Exhibit 4.1





4.1               Articles  Supplementary  of   Series  A Cumulative Convertible
                  Redeemeable Preferred Stock


<PAGE>

                            ARTICLES SUPPLEMENTARY OF


           SERIES A CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK
                                       OF
                         CARRAMERICA REALTY CORPORATION
                       Pursuant to Section 2-208(b) of the


                       General Corporation Law of Maryland


     CarrAmerica Realty Corporation, a Maryland corporation (the "Corporation"),
hereby  certifies  that,  pursuant to the authority  conferred upon the Board of
Directors  of the  Corporation  by Section 4.4 of the Charter and in  accordance
with Section 2-208(b) of the General  Corporation Law of Maryland,  the Board of
Directors on October 10, 1996 duly classified unissued shares of Preferred Stock
of the Corporation,  and the description of the Preferred  Stock,  including the
preferences,   conversion  and  other  rights,   voting  powers,   restrictions,
limitations  as to  dividends,  qualifications,  and  terms  and  conditions  of
redemption thereof, as set by the Board of Directors, are as follows:

     Section 1. Number of Shares and Designation.  This class of Preferred Stock
shall be  designated  as Series A Cumulative  Convertible  Redeemable  Preferred
Stock, par value $.01 per share (the "Series A Preferred Stock").  The number of
shares  of  preferred  stock  constituting  the  Series  A  Preferred  Stock  is
1,740,000.

     Section 2.  Definitions.  The  following  terms  shall  have the  following
meanings herein:

     a."Board of Directors" shall mean the Board of Directors of the Corporation
or any  committee  authorized  by the Board of  Directors  to perform any of its
responsibilities with respect to the Series A Preferred Stock.

     b."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 City, New
York are not required to be open.

     c."Call Date" shall have the meaning set forth in Section 6(b).

     d."Charter"  means the Articles of Amendment and Restatement of Articles of
Incorporation of the Corporation,  as amended to the date hereof and as the same
may be amended hereafter from time to time.

     e."Code" shall have the meaning set forth in Section 12.

     f."Common Stock" shall mean the common stock of the Corporation,  par value
$.01 per share.

<PAGE>




     g."Constituent Person" shall have the meaning set forth in Section 5(e).

     h."Conversion  Price" shall mean the  conversion  price per share of Common
Stock for which the shares of Series A Preferred Stock are convertible,  as such
Conversion Price may be adjusted  pursuant to Section 5. The initial  conversion
price shall be $25.00  (equivalent  to a conversion  rate of one share of Common
Stock for each share of Series A Preferred Stock).

     i."Current  Market Price" of publicly  traded shares of Common Stock or any
other class of capital stock or other  security of the  Corporation or any other
issuer for any day shall mean the last  reported  sales  price,  regular way, on
such day,  or, if no sale takes place on such day,  the average of the  reported
closing  bid and asked  prices  on such  day,  regular  way,  in either  case as
reported on the New York Stock  Exchange  ("NYSE")  or, if such  security is not
listed or admitted for trading on the NYSE, on the principal national securities
exchange on which such  security  is listed or  admitted  for trading or, if not
listed or  admitted  for trading on any  national  securities  exchange,  on the
National Market System of the National  Association of Securities Dealers,  Inc.
Automated  Quotations  System  ("NASDAQ")  or, if such security is not quoted on
such National Market System,  the average of the closing bid and asked prices on
such day in the  over-the-counter  market as  reported  by NASDAQ or, if bid and
asked prices for such security on such day shall not have been reported  through
NASDAQ,  the average of the bid and asked prices on such day as furnished by any
NYSE member firm  regularly  making a market in such security  selected for such
purpose by the Board of Directors.

     j."Dividend Payment Date" shall mean the last calendar day (or, if such day
is not a Business Day, the next Business Day thereafter) of each February,  May,
August, and November, commencing on November 30, 1996.

     k."Dividend  Periods" shall mean quarterly  dividend periods  commencing on
March 1, June 1,  September  1 and  December  1 of each  year and  ending on and
including the day of the next succeeding  Dividend  Payment Date (other than the
initial Dividend Payment Date, which shall commence on the Issue Date, and other
than the Dividend  Period  during  which any shares of Series A Preferred  Stock
shall be redeemed pursuant to Section 6, which shall end on and include the Call
Date with respect to the shares of Series A Preferred Stock being redeemed).

     l."Exempted Person" shall have the meaning set forth in Section 12.

     m."Fair  Market Value" shall mean the average of the daily  Current  Market
Prices of a share of Common Stock during the five (5)  consecutive  Trading Days
selected by the Corporation commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the day in question and the

                                      -2-
<PAGE>


day before the "ex date" with respect to the issuance or distribution  requiring
such  computation.  The  term  "ex  date,"  with  respect  to  any  issuance  or
distribution,  means the first day on which  shares of the Common  Stock  trade,
regular way, without the right to receive such issuance or distribution,  on the
exchange or in the  market,  as the case may be,  used to  determine  that day's
Current Market Price.

     n."Fully  Junior  Stock" shall mean the Common Stock and any other class or
series of shares of capital stock of the Corporation now or hereafter issued and
outstanding  over which the Series A Preferred  Stock has preference or priority
in both (i) the payment of dividends and (ii) the  distribution of assets on any
liquidation, dissolution or winding up of the Corporation.

     o."Issue  Date"  shall mean the first date on which  shares of the Series A
Preferred Stock are issued and sold.

     p."Junior  Stock" shall mean the Common Stock and any other class or series
of shares of  capital  stock of the  Corporation  now or  hereafter  issued  and
outstanding  over which the Series A Preferred  Stock has preference or priority
in the payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.

     q."Non-Electing Share" shall have the meaning set forth in Section 5(e).

     r."Parity Stock" shall have the meaning set forth in Section 8(b).

     s."Person"  shall mean any individual,  firm,  partnership,  corporation or
other  entity,  and shall include any successor (by merger or otherwise) of such
entity.

     t."Preferred Stock" shall mean the preferred stock of the Corporation,  par
value $.01 per share.

     u."Securities"  and "Security" shall have the meanings set forth in Section
5(d)(iii).

     v."Series A Preferred Stock" shall have the meaning set forth in Section 1.

     w."set  apart for payment"  shall be deemed to include,  without any action
other than the  following,  the recording by the  Corporation  in its accounting
ledgers of any accounting or bookkeeping  entry which  indicates,  pursuant to a
declaration of dividends or other  distribution  by the Board of Directors,  the
allocation  of funds to be so paid on any  series or class of shares of  capital
stock of the Corporation;  provided, however, that if any funds for any class or
series of Junior Stock or Fully Junior Stock or any class or series of shares of
capital stock


