<PAGE>
 
                                                                     EXHIBIT 3.2

                                  BY-LAWS OF
                            INTEGRAL SYSTEMS, INC.
                              (AS RESTATED 8-98)
                                        
                                   ARTICLE I
                                    OFFICES
                                        
          Section 1.  REGISTERED OFFICE.  The registered office of the
          ----------  ------------------                              
Corporation shall be in the City of Lanham, County of Prince George's, State of
Maryland.

          SECTION 2.  OTHER OFFICES.  The Corporation may also have offices at
          ----------  --------------                                          
such other place or places, both within and without the State of Maryland, as
the Board of Directors may from time to time determine, or the business of the
Corporation may require.


                                  ARTICLE II
                           MEETINGS OF STOCKHOLDERS
                                        
          Section 1.  PLACE OF MEETINGS.  All meetings of the stockholders for
          ----------  ------------------                                      
the election of directors shall be held in Lanham, Maryland, at such place
within such city as may be fixed from time to time by the Board of Directors, or
at such other place either within or without the State of Maryland as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting. Meetings of stockholders for any other purpose may be held at
such time and place, within or without of the State of Maryland, as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.

          SECTION 2.  ANNUAL MEETINGS.  Annual meetings of stockholders shall be
          ----------  ----------------                                          
held during the month of July following the end of the Corporation's fiscal year
on such a date and time as shall be designated by the Board of Directors and
stated in the notice of the meeting, at which the stockholders entitled to vote
shall elect by a plurality vote a Board of Directors and transact such other
business as may properly be brought before the meeting.

          SECTION 3.  NOTICE OF ANNUAL MEETINGS.  Written notice of the annual
          ----------  --------------------------                              
meeting, stating the date, time and place of the meeting, shall be delivered in
person or by mail to each stockholder of record entitled to vote at such meeting
not less than ten or more than ninety (90) days before the date of the meeting.

                                      (1)
<PAGE>
 
          SECTION 4.  SPECIAL MEETINGS.  Special meetings of the stockholders
          ----------  -----------------                                      
for any purpose or purposes, unless otherwise prescribed by statute or by the
articles of incorporation, may be called at any time by order of the Board of
Directors and shall be called by the Chairman of the Board, the President or the
Secretary at the request in writing of a majority of the Board of Directors or
(1) if the common stock of the Company is either quoted on the NASDAQ National
Market or listed a national stock exchange, then by stockholders entitled to
cast at least twenty-five percent (25%) of all votes entitled to be cast at such
meeting or (2) if the common stock of the Company is not either quoted on the
NASDAQ National Market or listed on a national stock exchange, then by
stockholders entitled to cast at least ten percent (10%) of all votes entitled
to be cast at such meeting.  Such request shall state the purpose or purposes of
the proposed special meeting.  Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.

          SECTION 5.  NOTICE OF SPECIAL MEETINGS.  Written notice of a special
          ----------  ---------------------------                             
meeting, stating the place, date, and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be delivered in person or by
mail, to each stockholder of record entitled to vote at such meeting not less
than ten (10) nor more than ninety (90) days before the date of the meeting,
except that notice of a stockholders' meeting to act on an amendment of the
articles of incorporation, a plan of merger, share exchange, or proposed sale of
assets other than in the ordinary course of business, or the dissolution of the
corporation shall be given to all stockholders of record whether or not entitled
to vote thereon.

          SECTION 6.  QUORUM.  Except as otherwise provided by statute or the
          ----------  -------                                                
articles of incorporation, the holders of stock having a majority of the voting
power of the stock entitled to be voted thereat, present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at all meetings of the stockholders.  If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time without notice (other than
announcement at the meeting at which the adjournment is taken of the time and
place of the adjourned meeting) until a quorum shall be present or represented.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. If the adjournment is for more than one hundred twenty
(120) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.

