majority of the members of the Board of Trustees, provided that any person
becoming a Trustee of the Trust whose election or nomination for election was
approved by a vote of at least

                                      -2-


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a majority of the Incumbent Trustees shall, for purposes hereof be considered
an Incumbent Trustee.

         "CHANGE IN CONTROL PUT NOTICE" shall have the meaning set forth in
Section 5(b).

         "CHANGE IN CONTROL REDEMPTION DATE" shall have the meaning set forth
in Section 5(b).

         "COMMON BASE AMOUNT" shall have the meaning set forth in Section
3(a) hereof.

         "COMMON SHARES" shall mean the Common Shares, par value $.001 per
share, of the Trust.

         "CONVERSION PRICE" shall mean the conversion price per Common Share
for which each Series B Preferred Share is convertible. The initial
conversion price shall be $16.00 (equivalent to a conversion rate of 1.5625
Common Shares for each Series B Preferred Share).

         "CONVERSION PRICE ADJUSTMENT" shall have the meaning set forth in
Section 3(a) hereof.

         "CONVERSION RATIO" shall mean the quotient of (A) $25.00 divided by
(B) the Conversion Price then in effect.

         "COVERAGE RATIO I" means the ratio, for the year comprising the four
most recently completed calendar quarters for which financial statements are
available, of the Trust's Available Income I in such period to the Fixed
Charges I in such period.

         "COVERAGE RATIO II" means the ratio, for the year comprising the
four most recently completed calendar quarters for which financial statements
are available, of the Trust's Available Income II in such period to the Fixed
Charges II in such period.

         "CURRENT MARKET PRICE" shall mean, with respect to the Common
Shares, on any date specified herein, the average of the Market Price during
the period of the most recent 30 consecutive trading days ending on such date.

         "DECLARATION" shall mean the Trust's Declaration of Trust and any
amendments or supplements thereto.

         "DIVIDEND PAYMENT DATE" shall mean, with respect to each Dividend
Period, the last calendar day of January, April, July and October, in each
year, commencing on October 31, 1999; PROVIDED, HOWEVER, that if any Dividend
Payment Date falls on any day other than a Business Day, the dividend payment
due on such Dividend Payment Date shall be paid on the first Business Day
immediately following such Dividend Payment Date.

         "DIVIDEND PERIODS" shall mean quarterly dividend periods commencing
on February 1, May 1, August 1 and November 1 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period (other than the initial Dividend Period, which shall commence on the
Issue Date and end on and include October 31, 1999).

                                      -3-


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         "FIXED CHARGES I" means the amount which is expensed in the
applicable period for interest on indebtedness and required distributions
payable on Preferred Units.

         "FIXED CHARGES II" means the amount which is incurred in the
applicable period for interest on indebtedness and required distributions
payable on Preferred Units.

         "IRR" shall mean the annual discount rate which when applied to each
distribution on a Series B Preferred Share and the Redemption Price would
result in the net present value as of the respective Issue Date of all such
payments being equal to the Purchase Price.

         "ISSUE DATE" shall mean the date on which any Series B Preferred
Shares are issued and sold.

         "JUNIOR SHARES" shall mean the Common Shares and any other class or
series of shares of beneficial interest of the Trust constituting junior
shares within the meaning set forth in Section 9(a)(iii) hereof.

         "LIQUIDATION" shall mean (A) a dissolution or winding up of the
Trust, whether voluntary or involuntary, (B) a consolidation or merger of the
Trust with and into one or more entities which are not affiliates of the
Trust which results in a Change in Control, or (C) a sale or transfer of all
or substantially all of the Trust's assets other than to an affiliate of the
Trust.

         "LIQUIDATION PREFERENCE" shall have the meaning set forth in Section
4(a) hereof.

         "LIQUIDATION PREMIUM" shall mean (X) on or prior to December 15,
2003, in connection with (i) a Merger Liquidation in which the surviving
entity is a Qualified Entity, an amount equal to 5% of the Liquidation
Preference or (ii) any other Liquidation, an amount equal to 10% of the
Liquidation Preference, or (Y) after December 15, 2003, in connection with
any Liquidation, an amount equal to the difference between the Redemption
Price set forth in Section 5 and the Liquidation Preference.

         "MARKET PRICE" shall mean, with respect to the Common Shares on any
date, the last reported sales price, regular way on such day, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way on such day, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the American Stock Exchange ("AMEX") or, if the
Common Shares are not listed or admitted for trading on AMEX, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Common Shares are listed or admitted for trading or, if the Common Shares are
not listed or admitted for trading on any national securities exchange, the
last quoted price, or if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the NASD
Automated Quotation System or, if such system is no longer in use, the
principal other automated quotation system that may then be in use, or if the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
regularly making a market in the Common Shares selected for such purpose by
the Board of Trustees or, if there is no such

                                      -4-


<PAGE>

professional market maker, such amount as the Board of Trustees determines to be
the value of a Common Share.

     "MERGER LIQUIDATION" shall mean a Liquidation which constitutes a
consolidation or merger of the Trust with one or more entities that are not
affiliates of the Trust and as a result of which the Trust is not the surviving
entity.

     "OP UNITS" shall mean units of limited partnership interest in the
Partnership that are not Preferred Units.

     "PARITY SHARES" shall have the meaning set forth in Section 9(a)(ii)
hereof.

     "PARTNERSHIP" shall mean Keystone Operating Partnership, L.P., a Delaware
limited partnership.

     "PERSON" shall mean any individual, firm, partnership, corporation, trust,
limited liability company or other entity, and shall include any successor (by
merger or otherwise) of such entity.

     "PREFERRED SHARES" shall mean the preferred shares, par value $.001 per
share, of the Trust.

     "PREFERRED UNITS" shall mean any units issued by the Partnership that may
be issued in one or more series or classes, having such rights, powers, duties
and preferences as may be determined by the Trust as general partner in its sole
and absolute discretion.

