<PAGE>   1
EXHIBIT 3.1    STATEMENT PURSUANT TO ARIZONA REVISED STATUTES SECTION 10-602
               [DESIGNATION OF TERMS OF SERIES C CONVERTIBLE PREFERRED STOCK]
-----------------------------------------------------------------------------


                                    EXHIBIT A
                                       TO
                   STATEMENT PURSUANT TO A.R.S. SECTION 10-602
                                       OF
                        PROLOGIC MANAGEMENT SYSTEMS, INC.



   The following is the text of the resolution adopted by the Board of Directors
of Prologic Management Systems, Inc. (the "Corporation") at a meeting of the
Board of Directors on December 30, 1999:

   RESOLVED, that the following is the statement of the designations, powers,
privileges, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or actions relating to the Series C
10% Cumulative Convertible Preferred Stock (the "Preferred Stock"):

   1. DESIGNATION AND AMOUNT. The series of Preferred Stock of the Corporation
designated as "Series C 10% Cumulative Convertible Preferred Stock" shall be
100,000 shares.

   2. DIVIDEND RATE. The holders of outstanding shares of the Preferred Stock
shall be entitled to receive out of funds legally available therefore cash
dividends accruing at the rate of 10% per annum (on the basis of a 360-day year)
on the Stated Value (defined herein) per share of the Preferred Stock
("Dividends"). The right to receive Dividends on the Preferred Stock shall be
cumulative. Dividends shall be payable, to the extent of funds legally available
therefore, on each April 30 and October 31, beginning on April 1, 2000 or when
otherwise determined by the Board of directors (each, a "Dividend Payment
Date"), to holders of record on the date that is 15 days preceding the
appropriate Dividend Payment Date. Such dividends shall be payable in preference
and priority to any payment of any dividend on Common Stock of the Corporation.
No interest or other charge shall accrue with respect to accumulated by unpaid
dividends on the Preferred Stock. No dividend shall be paid on the Common Stock
in any year, other than dividends payable solely in Common Stock, until all
Dividends for such year have been declared and paid on the Preferred Stock. In
the event that the Board of Directors shall have declared and paid, or set apart
for payment, all dividends on the Preferred Stock at the rates specified in this
section in any one fiscal year, and shall elect to declare additional dividends
in that fiscal year out of funds legally available therefor, such additional
dividends shall be declared and paid on the Common Stock, in an amount equal to
the dividends paid on such number of shares of Common Stock into which such
share of Preferred Stock, on the record date for such dividend payment, is
convertible. At the Corporation's sole discretion, the Corporation may elect to
pay any or all Dividends by issuing, in lieu of cash, shares of Common Stock.
The number of shares of Common Stock shall equal the total undeclared and
accrued Dividends multiplied by 85% of the lower of (i) the Applicable
Conversion Value (determined on the date that is 15 days before the relevant
Dividend Payment Date), as adjusted pursuant to Section 5, or (ii) the average
of the closing "bid" and "asked" price of the Common Stock on the Nasdaq Stock
market during the twenty trading days preceding the relevant Dividend Payment
Date (or, if the Common Stock is not then quoted on the Nasdaq stock Market, the
closing prices on such other market on which the Common Stock is then traded or,
if not traded, as the Board of Directors of the Corporation may reasonably
determine).

   3. LIQUIDATION, DISSOLUTION OR WINDING UP.

     (a) PREFERENCE - CONVERTIBLE PREFERRED STOCK. In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, holders of each share of Preferred Stock shall be entitled to be
paid out of the assets of the Corporation legally available for such
distribution, before any sums shall be paid or any assets distributed among the
holders of shares of Common Stock, an amount equal to $10.00 per share of
Preferred Stock (the "Stated Value") plus the accrued but unpaid Dividends
thereon, up to and including the date of full payment. If the assets of the
Corporation shall be insufficient to permit the payment in full to the holders
of the Preferred Stock of the amount thus distributable, then the entire assets
of the Corporation legally available for such distribution shall be distributed
ratably among the holders of the Preferred Stock and any other class or series
of preferred stock of the Corporation outstanding on the distribution date.
After such payment shall have been made in full to the holders of the Preferred
Stock or funds


                                                                              16
<PAGE>   2
necessary for such payment shall have been set aside by the Corporation in trust
for the account of holders of the Preferred Stock so as to be available for such
payment, holders of the Preferred Stock shall be entitled to no further
participation in the distribution of the assets of the Corporation and shall
have no further rights of conversion, and the remaining assets available for
distribution shall be distributed ratably among the holders of the Common Stock.

     (b) A consolidation or merger (other than a consolidation or merger in
which the holders of voting securities of the Corporation immediately before the
consolidation or merger own (immediately after the consolidation or merger)
voting securities of the surviving or acquiring corporation, or of a parent
party of such surviving or acquiring corporation, possessing more than 50% of
the voting power of such surviving or acquiring corporation or parent party) of
the Corporation or a sale of all or substantially all of the assets of the
Corporation shall be regarded as a liquidation, dissolution or winding up of the
affairs of the Corporation within the meaning of this Section 3.

