<PAGE>   1
                                                                     Exhibit 3.1

                            CERTIFICATE OF AMENDMENT
                                     TO THE
                                    RESTATED
                          CERTIFICATE OF INCORPORATION
                                       OF
                                   ALTEON INC.


         Kenneth I. Moch hereby certifies that:

         1. The name of the corporation is Alteon Inc. (the "Corporation"), and
the date of filing of the original Certificate of Incorporation of the
Corporation with the Secretary of State of the State of Delaware is October 22,
1986.

         2. He is the duly elected President and Chief Executive Officer of the
Corporation.

         3. Paragraph 4 of the Corporation's Amended and Restated Certificate of
Incorporation is hereby amended to read in its entirety as follows:

                  "FOURTH: The total number of shares of all classes of stock
         which the Corporation shall have authority to issue is 41,993,329
         shares. The Corporation is authorized to issue two classes of stock,
         designated "Common Stock" and "Preferred Stock" respectively. The total
         number of shares of Common Stock authorized to be issued by the
         Corporation is 40,000,000, and each such shares of Common Stock shall
         have a par value of $.01 per share. The total number of shares of
         Preferred Stock authorized to be issued by the Corporation is
         1,993,329, and each such share shall have a par value of $.01 per
         share."

         4. The foregoing amendment has been duly adopted by the Board of
Directors and the stockholders of the Corporation in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware. The total number of outstanding shares entitled to vote thereon was
17,974,125. Holders of 83.1% of such outstanding shares approved such amendment
at the duly called and conducted Annual Meeting of the stockholders of the
Corporation, held on July 22, 1998.





                                      * * *
<PAGE>   2
                  IN WITNESS WHEREOF, Alteon Inc. has caused this Certificate of
         Amendment to be signed by its President this 27th day of July 1999.

                                    Alteon Inc.



                                    By:  /s/ Kenneth I. Moch
                                         ---------------------------------------
                                    Name: Kenneth I. Moch
                                    Title: President and Chief Executive Officer
<PAGE>   3
                            CERTIFICATE OF AMENDMENT

                                     TO THE

                      RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                                  GERITECH INC.

         Pursuant to Section 242 of the Delaware General Corporation Law, the
undersigned corporation executes this Certificate of Amendment to its Restated
Certificate of Incorporation.

         I. Paragraph FIRST of the Corporation's Restated Certificate of
Incorporation is amended to provide in its entirety:

            "FIRST: The name of the Corporation is Alteon Inc."

         II. Paragraph FOURTH of the Corporation's Certificate of Incorporation
is amended to provide in its entirety:

                  "FOURTH: The total number of shares of all classes of stock
         which the Corporation shall have authority to issue is 34,000,000
         shares. The Corporation is authorized to issue two classes of stock
         designated "Common Stock" and "Preferred Stock," respectively. The
         total number of shares of Common Stock authorized to be issued by the
         Corporation is 30,000,000, and each such share of Common Stock shall
         have a par value of $.01 per share. The total number of shares of
         Preferred Stock authorized to be issued by the Corporation is
         4,000,000, and each such share shall have a par value of $.01 per
         share.

                  Each share of Common Stock of the Corporation, par value $.01
         per share, issued and outstanding or held in the treasury of the
         Corporation is hereby reclassified and changed into 3.36 fully paid and
         nonassessable shares of Common Stock of the Corporation, par value
         $.01, and each holder of record of a certificate for one or more shares
         of Common Stock of the Corporation as of the close of business on the
         date this amendment becomes effective shall be entitled to receive, as
         soon as practicable, upon surrender of such certificate, a certificate
         or certificates representing 3.36 shares of Common Stock for each one
         share of Common Stock represented by the certificate of such holder."

         III. Paragraph ELEVENTH, TWELFTH and THIRTEENTH, are hereby added to
the Restated Certificate of Incorporation:

                  "ELEVENTH: Upon the consummation of the initial public
         offering of securities of the Corporation under the Securities
         Act of 1933, as amended (the "Securities Act"), the Board of
         Directors of the Corporation shall be divided into three
<PAGE>   4
         classes, which are hereby designated Class A, Class B and Class C,
         respectively. The names and post office addresses of the directors of
         the Corporation until the next annual meeting of stockholders and the
         class to which each shall belong are as follows:

<TABLE>
<CAPTION>
         Name                                         Post Office Address
         ----                                         -------------------
<S>                                 <C>               <C>
                                    Class A

         Marilyn G. Breslow                           527 Madison Avenue
                                                      New York, N.Y.  10022

         Craig A.T. Jones                             435 Tasso Street
                                                      Palo Alto, CA 94310

                                    Class B

         Richard D. Propper, M.D.                     600 Montgomery Street
                                                      San Francisco, CA 94111

         Stephen R. Wong                              3201 Fostoria Way
                                                      San Ramon, CA 94583

                                    Class C

         Charles A. Faden                             165 Ludlow Avenue
                                                      Northvale, N.J.  07647

         Paul Cameron                                 20 Heathcliff Road
                                                      Rumson, N.J.  07780

         Louis Fernandez                              74 Crystal Downs
                                                      Frankfort, MI 49635
</TABLE>

                  The term of office of the initial Class A directors shall
         expire at the next annual meeting of stockholders; that of the Class B
         directors at the second succeeding annual meeting of stockholders; and
         that of the Class C directors at the third succeeding annual meeting of
         stockholders. At each annual meeting after the initial classification
         of directors, directors to replace those whose terms expire at such
         meeting shall be elected to hold office until the third succeeding
         annual meeting. Each class shall hold office until its successors are
         elected and qualified. In addition to the limitations imposed by law,
         the classification of directors shall be subject to the following
         limitations: (i) the number of directors shall be determined in
         accordance with the Bylaws of the Corporation and (ii) the classes must
         be equal in number as possible.

                  TWELFTH: Upon the consummation of the initial public



                                      -2-
<PAGE>   5
         offering of securities of the Corporation under the Securities Act, (a)
         the affirmative vote of the holders of not less than eighty percent
         (80%) of the outstanding shares of Voting Stock (except as otherwise
         provided herein, all capitalized terms used in this Article TWELFTH
         shall have the meanings set forth in paragraph (b) below) of the
         Corporation, in each case voting together as a single class, which vote
         shall include the affirmative vote of at least two-thirds (2/3) of the
         outstanding shares of Voting Stock held by stockholders other than a
         Related Person, shall be required for the approval or authorization of
         any Business Combination; provided, however, that the super-majority
         voting requirement referred to above shall not be applicable to any
         particular Business Combination, and such Business Combination shall
         require only such affirmative vote as may be required by law, any other
         provision of this Certificate of Incorporation, any Preferred Stock and
         any agreement with any national securities exchange, if, (1) in the
         case of a Business Combination that does not involve any cash or other
         consideration being received by the stockholders of the Corporation,
         solely in their respective capacities as stockholders of the
         Corporation, the condition specified in paragraph (i) below is
         satisfied, or, (2) in the case of any other Business Combination, the
         conditions specified in paragraphs (i) or (ii) below are satisfied:

                  (i) such Business Combination shall have been approved by a
         majority of the Disinterested Directors of the Corporation; or

                  (ii) Each of the following five conditions have been satisfied
         or have been waived by a vote of not less than a majority of the
         Disinterested Directors:

                                    (A) the aggregate amount of the cash and the
         Fair Market Value as of the Consummation Date of any consideration
         other than cash to be received per share by holders of Common Stock in
         such Business Combination shall be at least equal to the highest of the
         following (it being intended that the requirements of this clause
         (ii)(A) shall be required to be met with respect to all shares of
         Common Stock outstanding whether or not the Related Person has acquired
         any shares of the Common Stock):

                                            (1) if applicable, the highest per
         share price (including any brokerage commissions, transfer taxes and
         soliciting dealers' fees) paid in order to acquire any shares of Common
         Stock beneficially owned by the Related Person which were acquired
         beneficially by such Related Person (x) within the two-year period
         immediately prior to the Announcement Date or (y) in the transaction in
         which such person became a Related Person, whichever is higher; or




                                      -3-
<PAGE>   6
                                            (2) the Fair Market Value per share
         of Common Stock on the Announcement Date, or on the Determination Date,
         whichever is higher; or

                                            (3) the amount which bears the same
         percentage relationship to the Fair Market Value of the Common Stock on
         the Announcement Date as the highest per share price determined in
         (ii)(A)(1) above bears to the Fair Market Value of the Common Stock on
         the date of the commencement of the acquisition of the Common Stock by
         such Related Person; and

                                    (B) the aggregate amount of the cash and the
         Fair Market Value as of the Consummation Date of any consideration
         other than cash to be received per share by holders of the shares of
         any class or series of Voting Stock (other than Common Stock) shall be
         at least equal to the highest of the following (it being intended that
         the requirements of this clause (ii)(B) shall be required to be met
         with respect to every class and series of such outstanding Voting
         Stock, whether or not the Related Person has previously acquired any
         shares of a particular class of series of Voting Stock):

                                            (1) if applicable, the highest per
         share price (including any brokerage commissions, transfer taxes and
         soliciting dealers' fees) paid in order to acquire any shares of such
         class or series of Voting Stock beneficially by such Related Person (x)
         within the two-year period immediately prior to the Announcement Date
         or (y) in the transaction in which such person became a Related Person,
         whichever is higher; or

                                            (2) if applicable, the highest
         preferential amount per share to which the holders of shares of such
         class or series of Voting Stock are entitled in the event of any
         voluntary or involuntary liquidation, dissolution or winding up of the
         Corporation; or

                                            (3) the Fair Market Value per share
         of such class or series of Voting Stock on the Announcement Date or the
         Determination Date, whichever is higher; or

                                            (4) the amount which bears the same
         percentage to the Fair Market Value of such class or series of Voting
         Stock on the Announcement Date as the highest per share price in
         (ii)(B)(1) above bears to the Fair Market Value of such Voting Stock on
         the date of the commencement of the acquisition of such Voting Stock by
         such Related Person; and

                                    (C) the consideration to be received by
         holders of a particular class or series of outstanding Voting Stock
         (including Common Stock) shall be in cash or in the same form



                                      -4-
<PAGE>   7
         as was previously paid in order to acquire beneficially shares of such
         class or series of Voting Stock that are beneficially owned by the
         Related Person and, if the Related Person beneficially owns shares of
         any class or series of Voting Stock that were acquired with varying
         forms of consideration, the form of consideration to be received by
         each holder of such class or series of Voting Stock shall be at the
         option of such holder, either cash or the form used by the Related
         Person to acquire beneficially the largest number of shares of such
         class or series of Voting Stock beneficially acquired by the Related
         Person prior to the Announcement Date; and

                                    (D) after such Related Person has become a
         Related Person and prior to the consummation of such Business
         Combination:

                                        (1) such Related Person shall not have
         become the beneficial owner of any additional shares of Voting Stock of
         the Corporation, except as part of the transaction in which such person
         became a Related Person or upon conversion of convertible securities
         acquired by such person prior to becoming a Related Person or as a
         result of a pro rata stock dividend or stock split; and

                                        (2) such Related Person shall not have
         received the benefit, directly or indirectly (except proportionately as
         a stockholder), or any loans, advances, guarantees, pledges or other
         financial assistance or tax credits or other tax advantages provided by
         the Corporation or any Subsidiary, whether in anticipation of or in
         connection with such Business Combination or otherwise; and

                                        (3) such Related Person shall not have
         caused any material change in the Corporation's business or capital
         structure, including, without limitation, the issuance of shares of
         capital stock of the Corporation to any third party; and

                                        (4) there shall have been (x) no failure
         to declare and pay at the regular date therefor the full amount of
         dividends (whether or not cumulative) on any outstanding Preferred
         Stock, except as approved by a majority of the Disinterested Directors
         (y) no reduction in the rate of dividends, annualized on the basis of
         the last dividend declaration, paid on Common Stock (except as
         necessary to reflect any subdivision of the Common Stock), except as
         approved by a majority of the Disinterested Directors and (z) an
         increase in such annual rate of dividends (as necessary to prevent any
         such reduction) in the event of any reclassification (including any
         reverse stock split), recapitalization, reorganization, self tender
         offer or any similar transaction which has the effect of reducing the



                                      -5-
<PAGE>   8
         number of outstanding shares of the Common Stock, unless the failure so
         to increase such annual rate was approved by a majority of the
         Disinterested Directors; and

                                    (E) a proxy or information statement
         describing the proposed Business Combination and complying with the
         requirements of the Securities Exchange Act of 1934, as amended (the
         "Exchange Act") and the rules and regulation thereunder (or any
         subsequent provisions replacing such rules and regulations), whether or
         not the Corporation is then subject to such requirements shall be
         mailed by and at the expense of the Related Person at least 40 days
         prior to the Consummation Date of such Business Combination to the
         public stockholders of the Corporation (whether or not such proxy or
         information statement is required to be mailed pursuant to the Exchange
         Act or subsequent provisions), and shall contain at the front thereof
         in a prominent place (1) any recommendations as to the advisability (or
         inadvisability) of the Business Combination which the Disinterested
         Directors, if any, may choose to state, and (2) the opinion of a
         reputable national investment banking firm as to the fairness (or not)
         of such Business Combination from the point of view of the remaining
         public stockholders of the Corporation (such investment banking firm to
         be engaged solely on behalf of the remaining public stockholders, to be
         paid a reasonable fee for their services by the Corporation upon
         receipt of such opinion, to be unaffiliated with such Related Person
         and, if there are at the time any Disinterested Directors, to be
         selected by a majority of the Disinterested Directors).

