
<PAGE>   1
                                                                     EXHIBIT 3.1

                          CERTIFICATE OF INCORPORATION

                                       OF

                                CERUS CORPORATION

                  The undersigned, a natural person (the "Sole Incorporator"),
for the purpose of organizing a corporation to conduct the business and promote
the purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware hereby certifies that:

                                       I.

                  The name of this Corporation is Cerus Corporation.

                                       II.

                  The address of the registered office of the Corporation in the
State of Delaware is 9 East Loockerman Street, City of Dover, County of Kent,
and the name of the registered agent of the Corporation in the State of Delaware
at such address is the National Registered Agents, Inc.

                                      III.

                  The purpose of this Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware.

                                       IV.

                  A. This Corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares which the Corporation is authorized to issue is
fifty-five million (55,000,000) shares. Fifty million (50,000,000) shares shall
be Common Stock, each having a par value of one-tenth of one cent ($.001). Five
million (5,000,000) shares shall be Preferred Stock, each having a par value of
one-tenth of one cent ($.001).

                  The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is hereby authorized, by filing a
certificate (a "Preferred Stock Designation") pursuant to the Delaware General
Corporation Law, to fix or alter from time to time the designation, powers,
preferences and rights of the shares of each such series and the qualifications,
limitations or restrictions of any wholly unissued series of Preferred Stock,
and to establish from time to time the number of shares constituting any such
series or any of them; and to increase or decrease the number of shares of any
series subsequent to the issuance of shares of that series, but not below the
number of shares of such series then

                                       1.
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outstanding. In case the number of shares of any series shall be decreased in
accordance with the foregoing sentence, the shares constituting such decrease
shall resume the status that they had prior to the adoption of the resolution
originally fixing the number of shares of such series.

                  B. Seven Hundred Sixty-One Thousand Seventy-Nine (761,079) of
the authorized shares of Preferred Stock are hereby designated "Series A
Preferred Stock" (the "Series A Preferred"), Three Hundred Five Thousand Four
Hundred Sixty-One (305,461) shares of the authorized shares of Preferred Stock
are hereby designated "Series B Preferred Stock" (the "Series B Preferred"), One
Million One Hundred Forty-Seven Thousand Four Hundred Forty-Nine (1,147,449)
shares of the authorized shares of Preferred Stock are hereby designated "Series
C Preferred Stock" (the "Series C Preferred"), Six Hundred Five Thousand
(605,000) shares of the authorized shares of Preferred Stock are hereby
designated Series D Preferred Stock (the "Series D Preferred") and Three Hundred
Eighty Thousand Nine Hundred Fifty-Three (380,953) shares of the authorized
shares of Preferred Stock are hereby designated "Series E Preferred Stock" (the
"Series E Preferred").

                  C. The rights, preferences, privileges, restrictions and other
matters relating to the Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series D Preferred and the Series E Preferred (hereinafter the
Series A Preferred, the Series B Preferred, the Series C Preferred, the Series D
Preferred and the Series E Preferred shall be referred to collectively as the
"Preferred Stock") are as follows:

                  1. DIVIDEND RIGHTS.

                        A. Holders of Preferred Stock, in preference to the
holders of any Common Stock, shall be entitled to receive, when and if declared
by the Board of Directors, but only out of funds that are legally available
therefor, cash dividends at the rate of $0.46 per annum on each outstanding
share of Series A Preferred, $0.61 per annum on each outstanding share of Series
B Preferred, $0.96 per annum on each outstanding share of Series C Preferred,
$1.26 per annum on each outstanding share of Series D Preferred and $1.89 per
annum on each outstanding share of Series E Preferred. Such dividends shall be
non-cumulative, and no right shall accrue to the holders of Preferred Stock by
reason of the fact that dividends on such shares are not declared or paid in any
prior year.