                                      -3-
<PAGE>

ranking  on a parity  with the  Series A  Preferred  Stock as to the  payment of
dividends are placed in a separate  account of the Corporation or delivered to a
disbursing,  paying or other  similar  agent,  then "set apart for payment" with
respect to the Series A  Preferred  Stock  shall  mean  placing  such funds in a
separate  account  or  delivering  such funds to a  disbursing,  paying or other
similar agent.

     x."Trading  Day" shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for trading
on the  NYSE,  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 National Market System of NASDAQ, or if
such securities are not quoted on such National Market System, in the applicable
securities market in which the securities are traded.

     y."Transaction" shall have the meaning set forth in Section 5(e).

     z."Transfer Agent" means Boston EquiServe, Boston,  Massachusetts,  or such
other agent or agents of the  Corporation  as may be  designated by the Board of
Directors  or their  designee as the  transfer  agent,  registrar  and  dividend
disbursing agent for the Series A Preferred Stock.

     Section 3.Dividends.

     (a)The  holders of Series A  Preferred  Stock shall be entitled to receive,
when,  as and if  declared  by the  Board  of  Directors  out of  funds  legally
available  for that  purpose,  dividends  payable in cash in an amount per share
equal  to the  greater  of (i)  $1.75  per  annum  or (ii)  the  cash  dividends
(determined  on each Dividend  Payment Date) paid on the shares of Common Stock,
or  portion  thereof,  into  which  a share  of  Series  A  Preferred  Stock  is
convertible.  The  dividends  referred  to in  clause  (ii)  of the  immediately
preceding  sentence shall equal the number of shares of Common Stock, or portion
thereof,  into  which a share  of  Series  A  Preferred  Stock  is  convertible,
multiplied  by the most  current  quarterly  dividend  paid on a share of Common
Stock on or before the applicable  Dividend  Payment Date.  Such dividends shall
begin to accrue and shall be fully  cumulative  from the Issue Date,  whether or
not in any Dividend  Period or Periods  there shall be funds of the  Corporation
legally  available  for the  payment  of such  dividends,  and shall be  payable
quarterly,  when,  as and if declared by the Board of  Directors,  in arrears on
Dividend Payment Dates,  commencing on the first Dividend Payment Date after the
Issue Date.  Such dividends shall be payable in arrears to the holders of record
of  Series A  Preferred  Stock,  as they  appear  on the  stock  records  of the
Corporation at the close of business on the record date, not more than 50 days


                                      -4-
<PAGE>


preceding the relevant  Dividend Payment Date, as shall be fixed by the Board of
Directors.  Accrued and unpaid  dividends for any past  Dividend  Periods may be
declared and paid at any time and for such interim periods, without reference to
any  regular  Dividend  Payment  Date,  to holders  of record on such date,  not
exceeding 50 days  preceding  the payment date  thereof,  as may be fixed by the
Board of Directors.  Any dividend  payment made on the Series A Preferred  Stock
shall first be credited  against the  earliest  accrued but unpaid  dividend due
with respect to the Series A Preferred Stock which remains payable.

     (b)  The amount of dividends  referred  to in clause  (i) of  Section  3(a)
payable for each full Dividend  Period for the Series A Preferred Stock shall be
computed by dividing  the annual  dividend  rate by four.  The initial  Dividend
Period will include a partial  dividend for the period from the Issue Date until
November 30,  1996.  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 A Preferred Stock shall be computed on the basis of the actual number
of days in such Dividend  Period.  Holders of Series A Preferred Stock shall not
be entitled to any  dividends,  whether  payable in cash,  property or shares of
stock, in excess of cumulative  dividends,  as herein provided,  on the Series A
Preferred  Stock.  No interest,  or sum of money in lieu of  interest,  shall be
payable in respect of any dividend payment or payments on the Series A Preferred
Stock that may be in arrears.

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

     (d)  So long as any shares of Series A Preferred  Stock 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, Fully Junior
Stock) shall be declared or paid or set apart for payment or other  distribution
declared or made upon Junior Stock or Fully Junior  Stock,  nor shall any Junior
Stock or Fully Junior Stock be redeemed,  purchased or otherwise acquired (other
than a redemption,  purchase or other acquisition of shares of Common Stock made
for purposes of any employee incentive or benefit plan of the Corporation or any
subsidiary)  for any  consideration  (or any moneys be paid to or made available
for a sinking fund for the  redemption  of any such shares) by the  Corporation,
directly or  indirectly  (except by  conversion  into or exchange  for shares of
Fully Junior Stock),  unless in each case (i) the full  cumulative  dividends on
all outstanding shares of Series A Preferred Stock and any other Parity Stock of
the

                                      -5-

<PAGE>



Corporation  shall  have  been or  contemporaneously  are  declared  and paid or
declared and set apart for payment for all past Dividend Periods with respect to
the Series A Preferred Stock and all past dividend  periods with respect to such
Parity Stock and (ii) sufficient funds shall have been or contemporaneously  are
declared  and paid or declared and set apart for the payment of the dividend for
the current Dividend Period with respect to the Series A Preferred Stock and the
current dividend period with respect to such Parity Stock.

     (e)  No distributions on Series A Preferred  Stock shall be declared by the
Board of Directors or paid or set apart for payment by the  Corporation  at such
time as the terms and provisions of any agreement of the Corporation,  including
any agreement relating to its indebtedness,  prohibits such declaration, payment
or setting  apart for  payment or  provides  that such  declaration,  payment or
setting  apart  for  payment  would  constitute  a breach  thereof  or a default
thereunder,  or if such declaration or payment shall be restricted or prohibited
by law.

     Section 4.Liquidation Preference.