     (c) Whenever the distribution provided for herein shall be paid 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.

   4. VOTING POWER. Except as otherwise expressly provided in Section 9 hereof,
or as required by law, no holder of Preferred Stock shall be entitled to vote on
any matters submitted to a vote of the shareholders of the Corporation.

   5. CONVERSION RIGHTS. The holders of Preferred Stock shall have the following
conversion rights:

     (a) GENERAL. Subject to and in compliance with the provisions of this
Section 5, any shares of Preferred Stock may, at the option of the holder, be
converted into fully-paid and nonassessable shares (calculated as to each
conversion to the largest whole share) of Common Stock. The number of shares of
Common Stock to which a holder of Preferred Stock shall be entitled upon
conversion of each share of Preferred Stock shall be the product obtained by
multiplying the Applicable Conversion Rate (determined as provided in Section
5(b)) by the number of shares of Preferred Stock being converted.

     (b) APPLICABLE CONVERSION RATE. The conversion rate in effect at any time
(the "Applicable Conversion Rate") shall be the quotient obtained by dividing
$10.00 by the Applicable Conversion Value, calculated as provided in Section
5(c).

     (c) APPLICABLE CONVERSION VALUE. The Applicable Conversion Value in effect
from time to time, except as adjusted in accordance with Section 5(d) hereof,
shall be $2.25.

     (d) ADJUSTMENTS TO APPLICABLE CONVERSION VALUE. In the event that the
Series C Preferred Stock has not been redeemed and the redemption price paid in
full and the Corporation shall issue any new class or series of its preferred
stock having a conversion price lower than $2.25 per share of Common Stock, then
the Applicable Conversion Value of the Series C Convertible Preferred Stock
shall, upon such issuance, be adjusted downward to an amount equal to such lower
conversion price of each such issuance. Further, in the event that the Series C
Preferred Stock has not been redeemed and the redemption price paid in full and
the Applicable Conversion Value of any other existing class or series of its
preferred stock is adjusted after December 30, 1999 to a conversion price lower
than $2.25 per share of Common Stock, then the Applicable Conversion Value of
the Series C Convertible Preferred Stock shall, upon such adjustment, be
adjusted downward to an amount equal to such lower conversion price of such
class or series of preferred stock.

     (e) DIVIDENDS. In the event the Corporation shall make or issue, or fix a
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the
Corporation other than of Common Stock or in assets (excluding cash dividends or
distributions), then and in each such event provision shall be made so that the
holders of the Preferred Stock shall receive upon conversion thereof in addition
to the number of shares of Common Stock receivable thereupon, the number of
securities or such other assets of the Corporation which they would have
received had their Preferred Stock been converted into Common Stock on the date
of such event and had they thereafter, during the period from the date of such
event to and including the Conversion Date (as that term is hereafter defined in
Section 5(h)), retained such securities or such other assets receivable by them
as aforesaid during such period, giving application to all adjustments called
for during such period under this Section 5 with respect to the rights of the
holders of the Preferred Stock.


                                                                              17
<PAGE>   3
     (f) RECAPITALIZATION OR RECLASSIFICATION. If the Common Stock issuable upon
the conversion of the Preferred Stock shall be changed into the same or
different number of shares of any class or classes of stock of the Corporation,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of or stock dividend provided for elsewhere in this
Section 5, or a reorganization, merger, consolidation or sale of assets provided
for elsewhere in this Section 5), then and in each such event the holder of each
share of Preferred Stock shall have the right thereafter to convert such share
into the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification or other change by holders
of the number of shares of Common Stock into which such share of Preferred Stock
might have been converted (taking into account all declared but unpaid Dividends
with respect to such Preferred Stock) immediately prior to such reorganization,
reclassification or change, all subject to further adjustment as provided
herein.

     (g) CERTIFICATE AS TO ADJUSTMENTS. In each case of an adjustment or
readjustment of the Applicable Conversion Rate, the Corporation will furnish
each holder of Preferred Stock with a certificate, executed by an executive
officer of the Corporation showing such adjustment or readjustment, and stating
in detail the facts upon which such adjustment or readjustment is based.

     (h) EXERCISE OF CONVERSION PRIVILEGE. To exercise its conversion privilege,
a holder of Preferred Stock shall surrender the certificate or certificates
representing the shares being converted to the Corporation at its principal
office, 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 or certificates
for shares of Common Stock issuable upon such conversion shall be issued. The
certificate or certificates for shares of Preferred Stock surrendered for
conversion shall be accompanied by proper assignment thereof to the Corporation
or in blank. The date when such written notice is received by the Corporation,
together with the certificate or certificates representing the shares of
Preferred Stock being converted, shall be the "Conversion Date." As, promptly as
practicable, but in any event within 30 days after the Conversion Date, the
Corporation shall issue and shall deliver to the holder of the shares of
Preferred Stock being converted, or on its written order, such certificate or
certificates as it may request for the number of whole shares of Common Stock
issuable upon the conversion of such shares of Preferred Stock in accordance
with the provisions of this Section 5, and cash, as provided in Section 5(i), in
respect of any fraction of a share of Common Stock issuable upon such
conversion. 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 Preferred Stock shall
cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby.