                  (b) For the purposes of this Article TWELFTH and Article
         THIRTEENTH:

                           (i) The term "Business Combination" shall mean (A)
         any merger, consolidation or binding share exchange of the Corporation
         or any subsidiary with or into any Related Person, (B) any sale, lease,
         exchange, mortgage, pledge, transfer or other disposition to or with a
         Related Person of Assets either of the Corporation (including, without
         limitation, any voting securities of a Subsidiary) or of a Subsidiary
         having an aggregate Fair Market Value of $10,000,000 or more, (C) any
         sale, lease, exchange, mortgage, pledge, transfer or other disposition
         to the Corporation or a Subsidiary of assets of a Related Person having
         a Fair Market Value of $10,000,000 or more, (D) the issuance or
         transfer by the Corporation or any Subsidiary (other than by way of a
         pro rata distribution to all stockholders) of any securities of the
         Corporation or any Subsidiary to a Related Person, (E) any transaction
         involving the Corporation or any Subsidiary (whether or not with or
         into or otherwise involving a Related Person), and including without
         limitation, any reclassification of securities (including any reverse
         stock split) or recapitalization or



                                      -6-
<PAGE>   9
         reorganization of the Corporation, any merger or consolidation of the
         Corporation with any of its Subsidiaries or any self tender offer for
         or repurchase of securities of the Corporation by the Corporation or
         any Subsidiary, which in any such case has the effect, directly or
         indirectly, of increasing the voting power (whether or not then
         exercisable) of a Related Person or increasing the share of the
         outstanding shares of any class of equity securities or securities
         convertible into equity securities of the Corporation or any Subsidiary
         beneficially owned by a Related Person, (F) the adoption of any plan or
         proposal for the liquidation or dissolution of the Corporation proposed
         by or on behalf of a Related Person, (G) any series or combination of
         transactions directly or indirectly having the same effect as any of
         the foregoing or (H) any agreement, contract or other arrangement
         providing directly or indirectly for any of the foregoing.

                           (ii) The term "Disinterested Director" shall mean any
         member of the Board of Directors who is not affiliated with, and not a
         nominee of, a Related Person and who was a member of the Board of
         Directors immediately prior to the time that the Related Person became
         a Related Person, and any successor to a Disinterested Director who is
         not affiliated with, and not a nominee of, the Related Person and who
         is recommended to succeed a Disinterested Director by a majority of
         Disinterested Directors who are then members of the Board of Directors.

                           (iii) The term "Fair Market Value" shall mean (A) in
         the case of stock, the highest closing sale price during the 30-day
         period commencing on the 40th day preceding the date in question of a
         share of such stock on the Composite Tape for New York Stock
         Exchange-Listed Stocks, or, if such stock is not quoted on the New York
         Stock Exchange-Composite Tape, on the principal United States
         securities exchange registered under the Exchange Act on which such
         stock is listed, or, if such stock is not listed on any such exchange,
         the highest closing sale price or bid quotation with respect to a share
         of such stock during the 30-day period commencing on the 40th day
         preceding the date in question on the National Association of
         Securities Dealers, Inc., Automated Quotation System or any system then
         in use, or if no such quotations are available, the fair market value
         on the date in question of a share of stock as determined by a majority
         of the Disinterested Directors in good faith; and (B) in the case of
         property other than cash or stock, the fair market value of such
         property as determined by a majority of the Disinterested Directors in
         good faith.

                           (iv) The term "Related Person" shall mean and include
         any individual, corporation, partnership or other "person" or "group"
         of persons or entities (as such terms are used in Rule



                                      -7-
<PAGE>   10
         13d under the Exchange Act), and the "Affiliates" and "Associates" (as
         such terms are in Rule 12b-2 under the Exchange Act) of any such
         individual, corporation, partnership or other person or group of
         persons, other than the Corporation or any Subsidiary or any employee
         benefit plan or plans sponsored by the Corporation or any Subsidiary,
         that (A) individually or together constitute the Beneficial Owner of an
         aggregate of ten percent (10%) or more of the outstanding Voting Stock
         of the Corporation, (B) is an Affiliate of the Corporation and at any
         time within the two-year period immediately prior to the date in
         question was the Beneficial Owner of ten percent (10%) or more of the
         outstanding Voting Stock of the Corporation, or (C) is an assignee or
         has otherwise succeeded to the beneficial ownership of any shares of
         Voting Stock that were at any time within the two-year period
         immediately prior to the date in question beneficially owned by a
         Related Person, if such assignment or succession shall have occurred in
         the course of a transaction or series of transactions not involving a
         public offering within the meaning of the Securities Act.

                  (v) The term "Subsidiary" shall mean any company fifty percent
         (50%) of whose outstanding equities having ordinary voting power in the
         election of directors is owned, directly or indirectly, by the
         Corporation or a Subsidiary or by the Corporation and one or more
         Subsidiaries.

                  (vi) The term "Voting Stock" shall mean all outstanding shares
         of capital stock of all classes and series of the Corporation entitled
         to vote generally in the election of directors, and each reference to a
         proportion of shares of Voting Stock shall refer to shares having such
         proportion of the number of shares entitled to be cast.

                  (vii) The term "Announcement Date" shall mean the date of
         first public announcement of the proposed Business Combination.

                  (viii) The term "Determination Date" shall mean the date on
         which the Related Person became a Related Person.

                  (ix) The term "Consummation Date" shall mean the date of the
         consummation of the Business Combination.

                  (x) A person shall be the "Beneficial Owner" of any Voting
         Stock: (A) which such person or any of its Affiliates or Associates
         beneficially owns, directly or indirectly; (B) which such person or any
         of its Affiliates or Associates has (1) the rights to acquire (whether
         or not such right is exercisable immediately) pursuant to any
         agreement, arrangement or understanding or upon the exercise of
         conversion rights, exchange rights, warrants or options, or



                                      -8-
<PAGE>   11
         otherwise, or (2) the rights to vote or direct the vote pursuant to any
         agreement, arrangement or understanding; or (C) which are beneficially
         owned, directly or indirectly, by any other person with which such
         person or any of its Affiliates or Associates has any agreement,
         arrangement or understanding for the purpose of acquiring, holding,
         voting or depositing of any shares of Voting Stock.

                  (xi) For purposes of subparagraphs (a)(ii)(A) and (a)(ii)(B)
         of this Article TWELFTH, the expression "other consideration to be
         received" shall include, without limitation, Common Stock and/or the
         shares of any other class or series of outstanding Voting Stock
         retained by the Corporation's existing stockholders in the event of a
         Business Combination in which the Corporation is the surviving
         corporation.

                  THIRTEENTH: Except as approved by a vote of not less than a
         majority of the directors of the Corporation then holding office (or,
         in the event that the Corporation at the time has a Related Person,
         then by a vote of not less than a majority of the Disinterested
         Directors), Articles ELEVENTH and TWELFTH hereof and this Article
         THIRTEENTH may not be amended, altered, changed, repealed or rescinded
         in any respect unless such action is approved by the affirmative vote
         of the holders of not less than eighty percent (80%) of the outstanding
         shares of Voting Stock of the Corporation, considered for purposes of
         this Article THIRTEENTH as one class; provided, however, that if there
         is a Related Person on the Record Date for the meeting at which such
         action is submitted to the stockholders for their consideration, such
         eighty percent (80%) vote must include the affirmative vote of at least
         two-thirds (2/3) of the outstanding shares of Voting Stock held by
         stockholders other than the Related Person. The voting requirements
         contained in this Article THIRTEENTH shall be in addition to voting
         requirements imposed by law or other provisions of this Certificate of
         Incorporation or any designation of preferences in favor of certain
         classes or series of classes of Preferred Stock of the Corporation or
         any agreement with any national securities exchange."



                                      -9-
<PAGE>   12
         IV. The foregoing amendment has been duly adopted in accordance with
the provisions of Section 242(b) of the Delaware General Corporation Law.

         IN WITNESS WHEREOF, this Certificate of Amendment is made this 29th day
of August, 1991.

                                              GERITECH INC.


                                              By:  /s/Charles A. Faden
                                                   ---------------------------
                                                   Charles A. Faden, President
                                                   and Chief Executive Officer

ATTEST:


By:/s/ Brian Hayden
   -----------------------------
       Brian Hayden, Secretary


                                      -10-
<PAGE>   13
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                                  GERITECH INC.

                                     * * * *

                       Adopted in accordance with Sections
                     242 and 245 of the General Corporation
                          Law of the State of Delaware

                                     * * * *


     CHARLES A. FADEN and BRIAN J. HAYDEN, being the President and Secretary,
respectively, of Geritech Inc. (the "Corporation"), a corporation duly organized
and existing under and by virtue of the General Corporation Law of the State of
Delaware, DO HEREBY CERTIFY THAT:

         FIRST: The Corporation filed its original Certificate of Incorporation
on October 22, 1986 under the name of Geritech Inc.

         SECOND: The Corporation filed amendments to the Certificate of
Incorporation on September 9, 1987 and February 4, 1988.

         THIRD: The Corporation filed a Restated Certificate of Incorporation on
June 24, 1988.

         FOURTH: The Corporation filed a Certificate of Designation of Series D
Preferred Stock on July 25, 1989.

         FIFTH: The Board of Directors of the Corporation at a meeting held on
November 28, 1990, and in accordance with Sections 242, 245 and 141(i) of the
General Corporation Law of the State of Delaware, adopted a resolution
authorizing the Corporation to amend, integrate and restate the Certificate of
Incorporation. The Restated Certificate of Incorporation of the Corporation
which sets forth as amended, and which restates and integrates, the Certificate
of Incorporation of the Corporation as heretofore amended and supplemented is
attached hereto and incorporated herein as Exhibit A.

         SIXTH: In accordance with Sections 228, 242 and 245 of the General
Corporate Law of the State of Delaware, the holders of a majority of the issued
and outstanding shares of Common Stock, a majority of the issued and outstanding
shares of Series A Preferred Stock, a majority of the issued and outstanding
shares of Series B Preferred Stock, a majority of the issued and outstanding
shares of Series C Preferred Stock and a majority of the issued and outstanding
shares of Series D Preferred Stock of the Corporation, and the holders of sixty
seven percent (67%) of the issued and outstanding shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock voting together as a single class, adopted the Restated Certificate of

<PAGE>   14
Incorporation, attached hereto as Exhibit A, by written consents in lieu of an
annual meeting of the stockholders of the Corporation, as of December 6, 1990.

         SEVENTH: In accordance with Section 228 of the General Corporation Law
of the State of Delaware, written notice has been given to the stockholders who
have not consented in writing.

