<PAGE>

                                  Exhibit 3.1

                                                          FEDERAL IDENTIFICATION
                                                          NO. 04-2751645
                                                              ------------------

                       The Commonwealth of Massachusetts

                            William Francis Galvin
                         Secretary of the Commonwealth
             One Ashburton Place, Boston, Massachusetts 02108-1512

                       RESTATED ARTICLES OF ORGANIZATION
                   (General Laws, Chapter 156B, Section 74)


We, John L. Youngblood                                           , *President
    -------------------------------------------------------------

and David L. Renauld                                             ,*Clerk
    -------------------------------------------------------------

of  Millitech Corporation                                                     ,
    --------------------------------------------------------------------------
                          (Exact name of corporation)

located at South Deerfield Research Park, P.O. Box 109, South Deerfield, MA
           ----------------------------------------------------------------
                                    01373,
                                    -----
                 (Street address of corporation Massachusetts)

do hereby certify that the following Restatement of the Articles of Organization
was duly adopted at a meeting held on October 13       , 1999     by a vote of
                                      -----------------    ------
the directors/or:

833,922  shares of Common Stock of 1,623,972 shares outstanding,
-------
2,708,134 shares of Class A Preferred Stock   of 3,045,696   shares outstanding,
---------           -------------------------    ------------
                        (type, class & series, if any)


743,756 shares of Class B Preferred Stock   of  789,677  shares outstanding, and
-------           -------------------------   ----------
                        (type, class & series, if any)

6,864,898 shares of Class D Preferred Stock  of 7,200,000   shares outstanding,
---------           ------------------------    -----------
                        (type, class & series, if any)


9,557,110 shares of Class E Preferred Stock of 9,941,508 shares outstanding,
---------
** being at least two-thirds of each type, class or series outstanding and
entitled to vote thereon and of each type, class or series of stock whose rights
are adversely affected thereby:

                                   ARTICLE I
                        The name of the corporation is:

                      Telaxis Communications Corporation

                                  ARTICLE II
    The purpose of the corporation is to engage in the following business
                                  activities:

                                 See Attached.


*Delete the inapplicable words.      **Delete the inapplicable clause.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper with a left margin of at least 1 inch. Additions to more than one article
may be made on a single sheet so long as each article requiring each addition is
clearly indicated.

<PAGE>

                                  ARTICLE III

State the total number of shares and par value, if any, of each class of stock
which the corporation is authorized to issue:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
     WITHOUT PAR VALUE                                WITH PAR VALUE
-----------------------------------------------------------------------------------------
  TYPE      NUMBER OF SHARES        TYPE            NUMBER OF SHARES       PAR VALUE
-----------------------------------------------------------------------------------------
<S>         <C>                    <C>        <C>                          <C>
 Common:                           Common:        100,000,000               $.01
-----------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------
                                                   Class A     3,090,323    $.01
 Preferred:                        Preferred:      Class B       789,677    $.01
-----------------------------------------------------------------------------------------
                                                   Class C             0    $.01
                                                   Class D     7,200,000    $.01
-----------------------------------------------------------------------------------------
                                                   Class E    11,000,000    $.01
                                              Undesignated     4,500,000    $.01
-----------------------------------------------------------------------------------------
</TABLE>

                                  ARTICLE IV

If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class, if
shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of that class and of each other class of which
shares are outstanding and of each series then established within any class.

                                 See Attached.

                                   ARTICLE V

The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:

                                     None.

                                  ARTICLE VI

**Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:

                                 See Attached.


**if there are no provisions state "None".
Note: The preceding six (6) articles are considered to be permanent and may ONLY
be changed by filing appropriate Articles of Amendment.

<PAGE>

                                  ARTICLE VII

The effective date of the restated Articles of Organization of the corporation
shall be the date approved and filed by the Secretary of the Commonwealth. If a
later effective date is desired, specify such date which shall not be more than
thirty days after the date of filing.


                                 ARTICLE VIII

The information contained in Article VIII is not a permanent part of the
Articles of Organization.

a. The street address (post office boxes are not acceptable) of the principal
office of the corporation in Massachusetts is:
          South Deerfield Research Park, South Deerfield, MA 01373

b. The name, residential address and post office address of each director and
officer of the corporation is as follows:

<TABLE>
<CAPTION>
               NAME                     RESIDENTIAL ADDRESS           POST OFFICE ADDRESS
<S>                                     <C>                           <C>
President:     John L. Youngblood       29366 Duberry Ridge           29366 Duberry Ridge
                                        Boerne, TX 78015              Boerne, TX 78015

Treasurer:     Dennis C. Stempel        18 Independence Road          18 Independence Road
                                        Feeding Hills, MA 01030       Feeding Hills, MA 01030

Clerk:         David L. Renauld         40 Barnes Road                40 Barnes Road
                                        No. Brookfield, MA 01535      No. Brookfield, MA 01535

Directors:     Albert E. Paladino       12 Wachusett Road             12 Wachusett Road
                                        Chestnut Hill, MA 02167       Chestnut Hill, MA 02167

               Allan M. Doyle, Jr.      17 Soo-Nipi Park Road         17 Soo-Nipi Park Road
                                        New London, NH 03257          New London, NH 03257

               Robert C. Fleming        7 Cider Hill Lane             7 Cider Hill Lane
                                        Sherborn, MA 01770            Sherborn, MA 01770

               Matthew S. Robison       3204 Caves Road               3204 Caves Road
                                        Owings Mills, MD 21117        Owings Mills, MD 21117

               James W. Fordyce         370 Lake Avenue               370 Lake Avenue
                                        Greenwich, CT 06830           Greenwich, CT 06830

               David A. Norbury         6705 Polo Farms Drive         6705 Polo Farms Drive
                                        Summerfield, NC 27358         Summerfield, NC 27358

               John L. Youngblood       29366 Duberry Ridge           29366 Duberry Ridge
                                        Boerne, TX 78015              Boerne, TX 78015
</TABLE>

c. The fiscal year (i.e., tax year) of the corporation shall end on the last day
of the month of: December

d. The name and business address of the resident agent, if any, of the
corporation is: N/A

**We further certify that the foregoing Restated Articles of Organization affect
no amendments to the Articles of Organization of the corporation as heretofore
amended, except amendments to the following articles. Briefly describe
amendments below:

          See Attached.

SIGNED UNDER THE PENALTIES OF PERJURY, this 13th/  day of October, 1999,
                                            -------        -------    --

   /s/ John L. Youngblood                                          , *President
-------------------------------------------------------------------
John L. Youngblood

                  /s/ David L. Renauld                             , *Clerk
-------------------------------------------------------------------
David L. Renauld
*Delete the inapplicable words.    **If there are no amendments, state `None'.


<PAGE>

                       THE COMMONWEALTH OF MASSACHUSETTS

                       RESTATED ARTICLES OF ORGANIZATION
                    (General Laws, Chapter 156B, Section 74)

               ================================================

I hereby approve the within Restated Articles of Organization and, the filing
fee in the amount of $64,400 having been paid, said articles are deemed to
have been filed with me this 14th day of October, 1999.



Effective Date: 10-14-99



                            WILLIAM FRANCIS GALVIN
                         Secretary of the Commonwealth


                        TO BE FILLED IN BY CORPORATION
                     Photocopy of document to be sent to:


David L. Renauld, Esquire
--------------------------------------------
Mirick, O'Connell, DeMallie & Lougee, LLP
100 Front Street
--------------------------------------------
Worcester, MA 01608-1477
--------------------------------------------

Telephone: (508) 791-8500
          ----------------------------------
<PAGE>

                                  ARTICLE II
                                  ----------

                                   Purposes
                                   --------


     To develop, manufacture, market, sell and service devices, components,
subsystems and systems operating in the millimeter and submillimeter wavelength
regions of the electromagnetic spectrum.

     To carry on any manufacturing, mercantile, selling, management, service or
other business, operation or activity which may be lawfully carried on by a
corporation organized under the Business Corporation Law of the Commonwealth of
Massachusetts, whether or not related to those referred to in the foregoing
paragraph.
<PAGE>

                                  ARTICLE IV
                                  ----------

                                 Capital Stock
                                 -------------


     The total number of shares of all classes of stock which the corporation
shall have authority to issue is One Hundred Twenty-Six Million Five Hundred
Eighty Thousand (126,580,000) shares, consisting of One Hundred Million
(100,000,000) shares of Common Stock, par value $.01 per share (the "Common
Stock"), and Twenty-Six Million Five Hundred Eighty Thousand (26,580,000) shares
of Preferred Stock, par value $.01 per share (the "Preferred Stock").

                                 COMMON STOCK
                                 ------------

     Section 1.  Voting Rights.  Subject to the relative rights and preferences
     ---------   -------------
of any shares of preferred stock authorized and issued hereunder, the holders of
shares of Common Stock shall be entitled to one vote for each share so held with
respect to all matters voted on by the shareholders of the corporation.

     Section 2.  Liquidation Rights.  Subject to the prior and superior right of
     ---------   ------------------
any shares of preferred stock authorized and issued hereunder, upon any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the corporation, the holders of Common Stock shall be entitled to receive
that portion of the remaining funds to be distributed.  Such funds shall be paid
to the holders of Common Stock on the basis of the number of shares of Common
Stock held by each of them.

     Section 3.  Dividends.  Subject to the relative rights and preferences of
     ---------   ---------
any shares of preferred stock authorized and issued hereunder, dividends may be
paid on the Common Stock as and when declared by the Board of Directors.

     Section 4.  Residual Rights.  All rights accruing to the outstanding shares
     ---------   ---------------
of the corporation not expressly provided for to the contrary herein shall be
vested in the Common Stock.

                                PREFERRED STOCK
                                ---------------

     Section 1.  Classes and Series of Preferred Stock.  The Preferred Stock may
     ---------   -------------------------------------
from time to time be divided into and issued in classes and series within a
class. The different classes and series of Preferred Stock shall be established
and designated, and the variations in the relative rights and preferences as
between the different classes and series shall be fixed and determined, by the
Board of Directors as hereinafter provided. In all other respects all shares of
Preferred Stock shall be identical.

                                       2
<PAGE>

     Section 2.  Designation of Class by Board of Directors.  The Board of
     ---------   ------------------------------------------
Directors is hereby expressly authorized, subject to the provisions of these
Restated Articles of Organization, to establish classes of Preferred Stock, with
or without series, in accordance with applicable law and to fix and determine by
vote providing for the issue of such class:

     (a)  the number of shares constituting that class and series within that
          class and the distinctive designation of that class and/or any series
          and whether additional shares of that class and/or series may be
          issued;

     (b)  whether any dividends shall be paid on shares of that class and/or
          series, and, if so, the dividend rate on the shares of that class
          and/or series; whether dividends shall be cumulative and, if so, from
          which date or dates, and the relative rights of priority, if any, of
          payment of dividends on shares of that class and/or series;

     (c)  whether shares of that class and/or series shall have voting rights in
          addition to the voting rights provided by law and, if so, the terms of
          such voting rights;

     (d)  whether shares of that class and/or series shall be convertible into
          shares of Common Stock or another security and, if so, the terms and
          conditions of such conversion, including provisions for adjustment of
          the conversion rate in such events as the Board of Directors shall
          determine;

     (e)  whether or not the shares of that class and/or series shall be
          redeemable and, if so, the terms and conditions of such redemption,
          including the date or dates upon or after which they shall be
          redeemable and the amount per share payable in case of redemption,
          which amount may vary under different conditions and at different
          redemption dates; and whether that class and/or series shall have a
          sinking fund for the redemption or purchase of shares of that class
          and/or series and, if so, the terms and amount of such sinking fund;

     (f)  whether, in the event of purchase or redemption of the shares of that
          class and/or series, any shares of that class and/or series shall be
          restored to the status of authorized but unissued shares or shall have
          another specified status;

     (g)  the rights of the shares of that class and/or series in the event of
          the sale, conveyance, exchange or transfer of all or substantially all
          of the property and assets of the corporation, or the merger or
          consolidation of the corporation into or with any other corporation,
          or the merger of any other corporation into it, or the voluntary or
          involuntary liquidation, dissolution or winding up of the corporation,
          and the relative rights of priority, if any, of shares of that class
          and/or series to payment in any such event;

                                       3
<PAGE>

     (h)  whether the shares of that class and/or series shall carry any
          preemptive right in or preemptive right to subscribe for any
          additional shares of that class or series or any shares of any other
          class of stock which may at any time be authorized or issued, or any
          bonds, debentures or other securities convertible into shares of stock
          of any class of the corporation, or options or warrants carrying
          rights to purchase such shares or securities;

     (i)  whether the shares of that class and/or series shall carry any
          registration rights and the terms and conditions of such registration;
          and

     (j)  any other designation, preferences, voting powers, qualifications, and
          special or relative rights or privileges of the shares of that class
          and/or series.

     The Board of Directors may from time to time increase the number of shares
of any class or series of Preferred Stock already created by providing that any
unissued shares of Preferred Stock shall constitute part of such class or
series, and/or may decrease (but not below the number of shares thereof then
outstanding) the number of shares of any class or series of Preferred Stock
already created by providing that any unissued shares previously assigned to
such class or series shall no longer constitute part thereof.

     Section 3.  Residual Rights.  All rights accruing to the outstanding shares
     ---------   ---------------
of capital stock of the corporation not expressly provided for to the contrary
in the Restated Articles of Organization with respect to the existing class or
series of Preferred Stock or in any subsequent designations with respect to any
other class or series of Preferred Stock shall be vested in the Common Stock.

                            CLASS A PREFERRED STOCK
                            -----------------------

     Section 1.  Designation.  Three Million Ninety Thousand Three Hundred
     ---------   -----------
Twenty-Three (3,090,323) shares of Preferred Stock are hereby designated as
"Class A Preferred Stock" (the "Class A Preferred").

     Section 2.  Liquidation Rights.  In the event of any voluntary or
     ---------   ------------------
involuntary liquidation, dissolution or winding up of the affairs of the
corporation, the holders of each share of Class A Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the corporation to the holders of the Class C Preferred and the
holders of the Common Stock of the corporation by reason of their ownership
thereof, an amount equal to three dollars and twenty-five cents ($3.25) per
share plus an amount equal to all declared but unpaid dividends to and including
the date full payment shall be tendered to the holder of the Class A Preferred
with respect to such liquidation, dissolution or winding up.

     All of the preferential amounts to be paid to the holders of the Class A
Preferred under this Section 2 shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the distribution of
any assets of the corporation to, the holders of

                                       4
<PAGE>

the Class C Preferred or the holders of the Common Stock in connection with such
liquidation, dissolution or winding up. After the payment or the setting apart
of payment to the holders of the Class A Preferred of the preferential amounts
so payable to them, the holders of the Class C Preferred and the holders of the
Common Stock shall be entitled to receive all remaining assets of the
corporation.

     If the assets or surplus funds to be distributed to the holders of the
Class A Preferred are insufficient to permit the payment to such holders of
their full preferential amount, the assets and surplus funds legally available
for distribution shall be distributed ratably among the holders of the Class A
Preferred in proportion to the full preferential amount each such holder is
otherwise entitled to receive.

