CERTIFICATE OF INCORPORATION
 
                                       OF
 
                                UNICA CORPORATION
 
                                   * * * * * *
 
            FIRST. The name of the corporation is Unica Corporation
 
            SECOND. The address of its registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle,
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
 
            THIRD. The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
 
            FOURTH. The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is 31,421,220, of which (a)
3,421,220 shares shall be designated as Preferred Stock, par value $.01 per
share (the "Preferred Stock"), and (b) 28,000,000 shares shall be designated as
Common Stock, par value $.01 per share (the "Common Stock").
 
            The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations and restrictions
thereof in respect of each class of capital stock of the Corporation.
 
A. SERIES A CONVERTIBLE PARTICIPATING PREFERRED STOCK
 
      1.    Designation. A total of 74,811 shares of the Corporation's Preferred
Stock shall be designated as a series known as Series A Convertible
Participating Preferred Stock, par value $.01 per share (the "Series A Preferred
Stock").
 
      2.    Voting. The holder of each share of Series A Preferred Stock shall
be entitled to the number of votes equal to the largest number of full shares of
Common Stock into which such share of Series A Preferred Stock could be
converted pursuant to Section A.6 hereof on the record date for the vote or
written consent of stockholders. The holder of each share of Series A Preferred
Stock shall be entitled to notice of any stockholders' meeting in accordance
with the by-laws of the Corporation and shall vote with holders of the Common
Stock and Series B Preferred Stock (as defined herein), voting together as a
single class, upon all matters submitted to a vote of stockholders, excluding
those matters required to be submitted to a class or series vote pursuant to the
terms hereof (including, without limitation, Section A.8) and or by law.
 
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      3.    Dividends. The holders of shares of Series A Preferred Stock shall
be entitled to receive in preference to the holders of any and all other classes
of capital stock of the Corporation and pari passu with the holders of Series B
Preferred Stock, when and if declared by the Board of Directors, out of funds
legally available therefor, cumulative dividends on the Series A Preferred Stock
in cash at the rate per annum of $8.1205 per share, from the date on which such
shares of Series A Preferred Stock were issued by the Corporation (each such
date, a "Series A Convertible Issuance Date"), subject to proration for partial
years on the basis of a 365-day year (the "Series A Dividends"). Such dividends
will accumulate commencing as of the Series A Convertible Issuance Date and
shall be cumulative, to the extent unpaid, whether or not they have been
declared and whether or not the Corporation may legally pay the dividends. Such
dividends shall become due and payable with respect to any shares of Series A
Preferred Stock as provided in Sections A.4, A.5 and A.6. Dividends paid in an
amount less than the total amount of such dividends at the time accumulated and
payable on all outstanding shares of Series A Preferred Stock shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. So long as any shares of Series A Preferred Stock are outstanding
and the Series A Dividends have not been paid in full in cash (a) no dividend
whatsoever (other than stock dividends) shall be paid or declared, and no
distribution shall be made, on any Common Stock, or other capital stock of the
Corporation ranking junior to the Series A Preferred Stock; and (b) except as
provided in Sections A.8B(c) and C.8B(c) and the Series A Redeemable Preferred
Stock (as defined herein), if applicable, no shares of Common Stock or other
capital stock of the Corporation ranking junior to the Series A Preferred Stock
shall be repurchased, redeemed or acquired by the Corporation and no monies
shall be paid into or set aside or made available for a sinking fund for the
purchase, redemption or acquisition thereof.
 
            In addition to Series A Dividends, the holders of the Series A
Preferred Stock shall be entitled to receive, out of funds legally available
therefor, any dividends declared on the Common Stock (treating each share of
Series A Preferred Stock as being equal to the number of shares of Common Stock
into which each such share of Series A Preferred Stock would be converted if it
were converted pursuant to the provisions of Section A.6 hereof with such number
determined as of the record date for the determination of holders of Common
Stock entitled to receive such dividend).
 
            All numbers relating to the calculation of dividends pursuant to
this Section A.3 shall be subject to equitable adjustment in the event of any
stock split, combination, reorganization, recapitalization, reclassification or
other similar event involving a change in the Series A Preferred Stock.
 
      4.    Liquidation and Extraordinary Transactions.
 
                  (a)   Liquidation Preference. Upon (i) any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary
(a "Liquidation Event"), or (ii) (w) a merger or consolidation of the
Corporation with or into another corporation (except for a merger or
consolidation in which the holders of capital stock of the Corporation
immediately prior to such merger or consolidation continue to hold at least a
majority of the outstanding voting power of such surviving corporation), (x) the
sale or transfer of all or
 
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substantially all of the properties and assets of the Corporation, (y) any
purchase of shares of capital stock of the Corporation (either through a
negotiated stock purchase or a tender for such shares) by any party or group
(other than the Investors, as that term is defined in either (i) that certain
Stock Purchase Agreement, dated as of November 24, 1999, by and among the
Corporation, the Investors and the other parties named therein (the "Series A
Purchase Agreement")), or (ii) that certain Stock Purchase Agreement, dated as
of March [___], 2001, by and among the Corporation and the Investors (the
"Series B Purchase Agreement") that did not beneficially own a majority of the
voting power of the outstanding shares of capital stock of the Corporation
immediately prior to such purchase, the effect of which is that such party or
group beneficially owns at least a majority of such voting power immediately
after such purchase, or (z) the redemption or repurchase of shares (other than
the Preferred Stock as provided in this Certificate of Incorporation) the effect
of which is that any party or group (other than the Investors) that did not
beneficially own a majority of the voting power of the outstanding shares of
capital stock of the Corporation immediately prior to such redemption or
repurchase beneficially owns a majority of the voting power of the outstanding
shares of capital stock of the Corporation after such redemption or repurchase
(each an "Extraordinary Transaction"), each holder of outstanding shares of
Series A Preferred Stock shall be entitled to be paid out of the assets of the
Corporation available for distribution to stockholders, whether such assets are
capital, surplus or earnings:
 
            (i)   Before any amount shall be paid or distributed to the holders
      of Common Stock or of any other stock ranking on liquidation junior to the
      Series A Preferred Stock, an amount in cash equal to (i) $90.227373 per
      share of Series A Preferred Stock (adjusted appropriately for stock
      splits, stock dividends, recapitalizations and the like with respect to
      the Series A Preferred Stock) (the "Series A Base Liquidation Amount"),
      plus (ii) any accumulated but unpaid dividends, including, without
      limitation, the Series A Dividends, to which such holder of outstanding
      shares of Series A Preferred Stock is then entitled (the "Series A
      Dividend Liquidation Amount") (the sum of clauses (i) and (ii) being
      referred to herein as the "Series A Senior Convertible Liquidation
      Amount"); provided, however, that
 
                  (A) if a Liquidation Event or Extraordinary Transaction occurs
                  and the holders of Series A Preferred Stock would, if all
                  proceeds were distributed pursuant to Section A.4(a)(ii)
                  without payment of the Series A Senior Convertible Liquidation
                  Amount, receive an amount equal to or in excess of $295 per
                  share of Series A Preferred Stock (adjusted appropriately for
                  stock splits, stock dividends, recapitalizations and the like
                  with respect to the Series A Preferred Stock), then the
                  holders of Series A Preferred Stock shall not be entitled to
                  receive any Series A Senior Convertible Liquidation Amount
                  hereunder; and
 
                  (B) if a Liquidation Event or Extraordinary Transaction occurs
                  and the holders of Series A Preferred Stock would, if all
                  proceeds
 
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                  were distributed pursuant to Section A.4(a)(ii) without
                  payment of the Series A Senior Convertible Liquidation Amount,
                  receive an amount which is in excess of $221 per share of
                  Series A Preferred Stock (as adjusted appropriately for stock
                  splits, stock dividends, recapitalizations and the like with
                  respect to the Series A Preferred Stock) (such applicable per
                  share amount to be referred to herein as the "Series A Minimum
                  Amount") but is less than $295 per share of Series A Preferred
                  Stock (as adjusted appropriately for stock splits, stock
                  dividends, recapitalizations and the like with respect to the
                  Series A Preferred Stock) (such applicable per share amount to
                  be referred to herein as the "Series A Target Amount"), then
                  each holder of Series A Preferred Stock shall be entitled to
                  receive only: that portion of the Series A Senior Convertible
                  Liquidation Amount equal to the product of (x) the Series A
                  Senior Convertible Liquidation Amount multiplied by (y) a
                  fraction, the numerator of which is the remainder of (1) the
                  Series A Target Amount minus (2) the actual amount per share
                  that the holders of Series A Preferred Stock would so receive
                  pursuant to Section A.4(a)(ii) without payment of the Series A
                  Senior Convertible Liquidation Amount and the denominator of
                  which is equal to the remainder of (1) the Series A Target
                  Amount minus (2) the Series A Minimum Amount; and
 
provided further that if, upon any Liquidation Event or Extraordinary
Transaction, the amounts payable with respect to the Series A Senior Convertible
Liquidation Amount as provided in this Section A.4 and the Series B Senior
Convertible Liquidation Amount as provided in Section C.4 are not paid in full,
the holders of the Series A Preferred Stock and the Series B Preferred Stock
shall share ratably in any distribution of assets in proportion to the full
respective preferential amounts to which they are entitled; and
 
      (ii)  After the payment of the Series A Senior Convertible Liquidation
Amount (subject to the prior payment of amounts due to holders of any shares of
capital stock ranking senior, pari passu or junior to the Series A Preferred
Stock, as the case may be), any assets remaining available for distribution
shall be distributed ratably among the holders of the Common Stock, the Series A
Preferred Stock and the Series B Preferred Stock based upon the number of shares
of Common Stock (i) then held by each holder of Common Stock and (ii) issuable
upon conversion of the shares of Series A Preferred Stock held by a holder of
Series A Preferred Stock pursuant to Section A.6 and the conversion of the
shares of Series B Preferred Stock held by a holder of Series B Preferred Stock
pursuant to Section C.6, in each case immediately prior to the occurrence of any
such Liquidation Event or Extraordinary Transaction (the "Series A Residual
Convertible Liquidation Amount" and, together with the Series A Senior
Convertible Liquidation Amount, the "Series A Total Convertible Liquidation
Amount").
 
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            (b)   Conversion Rights Not Impaired. Nothing in this Section A.4
shall with respect to any Liquidation Event or Extraordinary Transaction in any
way limit the right of the holders of the Series A Preferred Stock to elect to
have the provisions of Section A.6 govern such Liquidation Event or
Extraordinary Transaction.
 
            (c)   Non-Cash Consideration. Notwithstanding the provisions of
Section A.4(a), in connection with any Extraordinary Transaction, the holders of
Series A Preferred Stock shall, on the effective date of such Extraordinary
Transaction, be paid by the Corporation the Series A Senior Convertible
Liquidation Amount in cash solely to the extent that cash is paid in such
Extraordinary Transaction and then (or alternatively if no cash payments are
involved, as applicable), in such other consideration (valued as provided below)
as is delivered in such Extraordinary Transaction an amount equal to the Series
A Senior Convertible Liquidation Amount. The Series A Residual Convertible
Liquidation Amount shall be paid in the same combination of cash and other
consideration as remains payable to pay to the holders of the Common Stock and
the holders entitled to the Series A Residual Convertible Liquidation Amount
(after payment of Series A Senior Convertible Liquidation Amount, if any) and
the Series B Residual Convertible Liquidation Amount (after payment of the
Series B Senior Convertible Liquidation Amount) (in each case as defined in
Section C.6) based upon the number of shares of Common Stock (i) then held by
each holder of Common Stock and (ii) issuable upon conversion of the shares of
Series A Preferred Stock held by a holder of Series A Preferred Stock pursuant
to Section A.6 and Series B Preferred Stock held by a holder of Series B
Preferred Stock pursuant to Section C.6, in each case immediately prior to the
occurrence of any such Liquidation Event or Extraordinary Transaction.
 
            Any securities or other consideration to be delivered to the holders
of the Series A Preferred Stock and Series B Preferred Stock upon any
Extraordinary Transaction shall be valued as follows: (i) if traded on a
nationally recognized securities exchange or inter-dealer quotation system, the
value shall be deemed to be the average of the closing prices of the securities
on such exchange or system over the twenty-one (21) trading days (or all such
trading days on which such securities have been traded if fewer than twenty-one
(21) days) preceding the consummation of such Liquidation Event or Extraordinary
Transaction; (ii) if traded over-the-counter, the value shall be deemed to be
the average of the closing bid prices over the twenty-one (21) trading days (or
all such trading days on which such securities have been traded if fewer than
twenty-one (21) days) preceding the consummation of such Liquidation Event or
Extraordinary Transaction; and (iii) if there is no active public market, the
value shall be the fair market value thereof, as determined in good faith by
resolution of the Board of Directors of the Corporation and the holders of two
thirds of the outstanding Series A Preferred Stock and Series B Preferred Stock,
voting together as a class.
 
            (d)   Surrender of Certificates. On the effective date of any
Extraordinary Transaction, the Corporation shall pay all cash and other
consideration to which the holders of Series A Preferred Stock shall be entitled
under this Section A.4. Upon receipt of such payment, each holder of shares of
Series A Preferred Stock shall surrender the certificate or certificates
representing such shares, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), at
the principal
 
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executive office of the Corporation or the offices of the transfer agent for the
Corporation, or shall notify the Corporation or any transfer agent that such
certificates have been lost, stolen or destroyed and shall execute an affidavit
or agreement reasonably satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection therewith (an "Affidavit
of Loss"), and each surrendered certificate shall be canceled and retired.
 
