Articles of Incorporation - Sonic Systems


                             AMENDED AND RESTATED
                           ARTICLES OF INCORPORATION
                               OF SONIC SYSTEMS
                           a California corporation

     Sreekanth Ravi and Jerrold F. Petruzzelli certify as follows:

     1.  They are the duly elected and acting President and Secretary,
respectively, of Sonic Systems, a California corporation (the 'Corporation').

     2.  The Articles of Incorporation of the Corporation are hereby amended and
restated in their entirety to read in full as follows:

                                   ARTICLE I

     The name of the Corporation is SonicWALL, Inc.

                                  ARTICLE II

     The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.

                                  ARTICLE III

     This Corporation is authorized to issue two classes of shares of stock,
which shall be designated as Common Stock and Preferred Stock, respectively.
The total number of shares of Common Stock the Corporation is authorized to
issue is Two Hundred Million (200,000,000) and the total number of shares of
Preferred Stock the Corporation is authorized to issue is Ten Million
(10,000,000).  The Board of Directors may determine, fix, alter, or revoke by
resolution the rights, preferences, privileges, and restriction of any wholly
unissued class or series of shares, other than Common Shares, and the series
designation and number of shares to constitute any series (which number may
thereafter in the same manner be increased or decreased, but not below the
number of shares of such series then outstanding), and a certificate of
determination shall then be filed with the California Secretary of State.  Upon
the filing of these Amended and Restated Articles of Incorporation, each one (1)
share of Common Stock then outstanding shall be split into two (2) shares of
Common Stock.

                                  ARTICLE IV

     The rights, preferences, privileges, restrictions and other matters
relating to the ten million (10,000,000) shares of Preferred Stock are as
follows:

     A.  Designation.  One million four hundred thousand thirty eight thousand
         -----------                                                          
three hundred seventy seven (1,438,377) of the shares of Preferred Stock shall
be designated and known as Series A 

                                       1

 
Preferred Stock ('Series A Preferred Stock' or 'Series A Preferred'). The
balance of the shares of Preferred Stock may be divided into such number of
series as the Board of Directors may determine with such rights, preferences,
privileges and restrictions as the Board of Directors may determine.

     B.   Liquidation Rights.
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          (1)  In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or not, the holders of Series A Preferred Stock
shall be entitled to receive, before any amount shall be paid to holders of
Common Stock, an amount equal to $3.476139 per share (as adjusted for stock
splits, stock dividends, recapitalizations and the like ('Original Issue Price')
plus an amount equal to all dividends declared but unpaid thereon (collectively,
----                                                                            
the 'Preference Amount'). Thereafter, if assets or surplus funds remain in the
Corporation after the payment of the Preference Amount to the holders of Series
A Preferred, remaining assets or surplus funds shall be distributed pro-rata to
the holders of Series A Preferred Stock on an as-converted to Common Stock basis
and to the holders of Common Stock together until the holders of the Series A
Preferred Stock shall have received a total of Twelve Dollars and Seventeen
Cents ($12.17) per share of Series A Preferred Stock (as adjusted for stock
splits, stock dividends, recapitalizations and the like) (which includes the
Preference Amount of $3.476139 per share).  After the holders of Series A
Preferred have received such an amount, then all the remaining assets or surplus
funds shall be distributed solely to the holders of Common Stock.  If, upon the
occurrence of a liquidation, dissolution or winding up, the assets and surplus
funds distributed among the holders of Series A Preferred Stock shall be
insufficient to permit the payment to such holders of Series A Preferred Stock
of the full Preference Amount, then the entire assets and surplus funds of the
Corporation legally available for distribution shall be distributed pro rata
among the holders of Series A Preferred Stock based on the number of shares held
by each.

          (2)  For purposes of this Section B, a liquidation, dissolution or
winding up of the Corporation shall be deemed to be occasioned by, and to
include, the Corporation's sale of all or substantially all of its assets or the
acquisition of the Corporation by or reorganization of this Corporation into or
with another entity in which the shareholders of the Corporation will not own,
by virtue of their share ownership in the Corporation, a majority of the
outstanding shares or other voting interests of the surviving, purchasing, or
newly resulting entity, whether by means of merger or consolidation or
reorganization resulting in the exchange of the outstanding shares of this
Corporation for securities or consideration issued, or caused to be issued, by
the acquiring corporation or its subsidiary.  No later than thirty (30) days
before any actual or deemed liquidation, dissolution or winding up of the
Corporation as described in paragraph B(1) or this paragraph B(2), or before any
event or transaction of the type specified in paragraph D(5), or any other event
that permits a holder of Series A Preferred to have each share of Series A
Preferred held by such holder treated for all purposes as if it had been
converted into Common Stock, the Corporation shall deliver a notice to each
holder of Series A Preferred setting forth the principal terms of such merger or
sale of the Corporation.  Such notice shall be deemed delivered upon personal
delivery or five (5) days after deposit in the United States mail, by first
class, registered or certified mail (in each case, prepaid), addressed to a
party at its address as shown on the stock records of the Corporation.  Such
notice shall include a description of the amounts that would be paid to holders
of Series A Preferred under this Section B and of the consideration that such
holders would receive if they were to exercise their rights to have shares of
Series A Preferred treated as if they had been converted into Common Stock.  No
later than fifteen (15) days after delivery of the notice, each holder of Series
A Preferred may deliver an election to the 