     "PURCHASE PRICE" shall mean Twenty-Five Dollars ($25.00) per Series B
Preferred Share issued hereunder.

     "QUALIFIED ENTITY" shall mean any Person that either (i) is or may be the
issuer of senior unsecured debt securities which are rated no lower than
investment grade by either Standard & Poor's Rating Service, Inc., a division of
the McGraw Hill Companies, Inc. ("S&P"), or Moody's Investor Services, Inc.
("Moody's"), which rating may (A) relate to any outstanding issue of such debt
securities or (B) relate to any unissued debt securities registered on an
effective shelf registration statement or (ii) is an issuer of outstanding
preferred equity securities which are rated no lower than Ba1 by Moody's or BB+
by S&P.

     "RATCHETED AMOUNT" shall have the meaning set forth in Section 3 hereof.

     "REDEMPTION DATE" shall have the meaning set forth in Section 5(a) hereof.

     "REDEMPTION NOTICE" shall have the meaning set forth in Section 5(a)
hereof.

     "REDEMPTION PRICE" shall have the meaning set forth in Section 5(a) hereof.

     "SERIES B PREFERRED SHARES" shall have the meaning set forth in Section 1
hereof.

                                      -5-


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         "SET APART FOR PAYMENT" shall be deemed to include, without any action
other than the following, the recording by the Trust in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of a dividend or other distribution by the Board of Trustees, the
allocation of funds to be so paid on any series or class of shares of beneficial
interest of the Trust; PROVIDED, HOWEVER, that if any funds for any class or
series of Junior Shares or any class or series of Parity Shares are placed in a
separate account of the Trust or delivered to a disbursing, paying or other
similar agent, then "set apart for payment" with respect to the Series B
Preferred Shares shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.

         "TRADING DAY" shall mean any day on which the securities in question
are traded on the AMEX, or if such securities are not listed or admitted for
trading on the AMEX, on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities exchange, on the Nasdaq National Market, or if such
securities are not quoted on such Nasdaq National Market, in the applicable
securities market in which the securities are traded.

         SECTION 3. DIVIDENDS.

                  (a) The holders of Series B Preferred Shares shall be entitled
to receive, when, as and if authorized and declared by the Board of Trustees out
of funds legally available for that purpose, dividends payable in cash at the
rate per annum equal to (i) $2.4375 per Series B Preferred Share ("ANNUAL
DIVIDEND RATE") PLUS (ii) an amount (the "RATCHETED AMOUNT") equal to the
product of (x) the amount by which cash dividends with respect to each Common
Share exceeds $1.56 (the "COMMON BASE AMOUNT") and (y) the Conversion Ratio in
effect immediately after any adjustment to the Conversion Price pursuant to (i)
a payment of a dividend or a distribution on its shares of beneficial interest
in Common Shares, (ii) a subdivision of its outstanding Common Shares into a
greater number of shares, (iii) a combination of its outstanding Common Shares
into a smaller number of shares or (iv) an issuance of any shares of beneficial
interest by reclassification of its outstanding Common Shares (a "CONVERSION
PRICE ADJUSTMENT"); PROVIDED, THAT, at the time of a Conversion Price
Adjustment, the Common Base Amount shall be adjusted to an amount equal to the
product of (I) the Common Base Amount in effect immediately prior to the
Conversion Price Adjustment and (II) a fraction, the numerator of which shall be
the Conversion Ratio in effect immediately prior to the applicable Conversion
Price Adjustment and the denominator of which shall be the Conversion Ratio in
effect immediately after the applicable Conversion Price Adjustment. Such
dividends shall be cumulative from the Issue Date, whether or not in any
Dividend Period or Periods there shall be funds of the Trust legally available
for the payment of such dividends, and shall compound at a rate per annum equal
to 9.75% and shall be payable quarterly, when, as and if authorized and declared
by the Board of Trustees, in arrears on Dividend Payment Dates, commencing on
the first Dividend Payment Date after the Issue Date. Each such dividend shall
be payable in arrears to the holders of record of the Series B Preferred Shares,
as they appear on the share records of the Trust at the close of business on
each record date which shall not be less than ten nor more than 30 days
preceding the applicable Dividend Payment Date (the "DIVIDEND PAYMENT RECORD
DATE"), as shall be fixed by the Board of Trustees. Accrued and unpaid dividends
for any past

                                      -6-


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Dividend Periods may be authorized and declared and paid at any time, without
reference to any regular Dividend Payment Date, to holders of record on such
date, which shall not be more than 45 days preceding the payment date thereof,
as may be fixed by the Board of Trustees. The amount of accrued and unpaid
dividends (including any Ratcheted Amount if applicable) on any Series B
Preferred Share at any date shall be the amount of any dividends thereon
calculated and compounded at the applicable rate to and including such date,
whether or not earned or declared, which have not been paid in cash.

                  (b) The amount of dividends payable for each full Dividend
Period for the Series B Preferred Shares shall be computed by dividing the
Annual Dividend Rate by four. The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series B Preferred Shares shall be computed on the basis of
twelve 30-day months and a 360-day year.

                  (c) So long as any Series B Preferred Shares are outstanding,
no dividends, except as described in the immediately following sentence, shall
be authorized and declared or paid or set apart for payment on any series or
class or classes of Parity Shares for any period unless full cumulative
dividends have been or contemporaneously are authorized and declared and paid or
authorized and declared and a sum sufficient for the payment thereof set apart
for such payment on the Series B Preferred Shares for all Dividend Periods
terminating on or prior to the dividend payment date for such class or series of
Parity Shares. When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends authorized and declared
upon Series B Preferred Shares and all dividends authorized and declared upon
any other series or class or classes of Parity Shares shall be authorized and
declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Series B Preferred Shares and such Parity Shares.