            (e)   Notice. Prior to the occurrence of any Liquidation Event or
Extraordinary Transaction, the Corporation will furnish each holder of Series A
Preferred Stock notice in accordance with Section A.9 hereof, together with a
certificate prepared by the chief financial officer of the Corporation
describing the facts of such Liquidation Event or Extraordinary Transaction,
stating in reasonable detail the amount(s) per share of Series A Preferred Stock
each holder of Series A Preferred Stock would receive pursuant to the provisions
of Section A.4(a) hereof and stating in reasonable detail the facts upon which
such amount was determined and, in connection with any Extraordinary
Transaction, describing in reasonable detail all material terms of such
Extraordinary Transaction, including without limitation the consideration to be
delivered in connection with such Extraordinary Transaction, the valuation of
the Corporation at the time such Extraordinary Transaction and the identities of
the parties to the Extraordinary Transaction.
 
      5.    Redemption.
 
            (a)   On or after March 20, 2008, at the election of the holders of
a majority of the then outstanding shares of Series A Preferred Stock, the
Corporation shall redeem all shares of Series A Preferred Stock then outstanding
at the Series A Redemption Price specified in Section A.5(b) herein, the
foregoing election shall be made by such holders giving the Corporation and each
of the other holders of the Series A Preferred Stock not less than thirty (30)
days prior written notice, which notice shall set forth the date for such
redemption (the "Series A Redemption Date"). Upon the receipt of any such
notice, the Corporation shall provide concurrent written notice to each holder
of the Series B Preferred Stock.
 
            (b)   On the Series A Redemption Date, the Corporation shall redeem
all shares of Series A Preferred Stock for a per share redemption price equal to
the greater of (i) the Series A Senior Convertible Liquidation Amount or (ii)
the amount received if each share of Series A Preferred Stock was converted into
Common Stock and such Common Stock was redeemed at its Going Concern Value (as
defined in Section A.5(e) hereof) (the "Series A Redemption Price"). On the
Series A Redemption Date, each holder of shares of Series A Preferred Stock
shall surrender the certificate evidencing such shares to the Corporation and
shall thereupon be entitled to receive payment of the Series A Redemption Price.
 
            (c)   From and after the Series A Redemption Date, unless there
shall have been a default in payment or tender by the Corporation of the Series
A Redemption Price, all dividends on the Series A Preferred Stock shall cease to
accrue, all rights of the holders with respect to such redeemed shares of Series
A Preferred Stock (except the right to receive the Series A Redemption Price
upon surrender of their certificate) shall cease and such shares
 
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shall not thereafter be transferred on the books of this Corporation or be
deemed outstanding for any purposes whatsoever.
 
            (d)   If the funds of the Corporation legally available for
redemption of shares of Series A Preferred Stock on the Series A Redemption Date
and Series B Preferred Stock on the Series B Redemption Date (as defined in
Section C.5), if applicable, are insufficient to redeem the total number of
shares of to be redeemed, the Corporation shall use those funds which are
legally available to redeem the maximum possible number of such shares ratably
among the holders of such shares to be redeemed. At any time thereafter when
additional funds of the Corporation are legally available for the redemption of
shares of Series A Preferred Stock and Series B Preferred Stock, if applicable,
such funds will immediately be used to redeem the balance of the shares which
the Corporation has become obligated to redeem (ratably among the holders of
such shares to be redeemed to the extent that such funds are insufficient to
redeem the shares remaining to be redeemed), but which it has not redeemed at
the Series A Redemption Price or Series B Redemption Price, whichever is
applicable, together with any accrued interest thereon as provided below. If any
shares to be redeemed are not redeemed for the foregoing reason or because the
Corporation otherwise failed to pay or tender to pay the aggregate Series A
Redemption Price and Series B Redemption Price (as defined in Section C.5), as
applicable, on all outstanding shares of Series A Preferred Stock and Series B
Preferred Stock, all shares which have not been redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein, and
the Corporation shall pay interest on the Series A Redemption Price and the
Series B Redemption Price, if applicable, for the unredeemed portion at an
aggregate per annum rate equal to twelve percent (12%), which such rate shall
increase every six months thereafter by an additional one percent (1%) per annum
to a maximum of twenty percent (20%) per annum, or the maximum rate of interest
permitted under applicable law, whichever is less.
 
            (e)   Going Concern Value. For purposes of Sections A.5(b) and
C.5(b) hereof, "Going Concern Value" shall be determined on the basis of the
following assumptions: (i) as though all outstanding securities which are then
convertible into, exercisable for or exchangeable into shares of Common Stock of
the Corporation (including, without limitation, vested options and warrants) had
been converted into, exercised for or exchanged into Common Stock of the
Corporation and any amounts payable upon such conversion, exercise or exchange
paid to the Corporation; (ii) without any reduction in value for lack of control
or the inherent lack of liquidity of minority interests; (iii) giving full
effect to the earnings history and prospects of the Corporation; and (iv)
otherwise on a basis which values each share of Common Stock of the Corporation
at the same per share price. In order to determine the Going Concern Value, the
Board of Directors of the Corporation and the holder or holders of Series A
Preferred Stock and Series B Preferred Stock electing to redeem shares of such
stock shall meet and use their best efforts to reach an agreement on the
Corporation's Going Concern Value. If such parties are unable to reach such
agreement within a reasonable amount of time, such parties will use their best
efforts to agree upon the selection of an independent appraiser or investment
banking firm of national standing within 30 business days after giving of notice
that requires a determination of Going Concern Value. Such appraiser or
investment banking firm will have 30 business days in which to determine
 
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the Going Concern Value and its determination will be final and binding on all
parties concerned. All costs of such determination shall be borne by the
Corporation.
 
      6.    Conversion. The holders of the Series A Preferred Stock shall have
the following conversion rights:
 
            (a)   Voluntary Conversion. Each holder of shares of Series A
Preferred Stock may elect at any time to convert the shares of Series A
Preferred Stock then held by such holder into a number of shares of Common Stock
computed by multiplying the number of shares of Series A Preferred Stock to be
converted by the Series A Conversion Value and dividing the result by the Series
A Conversion Price then in effect. The "Series A Conversion Value" shall
initially be $90.227373 per share of Series A Preferred Stock. After giving
effect to the Corporation's 60-for-1 stock split via a 59-for-1 stock dividend
on February 14, 2000 (the "2000 Stock Split"), the "Series A Conversion Price"
shall be $1.503790 per share of Series A Preferred Stock, subject to adjustment
as hereinafter provided. Additionally, each share of Series A Preferred Stock
outstanding shall automatically be converted into the number of shares of Common
Stock into which such shares are convertible according to the formula set forth
above at the then effective Series A Conversion Price upon the date specified by
the holders of not less than a majority of the shares of Series A Preferred
Stock then outstanding. Except as otherwise provided in this Section A.6(a) or
Section A.6(c) hereof, if shares of Series A Preferred Stock are converted
pursuant to this Section A.6(a) at a time when there are any declared and unpaid
dividends or other amounts due on such shares, other than Series A Dividends,
before any amount shall be paid or distributed to the holders of Common Stock,
or of any other stock ranking on liquidation pari passu or junior to the Series
A Preferred Stock, such dividends and other amounts shall be paid in full by the
Corporation in connection with such conversion; provided, however, that in the
event shares of Series A Preferred Stock are so converted into shares of Common
Stock in connection with an Extraordinary Transaction or a Liquidation Event and
the holders thereof would, if all proceeds with respect thereto were distributed
pursuant to Section A.4(a)(ii) hereof without payment of the Series A Senior
Convertible Liquidation Amount, receive less than the Series A Target Amount,
the Corporation shall pay, before any amount shall be paid to the holders of
Common Stock, or of any other stock ranking on liquidation pari passu or junior
to the Series A Preferred Stock, to each such holder, in addition to any other
declared and unpaid dividends or other amounts due on such shares, any Series A
Dividends to which such holder would otherwise be entitled if the provisions of
Section A.4 hereof were applicable thereto.
 
            (b)   Automatic Conversion Upon Series A Qualified Public Offering.
Each share of Series A Preferred Stock outstanding shall automatically be
converted into the number of shares of Common Stock into which such shares are
convertible as computed according to the formula set forth in Section A.6(a)
hereof at the then effective Series A Conversion Price as of, and in all cases
subject to, the closing of the Corporation's first underwritten offering to the
public pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the "Securities Act") covering the offer and sale of Common
Stock for the account of the Corporation to the public generally, provided that
(i) such registration statement covers the offer and sale of Common Stock of
which the
 
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aggregate net proceeds attributable to sales for the account of the Corporation
equal or exceed $30,000,000, (ii) such Common Stock is listed for trading on
either the New York Stock Exchange or the NASDAQ National Market and (iii) the
per share public offering price (net of underwriter discounts and commissions)
exceeds $4.916667 per share of Common Stock (adjusted appropriately for stock
splits, stock dividends, recapitalizations and the like with respect to the
Common Stock)(a "Series A QPO" or a "Series A Qualified Public Offering");
provided, that if a closing of a Series A QPO occurs, all outstanding shares of
Series A Convertible Stock shall be deemed to have been converted into shares of
Common Stock immediately prior to such closing. If the holders of shares of
Series A Convertible Stock are required to convert the outstanding shares of
Series A Preferred Stock pursuant to this Section A.6(b) at a time when there
are any accumulated but unpaid dividends or other amounts due on or in respect
of such shares, other than Series A Dividends, before any amount shall be paid
or distributed to the holders of Common Stock, or of any other stock ranking on
liquidation pari passu or junior to the Series A Preferred Stock, such dividends
and other amounts shall be paid in full in cash by the Corporation in connection
with such conversion.
 
            (c)   Conversion Upon Series A Initial Public Offering Other than
Series A Qualified Public Offering. Notwithstanding anything to the contrary
contained herein, upon election by a holder or holders of Series A Preferred
Stock to convert such shares into shares of Common Stock pursuant to the
provisions of Section A.6(a) hereof in connection with the Corporation's first
public offering pursuant to an effective registration statement under the
Securities Act, which offering does not constitute a Series A Qualified Public
Offering (a "Series A Initial Public Offering"), each share of Series A
Preferred Stock then held by such holder or holders shall as of, and in all
cases subject to, the closing of the Series A Initial Public Offering, be
converted into (i) the number of shares of Common Stock into which such share is
convertible as computed according to the formula set forth in Section A.6 hereof
and (ii) one (1) share of Series A Redeemable Preferred Stock; provided, that if
a closing of a Series A Initial Public Offering occurs, all such shares of
Series A Preferred Stock being so converted shall be deemed to have been
converted as set forth in this Section A.6(c) immediately prior to such closing;
and provided, further that in the event that the per share public offering price
(net of underwriter discounts and commissions) (the "Offering Price") for the
Series A Initial Public Offering exceeds the Series A Minimum Amount but is less
than the Series A Target Amount, then the number of shares of Series A
Redeemable Preferred Stock issuable to a holder of shares of Series A Preferred
Stock shall be equal to the product of (x) the number of shares of Series A
Redeemable Preferred Stock issuable pursuant to the formula set forth above
multiplied by (y) a fraction, the numerator of which is the remainder of (A) the
Series A Target Amount minus (B) the Offering Price and the denominator of which
is the remainder of (A) the Series A Target Amount minus (B) the Series A
Minimum Amount. If shares of Series A Preferred Stock are converted pursuant to
this Section A.6(c) at a time when there are any declared and unpaid dividends
or other amounts due on such shares, including Series A Dividends, before any
amount shall be paid or distributed to the holders of Common Stock, or of any
other stock ranking on liquidation pari passu or junior to the Series A
Preferred Stock, such dividends and other amounts shall be paid in full by the
Corporation in connection with such conversion; provided that in the
 
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event the Offering Price exceeds the Series A Minimum Amount but is less than
the Series A Target Amount, then each holder of Series A Preferred Stock so
converting shall be entitled to receive only that portion of the accrued Series
A Dividends with respect to such shares (the "Accrued Series A Dividends") equal
to the product of (x) the Accrued Series A Dividends multiplied by (y) a
fraction, the numerator of which is the remainder of (1) the Series A Target
Amount minus (2) the Series A Offering Price and the denominator of which is
equal to the remainder of (1) the Series A Target Amount minus (2) the Series A
Minimum Amount.
 