          SECTION 7.  ORGANIZATION.  At each meeting of the stockholders, the
          ----------  -------------                                          
Chairman of the Board or the President, determined as provided in Article V of
these bylaws, or if those officers shall be absent therefrom, another officer of
the Corporation 

                                      (2)
<PAGE>
 
chosen as chairman, or if all the officers of the Corporation shall be absent
therefrom, a stockholder holding of record shares of stock of the Corporation,
so chosen, shall act as chairman of the meeting and preside thereat. The
Secretary, or if he shall be absent from such meeting or shall be required
pursuant to the provisions of this Section 7 to act as chairman of such meeting,
the person (who shall be an Assistant Secretary, if an Assistant Secretary shall
be present thereat) whom the chairman of such meeting shall appoint, shall act
as Secretary of such meeting and keep the minutes thereof.

          SECTION 8.  ORDER OF BUSINESS.  The order of business at annual
          ----------  ------------------                                 
meetings of stockholders and, so far as practicable, at other meetings of
stockholders shall be as follows unless changed by the vote of a majority in
voting interest of those present in person or by proxy at such meeting and
entitled to vote thereat:

          (a) Call to order.
          (b) Proof of due notice of meeting.
          (c) Determination of quorum and examination of proxies.
          (d) Reading and disposing of minutes of last meeting of stockholders.
          (e) Announcement of purposes for which the meeting was called.
          (f) Nomination and election of directors.
          (g) Entertainment of motions with respect to other business.
          (h) Reports of officers and committees.
          (i) Other business.
          (j) Adjournment.

          SECTION 9.  VOTING.  Except as otherwise provided in the articles of
          ----------  -------                                                 
incorporation, each stockholder shall, at each meeting of the stockholders, be
entitled to one vote in person or by proxy for each share of stock of the
Corporation held by him and registered in his name on the books of the
Corporation on the date fixed pursuant to the provisions of Section 5 of Article
VII of these bylaws as the record date for the determination of stockholders who
shall be entitled to notice of and to vote at such meeting.  Shares of its own
stock owned, directly or indirectly, by the Corporation, shall not be entitled
to vote and shall not be counted in determining the total number of outstanding
shares entitled to be voted at any given time. Shares of its own stock are
considered owned indirectly by the Corporation if owned by another corporation
in which the Corporation owns shares entitled to cast a majority of all the
votes entitled to be cast by all shares outstanding and entitled to vote.  The
Corporation shall be entitled to vote shares of its own stock held by it in a
fiduciary capacity and such shares shall be counted in determining such total
number of outstanding shares entitled to be voted.  Any vote by stock of the
Corporation may be given at any meeting of the stockholders by the stockholder
entitled thereto, in person or by his proxy appointed by an instrument in
writing subscribed by such stockholder or by his attorney thereunto duly
authorized and delivered to the Secretary of the Corporation or to the Secretary
of the meeting; provided, however, that no proxy shall be voted or acted upon
after eleven (11) months from its 

                                      (3)
<PAGE>
 
date, unless said proxy shall provide for a longer period. Each proxy shall be
revocable unless expressly provided therein to be irrevocable and unless
otherwise made irrevocable by law. At all meetings of the stockholders all
matters, except where other provision is made by the law, the articles of
incorporation or these bylaws, shall be decided by the vote of a majority of the
votes cast by the stockholders present in person or by proxy and entitled to
vote thereat, a quorum being present. Unless demanded by a stockholder of the
Corporation present in person or by proxy at any meeting of the stockholders and
entitled to vote thereat, or so directed by the chairman of the meeting, the
vote thereat on any question other than the election or removal of directors
need not be by written ballot. Upon a demand of any such stockholder for a vote
by written ballot on any question or at the direction of such chairman that a
vote by written ballot be taken on any question, such vote shall be taken by
written ballot, each ballot shall be signed by the stockholder voting or by his
proxy, if there be such proxy, and shall state the number of shares voted.

          SECTION 10.  STOCK LEDGER.  It shall be the duty of the Secretary or
          -----------  -------------                                          
other officer of the Corporation who shall have charge of its share transfer
books, either directly or through another officer of the Corporation designated
by him or through a transfer agent appointed by the Board of Directors, to
prepare and maintain, a complete list of the stockholders arranged in
alphabetical order, and showing the address of each stockholder and the number
of each class of shares registered in the name of each stockholder.  The
original or a duplicate of the Stock Ledger shall be kept at the principal
office of the Corporation.  Such list shall be available for inspection by any
holder of the Corporation's stock during normal business hours.  In addition,
such list shall be open to the examination of any stockholder, for any purpose
germane to any stockholder meeting, during ordinary business hours, for a period
of at least ten (10) days prior to said meeting, either at the registered office
of the Corporation or at its principal office, or at the office at its transfer
agent or registrar.  The list shall also be produced and kept at the time and
place of said meeting during the whole time thereof, and may be inspected by any
stockholder of record who shall be present thereat.  The original share transfer
books shall be prima facie evidence as to which stockholders are entitled to
examine the share transfer books, stockholder list, or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.