     A consolidation or merger 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 2; provided, however, that each holder of Class A
                               --------  -------
Preferred shall have the right to elect the benefits of the provisions of
Section 3(d) (vii) hereof in lieu of receiving payment in liquidation,
dissolution or winding up of the corporation pursuant to this Section 2.

     Section 3.  Conversion.  The holders of the Class A Preferred shall have
     ---------   ----------
conversion rights as follows (the "Conversion Rights"):

          (a)  Right to Convert.  Each share of Class A Preferred shall be
               ----------------
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the corporation or any transfer agent
for the Class A Preferred, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing three dollars and
twenty-five cents ($3.25) by the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. The Conversion Price at which
shares of Common Stock shall be deliverable upon conversion without the payment
of any additional consideration by the holder thereof (the "Conversion Price")
shall initially be three dollars and twenty-five cents ($3.25) per share of
Common Stock. Such initial Conversion Price shall be subject to adjustment, in
order to adjust the number of shares of Common Stock into which the Class A
Preferred is convertible, as hereinafter provided.

          (b)  Automatic Conversion.  Each share of Class A Preferred shall
               --------------------
automatically be converted into shares of Common Stock at the then effective
Conversion Price upon the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the corporation to the public at a public offering price of at least
$4.50 per share (with such amount to be appropriately adjusted in the event of
any stock dividend, stock distribution or subdivision as provided in
subparagraph (d)(vi) hereof) and having an aggregate offering price to the
public resulting in gross proceeds to the corporation of not less than
$15,000,000 (in the event of which offering, the person(s) entitled to receive
the Common Stock issuable upon such conversion of the Class A Preferred shall
not be deemed to have converted that Class A Preferred until immediately prior
to the closing of such offering).

                                       5
<PAGE>

Each person who holds of record Class A Preferred immediately prior to such
automatic conversion shall be entitled to all dividends which have accrued to
the time of the automatic conversion, but not paid on the Class A Preferred,
pursuant to Section 6 hereof. Such dividends shall be paid to all such holders
within 30 days of the automatic conversion.

          (c)  Mechanics of Conversion.  No fractional shares of Common Stock
               -----------------------
shall be issued upon conversion of the Class A Preferred. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price. Before any holder of Class A Preferred shall be
entitled to convert the same into full shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Class A Preferred, and shall
give written notice to the corporation at such office that he elects to convert
the same and shall state therein his name or the name or names of his nominees
in which he wishes the certificate or certificates for shares of Common Stock to
be issued. The corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Class A Preferred, or to his nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Class A Preferred to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such shares of Common Stock
on such date.

          (d)  Adjustments to Conversion Price for Diluting Issues.

               (i)  Special Definitions.  For purposes of this Section 3(d), the
                    -------------------
following definitions shall apply:

                    (1)  "Option" shall mean rights, options, or warrants to
                          ------
subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.

                    (2)  "Original Issue Date" shall mean the date on which a
share of Class A Preferred was first issued.

                    (3)  "Convertible Securities" shall mean any evidences of
indebtedness, shares (other than Common Stock, Class A Preferred or Class B
Preferred) or other securities directly or indirectly convertible into or
exchangeable for Common Stock.

                    (4)  "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to Section 3(d)(iii) hereof, deemed
to be issued) by the corporation after the Original Issue Date, other than
shares of Common Stock issued or issuable:

                         (A)  upon conversion of shares of Class A Preferred or
of Class B Preferred;

                                       6
<PAGE>

                         (B)  to officers or employees of, or consultants to,
the corporation pursuant to the corporation's 1983 Incentive Stock Option Plan,
1984 Incentive Stock Option Plan, 1986 Incentive Stock Option Plan, 1987 Stock
Plan, 1988 Stock Plan, 1996 Stock Plan or pursuant to action by the Board of
Directors prior to March 28, 1984, and pursuant to a stock purchase or option
plan or other employee or director stock incentive or compensation program
(collectively, the "Plans") approved by a majority of the representatives of the
Class A Preferred on the Board of Directors;

                         (C)  by way of dividend or other distribution of shares
of Common Stock excluded from the definition of Additional Shares of Common
Stock by the foregoing clauses (A) and (B) or this clause (C) or on shares of
Common Stock so excluded; or

                         (D)  with the approval of a majority of the
representatives of the Class A Preferred and Class B Preferred on the Board of
Directors, which shares have been designated by said majority to be excepted
from the definition of "Additional Shares of Common Stock" contained herein.

               (ii)  No Adjustment of Conversion Price. No adjustment in the
                     ---------------------------------
number of shares of Common Stock into which the Class A Preferred is convertible
shall be made, by adjustment in the Conversion Price of Class A Preferred in
respect of the issuance of Additional Shares of Common Stock or otherwise,
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 Conversion
Price in effect on the date of, and immediately prior to, the issue of such
Additional Share.

               (iii) Issue of Securities 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 or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
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, 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 or, in case such record date shall have been fixed, as of
the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section 3(d)(v) hereof), of such Additional
Shares of Common Stock would be less than the Conversion Price in effect on the
date of and immediately prior to such issue, or such record date, as the case
may be, and provided further that in any such case in which Additional Shares of
Common Stock are deemed to be issued:

                                       7
<PAGE>

                         (A)  no further adjustment in the 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;

                         (B)  if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase in the
consideration payable to the corporation, or decrease in the number of shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be re-computed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;

                         (C)  upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such expiration, be
re-computed 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 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 such exercise, or
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 then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation
(determined pursuant to Section 3(d)(v) hereof) upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised;

                         (D)  no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Conversion Price to an amount
which exceeds the lower of (i) the Conversion Price on the original adjustment
data, or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date;

                                       8
<PAGE>

                         (E)  in the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no adjustment of
the Conversion Price shall be made until the expiration or exercise of all such
Options, whereupon such adjustment shall be made in the same manner provided in
clause (C) above; and

                         (F)  if such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date fixed therefor, the
adjustment previously made in the Conversion Price which became effective on
such record date shall be canceled as of the close of business on such record
date, and thereafter the Conversion Price shall be adjusted pursuant to this
subparagraph 3(d)(iii) as of the actual date of their issuance.

                    (2)  Stock Dividends, Stock Distributions and Subdivisions.
                         -----------------------------------------------------
In the event the corporation at any time or from time to time after the Original
Issue Date shall declare or pay any dividend or make any other distribution on
the Common Stock payable in Common Stock, or effect a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock), then and in any such event, Additional
Shares of Common Stock shall be deemed to have been issued:

                         (A)  in the case of any such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend or
distribution, or

                         (B)  in the case of any such subdivision, at the close
of business on the date immediately prior to the date upon which such corporate
action becomes effective.

     If such record date shall have been fixed and such dividend shall not have
been fully paid on the date fixed therefor, the adjustment previously made in
the Conversion Price which became effective on such record date shall be
canceled as of the close of business on such record date, and thereafter the
Conversion Price shall be adjusted pursuant to this subparagraph 3(d)(iii) as of
the time of actual payment of such dividend.

               (iv) Adjustment of Conversion Price 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 3(d) (iii) hereof, but excluding Additional Shares of
Common Stock issued pursuant to Section 3(d)(iii)(2), which event is dealt with
in Section 3(d)(vi) hereof) without consideration or for a consideration per
share less than the Conversion Price in effect on the date of and immediately
prior to such issue, then and in such event, such Conversion Price shall be
reduced, concurrently with such issue in order to increase the number of shares
of Common Stock into which the Class A Preferred is convertible, to a price
(calculated to the nearest cent) determined by multiplying such Conversion Price
by a fraction (x) the numerator of which shall be (1) the number of shares of
Common Stock outstanding immediately prior to such issue (including shares of
Common Stock issuable upon conversion of any outstanding Class A Preferred,
Class B Preferred or Convertible Securities), plus (2) the number of shares of
Common Stock which the aggregate

                                       9
<PAGE>

consideration received by the corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Conversion Price, and
(y) the denominator of which shall be (1) the number of shares of Common Stock
outstanding immediately prior to such issue (including shares of Common Stock
issuable upon conversion of any outstanding Class A Preferred, Class B Preferred
or Convertible Securities), plus (2) the number of such Additional Shares of
Common Stock so issued, provided that the Conversion Price shall not be so
reduced at such time if the amount of such reduction would be an amount less
than $0.05, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $0.05 or more.

               (v)  Determination of Consideration.  For purposes of this
                    ------------------------------
Section 3(d), 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 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 at the time of such issue, as
determined in good faith by the Board of Directors; and

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

                    (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 3(d)(iii)(1) above, relating to
Options and Convertible Securities shall be determined by dividing

                         (x)  the total amount, if any, received or receivable
by the corporation as consideration for the issue of such Options or Convertible
Securities, 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 consideration until such
subsequent adjustment occurs) 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

                                       10
<PAGE>

                         (y)  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 until such
subsequent adjustment occurs) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.

               (vi) Adjustment for Dividends, Distributions, Subdivisions,
                    ------------------------------------------------------
Combinations or Consolidation of Common Stock.
---------------------------------------------

                    (1)  Stock Dividends, Distributions or Subdivisions.  In the
                         ----------------------------------------------
event the corporation shall issue Additional Shares of Common Stock pursuant to
Section 3(d)(iii)(2) hereof in a stock dividend, stock distribution or
subdivision, the Conversion Price in effect immediately prior to such stock
dividend, stock distribution or subdivision shall, concurrently with the
effectiveness of such stock dividend, stock distribution or subdivision, be
proportionately decreased.

                    (2)  Combination or Consolidations.  In the event the
                         -----------------------------
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Conversion Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.

               (vii) Adjustment for Merger or Reorganization.  In case of any
                     ---------------------------------------
consolidation or merger of the corporation with or into another corporation or
the conveyance of all or substantially all of the assets of the corporation to
another corporation, each share of Class A Preferred shall thereafter be
convertible into the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock of the corporation
deliverable upon conversion of such Class A Preferred would have been entitled
upon such consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interest thereafter of the holders of the Class A Preferred, to the end that
the provisions set forth herein (including provisions with respect to changes in
and other adjustments of the Conversion Price) shall thereafter be applicable,
as nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of the Class A Preferred.

     Each holder of Class A Preferred upon the occurrence of a capital
reorganization, merger or consolidation of the corporation or the sale of all or
substantially all its assets and properties as such events are more fully set
forth in the first paragraph of this Section 3(d)(vii), shall have the option of
electing treatment of his shares of Class A Preferred under either this
Section 3(d)(vii) or Section 2 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 event.

          (e)  No Impairment.  The corporation will not, by amendment of its
               -------------
Restated Articles of Organization 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

                                       11
<PAGE>

observance or performance of any of the terms to be observed or performed
hereunder by the corporation but will at all times in good faith assist in the
carrying out of all the provisions of this Section 3 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Class A Preferred against impairment.

          (f)  Certificate as to Adjustments.  Upon the occurrence of each
               -----------------------------
adjustment or readjustment of the Conversion Price pursuant to this Section 3,
the corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Class A Preferred 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 of any
holder of Class A Preferred, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Class A Preferred.

          (g)  Notice of Record Date.  In the event of (i) 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 (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, or (ii) any capital reorganization of
the corporation, any reclassification or recapitalization of the capital stock
of the corporation, any merger or consolidation of the corporation, and any
transfer of all or substantially all of the assets of the corporation to any
other corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the corporation, the
corporation shall mail to each holder of Class A Preferred at least 20 days
prior to the record date specified therein, a notice specifying (A) the date on
which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (B) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective,
and (C) 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, transfer, consolidation,
merger, dissolution, liquidation or winding up.

          (h)  Common Stock Reserved.  The corporation shall reserve and keep
               ---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Class A Preferred.

     Section 4.  Redemption.  (a) There shall be a five-year period (the
     ---------   ----------
"Redemption Period") for each share of the Class A Preferred commencing five
years after April 20, 1994 for any Class A Preferred issued on or prior to that
date and commencing five years after the date of issuance for any Class A
Preferred issued subsequent to April 20, 1994.  On the commencement date of the
Redemption Period for each share of the Class A Preferred eligible for
redemption and on the first, second, third and fourth anniversaries thereof, the
corporation shall offer to each holder of shares of Class A Preferred eligible
for redemption to redeem a maximum of twenty percent

                                       12
<PAGE>

(20%), forty percent (40%), sixty percent (60%), eighty percent (80%) and one
hundred percent (100%), respectively, of the total number of shares of Class A
Preferred held by such holder prior to the commencement of the Redemption Period
with respect to such Class A Preferred, at a price of three dollars and twenty-
five cents ($3.25) per share, plus an amount equal to all declared but unpaid
dividends payable in accordance with Section 6 hereof on each share of Class A
Preferred tendered for redemption; provided, that any shares of Class A
Preferred redeemed hereunder in any previous years shall reduce the maximum
amount of Class A Preferred which the corporation may be requested to redeem in
any then current year. The corporation shall offer to redeem shares of Class A
Preferred eligible for redemption by giving written notice thereof to each
holder of shares of Class A Preferred eligible for redemption, which notice
shall state the number of shares of Class A Preferred eligible to be redeemed by
such holder and shall specify a redemption date not less than forty-five (45)
days nor more than sixty (60) days after the date of such written notice. Any
holder of shares of Class A Preferred eligible to be redeemed may redeem such
shares by giving written notice thereof to the corporation, and to each other
holder of shares of Class A Preferred, no less than 15 days prior to the
redemption date specified in the corporation's written offer of redemption, and
by surrendering to the corporation on or before the redemption date the share
certificates for the number of shares of Class A Preferred to be redeemed. If
less than all of the shares represented by such certificates are redeemed, a new
certificate shall be issued for the unredeemed shares as promptly as possible.
Notwithstanding the foregoing, the holders of sixty-six and two-thirds percent
(66 2/3%) or more of the Class A Preferred shall have the right to postpone for
a specified period of time or waive such rights of redemption of all holders by
written notice to the corporation and to all such holders given at least fifteen
(15) days prior to the scheduled date of redemption.

          (b)  In the event of a sale of all or substantially all the assets of
the corporation, then the corporation shall offer to each holder of shares of
Class A Preferred to redeem not less than all the shares of Class A Preferred
held by such holder on the date the corporation fixes as the date to mail or
otherwise send out its offer of redemption, at a redemption price of three
dollars and twenty-five cents ($3.25) per shares plus an amount equal to all
declared but unpaid dividends payable in accordance with Section 6 hereof on
each such share of Class A Preferred tendered for redemption. The corporation
shall offer to redeem shares of Class A Preferred by giving written notice
thereof to each holder of shares of Class A Preferred, which notice shall be
sent not less than twenty (20) days before the scheduled date of consummation of
the transaction described above. Such notice of redemption shall state the
number of shares of Class A Preferred eligible to be redeemed by such holder and
shall specify a redemption date not less than twenty (20) days nor more than
sixty (60) days after the date of such written notice. Any holder of shares of
Class A Preferred may redeem such shares by giving written notice thereof to the
corporation not less than ten (10) days prior to the redemption date specified
in the corporation's written offer of redemption, and by surrendering to the
corporation on or before the redemption date the share certificates for the
number of shares of Class A Preferred to be redeemed.