            (d)   Procedure for Voluntary Conversion. Upon election to convert
pursuant to Section A.6(a), the relevant holder or holders of Series A Preferred
Stock shall surrender the certificate or certificates representing the Series A
Preferred Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), at
the principal executive office of the Corporation or the offices of the transfer
agent for the Series A Preferred Stock or such office or offices in the
continental United States of an agent for conversion as may from time to time be
designated by notice to the holders of the Series A Preferred Stock by the
Corporation, or in the event the certificate or certificates are lost, stolen or
missing, shall deliver an Affidavit of Loss with respect to such certificates.
The issuance by the Corporation of Common Stock upon a conversion of Series A
Preferred Stock upon election to convert pursuant to Section A.6(a) hereof shall
be effective as of the surrender of the certificate or certificates for the
Series A Preferred Stock to be converted, duly assigned or endorsed for transfer
to the Corporation (or accompanied by duly executed stock powers relating
thereto), or as of the delivery of an Affidavit of Loss. Upon surrender of a
certificate representing Series A Preferred Stock for conversion, or delivery of
an Affidavit of Loss, the Corporation shall issue and send by hand delivery, by
courier or by first class mail (postage prepaid) to the holder thereof or to
such holder's designee, at the address designated by such holder, certificates
for the number of shares of Common Stock and Series A Redeemable Preferred
Stock, if applicable, to which such holders shall be entitled upon conversion,
plus a cash payment in the amount of any accrued but unpaid dividends and other
amounts as contemplated by this Section A.6 in respect of the shares of Series A
Preferred Stock which are converted. Notwithstanding the foregoing, in the event
of an automatic conversion pursuant to Section A.6(a) upon the election of the
holders of not less than a majority of Series A Preferred Stock, the outstanding
shares of Series A Preferred Stock shall be converted automatically without any
further action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent and all rights with respect to such applicable Series A Preferred Stock
shall terminate, except any of the rights of the holders thereof upon surrender
of their certificate or certificates therefore or delivery of an Affidavit of
Loss thereof to receive certificates for the number of shares of Common Stock
and Series A Redeemable Preferred Stock, if applicable, into which such shares
of Series A Preferred Stock have been converted plus all declared but unpaid
dividends and other amounts as contemplated by this Section A.6 in respect of
the shares of Series A Preferred Stock which are converted. The issuance of
certificates for Common Stock and Series A Redeemable Preferred Stock, if
applicable, upon conversion of Series A Preferred Stock will be made without
charge to the holders of such shares for any
 
                                       10
<PAGE>
 
issuance tax in respect thereof or other costs incurred by the Corporation in
connection with such conversion and the related issuance of such stock.
 
            (e)   Procedure for Automatic Conversion on Series A Qualified
Public Offering. As of, and in all cases subject to, the closing of a Series A
Qualified Public Offering (the "Series A Automatic Conversion Date"), all
outstanding shares of Series A Preferred Stock shall be converted automatically
into shares of Common Stock as set forth in Section A.6(b) hereof and without
any further action by the holders of such shares and whether or not the
certificates representing such shares of Series A Preferred Stock are
surrendered to the Corporation or its transfer agent. On the Series A Automatic
Conversion Date, all rights with respect to the Series A Preferred Stock so
converted shall terminate, except any of the rights of the holders thereof upon
surrender of their certificate or certificates therefor or delivery of an
Affidavit of Loss thereof to receive certificates for the number of shares of
Common Stock into which such Series A Preferred Stock has been converted plus
all accrued but unpaid dividends and other amounts as contemplated by Section
A.6(b). If so required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or by his, her or its attorney duly authorized in
writing. Upon surrender of such certificates or Affidavit of Loss the
Corporation shall issue and deliver to such holder, promptly at such office and
in its name as shown on such surrendered certificate or certificates, a
certificate or certificates for the number of shares of Common Stock into which
the shares of the Series A Preferred Stock surrendered are convertible on the
Series A Automatic Conversion Date and shall pay all declared but unpaid
dividends and other amounts as contemplated by Section A.6(b) in respect of the
shares of Series A Preferred Stock which are converted.
 
            (f)   Fractional Shares. The Corporation shall not be obligated to
deliver to holders of Series A Preferred Stock any fractional share of Common
Stock issuable upon any conversion of such Series A Preferred Stock, but in lieu
thereof may make a cash payment in respect thereof in any manner permitted by
law; provided, however, the Corporation shall deliver to the holders of Series A
Preferred Stock fractional shares of Series A Redeemable Preferred Stock, if
applicable, upon the conversion of Series A Preferred Stock pursuant to the
provisions of Section A.6(c) hereof.
 
            (g)   Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock and Series A Redeemable Preferred Stock solely for the
purpose of effecting the conversion of the shares of Series A Preferred Stock
such number of its shares of Common Stock and Series A Redeemable Preferred
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock and Series A Redeemable Preferred
Stock shall not be sufficient to effect the conversion of all then outstanding
shares of Series A Preferred Stock, the Corporation will take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock and Series A Redeemable Preferred Stock to such number of shares as
shall be sufficient for such purpose.
 
                                       11
<PAGE>
 
            (h)   No Closing of Transfer Books. The Corporation shall not close
its books against the transfer of shares of Series A Preferred Stock in any
manner which would interfere with the timely conversion of any shares of Series
A Preferred Stock.
 
      7.    Adjustments. The Series A Conversion Price in effect from time to
time shall be subject to adjustment from and after the Series A Convertible
Issuance Date as follows:
 
            (a)   Dividends and Stock Splits. If the number of shares of Common
Stock outstanding at any time after the date hereof is increased by a stock
dividend payable in shares of Common Stock or by a subdivision or split-up of
shares of Common Stock, then, on the date such payment is made or such change is
effective, the Series A Conversion Price shall be appropriately decreased so
that the number of shares of Common Stock issuable on conversion of any shares
of Series A Preferred Stock shall be increased in proportion to such increase of
outstanding shares of Common Stock.
 
            (b)   Reverse Stock Splits. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination or
reverse split of the outstanding shares of Common Stock, then, on the effective
date of such combination or reverse split, the Series A Conversion Price shall
be appropriately increased so that the number of shares of Common Stock issuable
on conversion of any shares of Series A Preferred Stock, shall be decreased in
proportion to such decrease in outstanding shares of Common Stock.
 
            (c)   Sale of Common Stock. In the event the Corporation shall at
any time, or from time to time, issue, sell or exchange any shares of Common
Stock (including shares held in the Corporation's treasury but excluding (i) any
shares of Common Stock issued (pursuant to the exercise of options or otherwise)
to the Corporation's employees, directors and consultants pursuant to employee
stock and option plans approved by the Corporation's Board of Directors, (ii)
any Common Stock which may be issued upon conversion of the Series A Preferred
Stock or Series B Preferred Stock, (iii) any Common Stock issued or issuable by
reason of a stock split, stock dividend or other distribution of shares of
Common Stock that is covered by Sections A.7(a) and (b) and C.7(a) and (b)
hereof, and (iv) subject to the requisite approval of the holders of Series A
Preferred Stock (as provided for in Section A.8B(d) hereof) and the holders of
Series B Preferred Stock (as provided for in Section C.8B(d) hereof), any Common
Stock issued in connection with an acquisition of any corporation or business
concern (the securities referred to in clauses (i) through (iv) shall
collectively be referred to as the "Excluded Shares")) for a consideration per
share (the "Purchase Price") less than the Series A Conversion Price in effect
immediately prior to the issuance, sale or exchange of such shares (any such
issuance, sale or exchange is hereafter referred to as a "Series A Dilutive
Transaction"), then, and thereafter successively upon each such Series A
Dilutive Transaction the Series A Conversion Price shall forthwith be reduced to
an amount determined by multiplying the Series A Conversion Price by a fraction:
 
            (i)   the numerator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the Series A
      Dilutive Transaction (excluding treasury shares but including all shares
      of Common Stock
 
                                       12
<PAGE>
 
      issuable upon conversion or exercise of any outstanding Series A Preferred
      Stock, Series B Preferred Stock, options, warrants, rights or other
      convertible securities) plus (Y) the number of shares of Common Stock
      which the net aggregate consideration received by the Corporation for the
      total number of such additional shares of Common Stock so issued in the
      Series A Dilutive Transaction would purchase at the Series A Conversion
      Price (prior to such adjustment); and
 
            (ii)  the denominator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the Series A
      Dilutive Transaction (excluding treasury shares but including all shares
      of Common Stock issuable upon conversion or exercise of any outstanding
      Series A Preferred Stock, Series B Preferred Stock, options, warrants,
      rights or other convertible securities), plus (Y) the number of such
      additional shares of Common Stock so issued in the Series A Dilutive
      Transaction.
 
            (d)   Sale of Options, Rights or Convertible Securities. In the
event the Corporation shall at any time or from time to time, issue options,
warrants or rights to subscribe for shares of Common Stock, or issue any
securities convertible into or exchangeable for shares of Common Stock (other
than any options or warrants for Excluded Shares), for a Purchase Price
(determined by dividing the Net Aggregate Consideration (as determined below) by
the aggregate number of shares of Common Stock that would be issued if all such
options, warrants, rights or other convertible securities were exercised or
converted to the fullest extent permitted by their terms) less than the Series A
Conversion Price in effect immediately prior to the issuance of such options,
warrants or rights or other convertible or exchangeable securities, the Series A
Conversion Price shall forthwith be reduced to an amount determined by
multiplying the Series A Conversion Price by a fraction:
 
            (i)   the numerator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the issuance
      of such options, warrants, rights or other convertible securities
      (excluding treasury shares but including all shares of Common Stock
      issuable upon conversion or exercise of any outstanding Series A Preferred
      Stock, Series B Preferred Stock, options, warrants, rights or other
      convertible securities), plus (Y) the number of shares of Common Stock
      which the total amount of consideration received by the Corporation for
      the issuance of such options, warrants, rights or convertible securities
      plus the minimum amount set forth in the terms of such security as payable
      to the Corporation upon the exercise or conversion thereof (the "Net
      Aggregate Consideration") would purchase at the Series A Conversion Price
      prior to adjustment; and
 
            (ii)  the denominator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the issuance
      of such options, warrants, rights or other convertible securities
      (excluding treasury shares but including all shares of Common Stock
      issuable upon conversion or exercise of any outstanding Series A Preferred
      Stock, Series B Preferred Stock, options, warrants, rights or other
      convertible securities), plus (Y) the aggregate number of shares of
 
                                       13
<PAGE>
 
      Common Stock that would be issued if all such options, warrants, rights or
      other convertible securities were exercised or converted.
 
            (e)   Expiration or Change in Price. If the consideration per share
provided for in any options, warrants, convertible securities or any other
rights to subscribe for shares of Common Stock or any securities exchangeable
for or convertible into shares of Common Stock, changes at any time, the Series
A Conversion Price in effect at the time of such change shall be readjusted to
the Series A Conversion Price which would have been in effect at such time had
such options, warrants, convertible securities or other rights provided for such
changed consideration per share (determined as provided in Section A.7(d)
hereof), at the time initially granted, issued or sold; provided, that such
adjustment of the Series A Conversion Price will be made only as and to the
extent that such Series A Conversion Price effective upon such adjustment
remains less than or equal to such Series A Conversion Price that would be in
effect if such options, warrants, rights or securities had not been issued. No
adjustment of the Series A Conversion Price shall be made under this Section A.7
upon the issuance of any additional shares of Common Stock which are issued
pursuant to the exercise of any warrants, options or other subscription or
purchase rights or pursuant to the exercise of any conversion or exchange rights
in any convertible securities if an adjustment shall previously have been made
upon the issuance of such warrants, options or other rights. Any adjustment of
the Series A Conversion Price shall be disregarded if, as, and when the rights
to acquire shares of Common Stock upon exercise or conversion of the warrants,
options, rights or convertible securities which gave rise to such adjustment
expire or are canceled without having been exercised, so that the Series A
Conversion Price effective immediately upon such cancellation or expiration
shall be equal to the Series A Conversion Price in effect at the time of the
issuance of the expired or canceled warrants, options, rights or convertible
securities, with such additional adjustments as would have been made to the
Series A Conversion Price had the expired or canceled warrants, options, rights
or convertible securities not been issued.
 
            (f)   Other Adjustments. In the event the Corporation shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, then and in each such event
lawful and adequate provision shall be made so that the holders of Series A
Preferred Stock, shall receive upon conversion thereof in addition to the number
of shares of Common Stock receivable thereupon, the number of securities of the
Corporation which they would have received had their Series A Preferred Stock,
been converted into Common Stock on the date of such event and had they
thereafter, during the period from the date of such event to and including the
date of conversion, retained such securities receivable by them as aforesaid
during such period, giving application to all adjustments called for during such
period under this Section A.7 as applied to such distributed securities.
 
            (g)   Reorganization, etc. If the Common Stock issuable upon the
conversion of the Series A Preferred Stock, shall be changed into the same or
different number of shares of any class or classes of stock, whether by
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend provided for above, or a
 
                                       14
<PAGE>
 
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section A.7), then and in each such event the holder of each share of
Series A Preferred Stock, shall have the right to receive upon conversion of the
Series A Preferred Stock, the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification or
other change, by holders of the number of shares of Common Stock into which such
shares of Series A Preferred Stock might have been converted immediately prior
to such reorganization, reclassification or change, all subject to further
adjustment as provided herein.
 
            (h)   Mergers and Other Reorganizations. If at any time or from time
to time there shall be a capital reorganization of the Common Stock (other than
a subdivision, combination or reclassification provided for elsewhere in this
Section A.7) or a merger or consolidation of the Corporation with or into
another Corporation or the sale of all or substantially all of the Corporation's
properties and assets to any other person, then, as part of and as a condition
to the effectiveness of such reorganization, merger, consolidation or sale,
lawful and adequate provision shall be made so that the holders of the Series A
Preferred Stock, shall thereafter be entitled to receive upon conversion of the
Series A Preferred Stock the number of shares of stock or other securities or
property of the Corporation or of the successor corporation resulting from such
merger or consolidation or sale, to which a holder of Common Stock deliverable
upon conversion would have been entitled on such capital reorganization, merger,
consolidation, or sale. In any such case, appropriate provisions shall be made
with respect to the rights of the holders of the Series A Preferred Stock after
the reorganization, merger, consolidation or sale to the end that the provisions
of this Section A.7 (including, without limitation, provisions for adjustment of
the Series A Conversion Price and the number of shares purchasable upon
conversion of the Series A Preferred Stock) shall thereafter be applicable, as
nearly as may be, with respect to any shares of stock, securities or assets to
be deliverable thereafter upon the conversion of the Series A Preferred Stock.
 