          SECTION 11.  ACTION WITHOUT A MEETING.  Any action required to be
          -----------  -------------------------                           
taken at any annual or special meeting of stockholders of the Corporation, or
any action which may be taken at any annual or special meeting of stockholders,
may be taken without a meeting, and without action by the Board of Directors, if
a consent in writing, setting forth the action so taken, shall be signed by all
the stockholders entitled to vote on the action and delivered to the Secretary
of the Corporation for inclusion in the minutes or filing with the corporate
records.

                                      (4)
<PAGE>
 
                                  ARTICLE III
                              BOARD OF DIRECTORS
                                        
          SECTION 1.  POWERS.  The business and affairs of the Corporation shall
          ----------  -------                                                   
be managed by its Board of Directors, which shall exercise all such powers of
the Corporation and do all such lawful acts and things not expressly forbidden
by statute, the articles of incorporation or these bylaws directed or required
to be exercised or done by the stockholders.

          SECTION 2.  NUMBER, QUALIFICATION, AND TERM OF OFFICE.  The number of
          ----------  ------------------------------------------               
directors which shall constitute the whole Board of Directors shall not be less
than three nor more than seven.  Within the limits above specified, the number
of directors which shall constitute the whole Board of Directors shall be
determined by resolution of the Board of Directors or by the stockholders at any
annual or special meeting or otherwise pursuant to action of the stockholders.
Directors need not be stockholders.  The directors shall be elected at the
annual meeting of the stockholders, except as provided in Section 4 and 5 of
this Article III, and each director elected shall hold office until the annual
meeting next after his election and until his successor is elected and
qualified, or until his death or retirement or until he shall resign or shall be
removed in the manner hereinafter provided.  Such election shall be by written
ballot.

          SECTION 3.  RESIGNATIONS.  Any director may resign at any time by
          ----------  -------------                                        
giving written notice of his resignation to the Board of Directors, its
Chairman, the President or the Secretary of the Corporation.  Any such
resignation shall take effect at the time specified therein, or, if the time
when it shall become effective shall not be specified therein, then it shall
take effect immediately upon its receipt by the Secretary.  Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

          SECTION 4.  REMOVAL OF DIRECTORS.  Any director may be removed, either
          ----------  ---------------------                                     
with or without cause, at any time, by the affirmative vote by written ballot of
a majority in voting interest of the stockholders of record of the Corporation
entitled to vote, given only at an annual or special meeting of the stockholders
called for that purpose.  A vacancy in the Board of Directors caused by any such
removal shall be filled by the stockholders at such meeting or, if not so
filled, by the Board of Directors as provided in Section 5 of this Article III.

          SECTION 5.  VACANCIES.  Newly created directorships resulting from any
          ----------  ----------                                                
increase in the authorized number of directors may be filled by a majority of
the directors then in office.  Vacancies resulting from any other cause may be
filled by a majority of the directors then in office, whether or not sufficient
to constitute a quorum and the directors so chosen shall hold office until the
annual meeting next after their election and until their successors are elected
and qualified, unless sooner displaced.  If there are no 

                                      (5)
<PAGE>
 
directors in office, then an election of directors may be held in the manner
provided by statute.


             MEETINGS OF THE BOARD OF DIRECTORS
                                        
          SECTION 6.  PLACE OF MEETINGS.  The Board of Directors of the
          ----------  ------------------                               
Corporation may hold meetings, both regular and special, either within or
outside of the State of Maryland.

          SECTION 7.  ANNUAL MEETINGS.  Annual meetings of the Board of
          ----------  ----------------                                 
Directors shall be held within sixty (60) days after the annual meeting of the
stockholders on such date and time as shall be designated by the Board of
Directors in a notice given as hereinafter provided for special meetings of the
Board of Directors or as shall be specified in a written waiver signed by all of
the directors.