     (a)  In the event of any  liquidation,  dissolution  or  winding  up of the
Corporation,   whether   voluntary  or   involuntary,   before  any  payment  or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the  holders  of Junior  Stock,  the  holders of the
Series A Preferred Stock shall be entitled to receive $25.00 per share of Series
A Preferred  Stock plus an amount equal to all dividends  (whether or not earned
or declared)  accrued and unpaid  thereon to the date of final  distribution  to
such holders; but such holders shall not be entitled to any further payment. If,
upon any liquidation,  dissolution or winding up of the Corporation,  the assets
of the Corporation, or proceeds thereof,  distributable among the holders of the
Series A Preferred Stock shall be  insufficient to pay in full the  preferential
amount  aforesaid and  liquidating  payments on any other shares of any class or
series of Parity  Stock,  then such assets,  or the proceeds  thereof,  shall be
distributed among the holders of the Series A Preferred Stock and any such other
Parity Stock ratably in  accordance  with the  respective  amounts that would be
payable on such Series A Preferred  Stock and any such other Parity Stock if all
amounts  payable  thereon were paid in full. For the purposes of this Section 4,
(i) a consolidation or merger of the Corporation with one or more  corporations,
real estate investment trusts, or other entities, (ii) a sale, lease or transfer
of all or substantially  all of the  Corporation's  assets, or (iii) a statutory
share exchange  shall not be deemed to be a liquidation,  dissolution or winding
up, voluntary or involuntary, of the Corporation.

     (b)  Subject to the rights of the  holders of shares of any series or class
or classes of capital  stock  ranking on a parity  with or prior to the Series A
Preferred  Stock  upon   liquidation,   dissolution  or  winding  up,  upon  any
liquidation,  dissolution or winding up of the Corporation,  after payment shall
have  been made in full to the  holders  of the  Series A  Preferred  Stock,  as
provided in this Section 4,

                                      -6-

<PAGE>

any other  series or class or  classes  of Junior  Stock or Fully  Junior  Stock
shall, subject to the respective terms and provisions (if any) applying thereto,
be entitled to receive any and all assets  remaining to be paid or  distributed,
and the holders of the Series A  Preferred  Stock shall not be entitled to share
therein.

     Section  5.Conversion.  Holders of Series A Preferred  Stock shall have the
right to convert all or a portion of such shares into shares of Common Stock, as
follows:

     (a) The Series A Preferred  Stock shall not be  convertible  by the holders
thereof  prior to the date that is six (6) months  following  the Issue Date. On
and after the date that is six (6) months  following  the Issue Date and subject
to and upon compliance with the provisions of this Section 5, a holder of Series
A  Preferred  Stock shall have the right,  at his or her option,  at any time to
convert such shares into the number of fully paid and non- assessable  shares of
Common Stock obtained by dividing the aggregate  liquidation  preference of such
shares  by the  Conversion  Price  (as in  effect  at the  time  and on the date
provided for in the last paragraph of Section 5(b)) by surrendering  such shares
to be  converted,  such  surrender to be made in the manner  provided in Section
5(b); provided,  however, that the right to convert shares called for redemption
pursuant  to Section 6 shall  terminate  at the close of  business  on the fifth
Business  Day  prior to the Call  Date  fixed for such  redemption,  unless  the
Corporation  shall  default  in making  payment  of the cash  payable  upon such
redemption  under Section 6.

     (b) In order to exercise the conversion  right, the holder of each share of
Series A  Preferred  Stock  to be  converted  shall  surrender  the  certificate
representing  such share,  duly  endorsed or assigned to the  Corporation  or in
blank, at the office of the Transfer Agent, accompanied by written notice to the
Corporation  that the holder  thereof  elects to convert such shares of Series A
Preferred  Stock.  Unless the shares  issuable on conversion are to be issued in
the same name as the name in which such  shares of Series A  Preferred  Stock is
registered,  each share  surrendered  for  conversion  shall be  accompanied  by
instruments of transfer, in form satisfactory to the Corporation,  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
Corporation  demonstrating t hat such taxes have been paid).

     Holders of Series A Preferred  Stock at the close of business on a dividend
payment  record date shall be entitled to receive the  dividend  payable on such
shares on the corresponding Dividend Payment Date notwithstanding the conversion
thereof  following such dividend  payment record date and prior to such Dividend
Payment Date.  However,  Series A Preferred  Stock  surrendered  for  conversion
during the period  between the close of business on any dividend  payment record
date and the opening of  business on the  corresponding  Dividend  Payment  Date
(except shares converted after the issuance of notice of redemption 


                                      -7-
<PAGE>


with  respect  to a Call  Date  during  such  period,  such  shares  of Series A
Preferred  Stock being  entitled to such dividend on the Dividend  Payment Date)
must be  accompanied  by payment of an amount equal to the  dividend  payable on
such  shares  on such  Dividend  Payment  Date.  A holder  of shares of Series A
Preferred  Stock on a dividend  payment  record  date who (or whose  transferee)
tenders  any such  shares  for  conversion  into  shares of Common  Stock on the
corresponding  Dividend  Payment Date will  receive the dividend  payable by the
Corporation  on such  shares of Series A Preferred  Stock on such date,  and the
converting  holder need not include  payment of the amount of such dividend upon
surrender of such shares of Series A Preferred Stock for  conversion.  Except as
provided above,  the  Corporation  shall make no payment or allowance for unpaid
dividends,  whether or not in arrears,  on converted  shares or for dividends on
the  shares  of Common  Stock  issued  upon  such  conversion.  

     As promptly as practicable  after the surrender of certificates  for shares
of Series A Preferred Stock as aforesaid,  the Corporation shall issue and shall
deliver  at such  office  to such  holder,  or on his or her  written  order,  a
certificate  or  certificates  for the  number of full  shares  of Common  Stock
issuable upon the conversion of such shares in accordance with the provisions of
this  Section  5, and any  fractional  interest  in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in Section 5(c).

     Each conversion shall be deemed to have been effected  immediately prior to
the close of business on the date on which the certificates for shares of Series
A  Preferred  Stock  shall  have  been  surrendered  and  such  notice  (and  if
applicable,  payment of an amount equal to the dividend  payable on such shares)
received by the  Corporation  as  aforesaid,  and the person or persons in whose
name or names any certificate or  certificates  for shares of Common Stock shall
be issuable  upon such  conversion  shall be deemed to have become the holder or
holders of record of the shares  represented  thereby at such time on such date,
and such conversion  shall be at the Conversion  Price in effect at such time on
such date unless the stock transfer books of the Corporation  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 share transfer books are open, but such conversion shall be at
the Conversion  Price in effect on the date on which such shares shall have been
surrendered  and such notice  received  by the  Corporation

     (c) No  fractional  shares  or scrip  representing  fractions  of shares of
Common Stock shall be issued upon  conversion  of the Series A Preferred  Stock.
Instead  of any  fractional  interest  in a share of  Common  Stock  that  would
otherwise be  deliverable  upon the  conversion of a share of Series A Preferred
Stock,  the Corporation  shall pay to the holder of such share an amount in cash
based  upon  the  Current  Market  Price of  Common  Stock  on the  Trading  Day
immediately  preceding the date of  conversion.  If more than one share shall be
surrendered  for  conversion


                                      -8-
<PAGE>

at one time by the same  holder,  the  number of full  shares  of  Common  Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Series A Preferred Stock so surrendered. 

