<PAGE>
 
                  Second Amended Certificate of Designations
                                      of
                             Virtual Telecom, Inc.
                            A Delaware Corporation


     The undersigned, Neil Gibbons and Daniel Huber, hereby certify that:

     1.  They are the duly elected and acting Chief Executive Officer and
Secretary, respectively, of Virtual Telecom, Inc., a Delaware corporation (the
"Corporation").

     2.  The Corporation, in its Certificate of Incorporation, has authorized
10,000,000 shares of preferred stock.  By resolution, the Board of Directors of
the Corporation has previously designated 750,000 shares of preferred stock
authorized by the Certificate of Incorporation as Series A Preferred Stock.  The
Corporation subsequently issued 283,781 shares of Series A Preferred Stock of
which 215,281 shares were converted into Common Stock and 68,500 shares of
Series A Preferred Stock are outstanding as of the date of this Certificate of
Designations.  The Board of Directors of the Corporation has also previously
designated 1,923,716 shares of preferred stock authorized by the Certificate of
Incorporation as Series B Preferred Stock, all of which are outstanding as of
the date of this Second Amended Certificate of Designations.

     3.  By resolution, the Board of Directors of the Corporation has also
designated 3,783,784 shares of preferred stock authorized by the Certificate of
Incorporation as Series C Preferred Stock.  No shares of Series C Preferred
Stock have been issued.

     4.  Pursuant to authority given by the Corporation's Certificate of
Incorporation, the Board of Directors of the Corporation has duly adopted
substantially the following recital and resolution:

     WHEREAS, Article IV of the Certificate of Incorporation of the Corporation
authorizes this Corporation to issue 10,000,000 shares of preferred stock,
US$.001 par value per share, issuable from time to time in one or more series
(the "Preferred Stock").

     RESOLVED, the Board of Directors hereby determines that it is in the best
interests of this Corporation to amend and restate the Amended Certificate of
Designations with respect to the issued and outstanding shares of Series A
Preferred Stock and Series B Preferred Stock to designate 3,783,784 shares of
Series C Preferred Stock upon the following terms and conditions:

     Section 1.  Designation.  The initial series of Preferred Stock shall be
                 -----------                                                 
designated and known as "Series A Preferred Stock."  The number of authorized
shares constituting such series shall be 68,500.  The Series A Preferred Stock
shall have a par value of US$.001 per share.  The second series of Preferred
Stock shall be designated and known as "Series B Preferred Stock."  The number
of authorized shares constituting such series shall be 1,923,716.  The Series B

<PAGE>
 
Preferred Stock shall have a par value of US$.001 per share.  The third series
of Preferred Stock shall be designated and known as "Series C Preferred Stock."
The number of authorized shares constituting such series shall be 3,783,784.
The Series C Preferred Stock shall have a par value of US$.001 per share.

     Section 2.  Definitions.  For the purposes of this Second Amended
                 -----------                                          
Certificate of Designations, the following terms shall have the meanings
indicated:

             "Alternative Liquidation Preference" shall mean $3.50 per share of
              ----------------------------------
Preferred Stock plus any accrued and unpaid dividends if the event of
liquidation occurs on or before December 31, 2000 and thereafter shall mean
$5.20 per share of Preferred Stock plus any accrued and unpaid dividends.

             "Common Stock" shall mean the Corporation's $.001 par value common
              ------------
stock.

             "Conversion Price" has the meaning assigned to such term in Section
              ----------------
7(a).


             "Initial Conversion Price" shall mean with respect to Series A
              ------------------------
Preferred Stock, US$1.75 per share of Series A Preferred Stock; with respect to
Series B Preferred Stock, shall mean US$1.5595 per share of Series B Preferred
Stock; and with respect to Series C Preferred Stock, shall mean US$1.85 per
share of Series C Preferred Stock,

              "Junior Stock" shall mean any capital stock of the Corporation,
               ------------
including without limitation the Common Stock, ranking junior to either the
Series A Preferred Stock, the Series B Preferred Stock, or the Series C
Preferred Stock, as the case may be, with respect to dividends, distribution in
liquidation or any other preferences, rights and powers.