            Each holder of Series A Preferred Stock upon the occurrence of a
capital reorganization, merger or consolidation of the Corporation or the sale
of all or substantially all of its assets and properties and such events are
more fully set forth on the first paragraph of this Section A.7(h), shall have
the option of electing treatment of its shares of Series A Preferred Stock under
either this Section A.7(h) or Section A.4 hereof.
 
            (i) Calculations. All calculations under this Section A.7 shall be
made to the nearest cent or to the nearest one hundredth (1/100) of a share, as
the case may be.
 
            (j) Certificate. Upon the occurrence of each adjustment or
readjustment pursuant to this Section A.7, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to each holder of Series A Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon written request at any time of any holder of Series A Preferred
Stock furnish or cause to be furnished to such holder a like certificate setting
forth (i) such adjustments and readjustments, (ii) the applicable Series A
Conversion Price before
 
                                       15
<PAGE>
 
and after such adjustment or readjustment, and (iii) the number of shares of
Common Stock and Series A Redeemable Preferred Stock, if applicable, and the
amount, if any, of other property which at the time would be received upon the
conversion of such holder's shares of Series A Preferred Stock.
 
      8.    Covenants.
 
            A.    Series A Preferred Stock Rights. So long as any shares of
Series A Preferred Stock shall be outstanding, the Corporation shall not,
without first having provided written notice of such proposed action to each
holder of outstanding shares of Series A Preferred Stock and having obtained the
affirmative vote or written consent of the holders of not less than a majority
of the outstanding shares of Series A Preferred Stock, voting as a single class:
 
                  (a)   Take any action or enter into any agreement to create or
authorize any new class of securities which has a preference over, or is offered
with rights on a pari passu basis with, the Series A Preferred Stock or the
Series A Redeemable Preferred Stock with respect to the distribution of assets
or other amounts in connection with a Liquidation Event or an Extraordinary
Transaction or as to dividends or redemption rights; or
 
                  (b)   amend, alter, repeal or waive any provision of, or add
any provision to, this Certificate of Incorporation or by-laws in a manner that
changes the rights, preferences or privileges of the Series A Preferred Stock or
the Series A Redeemable Preferred Stock or that otherwise adversely affects the
rights of the holders of the Series A Preferred Stock or the Series A Redeemable
Preferred Stock.
 
            B.    Preferred Stock Rights. In addition, so long as any shares of
Series A Preferred Stock or Series B Preferred Stock shall be outstanding, the
Corporation shall not, without first having provided written notice of such
proposed action to each holder of outstanding shares of Series A Preferred Stock
and Series B Preferred Stock and having obtained the affirmative vote or written
consent of the holders of not less than two thirds of the outstanding shares of
Series A Preferred Stock and Series B Preferred Stock, voting together (on an
as-converted basis) as a single class:
 
            (a)   effect any (i) Liquidation Event or (ii) Extraordinary
                  Transaction;
 
            (b)   declare or pay dividends or make any distributions of cash,
                  property or securities of the Corporation with respect to any
                  shares of its Common Stock or any other capital stock of the
                  Corporation other than dividends or distributions required to
                  be made with respect to the Series A Preferred Stock, the
                  Series B Preferred Stock, the Series A Redeemable Preferred
                  Stock or the Series B Redeemable Preferred Stock as provided
                  in this Certificate of Incorporation;
 
            (c)   repurchase, redeem or otherwise acquire any of the outstanding
                  capital stock of the Corporation, except for (i) the
                  repurchase of
 
                                       16
<PAGE>
 
                  unvested shares from employees, directors or consultants at
                  cost, pursuant to the terms of agreements providing for the
                  original issuance of such capital stock (or options to
                  purchase such capital stock) and (ii) the redemption of the
                  Series A Preferred Stock, the Series B Preferred Stock, the
                  Series A Redeemable Preferred Stock or the Series B Redeemable
                  Preferred Stock pursuant to and as provided in this
                  Certificate of Incorporation;
 
            (d)   authorize or engage in any acquisition of any corporation or
                  business concern, whether by acquisition of cash, capital
                  stock or otherwise, or make any other investment in another
                  business entity or any joint venture or similar management;
 
            (e)   authorize any reclassification or recapitalization of the
                  outstanding capital stock of the Corporation; or
 
            (f)   increase the authorized number of directors constituting the
                  Corporation's Board of Directors to more than seven (7).
 
            Further, the Corporation shall not, by amendment of this Certificate
of Incorporation or through any Extraordinary Transaction or other
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities, agreement 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 shall at all times in good faith
assist in the carrying out of all the provisions set forth herein and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holders of the Series A Preferred Stock, Series A Redeemable
Preferred Stock, the Series B Preferred Stock and the Series B Redeemable
Preferred Stock, if applicable, against impairment. Without limitation of the
foregoing, the Corporation shall take such action as shall be necessary or
appropriate, to the extent reasonably within its control, to remove promptly any
impediments to its ability to redeem Series A Preferred Stock and Series A
Redeemable Preferred Stock under the circumstances contemplated by Sections A.5
or B.4 hereof or the Series B Preferred Stock and Series B Redeemable Preferred
Stock under the circumstances contemplated by Sections C.5 and D.4. Any
successor to the Corporation shall agree, as a condition to such succession, to
carry out and observe the obligations of the Corporation hereunder with respect
to the Series A Preferred Stock and the Series A Redeemable Preferred Stock, and
the Series B Preferred Stock and the Series B Redeemable Preferred Stock.
 
      9.    Notice.
 
            (a)   Liquidation Events, Extraordinary Transactions, Etc. In the
event (i) the Corporation establishes a record date to determine the holders of
any class of securities who are entitled to receive any dividend or other
distribution or who are entitled to vote at a meeting (or by written consent) in
connection with any of the transactions identified in clause (ii) hereof, or
(ii) any Liquidation Event, Extraordinary Transaction, Series A Initial Public
 
                                       17
<PAGE>
 
Offering or Series A QPO becomes reasonably likely to occur, the Corporation
shall mail or cause to be mailed by first class mail (postage prepaid) to each
holder of Series A Preferred Stock at least twenty (20) days prior to such
record date specified therein or the expected effective date of any such
transaction, whichever is earlier, a notice specifying (A) the date of such
record date for the purpose of such dividend or distribution or meeting or
consent and a description of such dividend or distribution or the action to be
taken at such meeting or by such consent, (B) the date on which any such
Liquidation Event, Extraordinary Transaction, Series A Initial Public Offering
or Series A QPO is expected to become effective, and (C) the date on which the
books of the Corporation shall close or a record shall be taken with respect to
any such event.
 
            (b)   Waiver of Notice. The holder or holders of not less than a
majority of the outstanding shares of Series A Preferred Stock may, at any time
upon written notice to the Corporation, waive any notice provisions specified
herein for the benefit of such holders, and any such waiver shall be binding
upon all holders of such securities.
 
            (c) General. In the event that the Corporation provides any notice,
report or statement to any holder of Common Stock or any other class or series
of Preferred Stock, the Corporation shall at the same time provide a copy of any
such notice, report or statement to each holder of outstanding shares of Series
A Preferred Stock.
 
      10.   No Reissuance of Series A Preferred Stock. No share or shares of
Series A Preferred Stock acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued, and all such shares shall
be canceled, retired and eliminated from the shares which the Corporation shall
be authorized to issue.
 
      11.   Contractual Rights of Holders. The various provisions set forth
herein for the benefit of the holders of the Series A Preferred Stock shall be
deemed contract rights enforceable by them, including without limitation, one or
more actions for specific performance.
 
B. SERIES A REDEEMABLE PREFERRED STOCK
 
      1.    Designation. A total of 74,811 shares of the Corporation's Preferred
Stock shall be designated as a series known as Series A Redeemable Preferred
Stock, par value $.01 per share (the "Series A Redeemable Preferred Stock").
 
      2.    Voting. The holders of Series A Redeemable Preferred Stock shall not
be entitled to vote on any matters except to the extent otherwise required under
by law.
 
      3.    Dividends. The holders of shares of Series A Redeemable Preferred
Stock shall be entitled to receive dividends on the Series A Redeemable
Preferred Stock when and if declared by the Board of Directors.
 
      4.    Redemption.
 
                                       18
<PAGE>
 
            (a)   All of the outstanding shares of Series A Redeemable Preferred
Stock shall be automatically redeemed immediately upon the closing of a Series A
Initial Public Offering (the "Series A Redeemable Preferred Redemption Date") at
the Series A Redeemable Redemption Price. The "Series A Redeemable Redemption
Price" shall be equal to $90.227373 per share for each share of Series A
Redeemable Preferred Stock (appropriately adjusted for stock splits, stock
dividends, recapitalizations and the like with respect to the Series A
Redeemable Preferred Stock). On the Series A Redeemable Preferred Redemption
Date, each holder of shares of Series A Redeemable Preferred Stock shall
surrender the certificate evidencing such shares to the Corporation and shall
thereupon be entitled to receive payment of the Series A Redeemable Redemption
Price.
 
            (b)   From and after the Series A Redeemable Preferred Redemption
Date, unless there shall have been a default in payment or tender by the
Corporation of the Series A Redeemable Redemption Price, any dividends on the
Series A Redeemable Preferred Stock shall cease to accrue, all rights of the
holders with respect to such redeemed shares of Series A Redeemable Preferred
Stock (except the right to receive the Series A Redeemable Redemption Price upon
surrender of their certificate) shall cease and such shares shall not thereafter
be transferred on the books of this Corporation or be deemed outstanding for any
purposes whatsoever.
 
            (c)   If the funds of the Corporation legally available for
redemption of shares of Series A Redeemable Preferred Stock are insufficient to
redeem the total number of shares of Series A Redeemable Preferred Stock, the
Corporation shall use those funds which are legally available to redeem the
maximum possible number of such shares ratably among the holders of such shares
to be redeemed. At any time thereafter when additional funds of the Corporation
are legally available for the redemption of shares of Series A Redeemable
Preferred Stock, such funds will immediately be used to redeem the balance of
the shares which the Corporation has become obligated to redeem but which it has
not redeemed at the Series A Redeemable Redemption Price together with any
accrued interest thereon as provided below. If any shares of Series A Redeemable
Preferred Stock are not redeemed for the foregoing reason or because the
Corporation otherwise failed to pay or tender to pay the aggregate Series A
Redeemable Redemption Price on all outstanding shares of Series A Redeemable
Preferred Stock, all shares which have not been redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein, and
the Corporation shall pay interest on the Series A Redeemable Redemption Price
for the unredeemed portion at an aggregate per annum rate equal to twelve
percent (12%), which such rate shall increase every six months thereafter by an
additional one percent (1%) per annum to a maximum of twenty percent (20%) per
annum, or the maximum rate of interest permitted under applicable law, whichever
is less.
 
                                       19
<PAGE>
 
      5.    Notice. In the event that the Corporation provides or is required to
provide notice to any holder of Series A Preferred Stock, Common Stock or any
other capital stock of the Corporation in accordance with the provisions of this
Certificate of Incorporation and/or the Corporation's by-laws, the Corporation
shall at the same time provide a copy of any such notice to each holder of
outstanding shares of Series A Redeemable Preferred Stock.
 
      6.    No Reissuance of Series A Redeemable Preferred Stock. No share or
shares of Series A Redeemable Preferred Stock acquired by the Corporation by
reason of redemption, purchase, conversion, exchange or otherwise shall be
reissued, and all such shares shall be canceled, retired and eliminated from the
shares which the Corporation shall be authorized to issue.
 
C. SERIES B CONVERTIBLE PARTICIPATING PREFERRED STOCK
 
      1.    Designation. A total of 1,635,799 shares of the Corporation's
Preferred Stock shall be designated as a series known as Series B Convertible
Participating Preferred Stock, par value $.01 per share (the "Series B Preferred
Stock").
 
      2.    Voting. The holder of each share of Series B Preferred Stock shall
be entitled to the number of votes equal to the largest number of full shares of
Common Stock into which such share of Series B Preferred Stock could be
converted pursuant to Section C.6 hereof on the record date for the vote or
written consent of stockholders. The holder of each share of Series B Preferred
Stock shall be entitled to notice of any stockholders' meeting in accordance
with the by-laws of the Corporation and shall vote with holders of the Common
Stock and Series A Preferred Stock, voting together as a single class, upon all
matters submitted to a vote of stockholders, excluding those matters required to
be submitted to a class or series vote pursuant to the terms hereof (including,
without limitation, Section C.8) and or by law.
 
      3.    Dividends. The holders of shares of Series B Preferred Stock shall
be entitled to receive in preference to the holders of any and all other classes
of capital stock of the Corporation and pari passu with the holders of Series A
Preferred Stock, when and if declared by the Board of Directors, out of funds
legally available therefor, cumulative dividends on the Series B Preferred Stock
in cash at the rate per annum of $0.245384 per share, from the date on which
such shares of Series B Preferred Stock were issued by the Corporation (each
such date, a "Series B Convertible Issuance Date"), subject to proration for
partial years on the basis of a 365-day year (the "Series B Dividends"). Such
dividends will accumulate commencing as of the Series B Convertible Issuance
Date and shall be cumulative, to the extent unpaid, whether or not they have
been declared and whether or not the Corporation may legally pay the dividends.
Such dividends shall become due and payable with respect to any shares of Series
B Preferred Stock as provided in Sections C.4, C.5 and C.6. Dividends paid in an
amount less than the total amount of such dividends at the time accumulated and
payable on all outstanding shares of Series B Preferred Stock shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. So long as any shares of Series B Preferred Stock are outstanding
and the Series B Dividends
 
                                       20
<PAGE>
 
have not been paid in full in cash (a) no dividend whatsoever (other than stock
dividends) shall be paid or declared, and no distribution shall be made, on any
Common Stock or other capital stock of the Corporation ranking junior to the
Series B Preferred Stock; and (b) except as provided in Sections A.8B(c) and
C.8B(c) and the Series B Redeemable Preferred Stock, if applicable, no shares of
Common Stock, or other capital stock of the Corporation ranking junior to the
Series B Preferred Stock shall be repurchased, redeemed or acquired by the
Corporation and no monies shall be paid into or set aside or made available for
a sinking fund for the purchase, redemption or acquisition thereof.
 