                                       2

 
Corporation notifying the Corporation that the holder desires that such holder's
shares of Series A Preferred be treated as if they had been converted into
shares of Common Stock and, if no such election is delivered to the Corporation,
such holder shall receive such amounts as are provided for under this Section B.

          (3)  In the event the Corporation shall propose to take any action
regarding the liquidation, dissolution or winding up of the Corporation which
will involve the distribution of assets other than cash, the value of the assets
to be distributed to the holders of shares of the Series A Preferred Stock shall
be determined in good faith by the consent or vote of the Board of Directors,
and such determination shall be binding upon the holders of the Series A
Preferred Stock and Common Stock, except that any securities distributed shall
be valued as follows:

               (a)  Securities not subject to investment letter or other similar
restrictions on free marketability:

                    (i)   if traded on a securities exchange, the value shall be
deemed to be the average of the security's closing prices on such exchange over
the thirty (30) day period ending two (2) days prior to the closing; and

                    (ii)  if actively traded over-the-counter, the value shall
be deemed to be the average of the closing bid prices over the thirty (30) day
period ending two (2) days prior to the closing; and

                    (iii) if there is no active public market, the value shall
be the fair market value thereof, as mutually determined by the Corporation and
the holders of not less than fifty percent (50%) of the outstanding Series A
Preferred Stock and such determination shall be binding on the holders of the
remaining Series A Preferred Stock and upon the holders of the Common Stock.

          (b)  The method of valuation of securities subject to investment
letter or other restrictions on free marketability shall be to make an
appropriate discount from the market value determined as above in subparagraphs
B(3)(a)(i), (ii) or (iii) to reflect the approximate fair market value thereof,
as mutually determined by the Corporation and the holders of not less than fifty
percent (50%) of the outstanding Series A Preferred Stock and such determination
shall be binding upon the remaining holders of the Series A Preferred Stock and
upon the holders of the Common Stock.

     C.   Dividends.
          --------- 

          (1)  Preferred Stock.  The holders of the outstanding Series A
               ---------------                                          
Preferred Stock shall be entitled to receive in any fiscal year, if, when and as
declared by the Board of Directors, out of any assets at the time legally
available therefor, dividends in cash at the rate of eight percent (8%) of the
Original Issue Price per share of Series A Preferred Stock (as adjusted for
stock splits, stock dividends, recapitalizations and the like) per annum, before
any dividend is declared or paid on shares of Common Stock.  Dividends may be
payable quarterly or otherwise as the Board of Directors may from time to time
determine.  Dividends shall not be cumulative.

          (2)  Common Stock. No distributions (as defined below) shall be paid
               ------------
on the Common Stock until a dividend for the fiscal year shall have first been
paid to or declared and set apart for the

                                       3

 
holders of the Series A Preferred Stock then outstanding at the rates specified
in paragraph C(1) above. No distributions (as defined below) shall be paid on
the Common Stock in excess of a rate of eight percent (8%) per annum of the fair
market value of the Common Stock, as determined in good faith by the consent or
vote of the Board of Directors.

          (3)  Distributions Defined. For purposes of this Section C, unless the
               ---------------------                                            
context requires otherwise, 'distribution' shall mean the transfer of cash or
property without consideration, whether by way of dividend or otherwise, payable
other than in Common Stock or other securities of the Corporation, or the
purchase or redemption of shares of the Corporation (other than repurchases of
Common Stock held by employees or directors of, or consultants to, the
Corporation upon termination of their employment or services pursuant to
agreements providing for such repurchase or pursuant to the Company's exercise
of any right of first refusal as to such shares) for cash or property, including
any such transfer, purchase, or redemption by a subsidiary of the Corporation.

     D.   Conversion to Common Stock
          --------------------------

     The Series A Preferred Stock shall be convertible into Common Stock of the
Corporation as follows:

          (1)  Definitions.  For purposes of this Section D the following
               -----------                                               
definitions shall apply:

               (a)  'Issuance Date' shall mean the first date on which the
Corporation issues any shares of Series A Preferred Stock.

               (b)  'Series A Conversion Price' shall mean the price, determined
pursuant to this Section D, at which shares of Common Stock shall be deliverable
upon conversion of Series A Preferred Stock.

               (c)  'Current Conversion Price' shall mean the Series A
Conversion Price immediately before the occurrence of any event which, pursuant
to this Section D, causes an adjustment to the Series A Conversion Price.