                  (d) So long as any Series B Preferred Shares are outstanding,
no dividends (other than dividends or distributions paid solely in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Junior
Shares) shall be authorized and declared or paid or set apart for payment or
other distribution authorized and declared or made upon Junior Shares, nor shall
any Junior Shares be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Shares made for purposes of
and in compliance with requirements of an employee incentive or benefit plan of
the Trust or any subsidiary), for any consideration (or any moneys to be paid to
or made available for a sinking fund for the redemption of any such shares) by
the Trust, directly or indirectly (except by conversion into or exchange for
Junior Shares), unless in each case (i) all accumulated and unpaid dividends on
all outstanding Series B Preferred Shares and any other Parity Shares of the
Trust shall have been paid or set apart for payment for all past Dividend
Periods with respect to the Series B Preferred Shares and all past dividend
periods with respect to such Parity Shares and (ii) sufficient funds shall have
been paid or set apart for the payment of the dividend for the current Dividend
Period with respect to the Series B Preferred Shares and any Parity Shares.

                  (e) If the Trust shall after the Issue Date make any issuance
or distribution to holders of its Common Shares other than the regular quarterly
dividend thereon (or any special

                                      -7-


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distribution in lieu thereof in an amount not exceeding the regular quarterly
dividend), the holders of the Series B Preferred Shares shall be entitled to
receive such issuance or distribution in an amount per Series B Preferred Share
equal to the amount the holder of such share would have received if such Series
B Preferred Share had been converted into Common Shares immediately prior to
such issuance or distribution.

         SECTION 4. LIQUIDATION PREFERENCE.

                  (a) In the event of any Liquidation, before any payment or
distribution of the assets of the Trust (whether capital or surplus) shall be
made to or set apart for the holders of Junior Shares, the holders of Series
B Preferred Shares shall be entitled to receive the greater of (i) an amount
equal to (A) Twenty-Five Dollars ($25.00) per Series B Preferred Share plus
dividends (whether or not earned or declared) accrued and unpaid thereon to
the date of final distribution to such holder (the "LIQUIDATION PREFERENCE")
plus (B) the Liquidation Premium or (ii) an amount per Series B Preferred
Share equal to the amount which would have been payable had each Series B
Preferred Share been converted into Common Shares immediately prior to such
Liquidation. The foregoing amounts shall be subject to equitable adjustment
whenever there shall occur a share dividend, share split, combination,
reorganization, recapitalization, reclassification or other similar event
involving a change in the capital structure of the Trust. Until the holders
of the Series B Preferred Shares have been paid the Liquidation Preference in
full, no payment will be made to any holder of Junior Shares upon
Liquidation. If, upon any such Liquidation, the assets of the Trust, or
proceeds thereof, distributable among the holders of Series B Preferred
Shares shall be insufficient to pay in full the preferential amount aforesaid
and liquidating payments then payable on any other shares of any class or
series of Parity Shares, then such assets, or the proceeds thereof, shall be
distributed among the holders of such Series B Preferred Shares and such
other Parity Shares ratably in accordance with the amounts that would be
payable on such Series B Preferred Shares in accordance with the first
sentence of this Section 4(a) and on all other Parity Shares if all amounts
then payable thereon were paid in full.

In connection with a Merger Liquidation, the holders of Series B Preferred
Shares shall have the right (a "CONTINUATION RIGHT") to elect, by delivering
written notice to the Trust not less than five Business Days prior to the
Merger Liquidation, to require the Trust to make provision for the Series B
Preferred Shares to be assumed by the surviving entity as described in
Section 7(e); PROVIDED, HOWEVER, notwithstanding the election by the holders
of the Series B Preferred Shares of the Continuation Right, the Trust shall
have the right, in connection with any Merger Liquidation, to elect, by
delivering written notice to the holders of Series B Preferred Shares at any
time prior to the Merger Liquidation, to redeem any or all of the outstanding
Series B Preferred Shares for an amount per Series B Preferred Share equal to
the Liquidation Preference plus a premium equal to 10% of the Liquidation
Preference.

                  (b) Subject to the rights of the holders of any Parity Shares,
upon any Liquidation of the Trust, after payment shall have been made in full to
the holders of Series B Preferred Shares and any Parity Shares, as provided in
this Section 4, any other series or class or classes of Junior Shares shall,
subject to the respective terms thereof, be entitled to receive any

                                      -8-


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and all assets remaining to be paid or distributed, and the holders of the
Series B Preferred Shares and any Parity Shares shall not be entitled to share
therein.

         SECTION 5. REDEMPTION.

                  (a) At any time on or after the Issue Date, upon the written
election of the Trust given to each record holder of Series B Preferred Shares
(the "REDEMPTION NOTICE"), the Trust may redeem for cash on the date specified
in the Redemption Notice (which date shall not be less than 20 days nor more
than 30 days after the date of the Redemption Notice) (the "REDEMPTION DATE"),
all or part of the outstanding Series B Preferred Shares at a price per Series B
Preferred Share equal to the following amounts or percentages of the Liquidation
Preference during the following periods (the "REDEMPTION PRICE"):

<TABLE>
<S>                                                                                 <C>
         From the Issue Date through and including the
         fifth anniversary of the Issue Date                                        the amount necessary
                                                                                    to produce a 17% IRR

         From the fifth anniversary of the Issue Date
         through and including the sixth anniversary of the Issue Date              104.825%

         From the sixth anniversary of the Issue Date
         through and including the seventh anniversary of the Issue Date            103.62%

         From the seventh anniversary of the Issue Date
         through and including the eighth anniversary of the Issue Date             102.41%

         From the eighth anniversary of the Issue Date
         through and including the ninth anniversary of the Issue Date              101.21%

         The ninth anniversary of the Issue Date and thereafter                     100%
</TABLE>

PROVIDED, HOWEVER, that if Redemption Date would occur subsequent to the
Change in Control Redemption Date (as defined below), and a holder of Series
B Preferred Shares, whose shares are subject to a Redemption Notice, delivers
a Change in Control Put Notice (as defined below), the Redemption Notice
shall be deemed void and have no effect and the Trust shall redeem the
holder's Series B Preferred Shares in accordance with Section 5(b).