                                       13
<PAGE>

     Section 5.  Voting Rights.
     ---------   -------------

          (a)  The holders of shares of Class A Preferred shall be entitled to
notice of any shareholders' meeting and to vote upon any matter submitted to a
shareholder for a vote, as though the Common Stock, the Class A Preferred, the
Class B Preferred and the Class C Preferred constitute a single class of stock,
except with respect to those matters on which the Massachusetts Corporation Law
requires that a vote must be by a separate class or classes or by separate
series. For all votes other than votes by a separate class or series, holders of
Class A Preferred shall have that number of votes per share as is equal to the
number of shares of Common Stock into which each such share of Class A Preferred
held by such holder is then convertible, provided, however, that at any time, if
the number of shares of Common Stock into which the Class A Preferred is
convertible is increased as a result of an adjustment of the Conversion Price,
all as set forth in Section 3 above, the holders of Class A Preferred shall have
that number of votes equal to the number of shares of Common Stock into which
such Class A Preferred is convertible.

          (b)  The holders of Class A Preferred, the holders of Class B
Preferred, the holders of the Class C Preferred and the holders of Common Stock
shall be entitled to vote upon the election of directors on the following basis:
So long as at least 50,000 shares of Class A Preferred and Class B Preferred,
collectively, shall be outstanding, the holders of Class A Preferred and Class B
Preferred issued and outstanding, voting as a single class, are entitled to
elect three directors; and the holders of Class A Preferred, Class B Preferred,
Class C Preferred and Common Stock and any other capital stock having voting
rights are entitled to elect all other members of the Board of Directors.

     Section 6.  Dividend Rights.
     ---------   ---------------

          (a)  The holders of the then outstanding shares of Class A Preferred
shall be entitled to receive, when and as declared by the Board Directors, out
of funds legally available therefor, non-cumulative cash dividends at the annual
rate of $.26 per share payable at a rate of $.065 per share per calendar
quarter. The corporation's obligation to pay such dividends shall commence after
the first calendar quarter when the corporation's net after tax income,
calculated in accordance with generally accepted accounting principles, exceeds
five times such quarterly dividend on all then outstanding Class A Preferred,
Class B Preferred and Class C Preferred and on all then outstanding shares of
any other class of preferred stock of the corporation.

          (b)  Notwithstanding any provisions in Section 6(a) hereof, dividends
which have been declared on the Class A Preferred but not been paid prior to an
automatic conversion pursuant to Section 3(b) hereof shall be payable within 30
days of the Closing, as defined in Section 3(b), to each person who holds of
record Class A Preferred immediately prior to the automatic conversion.

     Section 7.  Covenants.  So long as at least 50,000 shares of Class A
     ---------   ---------
Preferred shall be outstanding (as adjusted for all subdivisions and
combinations), the corporation shall not,

                                       14
<PAGE>

without first obtaining the affirmative vote or written consent of not less than
sixty-six percent (66%) of such outstanding shares of Class A Preferred:

          (a)  amend or repeal any provision of, or add any provision to, the
corporation's Restated Articles of Organization or By-Laws if such action would
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Class A Preferred generally except
with respect to any class or any series of preferred stock of the corporation
created by the Board of Directors pursuant to a Certificate of Designation in
accordance with the provisions of these Revised Articles of Organization so long
as shares of the class or series created do not have any preference or priority
as to dividends or assets superior to the Class A Preferred;

          (b)  reclassify any Common Stock into shares having any preference or
priority as to dividends or assets superior to or on a parity with any such
preference or priority of the Class A Preferred;

          (c)  pay or declare any dividend or distribution on any shares of
Common Stock or apply any of its assets to the redemption, retirement, purchase
or other acquisition directly or indirectly, through subsidiaries, if any, or
otherwise, of any shares of Common Stock except from officers, directors or
employees of or consultants to the corporation upon termination of employment
and except pursuant to the corporation's rights of first refusal; or

          (d)  create any other class or classes of stock or series of preferred
stock having any preference or priority as to dividends or assets superior to
any such preference or priority of the Class A Preferred; or

          (e)  authorize any merger or consolidation of the corporation with or
into any other corporation or entity (except into or with a wholly-owned
subsidiary corporation with the requisite shareholder approval), or authorize
the sale of substantially all of the assets of the corporation.

                            CLASS B PREFERRED STOCK
                            -----------------------

     Section 1.  Designation.  Seven Hundred Eighty-Nine Thousand Six Hundred
     ---------   -----------
Seventy-Seven (789,677) shares of Preferred Stock are hereby designated as
"Class B Preferred Stock" (the "Class B Preferred").

     Section 2.  Liquidation Rights.  In the event of any voluntary or
     ---------   ------------------
involuntary liquidation, dissolution or winding up of the affairs of the
corporation, the holders of each share of Class B Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the corporation to the holders of the Class A Preferred, the
holders of the Class C Preferred and the holders of the Common Stock of the
corporation by reason of their ownership thereof, an amount equal to three
dollars and twenty-five cents ($3.25) per share plus an amount equal to all
declared but unpaid dividends to and including the date full payment shall

                                       15
<PAGE>

be tendered to the holder of the Class B Preferred with respect to such
liquidation, dissolution or winding up.

     All of the preferential amounts to be paid to the holders of the Class B
Preferred under this Section 2 shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the distribution of
any assets of the corporation to, the holders of the Class A Preferred, the
holders of the Class C Preferred or the holders of the Common Stock in
connection with such liquidation, dissolution or winding up. After the payment
or the setting apart of payment to the holders of the Class B Preferred of the
preferential amounts so payable to them, the holders of the Class A Preferred,
the holders of the Class C Preferred and the holders of the Common Stock shall
be entitled to receive all remaining assets of the corporation.

     If the assets or surplus funds to be distributed to the holders of the
Class B Preferred are insufficient to permit the payment to such holders of
their full preferential amount, the assets and surplus funds legally available
for distribution shall be distributed ratably among the holders of the Class B
Preferred in proportion to the full preferential amount each such holder is
otherwise entitled to receive.

     A consolidation or merger 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 2; provided, however, that each holder of Class B
                               --------  -------
Preferred shall have the right to elect the benefits of the provisions of
Section 3(d)(vii) hereof in lieu of receiving payment in liquidation,
dissolution or winding up of the corporation pursuant to this Section 2.

     Section 3.  Conversion.  The holders of the Class B Preferred shall have
     ---------   ----------
conversion rights as follows (the "Conversion Rights"):

          (a)  Right to Convert.  Each share of Class B Preferred shall be
               ----------------
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the corporation or any transfer agent
for the Class B Preferred, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing three dollars and twenty-
five cents ($3.25) by the Conversion Price, determined as hereinafter provided,
in effect at the time of conversion.  The Conversion Price at which shares of
Common Stock shall be deliverable upon conversion without the payment of any
additional consideration by the holder thereof (the "Conversion Price") shall
initially be three dollars and twenty-five cents ($3.25) per share of Common
Stock.  Such initial Conversion Price shall be subject to adjustment, in order
to adjust the number of shares of Common Stock into which the Class B Preferred
is convertible, as hereinafter provided.

          (b)  Automatic Conversion.  Each share of Class B Preferred shall
               --------------------
automatically be converted into shares of Common Stock at the then effective
Conversion Price upon the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the corporation to the public at a public offering price of at

                                       16
<PAGE>

least $4.50 per share (with such amount to be appropriately adjusted in the
event of any stock dividend, stock distribution or subdivision as provided in
subparagraph (d)(vi) hereof) and having an aggregate offering price to the
public resulting in gross proceeds to the corporation of not less than
$15,000,000 (in the event of which offering, the person(s) entitled to receive
the Common Stock issuable upon such conversion of the Class B Preferred shall
not be deemed to have converted that Class B Preferred until immediately prior
to the closing of such offering). Each person who holds of record Class B
Preferred immediately prior to such automatic conversion shall be entitled to
all dividends which have accrued to the time of the automatic conversion, but
not paid on the Class B Preferred, pursuant to Section 6 hereof. Such dividends
shall be paid to all such holders within 30 days of the automatic conversion.

          (c)  Mechanics of Conversion. No fractional shares of Common Stock
               -----------------------
shall be issued upon conversion of the Class B Preferred. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price. Before any holder of Class B Preferred shall be
entitled to convert the same into full shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Class B Preferred, and shall
give written notice to the corporation at such office that he elects to convert
the same and shall state therein his name or the name or names of his nominees
in which he wishes the certificate or certificates for shares of Common Stock to
be issued. The corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Class B Preferred, or to his nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Class B Preferred to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such shares of Common Stock
on such date.

          (d)  Adjustments to Conversion Price for Diluting Issues.
               ---------------------------------------------------

               (i)  Special Definitions. For purposes of this Section 3(d), the
                    -------------------
following definitions shall apply:

                    (1)  "Option" shall mean rights, options, or warrants to
                          ------
subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.

                    (2)  "Original Issue Date" shall mean the date on which a
                          -------------------
share of Class B Preferred was first issued.

                    (3)  "Convertible Securities" shall mean any evidences of
                          ----------------------
indebtedness, shares (other than Common Stock, Class A Preferred or Class B
Preferred) or other securities directly or indirectly convertible into or
exchangeable for Common Stock.

                                       17
<PAGE>

                    (4)  "Additional Shares of Common Stock" shall mean all
                          ---------------------------------
shares of Common Stock issued (or, pursuant to Section 3(d)(iii) hereof, deemed
to be issued) by the corporation after the Original Issue Date, other than
shares of Common Stock issued or issuable:

                         (A)  upon conversion of shares of Class A Preferred or
of Class B Preferred;

                         (B)  to officers or employees of, or consultants to,
the corporation pursuant to the corporation's 1983 Incentive Stock Option Plan,
1984 Incentive Stock Option Plan, 1986 Incentive Stock Option Plan, 1987 Stock
Plan, 1988 Stock Plan, 1996 Stock Plan or pursuant to action by the Board of
Directors prior to March 15, 1991, and pursuant to a stock purchase or option
plan or other employee or director stock incentive or compensation program
(collectively, the "Plans") approved by a majority of the representatives of the
Class A Preferred and Class B Preferred on the Board of Directors;

                         (C)  by way of dividend or other distribution of shares
of Common Stock excluded from the definition of Additional Shares of Common
Stock by the foregoing clauses (A) and (B) or this clause (C) or on shares of
Common Stock so excluded; or

                         (D)  with the approval of a majority of the
representatives of the Class A Preferred and Class B Preferred on the Board of
Directors, which shares have been designated by said majority to be excepted
from the definition of "Additional Shares of Common Stock" contained herein.

               (ii)  No Adjustment of Conversion Price. No adjustment in the
number of shares of Common Stock into which the Class B Preferred is convertible
shall be made, by adjustment in the Conversion Price of Class B Preferred in
respect of the issuance of Additional Shares of Common Stock or otherwise,
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 Conversion
Price in effect on the date of, and immediately prior to, the issue of such
Additional Share.

               (iii) Issue of Securities 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 or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
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, 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 or, in case such record date shall have been

                                       18
<PAGE>

fixed, as of the close of business on such record date, provided that Additional
Shares of Common Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to Section 3(d)(v) hereof), of such
Additional Shares of Common Stock would be less than the Conversion Price in
effect on the date of and immediately prior to such issue, or such record date,
as the case may be, 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 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;

                         (B)  if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase in the
consideration payable to the corporation, or decrease in the number of shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be re-computed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;

                         (C)  upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such expiration, be
re-computed 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 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 such exercise, or
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 then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation
(determined pursuant to Section 3(d)(v) hereof) upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised;

                                       19
<PAGE>

                         (D)  no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Conversion Price to an amount
which exceeds the lower of (i) the Conversion Price on the original adjustment
data, or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date;

                         (E)  in the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no adjustment of
the Conversion Price shall be made until the expiration or exercise of all such
Options, whereupon such adjustment shall be made in the same manner provided in
clause (C) above; and

                         (F)  if such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date fixed therefor, the
adjustment previously made in the Conversion Price which became effective on
such record date shall be canceled as of the close of business on such record
date, and thereafter the Conversion Price shall be adjusted pursuant to this
subparagraph 3(d)(iii) as of the actual date of their issuance.

                    (2)  Stock Dividends, Stock Distributions and Subdivisions.
                         -----------------------------------------------------
In the event the corporation at any time or from time to time after the Original
Issue Date shall declare or pay any dividend or make any other distribution on
the Common Stock payable in Common Stock, or effect a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock), then and in any such event, Additional
Shares of Common Stock shall be deemed to have been issued:

                         (A)  in the case of any such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend or
distribution, or

                         (B)  in the case of any such subdivision, at the close
of business on the date immediately prior to the date upon which such corporate
action becomes effective.

               If such record date shall have been fixed and such dividend shall
not have been fully paid on the date fixed therefor, the adjustment previously
made in the Conversion Price which became effective on such record date shall be
canceled as of the close of business on such record date, and thereafter the
Conversion Price shall be adjusted pursuant to this subparagraph 3(d)(iii) as of
the time of actual payment of such dividend.

               (iv) Adjustment of Conversion Price 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 3(d)(iii) hereof, but excluding Additional Shares of
Common Stock issued pursuant to Section 3(d)(iii)(2), which event is dealt with
in Section 3(d)(vi) hereof) without consideration or for a consideration per
share less than the Conversion Price in effect on the date of and immediately
prior to such issue, then and in such event, such Conversion Price shall be
reduced, concurrently

                                       20
<PAGE>

with such issue in order to increase the number of shares of Common Stock into
which the Class B Preferred is convertible, to a price (calculated to the
nearest cent) determined by multiplying such Conversion Price by a fraction (x)
the numerator of which shall be (1) the number of shares of Common Stock
outstanding immediately prior to such issue (including shares of Common Stock
issuable upon conversion of any outstanding Class A Preferred, Class B Preferred
or Convertible Securities), plus (2) 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 would purchase at such Conversion
Price, and (y) the denominator of which shall be (1) the number of shares of
Common Stock outstanding immediately prior to such issue (including shares of
Common Stock issuable upon conversion of any outstanding Class A Preferred,
Class B Preferred or Convertible Securities), plus (2) the number of such
Additional Shares of Common Stock so issued, provided that the Conversion Price
shall not be so reduced at such time if the amount of such reduction would be an
amount less than $0.05, but any such amount shall be carried forward and
reduction with respect thereto made at the time of and together with any
subsequent reduction which, together with such amount and any other amount or
amounts so carried forward, shall aggregate $0.05 or more.

               (v)  Determination of Consideration. For purposes of this Section
                    ------------------------------
3(d), 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 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 at the time of such issue, as
determined in good faith by the Board of Directors; and

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

                    (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 3(d)(iii)(1) above, relating to
Options and Convertible Securities shall be determined by dividing

                         (x)  the total amount, if any, received or receivable
by the corporation as consideration for the issue of such Options or Convertible
Securities, 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

                                       21
<PAGE>

consideration until such subsequent adjustment occurs) 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

                         (y)  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 until such
subsequent adjustment occurs) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.