               (d)  'Convertible Securities' shall mean any indebtedness or
shares of stock convertible into or exchangeable for Common Stock, including
Series A Preferred Stock.

               (e)  'Options' shall mean any rights, warrants or options to
subscribe for or purchase Common Stock or Convertible Securities.

               (f)  'Common Stock Outstanding' shall mean the aggregate of all
Common Stock outstanding and all Common Stock issuable upon exercise of all
outstanding Options and conversion of all outstanding Convertible Securities.

               (g)  'Common Stock Equivalents' shall mean Convertible Securities
and rights entitling the holder thereof to receive, directly or indirectly,
additional shares of Common Stock without the payment of any consideration by
such holder for such additional shares of Common Stock or Common Stock
Equivalents.

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          (2)  Right to Convert; Initial Conversion Price.
               ------------------------------------------ 

               (a)  Each holder of Series A Preferred Stock may, at any time,
convert any or all of such Series A Preferred shares into fully-paid and
nonassessable shares of Common Stock at the Series A Conversion Price. Each
share of Series A Preferred Stock shall be convertible into the number of shares
of Common Stock that results from dividing the Series A Conversion Price in
effect at the time of conversion into $3.476139 for each share of Series A
Preferred Stock being converted; the initial Series A Conversion Price shall be
$3.476139. The Series A Conversion Price shall be subject to adjustment from
time to time in certain instances as hereinafter provided. No adjustments with
respect to conversion shall be made on account of any dividends that may be
declared but unpaid on the Series A Preferred surrendered for conversion, but no
dividends shall thereafter be paid on the Common Stock unless such unpaid
dividends have first been paid to the Series A Preferred holders entitled to
payment at the time of conversion of the Series A Preferred.

               (b)  Before any holder of Series A Preferred Stock shall be
entitled to convert the same into Common Stock, he shall surrender the
certificate or certificates therefor, duly endorsed, to the office of the
Corporation or any transfer agent for such Series A Preferred and shall give
written notice to the Corporation at such office that he elects to convert the
same. The Corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Series A Preferred, or to his nominee
or nominees, certificates for the number of full shares of Common Stock to which
he shall be entitled, together with cash in lieu of any fraction of a share as
hereinafter provided, and, if less than all of the shares of Series A Preferred
represented by any such certificate are converted, a certificate representing
the shares of Series A Preferred not converted. Such conversion shall be deemed
to have been made as of the date of such surrender of the certificate for the
Series A Preferred to be converted, and the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such Common Stock on such date. If
the conversion is in connection with an offer of securities registered pursuant
to the Securities Act of 1933, as amended, the conversion may, at the option of
any holder tendering Series A Preferred for conversion, be conditioned upon the
closing of the sale of securities pursuant to such offering, in which event the
holder shall not be deemed to have converted such Series A Preferred until
immediately prior to the closing of such sale of securities.

          (3)  Adjustments to Conversion Price.  Subject to subsection D(3)(j)
               -------------------------------                                
below, the Series A Conversion Price in effect from time to time shall be
subject to adjustment in certain cases as follows:

               (a)  Issuance of Additional Shares of Common Stock.  In case the
                    ---------------------------------------------              
Corporation shall at any time after the Issuance Date issue or sell any Common
Stock, Options, Convertible Securities, or Common Stock Equivalents (hereinafter
the 'Additional Shares of Common Stock') without consideration or for a
consideration per share of Common Stock less than the Current Conversion Price
for the Series A Preferred Stock, then such Current Conversion Price for the
Series A Preferred Stock shall simultaneously with such issuance or sale be
adjusted to a Series A Conversion Price (calculated to the nearest cent)
determined by multiplying such Current Conversion Price by a fraction,

                                       5

 
               (A)  the numerator of which shall be (x) the Common Stock
Outstanding at the close of business on the day immediately preceding the date
of such issuance or sale, plus (y) the number of shares of Common Stock which
the aggregate consideration received (or by the express provisions hereof deemed
to have been received) by the Corporation for the total number of Additional
Shares of Common Stock so issued or sold would purchase at the Current
Conversion Price, and (B) the denominator of which shall be the number of shares
of Common Stock outstanding at the close of business on the date of such
issuance or sale after giving effect to such issuance or sale of Additional
Shares of Common Stock. For the purpose of the calculation described in this
Section D(3)(a), the Common Stock Outstanding shall include, in addition to the
number of shares of Common Stock actually outstanding, (A) the number of shares
of Common Stock into which the Series A Preferred Stock could be converted if
fully converted on the day immediately preceding the issuance or sale or deemed
issuance or sale of Additional Shares of Common Stock, and (B) the number of
shares of Common Stock which would be obtained through the exercise or
conversion of all rights, Options and Convertible Securities outstanding on the
day immediately preceding the issuance or sale or deemed issuance or sale of
Additional Shares of Common Stock but not including in such calculation any
additional shares of Common Stock issuable with respect to shares of Series A
Preferred Stock, Convertible Securities, or outstanding options, warrants or
other rights for the purchase of shares of stock or convertible securities,
solely as a result of the adjustment of the respective Conversion Prices (or
other conversion ratios) resulting from the issuance of Additional Shares of
Common Stock causing such adjustment.