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

          (i) If the  Corporation  shall after the Issue Date (A) pay a dividend
     or make a distribution on its shares of stock, in either case, in shares of
     Common Stock,  (B) subdivide its outstanding  shares of Common Stock into a
     greater  number of shares,  (C)  combine its  outstanding  shares of Common
     Stock  into  a  smaller  number  of  shares  or  (D)  issue  any  stock  by
     reclassification  of its shares of Common Stock,  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  Business  Day  next
     following   the   day   on   which   such   subdivision,   combination   or
     reclassification  becomes effective,  as the case may be, shall be adjusted
     so that the holder of any  shares of Series A  Preferred  Stock  thereafter
     surrendered  for  conversion  shall be  entitled  to receive  the number of
     shares of Common  Stock  that such  holder  would  have  owned or have been
     entitled  to receive  after the  happening  of any of the events  described
     above as if such  shares of  Series A  Preferred  Stock had 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  after the opening of
     business on the  Business  Day next  following  the record date  (except as
     provided  in Section  5(h)) in the case of a dividend or  distribution  and
     shall  become  effective  immediately  after the opening of business on the
     Business  Day  next   following  the  effective  date  in  the  case  of  a
     subdivision, combination or reclass ification.

          (ii) If the  Corporation  shall  issue  after the Issue  Date  rights,
     options or warrants to all holders of Common  Stock  entitling  them (for a
     period  expiring  within 45 days after the record date mentioned  below) to
     subscribe  for or purchase  Common Stock at a price per share less than 94%
     (100% if a stand-by  underwriter  is used and  charges  the  Corporation  a
     commission)  of the Fair  Market  Value per  share of  Common  Stock on the
     record date for the determination of shareholders  entitled to receive such
     rights,  options or warrants,  then the  Conversion  Price in effect at the
     opening of business on the  Business  Day next  following  such record date
     shall be  adjusted to equal the price  determined  by  multiplying  (I) the
     Conversion Price in effect  immediately prior to the opening of business on
     the Business Day next  following the date fixed for such  determination  by
     (II) a fraction,  the numerator of which shall be the sum of (A) the number
     of shares of Common 

                                      -9-
<PAGE>


     Stock  outstanding  on the  close of  business  on the date  fixed for such
     determination  and (B) the number of shares that the aggregate  proceeds to
     the Corporation  from the exercise of such rights,  options or warrants for
     shares of Common Stock would  purchase at 94% of such Fair Market Value (or
     100% in the case of a stand-by underwriting),  and the denominator of which
     shall be the sum of (A) the number of shares of Common Stock outstanding on
     the close of business on the date fixed for such  determination and (B) the
     number of  additional  shares of Common Stock offered for  subscription  or
     purchase  pursuant to such  rights,  options or warrants.  Such  adjustment
     shall become effective immediately after the opening of business on the day
     next following  such record date (except as provided in Section  5(h)).  In
     determining whether any rights,  options or warrants entitle the holders of
     Common Stock to subscribe for or purchase  Common Stock at less than 94% of
     such Fair  Market  Value (or 100% in the case of a stand-by  underwriting),
     there  shall  be taken  into  account  any  consideration  received  by the
     Corporation  upon  issuance and upon  exercise of such  rights,  options or
     warrants,  the  value of such  consideration,  if other  than  cash,  to be
     determined by the Board of Directors.

          (iii) If the Corporation shall distribute to all holders of its Common
     Stock any stock of the Corporation (other than Common Stock) or evidence of
     its  indebtedness  or  assets  (excluding   cumulative  cash  dividends  or
     distributions paid with respect to the Common Stock after December 31, 1995
     which are not in excess of the following:  the sum of (A) the Corporation's
     cumulative  undistributed  funds from operations at December 31, 1995, plus
     (B) the cumulative  amount of funds from  operations,  as determined by the
     Board of  Directors,  after  December  31, 1995,  minus (C) the  cumulative
     amount of  dividends  accrued or paid in respect of the Series A  Preferred
     Stock or any other class or series of  Preferred  Stock of the  Corporation
     after the Issue Date) or rights,  options or warrants to  subscribe  for or
     purchase  any  of its  securities  (excluding  those  rights,  options  and
     warrants  issued to all holders of Common Stock entitling them for a period
     expiring  within 45 days after the record date referred to in  subparagraph
     (ii) above to  subscribe  for or  purchase  shares of Common  Stock,  which
     rights,  options  and  warrants  are  referred  to  in  and  treated  under
     subparagraph  (ii) above) (any of the foregoing  being  hereinafter in this
     subparagraph (iii) collectively  called the "Securities" and individually a
     "Security"),  then in each such case the Conversion Price shall be adjusted
     so  that it  shall  equal  the  price  determined  by  multiplying  (I) the
     Conversion  Price in effect  immediately  prior to the close of business on
     the date fixed for the  determination  of shareholders  entitled to receive
     such  distribution by (II) a fraction,  the numerator of which shall be the
     Fair Market  Value per share of Common  Stock on the record date  mentioned
     below  less the then  fair  market  value  (as  determined  by the Board of
     Directors, whose determination shall be conclusive),  of the portion of the
     stock or assets or  evidences of  indebtedness  so  distributed  or of such
     rights,  

                                      -10-
<PAGE>


     options  or  warrants  applicable  to one  share of Common  Stock,  and the
     denominator  of which  shall be the Fair  Market  Value per share of Common
     Stock on the record date  mentioned  below.  Such  adjustment  shall become
     effective  immediately  at the opening of business on the Business Day next
     following  (except as provided in paragraph  (h) below) the record date for
     the  determination of shareholders  entitled to receive such  distribution.
     For the  purposes of this clause  (iii),  the  distribution  of a Security,
     which is  distributed  not only to the  holders of the Common  Stock on the
     date  fixed  for  the  determination  of  shareholders   entitled  to  such
     distribution of such Security,  but also is distributed  with each share of
     Common Stock delivered to a Person converting a share of Series A Preferred
     Stock after such determination date, shall not require an adjustment of the
     Conversion Price pursuant to this clause (iii); provided, that on the date,
     if any, on which a Person  converting  a share of Series A Preferred  Stock
     would no longer be entitled to receive such Security with a share of Common
     Stock (other than as a result of the termination of all such Securities), a
     distribution  of such  Securities  shall be deemed to have occurred and the
     Conversion  Price shall be  adjusted as provided in this clause  (iii) (and
     such day shall be deemed to be "the date fixed for the determination of the
     shareholders  entitled to receive such  distribution" and "the record date"
     within the meaning of th e two preceding sentences).