         IN WITNESS WHEREOF, the undersigned has caused this Restated
Certificate of Incorporation to be signed by Charles A. Faden, its President,
and Brian J. Hayden, its Secretary this 6th day of December, 1990.

                                      GERITECH INC.,
                                      a Delaware Corporation


                                      By: /s/ Charles A. Faden
                                          --------------------
                                           Charles A. Faden
                                           President

ATTEST:

By: /s/ Brian J. Hayden
    -------------------
        Brian J. Hayden
        Secretary

                                      -2-

<PAGE>   15
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                                  GERITECH INC.


         FIRST:  The name of the Corporation is Geritech Inc.

         SECOND: The registered office of the Corporation in the State of
Delaware is to be located at the Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801. The name of its registered agent
at such address is The Corporation Trust Company.

         THIRD: The purpose of the Corporation is to engage in any lawful acts
or activities for which corporations may be organized under the General
Corporation Law of Delaware.

         FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is six million five hundred thousand
(6,500,000). The Corporation is authorized to issue two classes of stock
designated "Common Stock" and "Preferred Stock," respectively. The total number
of shares of Common Stock authorized to be issued by the Corporation is four
million (4,000,000), and each such share of Common Stock shall have a par value
of $0.01 per share. The total number of shares of Preferred Stock authorized to
be issued by the Corporation is two million five hundred thousand (2,500,000)
and each such share shall have a par value of $0.01 per share.

         FIFTH: The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the Corporation is hereby authorized, by
adopting a resolution or resolutions and filing a certificate or certificates
pursuant to the applicable provisions of the General Corporation Law of
Delaware, to establish from time to time the number of shares to be included in
each such series of Preferred Stock, and to fix the designation, powers,
preferences and rights of the shares of each such series and the qualifications,
limitations or restrictions thereof, including but not limited to the fixing or
alteration of the dividend rights, dividend rate or rates, conversion rights,
voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation preferences of
any wholly unissued series of shares of Preferred Stock, or any of them, and to
increase or decrease the number of shares of any series subsequent to the
issuance of shares of that series, but not below the number of shares of such
series then outstanding. In case the number of shares of any series shall be so
decreased, the shares removed from such series by such decrease shall resume the
status which they had prior to the adoption of the resolution originally fixing
the number of shares of such series.

         270,000 shares of Preferred Stock are hereby designated as the Series A
Preferred Stock of the Corporation ("Series A Stock"), 400,000 shares of
Preferred Stock are hereby designated as Series

<PAGE>   16
B Preferred Stock of the Corporation ("Series B Stock"), 835,606 shares of
Preferred Stock are hereby designated as the Series C Preferred Stock of the
Corporation ("Series C Stock"), 233,531 share of Preferred Stock are hereby
designated as the Series D Preferred Stock of the Corporation "Series D Stock")
and 262,534 shares of Preferred Stock are hereby designated as the Series E
Preferred Stock of the Corporation("Series E Stock"). The powers, preferences,
rights, qualifications, limitations and restrictions of the Series A Stock,
Series B Stock, Series C Stock, Series D Stock and Series E Stock are set forth
below in this Article FIFTH.

         1.       DIVIDEND RIGHTS.

                  (a) Series A Stock. Subject to the prior rights of the holders
of Series B Stock, Series C Stock, Series D Stock and Series E Stock, the
holders of the Series A Stock shall be entitled to receive, when and as declared
by the Board of Directors of the Corporation, out of funds and assets of the
Corporation legally available therefor, noncumulative dividends in the total
amount of $0.10 per share of Series A Stock per calendar year. No dividend or
distribution (as hereinafter defined) shall be declared or made with respect to
the Common Stock of the Corporation during any calendar year until dividends in
a total amount equal to $0.10 per share of Series A Stock shall have been
declared and paid (or set apart for payment) in full in such calendar year.
Dividends on the Series A Stock shall not be cumulative, and no right shall
accrue to the holders of Series A Stock by reason of the fact that the
Corporation may fail to declare or pay dividends on the Series A Stock in the
amount of $0.10 per share or in any amount in any previous calendar year,
whether or not the earnings of the Corporation in that previous calendar year
were sufficient to pay such dividends in whole or in part.

                  (b) Series B Stock. The holders of the Series B Stock shall be
entitled to receive, when and as declared by the Board of Directors of the
Corporation, out of funds and assets of the Corporation legally available
therefor, cumulative dividends, payable in cash, which, commencing on the date
of issuance with respect to each share of Series B Stock, shall accumulate
ratably from day to day at the rate of $0.50 per annum per share of Series B
Stock, whether or not earned or declared. Nothing in this Section 1(b) is
intended to obligate the Corporation to declare any dividends on the Series B
Stock. No dividend or distribution (as hereinafter defined) shall be declared or
made with respect to the Series A Stock or the Common Stock of the Corporation
during any calendar year until dividends in a total amount equal to the greater
of (i) $0.50 per share of Series B Stock then outstanding or (ii) all unpaid
cumulative dividends then accumulated on the outstanding Series B Stock shall
have been declared and paid (or set apart for payment) in full in such calendar
year. Any accumulation of dividends on the Series B Stock shall not bear
interest.

                                      -2-
<PAGE>   17
                  (c) Series C Stock. The holders of the Series C Stock shall be
entitled to receive, when and as declared by the Board of Directors of the
Corporation, out of funds and assets of the Corporation legally available
therefor, cumulative dividends, payable in cash, which, commencing on the date
of issuance with respect to each share of Series C Stock, shall accumulate
ratably from day to day at the rate of 7.575% per annum of the Series C
Liquidation Value (plus any accumulated but unpaid dividends) of each share of
Series C Stock, whether or not earned or declared. Nothing in this Section 1(c)
is intended to obligate the Corporation to declare any dividends on the Series C
Stock. No dividend or distribution (as hereinafter defined) shall be declared or
made with respect to the Series A Stock or the Common Stock of the Corporation
during any calendar year until dividends in a total amount equal to the greater
of (i) 7.575% per annum of the Series C Liquidation Value (plus any accumulated
but unpaid dividends) of each share of Series C Stock then outstanding or (ii)
all unpaid cumulative dividends then accumulated on the outstanding Series C
Stock shall have been declared and paid (or set apart for payment) in full in
such calendar year. Any accumulation of dividends on the Series C Stock shall
not bear interest. The "Series C Liquidation Value" shall equal $6.60 per share.

                  (d) Series D Stock. The holders of the Series D Stock shall be
entitled to receive, when and as declared by the Board of Directors of the
Corporation, out of funds and assets of the Corporation legally available
therefor, cumulative dividends, payable in cash, which, commencing on the date
of issuance with respect to each share of Series D Stock, shall accumulate
ratably from day to day at the rate of $0.975 per annum per share of Series D
Stock, whether or not earned or declared. Nothing in this Section 1(d) is
intended to obligate the Corporation to declare any dividends on the Series D
Stock. No dividend or distribution (as hereinafter defined) shall be declared or
made with respect to the Series A Stock or the Common Stock of the Corporation
during any calendar year until dividends in a total amount equal to the greater
of (i) $0.975 per share of Series D Stock then outstanding or (ii) all unpaid
cumulative dividends then accumulated on the outstanding Series D Stock shall
have been declared and paid (or set apart for payment) in full in such calendar
year. Any accumulation of dividends on the Series D Stock shall not bear
interest.

                  (e) Series E Stock. The holders of the Series E Stock shall be
entitled to receive, when and as declared by the Board of Directors of the
Corporation, out of funds and assets of the Corporation legally available
therefor, cumulative dividends, payable in cash, which, commencing on the date
of issuance with respect to each share of Series E Stock, shall accumulate
ratably from day to day at the rate of $1.44 per annum per share of Series E
Stock, whether or not earned or declared. Nothing in this Section 1(e) is
intended to obligate the Corporation to declare any

                                      -3-

<PAGE>   18
dividends on the Series E Stock. No dividend or distribution (as hereinafter
defined) shall be declared or made with respect to the Series A Stock or the
Common Stock of the Corporation during any calendar year until dividends in a
total amount equal to the greater of (i) $1.44 per share of Series E Stock then
outstanding or (ii) all unpaid cumulative dividends then accumulated on the
outstanding Series E Stock shall have been declared and paid (or set apart for
payment) in full in such calendar year. Any accumulation of dividends on the
Series E Stock shall not bear interest.

                  (f) Partial Dividend Payments. If at any time less than the
full amount of accumulated dividends is paid with respect to the Series B Stock,
Series C Stock, Series D Stock and Series E Stock then outstanding, dividends
shall be paid ratably among the holders of the Series B Stock, Series C Stock,
Series D Stock and Series E Stock based upon the total amount of accumulated
dividends with respect to each series of stock.

                  (g) Distribution. As used in this Section 1, the term
"distribution" shall mean a transfer of cash, property or securities without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of the Corporation; provided, however, that the term
"distribution" shall not include (i) a dividend in shares of the Common Stock of
the Corporation, (ii) any purchase or redemption by the Corporation of shares of
its Series A Stock, Series B Stock, Series C Stock, Series D Stock or Series E
Stock pursuant to the provisions of Section 4 hereof, or (iii) any purchase or
redemption by the Corporation of shares of its Common Stock from a current or
former employee, officer, director, consultant of, or other person performing
services for the Corporation if such purchase or redemption is approved by the
Corporation's Board of Directors.

                  (h) Waiver of Dividends. An affirmative vote of the holders of
at least 67% of Series B Stock, Series C Stock, Series D Stock and Series E
Stock, voting together as a single class, may waive all or any portion of
accrued but unpaid dividends on the Series B Stock, Series C Stock, Series D
Stock and Series E Stock. Such waiver shall be pro rata among the holders of
Series B Stock, Series C Stock, Series D Stock and Series E Stock based upon the
total amount of accrued dividends with respect to each such series of Preferred
Stock.

         2.       LIQUIDATION.

                  (a) Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of the Series A Stock, Series B Stock, Series C Stock, Series D
Stock and Series E Stock then outstanding shall, on an equal priority pari passu
basis, be entitled, prior and in preference in all respects to the holders of

                                      -4-

<PAGE>   19
the Common Stock, to be paid first out of the assets and funds of the
Corporation legally available for distribution to holders of the Corporation's
capital stock of all classes, whether such assets are capital, surplus or
earnings, (i) in the case of the Series A Stock, an amount equal to $1.25 per
share of Series A Stock plus all declared and unpaid dividends thereon, to and
including the date full payment of the amounts payable to the holders of Series
A Stock under this Section 2(a) shall be tendered to the holders of the Series A
Stock, (ii) in the case of the Series B Stock, an amount equal to $5.00 per
share of Series B Stock plus all accumulated and unpaid dividends thereon,
whether or not earned or declared, to and including the date full payment of the
amounts payable to the holders of Series B Stock under this Section 2(a) shall
be tendered to the holders of the Series B Stock, (iii) in the case of the
Series C Stock, an amount equal to $6.60 per share of Series C Stock plus all
accumulated and unpaid dividends thereon, whether or not earned or declared, to
and including the date full payment of the amounts payable to the holders of
Series C Stock under this Section 2(a) shall be tendered to the holders of the
Series C Stock, (iv) in the case of the Series D Stock, an amount equal to
$12.85 per share of Series D Stock plus all accumulated and unpaid dividends
thereon, whether or not earned or declared, to and including the date full
payment of the amounts payable to the holders of Series D Stock under this
Section 2(a) shall be tendered to the holders of the Series D Stock, and (v) in
the case of the Series E Stock, an amount equal to $19.05 per share of Series E
Stock plus all accumulated and unpaid dividends thereon, whether or not earned
or declared, to and including the date full payment of the amounts payable to
the holders of Series E Stock under this Section 2(a) shall be tendered to the
holders of the Series E Stock.