               (vi)  Adjustment for Dividends, Distributions, Subdivisions,
                     -----------------------------------------------------
Combinations or Consolidation of Common Stock.
---------------------------------------------

                     (1) Stock Dividends, Distributions or Subdivisions. In the
                         ----------------------------------------------
event the corporation shall issue Additional Shares of Common Stock pursuant to
Section 3(d)(iii)(2) hereof in a stock dividend, stock distribution or
subdivision, the Conversion Price in effect immediately prior to such stock
dividend, stock distribution or subdivision shall, concurrently with the
effectiveness of such stock dividend, stock distribution or subdivision, be
proportionately decreased.

                     (2) Combination or Consolidations. In the event the
                         -----------------------------
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Conversion Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.

               (vii) Adjustment for Merger or Reorganization.  In case of any
                     ---------------------------------------
consolidation or merger of the corporation with or into another corporation or
the conveyance of all or substantially all of the assets of the corporation to
another corporation, each share of Class B Preferred shall thereafter be
convertible into the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock of the corporation
deliverable upon conversion of such Class B Preferred would have been entitled
upon such consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interest thereafter of the holders of the Class B Preferred, to the end that
the provisions set forth herein (including provisions with respect to changes in
and other adjustments of the Conversion Price) shall thereafter be applicable,
as nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of the Class B Preferred.

     Each holder of Class B Preferred upon the occurrence of a capital
reorganization, merger or consolidation of the corporation or the sale of all or
substantially all its assets and properties as such events are more fully set
forth in the first paragraph of this Section 3(d)(vii),

                                       22
<PAGE>

or Section 2 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 event.

          (e)  No Impairment. The corporation will not, by amendment of its
               -------------
Restated Articles of Organization 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 to be observed or performed hereunder by the corporation but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Class B Preferred against impairment.

          (f)  Certificate as to Adjustments. Upon the occurrence of each
               -----------------------------
adjustment or readjustment of the Conversion Price pursuant to this Section 3,
the corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Class B Preferred 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 of any holder
of Class B Preferred, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Class B Preferred.

          (g)  Notice of Record Date.  In the event of (i) 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 (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, or (ii) any capital reorganization of
the corporation, any reclassification or recapitalization of the capital stock
of the corporation, any merger or consolidation of the corporation, and any
transfer of all or substantially all of the assets of the corporation to any
other corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the corporation, the
corporation shall mail to each holder of Class B Preferred at least 20 days
prior to the record date specified therein, a notice specifying (A) the date on
which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (B) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective,
and (C) 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, transfer, consolidation,
merger, dissolution, liquidation or winding up.

          (h)  Common Stock Reserved.  The corporation shall reserve and keep
               ---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Class B Preferred.

                                       23
<PAGE>

     Section 4.  Redemption.  (a) There shall be a five-year period (the
     ---------   ----------
"Redemption Period") for each share of the Class B Preferred commencing five
years after the date of issuance for any Class B Preferred or on March 28, 1999,
whichever is later.  On the commencement date of the Redemption Period for each
share of the Class B Preferred eligible for redemption and on the first, second,
third and fourth anniversaries thereof, the corporation shall offer to each
holder of shares of Class B Preferred eligible for redemption to redeem a
maximum of twenty percent (20%), forty percent (40%), sixty percent (60%),
eighty percent (80%) and one hundred percent (100%), respectively, of the total
number of shares of Class B Preferred held by such holder prior to the
commencement of the Redemption Period with respect to such Class B Preferred, at
a price of three dollars and twenty-five cents ($3.25) per share, plus an amount
equal to all declared but unpaid dividends payable in accordance with Section 6
hereof on each share of Class B Preferred tendered for redemption; provided,
that any shares of Class B Preferred redeemed hereunder in any previous years
shall reduce the maximum amount of Class B Preferred which the corporation may
be requested to redeem in any then current year. The corporation shall offer to
redeem shares of Class B Preferred eligible for redemption by giving written
notice thereof to each holder of shares of Class B Preferred eligible for
redemption, which notice shall state the number of shares of Class B Preferred
eligible to be redeemed by such holder and shall specify a redemption date not
less than forty-five (45) days nor more than sixty (60) days after the date of
such written notice.  Any holder of shares of Class B Preferred eligible to be
redeemed may redeem such shares by giving written notice thereof to the
corporation, and to each other holder of shares of Class B Preferred, no less
than 15 days prior to the redemption date specified in the corporation's written
offer of redemption, and by surrendering to the corporation on or before the
redemption date the share certificates for the number of shares of Class B
Preferred to be redeemed.  If less than all of the shares represented by such
certificates are redeemed, a new certificate shall be issued for the unredeemed
shares as promptly as possible.  Notwithstanding the foregoing, the holders of
sixty-six and two-thirds percent (66 2/3%) or more of the Class B Preferred
shall have the right to postpone for a specified period of time or waive such
rights of redemption of all holders by written notice to the corporation and to
all such holders given at least fifteen (15) days prior to the scheduled date of
redemption.

          (b)  In the event of a sale of all or substantially all the assets of
the corporation, then the corporation shall offer to each holder of shares of
Class B Preferred to redeem not less than all the shares of Class B Preferred
held by such holder on the date the corporation fixes as the date to mail or
otherwise send out its offer of redemption, at a redemption price of three
dollars and twenty-five cents ($3.25) per share plus an amount equal to all
declared but unpaid dividends payable in accordance with Section 6 hereof on
each such share of Class B Preferred tendered for redemption. The corporation
shall offer to redeem shares of Class B Preferred by giving written notice
thereof to each holder of shares of Class B Preferred, which notice shall be
sent not less than twenty (20) days before the scheduled date of consummation of
the transaction described above. Such notice of redemption shall state the
number of shares of Class B Preferred eligible to be redeemed by such holder and
shall specify a redemption date not less than twenty (20) days nor more than
sixty (60) days after the date of such written notice. Any holder of shares of
Class B Preferred may redeem such shares by giving written notice thereof to the
corporation not less than ten (10) days prior to the redemption date specified
in the corporation's

                                       24
<PAGE>

written offer of redemption, and by surrendering to the corporation on or before
the redemption date the share certificates for the number of shares of Class B
Preferred to be redeemed.

     Section 5.  Voting Rights.
     ---------   -------------

          (a)  The holders of shares of Class B Preferred shall be entitled to
notice of any shareholders' meeting and to vote upon any matter submitted to a
shareholder for a vote, as though the Common Stock, the Class A Preferred, the
Class B Preferred and the Class C Preferred constitute a single class of stock,
except with respect to those matters on which the Massachusetts Corporation Law
requires that a vote must be by a separate class or classes or by separate
series. For all votes other than votes by a separate class or series, holders of
Class B Preferred shall have that number of votes per share as is equal to the
number of shares of Common Stock into which each such share of Class B Preferred
held by such holder is then convertible, provided, however, that at any time, if
the number of shares of Common Stock into which the Class B Preferred is
convertible is increased as a result of an adjustment of the Conversion Price,
all as set forth in Section 3 above, the holders of Class B Preferred shall have
that number of votes equal to the number of shares of Common Stock into which
such Class B Preferred is convertible.

          (b)  The holders of Class A Preferred, the holders of Class B
Preferred, the holders of Class C Preferred and the holders of Common Stock
shall be entitled to vote upon the election of directors on the following basis:
So long as at least 50,000 shares of Class A Preferred and Class B Preferred,
collectively, shall be outstanding, the holders of Class A Preferred and Class B
Preferred issued and outstanding, voting as a single class, are entitled to
elect three directors; and the holders of Class A Preferred, Class B Preferred,
Class C Preferred and Common Stock and any other capital stock having voting
rights are entitled to elect all other members of the Board of Directors.

     Section 6.  Dividend Rights.
     ---------   ---------------

          (a)  The holders of the then outstanding shares of Class B Preferred
shall be entitled to receive, when and as declared by the Board Directors, out
of funds legally available therefor, non-cumulative cash dividends at the annual
rate of $.26 per share payable at a rate of $.065 per share per calendar
quarter. The corporation's obligation to pay such dividends shall commence after
the first calendar quarter when the corporation's net after tax income,
calculated in accordance with generally accepted accounting principles, exceeds
five times such quarterly dividend on all then outstanding Class A Preferred,
Class B Preferred and Class C Preferred and on all then outstanding shares of
any other class of preferred stock of the corporation.

          (b)  Notwithstanding any provisions in Section 6(a) hereof, dividends
which have been declared on the Class B Preferred but not been paid prior to an
automatic conversion pursuant to Section 3(b) hereof shall be payable within 30
days of the conversion, as defined in Section 3(b), to each person who holds of
record Class B Preferred immediately prior to the automatic conversion.

                                       25
<PAGE>

     Section 7.  Covenants.  So long as at least 50,000 shares of Class A
     ---------   ---------
Preferred and Class B Preferred, collectively, shall be outstanding (as adjusted
for all subdivisions and combinations), the corporation shall not, without first
obtaining the affirmative vote or written consent of not less than sixty-six
percent (66%) of such outstanding shares of Class A Preferred and Class B
Preferred, collectively:

          (a)  amend or repeal any provision of, or add any provision to, the
corporation's Restated Articles of Organization or By-Laws if such action would
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Class A Preferred and/or Class B
Preferred generally except with respect to any class or any series of preferred
stock of the corporation created by the Board of Directors pursuant to a
Certificate of Designation in accordance with the provisions of these Revised
Articles of Organization so long as the shares of the class or series created do
not have any preference or priority as to dividends or assets superior to the
Class A Preferred and/or Class B Preferred;

          (b)  reclassify any Common Stock into shares having any preference or
priority as to dividends or assets superior to or on a parity with any such
preference or priority of the Class A Preferred and/or Class B Preferred;

          (c)  pay or declare any dividend or distribution on any shares of
Common Stock or apply any of its assets to the redemption, retirement, purchase
or other acquisition directly or indirectly, through subsidiaries, if any, or
otherwise, of any shares of Common Stock except from officers, directors or
employees of or consultants to the corporation upon termination of employment
and except pursuant to the corporation's rights of first refusal; or

          (d)  create any other class or classes of stock or series of preferred
stock having any preference or priority as to dividends or assets superior to
any such preference or priority of the Class A Preferred and/or Class B
Preferred; or

          (e)  authorize any merger or consolidation of the corporation with or
into any other corporation or entity (except into or with a wholly-owned
subsidiary corporation with the requisite shareholder approval), or authorize
the sale of substantially all of the assets of the corporation.

                            CLASS C PREFERRED STOCK
                            -----------------------

     Section 1.  Designation.  No (0) shares of Preferred Stock are hereby
     ---------   -----------
designated as "Class C Preferred Stock" (the "Class C Preferred Stock").

     Section 2.  Liquidation Rights.  In the event of any voluntary or
     ---------   ------------------
involuntary liquidation, dissolution or winding up of the affairs of the
corporation, the holders of each share of Class C Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the corporation to the holders of the Common Stock of the
corporation by reason of their ownership thereof, but after any distributions
upon any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the corporation to holders of

                                       26
<PAGE>

the Class A Preferred and Class B Preferred as provided in these Restated
Articles of Organization, an amount equal to twelve dollars and fifty cents
($12.50) per share plus an amount equal to all declared but unpaid dividends to
and including the date full payment shall be tendered to the holder of the Class
C Preferred with respect to such liquidation, dissolution or winding up.

     All of the preferential amounts to be paid to the holders of the Class C
Preferred under this Section 2 shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the distribution of
any assets of the corporation to, the holders of the Common Stock in connection
with such liquidation, dissolution or winding up.  After the payment or the
setting apart of payment to the holders of the Class C Preferred of the
preferential amounts so payable to them, the holders of the Common Stock shall
be entitled to receive all remaining assets of the corporation.

     If the assets or surplus funds to be distributed to the holders of the
Class C Preferred are insufficient to permit the payment to such holders of
their full preferential amount, the assets and surplus funds legally available
for distribution shall be distributed ratably among the holders of the Class C
Preferred in proportion to the full preferential amount each such holder is
otherwise entitled to receive.

     A consolidation or merger 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 2.

     Section 3.  Conversion. The holders of the Class C Preferred shall have
     ---------   ----------
conversion rights as follows (the "Conversion Rights"):

          (a)  Right to Convert.  Each share of Class C Preferred shall be
               ----------------
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the corporation or any transfer agent
for the Class C Preferred, into one (1) fully paid and nonassessable share of
Common Stock.

          (b)  Automatic Conversion.  Each share of Class C Preferred shall
               --------------------
automatically be converted into one share of Common Stock upon the closing of a
firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock for the account of the corporation to the
public at a public offering price of at least $9.75 per share and having an
aggregate offering price to the public resulting in gross proceeds to the
corporation of not less than $15,000,000 (in the event of which offering, the
person(s) entitled to receive the Common Stock issuable upon such conversion of
the Class C Preferred shall not be deemed to have converted that Class C
Preferred until immediately prior to the closing of such offering).  Each person
who holds of record Class C Preferred immediately prior to such automatic
conversion shall be entitled to all dividends which have accrued to the time of
the automatic

                                       27
<PAGE>

conversion, but not paid on the Class C Preferred, pursuant to Section 6 hereof.
Such dividends shall be paid to all such holders within 30 days of the automatic
conversion.

          (c)  Mechanics of Conversion. Before any holder of Class C Preferred
               -----------------------
shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Class C Preferred, and shall
give written notice to the corporation at such office that he elects to convert
the same and shall state therein his name or the name or names of his nominees
in which he wishes the certificate or certificates for shares of Common Stock to
be issued. The corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Class C Preferred, or to his nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of Class C Preferred to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable upon conversion
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on such date.

          (d)  No Impairment. The corporation will not, by amendment of its
               -------------
Restated Articles of Organization 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 to be observed or performed hereunder by the corporation but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Class C Preferred against impairment.

          (e)  Notice of Record Date.  In the event of (i) 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 (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, or (ii) any capital reorganization of
the corporation, any reclassification or recapitalization of the capital stock
of the corporation, any merger or consolidation of the corporation, and any
transfer of all or substantially all of the assets of the corporation to any
other corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the corporation, the
corporation shall mail to each holder of Class C Preferred at least 20 days
prior to the record date specified therein, a notice specifying (A) the date on
which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (B) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective,
and (C) 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, transfer, consolidation,
merger, dissolution, liquidation or winding up.

                                       28
<PAGE>

          (f)  Common Stock Reserved.  The corporation shall reserve and keep
               ---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Class C Preferred.

     Section 4.  Redemption.  The Class C Preferred shall be redeemable only
     ---------   ----------
upon the mutual agreement of the holders thereof and the corporation.  The
corporation shall have no obligation to redeem any shares of the Class C
Preferred.