              "Liquidation Preference" shall mean with respect to the Series A
               ----------------------
Preferred Stock $3.50 per share of Series A Preferred Stock plus any accrued and
unpaid dividends; shall mean with respect to the Series B Preferred Stock and
Series C Preferred Stock $1.85 per share of Preferred Stock plus any accrued and
unpaid dividends.

              "Parity Stock" shall mean any capital stock of the Corporation
               ------------
ranking on a parity with either the Series A Preferred Stock, the Series B
Preferred Stock or the Series C Preferred Stock, as the case may be, with
respect to dividends, distributions in liquidation and all other preferences,
rights or powers.

              "Person" shall mean any individual, firm, corporation,
               ------
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind, and shall include any successor (by merger or
otherwise) of such entity.

              "Preferred Stock" shall mean the Series A Preferred Stock, the
               ---------------
Series B Preferred Stock and the Series C Preferred Stock, unless the context
denotes otherwise.

                                      -2-
<PAGE>
 
              "Senior Stock" shall mean any capital stock of the Corporation
               ------------
ranking senior to either the Series A Preferred Stock, the Series B Preferred
Stock or the Series C Preferred Stock, as the case may be, with respect to
dividends, distribution in liquidation or any other preference, right or power.

     Section 3.  Ranking.  The Series B Preferred Stock and the Series C
                 -------                                                
Preferred Stock shall, with respect to rights on liquidation, dissolution or
winding up, as a group rank senior to all other equity securities of the
Corporation, including the Series A Preferred Stock and the Common Stock and any
other series or class of the Corporation's preferred or common stock, now or
hereafter authorized.

     Section 4.  Dividends.  If any dividends or other distributions (including,
                 ---------                                                      
without limitation, any distribution of cash, indebtedness, assets or other
property, but excluding any dividend payable in shares of its common stock) on
Common Stock ("Dividends") are so permitted and declared, such Dividends shall
be paid pro rata to the holders of the Common Stock and Preferred Stock.  The
holders of Preferred Stock shall receive a Dividend in an amount that would be
payable to such holder assuming that such shares had been converted on the
record date for determining the stockholders of the Corporation entitled to
receive payment of such Dividends into the maximum number of shares of Common
Stock into which such shares of Preferred Stock are then convertible as provided
in Section 7.

     Section 5.  Voting Rights.
                 ------------- 
 
     In addition to any voting rights provided by law, the holders of shares of
Preferred Stock shall have the following voting rights:

     (a) Except as otherwise required by applicable law and without limiting the
provisions of Section 5(b) below, each share of Preferred Stock shall entitle
the holder thereof to vote, in person or by proxy, at each special and annual
meeting of shareholders, on all matters voted on by holders of Common Stock,
voting together as a single class with the holders of Common Stock and with
holders of all other shares entitled to vote thereon.  With respect to any such
vote, each share of Preferred Stock shall entitle the holder thereof to cast the
number of votes that such holder would be entitled to cast assuming that such
shares of Preferred Stock had been converted, on the record date for determining
the stockholders entitled to vote on any such matters, into the maximum number
of shares of Common Stock into which such shares Preferred Stock are then
convertible as provided in Section 7(c) below.

     (b) The Board of Directors of the Corporation shall consist of nine (9)
members.  The holders of Series B Preferred Stock, voting together as a class,
shall be entitled to elect two (2) members of the Board of Directors at each
meeting or pursuant to each consent of the Corporation's shareholders for the
election of Directors.  The holders of Series C Preferred Stock, voting together
as a class, shall be entitled to elect two (2) members of the Board of Directors
at each meeting or pursuant to each consent of the Corporation's shareholders
for the election of Directors.  The holders of the Common Stock, as a class,
shall be entitled to elect five 

                                      -3-
<PAGE>
 
(5) members of the Board of Directors at each meeting or pursuant to each
consent of the shareholders for the election of Directors.