                  (b) Insufficient Assets. If the funds and assets of the
Corporation shall be insufficient to permit the payment in full to the holders
of the Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series
E Stock of the preferential amounts described in Section 2(a) above, then the
entire funds and assets of the Corporation legally available for such
distribution to stockholders shall be distributed pro rata among the holders of
the Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock in proportion to the amounts of their respective aggregate liquidation
preferences as described in Section 2(a) above. After payment in full of the
aforesaid preferential amounts shall have been made to the holders of the Series
A Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock,
then, provided that such liquidation, dissolution or winding up contemplates a
distribution to holders of Common Stock, all remaining assets and funds of the
Corporation legally available for distribution to stockholders shall be
distributed ratably among the holders of the Common Stock in proportion to the
number of shares of Common Stock then held by each of them.

                                      -5-

<PAGE>   20
                  (c) Special Treatment of Reorganizations, Mergers,
Consolidations and Sales of Assets. A reorganization, consolidation or merger of
the Corporation with or into any other corporation or corporations or other
entity or entities, or a sale, conveyance, lease, transfer or other disposition
of all or substantially all of the Corporation's properties and assets, or a
sale or other transfer, in a single transaction or in a series of related
transactions, of fifty percent (50%) or more of the Corporation's outstanding
stock shall be deemed to be a liquidation, dissolution and winding up of the
Corporation under this Section 2.

                  (d) Special Election. Each holder of Series A Stock, each
holder of Series B Stock, each holder of Series C Stock, each holder of Series D
Stock and each holder of Series E Stock, shall individually have the right to
elect the benefits of the provisions of Section 5(h) hereof in lieu of receiving
payment in liquidation, dissolution or winding up of the Corporation pursuant to
this Section 2.

                  (e) Distributions Other than Cash. Whenever a distribution
provided for in this Section 2 shall be payable in property other than cash, the
value of such distribution shall be the fair market value of such property as
determined in good faith by the Board of Directors of the Corporation.

         3.       VOTING RIGHTS.

         Except as otherwise expressly required by applicable law or as
otherwise provided herein, the rights of the holders of Series A Stock, the
holders of Series B Stock, the holders of Series C Stock, the holders of Series
D Stock, the holders of Series E Stock and the holders of Common Stock to vote
on any matter submitted to stockholders of the Corporation shall be as follows:

                  (a) Common Stock. Each issued and outstanding share of Common
Stock shall have one (1) vote. Except as provided herein, the holders of Common
Stock, Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series
E Stock will vote together as one class on all matters submitted to the
Corporation's stockholders for approval.

                  (b) Series A Stock. Except as otherwise expressly required by
applicable law or as otherwise provided herein, the Series A Stock shall have no
voting rights whatsoever. In the event that the Series A Stock shall have voting
rights under applicable law or otherwise provided herein, then each share of
Series A Stock shall have that number of votes which is equal to the number of
whole shares of Common Stock into which such share of Series A Stock could be
converted, pursuant to the provisions of Section 5 hereof, at the record date
for the determination of stockholders entitled to vote on such matter or, if no
such record date is established, at the date such vote is taken or any written
consent

                                      -6-

<PAGE>   21
of stockholders is solicited, and the determination of the number of whole
shares of Common Stock into which a share of Series A Stock is convertible for
the purposes of calculating the number of votes the holder of Series A Stock may
cast in respect of such holder's Series A Stock shall be calculated based upon
the total number of shares of Series A Stock held by such holder on the
applicable record date, and not upon each share of Series A Stock held by such
holder.

                  (c) Series B Stock. Except as otherwise expressly required by
applicable law or as otherwise provided herein, and subject to the second
sentence of this Section 3(c), each share of Series B Stock shall have that
number of votes which is equal to the product obtained by multiplying (i) 1.675
by (ii) the number of whole shares of Common Stock into which such share of
Series B Stock could be converted, pursuant to the provisions of Section 5
hereof, at the record date for the determination of stockholders entitled to
vote on such matter or, if no such record date is established, at the date such
vote is taken or any written consent of stockholders is solicited. The
determination of the number of whole shares of Common Stock into which a share
of Series B Stock is convertible for the purposes of calculating the number of
votes the holder of Series B Stock may cast in respect of such holder's Series B
Stock shall be calculated based upon the total number of shares of Series B
Stock held by such holder on the applicable record date, and not upon each share
of Series B Stock held by such holder.

                  (d) Series C Stock. Except as otherwise expressly required by
applicable law, as otherwise provided in this Section 3(d) with respect to the
election of directors or as otherwise provided herein, each share of Series C
Stock shall have that number of votes which is equal to the number of whole
shares of Common Stock into which such share of Series C Stock could be
converted, pursuant to the provisions of Section 5 hereof, at the record date
for the determination of stockholders entitled to vote on such matter or, if no
such record date is established, at the date such vote is taken or any written
consent of stockholders is solicited, and the determination of the number of
whole shares of Common Stock into which a share of Series C Stock is convertible
for the purposes of calculating the number of votes the holder of Series C Stock
may cast in respect of such holder's Series C Stock shall be calculated based
upon the total number of shares of Series C Stock held by such holder on the
applicable record date, and not upon each share of Series C Stock held by such
holder. In the election of directors, the holders of the Series C Stock voting
separately as a single class to the exclusion of all other classes of the
Corporation's capital stock (with each share of Series C Stock entitled to one
vote) shall be entitled to elect two directors to the Corporation's board of
directors.

                                      -7-

<PAGE>   22
                  (e) Series D Stock. Except as otherwise expressly required by
applicable law or as otherwise provided herein, each share of Series D Stock
shall have that number of votes which is equal to the number of whole shares of
Common Stock into which such share of Series D Stock could be converted,
pursuant to the provisions of Section 5 hereof, at the record date for the
determination of stockholders entitled to vote on such matter or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders is solicited, and the determination of the number of
whole shares of Common Stock into which a share of Series D Stock is convertible
for the purposes of calculating the number of votes the holder of Series D Stock
may cast in respect of such holder's Series D Stock shall be calculated based
upon the total number of shares of Series D Stock held by such holder on the
applicable record date, and not upon each share of Series D Stock held by such
holder.

                  (f) Series E Stock. Except as otherwise expressly required by
applicable law or as otherwise provided herein, each share of Series E Stock
shall have that number of votes which is equal to the number of whole shares of
Common Stock into which such share of Series E Stock could be converted,
pursuant to the provisions of Section 5 hereof, at the record date for the
determination of stockholders entitled to vote on such matter or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders is solicited, and the determination of the number of
whole shares of Common Stock into which a share of Series E Stock is convertible
for the purposes of calculating the number of votes the holder of Series E Stock
may cast in respect of such holder's Series E Stock shall be calculated based
upon the total number of shares of Series E Stock held by such holder on the
applicable record date, and not upon each share of Series E Stock held by such
holder.

         4.       REDEMPTION.

                  (a)      Voluntary Redemptions.

                        (i) All Preferred Stock. Provided that the holders of at
least 67% of the then outstanding shares of Series B Stock, Series C Stock,
Series D Stock and Series E Stock, voting together as a single class, have first
consented in writing in advance to such redemption, the Corporation may, at any
time after September 30, 1995, provided that it may lawfully do so, redeem in
whole or in part: (1) the Series A Stock by paying in cash therefor on the
"Redemption Date" (as defined in Section 4(d)(i) below) a sum equal to $1.25 per
share of Series A Stock plus all declared and unpaid dividends thereon (such sum
to be referred to herein as the "Series A Redemption Price"), (2) the Series B
Stock by paying in cash therefor on the "Redemption Date" (as defined in Section
4(d)(i) below) a sum equal to $5.00 per share of Series B Stock plus all
accumulated and unpaid dividends thereon, whether or not earned or

                                      -8-


<PAGE>   23
declared (such sum to be referred to herein as the "Series B Redemption Price"),
(3) the Series C Stock by paying in cash therefor on the "Redemption Date" (as
defined in Section 4(d)(i) below) a sum equal to $6.60 per share of Series C
Stock plus all accumulated and unpaid dividends thereon, whether or not earned
or declared (such sum to be referred to herein as the "Series C Redemption
Price"), (4) the Series D Stock by paying in cash therefor on the "Redemption
Date" (as defined in Section 4(d)(i) below) a sum equal to $12.85 per share of
Series D Stock plus all accumulated and unpaid dividends thereon, whether or not
earned or declared (such sum to be referred to herein as the "Series D
Redemption Price"), (5) the Series E Stock by paying in cash therefor on the
"Redemption Date" (as defined in Section 4(d))i) below) a sum equal to $19.05
per share of Series E Stock plus all accumulated and unpaid dividends thereon,
whether or not earned or declared (such sum to be referred to herein as the
"Series E Redemption Price").

                        (ii) A Single Series of Preferred Stock. The Corporation
may, at any time after September 30, 1995, provided that it may lawfully do so,
redeem in whole or in part any single series of Preferred Stock, provided that
the holders of at least 67% of the then outstanding shares of Series B Stock,
Series C Stock, Series D Stock and Series E Stock, voting together as a single
class, plus the holders of at least a majority of the then outstanding shares of
such series of Preferred Stock for which the Corporation is electing to redeem,
have first consented in writing in advance to such redemption. Such redemption
shall be made for: (1) the Series A Stock by paying therefor on the "Redemption
Date" (as defined in Section 4(d)(ii) below) the Series A Redemption Price, (2)
the Series B Stock, by paying therefor on the "Redemption Date" (as defined in
Section 4(d)(ii) below) the Series B Redemption Price, (3) the Series C Stock by
paying therefor on the "Redemption Date" (as defined in Section 4(d)(ii) below)
the Series C Redemption Price, (4) the Series D Stock by paying therefor on the
"Redemption Date" (as defined in Section 4(d)(ii) below) the Series D Redemption
Price, and (5) the Series E Stock by paying therefor on the "Redemption Date"
(as defined in Section 4(d)(ii) below) the Series E Redemption Price.

                  (b) Requested Redemption. Provided that the holders of at
least 67% of the then outstanding shares of Series B Stock, Series C Stock,
Series D Stock and Series E Stock, voting together as a single class, have first
consented in writing in advance to such redemption, at any time after September
30, 1997, the holders of a majority of the outstanding Series C Stock, Series D
Stock or Series E Stock may request redemption of all the outstanding Series C
Stock, Series D Stock or Series E Stock, as the case may be, at a price per
share payable in cash equal to the Series C Redemption Price, the Series D
Redemption Price or the Series E Redemption Price, as applicable, by delivering
written notice to the Corporation. Upon the receipt of a Preliminary Redemption
Notice

                                      -9-


<PAGE>   24
(as defined in Section 4(d)(iii) below), the holders of a majority of each of
the other series of Preferred Stock may each request redemption of all
outstanding shares of such series of Preferred Stock, at a price per share
payable in cash equal to the respective Redemption Prices thereof, by delivery
of written notice to the Corporation within fifteen (15) days after receipt of
the Preliminary Redemption Notice.

                  (c) Partial Redemption. Unless otherwise provided herein:

                        (i) in the event of a partial redemption involving more
than one series of Preferred Stock, such redemption shall be made pro rata among
all of such series of Preferred Stock; then

                        (ii) any partial redemption shall be made pro rata among
all holders of each individual series of Preferred Stock.

                  (d)      Mechanics of Redemption.