If less than all the Series B Preferred Shares are called for redemption by
the Trust, the number of Series B Preferred Shares to be redeemed by the
holders of the Series B Preferred Shares shall be redeemed PRO RATA among
such holders on the basis of the number of Series B Preferred Shares owned by
such holders.

                  (b) Notwithstanding the provisions of Section 4(a), in
connection with a Change in Control where the surviving entity is not a
Qualified Entity, the Trust shall provide notice of a proposed Change in
Control to the holders of Series B Preferred Shares at least 20 days prior to
such Change in Control becoming effective and each holder of Series B
Preferred Shares shall have the right to elect by delivering written notice
(the "CHANGE IN CONTROL PUT

                                      -9-


<PAGE>

NOTICE") to the Trust not less than five Business Days prior to the Change in
Control to require the Trust to redeem all, but not less than all, of the
outstanding Series B Preferred Shares owned by such holder for an amount per
Series B Preferred Share equal to the Liquidation Preference plus a premium
equal to 10% of the Liquidation Preference. Upon receipt of such notice, the
Trust shall redeem such shares on the date on which the Change of Control
becomes effective (the "CHANGE OF CONTROL REDEMPTION DATE"), if such shares
were not redeemed previously in accordance with Section 5(a).

                  (c) From and after the Redemption Date or the Change of
Control Redemption Date, as the case may be, (i) except as otherwise provided
herein, dividends on the Series B Preferred Shares so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of Series
B Preferred Shares of the Trust shall cease (except the rights to receive the
cash payable upon such redemption, without interest thereon, upon surrender
and endorsement of their certificates if so required and to receive any
dividends payable thereon). The Trust's obligation to provide cash in
accordance with the preceding sentence shall be deemed fulfilled if, on or
before the Redemption Date or the Change of Control Redemption Date, as the
case may be, the Trust shall deposit with a bank or trust company that has an
office in the Borough of Manhattan, City of New York, or in Philadelphia,
Pennsylvania and that has, or is an affiliate of a bank or trust company that
has, a capital and surplus of at least $50,000,000, any cash necessary for
such redemption, in trust, with irrevocable instructions that such cash be
applied to the redemption of the Series B Preferred Shares so called for
redemption, PROVIDED, HOWEVER, if the Trust elects to make such a deposit it
will notify the holders of Series B Preferred Shares subject to redemption in
advance of such deposit of (i) the date of such deposit, (ii) the office of
such bank or trust company as the place of payment for the redemption and
(iii) instructing such holders to surrender their certificates for payment at
such office on or about the Redemption Date or the Change in Control
Redemption Date. No interest shall accrue for the benefit of the holder of
Series B Preferred Shares to be redeemed on any cash so set aside by the
Trust.

                  (d) Notwithstanding the provisions of Section 5(c), if (i)
at any time during the one year period following the initial Issue Date, the
Trust redeems Series B Preferred Shares pursuant to Section 5(a) and (ii)
within 90 days of the Redemption Date with respect thereto a Change in
Control occurs wherein the surviving entity is not a Qualified Entity, the
Trust shall promptly pay to each holder of Series B Preferred Shares that
were redeemed on such Redemption Date an additional amount with respect to
each Series B Preferred Share of such holder that was so redeemed equal to
the difference between (x) the amount that would have been payable to such
holder with respect to such Series B Preferred Share had such holder
continued to hold such share beyond such Redemption Date and exercised the
rights of such holder under Section 5(b) upon such Change in Control and (y)
the amount the holder received on the Redemption Date for such Series B
Preferred Share pursuant to Section 5(a).

         SECTION 6. REACQUIRED SHARES. All Series B Preferred Shares which
shall have been issued and converted, redeemed or reacquired in any manner by
the Trust shall be restored to the status of authorized but unissued Series B
Preferred Shares.

                                     -10-


<PAGE>

         SECTION 7. CONVERSION. Holders of Series B Preferred Shares shall
have the right to convert all or a portion of such shares into Common Shares,
as follows:

                  (a) Subject to and upon compliance with the provisions of
this Section 7, a holder of Series B Preferred Shares shall have the right,
at his or her option, at any time and from time to time, to convert such
shares into the number of fully paid and nonassessable Common Shares obtained
by dividing the aggregate Liquidation Preference of such Series B Preferred
Shares by the Conversion Price (as in effect at the time and on the date
provided for in the last paragraph of paragraph (b) of this Section 7) by
surrendering such Series B Preferred Shares to be converted, such surrender
to be made in the manner provided in paragraph (b) of this Section 7;
PROVIDED, HOWEVER, that the right to convert Series B Preferred Shares called
for redemption pursuant to Section 5 hereof shall terminate at the close of
business on the Redemption Date fixed for such redemption, unless the Trust
shall default in making payment of any cash payable upon such redemption
under Section 5 hereof.

                  (b) In order to exercise the conversion right, the holder
of each Series B Preferred Share to be converted shall surrender the
certificate representing such Series B Preferred Share, duly endorsed or
assigned to the Trust or in blank, to the Trust, accompanied by written
notice to the Trust that the holder thereof elects to convert such Series B
Preferred Shares. Unless the Common Shares issuable on conversion are to be
issued in the same name as the name in which such Series B Preferred Shares
are registered, each share surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Trust, duly executed by
the holder or such holder's duly authorized attorney and an amount sufficient
to pay any transfer or similar tax (or evidence reasonably satisfactory to
the Trust demonstrating that such taxes have been paid).