          SECTION 8.  REGULAR MEETINGS.  Regular meetings of the Board of
          ----------  -----------------                                  
Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board of Directors.

          SECTION 9.  SPECIAL MEETINGS; NOTICE.  Special meetings of the Board
          ----------  -------------------------                               
of Directors may be called by the Chairman of the Board, President or Secretary
on 24 hours notice to each director, either personally or by telephone or by
mail, telegraph, telex, cable, wireless or other form of recorded communication.
Special meetings shall be called by the Chairman of the Board, President or
Secretary in like manner and on like notice on the written request of any
director.  Notice of any such meeting need not be given to any director,
however, if waived by him in writing or by telegraph, telex, cable, wireless or
other form of recorded communication, or if he shall be present at such meeting.

          SECTION 10.  QUORUM AND MANNER OF ACTING.  At all meetings of the
          -----------  ----------------------------                        
Board of Directors, 50% or more of the directors in office immediately before
the meeting begins shall constitute a quorum for the transaction of business,
unless it is determined that an item or items on the agenda will require the
disclosure of classified information. In such case, all Directors not holding a
valid security clearance on file at Integral Systems, Inc. or not possessing a
valid need-to-know for the business at hand, shall be excused for the duration
of the classified business. The remaining Directors shall constitute a quorum
for the transaction of the classified items only. The full Board will be
reconvened at the conclusion of the classified discussion. Under no
circumstances shall Directors not possessing a valid clearance and a certified
need-to-know be present during the discussion of classified material; these
Directors shall be absolved of all responsibility for all direct and indirect
consequences of decisions and actions undertaken with respect to classified
material. The Security Officer or his/her designated assistant 

                                      (6)
<PAGE>
 
shall be the sole authority as to when the agenda requires a discussion of
classified material, which Directors have a valid security clearance, and which
Directors have a need to know. If any meeting of this nature takes place, the
Security Officer shall note the date of said meeting and make available for
review the authorization for the cleared directors to attend to the DISCO
representative at the next security inspection.

          The acts of a majority of the Directors present at a meeting in which
a quorum, as defined above, is present shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by the
articles of incorporation.  If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present/1/.




          SECTION 11.  REMUNERATION.  Unless otherwise expressly provided by
          -----------  ------------                                         
resolution adopted by the Board of Directors, none of the directors shall, as
such, receive any stated remuneration for his services; but the Board of
Directors may at any time and from time to time by resolution provide that a
specified sum shall be paid to any director of the Corporation, either as his
annual remuneration as such director or member of any committee of the Board of
Directors, or as remuneration for his attendance at each meeting of the Board of
Directors or any such committee.  The Board of Directors may also likewise
provide that the Corporation shall reimburse each director for any expenses paid
by him on account of his attendance at any meeting.  Nothing in this Section 11
shall be construed to preclude any director from serving the Corporation in any
other capacity and receiving remuneration thereof.


                                    GENERAL
                                        
          SECTION 12.  ACTIONS WITHOUT A MEETING.  Unless otherwise restricted
          -----------  --------------------------                             
by the articles of incorporation or these bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting, if all members of the Board of Directors consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or the committee.

          SECTION 13.  PRESENCE AT MEETINGS BY MEANS OF COMMUNICATIONS
          -----------  -----------------------------------------------
EQUIPMENT.  Members of the Board of Directors may participate in a meeting of
----------                                                                   
the Board of Directors by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to this
Section 14 shall constitute presence in person at such meeting.

-----------------------------------
/1/ Reference S89-02, 12-7-88

                                      (7)
<PAGE>
 
                                  ARTICLE IV
                                    NOTICES
                                        
          SECTION 1.  TYPE OF NOTICE.  Whenever, under the provisions of the
          ----------  ---------------                                       
statutes, the articles of incorporation or these bylaws, notice is required to
be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, in person or by mail,
addressed to such director or stockholder, at his address as it appears in the
records of the Corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail.  Notice to directors may also be given in any manner permitted by
Article III hereof and shall be deemed to be given at the time when first
transmitted by the method of communication so permitted.