      In addition to Series B Dividends, the holders of the Series B Preferred
Stock shall be entitled to receive, out of funds legally available therefor, any
dividends declared on the Common Stock (treating each share of Series B
Preferred Stock as being equal to the number of shares of Common Stock into
which each such share of Series B Preferred Stock would be converted if it were
converted pursuant to the provisions of Section C.6 hereof with such number
determined as of the record date for the determination of holders of Common
Stock entitled to receive such dividend).
 
      All numbers relating to the calculation of dividends pursuant to this
Section C.3 shall be subject to equitable adjustment in the event of any stock
split, combination, reorganization, recapitalization, reclassification or other
similar event involving a change in the Series B Preferred Stock.
 
      4.    Liquidation and Extraordinary Transactions.
 
            (a) Liquidation Preference. Upon a Liquidation Event or an
Extraordinary Transaction, each holder of outstanding shares of Series B
Preferred Stock shall be entitled to be paid out of the assets of the
Corporation available for distribution to stockholders, whether such assets are
capital, surplus or earnings:
 
            (i) Before any amount shall be paid or distributed to the holders of
      Common Stock or of any other stock ranking on liquidation pari passu or
      junior to the Series B Preferred Stock, an amount in cash equal to (i)
      $2.726497 per share (adjusted appropriately for stock splits, stock
      dividends, recapitalizations and the like with respect to the Series B
      Preferred Stock) (the "Series B Base Liquidation Amount"), plus (ii) any
      accumulated but unpaid dividends, including, without limitation, the
      Series B Dividends, to which such holder of outstanding shares of Series B
      Preferred Stock is then entitled (the "Series B Dividend Liquidation
      Amount") (the sum of clauses (i) and (ii) being referred to herein as the
      "Series B Senior Convertible Liquidation Amount"); provided, however, that
 
                  (A) if a Liquidation Event or Extraordinary Transaction occurs
            and the holders of Series B Preferred Stock would, if all proceeds
            were distributed pursuant to Section C.4(a)(ii) below without
            payment of the Series B Senior Convertible Liquidation Amount,
            receive an amount equal to or in excess of $8.846005 per share of
            Series B Preferred Stock (adjusted appropriately for stock splits,
            stock
 
                                       21
<PAGE>
 
            dividends, recapitalizations and the like with respect to the Series
            B Preferred Stock), then the holders of Series B Preferred Stock
            shall not be entitled to receive any Series B Senior Convertible
            Liquidation Amount hereunder; and
 
            (B) if a Liquidation Event or Extraordinary Transaction occurs and
            the holders of Series B Preferred Stock would, if all proceeds were
            distributed pursuant to Section C.4(a)(ii) below without payment of
            the Series B Senior Convertible Liquidation Amount, receive an
            amount which is in excess of $6.622881 per share of Series B
            Preferred Stock (as adjusted appropriately for stock splits, stock
            dividends, recapitalizations and the like with respect to the Series
            B Preferred Stock) (such applicable per share amount to be referred
            to herein as the "Series B Minimum Amount") but is less than
            $8.846005 per share of Series B Preferred Stock (as adjusted
            appropriately for stock splits, stock dividends, recapitalizations
            and the like with respect to the Series B Preferred Stock) (such
            applicable per share amount to be referred to herein as the "Series
            B Target Amount"), then each holder of Series B Preferred Stock
            shall be entitled to receive only: that portion of the Series B
            Senior Convertible Liquidation Amount equal to the product of (x)
            the Series B Senior Convertible Liquidation Amount multiplied by (y)
            a fraction, the numerator of which is the remainder of (1) the
            Series B Target Amount minus (2) the actual amount per share that
            the holders of Series B Preferred Stock would so receive pursuant to
            Section C.4(a)(ii) below without payment of the Series B Senior
            Convertible Liquidation Amount and the denominator of which is equal
            to the remainder of (1) the Series B Target Amount minus (2) the
            Series B Minimum Amount; and
 
      provided further that if, upon any Liquidation Event or Extraordinary
      Transaction, the amounts payable with respect to the Series A Senior
      Convertible Liquidation Amount as provided in Section A.4 and the Series B
      Senior Convertible Liquidation Amount as provided in this Section C.4 are
      not paid in full, the holders of the Series A Preferred Stock and Series B
      Preferred Stock shall share ratably in any distribution of assets in
      proportion to the full respective preferential amounts to which they are
      entitled; and
 
            (ii) After the payment of the Series B Senior Convertible
      Liquidation Amount (subject to the prior payment of amounts due to holders
      of any shares of capital stock ranking senior, pari passu or junior to the
      Series B Preferred Stock, as the case may be), any assets remaining
      available for distribution shall be distributed ratably among the holders
      of the Common Stock, the Series A Preferred Stock and the Series B
      Preferred Stock based upon the number of shares of Common Stock (i) then
      held by each holder of Common Stock and (ii) and issuable upon conversion
      of the shares of Series B Preferred Stock held by a holder of Series B
      Preferred Stock
 
                                       22
<PAGE>
 
      pursuant to Section C.6 and the conversion of the shares of Series A
      Preferred Stock held by a holder of Series A Preferred Stock pursuant to
      Section A.6, in each case immediately prior to the occurrence of any such
      Liquidation Event or Extraordinary Transaction (the "Series B Residual
      Convertible Liquidation Amount" and, together with the Series B Senior
      Convertible Liquidation Amount, the "Series B Total Convertible
      Liquidation Amount").
 
            (b) Conversion Rights Not Impaired. Nothing in this Section C.4
shall with respect to any Liquidation Event or Extraordinary Transaction in any
way limit the right of the holders of the Series B Preferred Stock to elect to
have the provisions of Section C.6 govern such Liquidation Event or
Extraordinary Transaction.
 
            (c) Non-Cash Consideration. Notwithstanding the provisions of
Section C.4(a), in connection with any Extraordinary Transaction, the holders of
Series B Preferred Stock shall, on the effective date of such Extraordinary
Transaction, be paid by the Corporation the Series B Senior Convertible
Liquidation Amount in accordance with Section A.4(c) herein.
 
            Any securities or other consideration to be delivered to the holders
of the Series B Preferred Stock upon any Extraordinary Transaction shall be
valued in accordance with Section A.4(c).
 
            (d) Surrender of Certificates. On the effective date of any
Extraordinary Transaction, the Corporation shall pay all cash and other
consideration to which the holders of Series B Preferred Stock shall be entitled
under this Section C.4. Upon receipt of such payment, each holder of shares of
Series B Preferred Stock shall surrender the certificate or certificates
representing such shares, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), at
the principal executive office of the Corporation or the offices of the transfer
agent for the Corporation, or shall notify the Corporation or any transfer agent
that such certificates have been lost, stolen or destroyed and shall execute an
Affidavit of Loss, and each surrendered certificate shall be canceled and
retired.
 
            (e) Notice. Prior to the occurrence of any Liquidation Event or
Extraordinary Transaction, the Corporation will furnish each holder of Series B
Preferred Stock notice in accordance with Section C.9 hereof, together with a
certificate prepared by the chief financial officer of the Corporation
describing the facts of such Liquidation Event or Extraordinary Transaction,
stating in reasonable detail the amount(s) per share of Series B Preferred Stock
each holder of Series B Preferred Stock would receive pursuant to the provisions
of Section C.4(a) hereof and stating in reasonable detail the facts upon which
such amount was determined and, in connection with any Extraordinary
Transaction, describing in reasonable detail all material terms of such
Extraordinary Transaction, including without limitation the consideration to be
delivered in connection with such Extraordinary Transaction, the valuation of
the Corporation at the time such Extraordinary Transaction and the identities of
the parties to the Extraordinary Transaction.
 
                                       23
<PAGE>
 
      5.    Redemption.
 
            (a) On or after March 20, 2008, at the election of the holders of a
majority of the then outstanding shares of Series B Preferred Stock, the
Corporation shall redeem all shares of Series B Preferred Stock then outstanding
at the Series B Redemption Price specified in Section C.5(b) herein, the
foregoing election shall be made by such holders giving the Corporation and each
of the other holders of the Series B Preferred Stock not less than thirty (30)
days prior written notice, which notice shall set forth the date for such
redemption (the "Series B Redemption Date"). Upon the receipt of any such
notice, the Corporation shall provide concurrent written notice to each holder
of Series A Preferred Stock.
 
            (b) On the Series B Redemption Date, the Corporation shall redeem
all shares of Series B Preferred Stock for a per share redemption price equal to
the greater of (i) the Series B Senior Convertible Liquidation Amount or (ii)
the amount received if each share of Series B Preferred Stock was converted into
Common Stock and such Common Stock was redeemed at its Going Concern Value (as
defined in Section C.5(e) hereof) (the "Series B Redemption Price"). On the
Series B Redemption Date, each holder of shares of Series B Preferred Stock
shall surrender the certificate evidencing such shares to the Corporation and
shall thereupon be entitled to receive payment of the Series B Redemption Price.
 
            (c) From and after the Series B Redemption Date, unless there shall
have been a default in payment or tender by the Corporation of the Series B
Redemption Price, all dividends on the Series B Preferred Stock shall cease to
accrue, all rights of the holders with respect to such redeemed shares of Series
B Preferred Stock (except the right to receive the Series B Redemption Price
upon surrender of their certificate) shall cease and such shares shall not
thereafter be transferred on the books of this Corporation or be deemed
outstanding for any purposes whatsoever.
 
            (d) If the funds of the Corporation legally available for redemption
of shares of Series B Preferred Stock on the Series B Redemption Date and shares
of Series A Preferred Stock on the Series A Redemption Date, if applicable, are
insufficient to redeem the total number of shares to be redeemed, the
Corporation shall use those funds which are legally available to redeem the
maximum possible number of such shares ratably among the holders of such shares
to be redeemed. At any time thereafter when additional funds of the Corporation
are legally available for the redemption of shares of Series B Preferred Stock
and Series A Preferred Stock, if applicable, such funds will immediately be used
to redeem the balance of the shares which the Corporation has become obligated
to redeem (ratably among the holders of such shares to be redeemed to the extent
that such funds are insufficient to redeem the shares remaining to be redeemed),
but which it has not redeemed at the Series B Redemption Price or the Series A
Redemption Price, if applicable, together with any accrued interest thereon as
provided below. If any shares to be redeemed are not redeemed for the foregoing
reason or because the Corporation otherwise failed to pay or tender to pay the
aggregate Series B Redemption Price on all outstanding shares of Series B
Preferred Stock or the aggregate Series A Redemption Price on all outstanding
shares of Series A Preferred Stock, if applicable, all shares which have not
been redeemed shall remain
 
                                       24
<PAGE>
 
outstanding and entitled to all the rights and preferences provided herein, and
the Corporation shall pay interest on the Series B Redemption Price or the
Series A Redemption Price, as applicable, for the unredeemed portion at an
aggregate per annum rate equal to twelve percent (12%), which such rate shall
increase every six months thereafter by an additional one percent (1%) per annum
to a maximum of twenty percent (20%) per annum, or the maximum rate of interest
permitted under applicable law, whichever is less.
 
            (e) Going Concern Value. For purposes of Section C.5(b) hereof,
"Going Concern Value" shall be determined in accordance with Section A.5(e).
 
      6. Conversion. The holders of the Series B Preferred Stock shall have the
following conversion rights:
 
            (a) Voluntary Conversion. Each holder of shares of Series B
Preferred Stock may elect at any time to convert the shares of Series B
Preferred Stock then held by such holder into a number of shares of Common Stock
computed by multiplying the number of shares of Series B Preferred Stock to be
converted by the Series B Conversion Value and dividing the result by the Series
B Conversion Price then in effect. The "Series B Conversion Value" shall be
$2.726497 per share of Series B Preferred Stock. The "Series B Conversion Price"
shall be $2.726497 per share of Series B Preferred Stock, subject to adjustment
as hereinafter provided. Additionally, each share of Series B Preferred Stock
outstanding shall automatically be converted into the number of shares of Common
Stock into which such shares are convertible according to the formula set forth
above at the then effective Series B Conversion Price upon the date specified by
the holders of not less than a majority of the shares of Series B Preferred
Stock then outstanding. Except as otherwise provided in this Section C.6(a) or
Section C.6(c) hereof, if shares of Series B Preferred Stock are converted
pursuant to this Section C.6(a) at a time when there are any declared and unpaid
dividends or other amounts due on such shares, other than Series B Dividends,
before any amount shall be paid or distributed to the holders of Common Stock,
or of any other stock ranking on liquidation junior to the Series B Preferred
Stock, such dividends and other amounts shall be paid in full by the Corporation
in connection with such conversion; provided, however, that in the event shares
of Series B Preferred Stock are so converted into shares of Common Stock in
connection with an Extraordinary Transaction or a Liquidation Event and the
holders thereof would, if all proceeds with respect thereto were distributed
pursuant to Section C.4(a)(ii) hereof without payment of the Series B Senior
Convertible Liquidation Amount, receive less than the Series B Target Amount,
the Corporation shall pay, before any amount shall be paid to the holders of
Common Stock, or of any other stock ranking on liquidation pari passu or junior
to the Series B Preferred Stock, to each such holder, in addition to any other
declared and unpaid dividends or other amounts due on such shares, any Series B
Dividends to which such holder would otherwise be entitled if the provisions of
Section C.4 hereof were applicable thereto.
 