     (c)  Unless the consent or approval of a greater number of shares shall
then be required by law, the affirmative vote of the holders of more than 50% of
the outstanding shares of the Series A Preferred Stock, the Series B Preferred
Stock or the Series C Preferred Stock, as the case may be,  shall be necessary
to (1) authorize, increase the authorized number of shares of or issue
(including on conversion or exchange of any convertible or exchangeable
securities or by reclassification) any shares of any class or classes of Senior
Stock or Parity Stock or any additional shares of such series, (2) authorize,
adopt or approve any amendment to the Certificate of Incorporation, the Bylaws
or this Second Amended Certificate of Designations that would increase or
decrease the par value of the shares of such series, alter or change the powers,
preferences or rights of the shares of such series or alter or change the
powers, preferences or rights of any other capital stock of the Corporation if
after such alteration or change such capital stock would be Senior Stock or
Parity Stock to such series, (3) amend, alter or repeal the Certificate of
Incorporation or this Second Amended Certificate of Designations so as to affect
the shares of such series adversely, including, without limitation, by granting
any voting right to any holder of notes, bonds, debentures or other debt
obligations of the Corporation, or by amending, altering or repealing Section
5(b) above, or (4) authorize or issue any security convertible into,
exchangeable for or evidencing the right to purchase or otherwise receive any
shares of any class or classes of Senior Stock or Parity Stock.

     Section 6.  Liquidation, Dissolution or Winding Up.
                 -------------------------------------- 

     (a)  Except as otherwise provided in subpart (b) below, in the event of any
liquidation, dissolution or winding up of the Corporation, either voluntary or
involuntary, before any distribution or payment to holders of Junior Stock may
be made, the holder of each share of Preferred Stock shall be entitled to be
paid an amount equal to the Liquidation Preference of such share, plus all
accrued or declared but unpaid dividends on such share, in the following order
of priority: first, to the holders of the Series B Preferred Stock and  Series C
Preferred Stock as a group; next, to the holders of the Series A Preferred
Stock; and, then, to the holders of the Junior Stock in accordance with the
rights under such shares of Junior Stock.  Subsequent to the payment of all
Liquidation Preferences plus all accrued or declared but unpaid dividends on
such shares pursuant to this subpart (a), each share of Series B Preferred Stock
and Series C Preferred Stock shall participate with the holders of the Common
Stock on any further distributions or payments in proportion to their holdings
assuming that such shares of Preferred Stock had been converted, on the record
date for determining the stockholders entitled to receive distributions or
payments, into the maximum number of shares of Common Stock into which such
shares of Preferred Stock are then convertible as provided in Section 7(c).

     (b) If in the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of the Series B
Preferred Stock and Series C Preferred Stock would receive distributions
pursuant to subpart (a) of this Section 6 in an amount less than the Alternative
Liquidation Preference, then the holders of the Series B Preferred Stock and the
Series C Preferred Stock shall receive, prior to and in preference to the
holders of any 

                                      -4-
<PAGE>
 
Common Stock or Series A Preferred Stock, the Alternative Liquidation Preference
and no more.

          (c)  If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation available for distribution to the
holders of either the Series B Preferred Stock  and Series C Preferred Stock, as
a group, or the Series A Preferred Stock shall be insufficient to permit payment
of the Liquidation Preference payable in full to the holders of such series,
then all of the assets available for distribution to holders of such series
shall be distributed among and paid to such holders ratably in proportion to the
amounts that would be payable to such holders if such assets were sufficient to
permit payment in full.  A consolidation or merger of the Corporation into or
with another corporation or corporations in which the Corporation is not the
successor, or the sale of all or substantially all of the assets of the
Corporation to another corporation or any other entity, shall be deemed a
liquidation, dissolution or winding up of the Corporation within the meaning of
this Section 6.