          SECTION 2.  WAIVER OF NOTICE.  Whenever any notice is required to be
          ----------  -----------------                                       
given under the provisions of the statutes, the articles of incorporation or
these bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein and
filed with the minutes or corporate records, shall be deemed equivalent thereto,
and transmission of a waiver of notice by a director or stockholder by mail,
telegraph, telex, cable, wireless or other form of recorded communication may
constitute such a waiver.


                                   ARTICLE V
                                   OFFICERS
                                        
          SECTION 1.  ELECTED AND APPOINTED OFFICERS.  The elected officers of
          ----------  -------------------------------                         
the Corporation shall be a Chief Executive Officer(CEO), a President, a
Secretary and a Treasurer, and a Chairman of the Board (who shall be a
director).  The Board of Directors by resolution may also appoint one or more
agents as from time to time may appear to be necessary or advisable in the
conduct of the affairs of the Corporation.

          Section 2.  TIME OF ELECTION OR APPOINTMENT.  The Board of Directors
          ----------  --------------------------------                        
at its annual meeting shall elect or appoint, as the case may be, the officers
to fill the positions designated in or pursuant to Section 1 of this Article V,
Officers of the Corporation may also be elected or appointed, as the case may
be, at any other time.

          SECTION 3.  SALARIES OF ELECTED OFFICERS.  The salaries of all elected
          ----------  -----------------------------                             
officers of the Corporation shall be fixed by the Board of Directors.  The
salaries of all elected officers of the Corporation shall be fixed by the Board
of Directors/2/.

---------------------------------
/2/ Reference S96-28; 5-29-96

                                      (8)
<PAGE>
 
          SECTION 4.  TERM.  Each officer of the Corporation shall hold his
          ----------  -----                                                
office until his successor is elected or appointed and qualified or until his
earlier resignation or removal.  Any officer may resign at any time upon written
notice to the Corporation.  Any officer elected or appointed by the Board of
Directors may be removed at any time by the affirmative vote of a majority of
the whole Board of Directors.  Any vacancy occurring in any office of the
Corporation by death, resignation, removal or otherwise may be filled by the
Board of Directors or the appropriate committee thereof /3/.





          SECTION 5.  DUTIES OF THE CHAIRMAN OF THE BOARD.  The Chairman of the
          ----------  ------------------------------------                     
Board, if one be elected, shall preside when present at all meetings of the
Board of Directors and will preside at meetings of the stockholders or designate
an alternate to preside.  He shall advise and counsel the Chief Executive
Officer of the Corporation, and shall exercise such powers and perform such
duties as shall be assigned to or required of him from time to time by the Board
of Directors/4/.





          SECTION 6.  DUTIES OF THE CHIEF EXECUTIVE OFFICER.  The Chief
          ----------  --------------------------------------           
Executive Officer of the Corporation, subject to the provisions of these bylaws,
shall have general supervision of the affairs of the Corporation and shall have
general and active control of all its business.  He shall preside, when present,
at all meetings of stockholders or designate an individual to preside as may
otherwise be provided by statute.  He shall see that all orders and resolutions
of the Board of Directors and the shareholders are carried into effect.  He
shall have general authority to execute bonds, deeds, and contracts in the name
of the Corporation and to affix the corporate seal thereto; to sign stock
certificates; to cause the employment or appointment of such officers,
employees, and agents of the Corporation as the proper conduct of operation may
require, and to fix their compensation, subject to the provisions of these
bylaws; to remove or suspend any employee or agent who shall have been employed
or appointed under his authority or under authority of an officer subordinate to
him; to suspend for cause, pending final action by the authority which shall
have elected or appointed him, any officer subordinate to the Chief Executive
Officer, and, in general, to exercise all the powers and authority usually
appertaining to the chief executive officer of a corporation, except as
otherwise provided in these bylaws.