     For purposes of this subsection (D)(3)(a), the following provisions shall
also be applicable:

                    (i)   Cash Consideration. In case of the issuance or sale of
                          ------------------
Additional Shares of Common Stock for cash, the consideration received by the
Corporation therefor shall be deemed to be the amount of cash received by the
Corporation for such shares (or, if such shares are offered by the Corporation
for subscription, the subscription price, or, if such shares are sold to
underwriters or dealers for public offering without a subscription offering, the
initial public offering price), without deducting therefrom any compensation or
discount paid or allowed to underwriters or dealers or others performing similar
services or for any expenses incurred in connection therewith.

                    (ii)  Non-Cash Consideration. In case of the issuance
                          ----------------------
(otherwise than upon conversion or exchange of Convertible Securities) or sale
of Additional Shares of Common Stock for consideration other than cash or for
consideration a part of which shall be other than cash, the fair value of such
consideration as determined by the Board of Directors of the Corporation in the
good faith exercise of its business judgment, irrespective of the accounting
treatment thereof, shall be deemed to be the value, for purposes of this Section
D, of the consideration other than cash received by the Corporation for such
securities.

                    (iii) Options and Convertible Securities. In case the
                          ----------------------------------
Corporation shall in any manner issue or grant any Options or any Convertible
Securities, the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities at the time such Convertible Securities
first become convertible or exchangeable shall (as of the date of issue or grant
of such Options or, in the case of the issue or sale of Convertible Securities
other than where the same are issuable upon the exercise of

                                       6

 
Options, as of the date of such issue or sale) be deemed to be issued and to be
outstanding for the purpose of Section D(3)(a) and to have been issued for the
sum of the amount (if any) paid for such Options or Convertible Securities and
the amount (if any) payable upon the exercise of such Options or upon conversion
or exchange of such Convertible Securities at the time such Convertible
Securities first become convertible or exchangeable; provided, however, that,
subject to the provisions of subsection D(3)(b), no further adjustment of the
Current Conversion Price shall be made upon the actual issuance of any such
Common Stock upon the exercise of Options or upon the conversion or exchange of
any such Convertible Securities.

               (b)  Change in Option Price or Conversion Rate. If the purchase
                    -----------------------------------------  
price provided for in any Option referred to in subsection D(3)(a)(iii), or the
rate at which any Convertible Securities referred to in subsection D(3)(a)(iii)
are convertible into or exchangeable for shares of Common Stock shall change at
any time, the Current Conversion Price in effect at the time of such event shall
forthwith be readjusted to the Series A Conversion Price that would have been in
effect at such time had such Options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time same were initially granted, issued or
sold. If the purchase price provided for in any such Option referred to in
subsection D(3)(a)(iii), or the additional consideration (if any) payable upon
the conversion or exchange of any Convertible Securities referred to in
subsection D(3)(a)(iii), or the rate at which any Convertible Securities
referred to in subsection D(3)(a)(iii) are convertible into or exchangeable for
shares of Common Stock, shall be reduced at any time under or by reason of
provisions with respect thereto designed to protect against dilution, then in
case of the delivery of shares of Common Stock upon the exercise of any such
Option or upon conversion or exchange of any such Convertible Securities, the
Series A Conversion Price then in effect hereunder shall, upon issuance of such
shares of Common Stock, be adjusted to such amount as would have been obtained
had such Option or Convertible Securities never been issued and had adjustments
been made only upon the issuance of the shares of Common Stock delivered as
aforesaid and for the consideration actually received for such Option or
Convertible Securities and the Common Stock.

               (c)  Termination of Option or Conversion Rights. Upon the
                    ------------------------------------------
termination or expiration of any right to purchase Common Stock under any Option
or of any right to convert or exchange Convertible Securities, the Current
Conversion Price shall, upon such termination, be changed to the Series A
Conversion Price that would have been in effect at the time of such expiration
or termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination, never been
issued, and the shares of Common Stock issuable thereunder shall no longer be
deemed to be Common Stock Outstanding.