   Section 7.  Conversion of Preferred Stock into Common Stock.
               ----------------------------------------------- 

          (a)  Right to Convert. Each share of Preferred Stock shall be
               ----------------
convertible at any time, at the option of the holders thereof, into fully paid
and nonassessable shares of Common Stock at the Initial Conversion Price,
subject to adjustment as set forth in this Section 7 (the "Conversion Price").
Notwithstanding any other provision contained herein, in the event the
Corporation gives written notice of its intention to redeem the Preferred Stock
pursuant to Section 8(b) below, any such shares called for redemption shall be
or become eligible for conversion up through the date of redemption identified
in the written notice issued pursuant to Section 8(b) below.

          (b)  Number of shares of Common Stock Issuable upon Conversion. The
               --------------------------------------------------------- 
number of shares of Common Stock to be issued upon conversion of shares of any
Series A Preferred Stock shall be equal to the product of (X) and (Y), where (X)
is a fraction, the numerator of which is the Liquidation Preference of such
                                             ----------------------
series and the denominator of which is the applicable Conversion Price and (Y)
is the number of shares of Preferred Stock to be converted. The number of shares
of Common Stock to be issued upon conversion of shares of any Series B or Series
C Preferred Stock shall be equal to the product of (X) and (Y), where (X) is a
fraction, the numerator of which is the Initial Conversion Price of such series
and the denominator of which is the applicable Conversion Price and (Y) is the
number of shares of Preferred Stock to be converted.

          (c)  Antidilution Adjustments. The Conversion Price of the Preferred
               ------------------------
Stock shall be adjusted from time to time in certain cases as follows:

          (i)  Dividend, Subdivision, Combination or Reclassification of Common
               ----------------------------------------------------------------
Stock.  If the Corporation shall, at any time or from time to time, (a) declare
-----
a dividend on the Common Stock payable in shares of its capital stock (including
Common Stock), (b) subdivide the outstanding Common Stock, (c) combine the
outstanding Common Stock into a smaller number of shares, or (d) issue any
shares of its capital stock in a reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Corporation is the continuing corporation), then in each such case, the
Initial Conversion Price or the Conversion Price in effect at the time of the
record date for such dividend or at the effective date of such subdivision,
combination or reclassification shall be adjusted to that price which will
permit the number of shares of Common Stock into which the Preferred Stock may
be converted to be increased or reduced in the same proportion as the number of
shares of Common 

                                      -5-
<PAGE>
 
Stock are increased or reduced in connection with such dividend, subdivision,
combination or reclassification. Any such adjustment shall become effective
immediately after the record date of such dividend or the effective date of such
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur. In the event, if a
dividend is declared, such dividend is not paid, the Conversion Price shall be
adjusted to the Conversion Price in effect immediately prior to the record date
of such dividend.

     (ii)  Issuance of Additional Common Stock.  If the Corporation shall, at
           -----------------------------------                               
any time or from time to time, directly or indirectly, sell or issue shares of
Common Stock (regardless of whether originally issued or from the Corporation's
treasury), or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock (excluding shares issued in any of the transactions described in Section
7(c)(i)) at a price per share of Common Stock (determined, in the case of
rights, options, warrants or convertible or exchangeable securities, by dividing
(X) the total consideration received or receivable by the Corporation in
consideration of the sale or issuance of such rights, options, warrants or
convertible or exchangeable securities, plus the total consideration payable to
the Corporation upon exercise or conversion or exchange thereof, by (Y) the
total number of shares of Common Stock covered by such rights, options, warrants
or convertible or exchangeable securities) lower than the Initial Conversion
Price in effect immediately prior to such sale or issuance, then the Conversion
Price shall be reduced to the price determined by multiplying the Conversion
Price in effect immediately prior thereto by a fraction, the numerator of which
shall be the sum of the number of shares of Common Stock outstanding immediately
prior to such sale or issuance plus the number of shares of Common Stock which
the aggregate consideration received (determined as provided below) for such
sale or issuance would purchase at the Conversion Price and the denominator of
which shall be the total number of shares of Common Stock outstanding
immediately after such sale or issuance.  Such adjustment shall be made
successively whenever such sale or issuance is made.  For the purposes of such
adjustments, the shares of Common Stock which the holder of any such rights,
options, warrants, or convertible or exchangeable securities shall be entitled
to subscribe for or purchase shall be deemed to be issued and outstanding as of
the date of such sale or issuance and the consideration "received" by the
Corporation therefor shall be deemed to be the consideration actually received
or receivable by the Corporation (plus any underwriting discounts or commissions
in connection therewith) for such rights, options, warrants or convertible or
exchangeable securities, plus the consideration stated in such rights, options,
warrants or convertible or exchangeable securities to be payable to the
Corporation for the shares of Common Stock covered thereby.  If the Corporation
shall sell or issue shares of Common Stock for a consideration consisting, in
whole or in part, of property other than cash or its equivalent, then in
determining the "price per share of Common Stock" and the "consideration"
received or receivable by or payable to the Corporation for purposes of the
first sentence and the immediately preceding sentence of this Section 7(c)(ii),
the fair value of such property shall be determined in good faith by the Board
of Directors.  The determination of whether any adjustment is required under
this Section 7(c)(ii) by reason of the sale and issuance of rights, options,
warrants or convertible or exchangeable securities and the amount of such
adjustment, if any, shall be made only at the time of such issuance or sale and
not at the subsequent time of issuance or sale of Common Stock upon the exercise
of such rights to subscribe or purchase; 