Holders of Series B Preferred Shares at the close of business on any Dividend
Payment Record Date shall be entitled to receive the dividend payable on such
shares on the corresponding Dividend Payment Date (and of any accrued and
unpaid dividends to the date of conversion), notwithstanding the conversion
thereof, following such Dividend Payment Record Date and prior to such
Dividend Payment Date; PROVIDED, HOWEVER, that no holder Series B Preferred
Shares surrendered for conversion shall be entitled to receive a dividend for
such Dividend Period with respect to such Series B Preferred Shares if such
holder is entitled to receive a distribution for the identical quarterly
period with respect to Common Shares for which such Series B Preferred Shares
have been exchanged.

As promptly as practicable after the surrender of certificates for Series B
Preferred Shares as aforesaid, the Trust shall issue and shall deliver at
such office to such holder, or send on his or her written order, a
certificate or certificates for the number of full Common Shares issuable
upon the conversion of such Series B Preferred Shares in accordance with the
provisions of this Section 7, and any fractional interest in respect of a
Common Share arising upon such conversion shall be settled as provided in
paragraph (c) of this Section 7.

Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which the certificates for Series B
Preferred Shares shall have been surrendered and such notice received by the
Trust as aforesaid, and the person or persons in

                                     -11-
<PAGE>

whose name or names any certificate or certificates for Common Shares shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the Common Shares represented thereby at such time on
such date, and such conversion shall be at the Conversion Price in effect at
such time and on such date unless the shares transfer books of the Trust
shall be closed on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such shares transfer books are
open, but such conversion shall be at the Conversion Price in effect on the
date on which such Series B Preferred Shares shall have been surrendered and
such notice received by the Trust.

                  (c) No fractional shares or scrip representing fractions of
Common Shares shall be issued upon conversion of the Series B Preferred
Shares. Instead of any fractional interest in a Common Share that would
otherwise be deliverable upon the conversion of a Series B Preferred Share,
the Trust shall pay to the holder of such Series B Preferred Share an amount
in cash based upon the Current Market Price of Common Shares on the Trading
Day immediately preceding the date of conversion. If more than one Series B
Preferred Share shall be surrendered for conversion at one time by the same
holder, the number of full Common Shares issuable upon conversion thereof
shall be computed on the basis of the aggregate number of Series B Preferred
Shares so surrendered.

                  (d) The Conversion Price shall be adjusted from time to
time as follows:

                      (i) If the Trust shall after the Issue Date (A)
subdivide its outstanding Common Shares into a greater number of shares or
(B) combine its outstanding Common Shares into a smaller number of shares,
the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or distribution or at the opening of business on the
day following the day on which such subdivision or combination becomes
effective, as the case may be, shall be adjusted so that the holder of any
Series B Preferred Share thereafter surrendered for conversion shall be
entitled to receive the number of Common Shares that such holder would have
owned or have been entitled to receive after the happening of any of the
events described above, had such Series B Preferred Share been converted
immediately prior to the record date in the case of a dividend or
distribution or the effective date in the case of a subdivision, combination
or reclassification. An adjustment made pursuant to this subparagraph (i)
shall become effective immediately upon the opening of business on the day
next following the record date (subject to paragraph (h) below) in the case
of a dividend or distribution and shall become effective immediately upon the
opening of business on the day next following the effective date in the case
of a subdivision, combination or reclassification.

                      (ii) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative increase or
decrease of at least 1% in such price; PROVIDED, HOWEVER, that any
adjustments that by reason of this subparagraph (ii) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment until made; and provided, further, that any adjustment shall be
required and made in accordance with the provisions of this Section 7 (other
than this subparagraph (ii)) not later than such time as may

                                      -12-
<PAGE>

be required in order to preserve the tax-free nature of a distribution to the
holders of Common Shares. Notwithstanding any other provisions of this
Section 7, the Trust shall not be required to make any adjustment of the
Conversion Price for the issuance of any Common Shares pursuant to any plan
providing for the reinvestment of dividends or interest payable on securities
of the Trust and the investment of additional optional amounts in Common
Shares under such plan. All calculations under this Section 7 shall be made
to the nearest cent (with $.005 being rounded upward) or to the nearest
one-tenth of a share (with .05 of a share being rounded upward), as the case
may be. Anything in this paragraph (d) to the contrary notwithstanding, the
Trust shall be entitled, to the extent permitted by law, to make such
reductions in the Conversion Price, in addition to those required by this
paragraph (d), as it in its discretion shall determine to be advisable in
order that any share dividends, subdivision of shares, reclassification or
combination of shares, distribution of rights, options or warrants to
purchase shares or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Trust to its shareholders shall not be
taxable.

                  (e) If the Trust shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, self tender offer for all or substantially all Common Shares
outstanding, sale of all or substantially all of the Trust's assets or
recapitalization of the Common Shares but excluding any transaction as to
which subparagraph (d)(i) of this Section 7 applies) (each of the foregoing
being referred to herein as a "TRANSACTION"), in each case as a result of
which Common Shares shall be converted into the right to receive shares,
securities or other property (including cash or any combination thereof),
each Series B Preferred Share that is not redeemed or converted into the
right to receive shares, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of
shares, securities and other property (including cash or any combination
thereof) receivable upon the consummation of such Transaction by a holder of
that number of Common Shares into which one Series B Preferred Share was
convertible immediately prior to such Transaction, assuming such holder of
Common Shares (i) is not a Person with which the Trust consolidated or into
which the Trust merged or which merged into the Trust or to which such sale
or transfer was made, as the case may be (a "CONSTITUENT PERSON"), or an
affiliate of a Constituent Person and (ii) failed to exercise his or her
rights of the election, if any, as to the kind or amount of shares,
securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of shares, securities and
other property (including cash) receivable upon such Transaction is not the
same for each Common Share of the Trust held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised
("NON-ELECTING SHARE"), then for the purpose of this paragraph (e) the kind
and amount of shares, securities and other property (including cash)
receivable upon such Transaction by each Non-Electing Share shall be deemed
to be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares). The Trust shall not be a party to any Transaction
unless the terms of such Transaction are consistent with the provisions of
this paragraph (e), and it shall not consent or agree to the occurrence of
any Transaction until the Trust has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit of the
holders of the Series B Preferred Shares that will contain provisions
enabling the holders of the Series B Preferred Shares that remain outstanding
after such

                                      -13-
<PAGE>

Transaction to convert their Series B Preferred Shares into the consideration
received by holders of Common Shares at the Conversion Price in effect
immediately prior to such Transaction. The provisions of this paragraph (e)
shall similarly apply to successive Transactions.