               (d)  Stock Splits; Dividends; Distributions and Combinations. If
                    -------------------------------------------------------
the Corporation shall at any time or from time to time after the Issuance Date
fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or Common Stock Equivalents, then, following such record
date (or the date of such dividend, distribution, split or subdivision if no
record date is fixed), the Series A Conversion Price shall be appropriately
decreased so that the number of shares of Common Stock issuable on conversion of
each share of Series A Preferred shall be increased in proportion to such
increase in the number of outstanding shares of Common Stock (including for this
purpose, Common Stock Equivalents). If the

                                       7

 
number of shares of Common Stock outstanding at any time after the Issuance Date
is decreased by a combination of the outstanding shares of Common Stock, then,
following the record date of such combination, the Series A Conversion Price
shall be appropriately increased so that the number of shares of Common Stock
issuable on conversion of each share of Series A Preferred shall be decreased in
proportion to such decrease in the number of outstanding shares of Common Stock.

               (e)  Other Dividends. If this Corporation shall declare a
                    --------------- 
distribution payable in securities of other persons, evidence of indebtedness
issued by this Corporation or other persons, assets (excluding cash dividends)
or options or rights not referred to in subsection D(3)(a)(iii), then, in each
such case for the purpose of this subsection D(3)(e), the holders of Series A
Preferred Stock shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Corporation into which their shares of Series A Preferred are
convertible as of the record date fixed for the determination of the holders of
Common Stock of the Corporation entitled to receive such distribution.

               (f)  Recapitalizations. If at any time or from time to time there
                    -----------------
shall be a recapitalization of the Common Stock (other than as a result of a
subdivision, or combination, or a merger or a sale of assets transaction
provided for elsewhere in this Section D), provision shall be made so that the
holders of Series A Preferred shall thereafter be entitled to receive upon
conversion of shares of Series A Preferred the number of shares of stock or
other securities or property of the Corporation or otherwise, to which a holder
of Common Stock deliverable upon such conversion would have been entitled on
such recapitalization. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section D with respect to the rights
of the holders of Series A Preferred after the recapitalization to the end that
the provisions of this Section D (including adjustment of the Series A
Conversion Price then in effect and the number of shares or other property to be
received upon conversion of shares of Series A Preferred) shall be applicable
after that event as nearly equivalent as may be practicable.

               (g)  Successive Changes. The above provisions of this Section D
                    ------------------
shall similarly apply to successive issuances, sales, dividends or other
distributions, subdivisions and combinations on or of the Common Stock after the
Issuance Date.

               (h)  Other Events Altering Conversion Price. Upon the occurrence
                    --------------------------------------
of any event not specifically described in this Section D as reducing the Series
A Conversion Price that, in the reasonable exercise of the business judgment of
the Board of Directors of the Corporation reached in good faith, requires, on
equitable principles, the reduction of the Series A Conversion Price, the Series
A Conversion Price will be so equitably reduced.

               (i)  No Impairment. The Corporation will not, by amendment of
                    -------------
these Amended and Restated Articles of Incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section D and in the
taking of all such action as may be necessary or appropriate in order to protect
the conversion rights of the holders of Series A Preferred Stock against
impairment.

                                       8

 
               (j) Excluded Events. The Series A Conversion Price shall not be
                   ---------------
adjusted under subsection D(3)(a) above, by virtue of (a) the issuance of
capital stock or options to employees, consultants, officers or directors of the
Corporation pursuant to stock purchase or stock option plans approved by the
Board (including options granted prior to the date of these Amended and Restated
Articles) and the repurchase at cost of such shares and subsequent re-issuance,
(b) the issuance of securities as consideration for the acquisition of another
corporation or other business entity by merger or other reorganization, or for
the purchase of all or substantially all of the assets of such business entity,
(c) the issuance of securities to financial institutions or lessors in
connection with commercial credit arrangements, equipment financings or similar
transactions, (d) shares issued upon conversion of the Series A Preferred Stock,
(e) the issuance of securities pursuant to options, warrants, notes, or other
rights to acquire securities of the Corporation outstanding on or before the
filing date of these Amended and Restated Articles of Incorporation, or (g)
stock splits, stock dividends or like transactions (for which Conversion Price
adjustments are to be made under other subsections of Section D).

               (k)  No Fractional Shares. No fractional shares shall be issued
                    --------------------
upon conversion of shares of Series A Preferred. The Corporation shall deliver
cash to any holder of Series A Preferred in lieu of any fraction of a share. If
more than one share of Series A Preferred shall be surrendered for conversion at
any one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Series A Preferred so surrendered.

               (l)  Taxes. The Corporation shall pay any and all issue and other
                    -----  
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of Series A Preferred pursuant hereto. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the Series A Preferred so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Corporation the
amount of any such tax, or has established, to the satisfaction of the
Corporation, that such tax has been paid.

               (m)  Certificate as to Adjustments. Upon the occurrence of each
                    -----------------------------                              
adjustment or readjustment of the Series A Conversion Price pursuant to this
Section D, the Corporation, at its expense, shall compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A Preferred a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based.  The Corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (a) such adjustment and
readjustment, (b) the Series A Conversion Price, and (c) the number of shares of
Common Stock and the amount, if any, of other property which at the time would
be received upon the conversion of a share of Series A Preferred Stock.