          (iv) 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 (iv) 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  5  (other  than  this
     subparagraph  (iv)) not later than such time as may be required in order to
     preserve the  tax-free  nature of a  distribution  to the holders of Common
     Stock.  Notwithstanding  any  other  provisions  of  this  Section  5,  the
     Corporation  shall not be required to make any adjustment of the Conversion
     Price for the issuance of any shares of Common  Stock  pursuant to any plan
     providing  for  the  reinvestment  of  dividends  or  interest  payable  on
     securities of the  Corporation  and the  investment of additional  optional
     amounts  in Common  Stock  under  such plan.  All  calculations  under this
     Section 5 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 Section 5(d) to the
     contrary notwithstanding,  the Corporation shall be entitled, to the extent
     permitted  by law, to make such  reductions  in the  Conversion  Price,  in
     addition to those  required by this Section 5(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 or warrants to purchase stock or  

                                      -11-
<PAGE>

     securities,  or a distribution  of other assets (other than cash dividends)
     hereafter made by the Corporation to its shareholders shall not be taxable.

     (e) If the  Corporation  shall  be a party  to any  transaction  (including
without  limitation a merger,  consolidation,  statutory  share  exchange,  self
tender offer for all or substantially all shares of Common Stock, sale of all or
substantially all of the Corporation's  assets or recapitalization of the Common
Stock and excluding any transaction as to which Section  5(d)(i)  applies) (each
of the foregoing being referred to herein as a "Transaction"), in each case as a
result of which all or  substantially  all shares of Common Stock are  converted
into the right to receive stock, securities or other property (including cash or
any  combination  thereof),  each share of Series A Preferred Stock which is not
redeemed  or  converted  into the right to receive  stock,  securities  or other
property prior to such Transaction shall thereafter be convertible into the kind
and amount of shares of stock,  securities and other property (including cash or
any combination thereof) receivable upon the consummation of such Transaction by
a holder of that number of shares of Common Stock into which one share of Series
A  Preferred  Stock  was  convertible  immediately  prior  to such  Transaction,
assuming  such  holder of shares of Common  Stock (i) is not a Person with which
the  Corporation  consolidated  or into  which the  Corporation  merged or which
merged into the  Corporation  or to which such sale or transfer was made, as the
case may be ("Constituent  Person"), or an affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount
of stock,  securities and other property  (including  cash) receivable upon such
Transaction (provided that if the kind or amount of stock,  securities and other
property  (including  cash) receivable upon such Transaction is not the same for
each share of Common Stock 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  Section  5(e) the kind and amount of stock,  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 Corporation shall not be a
party to any  Transaction  unless the terms of such  Transaction  are consistent
with the  provisions of this Section 5(e),  and it shall not consent or agree to
the  occurrence of any  Transaction  until the  Corporation  has entered into an
agreement with the successor or purchasing  entity,  as the case may be, for the
benefit  of the  holders  of the  shares of Series A  Preferred  Stock that will
contain  provisions  enabling  the  holders of the shares of Series A  Preferred
Stock that  remain  outstanding  after  such  Transaction  to  convert  into the
consideration  received by holders of Common  Stock at the  Conversion  Price in
effect  immediately  prior to such  Transaction.  The provisions of this Section
5(e) shall similarly apply to successive Transactions.

                                      -12-
<PAGE>


     (f) If:

          (i)  the   Corporation   shall   declare  a  dividend  (or  any  other
     distribution)   on  the  Common  Stock   (other  than  cash   dividends  or
     distributions paid with respect to the Common Stock after December 31, 1995
     not in  excess  of the sum of the  Corporation's  cumulative  undistributed
     funds from operations at December 31, 1995,  plus the cumulative  amount of
     funds from  operations,  as  determined  by the Board of  Directors,  after
     December 31, 1995, minus the cumulative amount of dividends accrued or paid
     in respect of the shares of Series A Preferred  Stock or any other class or
     series of Prefer red Stock of the Corporation after the Issue Date); or

          (ii) the  Corporation  shall  authorize the granting to the holders of
     shares of Common Stock of rights,  options or warrants to subscribe  for or
     purchase any shares of stock of any class or any other  rights,  options or
     warrants,  which granting  requires an adjustment of the  Conversion  Price
     pursuan t to Section 5(d)(ii) above; or

          (iii) there shall be any  reclassification  of the Common Stock (other
     than an event to which Section  5(d)(i)  applies) or any  consolidation  or
     merger to which the  Corporation  is a party and for which  approval of any
     shareholders of the Corporation is required, or a statutory share exchange,
     or a self tender offer by the Corporation for all or  substantially  all of
     its   outstanding   Common  Stock  or  the  sale  or  transfer  of  all  or
     substantially all of the assets of the Corporation as an entirety; or

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

then the  Corporation  shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of shares of Series A Preferred Stock at their
addresses  as shown on the stock  records of the  Corporation,  as  promptly  as
possible,  but at  least  10  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 granting of rights,  options or
warrants,  or, if a record is not to be taken,  the date as of which the holders
of  shares  of  Common  Stock  of  record  to  be  entitled  to  such  dividend,
distribution or rights, options 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 shares of
Common  Stock of record  shall be entitled to  exchange  their  shares of Common
Stock  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 

                                      -13-
<PAGE>

defect  therein  shall not affect the  legality or  validity of the  proceedings
described in this Section 5.

     (g)  Whenever  the  Conversion  Price is adjusted as herein  provided,  the
Corporation shall promptly file with the Transfer Agent an officer's certificate
setting forth the  Conversion  Price after such  adjustment  and setting forth a
brief statement of the facts requiring such adjustment,  which certificate shall
be conclusive  evidence of the  correctness of such  adjustment  absent manifest
error.  Promptly  after  delivery of such  certificate,  the  Corporation  shall
prepare a notice of such  adjustment of the  Conversion  Price setting forth the
adjusted  Conversion  Price and the effective date of such  adjustment and shall
mail such notice of such  adjustment  of the  Conversion  Price to the holder of
each share of Series A Preferred Stock at such holder's last address as shown on
the share records of the Corporation.