          The Chief Executive Officer is allowed to delegate a number of his
powers to one or more persons.  These shall include his general authority to
execute bonds, deeds, and contracts in the name of the Company and to affix the
corporate seal thereto, to sign stock certificates; to cause the employment or
appointment of such officers, employees, and agents of the Corporation as the
proper conduct of operation may require and to fix their compensation, subject
to the provisions of the bylaws; to remove or suspend any officer, employee, or
agent who shall have been employed or appointed under his authority or under
authority of an officer subordinate to him; to suspend for 

---------------------------------
/3/ Reference S96-28, 5-29-96
/4/ Reference S96-29, 5-29-96

                                      (9)
<PAGE>
 
cause, pending final action by the authority which shall have been elected or
appointed, any officer subordinate to the Chief Executive Officer, and, in
general, to exercise all the powers and authority usually appertaining to the
chief executive officer of a corporation, except as otherwise provided in these
bylaws. This delegation can be whole or in part of any of these powers subject
to any constraints levied at or after said delegation.

          The Board of Directors can designate someone to replace the Chief
Executive Officer should he be unable to perform his duties due to absence or
other reasons/5/.




          SECTION 7.  DUTIES OF THE PRESIDENT. The President shall be the chief
          ----------  ------------------------                                  
executive officer of the Corporation and, subject to the provisions of these
bylaws, shall have general supervision of the affairs of the Corporation and
shall have general and active control of all its business. He shall preside,
when present, at all meeting of stockholders, except when the Chairman of the
Board presides with the approval of the President and as may otherwise be
provided by statute and, in the absence of any other person designated thereto
by these bylaws, at all meetings of the Board of Directors. He shall see that
all orders and resolutions of the Board of Directors and the shareholders are
carried into effect. He shall have general authority to execute bonds, deeds,
and contracts in the name of the Corporation and to affix the corporate seal
thereto; to sign stock certificates; to cause the employment or appointment of
such employees and agents of the Corporation as the proper conduct of operation
may require, and to fix their compensation, subject to the provisions of these
bylaws; to remove or suspend any employee or agent who shall have been employed
or appointed under his authority or under authority of an officer subordinate to
him; to suspend for cause, pending final action by the authority which shall
have elected or appointed him, any officer subordinate to the President, and, in
general, to exercise all the powers and authority usually appertaining to the
chief executive officer of a corporation, except as otherwise provided in these
bylaws/6/.


          The President is allowed to delegate a number of his powers to one or
more persons. These shall include his general authority to execute bonds,
deeds, and contracts in the name of the Company and to affix the corporate seal
thereto, to sign stock certificates; to cause the employment or appointment of
such employees and agents of the Corporation as the proper conduct of operation
may require and to fix their compensation, subject to the provisions of the
bylaws; to remove or suspend any employee or agent who shall have been employed
or appointed under his authority or under authority of an officer subordinate to
him; to suspend for cause, pending final action by the authority which shall
have elected or appointed, any officer subordinate to the President, and, in
general, to exercise all the powers and authority usually appertaining to the
chief executive officer of a corporation, except as otherwise provided in these
bylaws. This 

----------------------------------
/5/ Reference S96-29, 5-29-96
/6/ Reference S96-29, 5-29-96

                                      (10)
<PAGE>
 
delegation can be whole or in part of any of these powers subject
to any constraints levied at or after said delegation./7/

          SECTION 8.  DUTIES OF THE SECRETARY.  The Secretary shall attend all
          ----------  ------------------------                                
meetings of the Board of Directors and all meetings of the stockholders and
record all the proceedings of the meetings of the Corporation and of the Board
of Directors in a book to be kept for that purpose.  He shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or the President, under whose supervision he shall be.
He shall have custody of the corporate seal of the Corporation and he, or an
Assistant Secretary shall have authority to affix the same to any instrument
requiring it, and when so affixed, it may be attested by his signature or by the
signature of such Assistant Secretary.  The Board of Directors may give general
authority to any other officer to affix the seal of the Corporation and to
attest the affixing by his signature.  The Secretary shall keep and account for
all books, documents, papers, and records of the Corporation except those for
which some other officer or agent is properly accountable.  He shall have
authority to sign stock certificates and shall generally perform all the duties
usually appertaining to the office of the secretary of a corporation.

          SECTION 9.  DUTIES OF ASSISTANT SECRETARIES.  In the absence of the
          ----------  --------------------------------                       
Secretary or in the event of his inability or refusal to act, the Assistant
Secretary (or, if there shall be more than one, the Assistant Secretaries in the
order designated by the Board of Directors, or in the absence of any
designation, then in the order of their appointment) shall perform the duties
and exercise the powers of the Secretary and shall perform such other duties and
have such other powers as the Board of Directors, the President or the Secretary
may from time to time prescribe.