                  (f) If:

                      (i) the Trust shall declare a dividend (or any other
distribution) on the Common Shares (other than in cash out of assets, based
on a fair valuation of assets, in excess of the sum of the liabilities of the
Trust and the amount of stated capital attributable to Common Shares,
determined on the basis of the most recent annual consolidated cost basis and
current value basis and quarterly consolidated balance sheets of the Trust
and its consolidated subsidiaries available at the time of the declaration of
the dividend or distribution); or

                      (ii) the Trust shall authorize the granting to the
holders of the Common Shares of rights or warrants to subscribe for or
purchase any shares of any class or any other rights or warrants; or

                      (iii) there shall be any reclassification of the Common
Shares (other than an event to which subparagraph (d)(i) of this Section 7
applies) or any consolidation or merger to which the Trust is a party and for
which approval of any shareholders of the Trust is required, or a statutory
share exchange involving the conversion or exchange of Common Shares into
securities or other property, or a self tender offer by the Trust for all or
substantially all of its outstanding Common Shares, or the sale or transfer
of all or substantially all of the assets of the Trust as an entirety and for
which approval of any shareholders of the Trust is required; or

                      (iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Trust,

then the Trust shall cause to be prepared and delivered to the holders of the
Series B Preferred Shares at their addresses as shown on the share records of
the Trust, as promptly as possible, but at least 15 days prior to the
applicable date hereinafter specified, a notice stating (A) the date on which
a record is to be taken for the purpose of such dividend, distribution or
rights or warrants, or, if a record is not to be taken, the date as of which
the holders of Common Shares of record to be entitled to such dividend,
distribution or rights or warrants are to be determined or (B) the date on
which such reclassification, consolidation, merger, statutory share exchange,
sale, transfer, liquidation, dissolution or winding up is expected to become
effective, and the date as of which it is expected that holders of Common
Shares of record shall be entitled to exchange their Common Shares for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, statutory share exchange, sale, transfer, liquidation,
dissolution or winding up. Failure to give or receive such notice or any
defect therein shall not affect the legality or validity of the proceedings
described in this Section 7.

                  (g) Whenever the Conversion Price is adjusted as herein
provided, the Trust shall promptly prepare and deliver to the holders of the
Series B Preferred Shares a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective date of such
adjustment and an officer's certificate setting forth the Conversion Price

                                      -14-
<PAGE>

after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. The Trust shall mail such notice and such
certificate to the holders of each Series B Preferred Share at such holder's
last address as shown on the share records of the Trust.

                  (h) In any case in which paragraph (d) of this Section 7
provides that an adjustment shall become effective on the day next following
the record date for an event, the Trust may defer until the occurrence of
such event (A) issuing to the holder of any Series B Preferred Share
converted after such record date and before the occurrence of such event the
additional Common Shares issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Shares issuable
upon such conversion before giving effect to such adjustment and (B) paying
to such holder any amount of cash in lieu of any fraction pursuant to
paragraph (c) of this Section 7.

                  (i) There shall be no adjustment of the Conversion Price in
case of the issuance of any shares of beneficial interest of the Trust in a
reorganization, acquisition or other similar transaction except as
specifically set forth in this Section 7. If any action or transaction would
require adjustment of the Conversion Price pursuant to more than one
paragraph of this Section 7, only one adjustment shall be made, and such
adjustment shall be the amount of adjustment that has the highest absolute
value.

                  (j) If the Trust shall take any action affecting the Common
Shares, other than action described in this Section 7, that in the opinion of
the Board of Trustees would materially adversely affect the conversion rights
of the holders of the Series B Preferred Shares, the Conversion Price for the
Series B Preferred Shares may be adjusted, to the extent permitted by law, in
such manner, if any, and at such time, as the Board of Trustees, in its sole
discretion, may determine to be equitable in the circumstances.

                  (k) The Trust will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued Common Shares, for the purpose of effecting conversion of the Series
B Preferred Shares, the full number of Common Shares deliverable upon the
conversion of all outstanding Series B Preferred Shares not theretofore
converted. For purposes of this paragraph (i), the number of Common Shares
that shall be deliverable upon the conversion of all outstanding Series B
Preferred Shares shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.

The Trust covenants that any Common Shares issued upon conversion of the
Series B Preferred Shares shall be validly issued, fully paid and
nonassessable. Before taking any action that would cause an adjustment
reducing the Conversion Price below the then-par value of the Common Shares
deliverable upon conversion of the Series B Preferred Shares, the Trust shall
take any trust action that, in the opinion of its counsel, may be necessary
in order that the Trust may validly and legally issue fully paid and
nonassessable Common Shares at such adjusted Conversion Price.

                  (l) The Trust shall pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery
of Common Shares or other securities or

                                      -15-
<PAGE>

property on conversion of the Series B Preferred Shares pursuant hereto;
PROVIDED, HOWEVER, that the Trust shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issue or delivery
of any Common Shares or other securities or property in a name other than
that of the holder of the Series B Preferred Shares to be converted, and no
such issue or delivery shall be made unless and until the person requesting
such issue or delivery has paid to the Trust the amount of any such tax or
established, to the reasonable satisfaction of the Trust, that such tax has
been paid.