               (n)  Common Stock Reserve. The Corporation shall at all times
                    --------------------
reserve and keep available, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of the Series A Preferred,
the full number of shares of Common Stock issuable upon the conversion of all
Series A Preferred from time to time outstanding. The Corporation shall from
time to time, in accordance with the laws of the State of California, increase
the authorized amount of its

                                       9

 
Common Stock if at any time the authorized number of shares of its Common Stock
remaining unissued shall not be sufficient to permit the conversion of all of
the shares of Series A Preferred at the time outstanding.

          (4)  Automatic Conversion.  Each share of Series A Preferred Stock
               --------------------                                         
shall automatically be converted into shares of Common Stock, at the Series A
Conversion Price, upon the earlier of (a) the date specified by vote or written
consent or agreement of holders of at least two-thirds (2/3) of the then
outstanding shares of Series A Preferred Stock or (b) immediately upon the
closing of a firm commitment underwritten public offering registered under the
Securities Act of 1933, as amended, pursuant to which Common Stock is sold to
the public by the Corporation (or selling shareholders, if any) at (i) a public
offering price of at least Ten Dollars ($10.00) per share (as adjusted for stock
splits, stock dividends, recapitalizations and the like) and (ii) an aggregate
public offering price not less than Fifteen Million Dollars ($15,000,000), prior
to underwriting discounts, commissions and expenses.  On and after said
conversion date, notwithstanding that any certificates for the shares of Series
A Preferred shall not have been surrendered for conversion, the shares of Series
A Preferred formerly evidenced thereby shall be deemed to be no longer
outstanding, and all rights with respect thereto shall forthwith cease and
terminate, except only the rights of the holder (a) to receive a certificate
representing the shares of Common Stock to which he shall be entitled upon
conversion thereof, (b) to receive the amount of cash payable in respect of any
fractional share of Common Stock to which he shall be entitled, and (c) with
respect to dividends declared but unpaid on Series A Preferred prior to such
conversion date.  In the event that any holder of Series A Preferred presents
such holder's certificate therefor for surrender to the Corporation or its
transfer agent upon such conversion, a certificate for the number of shares of
Common Stock into which the shares of Series A Preferred surrendered were
convertible on such conversion date will be promptly issued and delivered to
such holder.  Such conversion shall be deemed to have been made as of the date
of such closing or the date specified by such vote or written consent or
agreement, as applicable, and the person or persons entitled to receive the
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such Common Stock on such date.

          (5)  Business Combination, Merger, Sale of Corporation.  After the
               -------------------------------------------------            
Issuance Date, in the event of any proposed business combination, consolidation
or merger of the Corporation with or into another corporation (other than a
business combination, consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any reclassification of, or
change in, the outstanding shares of Common Stock), or in the event of any
proposed sale or transfer to another corporation of all or substantially all of
the assets of the Corporation, any holder of Series A Preferred Stock may, upon
delivery of such shares and election pursuant to Section B above, have each
share of Series A Preferred held by such holder treated for all purposes as if
it had been converted into Common Stock on the earlier of (a) the record date,
if any, for voting by holders of Common Stock on such event, and (b) the date of
such event.

     E.   Voting Rights.
          ------------- 

          (1)  In General.
               ---------- 

               (a) Each holder of shares of Series A Preferred Stock shall be
entitled to the number of votes equal to the number of shares of Common Stock
into which such Series A Preferred

                                       10

 
Stock could be converted on the record date for the vote or the date of the
solicitation of any written consent of shareholders and shall have voting rights
and powers equal to the voting rights and powers of the Common Stock. The holder
of each share of Series A Preferred Stock shall be entitled to notice of any
shareholders' meeting in accordance with the Bylaws of the Corporation and,
except those matters required by law to be submitted to a class vote, shall vote
with holders of the Common Stock upon all matters submitted to a vote of
shareholders (including the election of directors). Holders of Common Stock and
Series A Preferred Stock shall be entitled to cumulate their votes in any
election of directors. Fractional votes by the holders of Series A Preferred
Stock shall not, however, be permitted and any fractional voting rights
resulting from the above formula (after aggregating all shares into which shares
of Series A Preferred Stock held by each holder could be converted) shall be
rounded to the nearest whole number.