                        B. So long as any shares of Preferred Stock shall be
outstanding, no dividend, whether in cash or property, shall be paid or
declared, nor shall any other distribution be made, on any Common Stock, nor
shall any shares of any class of stock of the Company be purchased, redeemed, or
otherwise acquired for value by the Company or any subsidiary of the Company,
unless a corresponding dividend, distribution or redemption has been or is
simultaneously declared or made on the Preferred Stock and all declared but
unpaid dividends on the shares of outstanding Preferred Stock shall have been
paid or a sum sufficient for the payment thereof shall have been reserved
therefor. The provisions of this Section 1(b) shall not, however, apply to (i) a
dividend payable solely in stock, (ii) the acquisition of shares of any Common
Stock in exchange for shares of any Common Stock,

                                       2.
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(iii) the repurchase of shares of Common Stock held by employees, officers,
directors, consultants or other persons performing services for the Company or
any wholly-owned subsidiary that are subject to restrictive stock purchase
agreements under which the Corporation has the option to repurchase such shares
at cost upon the occurrence of certain events, such as the termination of
employment; or (iv) any repurchase of any outstanding securities of the Company
that is approved by not less than four members of the Company's Board of
Directors. The holders of the Preferred Stock expressly waive their rights, if
any, as described in California Corporations Code Sections 503 and 506 as they
relate to repurchase of shares upon termination of employment.

                        C. Subject to the foregoing and to any further
limitations set forth herein, the Board of Directors may declare, out of any
funds legally available therefor, dividends upon the then outstanding shares of
any Common Stock; provided, however, that if any cash dividend or other
distribution is declared by the Board of Directors to be paid on the Common
Stock, then an additional dividend shall be paid at the same time to the holders
of the outstanding Preferred Stock at a rate per share (based upon the number of
shares of Common Stock into which the outstanding Preferred Stock is
convertible) equal to the rate at which cash dividends or other distributions
are paid or granted with respect to the Common Stock.

                  2. VOTING RIGHTS.

                        A. Except as otherwise provided herein or as required by
law, the shares of the Preferred Stock shall be voted equally with the shares of
the Common Stock of the Company and not as a separate class, at any annual or
special meeting of shareholders of the Company, and may act by written consent
in the same manner as the Common Stock, in either case upon the following basis:
each holder of shares of the Preferred Stock shall be entitled to such number of
votes as shall be equal to the whole number of shares of Common Stock into which
such holder's aggregate number of shares of Preferred Stock are convertible
(pursuant to Section 5 hereof) immediately after the close of business on the
record date fixed for such meeting or the effective date of such written
consent.

                        B. In addition to any other vote or consent required
herein or by law, the consent of the holders of at least two-thirds (2/3) of the
outstanding Preferred Stock voting together as a separate class, voting in
person or by proxy, either in writing without a meeting, or by a vote at any
meeting called for the purpose, shall be necessary for effecting or validating
the following actions:

                             (1) Any amendment, alteration, or repeal of any
provision of the Amended and Restated Articles of Incorporation or the Bylaws of
the Company (including any filing of a Certificate of Determination), that
affects adversely the voting powers, preferences, or other special rights or
qualifications, limitations, or restrictions of the Preferred Stock;

                                       3.
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                             (2) Any creation of or any increase, whether by
reclassification or otherwise, in the authorized amount of any class or series
of equity securities of the Company ranking on a parity with or prior to, or
convertible or exercisable into a class or series ranking on a parity with or
prior to, the Preferred Stock in right of liquidation preference, voting or
dividends;

                             (3) Any agreement to encumber (except in connection
with a financing in the ordinary course of business for other than equity
financing purposes), sell, lease or otherwise dispose of all or substantially
all of the assets, property or business of the Company, or to merge or
consolidate the Company with any person, or permit any other person to merge
into it, or any other reorganization, transaction or series of transactions
pursuant to which the holders of the Company's outstanding voting securities
immediately preceding such merger, consolidation or other transaction or series
of transactions fail to hold equity securities representing a majority of the
voting power of the surviving entity immediately following such consolidation,
merger or other transaction or series of transactions;

                             (4) Any voluntary liquidation or dissolution of the
Company (as defined in Section 3(c) hereof); and

                             (5) Any redemption of, or payment of dividends with
respect to, Common Stock, other than a repurchase of Common Stock pursuant to
the exercise of any contractual or other legal rights of first refusal upon
termination of employment or a consulting arrangement or repurchase in
settlement of shareholder disputes; provided that this subparagraph (v) shall
not apply to any redemption of Preferred Stock pursuant to Section 4 hereof, or
any repurchase of any outstanding securities of the Company that is approved by
not less than four members of the Company's Board of Directors.