            (b) Automatic Conversion Upon Qualified Public Offering. Each share
of Series B Preferred Stock outstanding shall automatically be converted into
the number of shares of Common Stock into which such shares are convertible as
computed according to the formula set forth in Section C.6(a) hereof at the then
effective Series B Conversion Price
 
                                       25
<PAGE>
 
as of, and in all cases subject to, the closing of the Corporation's first
underwritten offering to the public pursuant to an effective registration
statement under the Securities Act covering the offer and sale of Common Stock
for the account of the Corporation to the public generally, provided that (ii)
such registration statement covers the offer and sale of Common Stock of which
the aggregate net proceeds attributable to sales for the account of the
Corporation equal or exceed $30,000,000, (ii) such Common Stock is listed for
trading on either the New York Stock Exchange or the NASDAQ National Market and
(iii) the per share public offering price (net of underwriter discounts and
commissions) exceeds $8.646005 per share of Common Stock (adjusted appropriately
for stock splits, stock dividends, recapitalizations and the like with respect
to the Common Stock)(a "Series B QPO" or a "Series B Qualified Public
Offering"); provided, that if a closing of a Series B QPO occurs, all
outstanding shares of Series B Convertible Stock shall be deemed to have been
converted into shares of Common Stock immediately prior to such closing. If the
holders of shares of Series B Convertible Stock are required to convert the
outstanding shares of Series B Preferred Stock pursuant to this Section C.6(b)
at a time when there are any accumulated but unpaid dividends or other amounts
due on or in respect of such shares, other than Series B Dividends, before any
amount shall be paid or distributed to the holders of Common Stock, or of any
other stock ranking on liquidation pari passu or junior to the Series B
Preferred Stock, such dividends and other amounts shall be paid in full in cash
by the Corporation in connection with such conversion.
 
            (c) Conversion Upon Series B Initial Public Offering Other than
Series B Qualified Public Offering. Notwithstanding anything to the contrary
contained herein, upon election by a holder or holders of Series B Preferred
Stock to convert such shares into shares of Common Stock pursuant to the
provisions of Section C.6(a) hereof in connection with the Corporation's first
public offering pursuant to an effective registration statement under the
Securities Act, which offering does not constitute a Series B Qualified Public
Offering (a "Series B Initial Public Offering"), each share of Series B
Preferred Stock then held by such holder or holders shall as of, and in all
cases subject to, the closing of the Series B Initial Public Offering, be
converted into (i) the number of shares of Common Stock into which such share is
convertible as computed according to the formula set forth in Section C.6 hereof
and (ii) one (1) share of Series B Redeemable Preferred Stock; provided, that if
a closing of a Series B Initial Public Offering occurs, all such shares of
Series B Preferred Stock being so converted shall be deemed to have been
converted as set forth in this Section C.6(c) immediately prior to such closing;
and provided, further that if the Offering Price for the Series B Initial Public
Offering exceeds the Series B Minimum Amount but is less than the Series B
Target Amount, then the number of shares of Series B Redeemable Preferred Stock
issuable to a holder of shares of Series B Preferred Stock shall be equal to the
product of (x) the number of shares of Series B Redeemable Preferred Stock
issuable pursuant to the formula set forth above multiplied by (y) a fraction,
the numerator of which is the remainder of (A) the Series B Target Amount minus
(B) the Offering Price and the denominator of which is the remainder of (A) the
Series B Target Amount minus (B) the Series B Minimum Amount. If shares of
Series B Preferred Stock are converted pursuant to this Section C.6(c) at a time
when there are any declared and unpaid dividends or other amounts due on such
shares, including Series B Dividends, before any amount shall be paid or
distributed to the
 
                                       26
<PAGE>
 
holders of Common Stock, or of any other stock ranking on liquidation pari passu
or junior to the Series B Preferred Stock, such dividends and other amounts
shall be paid in full by the Corporation in connection with such conversion;
provided that in the event the Offering Price exceeds the Series B Minimum
Amount but is less than the Series B Target Amount, then each holder of Series B
Preferred Stock so converting shall be entitled to receive only that portion of
the accrued Series B Dividends with respect to such shares (the "Accrued Series
B Dividends") equal to the product of (x) the Accrued Series B Dividends
multiplied by (y) a fraction, the numerator of which is the remainder of (1) the
Series A Target Amount minus (2) the Offering Price and the denominator of which
is equal to the remainder of (1) the Series B Target Amount minus (2) the Series
B Minimum Amount.
 
            (d) Procedure for Voluntary Conversion. Upon election to convert
pursuant to Section C.6(a), the relevant holder or holders of Series B Preferred
Stock shall surrender the certificate or certificates representing the Series B
Preferred Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), at
the principal executive office of the Corporation or the offices of the transfer
agent for the Series B Preferred Stock or such office or offices in the
continental United States of an agent for conversion as may from time to time be
designated by notice to the holders of the Series B Preferred Stock by the
Corporation, or in the event the certificate or certificates are lost, stolen or
missing, shall deliver an Affidavit of Loss with respect to such certificates.
The issuance by the Corporation of Common Stock upon a conversion of Series B
Preferred Stock upon election to convert pursuant to Section C.6(a) hereof shall
be effective as of the surrender of the certificate or certificates for the
Series B Preferred Stock to be converted, duly assigned or endorsed for transfer
to the Corporation (or accompanied by duly executed stock powers relating
thereto), or as of the delivery of an Affidavit of Loss. Upon surrender of a
certificate representing Series B Preferred Stock for conversion, or delivery of
an Affidavit of Loss, the Corporation shall issue and send by hand delivery, by
courier or by first class mail (postage prepaid) to the holder thereof or to
such holder's designee, at the address designated by such holder, certificates
for the number of shares of Common Stock and Series B Redeemable Preferred
Stock, if applicable, to which such holders shall be entitled upon conversion,
plus a cash payment in the amount of any accrued but unpaid dividends and other
amounts as contemplated by this Section C.6 in respect of the shares of Series B
Preferred Stock which are converted. Notwithstanding the foregoing, in the event
of an automatic conversion pursuant to Section C.6(a) upon the election of the
holders of not less than a majority of Series B Preferred Stock, the outstanding
shares of Series B Preferred Stock shall be converted automatically without any
further action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent and all rights with respect to such applicable Series B Preferred Stock
shall terminate, except any of the rights of the holders thereof upon surrender
of their certificate or certificates therefore or delivery of an Affidavit of
Loss thereof to receive certificates for the number of shares of Common Stock
and Series B Redeemable Preferred Stock, if applicable, into which such shares
of Series B Preferred Stock has been converted plus all declared but unpaid
dividends and other amounts as contemplated by this Section C.6 in respect of
the shares of Series B Preferred Stock which are converted. The issuance of
certificates for
 
                                       27
<PAGE>
 
Common Stock and Series B Redeemable Preferred Stock, if applicable, upon
conversion of Series B Preferred Stock will be made without charge to the
holders of such shares for any issuance tax in respect thereof or other costs
incurred by the Corporation in connection with such conversion and the related
issuance of such stock.
 
            (e) Procedure for Automatic Conversion on Series B Qualified Public
Offering. As of, and in all cases subject to, the closing of a Series B
Qualified Public Offering (the "Series B Automatic Conversion Date"), all
outstanding shares of Series B Preferred Stock shall be converted automatically
into shares of Common Stock as set forth in Section C.6(b) hereof and without
any further action by the holders of such shares and whether or not the
certificates representing such shares of Series B Preferred Stock are
surrendered to the Corporation or its transfer agent. On the Series B Automatic
Conversion Date, all rights with respect to the Series B Preferred Stock so
converted shall terminate, except any of the rights of the holders thereof upon
surrender of their certificate or certificates therefor or delivery of an
Affidavit of Loss thereof to receive certificates for the number of shares of
Common Stock into which such Series B Preferred Stock has been converted plus
all accrued but unpaid dividends and other amounts as contemplated by Section
C.6(b). If so required by the Corporation, certificates surrendered for
conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or by his, her or its attorney duly authorized in
writing. Upon surrender of such certificates or Affidavit of Loss the
Corporation shall issue and deliver to such holder, promptly at such office and
in its name as shown on such surrendered certificate or certificates, a
certificate or certificates for the number of shares of Common Stock into which
the shares of the Series B Preferred Stock surrendered are convertible on the
Series B Automatic Conversion Date and shall pay all declared but unpaid
dividends and other amounts as contemplated by Section C.6(b) in respect of the
shares of Series B Preferred Stock which are converted.
 
            (f) Fractional Shares. The Corporation shall not be obligated to
deliver to holders of Series B Preferred Stock any fractional share of Common
Stock issuable upon any conversion of such Series B Preferred Stock, but in lieu
thereof may make a cash payment in respect thereof in any manner permitted by
law; provided, however, the Corporation shall deliver to the holders of Series B
Preferred Stock fractional shares of Series B Redeemable Preferred Stock, if
applicable, upon the conversion of Series B Preferred Stock pursuant to the
provisions of Section C.6(c) hereof.
 
            (g) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock and Series B Redeemable Preferred Stock solely for the
purpose of effecting the conversion of the shares of Series B Preferred Stock
such number of its shares of Common Stock and Series B Redeemable Preferred
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series B Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock and Series B Redeemable Preferred
Stock shall not be sufficient to effect the conversion of all then outstanding
shares of Series B Preferred Stock, the Corporation will take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock
 
                                       28
<PAGE>
 
and Series B Redeemable Preferred Stock to such number of shares as shall be
sufficient for such purpose.
 
            (h) No Closing of Transfer Books. The Corporation shall not close
its books against the transfer of shares of Series B Preferred Stock in any
manner which would interfere with the timely conversion of any shares of Series
B Preferred Stock.
 
      7. Adjustments. The Series B Conversion Price for the Series B Preferred
Stock in effect from time to time shall be subject to adjustment from and after
the Series B Convertible Issuance Date as follows:
 
            (a) Dividends and Stock Splits. If the number of shares of Common
Stock outstanding at any time after the date hereof is increased by a stock
dividend payable in shares of Common Stock or by a subdivision or split-up of
shares of Common Stock, then, on the date such payment is made or such change is
effective, the Series B Conversion Price shall be appropriately decreased so
that the number of shares of Common Stock issuable on conversion of any shares
of Series B Preferred Stock shall be increased in proportion to such increase of
outstanding shares of Common Stock.
 
            (b) Reverse Stock Splits. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination or
reverse split of the outstanding shares of Common Stock, then, on the effective
date of such combination or reverse split, the Series B Conversion Price shall
be appropriately increased so that the number of shares of Common Stock issuable
on conversion of any shares of Series B Preferred Stock, shall be decreased in
proportion to such decrease in outstanding shares of Common Stock.
 
            (c) Sale of Common Stock. In the event the Corporation shall at any
time, or from time to time, issue, sell or exchange any shares of Common Stock
(including shares held in the Corporation's treasury but excluding Excluded
Shares) for a Purchase Price less than the Series B Conversion Price in effect
immediately prior to the issuance, sale or exchange of such shares (any such
issuance, sale or exchange is hereafter referred to as a "Series B Dilutive
Transaction"), then, and thereafter successively upon each such Series B
Dilutive Transaction the Series B Conversion Price shall forthwith be reduced to
an amount determined by multiplying the Series B Conversion Price by a fraction:
 
            (i) the numerator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the Series B
      Dilutive Transaction (excluding treasury shares but including all shares
      of Common Stock issuable upon conversion or exercise of any outstanding
      Series A Preferred Stock, Series B Preferred Stock, options, warrants,
      rights or other convertible securities) plus (Y) the number of shares of
      Common Stock which the net aggregate consideration received by the
      Corporation for the total number of such additional shares of Common Stock
      so issued in the Series B Dilutive Transaction would purchase at the
      Series B Conversion Price (prior to such adjustment); and
 
                                       29
<PAGE>
 
            (ii) the denominator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the Series B
      Dilutive Transaction (excluding treasury shares but including all shares
      of Common Stock issuable upon conversion or exercise of any outstanding
      Series A Preferred Stock, Series B Preferred Stock, options, warrants,
      rights or other convertible securities), plus (Y) the number of such
      additional shares of Common Stock so issued in the Series B Dilutive
      Transaction.
 