                  (m) Except as permitted in Section 33 of the Contribution
and Exchange Agreement, dated as of August 6, 1999, by and among Reckson
Morris Industrial Trust, Reckson Morris Interim GP, LLC, Reckson Operating
Partnership, L.P., Robert Morris, Joseph D. Morris, Ronald Schram, Mark M.
Bava, The Drew Morris Trust, The Justin Morris Trust, The Keith Morris Trust,
Joseph D. Morris Family Limited Partnership, Robert Morris Family Limited
Partnership (the "CONTRIBUTION AGREEMENT"), holders of Series B Preferred
Shares will not have the conversion rights set forth in Section 7 hereof and
the Series B Preferred Shares may not be converted into Common Shares, until
and unless Shareholders' Approval (as such term is defined in the
Contribution Agreement) are obtained.

         SECTION 8. PERMISSIBLE DISTRIBUTIONS. In determining whether a
distribution (other than upon liquidation, dissolution or winding up),
whether by dividend, or upon redemption or other acquisition of shares or
otherwise, is permitted under Maryland law, amounts that would be needed, if
the Trust were to be dissolved at the time of the distribution, to satisfy
the preferential rights upon dissolution of holders of shares of beneficial
interest of any class or series whose preferential rights upon dissolution
are superior or prior to those receiving the distribution shall not be added
to the Trust's total liabilities.

         SECTION 9. RANKING.

                  (a) Any class or series of shares of beneficial interest of
the Trust shall be deemed to rank:

                      (i) prior to the Series B Preferred Shares, as to the
payment of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series B Preferred Shares;

                      (ii) on a parity with the Series B Preferred Shares, as
to the payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share thereof
be different from those of the Series B Preferred Shares, if the holders of
such class or series and the Series B Preferred Shares shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other ("PARITY SHARES"); and

                                      -16-
<PAGE>

                      (iii) junior to the Series B Preferred Shares, as to
the payment of dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, if such class or series shall be
Common Shares or if the holders of Series B Preferred Shares shall be
entitled to receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of such class or series, and such class or
series shall not in either case rank prior to the Series B Preferred Shares.

                  (b) The Series B Preferred Shares shall be deemed to rank
on a parity with the Series A Preferred Shares of the Trust, par value $.001
per share.

         SECTION 10. VOTING. Except as otherwise set forth herein, the Series
B Preferred Shares shall not have any relative, participating, optional or
other special voting rights and powers, and the consent of the holders
thereof shall not be required for the taking of any trust action.

                  (a) If and whenever six quarterly dividends (whether or not
consecutive) payable on the Series B Preferred Shares shall be in arrears
(which shall, with respect to any such quarterly dividend, mean that any such
dividend has not been paid in full), whether or not earned or declared, the
number of Trustees then constituting the Board of Trustees shall be increased
by one and the holders of Series B Preferred Shares, voting separately as a
single class, shall be entitled to nominate and elect the additional Trustee
to serve on the Board of Trustees. Whenever all arrearage in dividends on the
Series B Preferred Shares then outstanding shall have been paid and full
dividends thereon for the current quarterly dividend period shall have been
paid or declared and set apart for payment, then the right of the holders of
the Series B Preferred Shares to elect such additional Trustee shall cease
(but subject always to the same provision for the vesting of such voting
rights in the case of any similar future arrearages in six quarterly
dividends), and the term of office of the person elected as a Trustee by the
holders of the Series B Preferred Shares shall forthwith terminate and the
number of Trustees constituting the Board of Trustees shall be reduced
accordingly.

                  (b) The Trust covenants to the holders of the Series B
Preferred Shares that while any Series B Preferred Shares are outstanding:

                      (i) the Trust will not (x) incur any indebtedness for
borrowed money or (y) issue additional Parity Shares if, after giving effect
to such incurrence or issuance, the Trust's Coverage Ratio I would be less
than 1.5:1 or the Trust's Coverage Ratio II would be less than 1.2:1.

                      (ii) the Trust will not declare or pay any dividends
which result in the aggregate dividends declared or paid from the Issue Date
paid on Preferred Shares or Common Shares to exceed the sum of (x) the
cumulative Funds from Operations (FFO) (as defined by NAREIT and reported by
the Trust) from the Issue Date (with the amount for the quarter in which the
Series B Preferred Shares are issued being based upon the number of days such
shares are outstanding during such quarter divided by 90 and multiplied by
the FFO for such quarter) plus (y) any capital gains not included in (x) (net
of any capital gains tax paid by the Trust) from the Issue Date; and

                                      -17-
<PAGE>

                      (iii) the Trust will extend to the holders of the
Series B Preferred Shares the benefit of any covenant granted to holder of a
future series of Preferred Shares that restricts the total amount of the
Trust's combined indebtedness and Preferred Shares to a specified percentage
of the value of either assets or real estate held by the Trust.

If and whenever the Trust breaches any of the covenants set forth in this
Section 10(b), the number of Trustees then constituting the Board of Trustees
shall be increased by one and the holders of Series B Preferred Shares,
voting separately as a single class, shall be entitled to nominate and elect
the additional Trustee to serve on the Board of Trustees. Whenever the Trust
cures any breach of any of such covenants or is no longer in violation
thereof, then the rights of the holders of the Series B Preferred Shares to
elect such additional Trustee shall cease, and the term of office of the
person elected as a Trustee by the holders of the Series B Preferred Shares
shall forthwith terminate and the number of Trustees constituting the Board
of Trustees shall be reduced accordingly.