     Section 5.  Voting Rights.
     ---------   -------------

          (a)  The holders of shares of Class C Preferred shall be entitled to
notice of any shareholders' meeting and to vote upon any matter submitted to a
shareholder for a vote, as though the Common Stock, the Class A Preferred, the
Class B Preferred and the Class C Preferred constitute a single class of stock,
except with respect to those matters on which the Massachusetts Corporation Law
requires that a vote must be by a separate class or classes or by separate
series. For all votes, holders of Class C Preferred shall have one vote per
share.

          (b)  The holders of Class A Preferred, the holders of the Class B
Preferred, the holders of Class C Preferred and the holders of Common Stock
shall be entitled to vote upon the election of directors on the following basis:
So long as at least 50,000 shares of Class A Preferred and Class B Preferred,
collectively, shall be outstanding, the holders of Class A Preferred and Class B
Preferred issued and outstanding, voting as a single class, are entitled to
elect three directors; and the holders of Class A Preferred, Class B Preferred,
Class C Preferred and Common Stock and any other capital stock having voting
rights are entitled to elect all other members of the Board of Directors.

     Section 6.  Dividend Rights.  The holders of the then outstanding shares of
     ---------   ---------------
Class C Preferred shall be entitled to receive, when and as declared by the
Board Directors, out of funds legally available therefor, non-cumulative cash
dividends at the annual rate of $1.00 per share payable at a rate of $.25 per
share per calendar quarter. The corporation's obligation to pay such dividends
shall commence after the first calendar quarter when the corporation's net after
tax income, calculated in accordance with generally accepted accounting
principles, exceeds five times such quarterly dividend on all then outstanding
Class A Preferred, Class B Preferred and Class C Preferred and on all then
outstanding shares of any other class of preferred stock of the corporation.

                            CLASS D PREFERRED STOCK

     Section 1.  Designation.  Seven Million Two Hundred Thousand (7,200,000)
     ----------  -----------
shares of the corporation's authorized but unissued shares of Preferred Stock
are hereby designated as "Class D Preferred Stock". Such Class D Preferred
Stock (the "Class D Preferred") shall have the relative rights and preferences
set forth below.

                                       29
<PAGE>

     Section 2.  Liquidation Rights.
     ----------  ------------------

          (a) Payment to Holders of Class D Preferred Stock Upon Liquidation.
              --------------------------------------------------------------
In the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the corporation, the holder of each share of Class
D Preferred shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the corporation to the
holders of the Class A Preferred, the Class C Preferred and the Common Stock of
the corporation by reason of their ownership thereof, an amount equal to (i)
$1.80 per share of Class D Preferred plus (ii) an amount equal to all declared
but unpaid dividends to and including the date full payment shall be tendered to
the holder of the Class D Preferred with respect to such liquidation,
dissolution or winding-up.

All of the preferential amounts to be paid to the holders of the Class D
Preferred under this Section 2(a) shall be paid or set apart for payment before
the payment or setting apart for payment of any amount for, or the distribution
of any assets of the corporation to, the holders of the Class A Preferred, Class
C Preferred and Common Stock in connection with such liquidation, dissolution or
winding-up.  If the assets or surplus funds to be distributed to the holders of
the Class B Preferred and the Class D Preferred are insufficient to permit the
payment to such holders of their full preferential amount, the assets and
surplus funds legally available for distribution shall be distributed ratably
among the holders of Class D Preferred and Class B Preferred in proportion to
the full preferential amount each such holder is otherwise entitled to receive.

          (b) Payment to Holders of Class D Preferred and Common Stock.  After
              --------------------------------------------------------
the payment or the setting apart of payment to the holders of the Class A
Preferred, the Class B Preferred, the Class C Preferred and the Class D
Preferred of the preferential amounts so payable to them, all remaining assets
of the corporation shall be distributed among the holders of the Class D
Preferred and the holders of the Common Stock ratably in proportion to the
number of shares of Class D Preferred and Common Stock (and, in the case of
Class D Preferred, the number of shares of Common Stock into which each such
share of Class D Preferred held by such holder could be converted on the record
date for the determination of rights of stockholders to distributions under this
Section 2) held by them.

          (c) No Liquidation Preference After Conversion.  Upon conversion of
              ------------------------------------------
shares of Class D Preferred into shares of Common Stock pursuant to Section 3
below, the holder of such Common Stock shall not be entitled to any preferential
payment or distribution in case of any liquidation, dissolution or winding-up of
corporation, but shall share ratably in any distribution of the assets of the
corporation to all holders of Common Stock.

          (d) Distributions Other than Cash.  Whenever the 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.

                                       30
<PAGE>

          (e) Merger as Liquidation, etc.  The merger or consolidation of the
              --------------------------
corporation into or with another corporation (other than a wholly-owned
subsidiary of this corporation in a merger in which this corporation is the
surviving corporation and its Articles of Organization remain unchanged), or the
sale of all or substantially all of the assets of the corporation (other than to
a wholly-owned subsidiary of this corporation) shall be deemed to be a
liquidation, dissolution or winding-up of the corporation for purposes of this
Section 2 unless the holders of at least 51% of the then outstanding shares of
Class D Preferred (voting as a single class) elect to the contrary by giving
written notice thereof to the corporation at least three days before the
effective date of such event.  If such notice is given, the provisions of
Section 3(f) shall apply.  The amount deemed distributed to the holders of Class
D Preferred upon any such merger or consolidation shall be the cash or the value
of the property, rights or securities distributed to such holders by the
acquiring person, firm or other entity.  The value of such property, rights or
other securities shall be determined in good faith by the Board of Directors of
the corporation.

          (f) Notice and Opportunity to Exercise Conversion Rights.
              ----------------------------------------------------
Notwithstanding anything to the contrary that may be inferred from the
provisions of this Section 2, each holder of shares of Class D Preferred shall
be entitled to receive notice from the corporation pursuant to Section 3(i)
hereof of any proposed liquidation, dissolution or winding-up of the corporation
at least 20 days prior to the date on which any such liquidation, dissolution or
winding-up of the corporation is scheduled to occur and, at any time prior to
any such liquidation, dissolution or winding-up of the corporation, to convert
any or all of such holder's shares of Class D Preferred into shares of Common
Stock pursuant to Section 3 hereof.

     Section 3.  Conversion.  The holders of the Class D Preferred shall have
     ----------  ----------
conversion rights as follows (the "Conversion Rights"):

          (a) Right to Convert.  Each share of Class D Preferred shall be
              -----------------
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the corporation or any transfer agent
for the Class D Preferred, into such fully paid and nonassessable shares of
Common Stock, as is determined by dividing one dollar and eighty cents ($1.80)
by the Conversion Price, determined as hereinafter provided, in effect at the
time of conversion. The Conversion Price at which shares of Common Stock shall
be deliverable upon conversion without the payment of any additional
consideration by the holder thereof (the "Conversion Price") shall initially be
one dollar and eighty cents ($1.80) per share of Common Stock. Such initial
Conversion Price shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Class D Preferred is convertible, as
hereinafter provided.

          (b) Automatic Conversion.
              --------------------

                    (i)  Upon Qualifying Public Offerings. Each share of Class D
                         --------------------------------
Preferred shall automatically be converted into shares of Common Stock at the
then effective Conversion Price upon the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock for the account of the corporation to the public at a public

                                       31
<PAGE>

offering price of at least $4.50 per share (with such amount to be appropriately
adjusted in the event of any stock dividend, stock distribution or subdivision
as provided in subparagraph (e) hereof and having an aggregate offering price to
the public resulting in gross proceeds to the corporation of not less than
$15,000,000 (in the event of which offering, the person(s) entitled to receive
the Common Stock issuable upon such conversion of the Class D Preferred shall
not be deemed to have converted that Class D Preferred until immediately prior
to the closing of such offering). Each person who holds of record Class D
Preferred immediately prior to such automatic conversion shall be entitled to
all dividends which have accrued to the time of the automatic conversion, but
have not been paid on the Class D Preferred, pursuant to Section 6 hereof. Such
dividends shall be paid to all such holders within 30 days of the automatic
conversion.

                    (ii) Upon Conversion of 90% of Class D Preferred. Each share
                         -------------------------------------------
of Class D Preferred then outstanding shall automatically be converted into
shares of Common Stock at the then effective Conversion Price, upon the
conversion of ninety percent (90%) or more of the authorized Class D Preferred.
Such conversion shall be deemed to have occurred on the date upon which the
aggregate number of shares of Class D Preferred which have been converted to
Common Stock equals or exceeds ninety percent (90%) of the authorized Class D
Preferred.

          (c)  Mechanics of Conversion.  No fractional shares of Common Stock
               -----------------------
shall be issued upon conversion of the Class D Preferred.  In lieu of any
fractional shares to which the holder would otherwise be entitled, the
corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price. Before any holder of Class D Preferred shall be
entitled to convert the same into full shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Class D Preferred, and shall
give written notice to the corporation at such office that he elects to convert
the same and shall state therein his name or the name or names of his nominees
in which he wishes the certificate or certificates for shares of Common Stock to
be issued. The corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Class D Preferred, or to his nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Class D Preferred to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such shares of Common Stock
on such date.

          (d)  Adjustments to Conversion Price for Diluting Issues.
               ---------------------------------------------------

                    (i)  Special Definitions. For purposes of this Section 3(d),
                         -------------------
the following definitions shall apply:

                         (1)  "Option" shall mean rights, options, or warrants
                               ------
to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.

                                       32
<PAGE>

                         (2)  "Original Issue Date" shall mean the date on which
                               -------------------
the first share of Class D Preferred to be issued was issued.

                         (3)  "Convertible Securities" shall mean any evidences
                               ----------------------
of indebtedness, shares (other than Common Stock, Class A Preferred, Class B
Preferred, Class C Preferred or Class D Preferred) or other securities directly
or indirectly convertible into or exchangeable for Common Stock.

                         (4)  "Additional Shares of Common Stock" shall mean all
                               ---------------------------------
shares of Common Stock issued (or, pursuant to Section 3(d)(iii) hereof, deemed
to be issued) by the corporation after the Original Issue Date, other than:

                              (A)  shares of Common Stock issued or issuable
upon conversion of shares of Class A Preferred, Class B Preferred, Class C
Preferred or Class D Preferred;

                              (B)  up to 3,381,533 shares of Common Stock issued
or issuable to officers or employees of, or consultants to, the corporation
pursuant to the corporation's 1983 Incentive Stock Option Plan, 1984 Incentive
Stock Option Plan, 1986 Incentive Stock Option Plan, 1987 Stock Plan, 1988 Stock
Plan, 1996 Stock Plan or 1997 Employee Incentive Stock Option Plan
(appropriately adjusted to take account of any stock split, stock dividend,
combination of shares or the like), and such number of shares of Common Stock as
are issued or issuable pursuant to additional stock options approved by the
Board of Directors including the representative of Class D Preferred on the
Board of Directors;

                              (C)  shares of Common Stock issued by way of
dividend or other distribution on shares of Common Stock excluded from the
definition of Additional Shares of Common Stock by the foregoing clauses (A) and
(B) or this clause (C) or on shares of Common Stock so excluded; or

                              (D)  shares of Common Stock issued with the
approval of a majority of the representatives of the Class D Preferred on the
Board of Directors, which shares have been designated by said majority to be
excepted from the definition of "Additional Shares of Common Stock" contained
herein.

                    (ii)  No Adjustment of Conversion Price. No adjustment in
                          ---------------------------------
the number of shares of Common Stock into which the Class D Preferred is
convertible shall be made, by adjustment in the Conversion Price of Class D
Preferred in respect of the issuance of Additional Shares of Common Stock or
otherwise, 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
Conversion Price in effect on the date of, and immediately prior to, the issue
of such Additional Share.

                                       33
<PAGE>

                    (iii) Issue of Securities 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 or shall fix a record date for
the determination of holders of any class of securities entitled to receive any
such 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, 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 or, in case such record date shall have been fixed, as of
the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section 3(d)(v) hereof), of such Additional
Shares of Common Stock would be less than the Conversion Price in effect on the
date of and immediately prior to such issue, or such record date, as the case
may be, 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 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;

                              (B)  if such Options or Convertible Securities by
their terms provide, with the passage or time or otherwise, for any increase in
the consideration payable to the corporation, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price computed upon the original issue thereof (or upon
the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;

                              (C)  upon the expiration of any such Options or
any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments 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 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 such exercise, or
for the issue of all such Convertible Securities which were actually converted
or

                                       34
<PAGE>

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 then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation
(determined pursuant to Section 3(d)(v) hereof) upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised;

                              (D)  no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Conversion Price to an amount
which exceeds the lower of (i) the Conversion Price on the original adjustment
date, or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date;

                              (E)  in the case of any Options which expire by
their terms not more than 30 days after the date of issue thereof, no adjustment
of the Conversion Price shall be made until the expiration or exercise of all
such Options, whereupon such adjustment shall be made in the same manner
provided in clause (C) above; and

                              (F)  if such record date shall have been fixed and
such Options or Convertible Securities are not issued on the date fixed
therefor, the adjustment previously made in the Conversion Price which became
effective on such record date shall be canceled as of the close of business on
such record date and thereafter the Conversion Price shall be adjusted pursuant
to this subparagraph 3(d)(iii) as of the actual date of their issuance.

                         (2)  Stock Dividends, Stock Distributions and
                              ----------------------------------------
Subdivisions. In the event the corporation at any time or from time to time
------------
after the Original Issue Date shall declare or pay any dividend or make any
other distribution on the Common Stock payable in Common Stock, or effect a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock), then and in any such
event, Additional Shares of Common Stock shall be deemed to have been issued:

                              (A)  in the case of any such dividend or
distribution, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend or distribution, or

                              (B)  in the case of any such subdivision, at the
close of business on the date immediately prior to the date upon which such
corporate action becomes effective.

                                       35
<PAGE>

     If such record date shall have been fixed and such dividend shall not have
been fully paid on the date fixed therefor, the adjustment previously made in
the Conversion Price which became effective on such record date shall be
canceled as of the close of business on such record date, and thereafter the
Conversion Price shall be adjusted pursuant to this subparagraph 3(d)(iii) as of
the time of actual payment of such dividend.

                    (iv)  Adjustment of Conversion Price 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 3(d)(iii) hereof, but excluding
Additional Shares of Common Stock issued pursuant to Section 3(d)(iii)(2), which
event is dealt with in Section 3(e) hereof) without consideration or for a
consideration per share less than the Conversion Price in effect on the date of
and immediately prior to such issue, then and in such event, such Conversion
Price shall be reduced, concurrently with such issue in order to increase the
number of shares of Common Stock into which the Class D Preferred is
convertible, to a price (calculated to the nearest cent) determined by
multiplying such Conversion Price by a fraction (x) the numerator of which shall
be (1) the number of shares of Common Stock outstanding immediately prior to
such issue (including shares of Common Stock issuable upon conversion of any
outstanding Class A Preferred, Class B Preferred, Class C Preferred, Class D
Preferred or Convertible Securities) plus (2) 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 would purchase at
such Conversion Price, and (y) the denominator of which shall be (1) the number
of shares of Common Stock outstanding immediately prior to such issue (including
shares of Common Stock issuable upon conversion of any outstanding Class A
Preferred, Class B Preferred, Class C Preferred, Class D Preferred or
Convertible Securities), plus (2) the number of such Additional Shares of Common
Stock so issued, provided that the Conversion Price shall not be so reduced at
such time if the amount of such reduction would be an amount less than $0.05,
but any such amount shall be carried forward and reduction with respect thereto
made at the time of and together with any subsequent reduction which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate $0.05 or more.