                        (i) Redemption Procedure-Voluntary, For All Preferred
Stock. At least thirty (30) but no more than sixty (60) days prior to the date
fixed for any redemption of Series A Stock, Series B Stock, Series C Stock
Series D Stock and Series E Stock under Section 4(a)(i) above (the "Redemption
Date"), written notice (the "Redemption Notice") shall be sent by registered or
certified mail, postage prepaid, to each holder of record of Series A Stock,
Series B Stock, Series C Stock, Series D Stock and Series E Stock at the close
of business on the business day next preceding the day on which the Redemption
Notice is sent, at the address last shown on the records of the Corporation for
such holder or given by such holder to the Corporation for the purpose of notice
or, if no such address appears or is given, at the place where the principal
executive office of the Corporation is then located. The Redemption Notice shall
notify each holder of Series A Stock, Series B Stock, Series C Stock, Series D
Stock and Series E Stock of the redemption to be effected, specifying the
Redemption Date, the Series A Redemption Price, the Series B Redemption Price,
the Series C Redemption Price, the Series D Redemption Price and the Series E
Redemption Price, the place at which payment may be obtained and the date
("Termination Date") on which such holder's conversion rights (as set forth in
Section 5 hereof) as to such shares terminate (which Termination Date shall in
no event be earlier than the close of business on the date five (5) days prior
to the Redemption Date) and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, the certificate(s)
representing the shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock to be redeemed. Shares of Series A Stock,
Series B Stock, Series C Stock, Series D Stock and Series E Stock that have been
converted into Common Stock prior to the Termination Date shall not be
redeemable under this Section 4. Notwithstanding anything here to the

                                      -10-


<PAGE>   25
contrary, if there shall be a default or delay in the payment of the Series A
Redemption Price, the Series B Redemption Price, the Series C Redemption Price,
the Series D Redemption Price or the Series E Redemption Price, then the holders
of the shares of Series A Stock, Series B Stock, Series C Stock, Series D Stock
and Series E Stock to be redeemed shall retain all rights, preferences and
privileges relating to their shares of Series A Stock, Series B Stock, Series C
Stock, Series D Stock and Series E Stock, including without limitation the
conversion rights set forth in Section 5 hereof, until the Series A Redemption
Price, the Series B Redemption Price, the Series C Redemption Price, the Series
D Redemption Price and the Series E Redemption Price shall have been paid in
full. Except as provided in Section 4(d)(iv) hereof, on and after the Redemption
Date each holder of Series A Stock, Series B Stock, Series C Stock, Series D
Stock and Series E Stock shall surrender to the Corporation the certificate(s)
representing the shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock owned by such holder to be redeemed, duly
endorsed for transfer to the Corporation, and certificate(s) shall promptly be
issued representing any unredeemed shares.

                        (ii) Redemption Procedure-Voluntary, For a Single Series
of Preferred Stock. At least thirty (30) but not more than sixty (60) days prior
to the date fixed for any redemption of any single series of Preferred Stock
under Section 4(a)(ii) above (the "Redemption Date"), written notice (the
"Redemption Notice") shall be sent by registered or certified mail, postage
prepaid, to each holder of record of such series of Preferred Stock at the close
of business on the business day next preceding the day on which the Redemption
Notice is sent, at the address last shown on the records of the Corporation for
such holder or given by such holder to the Corporation for the purpose of notice
or, if no such address appears or is given, at the place where the principal
executive office of the Corporation is then located. The Redemption Notice shall
notify each holder of such series of Preferred Stock of the redemption to be
effected, specifying the Redemption Date, the applicable Redemption Price, the
place at which payment may be obtained and the date ("Termination Date") on
which such holder's conversion rights (as set forth in Section 5 hereof) as to
such shares terminate (which Termination Date shall in no event be earlier than
the close of business on the date five (5) days prior to the Redemption Date)
and calling upon such holder to surrender to the Corporation, in the manner and
at the place designated, the certificate(s) representing the shares of such
series of Preferred Stock to be redeemed. Shares of such series of Preferred
Stock that have been converted into Common Stock prior to the Termination Date
shall not be redeemable under this Section 4. Notwithstanding anything herein to
the contrary, if there shall be a default or delay in the payment of the
applicable Redemption Price, then the holders of the shares of such series of
Preferred Stock to be redeemed shall retain all rights, preferences and
privileges relating to their shares of such series of Preferred Stock,

                                      -11-


<PAGE>   26
including without limitation the conversion rights set forth in Section 5
hereof, until the applicable Redemption Price shall have been paid in full.
Except as provided in Section 4(d)(iv) hereof, on and after the Redemption Date
each holder of such series of Preferred Stock shall surrender to the Corporation
the certificate(s) representing the shares of such series of Preferred Stock
owned by such holder to be redeemed, duly endorsed for transfer to the
Corporation, and certificate(s) shall promptly be issued representing any
unredeemed shares.

                        (iii) Redemption Procedure - Requested. Within fifteen
(15) days after receipt of written notice of a request for redemption of the
Series C Stock, Series D Stock or Series E Stock pursuant to Section 4(b) above,
the Corporation will deliver a written notice (the "Preliminary Redemption
Notice"), by registered or certified mail and postage prepaid, to each holder of
record of each of the other series of Preferred Stock at the close of business
on the business day next preceding the day on which the Preliminary Redemption
Notice is sent, at the address last shown on the records of the Corporation for
such holder or given by such holder for the purpose of notice or, if no such
address appears or is given, at the place where the principal executive office
of the Corporation is then located. The Preliminary Redemption Notice shall
notify each holder of each of the other series of Preferred Stock of the
redemption of Series C Stock, Series D Stock or Series E Stock, as applicable,
and the rights of the holders of each of the other series of Preferred Stock to
request redemption under Section 4(b). The Corporation will fix a date for
redemption of the Series C Stock, Series D Stock or Series E Stock, as
applicable, and any of the other series of Preferred Stock ("Redemption Date"),
by delivering written notice (the "Final Redemption Notice") of such date by
registered or certified mail, postage prepaid within thirty (30) days after the
Corporation has delivered the Preliminary Redemption Notice. The Final
Redemption Notice will be sent to each holder of record of Series C Stock,
Series D Stock or Series E Stock, as applicable, and any of the other series of
Preferred Stock at the close of business on the business day next preceding the
day on which the Final Redemption Notice is sent, at the address last shown on
the records of the Corporation for such holder or given by such holder to the
Corporation for the purpose of notice or, if no such address appears or is
given, at the place where the principal executive office of the Corporation is
then located. The Redemption Date shall be at least forty-five (45) days but no
more than seventy-five (75) days after the Corporation's delivery of the
Preliminary Redemption Notice. The Final Redemption Notice shall notify each
holder of Series C Stock, Series D Stock or Series E Stock, as applicable, and
any of the other series of Preferred Stock of the redemption to be effected,
specifying the Redemption Date, the Series C Redemption Price, the Series D
Redemption Price or the Series E Redemption Price, as applicable, and the
applicable Redemption Price for any of the other series of Preferred Stock, the
place at which payment may be obtained and the

                                      -12-


<PAGE>   27
date ("Termination Date") on which such holder's conversion rights (as set forth
in Section 5 hereof) as to such shares terminate (which Termination Date shall
in no event be earlier than the close of business on the date five (5) days
prior to the Redemption Date) and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, the certificate(s)
representing the shares of Series C Stock, Series D Stock or Series E Stock, as
applicable, and any of the other series of Preferred Stock to be redeemed.
Shares of Series A Stock, Series B Stock, Series C Stock, Series D Stock and
Series E Stock that have been converted into Common Stock, prior to the
Termination Date shall not be redeemable under this Section 4. Notwithstanding
anything herein to the contrary, if there shall be a default or delay in the
payment of the Series A Redemption Price, the Series B Redemption Price, the
Series C Redemption Price, the Series D Redemption Price or the Series E
Redemption Price, then the holders of the shares of Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock to be redeemed shall
retain all rights, preferences and privileges relating to their shares of Series
A Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock,
including without limitation the conversion rights set forth in Section 5
hereof, until the Series A Redemption Price, the Series B Redemption Price, the
Series C Redemption Price, the Series D Redemption Price and the Series E
Redemption Price, as applicable, shall have been paid in full. Except as
provided in Section 4(d)(iv) hereof, on and after the Redemption Date each
holder of Series A Stock, Series B Stock, Series C Stock, Series D Stock, and
Series E Stock shall surrender to the Corporation the certificate(s)
representing the shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock owned by such holder to be redeemed, duly
endorsed for transfer to the Corporation, and certificate(s) shall promptly be
issued representing any unredeemed shares.

                        (iv) Effect of Redemption. From and after any Redemption
Date, unless there shall have been a default or delay in payment of the Series A
Redemption Price, the Series B Redemption Price, the Series C Redemption Price,
the Series D Redemption Price or the Series E Redemption Price, all rights of
the holders of such redeemed shares as holders of Series A Stock, Series B
Stock, Series C Stock, Series D Stock, and/or Series E Stock (except the right
to receive the Series A Redemption Price, the Series B Redemption Price, the
Series C Redemption Price, the Series D Redemption Price and/or Series E
Redemption Price without interest upon surrender of their certificate(s)) shall
cease with respect to such redeemed shares, and such shares shall not thereafter
be transferred on the books of the Corporation or be deemed to be outstanding
for any purpose whatsoever. Subject to this Section 4(d), if the assets and
funds of the Corporation legally available for redemption of shares of Series A
Stock, Series B

                                      -13-

<PAGE>   28
Stock, Series C Stock, Series D Stock and Series E Stock are insufficient to
redeem the total number of shares of Series A Stock, Series B Stock, Series C
Stock, Series D Stock and Series E Stock to be redeemed on such date, those
funds which are legally available will be used to redeem the maximum possible
number of such shares of Series A Stock, Series B Stock, Series C Stock, Series
D Stock and Series E Stock ratably among the holders of such shares of Series A
Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock to be
redeemed in the same proportion in which such shares would be redeemed under
Section 4(c). The shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock not redeemed shall remain outstanding and be
entitled to all the rights and preferences provided herein.

                        (v) Payment of Redemption Price. Three (3) business days
prior to the Redemption Date, the Corporation shall deposit the Series A
Redemption Price, the Series B Redemption Price, the Series C Redemption Price,
the Series D Redemption Price and the Series E Redemption Price for all
outstanding shares of Series A Stock, Series B Stock, Series C Stock, Series D
Stock and Series E Stock designated for redemption in the Redemption Notice, and
not yet redeemed or converted, with a bank or trust company having aggregate
capital and surplus in excess of $50,000,000 as a trust fund for the benefit of
the respective holders of the shares designated for redemption and not yet
redeemed. Simultaneously, the Corporation shall deposit irrevocable instructions
and authority to such bank or trust company to pay, on and after the date fixed
for redemption or prior thereto, the Series A Redemption Price, the Series B
Redemption Price, the Series C Redemption Price, the Series D Redemption Price
and the Series E Redemption Price to the holders of the Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock to be redeemed,
respectively, upon surrender of their certificates. Any moneys deposited by the
Corporation pursuant to this Section 4(d)(v) for the redemption of shares of
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock which are thereafter converted into shares of Common Stock pursuant to
Section 5 hereof prior to the close of business on the Redemption Date shall be
returned to the Corporation forthwith upon such conversion. The balance of any
moneys deposited by the Corporation pursuant to this Section 4(d)(v) remaining
unclaimed at the expiration of one (1) year following the Redemption Date shall
thereafter be returned to the Corporation together with any interest accrued
thereon, provided that the stockholders to which such monies would be payable
hereunder shall be entitled, upon proof of ownership of the Series A Stock,
Series B Stock, Series C Stock, Series D Stock and/or Series E Stock payment of
any bond requested by the Corporation, to receive such monies without interest
from the Redemption Date.