          SECTION 10.  DUTIES OF THE TREASURER.  The Treasurer shall have the
          -----------  ------------------------                              
custody of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors.  He shall disburse the funds of the Corporation as may be ordered
by the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the President and the Board of Directors, at its regular
meetings, or when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the Corporation.  If
required by the Board of Directors, he shall give the Corporation a bond (which
shall be renewed every six years) in such sum and with such surety or sureties
as shall be satisfactory to the Board of Directors for the faithful performance
of the duties of his office and for the restoration to the Corporation, in case
of his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind 

-----------------------------------
/7/ Reference S89-02, 12-7-88

                                      (11)
<PAGE>
 
in his possession or under his control belonging to the Corporation. The
Treasurer shall be under the supervision of the Vice President in charge of
finance, if one is so designated, and he shall perform such other duties as may
be prescribed by the Board of Directors, the President or any such Vice
President in charge of finance.

          SECTION 11.  DUTIES OF ASSISTANT TREASURERS.  The Assistant Treasurer
          -----------  -------------------------------                         
or Assistant Treasurers shall assist the Treasurer, and in the absence of the
Treasurer or in the event of his inability or refusal to act, the Assistant
Treasurer (or if there shall be more than one, the Assistant Treasurers in the
order designated by the Board of Directors, or in the absence of any
designation, then in the order of their appointment), shall perform the duties
and exercise the powers of the Treasurer and shall perform such other duties and
have such other powers as the Board of Directors, the President or the Treasurer
may from time to time prescribe.


                                  ARTICLE VI
                                INDEMNIFICATION
                                        
          SECTION 1.  RIGHT OF INDEMNIFICATION.  The Corporation shall indemnify
          ----------  -------------------------                                 
as determined by the Board of Directors any person who is serving or has served
as a director or officer or employee or agent of the Corporation to the extent
permitted by Maryland law, who has made, or is threatened to be made, a party to
an action, suit, or proceeding, whether civil, criminal, administrative,
investigative, or otherwise (including an action, suit, or proceeding by or in
the right of the Corporation), by reason of the fact that the person is or was a
director or officer or employee or agent of the Corporation, or a fiduciary
within the meaning of the Employee Retirement Income Security Act of 1974 with
respect to an employee benefit plan of the Corporation, or serves or served at
the request of the Corporation as a director, or as an officer, or as a
fiduciary of an employee benefit plan, or another corporation, partnership,
joint venture, trust or other enterprise, or as an employee, or as an agent,
except in relation to matters as to which such person is adjudged in such
action, suit or proceedings or otherwise determined to be liable for negligence
or misconduct in the performance of duty.

          In addition, the Corporation as determined by the Board of Directors
shall pay for or reimburse any expenses incurred by such persons who are parties
to such proceedings, in advance of the final disposition of such proceedings, to
the extent permitted by Maryland law/8/.

          SECTION 2.  INSURANCE.  Upon resolution passed by the Board of
          ----------  ----------                                        
Directors, the Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation
or who, while a

-----------------------------------
/8/ Reference S96-29, 5-29-96

                                      (12)
<PAGE>
 
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 corporation, partnership, joint venture, trust, or
other enterprise or employee benefit plan against any liability asserted against
and incurred by such person in any such capacity, or arising out of such
person's position as such, whether or not the Corporation would have the power
to indemnify him against such liability under the provisions of this Article VI.

          SECTION 3.  MERGERS.  For purposes of this Article VI, references to
          ----------  --------                                                
"the Corporation" shall include, in addition to the resulting or surviving
corporation, constituent corporations (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Article VI with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence and continued.