               (b)  While there are at least Five Hundred Thousand (500,000)
shares of Series A Preferred Stock outstanding, the Corporation shall not,
without first obtaining the approval (by vote or written consent, as provided by
law) of the holders of two-thirds (2/3) or more of the then outstanding shares
of Series A Preferred Stock, voting together as one class:

                    (i)   amend its Articles of Incorporation in any manner
(including filing a certificate of determination) that would alter or change any
of the rights, preferences, privileges or restrictions of the Series A Preferred
Stock;

                    (ii)  pay or declare any dividend (other than a dividend
payable solely in shares of its own Common Stock) or distribution on any shares
of its capital stock, or apply any of its assets to the redemption, retirement,
purchase or acquisition, directly or indirectly, through subsidiaries or
otherwise, of any shares of its capital stock, except as otherwise permitted
under Section F and/or Section G;

                    (iii) permit any subsidiary of the Corporation in which the
Corporation holds a controlling voting interest to sell or issue stock to any
party other than the Corporation;

                    (iv)  amend its Articles of Incorporation to increase or
decrease the authorized number of shares of Common Stock or Preferred Stock or
any series thereof;

                    (v)   authorize, designate or issue, whether by
reclassification or otherwise, any new or existing class or classes or series of
capital stock having any preference or priority as to dividends or assets
superior to or on a parity with any such preference or priority of the Series A
Preferred, or having voting rights superior to the voting rights of the Series A
Preferred, or authorize or issue shares of stock of any class or any bonds,
debentures, notes or other obligations convertible into or exchangeable for, or
having rights to purchase, any shares of stock of the Corporation having any
preference or priority as to dividends or assets superior to or on a parity with
any such preference or priority of the Series A Preferred; or

                    (vi)  amend its Articles of Incorporation or Bylaws to
change the authorized number of Directors.

                                       11

 
          (2) Common Stock Voting Rights.  Each holder of Common Stock shall be
              --------------------------                                       
entitled to one vote per share of Common Stock held by such holder in the
election of directors and upon each other matter coming before any vote of
shareholders.

     F.   Repurchase of Shares.
          -------------------- 

          In connection with repurchases by the Corporation of its Common Stock
pursuant to agreements with certain of the holders thereof (i) upon their
termination of any status pursuant to which they provide services to the
Corporation or (ii) pursuant to the Company's exercise of any rights of first
refusal as to such Common Stock, each holder of Series A Preferred Stock shall
be deemed to have consented, for purposes of Sections 500 through 503 of the
California General Corporation Law, to distributions made by the Corporation
with respect to such repurchases.

     G.   Redemption of Preferred Shares
          ------------------------------

          (1)  At any time after February 17, 2004, and upon the written request
of holders of sixty-seven percent (67%) of the Series A Preferred, the
Corporation shall redeem from any source of funds legally available therefor and
subject to Chapter 5 of the California General Corporation Law, all, but not
less, than all, of the outstanding Series A Preferred held by each holder in two
equal installments, the first such installment on a date not more than seventy
five (75) days following the date of receipt by the Corporation of notice from
sufficient holders requesting such redemption, and the second installment on the
one year anniversary of the first installment (each a 'Redemption Date'). The
Corporation shall effect such redemptions on the applicable Redemption Dates by
paying in cash in exchange for each share of Series A Preferred Stock to be
redeemed a sum equal to the Original Issue Price (subject to adjustment for
stock splits, recapitalization and the like) plus any dividends declared but
unpaid, with respect to all such shares prior to the Redemption Date (the
'Redemption Price'). The number of shares of Series A Preferred Stock that the
Corporation shall be required under this Section G.(1) to redeem on any
Redemption Date shall be equal to the amount determined by dividing (a) the
aggregate number of shares of Series A Preferred Stock outstanding immediately
prior to the Redemption Date by (b) the number of remaining Redemption Dates
(including the Redemption Date to which such calculation applies). Any
redemption effected pursuant to this Section G.(1) shall be made on a pro-rata
basis among the holders of the Series A Preferred Stock in proportion to the
shares of Series A Preferred Stock then held by them.

          (2)  At least thirty (30) and no more than sixty (60) days prior to
each Redemption Date, written notice shall be mailed, first class postage
prepaid, to each holder of record (at the close of business on the business day
next preceding the day on which notice is given) of the Series A Preferred Stock
to be redeemed, at the address last shown on the records of the Corporation for
such holder, notifying such holder of the redemption to be effected, specifying
the number of shares to be redeemed from such holder, the Redemption Date, the
Redemption Price, the place at which payment may be obtained and calling upon
such holder to surrender to the Corporation, in the manner and at the place
designated, his certificate or certificates representing the shares to be
redeemed (the 'Redemption Notice'). Except at provided in Section G.(3), on or
after the Redemption Date, each holder of Series A Preferred Stock to be
redeemed shall surrender to this Corporation the certificate or certificates
representing such shares, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name

                                       12

 
appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be cancelled. In the event less than all the
shares represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares.