                    (v)   Determination of Consideration. For purposes of this
                          ------------------------------
Section 3(d), 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 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 at the time of such issue, as
determined in good faith by the Board of Directors; and

                                       36
<PAGE>

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

                         (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 3(d)(iii)(1) above,
relating to Options and Convertible Securities shall be determined by dividing

                              (x)  the total amount, if any, received or
receivable by the corporation as consideration for the issue of such Options or
Convertible Securities, 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
consideration until such subsequent adjustment occurs) 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

                              (y)  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 until
such subsequent adjustment occurs) issuable upon the exercise of such Options or
the conversion or exchange of such Convertible Securities.

          (e)  Adjustment for Dividends, Distributions, Subdivisions,
               ------------------------------------------------------
Combinations or Consolidations of Common Stock.
----------------------------------------------

                    (i)  Stock Dividends, Distributions or Subdivisions. In the
                         ----------------------------------------------
event the corporation shall issue Additional Shares of Common Stock pursuant to
Section 3(d)(iii)(2) hereof in a stock dividend, stock distribution or
subdivision, the Conversion Price in effect immediately prior to such stock
dividend, stock distribution or subdivision shall, concurrently with the
effectiveness of such stock dividend, stock distribution or subdivision, be
proportionately decreased.

                    (ii) Combinations or Consolidations. In the event the
                         ------------------------------
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Conversion Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.

          (f)  Adjustment for Merger or Reorganization.  In case of any
               ---------------------------------------
consolidation or merger of the corporation with or into another corporation or
the conveyance of all or substantially all of the assets of the corporation to
another corporation, each share of Class D Preferred shall thereafter be
convertible into the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock of the corporation

                                       37
<PAGE>

deliverable upon conversion of such Class D Preferred would have been entitled
upon such consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interest thereafter of the holders of the Class D Preferred, to the end that
the provisions set forth herein (including provisions with respect to changes in
and other adjustments of the Conversion Price) shall thereafter be applicable,
as nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of the Class D Preferred.

     Each holder of Class D Preferred upon the occurrence of a capital
reorganization, merger or consolidation of the corporation or the sale of all
or, substantially all its assets and properties as such events are more fully
set forth in the first paragraph of this Section 3(f), shall have the option of
electing treatment of his shares of Class D Preferred under either this Section
3(f) or Section 2 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 event.

          (g)  No Impairment.  The corporation will not, by amendment of its
               -------------
Restated Articles of Organization 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 to be observed or performed hereunder by the corporation but
will at all times in good faith assist in the carrying out of the provisions of
this Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Class D Preferred against impairment.

          (h)  Certificate as to Adjustments.  Upon the occurrence of each
               -----------------------------
adjustment or readjustment of the Conversion Price pursuant to this Section 3,
the corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Class D Preferred 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 of any
holder of Class D Preferred, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the amount if any, of other property which at the time would be
received upon the conversion of Class D Preferred.

          (i)  Notice of Record Date.  In the event of (i) 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 (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, or (ii) any capital reorganization of
the corporation, any reclassification or recapitalization of the capital stock
of the corporation, any merger or consolidation of the corporation, and any
transfer of all or substantially all of the assets of the corporation to any
other corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding-up of the corporation, the
corporation shall mail to each holder of Class D Preferred at least 20 days
prior to the record date specified therein, a notice specifying (A) the date on
which any such record is to be taken for the purpose of such

                                       38
<PAGE>

dividend or distribution and a description of such dividend or distribution, (B)
the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective, and (C) 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, transfer,
consolidation, merger, dissolution liquidation or winding-up.

          (j)  Common Stock Reserved.  The corporation shall reserve and keep
               ---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Class D Preferred.

     Section 4.  Redemption.
     ----------  ----------

          (a)  On November 21, 2002 (the "Commencement Date") and on the first
and second anniversaries thereof, the corporation shall offer to redeem from
each holder of shares of Class D Preferred a maximum of thirty-three and a third
percent (33 1/3%), sixty-six and two-thirds percent (66 2/3%) and one hundred
percent (100%), respectively, of the total number of shares of Class D Preferred
held by such shareholder prior to the Commencement Date, at a price for each
share tendered for redemption equal to the greater of (i) $1.80 plus an amount
equal to all declared but unpaid dividends payable in accordance with Section 6
hereof or (ii) the fair market value per share (the "Redemption Price");
provided, that any shares of Class D Preferred redeemed hereunder in any
previous years shall reduce the maximum amount of Class D Preferred which the
corporation may be requested to redeem in any then current year.  Fair market
value shall mean the fair market value per share as determined in good faith by
the Board of Directors, provided that if holders of more than fifty percent of
the outstanding Class D Preferred disagree with such determination, the fair
market value shall be determined (i) by an independent investment banking firm
mutually selected by such holders and the Board of Directors, or (ii) failing
such agreement within thirty days, by two such firms, one selected by the Board
of Directors and one by such holders, or (iii) failing agreement by such two
firms within thirty days, by a third such firm mutually selected by such firms.
The fees of all such investment banking firms shall be borne in equal halves by
the corporation and such holders.  The corporation shall provide access to all
such information as is reasonably necessary for such firms to determine fair
market value.  The corporation shall offer to redeem shares of Class D Preferred
by giving written notice thereof to each holder of shares of Class D Preferred
eligible for redemption, which notice shall state the number of shares of Class
D Preferred eligible to be redeemed by such holder and shall specify a
redemption date not less than forty-five (45) days nor more than sixty (60) days
after the date of such written notice.  Any holder of shares of Class D
Preferred eligible to be redeemed may redeem such shares by giving written
notice thereof to the corporation, and to each other holder of shares of Class D
Preferred, no less than 15 days prior to the redemption date specified in the
corporation's written offer of redemption, and by surrendering to the
corporation on or before the redemption date the share certificates for the
number of shares of Class D Preferred to be redeemed.  If fewer than all of the
shares represented by such certificates are redeemed, one or more new
certificates shall be issued for the unredeemed shares as promptly as possible.
Notwithstanding the foregoing, the holders of more

                                       39
<PAGE>

than fifty percent (50%) of all Class D Preferred in the aggregate shall have
the right to postpone for a specified period of time or waive such rights of
redemption of all holders by written notice to the corporation and to all such
holders given at least fifteen (15) days prior to the scheduled date of
redemption.

          (b)  In the event of a sale of all or substantially all the assets of
the corporation, then the corporation shall offer to redeem not fewer than all
the shares of Class D Preferred held by all holders of shares of Class D
Preferred on the date the corporation fixes as the date to mail or otherwise
send out its offer of redemption, at the Redemption Price.  The corporation
shall offer to redeem shares of Class D Preferred by giving written notice
thereof to each holder of shares of such Class D Preferred, which notice shall
be sent not less than twenty (20) days before the scheduled date of consummation
of the transaction described above.  Such notice of redemption shall state the
number of shares of Class D Preferred eligible to be redeemed by such holder and
shall specify a redemption date not less than twenty (20) days nor more than
sixty (60) days after the date of such written notice.  Any holder of shares of
Class D Preferred may redeem such shares by giving written notice thereof to the
corporation not less than ten (10) days prior to the redemption date specified
in the corporation's written offer of redemption, and by surrendering to the
corporation on or before the redemption date the share certificates for the
number of shares of such Class D Preferred to be redeemed.

     Section 5.  Voting Rights.
     ----------  -------------

          (a)  The holders of shares of Class D Preferred shall be entitled to
notice of any shareholders' meeting and to vote upon any matter submitted to the
shareholders for a vote, as though the Common Stock, the Class A Preferred, the
Class B Preferred, the Class C Preferred and the Class D Preferred constituted a
single class of stock, except with respect to those matters on which the
Massachusetts Corporation Law requires that a vote must be by a separate class
or classes or by separate series.  For all votes, holders of each class of Class
D Preferred Stock shall have that number of votes per share as is equal to the
number of shares of Common Stock into which each such share of Class D Preferred
held by such holder is convertible on the record date for the determination of
stockholders entitled to vote at the meeting or on the date of any written
consent.

          (b)  The holders of Class D Preferred, shall be entitled to vote upon
the election of directors on the following basis:  So long as at least 50,000
shares of Class D Preferred shall be outstanding, the holders of Class D
Preferred issued and outstanding, voting as a single class, shall be entitled to
one director.

     Section 6.  Dividend Rights.
     ----------  ---------------

          (a)  The holders of the then outstanding shares of Class D Preferred
shall be entitled to receive, when and as declared by the Board Directors, out
of funds legally available therefor, non-cumulative cash dividends at the annual
rate of $.144 per share payable at a rate of $.036 per share per calendar
quarter.  The corporation's obligation to pay such dividends shall commence
after the first calendar quarter when the corporation's net after tax income,
calculated

                                       40
<PAGE>

in accordance with generally accepted accounting principles, exceeds five times
such quarterly dividend on all then outstanding Class D Preferred and on all
then outstanding shares of any other class of preferred stock of the
corporation.

          (b)  Notwithstanding any provisions in Section 6(a) hereof, dividends
which have been declared on any Class D Preferred but have not been paid prior
to an automatic conversion pursuant to Section 3(b) hereof shall be payable
within 30 days of the Closing, as defined in Section 3(b), to each person who
holds of record Class D Preferred immediately prior to the automatic conversion.

          (c)  When and as dividends are declared payable in cash, property or
shares of the corporation's capital stock on shares of Common Stock, the
corporation shall (except as otherwise provided in Section 3) declare at the
same time and pay to each holder of Class D Preferred a dividend equal to the
dividend which would have been payable to such holder if the shares of Class D
Preferred held by such holder had been converted into Common Stock on the record
date for the determination of holders of Common Stock entitled to receive such
dividend.

     Section 7.  Covenants.  So long as at least 50,000 shares of Class D
     ----------  ---------
Preferred shall be outstanding, the corporation shall not, without first
obtaining the affirmative vote or written consent of not less than sixty-six
percent (66%) of the outstanding shares of Class D Preferred:

          (a)  amend or repeal any provision of, or add any provision to, the
corporation's Restated Articles of Organization or By-Laws if such action would
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, Class D Preferred generally;

          (b)  reclassify any Common Stock into shares having any preference or
priority as to dividends or assets superior to or on a parity with any such
preference or priority of the Class D Preferred;

          (c)  pay or declare any dividend or distribution on any shares of
Common Stock or apply any of its assets to the redemption, retirement, purchase
or other acquisition directly or indirectly, through subsidiaries, if any, or
otherwise, of any shares of Common Stock except from officers, directors or
employees of or consultants to the corporation upon termination of employment
and except pursuant to the corporation's rights of first refusal;

          (d)  create any other class or classes of stock or series of capital
stock;

          (e)  authorize any merger or consolidation of the corporation with or
into any other corporation or entity (except into or with a wholly-owned
subsidiary corporation with the requisite shareholder approval), or authorize
the sale of substantially all of the assets of the corporation; or

          (f)  voluntarily liquidate, dissolve or wind up.

                                       41
<PAGE>

                            CLASS E PREFERRED STOCK

     Section 1.  Designation.  Eleven Million (11,000,000) shares of the
     ---------   -----------
corporation's authorized but unissued shares of Preferred Stock are hereby
designated as "Class E Preferred Stock".  Such Class E Preferred Stock (the
"Class E Preferred") shall have the relative rights and preferences set forth
below.

     Section 2.  Liquidation Rights.
     ---------   ------------------

          (a)  Payment to Holders of Class E Preferred Stock Upon Liquidation.
               --------------------------------------------------------------
In the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the corporation, the holder of each share of Class
E Preferred shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the corporation to the
holders of the Class A Preferred and the Common Stock of the corporation by
reason of their ownership thereof, an amount equal to (i) $2.25 per share of
Class E Preferred plus (ii) an amount equal to all declared but unpaid dividends
to and including the date full payment shall be tendered to the holder of the
Class E Preferred with respect to such liquidation, dissolution or winding-up.

All of the preferential amounts to be paid to the holders of the Class E
Preferred under this Section 2(a) shall be paid or set apart for payment before
the payment or setting apart for payment of any amount for, or the distribution
of any assets of the corporation to, the holders of the Class A Preferred and
Common Stock in connection with such liquidation, dissolution or winding-up.  If
the assets or surplus funds to be distributed to the holders of the Class B
Preferred, the Class D Preferred and the Class E Preferred are insufficient to
permit the payment to such holders of their full preferential amount, the assets
and surplus funds legally available for distribution shall be distributed
ratably among the holders of Class E Preferred, Class D Preferred and Class B
Preferred in proportion to the full preferential amount each such holder is
otherwise entitled to receive.

          (b)  Payment to Holders of Class E Preferred, Class D Preferred and
               --------------------------------------------------------------
Common Stock.  After the payment or the setting apart of payment to the holders
------------
of the Class A Preferred, the Class B Preferred, the Class D Preferred and the
Class E Preferred of the preferential amounts so payable to them, all remaining
assets of the corporation shall be distributed among the holders of the Class E
Preferred, the Class D Preferred and the holders of the Common Stock ratably in
proportion to the number of shares of Class D Preferred, Class E Preferred and
Common Stock (and, in the case of Class D Preferred and the Class E Preferred,
the number of shares of Common Stock into which each such share of Class D
Preferred or Class E Preferred, as the case may be, held by such holder could be
converted on the record date for the determination of rights of stockholders to
distributions under this Section 2) held by them.

          (c)  No Liquidation Preference After Conversion.  Upon conversion of
               ------------------------------------------
shares of Class E Preferred into shares of Common Stock pursuant to Section 3
below, the holder of such Common Stock shall not be entitled to any preferential
payment or distribution in case of any

                                       42
<PAGE>

liquidation, dissolution or winding-up of corporation, but shall share ratably
in any distribution of the assets of the corporation to all holders of Common
Stock.

          (d)  Distributions Other than Cash.  Whenever the 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.

          (e)  Merger as Liquidation, etc.  The merger or consolidation of the
               --------------------------
corporation into or with another corporation (other than a wholly-owned
subsidiary of this corporation in a merger in which this corporation is the
surviving corporation and its Articles of Organization remain unchanged), or the
sale of all or substantially all of the assets of the corporation (other than to
a wholly-owned subsidiary of this corporation) shall be deemed to be a
liquidation, dissolution or winding-up of the corporation for purposes of this
Section 2 unless the holders of at least 51% of the then outstanding shares of
Class E Preferred (voting as a single class) elect to the contrary by giving
written notice thereof to the corporation at least three days before the
effective date of such event.  If such notice is given, the provisions of
Section 3(f) shall apply.  The amount deemed distributed to the holders of Class
E Preferred upon any such merger or consolidation shall be the cash or the value
of the property, rights or securities distributed to such holders by the
acquiring person, firm or other entity.  The value of such property, rights or
other securities shall be determined in good faith by the Board of Directors of
the corporation.