                                      -6-
<PAGE>
 
provided, however, that if such rights, options, warrants or convertible or
exchangeable securities shall expire without exercise prior to any conversion of
the Preferred Stock pursuant to Section 7, then any adjustment made under this
Section 7(c)(ii) with respect thereto shall be reversed.

          (iii)  De Minimis Adjustments. No adjustment of the Conversion Price
                 ----------------------
shall be made if the amount of such adjustment would result in a change in the
Conversion Price per share of less than $.01 but in such case any adjustment
that would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent adjustment,
which together with any adjustment so carried forward, would result in a change
in the Conversion Price in excess of $.01 per share. All calculations under this
Section 7(c) shall be made to the nearest cent, or the nearest 1/100th of a
share, as the case may be. If the Corporation shall, at any time or from time to
time, issue Common Stock by way of dividends on any stock of the Corporation or
subdivide or combine the outstanding shares of the Common Stock, such amount of
$.01 (as theretofore increased or decreased, if such amount shall have been
adjusted in accordance with the provisions of this clause) shall forthwith be
proportionately increased in the case of a combination or decreased in the case
of a subdivision or stock dividend so as appropriately to reflect the same.
Notwithstanding the provisions of the first sentence of this Section 7(c)(iii),
any adjustment postponed pursuant to this Section 7(c)(iii) shall be made no
later than the earlier of (a) two years from the date of the transaction that
would, but for the provisions of the first sentence of this Section 7(c)(iii),
have required such adjustment and (b) the date of any redemption or conversion
of the shares of Preferred Stock.

          (iv)  Fractional Shares.  Notwithstanding any other provision of this
                -----------------                                              
Second Amended Certificate of Designations, the Corporation shall not be
required to issue fractions of shares upon conversion of any shares of Preferred
Stock or to distribute certificates which evidence fractional shares.  In lieu
of fractional shares of Common Stock, the Corporation shall pay therefore, at
the time of any conversion of shares of Preferred Stock as herein provided, an
amount in cash equal to such fraction multiplied by the Conversion Price then in
effect.

     (d)  Reorganization and Reclassification Adjustment.  If there occurs any
          ----------------------------------------------                      
capital reorganization or any reclassification of the Common Stock of the
Corporation, then each share of Preferred Stock shall thereafter be convertible
into the same kind and amounts of securities (including shares of stock) or
other assets, or both, which were issuable or distributable to the holders of
outstanding Common Stock of the Corporation upon such reorganization or
reclassification in respect of that number of shares of Common Stock into which
such shares of Preferred Stock might have been converted immediately prior to
such reorganization or reclassification; and, in any such case, appropriate
adjustments (as determined in good faith by the Board of Directors of the
Corporation) shall be made to assure 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
practicable, in relation to any securities or other assets thereafter
deliverable upon the conversion of the Preferred Stock.