         5.       CONVERSION RIGHTS.

         The holders of the Series A Stock, the holders of the Series B Stock,
the holders of the Series C Stock, the holders of the Series D Stock and the
holders of the Series E Stock shall have the

                                      -14-

<PAGE>   29
following rights with respect to the conversion of the Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock into shares of Common
Stock:

                  (a) General. Subject to and in compliance with the provisions
of this Section 5, any share of Series A Stock, any share of Series B Stock, any
share of Series C Stock, any share of Series D Stock and any share of Series E
Stock may, at the option of the holder, be converted at any time into fully-paid
and nonassessable shares of Common Stock. The number of shares of Common Stock
which a holder of Series A Stock shall be entitled to receive upon conversion
shall be the product obtained by multiplying the Series A Conversion Rate then
in effect (as defined in Section 5(c)) by the number of shares of Series A Stock
being converted. The number of shares of Common Stock which a holder of Series B
Stock shall be entitled to receive upon conversion shall be the product obtained
by multiplying the Series B Conversion Rate then in effect (as defined in
Section 5(c)) by the number of shares of Series B Stock being converted. The
number of shares of Common Stock which a holder of Series C Stock shall be
entitled to receive upon conversion shall be the product obtained by multiplying
the Series C Conversion Rate then in effect (as defined in Section 5(c)) by the
number of shares of Series C Stock being converted. The number of shares of
Common Stock which a holder of Series D Stock shall be entitled to receive upon
conversion shall be the product obtained by multiplying the Series D Conversion
Rate then in effect (as defined in Section 5(c) hereof) by the number of shares
of Series D Stock being converted. The number of shares of Common Stock which a
holder of Series E Stock shall be entitled to receive upon conversion shall be
the product obtained by multiplying the Series E Conversion Rate then in effect
(as defined in Section 5(c) hereof) by the number of shares of Series E Stock
being converted. Subject to and in compliance with the applicable provisions of
this Section 5, all shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock may, upon a vote of at least 67% of such stock
voting together as a single class (Series A Stock voting only to the extent such
stock shall have a right to vote under applicable law or under the Certificate
of Incorporation of the Corporation, as amended or restated), be converted at
any time into fully-paid and nonassessable shares of Common Stock. The number of
shares of Common Stock which a holder of Series A Stock, Series B Stock, Series
C Stock, Series D Stock or Series E Stock shall be entitled to receive upon
conversion shall be the product obtained by multiplying the applicable
conversion rate then in effect (as defined in Section 5(c)) by the number of
shares of Series A Stock, Series B Stock, Series C Stock, Series D Stock or
Series E Stock, respectively, being converted.

                  (b)      Automatic Conversion Upon Initial Public Offering.

                                      -15-

<PAGE>   30
                        (i) Simultaneously with the closing of a firm commitment
underwritten public offering of the Common Stock of the Corporation to the
general public pursuant to a registration statement on Form S-1 filed with, and
declared effective by, the U.S. Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended (the "1933 Act"), in which the aggregate
net cash proceeds to the Corporation exceed ten million dollars ($10,000,000)
and the offering price equals or exceeds nineteen dollars and eighty cents
($19.80) per share of Common Stock, as presently constituted, all outstanding
shares of Series A Stock, Series B Stock, Series C Stock, Series D Stock and
Series E Stock, shall automatically be converted into Common Stock pursuant to
this Section 5 at the applicable conversion rate then in effect (as defined in
Section 5(c)), without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent for the Common Stock; provided that all
declared and unpaid dividends on such shares of Series A Stock, Series B Stock,
Series C Stock, Series D Stock and Series E Stock shall first have been paid in
full.

                        (ii) Upon the occurrence of the automatic conversion
specified in the preceding Section 5(b)(i), each holder of such converted shares
of Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock shall, upon notice from the Corporation, surrender the certificates
representing such shares at the office of the Corporation or of its transfer
agent for the Common Stock. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by a written
instrument or instruments of transfer, in form reasonably satisfactory to the
Corporation, duly executed by the registered holder or its attorney duly
authorized in writing. Thereupon, there shall be issued and delivered to such
holder a certificate or certificates for the number of shares of Common Stock
into which the shares of the Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock surrendered were convertible on the date on
which such conversion occurred. The Corporation shall not be obligated to issue
such certificates unless and until certificates evidencing such shares of the
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock being converted are either delivered to the Corporation or any such
transfer agent, or the holder notifies the Corporation or any such transfer
agent that such certificates have been lost, stolen, mutilated or destroyed and
executes an agreement satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection therewith.
Notwithstanding the failure of any holder of Series A Stock, Series B Stock,
Series C Stock, Series D Stock or Series E Stock to surrender the certificate(s)
evidencing said holder's Series A Stock, Series B Stock, Series C Stock, Series
D Stock or Series E Stock, as provided in this Section 5(b)(ii), such holder's
Series A Stock, Series B Stock, Series C Stock, Series D Stock or Series E Stock
thereby shall nevertheless

                                      -16-

<PAGE>   31
be treated as converted pursuant to this Section 5(b) and shall, from and after
the date on which such conversion occurred, be deemed to have been retired and
cancelled, and the Corporation shall be entitled to take such action as may be
necessary to reduce accordingly the authorized number of shares of such Series A
Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock and to
treat any holder of such Series A Stock, Series B Stock, Series C Stock, Series
D Stock and Series E Stock in all respects as a holder of the appropriate number
of shares of the Corporation's Common Stock.

                  (c) Conversion Rates. The Conversion Rate in effect at any
time for the Series A Stock (the "Series A Conversion Rate") shall be the
quotient obtained by dividing $1.25 by the Series A Conversion Price then in
effect, calculated as provided in Section 5(d). The Conversion Rate in effect at
any time for the Series B Stock (the "Series B Conversion Rate") shall be the
quotient obtained by dividing $5.00 by the Series B Conversion Price then in
effect, calculated as provided in Section 5(d). The Conversion Rate in effect at
any time for Series C Stock (the "Series C Conversion Rate") shall be the
quotient obtained by dividing $6.60 by the Series C Conversion Price then in
effect, calculated as provided in Section 5(d). The Conversion Rate in effect at
any time for the Series D Stock (the "Series D Conversion Rate") shall be the
quotient obtained by dividing $12.85 by the Series D Conversion Price then in
effect, calculated as provided in Section 5(d). The Conversion Rate in effect at
any time for the Series E Stock (the "Series D Conversion Rate") shall be the
quotient obtained by dividing $19.05 by the Series E Conversion Price then in
effect, calculated as provided in Section 5(d).

                  (d) Conversion Prices. The Conversion Price for the Series A
Stock (the "Series A Conversion Price") shall initially be $1.25, and the Series
A Conversion Price shall be adjusted from time to time in accordance with this
Section 5. All references to the Series A Conversion Price herein shall mean the
Series A Conversion Price as so adjusted. The Conversion Price for the Series B
Stock (the "Series B Conversion Price") shall initially be $5.00, and the Series
B Conversion Price shall be adjusted from time to time in accordance with this
Section 5. All references to the Series B Conversion Price herein shall mean the
Series B Conversion Price as so adjusted. The Conversion Price for the Series C
Stock (the "Series C Conversion Price") shall initially be $6.60, and the Series
C Conversion Price shall be adjusted from time to time in accordance with this
Section 5. All references to the Series C Conversion Price herein shall mean the
Series C Conversion Price as so adjusted. The Conversion Price for the Series D
Stock (the "Series D Conversion Price") shall initially be $12.85 and the Series
D Conversion Price shall be adjusted from time to time in accordance with this
Section 5. All references to the Series D Conversion Price herein shall mean the
Series D Conversion Price as so adjusted. The Conversion Price for the

                                      -17-

<PAGE>   32
Series E Stock (the "Series E Conversion Price") shall initially be $19.05 and
the Series E Conversion Price shall be adjusted from time to time in accordance
with this Section 5. All references to the Series E Conversion Price herein
shall mean the Series E Conversion Price as so adjusted. All references herein
to a "Conversion Price" shall mean the Series A Conversion Price, the Series B
Conversion Price, the Series C Conversion Price, the Series D Conversion Price
or the Series E Conversion Price, as applicable, and all references herein to
"Conversion Prices" shall mean collectively the Series A Conversion Price, the
Series B Conversion Price, the Series C Conversion Price, the Series D
Conversion Price and the Series E Conversion Price.

                  (e) Adjustment to the Conversion Prices Upon Extraordinary
Common Stock Event. Upon the happening of an Extraordinary Common Stock Event
(as hereinafter defined), the Series A Conversion Price, the Series B Conversion
Price, the Series C Conversion Price, the Series D Conversion Price and the
Series E Conversion Price then in effect shall, simultaneously with the
happening of such Extraordinary Common Stock Event, be adjusted by multiplying
the then effective Conversion Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Conversion Price for such series of Preferred Stock. The Series A
Conversion Price, the Series B Conversion Price, the Series C Conversion Price,
the Series D Conversion Price and the Series E Conversion Price, as so adjusted,
shall be readjusted in the same manner upon the happening of any subsequent
Extraordinary Common Stock Event or Events. As used herein, the term
"Extraordinary Common Stock Event" shall mean (i) the issuance of additional
shares of Common Stock as a dividend or other distribution on outstanding Common
Stock, (ii) a subdivision of outstanding shares of Common Stock into a greater
number of shares of Common Stock (i.e., a stock split), or (iii) a combination
of outstanding shares of Common Stock into a smaller number of shares of Common
Stock (i.e., a reverse stock split).

                  (f)      Adjustments to Conversion Prices for Diluting Issues.

                        (i) Special Definitions. For purposes of this Section
5(f), the following definitions shall apply:

                             (1) "Convertible Securities" shall mean any
evidence of indebtedness, stock (other than Common Stock and the shares of
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock authorized herein) or other securities convertible into or exchangeable
for Common Stock.

                                      -18-

<PAGE>   33
                             (2) "Original Issue Date" shall mean, with respect
to a share of Series A Stock, Series B Stock, Series C Stock, Series D Stock or
Series E Stock, the date of issuance of such share of stock.

                             (3) "Options" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire (A) shares to any class
or series of Common Stock or Preferred Stock now or hereafter authorized (other
than any shares of Common Stock that are excluded from the definition of
"Additional Shares of Common Stock" by Section 5(f)(i)(4) hereof) or (B) any
Convertible Security.

                             (4) "Additional Shares of Common Stock" shall mean
all shares of Common Stock issued (or, pursuant to Section 5(f)(iii), deemed to
be issued) by the Corporation after the Original Issue Date, other than shares
of Common Stock issued or issuable at any time:

                                  (A) upon the conversion of shares of the
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock authorized herein;

                                  (B) to officers, directors or employees of, or
consultants to, the Corporation or its subsidiaries, if any, pursuant to a stock
grant, stock option plan, stock option agreement, stock purchase plan, stock
purchase agreement, or other similar stock agreement or arrangement approved by
the Board of Directors, in an aggregate amount of not more than 750,000 shares
of Common Stock, as presently constituted (including all stock options presently
outstanding but net of any shares repurchased by the Corporation from officers,
directors, employees, or consultants at their original issue price upon
termination of employment or consulting services pursuant to the terms of
agreements approved by the Board of Directors of the Corporation), such number
of shares to be subject to proportional adjustment to reflect any subsequent
Extraordinary Common Stock Event; or

                                  (C) as a dividend or distribution on the
Series A Stock, Series B Stock, Series C Stock, Series D Stock or Series E
Stock.

                        (ii) No Adjustment of Conversion Prices. No adjustment
of the Series A Conversion Price shall be made in respect of the issuance of
Additional Shares of Common Stock unless the consideration per share for an
Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Series A Conversion Price in effect on the date of,
and immediately prior to, such issue. No adjustment of the Series B Conversion
Price shall be made in respect of the issuance of Additional Shares of Common
Stock unless the consideration per share for an Additional Share of Common Stock
issued or deemed to be issued by

                                      -19-

<PAGE>   34
the Corporation is less than the Series B Conversion Price in effect on the date
of, and immediately prior to, such issue. No adjustment of the Series C
Conversion Price shall be made in respect of the issuance of Additional Shares
of Common Stock unless the consideration per share for an Additional Share of
Common Stock issued or deemed to be issued by the Corporation is less than the
Series C Conversion Price in effect on the date of, and immediately prior to,
such issue. No adjustment of the Series D Conversion Price shall be made in
respect of the issuance of Additional Shares of Common Stock unless the
consideration per share for an Additional Share of Common Stock issued or deemed
to be issued by the Corporation is less than the Series D Conversion Price in
effect on the date of, and immediately prior to, such issue. No adjustment of
the Series E Conversion Price shall be made in respect of the issuance of
Additional Shares of Common Stock unless the consideration per share for an
Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Series E Conversion Price in effect on the date of,
and immediately prior to, such issue.

                        (iii) Deemed Issue of Additional Shares of Common Stock.