                                  ARTICLE VII
                             CERTIFICATES OF STOCK

          SECTION 1.  RIGHT TO CERTIFICATE.  Every holder of stock in the
          ----------  ---------------------                              
Corporation shall be entitled to have a certificate, bearing the name of the
person to whom issued, and signed by the President, a Vice President or the
Chairman of the Board, and countersigned by the Secretary, an Assistant
Secretary, or the Treasurer of the Corporation certifying the number of shares
owned by him in the Corporation.  The certificate shall bear on its face the
name of the Corporation and shall state that such Corporation is organized under
the Laws of the State of Maryland.  If the Corporation shall be authorized to
issue more than one class of stock or more than one series of any class, the
powers, designations, preferences and relative, participating, optional or other
special rights of each or restrictions of such preferences and/or rights shall
be set forth in full or summarized on the face or back of the certificate which
the Corporation shall issue to represent such class or series of stock, provided
that, in lieu of the foregoing requirements, there may be set forth on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock, a statement that the Corporation will furnish without
charge to each stockholder who so requests the powers, designations, preferences
and relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.

          SECTION 2.  FACSIMILE SIGNATURES.  Any of or all the signatures on the
          ----------  ---------------------                                     
stock certificate may be facsimile.

                                      (13)
<PAGE>
 
          SECTION 3.  NEW CERTIFICATES.  The Board of Directors may direct a new
          ----------  -----------------                                         
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation and alleged to have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen or destroyed.  When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed
or the issuance of such new certificate.

          SECTION 4.  TRANSFERS.  Upon surrender to the Corporation or the
          ----------  ----------                                          
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the Corporation, subject to any proper
restrictions on transfer, to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

          SECTION 5.  RECORD DATE.  In order that the Corporation may determine
          ----------  ------------                                             
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be less than ten (10) nor more than forty-five (45) days before
the date of such meeting or other action/9/.  The Board of Directors may also
direct that the stock transfer books be closed for a stated period, not to
exceed twenty (20) days for the purpose of making a proper determination of the
stockholders with respect to any such action.  If the Board of Directors does
not so fix a record date in advance, the date of such meeting or action shall be
fixed as the record date.  A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.


          SECTION 6.  REGISTERED STOCKHOLDERS.  The Corporation shall be
          ----------  ------------------------                          
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be 

--------------------------------
/9/ Reference S89-02, 12-7-88

                                      (14)
<PAGE>
 
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not provided by the laws of
the State of Maryland.


                                 ARTICLE VIII
                              GENERAL PROVISIONS

          SECTION 1.  DIVIDENDS.  Dividends upon the capital stock of the
          ----------  ----------                                         
Corporation, subject to the provisions of the articles of incorporation, if any,
may be declared by the Board of Directors at any regular meeting, pursuant to
law.  Dividends may be paid in cash, in property or in shares of the capital
stock, subject to the provisions of the articles of incorporation.

          SECTION 2.  RESERVES.  Before payment of any dividend, there may be
          ----------  ---------                                              
set aside out of any funds of the Corporation available for dividends such sum
or sums as the Board of Directors from time to time, in its absolute discretion,
thinks proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation or
for such other purpose as the Board of Directors shall think conducive to the
interest of the Corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.

          SECTION 3.  ANNUAL STATEMENT.  The Board of Directors shall present at
          ----------  -----------------                                         
each annual meeting of the stockholders a full and correct statement of the
affairs of the Corporation which shall include a balance sheet and a financial
statement of operations for the preceding fiscal year.  Within twenty (20) days
after the meeting such statement of affairs shall be placed on file at the
Corporation's principal office.

          SECTION 4.  CHECKS.  All checks or demands for money and notes of the
          ----------  -------                                                  
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time prescribe.

          SECTION 5.  FISCAL YEAR.  The fiscal year of the Corporation shall
          ----------  ------------                                          
begin on the first day of October of each year./10/

          SECTION 6.  CORPORATE SEAL.  The corporate seal shall have inscribed
          ----------  ---------------                                         
thereon the name of the Corporation, the year of its organization and the word
"Maryland." The seal may be used by causing it or a facsimile thereof to be
impressed, affixed, reproduced or otherwise.

---------------------------------------
/10/   Reference S89-02, 12-7-88

                                      (15)
<PAGE>
 
                                  ARTICLE IX
                                  AMENDMENTS

          These bylaws may be altered, amended or repealed or new bylaws may be
adopted by an action of the whole Board of Directors or by affirmative vote of
the stockholders representing a majority of the voting stock, at an annual or
special meeting of the stockholders or the Board of Directors, provided that
notice of such alteration, amendment, repeal or adoption of new bylaws be
contained in the notice of such annual or special meeting.

                                      (16)