     (e)  Mechanics of Conversion.  The option to convert shall be exercised by
          -----------------------                                              
surrendering for such purpose to the Corporation, certificates representing the
shares to be converted, duly endorsed in blank or accompanied by proper
instruments of transfer, and at the 

                                      -7-
<PAGE>
 
time of such surrender, the Person in whose name any certificate for shares of
Common Stock shall be issuable upon such conversion shall be deemed to be the
holder of record of such shares of Common Stock on such date, notwithstanding
that the share register of the Corporation shall then be closed or that the
certificates representing such Common Stock shall not then be actually delivered
to such person. In the event the Corporation has given written notice of its
intention to redeem any or all of the shares to be converted, the certificates
representing such shares, duly endorsed in blank or accompanied by proper
instruments of transfer, shall be delivered into the possession of the
Corporation no later than the close of business on the date of redemption
identified in the written notice issued pursuant to Section 8(b) below.

     (f)  Certificate as to Adjustments.  Whenever the Conversion Price or the
          -----------------------------                                       
securities or other property deliverable upon the conversion of the Preferred
Stock shall be adjusted pursuant to the provisions hereof, the Corporation shall
promptly give written notice thereof to each holder of shares of Preferred Stock
at such holder's address as it appears on the transfer books of the Corporation
and shall forthwith file, at its principal executive office and with any
transfer agent or agents for the shares of Preferred Stock and the Common Stock,
a certificate, signed by the Chairman of the Board, Chief Executive Officer or
one of the Vice Presidents of the Corporation, and by its Chief Financial
Officer, its Treasurer or one of its Assistant Treasurers, stating the adjusted
Conversion Price and the securities or other property deliverable per share of
Preferred Stock calculated to the nearest cent or to the nearest one one-
hundredth of a share and setting forth in reasonable detail the method of
calculation and the facts requiring such adjustment and upon which such
calculation is based.  Each adjustment shall remain in effect until a subsequent
adjustment hereunder is required.

     (g)  Reservation of Common Stock.  The Corporation shall at all times
          ---------------------------                                     
reserve and keep available for issuance upon the conversion of the shares of
Preferred Stock, the maximum number of its authorized but unissued shares of
Common Stock as is reasonably anticipated to be sufficient to permit the
conversion of all outstanding shares of Preferred Stock, and shall take all
action required to increase the authorized number of shares of Common Stock if
at any time there shall be insufficient authorized but unissued shares of Common
Stock to permit such reservation or to permit the conversion of all outstanding
shares of Preferred Stock.

     (h)  No Conversion Charge or Tax.  The issuance and delivery of
          ---------------------------                               
certificates for shares of Common Stock upon the conversion of shares of
Preferred Stock shall be made without charge to the holder of shares of
Preferred Stock for any issue or transfer tax, or other incidental expense in
respect of the issuance or delivery of such certificates or the securities
represented thereby, all of which taxes and expenses shall be paid by the
Corporation.

     Section 8.  Redemption of Preferred Stock.
                 ----------------------------- 

     (a) The Corporation shall have the right to redeem for cash out of funds
legally available therefor each share of  Series A Preferred Stock.  Redemptions
pursuant to this Section 8(a) shall be made for a price per share equal to the
Liquidation Preference applicable to such share of Series A Preferred Stock,
plus an amount equal to the amount of all unpaid Dividends payable in accordance
with Section 4 hereof on each share of Series A Preferred Stock 

                                      -8-
<PAGE>
 
to be redeemed; provided, however, that no shares of Series A Preferred Stock
shall be redeemed without the consent of the majority of outstanding shares of
Series B Preferred Stock and Series C Preferred Stock, voting as a group.