            (d) Sale of Options, Rights or Convertible Securities. In the event
the Corporation shall at any time or from time to time, issue options, warrants
or rights to subscribe for shares of Common Stock, or issue any securities
convertible into or exchangeable for shares of Common Stock (other than any
options or warrants for Excluded Shares), for a Purchase Price (determined by
dividing the Net Aggregate Consideration by the aggregate number of shares of
Common Stock that would be issued if all such options, warrants, rights or other
convertible securities were exercised or converted to the fullest extent
permitted by their terms) less than the Series B Conversion Price in effect
immediately prior to the issuance of such options, warrants or rights or other
convertible or exchangeable securities, the Series B Conversion Price shall
forthwith be reduced to an amount determined by multiplying the Series B
Conversion Price by a fraction:
 
            (i) the numerator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the issuance
      of such options, warrants, rights or other convertible securities
      (excluding treasury shares but including all shares of Common Stock
      issuable upon conversion or exercise of any outstanding Series A Preferred
      Stock, Series B Preferred Stock, options, warrants, rights or other
      convertible securities), plus (Y) the number of shares of Common Stock
      which the Net Aggregate Consideration would purchase at the Series B
      Conversion Price prior to adjustment; and
 
            (ii) the denominator of which shall be (X) the number of shares of
      Common Stock of all classes outstanding immediately prior to the issuance
      of such options, warrants, rights or other convertible securities
      (excluding treasury shares but including all shares of Common Stock
      issuable upon conversion or exercise of any outstanding Series A Preferred
      Stock, Series B Preferred Stock, options, warrants, rights or other
      convertible securities), plus (Y) the aggregate number of shares of Common
      Stock that would be issued if all such options, warrants, rights or other
      convertible securities were exercised or converted.
 
            (e) Expiration or Change in Price. If the consideration per share
provided for in any options, warrants, convertible securities or any other
rights to subscribe for shares of Common Stock or any securities exchangeable
for or convertible into shares of Common Stock, changes at any time, the Series
B Conversion Price in effect at the time of such change shall be readjusted to
the Series B Conversion Price which would have been in effect at such time had
such options, warrants, convertible securities or other rights provided for such
changed consideration per share (determined as provided in Section C.7(d)
hereof), at the time initially granted, issued or sold; provided, that such
adjustment of the Series B
 
                                       30
<PAGE>
 
Conversion Price will be made only as and to the extent that such Series B
Conversion Price effective upon such adjustment remains less than or equal to
such Series B Conversion Price that would be in effect if such options,
warrants, rights or securities had not been issued. No adjustment of the Series
B Conversion Price shall be made under this Section C.7 upon the issuance of any
additional shares of Common Stock which are issued pursuant to the exercise of
any warrants, options or other subscription or purchase rights or pursuant to
the exercise of any conversion or exchange rights in any convertible securities
if an adjustment shall previously have been made upon the issuance of such
warrants, options or other rights. Any adjustment of the Series B Conversion
Price shall be disregarded if, as, and when the rights to acquire shares of
Common Stock upon exercise or conversion of the warrants, options, rights or
convertible securities which gave rise to such adjustment expire or are canceled
without having been exercised, so that the Series B Conversion Price effective
immediately upon such cancellation or expiration shall be equal to the Series B
Conversion Price in effect at the time of the issuance of the expired or
canceled warrants, options, rights or convertible securities, with such
additional adjustments as would have been made to the Conversion Price had the
expired or canceled warrants, options, rights or convertible securities not been
issued.
 
            (f) Other Adjustments. In the event the Corporation shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, then and in each such event
lawful and adequate provision shall be made so that the holders of Series B
Preferred Stock, shall receive upon conversion thereof in addition to the number
of shares of Common Stock receivable thereupon, the number of securities of the
Corporation which they would have received had their Series B Preferred Stock,
been converted into Common Stock on the date of such event and had they
thereafter, during the period from the date of such event to and including the
date of conversion, retained such securities receivable by them as aforesaid
during such period, giving application to all adjustments called for during such
period under this Section C.7 as applied to such distributed securities.
 
            (g) Reorganization, etc. If the Common Stock issuable upon the
conversion of the Series B Preferred Stock, shall be changed into the same or
different number of shares of any class or classes of stock, whether by
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend provided for above, or a reorganization, merger, consolidation
or sale of assets provided for elsewhere in this Section C.7), then and in each
such event the holder of each share of Series B Preferred Stock, shall have the
right to receive upon conversion of the Series B Preferred Stock, the kind and
amount of shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change, by holders of the number of
shares of Common Stock into which such shares of Series B Preferred Stock might
have been converted immediately prior to such reorganization, reclassification
or change, all subject to further adjustment as provided herein.
 
            (h) Mergers and Other Reorganizations. If at any time or from time
to time there shall be a capital reorganization of the Common Stock (other than
a subdivision,
 
                                       31
<PAGE>
 
combination or reclassification provided for elsewhere in this Section C.7) or a
merger or consolidation of the Corporation with or into another Corporation or
the sale of all or substantially all of the Corporation's properties and assets
to any other person, then, as part of and as a condition to the effectiveness of
such reorganization, merger, consolidation or sale, lawful and adequate
provision shall be made so that the holders of the Series B Preferred Stock,
shall thereafter be entitled to receive upon conversion of the Series B
Preferred Stock the number of shares of stock or other securities or property of
the Corporation or of the successor corporation resulting from such merger or
consolidation or sale, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such capital reorganization, merger,
consolidation, or sale. In any such case, appropriate provisions shall be made
with respect to the rights of the holders of the Series B Preferred Stock after
the reorganization, merger, consolidation or sale to the end that the provisions
of this Section C.7 (including, without limitation, provisions for adjustment of
the Series B Conversion Price and the number of shares purchasable upon
conversion of the Series B Preferred Stock) shall thereafter be applicable, as
nearly as may be, with respect to any shares of stock, securities or assets to
be deliverable thereafter upon the conversion of the Series B Preferred Stock.
 
            Each holder of Series B Preferred Stock upon the occurrence of a
capital reorganization, merger or consolidation of the Company or the sale of
all or substantially all of its assets and properties and such events are more
fully set forth on the first paragraph of this Section C.7(h), shall have the
option of electing treatment of its shares of Series B Preferred Stock under
either this Section C.7(h) or Section C.4 hereof.
 
            (i) Calculations. All calculations under this Section C.7 shall be
made to the nearest cent or to the nearest one hundredth (1/100) of a share, as
the case may be.
 
            (j) Certificate. Upon the occurrence of each adjustment or
readjustment pursuant to this Section C.7, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to each holder of Series B Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon written request at any time of any holder of Series B Preferred
Stock furnish or cause to be furnished to such holder a like certificate setting
forth (i) such adjustments and readjustments, (ii) the applicable Series B
Conversion Price before and after such adjustment or readjustment, and (iii) the
number of shares of Common Stock and Series B Redeemable Preferred Stock, if
applicable, and the amount, if any, of other property which at the time would be
received upon the conversion of such holder's shares of Series B Preferred
Stock.
 
      8.    Covenants.
 
            A. Series B Preferred Stock Rights. So long as any shares of Series
B Preferred Stock, the Corporation shall not, without first having provided
written notice of such proposed action to each holder of outstanding shares of
Series B Preferred Stock and
 
                                       32
<PAGE>
 
having obtained the affirmative vote or written consent of the holders of not
less than a majority of the outstanding shares of Series B Preferred Stock,
voting as a single class:
 
            (a) Take any action or enter into any agreement to create or
authorize any new class of securities which has a preference over, or is offered
with rights on a pari passu basis with, the Series B Preferred Stock or the
Series B Redeemable Preferred Stock with respect to the distribution of assets
or other amounts in connection with a Liquidation Event or an Extraordinary
Transaction or as to dividends or redemption rights; or
 
            (b) amend, alter, repeal or waive any provision of, or add any
provision to, this Certificate of Incorporation or by-laws in a manner that
changes the rights, preferences or privileges of the Series B Preferred Stock or
the Series B Redeemable Preferred Stock or that otherwise adversely affects the
rights of the holders of the Series B Preferred Stock or the Series B Redeemable
Preferred Stock.
 
            B. Preferred Stock Rights. In addition, so long as any shares of
Series B Preferred Stock shall be outstanding, the Corporation shall be subject
to Section A.8.B.
 
      9.    Notice.
 
            (a) Liquidation Events, Extraordinary Transactions, Etc. In the
event (i) the Corporation establishes a record date to determine the holders of
any class of securities who are entitled to receive any dividend or other
distribution or who are entitled to vote at a meeting (or by written consent) in
connection with any of the transactions identified in clause (ii) hereof, or
(ii) any Liquidation Event, Extraordinary Transaction, Series B Initial Public
Offering or Series B QPO becomes reasonably likely to occur, the Corporation
shall mail or cause to be mailed by first class mail (postage prepaid) to each
holder of Series B Preferred Stock at least twenty (20) days prior to such
record date specified therein or the expected effective date of any such
transaction, whichever is earlier, a notice specifying (A) the date of such
record date for the purpose of such dividend or distribution or meeting or
consent and a description of such dividend or distribution or the action to be
taken at such meeting or by such consent, (B) the date on which any such
Liquidation Event, Extraordinary Transaction, Series B Initial Public Offering
or Series B QPO is expected to become effective, and (C) the date on which the
books of the Corporation shall close or a record shall be taken with respect to
any such event.
 
            (b) Waiver of Notice. The holder or holders of not less than a
majority of the outstanding shares of Series B Preferred Stock may, at any time
upon written notice to the Corporation, waive any notice provisions specified
herein for the benefit of such holders, and any such waiver shall be binding
upon all holders of such securities.
 
            (c) General. In the event that the Corporation provides any notice,
report or statement to any holder of Common Stock or any other class or series
of Preferred Stock, the Corporation shall at the same time provide a copy of any
such notice, report or statement to each holder of outstanding shares of Series
B Preferred Stock.
 
                                       33
<PAGE>
 
      10.   No Reissuance of Series B Preferred Stock. No share or shares of
Series B Preferred Stock acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued, and all such shares shall
be canceled, retired and eliminated from the shares which the Corporation shall
be authorized to issue.
 
      11.   Contractual Rights of Holders. The various provisions set forth
herein for the benefit of the holders of the Series B Preferred Stock shall be
deemed contract rights enforceable by them, including without limitation, one or
more actions for specific performance.
 
D. SERIES B REDEEMABLE PREFERRED STOCK
 
      1.    Designation. A total of 1,635,799 shares of the Corporation's
Preferred Stock shall be designated as a series known as Series B Redeemable
Preferred Stock, par value $.01 per share (the "Series B Redeemable Preferred
Stock").
 
      2.    Voting. The holders of Series B Redeemable Preferred Stock shall not
be entitled to vote on any matters except to the extent otherwise required under
by law.
 
      3.    Dividends. The holders of shares of Series B Redeemable Preferred
Stock shall be entitled to receive dividends on the Series B Redeemable
Preferred Stock when and if declared by the Board of Directors.
 
      4.    Redemption.
 
            (a) All of the outstanding shares of Series B Redeemable Preferred
Stock shall be automatically redeemed immediately upon the closing of an Series
B Initial Public Offering (the "Series B Redeemable Preferred Redemption Date")
at the Series B Redeemable Redemption Price. The "Series B Redeemable Redemption
Price" shall be equal to $2.726497 per share of Series B Redeemable Preferred
Stock for each share of Series B Redeemable Preferred Stock (appropriately
adjusted for stock splits, stock dividends, recapitalizations and the like with
respect to the Series B Redeemable Preferred Stock). On the Series B Redeemable
Preferred Redemption Date, each holder of shares of Series B Redeemable
Preferred Stock shall surrender the certificate evidencing such shares to the
Corporation and shall thereupon be entitled to receive payment of the Series B
Redeemable Redemption Price.
 
            (b) From and after the Series B Redeemable Preferred Redemption
Date, unless there shall have been a default in payment or tender by the
Corporation of the Series B Redeemable Redemption Price, any dividends on the
Series B Redeemable Preferred Stock shall cease to accrue, all rights of the
holders with respect to such redeemed shares of Series B Redeemable Preferred
Stock (except the right to receive the Series B Redeemable Redemption Price upon
surrender of their certificate) shall cease and such shares shall not thereafter
be transferred on the books of this Corporation or be deemed outstanding for any
purposes whatsoever.
 
                                       34
<PAGE>
 
            (c) If the funds of the Corporation legally available for redemption
of shares of Series B Redeemable Preferred Stock are insufficient to redeem the
total number of shares of Series B Redeemable Preferred Stock, the Corporation
shall use those funds which are legally available to redeem the maximum possible
number of such shares ratably among the holders of such shares to be redeemed.
At any time thereafter when additional funds of the Corporation are legally
available for the redemption of shares of Series B Redeemable Preferred Stock,
such funds will immediately be use to redeem the balance of the shares which the
Corporation has become obligated to redeem but which it has not redeemed at the
Series B Redeemable Redemption Price together with any accrued interest thereon
as provided below. If any shares of Series B Redeemable Preferred Stock are not
redeemed for the foregoing reason or because the Corporation otherwise failed to
pay or tender to pay the aggregate Series B Redeemable Redemption Price on all
outstanding shares of Series B Redeemable Preferred Stock, all shares which have
not been redeemed shall remain outstanding and entitled to all the rights and
preferences provided herein, and the Corporation shall pay interest on the
Series B Redeemable Redemption Price for the unredeemed portion at an aggregate
per annum rate equal to twelve percent (12%), which such rate shall increase
every six months thereafter by an additional one percent (1%) per annum to a
maximum of twenty percent (20%) per annum, or the maximum rate of interest
permitted under applicable law, whichever is less.
 
      5.    Notice. In the event that the Corporation provides or is required to
provide notice to any holder of Series B Preferred Stock, Common Stock or any
other capital stock of the Corporation in accordance with the provisions of this
Certificate of Incorporation and/or the Corporation's by-laws, the Corporation
shall at the same time provide a copy of any such notice to each holder of
outstanding shares of Series B Redeemable Preferred Stock.
 
      6.    No Reissuance of Series B Redeemable Preferred Stock. No share or
shares of Series B Redeemable Preferred Stock acquired by the Corporation by
reason of redemption, purchase, conversion, exchange or otherwise shall be
reissued, and all such shares shall be canceled, retired and eliminated from the
shares which the Corporation shall be authorized to issue.
 