                  (c) At any time after voting power shall have been vested
in the holders of Series B Preferred Shares pursuant to (a) or (b) above, the
Secretary of the Trust may, and upon the written request of any holder of
Series B Preferred Shares (addressed to the Secretary at the principal office
of the Trust) shall, call a special meeting of the holders of the Series B
Preferred Shares for the election of the additional Trustee to be elected by
them as herein provided, such call to be made by notice similar to that
provided in the Bylaws of the Trust for a special meeting of the shareholders
or as required by law. If any such special meeting required to be called as
above provided shall not be called by the Secretary within 20 days after
receipt of such request, then any holder of Series B Preferred Shares may
call such meeting, upon the notice above provided, and for that purpose shall
have access to the shares books of the Trust. The Trustee elected at any such
special meeting shall hold office until the next annual meeting of the
shareholders or special meeting held in lieu thereof if such office shall not
have previously terminated as provided in (a) or (b) above. If the Trustee
elected by the holders of the Series B Preferred Shares shall leave the Board
of Trustees, a successor shall be elected by the Board of Trustees, upon the
nomination of the holders of the Series B Preferred Shares, to serve until
the next annual meeting of the shareholders or special meeting held in place
thereof if such office shall not have previously terminated as provided above.

                  (d) So long as any Series B Preferred Shares are
outstanding, in addition to any other vote or consent of shareholders
required by the Declaration, the affirmative vote of at least two-thirds
(2/3) of the votes cast by the holders of Series B Preferred Shares, at the
time outstanding, voting as a single class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:

                      (i) Any amendment, alteration or repeal of any of the
provisions of the Declaration or these Articles Supplementary that materially
and adversely affects the voting powers, rights or preferences of the holders
of the Series B Preferred Shares; PROVIDED, HOWEVER, that (A) the amendment
of the provisions of the Declaration so as to authorize or create or to
increase the authorized amount of, any Junior Shares or Parity Shares shall
not be deemed to

                                      -18-
<PAGE>

materially adversely affect the voting powers, rights or preferences of the
holders of Series B Preferred Shares and (B) any filing with the Department
by the Trust in connection with a merger, consolidation or sale of all or
substantially all of the assets of the Trust which does not include an
amendment to the Declaration or these Articles Supplementary shall not be
deemed to be an amendment, alteration or repeal of any of the provisions of
the Declaration or these Articles Supplementary provided that (i) the Trust
is the surviving entity and the Series B Preferred shares remain outstanding
with the terms thereof unchanged or (ii) the resulting, surviving or
transferee entity is a Trust, business trust or other like entity organized
under the laws of any state and substitutes for the Series B Preferred
Shares, other preferred shares having substantially the same terms and the
same rights as the Series B Preferred Shares including, with respect to
distributions, voting rights, conversion rights and rights upon liquidation,
distribution or winding up; or

                      (ii) The authorization or creation of, or the increase
in the authorized amount of, any shares of any class or series or any
security convertible into shares of any class or series ranking prior to the
Series B Preferred Shares in the distribution of assets on any liquidation,
dissolution or winding up of the Trust or in the payment of dividends;

PROVIDED, HOWEVER, that no such vote of the holders of Series B Preferred
Shares under this Section 10(d) shall be required if, at or prior to the time
when such amendment, alteration or repeal is to take effect, or when the
issuance of any such prior shares is to occur, as the case may be, provision
is made for the redemption of all Series B Preferred Shares, as the case may
be, at the time outstanding in accordance with Section 5 hereof.

                  (e) Each Series B Preferred Share shall have one (1) vote
per share.

                  (f) The Trust agrees that the holders of the Series B
Preferred Shares shall be granted, in addition to the voting rights
hereunder, voting rights equivalent to those granted by the Trust in
connection with the issuance of any future series of Preferred Shares,
including but not limited to the Series C Convertible Preferred Shares. In
the event such voting rights are granted by the Trust, these Articles
Supplementary shall be deemed to be amended to grant such voting rights to
the holders of the Series B Preferred Shares.

         SECTION 11. RECORD HOLDERS. The Trust may deem and treat the record
holder of any Series B Preferred Shares as the true and lawful owner thereof
for all purposes, and the Trust shall not be affected by any notice to the
contrary.

         SECTION 12. RESTRICTIONS ON OWNERSHIP AND TRANSFER. The Series B
Preferred Shares constitute Preferred Shares, and Preferred Shares
constitutes Shares of the Trust. Therefore, the Series B Preferred Shares,
being Shares, are governed by and issued subject to all the limitations,
terms and conditions of the Declaration applicable to Shares generally,
including but not limited to the terms and conditions (including exceptions
and exemptions) of Article IV of the Declaration applicable to Shares. The
foregoing sentence shall not be construed to limit the applicability to the
Series B Preferred Shares of any other term or provision of the Declaration.

                                      -19-
<PAGE>

         SECTION 13. NOTICES. All notices, requests and demands to be made
hereunder shall be in writing and shall be given by registered or certified,
first-class United States mail, postage prepaid, return receipt requested.
Notices to the Trust shall be sent to its principal office and notices to
holders shall be sent to the registered holders at the address shown of the
records of the Trust.

                                      -20-
<PAGE>

         IN WITNESS WHEREOF, KEYSTONE PROPERTY TRUST has caused these presents
to be signed in its name and on its behalf by its Vice President and witnessed
to by its Secretary as of October 7, 1999.

WITNESS:                               KEYSTONE PROPERTY TRUST


/s/  Timothy A. Peterson               By:  /s/  Stephen J. Butte
------------------------------              ----------------------------
     Timothy A. Peterson,                        Stephen J. Butte,
     Secretary                                   Vice President


         The UNDERSIGNED, Vice President of KEYSTONE PROPERTY TRUST, who
executed on behalf of the Trust these Articles Supplementary of which this
certificate is made a part, hereby acknowledges in the name and on behalf of
said Trust the foregoing Articles Supplementary to be the act of said Trust
and hereby certifies that the matters and facts set forth herein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.

                                       /s/  Stephen J. Butte
                                       ---------------------------
                                            Stephen J. Butte,
                                            Vice President

                                      -21-