                  3. LIQUIDATION RIGHTS.

                        A. Upon any liquidation, dissolution, or winding up of
the Company, whether voluntary or involuntary, before any distribution or
payment of the assets of the Company shall be made to the holders of any Common
Stock, the holders of Preferred Stock shall be entitled to be paid out of the
assets of the Company an amount equal to the sum of (i) $3.85 plus all declared
but unpaid dividends on such shares to the date of such payment for each share
of Series A Preferred outstanding, (ii) $5.075 plus all declared but unpaid
dividends on such shares to the date of such payment for each share of Series B
Preferred outstanding, (iii) $8.00 plus all declared but unpaid dividends on
such shares to the date of such payment for each share of Series C Preferred
outstanding, (iv) $10.50 plus all declared but unpaid dividends on such shares
to the date of such payment for each share of Series D Preferred outstanding,
and (v) $15.75 plus all declared but unpaid dividends on such shares to the date
of such payment for each share of Series E Preferred outstanding, respectively.
If, upon any liquidation, distribution, or winding up, the assets of the Company
shall be insufficient to make payment in full under this Section 3(a) to all
holders of Preferred Stock, then such assets shall be distributed among the
holders of Preferred Stock

                                       4.
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at the time outstanding, ratably in proportion to the full stated amounts to
which they would otherwise be respectively entitled under this Section 3(a).

                        B. After the payment of the full liquidation preference
of the Preferred Stock as set forth in Section 3(a) above, the holders of the
Common Stock and the holders of the Series A Preferred, Series B Preferred,
Series C Preferred and Series D Preferred shall receive the remaining assets on
a pro rata basis (as if the shares of Series A Preferred, Series B Preferred,
Series C Preferred and Series D Preferred had been converted to shares of Common
Stock as of the liquidation, dissolution or winding up of the Company);
provided, however, that the aggregate distributions made to the holders of
Series A Preferred, Series B Preferred, Series C Preferred and Series D
Preferred pursuant to Section 3(a) and this Section 3(b) shall not exceed $15.40
per share of Series A Preferred, $20.30 per share for each share of Series B
Preferred, $32.00 per share for each share of Series C Preferred, and $31.50 per
share for each share of Series D Preferred, respectively. Holders of series of
Preferred Stock created after the creation of the Series D Preferred will be
entitled to the full liquidation preference set forth in Section 3(a) above or
to convert their shares as provided in Section 5 below. Upon conversion of
shares as provided in Section 5, the holders of the Common Stock arising from
such converted shares will be entitled to receive such remaining assets on a pro
rata basis without being subject to the limitations set forth above in this
Section 3(b).

                        C. The following events shall be considered a
liquidation, dissolution or winding up under this Section 3:

                             (1) any consolidation or merger of the Company with
or into any other corporation or other entity or person, or any other corporate
reorganization or other transaction or series of transactions pursuant to which
the holders of the outstanding voting securities of the Company immediately
prior to such consolidation, merger, reorganization or other transaction or
series of transactions fail to hold equity securities representing a majority of
the voting power of the surviving entity immediately following such
consolidation, merger or reorganization or any transaction or series of related
transactions; or

                             (2) a sale, lease or other disposition of all or
substantially all of the assets of the Company.

                        D. Any securities to be delivered to the holders of the
Preferred Stock or Common Stock pursuant to a transaction treated as a
liquidation shall be valued as follows:

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

                                (I) If traded on a national securities exchange
or the National Market System of the National Association of Securities Dealers,
Inc. (the "NMS"),

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the value shall be deemed to be the average of the security's closing prices on
such exchange or the NMS over the thirty (30) day period ending three (3) days
prior to the closing;

                                (II) If traded over-the-counter (but not on the
NMS), the value shall be deemed to be the average of the mean of the closing bid
and ask prices over the thirty (30) day period ending three (3) days prior to
the closing; or

                                (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 Preferred Stock, voting together as a single class.

                             (2) 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
Sections 3(e)(i)(1), (2) or (3) 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 Preferred Stock, voting together as
a single class.

                  4. REDEMPTION.

                  The Company shall not have any right to require redemption of
the Preferred Stock, nor shall any holder of Preferred Stock be entitled to
require redemption of Preferred Stock.