     (i) CASH IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock
or scrip representing fractional shall be issued upon the conversion of shares
of Preferred Stock. Instead of any fractional of Common Stock which would
otherwise be issuable upon conversion of Preferred Stock, the Corporation shall
pay to the holder of the shares of Preferred 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 a
reasonable manner prescribed 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 Preferred
Stock being converted at any one time by any holder thereof, not upon each share
of Preferred Stock being converted.

     (j) PARTIAL CONVERSION. In the event some but not all of the shares of
Preferred 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 Preferred Stock which were not converted.

     (k) 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
Preferred Stock, such number of its shares of Common Stock as shall time to time
be sufficient to effect the conversion of all outstanding shares of the
Preferred Stock, and 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 Preferred Stock, the Corporation shall use its best
efforts to cause such corporate action to be taken 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.


                                                                              18
<PAGE>   4
   6. REDEMPTION. The Corporation shall have the right to redeem the Preferred
Stock or any portion thereof at a redemption price per share of Preferred Stock
equal to the Stated Value plus all undeclared and accrued Dividends thereon. The
Corporation shall give holders of the Preferred Stock at least 20 days notice of
the Corporation's election to redeem the Preferred Stock, and such notice shall
specify the redemption date ("Redemption Date"). Any shares of Preferred Stock
which shall not have been converted to shares of Common Stock as provided
elsewhere herein on the day preceding the Redemption Date shall be deemed
redeemed for all purposes, and the holder shall thereafter be entitled to
receive only the redemption price per share specified herein.

   7. NO REISSUANCE OF THE SERIES C 10% CUMULATIVE CONVERTIBLE PREFERRED Stock.
No share or shares of the Series C 10% Cumulative Convertible Preferred Stock
acquired by the Corporation by reason of redemption, purchase, conversion or
otherwise shall be reissued. The Corporation may from time to time take such
appropriate corporate action as may be necessary to reduce the authorized number
of shares of the Series C 10% Cumulative Convertible Preferred Stock, and such
shares shall thereafter be authorized but unissued shares of the Corporation's
preferred stock which thereafter may be issued with such designations, powers,
privileges, preferences and rights as the Board of Directors by resolution may
determine.

   8. RESTRICTIONS AND LIMITATIONS.

   Except as expressly provided herein or as required by law, so long as any of
the shares of Preferred Stock authorized remain outstanding, the Corporation
shall not, without the vote or written consent by the holders of at least 60% of
the then outstanding shares of Preferred Stock, each share of Preferred Stock to
be entitled to one vote in each instance:

        (i) Redeem, purchase or otherwise acquire for value (or pay into or set
aside for a sinking fund for such purpose), any share or shares of the
Corporation (except shares of the Corporation's Series A 8% Cumulative
Convertible Preferred stock, the Corporation's Series B 10% Cumulative
Convertible Preferred Stock and those shares repurchased from officers,
directors, employees, consultants or other shareholders of the Corporation under
agreements requiring such persons to offer to sell such to the Corporation in
certain events);

        (ii) Authorize or issue, or obligate itself to authorize or issue, any
other equity security senior to the Preferred Stock as to liquidation
preferences; or

        (iii) Amend its Articles of Incorporation to alter or change the rights,
preferences or privileges of the Preferred Stock; provided that no such
amendment shall alter or change (i) the ability of a holder to convert the
Preferred Stock into Common Stock, or (ii) the Applicable Conversion Rate
therefor subject to the provisions of Section 5 as in effect on the date of
authorization of the Preferred Stock pursuant to these Articles of
Incorporation, without the consent of each holder of the Preferred Stock
affected thereby.

   9. NO DILUTION OR IMPAIRMENT. The Corporation will not, by amendment of its
Articles 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 Preferred 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 Preferred Stock against dilution or other impairment.

   10. 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 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 transfer of all or substantially all of
the assets of the Corporation to any other corporation, or any other entity or
person, or

     (c)  any voluntary or involuntary dissolution, liquidation or winding up
of the Corporation,


                                                                              19
<PAGE>   5
then and in each such event the Corporation shall mail or cause to be mailed to
each holder of Preferred 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 and a description of such dividend, distribution or right, (ii) the date
on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up 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 deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up. Such notice shall be mailed at least 20 days prior to the date
specified in such notice on which such dividend, distribution or right or such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, liquidation or winding up is to be taken.


                                                                              20