E. COMMON STOCK
 
      1.    Voting Power. The holder of each share of Common Stock shall be
entitled to one vote for each such share as determined on the record date for
the vote or written consent of stockholders and shall vote together with the
holders of the Series A Preferred Stock and the Series B Preferred Stock (to the
extent provided by the provisions of Parts A and C of this Article FOURTH) as a
single class upon any items submitted to a vote of stockholders, except as
otherwise provided herein. Notwithstanding the provisions of Section 242(b)(2)
of the General Corporation Law of the State of Delaware, the number of
authorized shares of Common Stock may be increased or decreased (but not below
the number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to vote thereon,
irrespective of Section 242(b)(2) of the Delaware General Corporation Law, and
the Common Stock shall not be entitled to any separate class vote on any such
increase or decrease.
 
                                       35
<PAGE>
 
      2.    Dividends. Subject to the payment in full of all preferential
dividends to which the holders of Series A Preferred Stock and Series B
Preferred Stock are entitled hereunder, the holders of Common Stock shall be
entitled to receive dividends out of funds legally available therefor at such
times and in such amounts as the Board of Directors may determine in its sole
discretion, with holders of Series A Preferred Stock, Series B Preferred and
Common Stock sharing pari passsu in such dividends as contemplated by Sections
A.3 and C.3 hereof.
 
      3.    Liquidation. Upon any Liquidation Event, after the payment or
provision for payment of all debts and liabilities of the Corporation and all
preferential amounts to which the holders of Series A Preferred Stock and Series
B Preferred Stock are entitled with respect to the distribution of assets in
liquidation, the holders of Common Stock (and to the extent applicable, Series A
Preferred Stock and Series B Preferred Stock) shall be entitled to share ratably
in the remaining assets of the Corporation available for distribution, with such
stock being considered a single class for this purpose.
 
      4.    Fractional Shares; Uncertificated Shares. The Corporation may issue
fractional shares of Common Stock and Preferred Stock. Fractional shares shall
be entitled to dividends (on a pro rata basis), and the holders of fractional
shares shall be entitled to all rights as stockholders of the Corporation to the
extent provided herein and under applicable law in respect of such fractional
shares. Shares of Common Stock or Preferred Stock, or fractions thereof, may,
but need not be represented by share certificates. Such shares, or fractions
thereof, not represented by share certificates ("Uncertificated Common Shares")
shall be registered in the stock records book of the Corporation. The
Corporation at any time at its sole option may deliver to any registered holder
of such share certificates to represent Uncertificated Common Shares previously
issued (or deemed issued) to such holder.
 
      FIFTH. The name and mailing address of the sole incorporator is as
follows:
 
      Name                        Mailing Address
 
      Rachael T. McCarthy         Unica Corporation
                                  170 Tracer Lane
                                  Waltham, MA 02451
 
      SIXTH. The corporation is to have perpetual existence.
 
      SEVENTH. In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware:
 
      A. The board of directors of the corporation is expressly authorized to
adopt, amend or repeal the by-laws of the corporation.
 
      B. Elections of directors need not be by written ballot unless the by-laws
of the corporation shall so provide.
 
                                       36
<PAGE>
 
      C. The books of the corporation may be kept at such place within or
without the State of Delaware as the by-laws of the corporation may provide or
as may be designated from time to time by the board of directors of the
corporation.
 
      EIGHTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
 
      NINTH. 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 174 of Title 8 of the Delaware
Code or (iv) for any transaction from which such director derived an improper
personal benefit.
 
      TENTH. The corporation reserves the right to amend or repeal any provision
contained in this certificate of incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon a stockholder herein are
granted subject to this reservation.
 
      I, THE UNDERSIGNED, being the sole incorporator hereinabove named, for the
purpose of forming a corporation pursuant to the General Corporation law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this [20th] day of June, 2003.
 
                                              /s/ Rachael T. McCarthy
                                              ---------------------------
                                              Rachael T. McCarthy
                                              Sole Incorporator
 
                                       37
<PAGE>
 
                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                                UNICA CORPORATION
 
Pursuant to Section 242 of the General Corporation Law of the State of Delaware
 
                            ------------------------
 
      Unica Corporation (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
 
      At a meeting of the Board of Directors of the Corporation a resolution was
duly adopted, pursuant to Section 242 of the General Corporation Law of the
State of Delaware, setting forth amendments to the Certificate of Incorporation
of the Corporation and declaring said amendments to be advisable. The
stockholders of the Corporation duly adopted said amendments by written consent
in accordance with Sections 228 and 242 of the General Corporation Law of the
State of Delaware. Said amendments have been duly adopted in accordance with
Section 242 of the General Corporation Law of the State of Delaware. The
resolution setting forth the amendments is as follows:
 
RESOLVED:         That the Certificate of Incorporation of the Corporation, as
                  amended and/or restated to date (the "Restated Certificate")
                  be further amended as follows:
 
                  (1)      Article Fourth of the Restated Certificate is hereby
                           amended by deleting the first paragraph thereof in
                           its entirety and replacing it with the following:
 
                           "FOURTH. That, effective immediately upon the filing
                           of this Certificate of Amendment of Certificate of
                           Incorporation (the "Effective Time"), a three-for-two
                           reverse stock split of the Corporation's common stock
                           shall become effective, pursuant to which each three
                           shares of common stock outstanding and held of record
                           by each stockholder of the Corporation (including
                           treasury shares) immediately prior to the Effective
                           Time shall be reclassified and combined into two
                           shares of common stock automatically and without any
                           action by the holder thereof upon the Effective Time
                           and shall represent two shares of common stock from
                           and after the Effective Time. No fractional shares of
                           common stock shall be issued as a result of such
                           reclassification and combination. In lieu of any
                           fractional shares to which the stockholder would
                           otherwise be entitled, the Corporation shall pay cash
                           equal to such fraction multiplied by the then fair
                           market value of the common stock as determined by the
                           Board of Directors of the Corporation.
 
                           The total number of shares of all classes of capital
                           stock that the Corporation shall have authority to
                           issue is 31,421,220, of which (a) 3,421,220 shares
                           shall be designated as Preferred Stock, par value
                           $.01 per share (the "Preferred Stock"), and (b)
                           28,000,000 shares shall be designated as Common
                           Stock, par value $.01 per share (the "Common
                           Stock")."
 
                  (2)      Article Fourth of the Restated Certificate is hereby
                           amended by deleting the first sentence of Section
                           C(6)(c) in its entirety and replacing it with the
                           following:
 
                           "Notwithstanding anything to the contrary contained
                           herein, upon election by a holder or holders of
                           Series B Preferred Stock to convert such shares into
                           shares of Common Stock pursuant to the provisions of
                           Section C.6(a) hereof in connection
<PAGE>
                           with the Corporation's first public offering pursuant
                           to an effective registration statement under the
                           Securities Act, which offering does not constitute a
                           Series B Qualified Public Offering (a "Series B
                           Initial Public Offering"), each share of Series B
                           Preferred Stock then held by such holder or holders
                           shall as of, and in all cases subject to the closing
                           of the Series B Initial Public Offering, be converted
                           into (i) the number of shares of Common Stock into
                           which such share is convertible as computed according
                           to the formula set forth in Section C.6 hereof and
                           (ii) one (1) share of Series B Redeemable Preferred
                           Stock; provided, that if a closing of a Series B
                           Initial Public Offering occurs, all such shares of
                           Series B Preferred Stock being so converted shall be
                           deemed to have been converted as set forth in this
                           Section C.6(c) immediately prior to such closing; and
                           provided, further that if the closing of the Series B
                           Initial Public Offering occurs after June 30, 2005
                           and the Offering Price for the Series B Initial
                           Public Offering exceeds the Series B Minimum Amount
                           but is less than the Series B Target Amount, then the
                           number of shares of Series B Redeemable Preferred
                           Stock issuable to a holder of shares of Series B
                           Preferred Stock shall be equal to the product of (x)
                           the number of shares of Series B Redeemable Preferred
                           Stock issuable pursuant to the formula set forth
                           above multiplied by (y) a fraction, the numerator of
                           which is the remainder of (A) the Series B Target
                           Amount minus (B) the Offering Price and the
                           denominator of which is the remainder of (A) the
                           Series B Target Amount minus (B) the Series B Minimum
                           Amount."
 
                  (3)      Article Fourth of the Restated Certificate is hereby
                           amended by deleting the second sentence of Section
                           D(4)(a) in its entirety and replacing it with the
                           following:
 
                           "The "Series B Redeemable Redemption Price" shall be
                           equal to $2.726497 per share of Series B Redeemable
                           Preferred Stock for each share of Series B Redeemable
                           Preferred Stock (appropriately adjusted for stock
                           splits, stock dividends, recapitalizations and the
                           like with respect to the Series B Redeemable
                           Preferred Stock), provided that if the closing of the
                           Series B Initial Public Offering occurs on or before
                           June 30, 2005, the "Series B Redeemable Redemption
                           Price" shall be equal to $1,000,000 divided by the
                           number of outstanding shares of Series B Redeemable
                           Preferred Stock, rounded in such manner as shall be
                           reasonably determined by the Corporation."
 
                                      * * *
 
      IN WITNESS WHEREOF, this Certificate of Amendment of Certificate of
Incorporation has been executed by its duly authorized officer as of March 18,
2005.
 
                                 UNICA CORPORATION
 
 
 
                                 By: /s/ YUCHUN LEE
                                     ---------------------------------------
                                      Yuchun Lee:
                                      Chief Executive Officer and President
 
                                      -2-
<PAGE>
                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                                UNICA CORPORATION
 
Pursuant to Section 242 of the General Corporation Law of the State of Delaware
 
                            ------------------------
 
   Unica Corporation (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
 
   By unanimous consent of its members, the Board of Directors of the
Corporation adopted a resolution pursuant to Sections 141 and 242 of the General
Corporation Law of the State of Delaware, setting forth amendments to the
Certificate of Incorporation of the Corporation and declaring said amendments to
be advisable. The stockholders of the Corporation duly adopted said amendments
by written consent in accordance with Sections 228 and 242 of the General
Corporation Law of the State of Delaware. Said amendments have been duly adopted
in accordance with Section 242 of the General Corporation Law of the State of
Delaware. The resolution setting forth the amendments is as follows:
 
RESOLVED:  That the Certificate of Incorporation of the Corporation, as amended
           and/or restated to date (the "Restated Certificate") be further
           amended as follows:
 
           (1) Article Fourth of the Restated Certificate is hereby amended by
               deleting the first sentence of Section C(6)(c) in its entirety
               and replacing it with the following:
 
               "Notwithstanding anything to the contrary contained herein, upon
               election by a holder or holders of Series B Preferred Stock to
               convert such shares into shares of Common Stock pursuant to the
               provisions of Section C.6(a) hereof in connection with the
               Corporation's first public offering pursuant to an effective
               registration statement under the Securities Act, which offering
               does not constitute a Series B Qualified Public Offering (a
               "Series B Initial Public Offering"), each share of Series B
               Preferred Stock then held by such holder or holders shall as of,
               and in all cases subject to the closing of the Series B Initial
               Public Offering, be converted into (i) the number of shares of
               Common Stock into which such share is convertible as computed
               according to the formula set forth in Section C.6 hereof and (ii)
               one (1) share of Series B Redeemable Preferred Stock; provided,
               that if a closing of a Series B Initial Public Offering occurs,
               all such shares of Series B Preferred Stock being so converted
               shall be deemed to have been converted as set forth in this
               Section C.6(c) immediately prior to such closing; and provided,
               further that if the closing of the Series B Initial Public
               Offering occurs after December 31, 2005 and the Offering Price
               for the Series B Initial Public Offering exceeds the Series B
               Minimum Amount but is less than the Series B Target Amount, then
               the number of shares of Series B Redeemable Preferred Stock
               issuable to a holder of shares of Series B Preferred Stock shall
               be equal to the product of (x) the number of shares of Series B
               Redeemable Preferred Stock issuable pursuant to the formula set
               forth above multiplied by (y) a fraction, the numerator of which
               is the remainder of (A) the Series B Target Amount minus (B) the
               Offering Price and the denominator of which is the remainder of
               (A) the Series B Target Amount minus (B) the Series B Minimum
               Amount."
 
<PAGE>
 
 
           (2) Article Fourth of the Restated Certificate is hereby amended by
               deleting the second sentence of Section D(4)(a) in its entirety
               and replacing it with the following:
 
               "The "Series B Redeemable Redemption Price" shall be equal to
               $2.726497 per share of Series B Redeemable Preferred Stock for
               each share of Series B Redeemable Preferred Stock (appropriately
               adjusted for stock splits, stock dividends, recapitalizations and
               the like with respect to the Series B Redeemable Preferred
               Stock), provided that if the closing of the Series B Initial
               Public Offering occurs on or before December 31, 2005, the
               "Series B Redeemable Redemption Price" shall be equal to
               $1,000,000 divided by the number of outstanding shares of Series
               B Redeemable Preferred Stock, rounded in such manner as shall be
               reasonably determined by the Corporation."
 
                                      * * *
 
   IN WITNESS WHEREOF, this Certificate of Amendment of Certificate of
Incorporation has been executed by its duly authorized officer as of July 18,
2005.
 
                                    UNICA CORPORATION
 
 
 
                                    By:  /s/ Yuchun Lee
                                       ---------------------------------------
                                       Yuchun Lee
                                       Chief Executive Officer and President
 
 
 
 
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