                  5. CONVERSION RIGHTS.

                  The holders of the Preferred Stock shall have the following
rights with respect to the conversion of the Preferred Stock into shares of
Common Stock:

                        A. OPTIONAL CONVERSION. Subject to and in compliance
with the provisions of this Section 5, any shares of the Preferred Stock may, at
the option of the holder, be converted at any time into fully-paid and
nonassessable shares of Common Stock. The number of shares of Common Stock to
which a holder of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred, or Series E Preferred shall be entitled upon conversion
shall be the product obtained by multiplying, as the case may be, the "Series A
Conversion Rate," the "Series B Conversion Rate," the "Series C Conversion
Rate," the "Series D Conversion Rate," or the "Series E Conversion Rate" then in
effect (determined as provided in Section 5(b)) by the number of shares of
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred,
or Series E Preferred being converted.

                        B. SERIES A, SERIES B, SERIES C, SERIES D AND SERIES E
CONVERSION RATES. The conversion rate in effect at any time for conversion of
the Series A Preferred (the "Series A Conversion Rate") shall be the quotient
obtained by dividing $3.85

                                       6.
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by the "Series A Conversion Price," calculated as provided in Section 5(c), the
conversion rate in effect at any time for conversion of the Series B Preferred
(the "Series B Conversion Rate") shall be the quotient obtained by dividing
$5.075 by the "Series B Conversion Price," calculated as provided in Section
5(c), the conversion rate in effect at any time for conversion of the Series C
Preferred (the "Series C Conversion Rate") shall be the quotient obtained by
dividing $8.00 by the "Series C Conversion Price," calculated as provided in
Section 5(c), the conversion rate in effect at any time for conversion of the
Series D Preferred (the "Series D Conversion Rate") shall be the quotient
obtained by dividing $10.50 by the "Series D Conversion Price," calculated as
provided in Section 5(c), and the conversion rate in effect at any time for
conversion of the Series E Preferred (the "Series E Conversion Rate") shall be
the quotient obtained by dividing $15.75 by the "Series E Conversion Price,"
calculated as provided in Section 5(c).

                        C. CONVERSION PRICE. The conversion price for the Series
0A Preferred shall initially be $3.85 (the "Series A Conversion Price"), the
conversion price of the Series B Preferred shall initially be $5.075 (the
"Series B Conversion Price"), the conversion price of the Series C Preferred
shall initially be $8.00 (the "Series C Conversion Price"), the conversion price
of the Series D Preferred shall initially be $10.50 (the "Series D Conversion
Price") and the conversion price of the Series E Preferred shall initially be
$15.75 (the "Series E Conversion Price"). Such initial Conversion Price for each
series of Preferred Stock shall be adjusted from time to time in accordance with
this Section 5. All references to the Conversion Price herein shall mean the
Conversion Price as so adjusted. As used hereinafter, the term "Conversion
Price" shall refer to the Conversion Price for the Series A Preferred, the
Series B Preferred, the Series C Preferred, the Series D Preferred, or the
Series E Preferred, as applicable.

                        D. MECHANICS OF CONVERSION. Each holder of Preferred
Stock who desires to convert the same into shares of Common Stock pursuant to
this Section 5 shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Company or any transfer agent for the Preferred
Stock, and shall give written notice to the Company at such office that such
holder elects to convert the same. Such notice shall state the number of shares
and the series of Preferred Stock being converted and the name or names in which
the certificate or certificates for shares of Common Stock are to be issued.
Thereupon, the Company shall promptly issue and deliver at such office to such
holder a certificate or certificates for the number of shares of Common Stock to
which such holder is entitled and shall promptly pay in cash or, to the extent
sufficient funds are not then legally available therefor, in Common Stock (at
the Common Stock's fair market value determined by the Board of Directors as of
the date of such conversion), any declared and unpaid dividends on the shares of
Preferred Stock being converted. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender of
the certificates representing the shares of Preferred Stock to be converted, and
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder of
such shares of Common Stock on such date. If the conversion is in connection
with the underwritten offering of securities registered pursuant to the
Securities Act of 1933, the conversion may, at the option of any

                                       7.
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holder tendering Preferred Stock for conversion, be conditioned upon the closing
with the underwriter of the sale of securities pursuant to such offering, in
which event the persons to receive the Common Stock issuable upon such
conversion of the Preferred Stock shall not be deemed to have converted such
Preferred Stock until immediately prior to the closing of such sale of
securities.