          (f)  Notice and Opportunity to Exercise Conversion Rights.
               ----------------------------------------------------
Notwithstanding anything to the contrary that may be inferred from the
provisions of this Section 2, each holder of shares of Class E Preferred shall
be entitled to receive notice from the corporation pursuant to Section 3(i)
hereof of any proposed liquidation, dissolution or winding-up of the corporation
at least 20 days prior to the date on which any such liquidation, dissolution or
winding-up of the corporation is scheduled to occur and, at any time prior to
any such liquidation, dissolution or winding-up of the corporation, to convert
any or all of such holder's shares of Class E Preferred into shares of Common
Stock pursuant to Section 3 hereof.

     Section 3.  Conversion.  The holders of the Class E Preferred shall have
     ---------   ----------
conversion rights as follows (the "Conversion Rights"):

          (a)  Right to Convert.  Each share of Class E Preferred shall be
               ----------------
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the corporation or any transfer agent
for the Class E Preferred, into such fully paid and nonassessable shares of
Common Stock, as is determined by dividing two dollars and twenty-five cents
($2.25) by the Conversion Price, determined as hereinafter provided, in effect
at the time of conversion.  The Conversion Price at which shares of Common Stock
shall be deliverable upon conversion without the payment of any additional
consideration by the holder thereof (the "Conversion Price") shall initially be
two dollars and twenty-five cents ($2.25) per share of Common Stock.  Such
initial Conversion Price shall be subject to adjustment, in order to adjust the
number of shares of Common Stock into which the Class E Preferred is
convertible, as hereinafter provided.

                                       43
<PAGE>

          (b)  Automatic Conversion.
               --------------------

               (i)  Upon Qualifying Public Offerings. Each share of Class E
                    --------------------------------
Preferred shall automatically be converted into shares of Common Stock at the
then effective Conversion Price upon the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock for the account of the corporation to the public at a public
offering price of at least $4.50 per share (with such amount to be appropriately
adjusted in the event of any stock dividend, stock distribution or subdivision
as provided in subparagraph (e) hereof) and having an aggregate offering price
to the public resulting in gross proceeds to the corporation of not less than
$15,000,000 (in the event of which offering, the person(s) entitled to receive
the Common Stock issuable upon such conversion of the Class E Preferred shall
not be deemed to have converted that Class E Preferred until immediately prior
to the closing of such offering). Each person who holds of record Class E
Preferred immediately prior to such automatic conversion shall be entitled to
all dividends which have accrued to the time of the automatic conversion, but
have not been paid on the Class E Preferred, pursuant to Section 6 hereof. Such
dividends shall be paid to all such holders within 30 days of the automatic
conversion.

               (ii) Upon Conversion of 90% of Class E Preferred. Each share of
                    -------------------------------------------
Class E Preferred then outstanding shall automatically be converted into shares
of Common Stock at the then-effective Conversion Price, upon the conversion of
ninety percent (90%) or more of the authorized Class E Preferred. Such
conversion shall be deemed to have occurred on the date upon which the aggregate
number of shares of Class E Preferred which have been converted to Common Stock
equals or exceeds ninety percent (90%) of the authorized Class E Preferred.

          (c)  Mechanics of Conversion.  No fractional shares of Common Stock
               -----------------------
shall be issued upon conversion of the Class E Preferred.  In lieu of any
fractional shares to which the holder would otherwise be entitled, the
corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price.  Before any holder of Class E Preferred shall be
entitled to convert the same into full shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the corporation or of any transfer agent for the Class E Preferred, and shall
give written notice to the corporation at such office that he elects to convert
the same and shall state therein his name or the name or names of his nominees
in which he wishes the certificate or certificates for shares of Common Stock to
be issued.  The corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Class E Preferred, or to his nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share.  Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Class E Preferred to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such shares of Common Stock
on such date.

                                       44
<PAGE>

          (d)  Adjustments to Conversion Price for Diluting Issues.
               ---------------------------------------------------

                    (i)  Special Definitions. For purposes of this Section 3(d),
                         -------------------
the following definitions shall apply:

                         (1)  "Option" shall mean rights, options, or warrants
                               ------
to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.

                         (2)  "Original Issue Date" shall mean the date on which
                               -------------------
the first share of Class E Preferred to be issued was issued.

                         (3)  "Convertible Securities" shall mean any evidences
                               ----------------------
of indebtedness, shares (other than Common Stock, Class A Preferred, Class B
Preferred, Class D Preferred or Class E Preferred) or other securities directly
or indirectly convertible into or exchangeable for Common Stock.

                         (4)  "Additional Shares of Common Stock" shall mean all
                               ---------------------------------
shares of Common Stock issued (or, pursuant to Section 3(d)(iii) hereof, deemed
to be issued) by the corporation after the Original Issue Date, other than:

                              (A)  shares of Common Stock issued or issuable
upon conversion of shares of Class A Preferred, Class B Preferred, Class D
Preferred or Class E Preferred;

                              (B)  up to 3,355,507 shares of Common Stock issued
or issuable to officers or employees of, or consultants to, the corporation
pursuant to the corporation's 1983 Incentive Stock Option Plan, 1984 Incentive
Stock Option Plan, 1986 Incentive Stock Option Plan, 1987 Stock Plan, 1988 Stock
Plan, 1996 Stock Plan or 1997 Stock Plan (appropriately adjusted to take account
of any stock split, stock dividend, combination of shares or the like), and such
number of shares of Common Stock as are issued or issuable pursuant to
additional stock options approved by the Board of Directors including the
representative of Class D Preferred on the Board of Directors; or

                              (C)  shares of Common Stock issued by way of
dividend or other distribution on shares of Common Stock excluded from the
definition of Additional Shares of Common Stock by the foregoing clauses (A) and
(B) or this clause (C) or on shares of Common Stock so excluded; or

                              (D)  shares of Common Stock issued with the
approval of a majority of the representatives of the Class D Preferred on the
Board of Directors, which shares have been designated by said majority to be
excepted from the definition of "Additional Shares of Common Stock" contained
herein.

                                       45
<PAGE>

                    (ii)  No Adjustment of Conversion Price. No adjustment in
                          ---------------------------------
the number of shares of Common Stock into which the Class E Preferred is
convertible shall be made, by adjustment in the Conversion Price of Class E
Preferred in respect of the issuance of Additional Shares of Common Stock or
otherwise, 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
Conversion Price in effect on the date of, and immediately prior to, the issue
of such Additional Share.

                    (iii) Issue of Securities 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 or shall fix a record date for
the determination of holders of any class of securities entitled to receive any
such 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, 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 or, in case such record date shall have been fixed, as of
the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section 3(d)(v) hereof), of such Additional
Shares of Common Stock would be less than the Conversion Price in effect on the
date of and immediately prior to such issue, or such record date, as the case
may be, 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 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;

                              (B)  if such Options or Convertible Securities by
their terms provide, with the passage or time or otherwise, for any increase in
the consideration payable to the corporation, or decrease in the number of'
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price computed upon the original issue thereof (or upon
the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;

                              (C)  upon the expiration of any such Options or
any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon such expiration, be
re-computed as if:

                                       46
<PAGE>

                                   (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 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 such exercise, or
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 then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation
(determined pursuant to Section 3(d)(v) hereof) upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised;

                              (D)  no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Conversion Price to an amount
which exceeds the lower of (i) the Conversion Price on the original adjustment
date, or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date;

                              (E)  in the case of any Options which expire by
their terms not more than 30 days after the date of issue thereof, no adjustment
of the Conversion Price shall be made until the expiration or exercise of all
such Options, whereupon such adjustment shall be made in the same manner
provided in clause (C) above; and

                              (F)  if such record date shall have been fixed and
such Options or Convertible Securities are not issued on the date fixed
therefor, the adjustment previously made in the Conversion Price which became
effective on such record date shall be canceled as of the close of business on
such record date and thereafter the Conversion Price shall be adjusted pursuant
to this subparagraph 3(d)(iii) as of the actual date of their issuance.

                         (2)  Stock Dividends, Stock Distributions and
                              ----------------------------------------
Subdivisions. In the event the corporation at any time or from time to time
------------
after the Original Issue Date shall declare or pay any dividend or make any
other distribution on the Common Stock payable in Common Stock, or effect a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock), then and in any such
event, Additional Shares of Common Stock shall be deemed to have been issued:

                                       47
<PAGE>

                              (A)  in the case of any such dividend or
distribution, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend or distribution, or

                              (B)  in the case of any such subdivision, at the
close of business on the date immediately prior to the date upon which such
corporate action becomes effective.

     If such record date shall have been fixed and such dividend shall not have
been fully paid on the date fixed therefor, the adjustment previously made in
the Conversion Price which became effective on such record date shall be
canceled as of the close of business on such record date, and thereafter the
Conversion Price shall be adjusted pursuant to this subparagraph 3(d)(iii) as of
the time of actual payment of such dividend.

                    (iv)  Adjustment of Conversion Price 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 3(d) (iii) hereof, but excluding
Additional Shares of Common Stock issued pursuant to Section 3(d)(iii)(2), which
event is dealt with in Section (3)(e) hereof) without consideration or for a
consideration per share less than the Conversion Price in effect on the date of
and immediately prior to such issue, then and in such event, such Conversion
Price shall be reduced, concurrently with such issue in order to increase the
number of shares of Common Stock into which the Class E Preferred is
convertible, to a price (calculated to the nearest cent) determined by
multiplying such Conversion Price by a fraction (x) the numerator of which shall
be (1) the number of shares of Common Stock outstanding immediately prior to
such issue (including shares of Common Stock issuable upon conversion of any
outstanding Class A Preferred, Class B Preferred, Class D Preferred, Class E
Preferred or Convertible Securities) plus (2) 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 would purchase at
such Conversion Price, and (y) the denominator of which shall be (1) the number
of shares of Common Stock outstanding immediately prior to such issue (including
shares of Common Stock issuable upon conversion of any outstanding Class A
Preferred, Class B Preferred, Class D Preferred, Class E Preferred or
Convertible Securities), plus (2) the number of such Additional Shares of Common
Stock so issued, provided that the Conversion Price shall not be so reduced at
such time if the amount of such reduction would be an amount less than $0.05,
but any such amount shall be carried forward and reduction with respect thereto
made at the time of and together with any subsequent reduction which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate $0.05 or more.

                    (v)   Determination of Consideration. For purposes of this
                          ------------------------------
Section 3(d), 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:
                              -----------------

                                       48
<PAGE>

                              (A)  insofar as it consists of cash, be computed
at the aggregate amount of cash received by the corporation 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 at the time of such issue, as
determined in good faith by the Board of Directors; and

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

                         (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 3(d)(iii)(1) above,
relating to Options and Convertible Securities shall be determined by dividing

                              (x)  the total amount, if any, received or
receivable by the corporation as consideration for the issue of such Options or
Convertible Securities, 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
consideration until such subsequent adjustment occurs) 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

                              (y)  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 until
such subsequent adjustment occurs) issuable upon the exercise of such Options or
the conversion or exchange of such Convertible Securities.

          (e)  Adjustment for Dividends, Distributions, Subdivisions,
               ------------------------------------------------------
Combinations or Consolidations of Common Stock.
----------------------------------------------

                    (i)  Stock Dividends, Distributions or Subdivisions. In the
                         ----------------------------------------------
event the corporation shall issue Additional Shares of Common Stock pursuant to
Section 3(d)(iii)(2) hereof in a stock dividend, stock distribution or
subdivision, the Conversion Price in effect immediately prior to such stock
dividend, stock distribution or subdivision shall, concurrently with the
effectiveness of such stock dividend, stock distribution or subdivision, be
proportionately decreased.

                    (ii) Combinations or Consolidations. In the event the
                         ------------------------------
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Conversion Price in effect immediately prior to

                                       49
<PAGE>

such combination or consolidation shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.

          (f)  Adjustment for Merger or Reorganization.  In case of any
               ---------------------------------------
consolidation or merger of the corporation with or into another corporation or
the conveyance of all or substantially all of the assets of the corporation to
another corporation, each share of Class E Preferred shall thereafter be
convertible into the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock of the corporation
deliverable upon conversion of such Class E Preferred would have been entitled
upon such consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the Board of Directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interest thereafter of the holders of the Class E Preferred, to the end that
the provisions set forth herein (including provisions with respect to changes in
and other adjustments of the Conversion Price) shall thereafter be applicable,
as nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of the Class E Preferred.

     Each holder of Class E Preferred upon the occurrence of a capital
reorganization, merger or consolidation of the corporation or the sale of all
or, substantially all its assets and properties as such events are more fully
set forth in the first paragraph of this Section 3(f), shall have the option of
electing treatment of his shares of Class E Preferred under either this Section
3(f) or Section 2 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 event.

          (g)  No Impairment.  The corporation will not, by amendment of its
               -------------
Restated Articles of Organization 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 to be observed or performed hereunder by the corporation but
will at all times in good faith assist in the carrying out of the provisions of
this Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Class E Preferred against impairment.

          (h)  Certificate as to Adjustments.  Upon the occurrence of each
               -----------------------------
adjustment or readjustment of the Conversion Price pursuant to this Section 3,
the corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Class E Preferred 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 of any
holder of Class E Preferred, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the amount if any, of other property which at the time would be
received upon the conversion of Class E Preferred.

          (i)  Notice of Record Date.  In the event of (i) any taking by the
               ---------------------
corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof

                                       50
<PAGE>

who are entitled to receive any dividend (other than a cash dividend which is
the same as cash dividends paid in previous quarters) or other distribution, or
(ii) any capital reorganization of the corporation, any reclassification or
recapitalization of the capital stock of the corporation, any merger or
consolidation of the corporation, and any transfer of all or substantially all
of the assets of the corporation to any other corporation, or any other entity
or person, or any voluntary or involuntary dissolution, liquidation or winding-
up of the corporation, the corporation shall mail to each holder of Class E
Preferred at least 20 days prior to the record date specified therein, a notice
specifying (A) the date on which any such record is to be taken for the purpose
of such dividend or distribution and a description of such dividend or
distribution, (B) the date on which any such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding-up is
expected to become effective, and (C) 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, transfer, consolidation, merger, dissolution, liquidation or
winding-up.

          (j)  Common Stock Reserved.  The corporation shall reserve and keep
               ---------------------
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
the Class E Preferred.