     (h) In any case in which Section 5(d)  provides  that an  adjustment  shall
become  effective on the day next  following  the record date for an event,  the
Corporation  may defer  until the  occurrence  of such event (A)  issuing to the
holder of any share of Series A Preferred Stock converted after such record date
and before the  occurrence of such event the  additional  shares of Common Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such  conversion  before
giving  effect to such  adjustment  and (B) paying t o such holder any amount of
cash in lieu of any fraction pursuant to Section 5(c).

     (i) There shall be no  adjustment  of the  Conversion  Price in case of the
issuance of any stock or other security of the Corporation in a  reorganization,
acquisition or other similar  transaction  except as  specifically  set forth in
this Section 5. If any action or  transaction  would  require  adjustment of the
Conversion Price pursuant to more than one paragraph of this Section 5, only one
adjustment  shall be made and such adjustment  shall be the amount of adjustment
that has the highest absolute value.

     (j) If the  Corporation  shall take any action  affecting the Common Stock,
other than action  described in this Section 5, that in the opinion of the Board
of Directors would materially and adversely affect the conversion  rights of the
holders of the shares of Series A Preferred  Stock, the Conversion Price for the
Series A Preferred  Stock may be  adjusted,  to the extent  permitted by law, in
such manner,  if any, and at such time, as the Board of  Directors,  in its sole
discretion, may determine to be equitable in the circumstances.

     (k) The  Corporation  covenants  that it will at all times reserve and keep
available,  free from preemptive  rights, out of the aggregate of its authorized
but unissued shares of Common Stock, for the purpose of effecting  conversion of
the  shares of Series A  Preferred  Stock,  the full  number of shares of Common
Stock

                                      -14-
<PAGE>


deliverable upon the conversion of all outstanding  shares of Series A Preferred
Stock not theretofore  converted.  For purposes of this Section 5(k), the number
of shares of Common Stock that shall be  deliverable  upon the conversion of all
outstanding  shares of Series A  Preferred  Stock shall be computed as if at the
time of computation all such outstanding shares were held by a single holder.

     The  Corporation  covenants  that any shares of Common  Stock  issued  upon
conversion  of the shares of Series A Preferred  Stock shall be validly  issued,
fully paid and  non-assessable.  Before  taking any action  that would  cause an
adjustment reducing the Conversion Price below the then- par value of the shares
of Common Stock  deliverable upon conversion of the shares of Series A Preferred
Stock,  the Corporation  will take any corporate  action that, in the opinion of
its  counsel,  may be necessary  in order that the  Corporation  may validly and
legally  issue  fully paid and non-  assessable  shares of Common  Stock at such
adjusted Conversion Price.

     The Corporation  shall endeavor to list the shares of Common Stock required
to be delivered upon conversion of the Series A Preferred  Stock,  prior to such
delivery,  upon  each  national  securities  exchange,  if any,  upon  which the
outstanding shares of Common Stock are listed at the time of such delivery.

     Prior to the  delivery  of any  securities  that the  Corporation  shall be
obligated to deliver upon conversion of the shares of Series A Preferred  Stock,
the  Corporation  shall  endeavor  to comply with all federal and state laws and
regulations  thereunder  requiring the  registration of such securities with, or
any  approval  of or  consent  to the  delivery  thereof  by,  any  governmental
authority.

     (l) The Corporation will pay any and all documentary stamp or similar issue
or  transfer  taxes  payable in respect  of the issue or  delivery  of shares of
Common  Stock or other  securities  or property on  conversion  of the shares of
Series  A  Preferred  Stock  pursuant  hereto;   provided,   however,  that  the
Corporation  shall not be required to pay any tax that may be payable in respect
of any  transfer  involved  in the issue or  delivery  of Common  Stock or other
securities  or property in a name other than that of the holder of the shares of
Series A Preferred Stock 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  Corporation  the amount of any such tax or  established,  to the reasonable
satisfaction of the Corporation, that such tax has been paid.

     Section 6. Redemption at the Option of the Corporation.

     (a) The Series A Preferred Stock shall not be redeemable by the Corporation
prior to the third (3rd)  anniversary  of the Issue Date. On and after the third
(3rd) anniversary of the Issue Date, the Corporation,  at its option, may redeem
the Series A  Preferred  Stock,  in whole or in part at any time or from time to


                                      -15-
<PAGE>

time at a redemption price of Twenty Five Dollars ($25.00) per share of Series A
Preferred Stock, plus the amounts indicated in Section 6(b).

     (b) Upon any  redemption of the Series A Preferred  Stock  pursuant to this
Section 6, the Corporation shall pay all accrued and unpaid  dividends,  if any,
thereon  ending on or prior to the date of such  redemption  (the "Call  Date"),
without  interest.  If the Call Date falls after a dividend  payment record date
and prior to the corresponding Dividend Payment Date, then each holder of Series
A Preferred Stock at the close of business on such dividend  payment record date
shall be entitled to the  dividend  payable on such shares on the  corresponding
Dividend Payment Date  notwithstanding the redemption of such shares before such
Dividend Payment Date.  Except as provided above, the Corporation  shall make no
payment or allowance for unpaid dividends,  whether or not in arrears, on shares
of Series A Preferred Stock called for redemption.

     (c) If full  cumulative  dividends on the Series A Preferred  Stock and any
other class or series of Parity Stock of the Corporation  have not been declared
and paid or declared and set apart for payment, the Series A Preferred Stock may
not be  redeemed  under  this  Section  6 in part  and the  Corporation  may not
purchase or acquire the Series A Preferred  Stock,  otherwise than pursuant to a
purchase  or  exchange  offer made on the same terms to all  holders of Series A
Preferred Stock.