                             (1) Options and Convertible Securities. In the
event the Corporation at any time or from time to time after the Original Issue
Date shall issue any Options or Convertible Securities, then the maximum number
of shares (as set forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such number) of
Common Stock issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, upon the conversion or exchange of
such Convertible Securities, shall be deemed to be Additional Shares of Common
Stock issued as of the time of such issue, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section 5(f)(iv) hereof) of such Additional
Shares of Common Stock would be less than the Series A Conversion Price, the
Series B Conversion Price, the Series C Conversion Price, the Series D
Conversion Price or the Series E Conversion Price in effect on the date of and
immediately prior to such issue, and provided further that in any such case in
which Additional Shares of Common Stock are deemed to be issued:

                                  (A) no further adjustment in the Series A
Conversion Price, the Series B Conversion Price, the Series C Conversion Price,
the Series D Conversion Price or the Series E Conversion Price shall be made
upon the subsequent issue of Convertible Securities or shares of Common Stock
upon the exercise of such Options or conversion or exchange of such Convertible
Securities, except as provided in Section 5(f)(iii)(B) below;

                                      -20-

<PAGE>   35
                                  (B) if such Options or Convertible Securities
by their terms provide, with the passage of time or otherwise, for any change in
the amount of consideration payable to the Corporation, or change in the number
of shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the applicable Conversion Price for a series of Preferred Stock
computed upon the original issue thereof, and any subsequent adjustment based
thereon, shall, upon any such change becoming effective, be recomputed to
reflect an appropriate increase or decrease reflecting such change insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities, but only if as a result of such adjustment such
Conversion Price as then in effect is not increased above the price at which
such Conversion Price would then have been in effect had such Options and such
Convertible Securities never been issued;

                                  (C) upon the expiration of any such Options or
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the applicable Conversion Price for a series of
Preferred Stock computed upon the original issue thereof, and any subsequent
adjustment based thereon, shall, upon such expiration, be recomputed as if:

                                       (I) in the case of Convertible Securities
or Options for Common Stock, the only Additional Shares of Common Stock issued
were the shares of Common Stock, if any, actually issued upon the exercise of
such Options or upon the conversion or exchange of such Convertible Securities,
and the consideration received therefor was the consideration actually received
by the Corporation for the issue of all such Options, whether or not exercised,
plus the consideration actually received by the Corporation upon the exercise of
all such Options, plus the consideration actually received by the Corporation
for the issue of all such Convertible Securities which were actually converted
or exchanged, plus the additional consideration, if any, actually received by
the Corporation upon such conversion or exchange; and

                                       (II) in the case of Options for
Convertible Securities, only the Convertible Securities, if any, actually issued
upon the exercise thereof were issued at the time of issue of such Options, and
the consideration received by the Corporation for the Additional Shares of
Common Stock deemed to have been issued was the consideration actually received
by the Corporation for the issue of all such Options, plus the consideration
deemed to have been received by the Corporation upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised;

                                  (D) no readjustment pursuant to Sections
5(f)(iii)(1)(B) or (C) above shall have the effect of increasing the applicable
Conversion Price for a series of Preferred Stock to an amount which exceeds the
lower of (i) such Conversion Price on

                                      -21-

<PAGE>   36
the original adjustment date, or (ii) the Conversion Price for such series of
Preferred Stock that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date;
and

                                  (E) in the case of any Options which expire by
their terms not more than thirty (30) days after the date of issue thereof, no
adjustment of the applicable Conversion Price for a series of Preferred Stock
shall be made until the expiration or exercise of all such Options, whereupon
such adjustment shall be made in the same manner provided in Section
5(f)(iii)(1)(C) above.

                           (iv) Determination of Consideration. For purposes of
this Section 5(f), the consideration received by the Corporation for the issue
of any Additional Shares of Common Stock shall be computed as follows:

                               (1) Cash and Property. Such consideration
shall:

                                  (A) insofar as it consists of cash, be
computed at the aggregate amount of cash received by the Corporation (after
reduction for applicable selling expenses and sales commissions) excluding
amounts paid or payable for accrued interest or accrued dividends;

                                  (B) insofar as it consists of property other
than cash, be computed at the fair value thereof received by the Corporation at
the time of such issue (after reduction for applicable selling expenses and
sales commissions), as determined in good faith by the Board of Directors of the
Corporation; and

                                  (C) in the event Additional Shares of Common
Stock are issued together with other shares of securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in Sections 5(f)(iv)(1)(A) and
(B) above, as determined in good faith by the Board of Directors of the
Corporation.

                             (2) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section 5(f)(iii)(1),
relating to Options and Convertible Securities, shall be determined by dividing:

                                  (A) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities (after reduction for applicable selling expenses and
sales commissions), plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such

                                      -22-

<PAGE>   37
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or, in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by

                                  (B) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon exercise of such Options or the conversion or exchange of such Convertible
Securities.

                             (3) Stock Dividends and Stock Subdivisions. Any
Additional Shares of Common Stock deemed to have been issued, relating to stock
dividends and stock subdivisions, shall be deemed to have been issued for no
consideration and will be treated as an Extraordinary Common Stock Event under
Section 5(e).

                        (v) Adjustment of Conversion Prices upon Issuance of
Additional Shares of Common Stock. In the event the Corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 5(f)(iii)) without consideration or for
a consideration per share less than the applicable Conversion Price for a series
of Preferred Stock in effect on the date of and immediately prior to such issue,
then, and in each such event, such Conversion Price shall be reduced,
concurrently with such issue, to a price (calculated to the nearest cent)
determined by multiplying such Conversion Price by a fraction:

                                  (1) the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such issue plus the
number of shares of Common Stock which the aggregate consideration received by
the Corporation for the total number of Additional Shares of Common Stock so
issued (and/or deemed issued) would purchase at such Conversion Price; and

                                  (2) the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue
plus the number of Additional Shares of Common Stock so issued (and/or deemed
issued).

For the purposes of the above subparagraphs (1) and (2) of this Section 5(f)(v),
all shares of Common Stock issuable upon conversion of outstanding shares of
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock shall be deemed to be outstanding shares of Common Stock, all shares of
Common Stock issuable upon full exercise or conversion of outstanding Options
and Convertible Securities shall be deemed to be outstanding shares of Common
Stock and, immediately after any Additional Shares of Common Stock are deemed
issued pursuant to Section 5(f)(iii), such Additional Shares of Common Stock
shall be

                                      -23-


<PAGE>   38
deemed to be outstanding shares of Common Stock. Notwithstanding the above
provisions of this Section 5(f)(v), upon the happening of an Extraordinary
Common Stock Event the applicable Conversion Price for a series of Preferred
Stock shall be adjusted solely pursuant to the provisions of Section 5(e) and
not this Section 5(f)(v).

         (g) Dividends. In the event the Corporation shall make or issue, or
shall fix a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution with respect to the Common
Stock payable in (i) securities of the Corporation other than shares of Common
Stock or (ii) assets (excluding cash dividends provided for elsewhere herein)
then, and in each such event, provision shall be made so that (in addition to
all other securities or property which holders of Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock are then entitled to
receive upon conversion of their Series A Stock, Series B Stock, Series C Stock,
Series D Stock and Series E Stock) the holders of Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock shall also be entitled
to receive upon conversion of their Series A Stock, Series B Stock, Series C
Stock, Series D Stock and Series E Stock the number of securities or such other
assets of the Corporation which they would have received had their Series A
Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock been
converted into Common Stock on the date necessary to be entitled to receive such
dividend or distribution.

         (h) Corporate Reorganization. If at any time or from time to time there
shall be a capital reorganization or reclassification of the Common Stock (other
than an Extraordinary Common Stock Event), a reorganization, consolidation or
merger of the Corporation with or into any other corporation or corporations or
other entity or entities, or a sale, conveyance, lease, transfer or other
disposition of all or substantially all of the Corporation's properties and
assets, or a sale or other transfer in a single transaction or in a series of
related transactions, of fifty percent (50%) or more of the Corporation's
outstanding stock (each of such transactions being hereinafter referred to as a
"Corporate Reorganization"), then, as a part of such Corporate Reorganization,
provision shall be made so that the holders of the Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock shall thereafter be
entitled to receive upon conversion of their shares of Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock, the number of shares
of stock or other securities or property (including cash) of the Corporation, or
of any successor corporation resulting from any such Corporate Reorganization,
that are receivable upon such Corporate Reorganization by holders of the number
of shares of Common Stock into which such shares of Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock might have been
converted immediately prior to such Corporate Reorganization, all subject to
adjustment as provided herein. In any such case,

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<PAGE>   39
appropriate adjustment shall be made in the application of the provisions of
this Section 5 with respect to the rights of the holders of the Series A Stock,
Series B Stock, Series C Stock, Series D Stock and Series E Stock after such
Corporate Reorganization to the end that the provisions of this Section 5
(including adjustment of the Series A Conversion Price, the Series B Conversion
Price, the Series C Conversion Price, the Series D Conversion Price and the
Series E Conversion Price then in effect and the number of shares issuable upon
conversion of the Series A Stock, Series B Stock, Series C Stock, Series D Stock
and Series E Stock), shall be applicable after that event in as nearly
equivalent a manner as may be practicable.

         Upon the occurrence of a Corporate Reorganization, each holder of
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock, shall have the option of electing treatment of his, her or its shares of
Series A Stock, Series B Stock, Series C Stock, Series D Stock and/or Series E
Stock under either this Section 5(h) or Section 2(c) hereof, notice of which
election shall be submitted in writing to the Corporation at its principal
offices no later than five (5) days before the effective date of such Corporate
Reorganization. The Corporation shall give each holder of record of Series A
Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock at
least twenty (20) days' advance written notice of the effective date of such
Corporate Reorganization.

         (i) Exercise of Conversion Privilege. To convert Series A Stock, Series
B Stock, Series C Stock, Series D Stock and/or Series E Stock into Common Stock
(other than pursuant to Section 5(b) hereof), a holder of Series A Stock, Series
B Stock, Series C Stock, Series D Stock or Series E Stock shall surrender the
certificate(s) representing the shares of Series A Stock, Series B Stock, Series
C Stock, Series D Stock and Series E Stock being converted to the Corporation at
its principal office or at the office of its transfer agent, and shall give
written notice to the Corporation at that office that such holder elects to
convert such shares. Such notice shall also state the name or names (with
address or addresses) in which the certificate(s) for shares of Common Stock
issuable upon such conversion shall be issued. The certificate(s) for shares of
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock surrendered for conversion shall be accompanied by proper assignment
thereof to the Corporation or in blank. The date when the Corporation has
received both such written notice and the certificate(s) representing the shares
of Series A Stock, Series B Stock, Series C Stock, Series D Stock and/or Series
E Stock being converted shall be the "Conversion Date." As promptly as
practicable after the Conversion Date, the Corporation shall issue and deliver
to the holder of the shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock and/or Series E Stock being converted, such certificate(s) as
such holder may request for the number of whole shares of Common

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<PAGE>   40
Stock issuable upon the conversion of such shares of Series A Stock, Series B
Stock, Series C Stock, Series D Stock and/or Series E Stock, in accordance with
the provisions of this Section 5, cash in the amount of all dividends declared
and unpaid on Series A Stock, Series B Stock, Series C Stock, Series D Stock
and/or Series E Stock up to and including the Conversion Date, cash as provided
in Section 5(j) in respect of any fraction of a share of Common Stock issuable
upon such conversion, and any other securities, property or cash issuable upon
such conversion as provided in Section 5(h). Such conversion shall be deemed to
have been effected immediately prior to the close of business on the Conversion
Date, and at such time the rights of the holder as holder of the converted
shares of Series A Stock, Series B Stock, Series C Stock, Series D Stock and/or
Series E Stock shall cease and the person or persons in whose name or names any
certificate(s) 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 of
Common Stock represented thereby.

         (j) Cash in Lieu of Fractional Shares. No fractional shares of Common
Stock or scrip representing fractional shares shall be issued upon the
conversion of shares of Series A Stock, Series B Stock, Series C Stock, Series D
Stock or Series E Stock. In lieu of any fractional shares of Common Stock that
would otherwise be issuable upon conversion of Series A Stock, Series B Stock,
Series C Stock, Series D Stock or Series E Stock, the Corporation shall pay to
the holder of the shares of Series A Stock, Series B Stock, Series C Stock,
Series D Stock or Series E Stock which were converted, a cash adjustment in
respect of such fractional shares in an amount equal to the same fraction of the
market price per share of the Common Stock (as determined in good faith by the
Board of Directors) at the close of business on the Conversion Date. The
determination as to whether or not any fractional shares are issuable shall be
based upon the total number of shares of Series A Stock, Series B Stock, Series
C Stock, Series D Stock and/or Series E Stock being converted at any one time by
any holder thereof, and not upon each share of Series A Stock, Series B Stock,
Series C Stock, Series D Stock or Series E Stock being converted by such holder.