          (3)  From and after the Redemption Date, unless there shall have been
a default in payment of the Redemption Price, all rights of the holders of
shares of Series A Preferred Stock designated for redemption in the Redemption
Notice as holders of Series A Preferred Stock (except the right to receive the
Redemption Price without interest upon surrender of their certificate or
certificates) shall cease with respect to such shares, and such shares shall not
thereafter be transferred on the books of the Corporation or be deemed to be
outstanding for any purpose whatsoever.  If the funds of the Corporation legally
available for redemption of shares of Series A Preferred Stock on any Redemption
Date are insufficient to redeem the total number of shares of Series A Preferred
Stock to be redeemed on such date, those funds which are legally available will
be used to redeem the maximum possible number of such shares ratably among the
holders of such shares to be redeemed based upon their holdings of Series A
Preferred Stock.  The shares of Series A Preferred Stock not redeemed shall
remain outstanding and entitled to all the rights and preferences provided
herein.  At any time thereafter, when additional funds of the Corporation are
legally available for the redemption of shares of Series A Preferred Stock, such
funds will immediately be used to redeem the balance of the shares which the
Corporation has become obliged to redeem on any Redemption Date, but which it
had not redeemed.

          (4)  On or prior to each Redemption Date, the Corporation shall
deposit the Redemption Price of all shares of Series A Preferred Stock
designated for redemption in the Redemption Notice and not yet redeemed with a
bank or trust corporation having aggregate capital and surplus in excess of
$100,000,000 as a trust fund for the benefit of the respective holders of the
shares designated for redemption and not yet redeemed, with irrevocable
instructions and authority to the bank or trust corporation to pay the
Redemption Price for such shares to their respective holders on or after the
Redemption Date upon receipt of notification from the Corporation that such
holder has surrendered his share certificate to the Corporation pursuant to
Section G.(1) above. As of the Redemption Date, the deposit shall constitute
full payment of the shares to their holders, and from and after the Redemption
Date the shares so called for redemption shall be redeemed and shall be deemed
to be no longer outstanding, and the holders thereof shall cease to be
shareholders with respect to such shares and shall have no rights with respect
thereto except the rights to receive from the bank or trust corporation payment
of the Redemption Price of the shares, without interest, upon surrender of their
certificates therefor. Such instructions shall also provide that any moneys
deposited by the Corporation pursuant to this Section G.(4) for the redemption
of shares thereafter converted into shares of the Corporation's Common Stock
pursuant to Section D hereof prior to the Redemption Date shall be returned to
the Corporation forthwith upon such conversion. The balance of any moneys
deposited by the Corporation pursuant to this Section G.(4) remaining unclaimed
at the expiration of two (2) years following the Redemption Date shall
thereafter be returned to the Corporation upon its request expressed in a
resolution of its Board of Directors, and thereafter the holders of any
unsurrendered certificates formerly representing shares of Series A Preferred
shall look solely to the Corporation for payment of the Redemption Price for
such shares.

                                       13

 
     H.   Residual Rights.
          --------------- 

          All rights accruing to the outstanding shares of the Corporation not
otherwise expressly provided for in these Amended and Restated Articles of
Incorporation shall be vested in the Common Stock.

                                   ARTICLE V

          The liability of the directors of the Corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.

          The Corporation is authorized to provide indemnification of agents (as
provided in Section 317 of the California Corporations Code) for breach of duty
to the Corporation and its shareholders through Bylaw provisions or through
agreements with the agents, or both, in excess of the indemnification otherwise
permitted by Section 317 of the California Corporations Code, subject to the
limits of excess indemnification set forth in Section 204 of the California
Corporations Code.

          Any repeal or modification of the foregoing two paragraphs by the
shareholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.'

                                  ARTICLE VI

          Cumulative voting by shareholders involving the election of directors
of the Corporation shall be eliminated on and after the date upon which the
Corporation is a 'listed corporation' as defined in Section 301.5 of the
Corporations Code of California.

     3.   The foregoing amendment and restatement of the Articles of
Incorporation of the Corporation has been duly approved by the Board of
Directors of the Corporation.

     4.   The foregoing amendment and restatement of the Articles of
Incorporation of the Corporation has been duly approved by the required vote of
the shareholders of the Corporation in accordance with Section 902 and 903 of
the California Corporations Code. The total number of outstanding shares of
Common Stock of the Corporation is 8,361,920 and the total number of outstanding
shares of Preferred Stock is 1,438,377. The number of shares voting in favor of
the amendment equaled or exceeded the vote required. The percentage vote
required was more than fifty percent (50%) of the Common Stock and the Preferred
Stock, voting together as one class, and sixty two and two thirds percent (66
2/3%) of the Series A Preferred Stock, voting as a separate class.

[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                                       14

 
Sreekanth Ravi and Jerrold F. Petruzzelli each declare under penalty of perjury
that the matters set forth in the foregoing amended and restated articles are
true and correct.

      Executed this 24th day of August, 1999, at Santa Clara, California.

                              /s/ Sreekanth Ravi
                              ------------------
                              Sreekanth Ravi
                              President

                              /s/ Jerrold F. Petruzzelli
                              --------------------------
                              Jerrold F. Petruzzelli
                              Secretary

                                       15