     (d) Notice of the  redemption  of any Series A  Preferred  Stock under this
Section 6 shall be mailed by first-class mail to each holder of record of Series
A Preferred  Stock to be redeemed at the address of each such holder as shown on
the Corporation's  records,  not less than 30 nor more than 90 days prior to the
Call Date. Neither the failure to mail any notice required by this Section 6(d),
nor any defect  therein or in the mailing  thereof,  to any  particular  holder,
shall affect the  sufficiency  of the notice or the validity of the  proceedings
for redemption with respect to the other holders. Any notice which was mailed in
the manner  herein  provided  shall be  conclusively  presumed to have been duly
given on the date mailed  whether or not the holder  receives  the notice.  Each
such mailed  notice  shall state,  as  appropriate:  (1) the Call Date;  (2) the
number of shares of Series A Preferred  Stock to be redeemed  and, if fewer than
all the shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder;  (3) the place or places at which  certificates
for such shares are to be surrendered;  (4) the then-current  Conversion  Price;
and (5) that  dividends  on the shares to be  redeemed  shall cease to accrue on
such Call Date except as otherwise provided herein. Notice having been mailed as
aforesaid,  from and after the Call Date (unless the  Corporation  shall fail to
make  available  an amount of cash  necessary  to effect such  redemption),  (i)
except as otherwise  provided herein,  dividends on the Series A Preferred Stock
so  called  for  redemption  shall  cease to  accrue,  (ii)  shares  of Series A
Preferred  Stock  shall no longer be  deemed  to be  outstanding,  and (iii) all
rights of the  holders  thereof as holders  of Series A  Preferred  Stock of the
Corporation  shall cease  (except the right to receive  cash  payable  upon such
redemption,  without

                                      -16-
<PAGE>


interest  thereon,  upon surrender and  endorsement of their  certificates if so
required  and to receive  any  dividends  payable  thereon).  The  Corporation's
obligation to provide cash in accordance  with the preceding  sentence  shall be
deemed  fulfilled if, on or before the Call Date, the Corporation  shall deposit
with a bank or trust company (which may be an affiliate of the Corporation) that
has an office in Washington, D.C., and that has, or is an affiliate of a bank or
trust company that has, capital and surplus of at least $50,000,000,  the amount
of cash necessary for such redemption,  in trust, with irrevocable  instructions
that such cash be applied to the  redemption of the Series A Preferred  Stock so
called for  redemption.  No interest shall accrue for the benefit of the holders
of  Series A  Preferred  Stock to be  redeemed  on any cash so set  aside by the
Corporation.  Subject to applicable escheat laws, any such cash unclaimed at the
end of two years from the Call Date  shall  revert to the  general  funds of the
Corporation,  after  which  reversion  the  holders of such shares so called for
redemption  shall  look only to the  general  funds of the  Corporation  for the
payment  of such  cash. 

     As promptly as  practicable  after the  surrender in  accordance  with said
notice of the certificates for any such shares so redeemed (properly endorsed or
assigned for  transfer,  if the  Corporation  shall so require and if the notice
shall so state),  such shares shall be exchanged for any cash (without  interest
thereon)  for which  such  shares  have  been  redeemed.  If fewer  than all the
outstanding  shares of Series A Preferred  Stock are to  redeemed,  shares to be
redeemed shall be selected by the Corporation from outstanding  shares of Series
A Preferred  Stock not  previously  called for redemption by lot or pro rata (as
nearly as may be) or by any other method  determined by the  Corporation  in its
sole  discretion  to be  equitable.  If fewer  than all the  shares  of Series A
Preferred  Stock   represented  by  any  certificate  are  redeemed,   then  new
certificates  representing the unredeemed shares shall be issued without cost to
the holder thereof.

     Section 7. Shares of Stock To Be Retired.  All shares of Series A Preferred
Stock  which  shall  have  been  issued  and  reacquired  in any  manner  by the
Corporation shall be restored to the status of authorized but unissued shares of
capital stock of the Corporation, without designation as to class or series.

     Section 8.  Ranking.  Any class or series of shares of capital stock of the
Corporation shall be deemed to rank:

     (a) prior to the Series A Preferred  Stock,  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 A
Preferred Stock;

     (b) on a parity  with the Series A  Preferred  Stock,  as to the payment of
dividends and as to  distribution  of assets upon  liquidation,  dissolution  or
winding 

                                      -17-
<PAGE>


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 A
Preferred  Stock,  if the holders of such class or series of shares of stock and
the Series A Preferred  Stock 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 Stock");

     (c) junior to the Series A Preferred  Stock, as to the payment of dividends
or as to the distribution of assets upon liquidation, dissolution or winding up,
if such shares of stock shall be Junior Stock; and

     (d) junior to the Series A Preferred  Stock, as to the payment of dividends
and as to the distribution of assets upon liquidation dissolution or winding up,
if such shares of stock shall be Fully Junior Stock.

     Section 9.  Voting.  If and whenever six  consecutive  quarterly  dividends
payable on the Series A Preferred  Stock or any series or class of Parity  Stock
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 declared,
the  number of  directors  then  constituting  the Board of  Directors  shall be
increased by two, and the holders of Series A Preferred Stock, together with the
holders  of shares of every  other  series of Parity  Stock,  voting as a single
class  regardless  of  series,  shall be  entitled  to elect the two  additional
directors  to  serve  on the  Board  of  Directors  at  any  annual  meeting  of
shareholders or special  meeting held in place thereof,  or at a special meeting
of the holders of the Series A Preferred  Stock and the Parity  Stock  called as
hereinafter  provided.  Whenever  all  arrears  in  dividends  on the  Series  A
Preferred Stock and the Parity Stock then  outstanding  shall have been paid and
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 A  Preferred  Stock and the  Parity  Stock to elect such  additional  two
directors shall  immediately 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 consecutive quarterly dividends),  and the terms of office of all persons
elected as  directors  by the  holders of the Series A  Preferred  Stock and the
Parity  Stock  shall  immediately  terminate  and the  number  of the  Board  of
Directors  shall be reduced  accordingly.  At any time after such voting  rights
shall  have been so vested in the  holders of Series A  Preferred  Stock and the
Parity Stock, the secretary of the Corporation may, and upon the written request
of any holder of Series A Preferred  Stock  (addressed  to the  secretary at the
principal  office  of the  Corporation)  shall,  call a special  meeting  of the
holders of the Series A Preferred Stock and of the Parity Stock for the election
of the two directors to be elected by them as herein  provided,  such call to be
made by notice similar to that provided in the Bylaws of the  Corporation  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 

                                      -18-
<PAGE>

by the  secretary  within 20 days after  receipt of any such  request,  then any
holder of Series A Preferred Stock may call such meeting,  upon the notice above
provided,  and for that  purpose  shall have access to the stock  records of the
Corporation. The directors 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 above
provided.  If any vacancy shall occur among the directors elected by the holders
of the Series A  Preferred  Stock and the Parity  Stock,  a  successor  shall be
elected by the Board of Directors,  upon the  nomination  of the  then-remaining
director  elected by the holders of the Series A Preferred  Stock and the Parity
Stock or the  successor  of such  remaining  director,  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.