         (k) Partial Conversion. In the event some but not all of the shares of
Series A Stock, Series B Stock, Series C Stock, Series D Stock or Series E Stock
represented by a certificate or certificates surrendered by a holder are
converted, the Corporation shall execute and deliver to or on the order of the
holder, at the expense of the Corporation, a new certificate representing the
number of shares of Series A Stock, Series B Stock, Series C Stock, Series D
Stock and Series E Stock that were not converted.

         (l) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series A Conversion Price, the Series B
Conversion Price, the Series C Conversion

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<PAGE>   41
Price, Series D Conversion Price and/or the Series E Conversion Price pursuant
to this Section 5, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and shall furnish
to each holder of Series A Stock, Series B Stock, Series C Stock, Series D Stock
and Series E Stock a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time by any holder
of Series A Stock, Series B Stock, Series C Stock, Series D Stock or Series E
Stock, furnish or cause to be furnished to such holder a like certificate
setting forth (i) the Series A Conversion Price, the Series B Conversion Price,
the Series C Conversion Price, the Series D Conversion Price and the Series E
Conversion Price at the time in effect and (ii) the shares of Common Stock and
the amount, if any, of other property which at the time would be received upon
the conversion of the Series A Stock, Series B Stock, Series C Stock, Series D
Stock and Series E Stock.

     6. NO REISSUANCE OF PREFERRED STOCK. No share or shares of Series A Stock,
Series B Stock, Series C Stock, Series D Stock or Series E Stock acquired by the
Corporation by reason of redemption, purchase, conversion or otherwise shall be
reissued, and all such shares shall be cancelled, retired and eliminated from
the shares of Preferred Stock which the Corporation shall be authorized to
issue.

     7. RESERVATION OF COMMON STOCK. The Corporation shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the conversion of the shares of the Series A
Stock, Series B Stock, Series C Stock, Series D Stock and the Series E Stock,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series A
Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock. If at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion of all then outstanding shares of the
Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock, then the Corporation shall promptly take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.

     8. EVENTS OF NONCOMPLIANCE.

         (a) Definition. An Event of Noncompliance will be deemed to have
occurred if:

              (i) the Corporation fails to make any redemption payment with
respect to the Series C Stock, Series D Stock or

                                      -27-

<PAGE>   42
Series E Stock which it is obligated to make hereunder, whether or not such
payment is legally permissible;

              (ii) the Corporation breaches or otherwise fails to perform or
observe any other covenant or agreement set forth herein with respect to the
Series C Stock, Series D Stock or Series E Stock or in the Purchase Agreement
dated as of June 24, 1988, between the Corporation and the original purchasers
of the Series C Stock (the "Series C Agreement"); provided that an Event of
Noncompliance will not be deemed to have occurred under this Section 8(a)(ii) if
(1) the Event of Noncompliance is not material to the Corporation's financial
condition, operations, assets or business prospects, and (2) if the Event of
Noncompliance is not material to any holder's investment in the Series C Stock,
Series D Stock or Series E Stock; or

              (iii) any representation or warranty contained in the Series C
Agreement or required to be furnished to any holder of Series C Stock pursuant
to the Series C Agreement, or any information contained in writing furnished by
the Corporation or any subsidiary to any holder of Series C Stock, is false or
misleading in any material respect on the date made or furnished;

              (iv) the Corporation or any subsidiary makes an assignment for the
benefit of creditors or admits in writing its inability to pay its debts
generally as they become due; or an order, judgment or decree is entered
adjudicating the Corporation or any subsidiary bankrupt or insolvent; or any
order for relief with respect to the Corporation or any subsidiary is entered
under the Federal Bankruptcy Code; or the Corporation or any subsidiary
petitions or applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Corporation or any subsidiary or of any
substantial part of the assets of the Corporation or any subsidiary, or
commences any proceeding (other than a proceeding for the voluntary liquidation
and dissolution of a subsidiary) relating to the Corporation or any subsidiary
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction; or any such petition
or application is filed, or any such proceeding is commenced, against the
Corporation or any subsidiary and either (1) the Corporation or any such
subsidiary by any act indicates its approval thereof, consent thereto or
acquiescence therein or (2) such petition, application or proceeding is not
dismissed within sixty (60) days; or

              (v) the Corporation or any subsidiary defaults in the performance
of any obligation or agreement if the effect of such default is to cause an
amount exceeding $1,000,000 to become due prior to its stated maturity or to
permit the holder or holders of any obligation to cause an amount exceeding
$1,000,000 to become due prior to its stated maturity.

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<PAGE>   43
              (b) Consequences of Certain Events of Noncompliance.

                   (i) If an Event of Noncompliance of the type described in
Section 8(a)(ii) has occurred and continued for a period of thirty (30) days or
any other Event of Noncompliance has occurred, the holder or holders of a
majority of the Series C Stock, Series D Stock or Series E Stock then
outstanding may demand (by written notice delivered to the Corporation),
immediate redemption of all or any portion of the Series C Stock, Series D Stock
or Series E Stock owned by such holder or holders at a price per share equal to
the Series C Redemption Price, the Series D Redemption Price or the Series E
Redemption Price, as applicable. The Corporation will give prompt written notice
of such election to the other holders of Series C Stock, Series D Stock or
Series E Stock, as applicable, and to the holders of each of the other series of
Preferred Stock (but in any event within ten (10) days after receipt of the
initial demand for redemption), and each such other holder may demand immediate
redemption of all or any portion of such holder's Series A Stock, Series B
Stock, Series C Stock, Series D Stock or Series E Stock by giving written notice
thereof to the Corporation within fifteen (15) days after receipt of the
Corporation's notice. The Corporation will redeem all Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock as to which rights
under this Section 8(b)(i) have been exercised within thirty (30) days after
receipt of the initial demand for redemption.

                   (ii) If any Event of Noncompliance exists, each holder of
Series C Stock, Series D Stock and Series E Stock will also have any other
rights which such holder may have been afforded under any contract or agreement
at any time and any other rights which such holder may have pursuant to
applicable law.

     9. NO IMPAIRMENT. The Corporation will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Series A Stock, Series B Stock, Series C Stock, Series D Stock
and Series E Stock set forth herein, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holders of
the Series A Stock, Series B Stock, Series C Stock, Series D Stock and Series E
Stock against impairment. Without limiting the generality of the foregoing, the
Corporation (a) will not increase the par value of any shares of stock
receivable on the conversion of the Series A Stock, Series B Stock, Series C
Stock, Series D Stock or Series E Stock above the amount payable therefor on
such conversion, and (b) will take all such action as may be necessary or
appropriate in order that the Corporation may validly and legally issue fully
paid and nonassessable shares of stock on the conversion of all Series

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<PAGE>   44
A Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock from
time to time outstanding.

     10. PROTECTIVE PROVISIONS. Notwithstanding the provisions of Section 9, the
prior affirmative vote of the holders of at least 67% of the Series A Stock
(only to the extent that the Series A Stock shall have a right to vote under
applicable law or under the Certificate of Incorporation of the Corporation, as
amended or restated), Series B Stock, Series C Stock, Series D Stock and Series
E Stock, voting together as a single class, and in the event there is any
amendment to the Company's Restated Certificate of Incorporation or bylaws or a
resolution of the Board of Directors of the Company which contains any
provisions adversely affecting or otherwise impairing the rights of the holders
of any individual series of Preferred Stock under the Restated Certificate of
Incorporation of the Corporation or the applicable stock purchase agreement
between the Corporation and the original purchasers of any series of Preferred
Stock (the "Stock Purchase Agreements"), such vote including the affirmative
vote of the holders of at least a majority of such affected series of Preferred
Stock (but a majority vote of each series of Preferred Stock shall not be
required if such event adversely affects or otherwise impairs the rights of the
holders of all series of Preferred Stock), shall be required for any action
which:

                   (i) merges, consolidates or reorganizes the Corporation,
sells, assigns, leases or otherwise disposes of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereinafter acquired), or sells or otherwise transfers, in a single
transaction or a series of related transactions, fifty percent (50%) or more of
the Corporation's outstanding stock, or sells additional securities, in a single
transaction or series of related transactions, representing fifty percent (50%)
or more of the voting power of the Corporation after such sale, or assigns or
otherwise disposes of or permits any subsidiary to do the foregoing, except for
sales or other dispositions of assets in the ordinary course of business and
except that any corporation all of whose outstanding shares of each class and
series of stock and all of whose other securities are owned by the Corporation
(a "Controlled Subsidiary") may merge into or consolidate with or transfer
assets to any other Controlled Subsidiary without compliance with this Section
10(i);

                   (ii) Alters or changes any of the powers, rights,
preferences, privileges, qualifications, limitations or restrictions of any
series of Preferred Stock of the Corporation;

                   (iii) increases the authorized number of shares of the
Preferred Stock or of any series of Preferred Stock;

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<PAGE>   45
                   (iv) creates a new class or series of capital stock having
any rights, preferences or privileges superior to or on a parity with, in any
respect, any series of Preferred Stock;

                   (v) would result in the payment of declaration (or setting
aside for payment) of any dividend on the Common Stock (other than a dividend
payable solely in shares of Common Stock);

                   (vi) would result in the imputation of a dividend on any
series of Preferred Stock pursuant to Section 305 of the United States Internal
Revenue Code, as amended, or successor provisions thereto; or

                   (vii) involves the repurchase, redemption or other
reacquisition of shares of the capital stock of the Corporation, other than
redemptions, repurchases or conversions of any series of Preferred Stock
contemplated herein or in any of the Stock Purchase Agreements and other than
repurchases of shares of Common Stock from employees, officers, directors or
consultants to the Corporation if such repurchases are effected pursuant to
written agreements to which the Corporation is a party and which have been
approved by the Board of Directors or authorized under an employee stock
purchase, stock option or other plan or arrangement approved by the Board of
Directors.

         11. NOTICES OF RECORD DATE. In the event of:

              (a) any taking by the Corporation of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right; or

              (b) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, or any sale, conveyance,
transfer or other disposition of all or substantially all of the assets of the
Corporation;

then, and in each such event, the Corporation shall send by registered or
certified mail, postage prepaid, to each holder of Series A Stock, Series B
Stock, Series C Stock, Series D Stock and Series E Stock a notice specifying (i)
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, (ii) the date on which any such reorganization,
reclassification, recapitalization, merger, consolidation, sale, conveyance,
transfer or other disposition is expected to become effective and (iii) the
time, if any, that is to be fixed as to when the holders of record of Common
Stock (or other securities) shall be entitled to exchange their shares of Common
Stock (or other securities) for securities or other property

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<PAGE>   46
deliverable upon such reorganization, reclassification, recapitalization,
merger, consolidation, sale, conveyance, transfer or other disposition. Such
notice shall be mailed at least thirty (30) days prior to the date specified in
such notice on which such action is to be taken.

     SIXTH: The Board of Directors of the Corporation is expressly authorized to
adopt, amend or repeal the By-Laws and may alter or repeal any By-Law, whether
adopted by them or otherwise.

     SEVENTH: The business and affairs of the Corporation shall be managed by
the Board of Directors, and the directors need not be elected by ballot unless
required by the By-Laws of the Corporation.

     EIGHTH: The Board of Directors may adopt By-Laws from time to time with
respect to indemnification to provide at all times the fullest indemnification
permitted by the General Corporation Law of the State of Delaware, as amended
from time to time, and may cause the Corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the Corporation would have the power to indemnify
such person against such liability.

     No director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.

     NINTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as


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<PAGE>   47
the case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.

     TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders,
directors and other persons herein are granted subject to this reservation.

                                      -33-