     Section 4.  Redemption.
     ---------   ----------

          (a)  On October 21, 2003 (the "Commencement Date") and on the first
and second anniversaries thereof, the corporation shall offer to redeem from
each holder of shares of Class E Preferred a maximum of thirty-three and a third
percent (33 1/3%), sixty-six and two-thirds percent (66 2/3%) and one hundred
percent (100%), respectively, of the total number of shares of Class E Preferred
held by such shareholder prior to the Commencement Date, at a price for each
share tendered for redemption equal to the greater of (i) $2.25 plus an amount
equal to all declared but unpaid dividends payable in accordance with Section 6
hereof and (ii) the fair market value per share (the "Redemption Price");
provided, that any shares of Class E Preferred redeemed hereunder in any
previous years shall reduce the maximum amount of Class E Preferred which the
corporation may be requested to redeem in any then current year.  Fair market
value shall mean the fair market value per share as determined in good faith by
the Board of Directors, provided that if holders of more than fifty percent
(50%) of the outstanding Class E Preferred disagree with such determination, the
fair market value shall be determined (i) by an independent investment banking
firm mutually selected by such holders and the Board of Directors, or (ii)
failing such agreement within thirty days, by two such firms, one selected by
the Board of Directors and one by such holders, or (iii) failing agreement by
such two firms within thirty days, by a third such firm mutually selected by
such firms.  The fees of all such investment banking firms shall be borne in
equal halves by the corporation and such holders.  The corporation shall provide
access to all such information as is reasonably necessary for such firms to
determine fair market value.  The corporation shall offer to redeem shares of
Class E Preferred by giving written notice thereof to each holder of shares of
Class E Preferred eligible for redemption, which notice shall state the number
of shares of Class E Preferred eligible to be redeemed by such holder and shall
specify a redemption date not less than forty-five (45) days

                                       51
<PAGE>

nor more than sixty (60) days after the date of such written notice. Any holder
of shares of Class E Preferred eligible to be redeemed may redeem such shares by
giving written notice thereof to the corporation, and to each other holder of
shares of Class E Preferred, no less than 15 days prior to the redemption date
specified in the corporation's written offer of redemption, and by surrendering
to the corporation on or before the redemption date the share certificates for
the number of shares of Class E Preferred to be redeemed. If fewer than all of
the shares represented by such certificates are redeemed, one or more new
certificates shall be issued for the unredeemed shares as promptly as possible.
Notwithstanding the foregoing, the holders of more than fifty percent (50%) of
all Class E Preferred in the aggregate shall have the right to postpone for a
specified period of time or waive such rights of redemption of all holders by
written notice to the corporation and to all such holders given at least fifteen
(15) days prior to the scheduled date of redemption.

          (b)  In the event of a sale of all or substantially all the assets of
the corporation, the corporation shall offer to redeem not fewer than all the
shares of Class E Preferred held by all holders of shares of Class E Preferred
on the date the corporation fixes as the date to mail or otherwise send out its
offer of redemption, at the Redemption Price.  The corporation shall offer to
redeem shares of Class E Preferred by giving written notice thereof to each
holder of shares of such Class E Preferred, which notice shall be sent not less
than twenty (20) days before the scheduled date of consummation of the
transaction described above.  Such notice of redemption shall state the number
of shares of Class E Preferred eligible to be redeemed by such holder and shall
specify a redemption date not less than twenty  (20) days nor more than sixty
(60) days after the date of such written notice.  Any holder of shares of Class
E Preferred may redeem such shares by giving written notice thereof to the
corporation not less than ten (10) days prior to the redemption date specified
in the corporation's written offer of redemption, and by surrendering to the
corporation on or before the redemption date the share certificates for the
number of shares of such Class E Preferred to be redeemed.

     Section 5.  Voting Rights.  The holders of shares of Class E Preferred
     ---------   -------------
shall be entitled to notice of any shareholders' meeting and to vote upon any
matter submitted to the shareholders for a vote, as though the Common Stock, the
Class A Preferred, the Class B Preferred, the Class D Preferred and the Class E
Preferred constituted a single class of stock, except with respect to those
matters on which the Massachusetts Corporation Law requires that a vote must be
by a separate class or classes or by separate series.  For all votes, holders of
Class E Preferred Stock shall have that number of votes per share as is equal to
the number of shares of Common Stock into which each such share of Class E
Preferred held by such holder is convertible on the record date for the
determination of stockholders entitled to vote at the meeting or on the date of
any written consent.

     Section 6.  Dividend Rights.
     ---------   ---------------

          (a)  The holders of the then outstanding shares of Class E Preferred
shall be entitled to receive, when and as declared by the Board Directors, out
of funds legally available therefor, non-cumulative cash dividends at the annual
rate of $.18 per share payable at a rate of $.045 per share per calendar
quarter.  The corporation's obligation to pay such dividends shall

                                       52
<PAGE>

commence after the first calendar quarter when the corporation's net after tax
income, calculated in accordance with generally accepted accounting principles,
exceeds five times such quarterly dividend on all then outstanding Class E
Preferred and on all then outstanding shares of all other classes of preferred
stock of the corporation.

          (b)  Notwithstanding any provisions in Section 6(a) hereof, dividends
which have been declared on any Class E Preferred but have not been paid prior
to an automatic conversion pursuant to Section 3(b) hereof shall be payable
within 30 days of the Closing, as defined in Section 3(b), to each person who
holds of record Class E Preferred immediately prior to the automatic conversion.

          (c)  When and as dividends are declared payable in cash, property or
shares of the corporation's capital stock on shares of Common Stock, the
corporation shall (except as otherwise provided in Section 3) declare at the
same time and pay to each holder of Class E Preferred a dividend equal to the
dividend which would have been payable to such holder if the shares of Class E
Preferred held by such holder had been converted into Common Stock on the record
date for the determination of holders of Common Stock entitled to receive such
dividend.

     Section 7.  Covenants.  So long as at least 50,000 shares of Class E
     ---------   ---------
Preferred shall be outstanding, the corporation shall not, without first
obtaining the affirmative vote or written consent of not less than sixty-six
percent (66%) of the outstanding shares of Class E Preferred:

          (a)  amend or repeal any provision of, or add any provision to, the
corporation's Restated Articles of Organization or By-Laws if such action would
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, Class E Preferred generally;

          (b)  reclassify any Common Stock into shares having any preference or
priority as to dividends or assets superior to or on a parity with any such
preference or priority of the Class E Preferred;

          (c)  pay or declare any dividend or distribution on any shares of
Common Stock or apply any of its assets to the redemption, retirement, purchase
or other acquisition directly or indirectly, through subsidiaries, if any, or
otherwise, of any shares of Common Stock except from officers, directors or
employees of or consultants to the corporation upon termination of employment
and except pursuant to the corporation's rights of first refusal;

          (d)  create any other class or classes of stock or series of capital
stock;

          (e)  authorize any merger or consolidation of the corporation with or
into any other corporation or entity (except into or with a wholly-owned
subsidiary corporation with the requisite shareholder approval), or authorize
the sale of substantially all of the assets of the corporation; or

          (f)  voluntarily liquidate, dissolve or wind up.

                                       53
<PAGE>

                                  ARTICLE VI
                                  ----------

                            OTHER LAWFUL PROVISIONS
                            -----------------------

          (a)  The corporation may carry on any business, operation or activity
referred to in Article 2 to the same extent as might an individual, whether as
principal, agent, contractor or otherwise, and either alone or in conjunction or
a joint venture or other arrangement with any corporation, association, trust,
firm or individual.

          (b)  The corporation may carry on any business, operation or activity
through a wholly or partly owned subsidiary.

          (c)  The corporation may be a partner in any business enterprise which
it would have the power to conduct by itself.

          (d)  the directors may make, amend or repeal the bylaws in whole or in
part, except with respect to any provision thereof which by law or the bylaws
requires action by the stockholders.

          (e)  Meetings of the stockholders may be held anywhere in the United
States.

          (f)  No stockholder shall have any right to examine any property or
any books, accounts or other writings of the corporation if there is reasonable
ground for belief that such examination will for any reason be adverse to the
interests of the corporation, and a vote of the directors refusing permission to
make such examination and setting forth that in the opinion of the directors
such examination would be adverse to the interests of the corporation shall be
prima facie evidence that such examination would be adverse to the interests of
the corporation. Every such examination shall be subject to such reasonable
regulations as the directors may establish in regard thereto.

          (g)  The directors may specify the manner in which the accounts to the
corporation shall be kept and may determine what constitutes net earnings,
profits and surplus, what amounts, if any, shall be declared as dividends.
Unless the board of directors otherwise specifies, the excess of the
consideration for any share of its capital stock with par value issued by it
over such par value shall be paid-in surplus. The board of directors may
allocate to capital stock less than all of the consideration for any share of
its capital stock without par value issued by it, in which case the balance of
such consideration shall be paid-in surplus. All surplus shall be available for
any corporate purpose, including the payment of dividends.

          (h)  The purchase or other acquisition or retention by the corporation
of shares of its own capital stock shall not be deemed a reduction of its
capital stock.  Upon any reduction of capital or capital stock, no stockholder
shall have any right to demand any distribution from the

                                       54
<PAGE>

corporation, except as and to the extent that the stockholders shall have
provided at the time of authorizing such reduction.

          (i)  The directors shall have the power to fix from time to time their
compensation.  No person shall be disqualified from holding any office by reason
of any interest.  In the absence of fraud, any director, officer or stockholder
of this corporation individually, or any individual having any interest in any
concern which is a stockholder of this corporation, or any concern in which any
of such directors, officers, stockholders or individuals has any interest, may
be a party to, or may be pecuniary or otherwise interested in, any contract,
transaction or other act of this corporation, and

               (1)  such contract, transaction or act shall not be in any way
                    invalidated or otherwise affected by that fact;

               (2)  no such director, officer, stockholder or individual shall
                    be liable to account to this corporation for any profit or
                    benefit realized through any such contract, transaction or
                    act; and

               (3)  any such director of this corporation may be counted in
                    determining the existence of a quorum at any meeting of the
                    directors or of any committee thereof which shall authorize
                    any such contract, transaction or act, and may vote to
                    authorize the same;

provided, however, that any contract, transaction or act in which any director
or officer of this corporation is so interested individually or as a director,
officer, trustee or member of any concern which is not a subsidiary or affiliate
of this corporation, or in which any directors or officers are so interested as
holders, collectively, of a majority of shares of capital stock or other
beneficial interest at the time outstanding in any concern which is not a
subsidiary or affiliate of this corporation, shall be duly authorized or
ratified by a majority of the directors who are not so interested, to whom the
nature of such interest has been disclosed and who have made any findings
required by law;

          the term "interest" including personal interest and interest as a
          director, officer, stockholder, shareholder, trustee, member or
          beneficiary of any concern;

          the term "concern" meaning any corporation, association, trust,
          partnership, firm, person or other entity other than this corporation;
          and

          the phrase "subsidiary or affiliate" meaning a concern in which a
          majority of the directors, trustees, partners or controlling persons
          is elected or appointed by the directors of this corporation, or is
          constituted of the directors or officers of this corporation.

To the extent permitted by law, the authorizing or ratifying vote of the holders
of a majority of the shares of each class of the capital stock of this
corporation outstanding and entitled to vote for directors at any annual meeting
or a special meeting duly called for the purpose (whether

                                       55
<PAGE>

such vote is passed before or after judgment rendered in a suit with respect to
such contract, transaction or act) shall validate any contract, transaction or
act of this corporation, or of the board of directors or any committee thereof,
with regard to all creditors and other claimants under this corporation;
provided, however, that

          A.   with respect to the authorization or ratification of contractors,
               transactions or acts in which any of the directors, officers or
               stockholders of this corporation have an interest, the nature of
               such contracts, transactions or acts and the interest of any
               director, officer or stockholder therein shall be summarized in
               the notice of any such annual or special meeting, or in a
               statement or letter accompanying such notice, and shall be fully
               disclosed at any such meeting;

          B.   the stockholders so voting shall have made any findings required
               by law;

          C.   stockholders so interested may vote at any such meeting except to
               the extent otherwise provided by law; and

          D.   any failure of the stockholders to authorize or ratify such
               contract, transaction or act shall not be deemed in any way to
               invalidate the same or to deprive this corporation, its
               directors, officers or employees of its or their right to proceed
               with such contract, transaction or act.

No contract, transaction or act shall be avoided by reason of any provision of
this paragraph (i) which would be valid but for such provision or provisions.

         (j)   The corporation shall have all powers granted to corporations by
the laws of The Commonwealth of Massachusetts, provided that no such power shall
include any activity inconsistent with the Business Corporation Law or the
general laws of said Commonwealth.

         (k)   The corporation eliminates the personal liability of each member
of its board of directors to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that the foregoing
shall not eliminate the liability of a director (i) for any breach of such
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 61 or 62 of Chapter 156B of the
Massachusetts General Laws, or (iv) for any transaction from which such director
derived an improper personal benefit.

         (l)   The Directors of the corporation shall be classified with respect
to the time for which they shall severally hold office by dividing them into
three classes, each consisting of one-third, or as equal in number as possible,
of the whole number of the Board of Directors, and all Directors shall hold
office until their successors are chosen and qualified, or until their earlier
death, resignation, or removal.  The Board of Directors has adopted a vote
designating, from among its members, Directors to serve as Directors of the
first class ("Class I Directors") who will hold office until the annual meeting
in 2000 and until their successors are duly elected and qualified, Directors of
the second class ("Class II Directors") who will hold office until the

                                       56
<PAGE>

annual meeting in 2001 and until their successors are duly elected and
qualified, and Directors of the third class ("Class III Directors") who will
hold office until the annual meeting in 2002 and until their successors are duly
elected and qualified. At each annual meeting beginning in 2000, the successors
to the class of Directors whose term expires at that meeting shall be elected to
hold office for a term continuing until the annual meeting held in the third
year following the year of their election and until their successors are duly
elected and qualified.

                                       57
<PAGE>

                           DESCRIPTION OF AMENDMENTS
                           -------------------------

Article I was amended to change the name of the corporation from "Millitech
Corporation" to "Telaxis Communications Corporation."

Article III was amended to increase the authorized Common Stock of the
corporation from 36,000,000 shares to 100,000,000 shares.

Article IV was amended to

     (a)  incorporate the preferences, voting powers, qualifications, and
          special or relative rights or privileges of the Class E Preferred
          Stock of the corporation effected by the Certificate of Vote of
          Directors Establishing a Series of a Class of Stock as filed with the
          Massachusetts Secretary of State and effective October 26, 1998 (as
          amended by the Certificate of Amendment as filed with the
          Massachusetts Secretary of State and effective May 19, 1999 and by the
          Certificate of Vote of Directors Establishing a Series of a Class of
          Stock as filed with the Massachusetts Secretary of State and effective
          August 18, 1999),
     (b)  reflect the changes in the authorized capital of the corporation
          described above, and
     (c)  amend the automatic conversion provisions of Section 3(b) of the
          description of the rights of each of Class A Preferred Stock, Class B
          Preferred Stock and Class D Preferred Stock by reducing the minimum
          public offering price upon an initial public offering of the Company's
          stock required to trigger automatic conversion from $9.75 per share to
          $4.50 per share (the same minimum public offering price contained in
          the Class E Preferred Stock terms).

Article VI was amended to classify the Board of Directors of the corporation
into three classes, as nearly equal in number as possible, with the terms of
Class I directors expiring in 2000, the terms of Class II directors expiring in
2001, and the terms of Class III directors expiring in 2002.