     So long as any  shares of Series A  Preferred  Stock  are  outstanding,  in
addition to any other vote or consent of shareholders  required by law or by the
Charter of the  Corporation,  the  affirmative  vote of at least  66-2/3% of the
votes entitled to be cast by the holders of the Series A Preferred Stock and the
Parity Stock, at the time  outstanding,  acting as a single class  regardless of
series,  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:

     (a) Any  amendment,  alteration  or repeal of any of the  provisions of the
Charter  of  the  Corporation  (including  these  Articles  Supplementary)  that
materially and adversely affects the voting powers, rights or preferences of the
holders of the Series A Preferred Stock or the Parity Stock; provided,  however,
that the amendment of the provisions of the Charter of the  Corporation so as to
authorize  or create or to increase  the  authorized  amount of any Fully Junior
Stock or  Junior  Stock  that are not  senior  in any  respect  to the  Series A
Preferred  Stock, or any shares of any class ranking on a parity with the Series
A  Preferred  Stock or the  Parity  Stock,  shall not be  deemed  to  materially
adversely  affect the voting  powers,  rights or  preferences  of the holders of
Series A Preferred  Stock;  and provided  further,  that if any such  amendment,
alteration or repeal would  materially  and adversely  affect any voting powers,
rights or  preferences  of the Series A  Preferred  Stock or  another  series of
Parity Stock that are not enjoyed by some or all of the other  series  otherwise
entitled  to vote in  accordance  herewith,  the  affirmative  vote of at  least
66-2/3% of the votes entitled to be cast by the holders of all series  similarly
affected,  similarly given, shall be required in lieu of the affirmative vote of
at least 66-2/3% of the votes entitled to be cast by the holders of the Series A
Preferred  Stock and the Parity Stock  otherwise  entitled to vote in accordance
herewith; or

     (b) A  share  exchange  that  affects  the  Series  A  Preferred  Stock,  a
consolidation  with or merger  of the  Corporation  into  another  entity,  or a
consolidation  with or merger of another entity into the Corporation,  unless in
each  such  case  each  share of  Series A  Preferred  Stock  (i)  shall  remain
outstanding

                                      -19-
<PAGE>

without a material  and adverse  change to its terms and rights or (ii) shall be
converted  into or exchanged for  convertible  preferred  stock of the surviving
entity  having   preferences,   conversion  or  other  rights,   voting  powers,
restrictions,   limitations  as  to  dividends,   qualifications  and  terms  or
conditions  of  redemption  thereof  identical  to that of a share  of  Series A
Preferred Stock (except for changes that do not materially and adversely  affect
the holders of the Series A Preferred Stock); or

     (c) The  authorization  or creation of, or the  increase in the  authorized
amount of, any shares of any class or any  security  convertible  into shares of
any class ranking prior to the Series A Preferred  Stock in the  distribution of
assets on any  liquidation,  dissolution or winding up of the Corporati on or in
the payment of dividends; 

provided,  however, that no such vote of the holders of Series A Preferred Stock
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 shares or convertible
securities  is to be  made,  as the  case  may be,  provision  is  made  for the
redemption of all shares of Series A Preferred Stock at the time outstanding.

     For purposes of the  foregoing  provisions of this Section 9, each share of
Series A  Preferred  Stock  shall have one (1) vote per share,  except that when
shares of any other series of Preferred  Stock shall have the right to vote with
the Series A Preferred Stock as a single class on any matter,  then the Series A
Preferred  Stock and such other  series  shall have with respect to such matters
one (1) vote per $25.00 of stated  liquidation  preference.  Except as otherwise
required by applicable law or as set forth herein,  the Series A Preferred Stock
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 corporate action.

     Section 10. Record Holders. The Corporation and the Transfer Agent may deem
and treat the  record  holder of any  Series A  Preferred  Stock as the true and
lawful  owner  thereof for all  purposes,  and neither the  Corporation  nor the
Transfer Agent shall be affected by any notice  to the contrary.

     Section  11.  Sinking  Fund.  The  Series A  Preferred  Stock  shall not be
entitled to the benefits of any retirement or sinking fund.

     Section 12. Ownership Limitation.  Pursuant to the authority granted to the
Board of Directors under Section 5.10 of the Charter,  any Person (as defined in
the Charter) who is not an individual within the meaning of Section 542(a)(2) of
the Internal  Revenue  Code of 1986,  as amended  (the  "Code"),  as modified by
Section  856(h)(3)  of the Code  (referred  to as an  "Exempted  Person"),  that
Acquires (as defined in the  Charter)  Beneficial  Ownership  (as defined in the
Charter) of shares of Series A Preferred  Stock is exempted  from clause (ii) of
the  Ownership  Limit (as defined in the  Charter)  with respect to the Series A
Preferred  Stock,  subject to the

                                      -20-
<PAGE>

condition that no Person (as defined in the Charter) who is an individual within
the meaning of Section  542(a)(2) of the Code, as modified by Section  856(h)(3)
of the Code and who  Beneficially  Owns (as defined in the  Charter)  any of the
shares of Series A Preferred  Stock owned directly by the Exempted Person at any
time  Beneficially  Owns an amount of Series A Preferred  Stock in excess of the
Ownership Limit.  Each Exempted Person who acquires shares of Series A Preferred
Stock in reliance  upon the  conditional  exemption  set forth in the  preceding
sentence  represents  and  warrants to the  Corporation  as a condition  of such
reliance  that the  condition  set forth  therein is  satisfied at the time such
Exempted  Person  Acquired  the shares of Series A  Preferred  Stock and will be
satisfied  throughout the period during which such Exempted Person  Beneficially
Owns the shares of Series A Preferred  Stock.  Each Exempted Person who acquires
shares of Series A Preferred  Stock in reliance upon the  conditional  exemption
set forth in the second preceding  sentence further agrees that in the event the
condition  set  forth  in the  second  preceding  sentence  is at any  time  not
satisfied,  the exemption granted under this Section 12 no longer shall apply to
such  Exempted  Person  and  all of the  shares  of  Series  A  Preferred  Stock
Beneficially  Owned  by such  Exempted  Person  shall be  subject  to all of the
restrictions  and  remedies  set forth in Article V of the  Charter  (including,
without limitation, the remedies set forth in Section 5.3 of the Charter).


                                      -21-

<PAGE>

     IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary
to be signed in its name and on its behalf by its  President and attested by its
Secretary on October __, 1996.

                                         CARRAMERICA REALTY CORPORATION





                                         By: /s/ Thomas A. Carr
                                             --------------------------
                                             Thomas A. Carr
                                             President


                                             (SEAL)




Attest: /s/ Andrea F. Bradley
        ---------------------
        Andrea F. Bradley
        Secretary


                                      -22-