          (b) The Corporation shall give written notice of its intention to
redeem the Series A Preferred Stock as provided herein, to each holder thereof,
at such holder's address as it appears on the transfer books of the Corporation,
which notice shall specify (i) the total number of shares of Series A Preferred
Stock being redeemed (which shall be all of such shares then outstanding); (ii)
the number of shares of Series A Preferred Stock held by the holder which the
Corporation intends to redeem (which shall be all of such shares then held by
the holder); (iii) the date of redemption (which shall be at least 30 days from
the date of mailing of such notice by the Corporation); and (iv) the redemption
price. On or after the date of redemption, each holder of Series A Preferred
Stock shall surrender his certificate for the number of shares to be redeemed as
stated in the notice provided by the Corporation. Dividends will cease to
accumulate on shares of Series A Preferred Stock called for redemption.

          (c) For the purpose of determining whether funds are legally available
for redemption of shares of Series A Preferred Stock as provided herein, the
Corporation shall value its assets at the highest amount permissible under
applicable law. If on the redemption date funds of the Corporation legally
available therefor shall be insufficient to redeem all the shares of Series A
Preferred Stock required to be redeemed as provided herein, funds to the extent
legally available shall be used for such purpose and the Corporation shall
effect such redemption pro rata according to the total redemption amount owed to
each holder of Series A Preferred Stock as of the redemption date. The
redemption requirements provided hereby shall be continuous, so that if such
requirement shall not be fully discharged, funds legally available shall be
applied therefor until such requirements are fully discharged in accordance with
the preceding sentence.

     Section 9.  Notice of Certain Events.  In case the Corporation shall
                 ------------------------                                
propose at any time or from time to time (A) to declare or pay any dividend
payable in stock of any class to the holders of Common Stock or to make any
other distribution to the holders of Common Stock, (B) to offer to the holders
of Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (C) to effect any reclassification of its Common
Stock, (D) to effect any consolidation, merger or sale, transfer or other
disposition of all or substantially all of the property, assets or business of
the Corporation which would, if consummated result in the mandatory conversion
of shares of Preferred Stock, or (E) to effect the liquidation, dissolution or
winding up of the Corporation, then, in each such case, the Corporation shall
mail to each holder of shares of Preferred Stock via first class mail at such
holder's address as it appears on the transfer books of the Corporation, a
written notice of such proposed action, which shall specify (1) the date on
which a record is to be taken for the purpose of such dividend, distribution or
rights or warrants or, if a record is not to be taken, the date as of which the
holders of shares of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (2) the date on which such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up is expected to become effective, and such 

                                      -9-
<PAGE>
 
notice shall be so given as promptly as possible but in any event at least ten
(10) business days prior to the applicable record, determination or effective
date, specified in such notice.

     Section 10.  Certain Remedies.  Any registered holder of shares of
                  ----------------                                     
Preferred Stock shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Second  Amended Certificate of Designations
and to enforce specifically the terms and provisions of this Second  Amended
Certificate of Designations in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
such holder may be entitled at law or in equity.

     Section 11.  Method of Election.  For purposes of this Second Amended
                  ------------------                                      
Certificate of Designations, any election required or allowed to be made by the
majority of the holders of Preferred Stock shall be effective upon receipt by
the Company of the written consent of a majority of such holders.

     Section 12.  Status of Reacquired Shares.  Shares of Preferred Stock which
                  ---------------------------                                  
have been issued and converted or redeemed shall (upon compliance with any
applicable provisions of the laws of the State of Delaware) have the status of
authorized and unissued shares of Preferred Stock issuable in series
undesignated as to series and may be redesignated and reissued.

     The undersigned, Neil Gibbons and Daniel Huber, Chief Executive Officer and
Secretary of Virtual Telecom, Inc., respectively, hereby declare and certify
under penalty of perjury that the foregoing Certificate is the act and deed of
the Corporation and that the facts herein stated are true.

     Executed at Geneva, Switzerland on January  __, 1999.



                                                         /s/ NEIL GIBBONS
                                                         ----------------
                                                         NEIL GIBBONS
                                                         Chief Executive Officer


                                                         /s/ DANIEL HUBER
                                                         ----------------
                                                         DANIEL HUBER
                                                         Secretary

                                      -10-