                        E. ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Company shall at any time or from time to time after the date that the first
share of Preferred Stock is issued (the "Original Issue Date") fix a record date
for the effectuation of a split or subdivision of the outstanding Common Stock,
the Conversion Price for the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred in effect immediately
before that subdivision shall be proportionately decreased. Conversely, if the
Company shall at any time or from time to time after the Original Issue Date
combine the outstanding shares of Common Stock into a smaller number of shares,
the Conversion Price for the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred in effect immediately
before the combination shall be proportionately increased. Any adjustment under
this Section 5(e) shall become effective at the close of business on the date
the split, subdivision or combination becomes effective.

                        F. ADJUSTMENT FOR COMMON STOCK DIVIDENDS AND
DISTRIBUTIONS. If the Company at any time or from time to time after the
Original Issue Date makes, or fixes a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, in each such event the Conversion
Price for the Series A Preferred, Series B Preferred, Series C Preferred, Series
D Preferred and Series E Preferred that is then in effect shall be decreased as
of the time of such issuance or, in the event such record date is fixed, as of
the close of business on such record date, by multiplying the Conversion Price
then in effect with respect to each such series of Preferred Stock by a fraction
(i) the numerator of which is the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (ii) the denominator of which is the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Conversion Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Conversion Price shall
be adjusted pursuant to this Section 5(f) to reflect the actual payment of such
dividend or distribution or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock.

                        G. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If
the Company at any time or from time to time after the Original Issue Date makes
or fixes a record date for the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in securities of the Company
other than shares of Common Stock, in each such event for purposes of this
subsection 5(g), provision shall be made so

                                       8.
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that the holders of the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred shall receive upon
conversion thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of other securities of the Company which they
would have received had their Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred been converted into Common
Stock as of the record date fixed for the determination of the holders of Common
Stock of the Company entitled to receive such distribution and had they
thereafter, during the period from the date of such event to and including the
conversion date, retained such securities receivable by them as aforesaid during
such period, subject to all other adjustments called for during such period
under this Section 5 with respect to the rights of the holders of the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred, or Series
E Preferred or with respect to such other securities by their terms.

                        H. ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND
SUBSTITUTION. If at any time or from time to time after the Original Issue Date,
the Common Stock issuable upon the conversion of the Series A Preferred, Series
B Preferred, Series C Preferred, Series D Preferred, or Series E Preferred is
changed into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets provided for elsewhere in this Section 5
or in Section 3), in any such event each holder of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred shall
have the right thereafter to convert such stock into the kind and amount of
stock and other securities and property receivable upon such recapitalization,
reclassification or other change by holders of the maximum number of shares of
Common Stock into which such shares of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred could have been
converted immediately prior to or as of such recapitalization, reclassification
or change, all subject to further adjustment as provided herein or with respect
to such other securities or property by the terms thereof. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5 with respect to the rights of the holders of Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred, or Series E
Preferred after such recapitalization, reclassification or change to the end
that the provisions of this Section 5 (including adjustment of the Conversion
Price then in effect and the number of shares issuable upon conversion of the
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred
and Series E Preferred) shall be applicable after that event and be as nearly
equivalent as practicable.

                        I. REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF
ASSETS. If at any time or from time to time after the Original Issue Date, there
is a capital reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification, exchange or substitution of shares
provided for elsewhere in this Section 5 or in Section 3), as a part of such
capital reorganization, provision shall be made so that the holders of the
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred
and Series E Preferred shall thereafter be entitled to receive upon conversion
of the Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred

                                       9.
<PAGE>   10
the number of shares of stock or other securities or property of the Company or
otherwise to which a holder of the number of shares of Common Stock deliverable
upon conversion would have been entitled on such capital reorganization, subject
to adjustment in respect of such stock or securities by the terms thereof. In
any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 5 with respect to the rights of the holders of Series
A Preferred, Series B Preferred, Series C Preferred, Series D Preferred and
Series E Preferred after the capital reorganization to the end that the
provisions of this Section 5 (including adjustment of the Conversion Price then
in effect and the number of shares issuable upon conversion of the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and Series
E Preferred) shall be applicable after that event and be as nearly equivalent as
practicable.

                        J. SALE OF SHARES BELOW CONVERSION PRICE.

                             (I) If at any time or from time to time after the
Original Issue Date, the Company issues or sells, or is deemed by the express
provisions of this subsection (j) to have issued or sold, Additional Shares of
Common Stock (as hereinafter defined), other than as a dividend or other
distribution on any class of stock as provided in Section 5(f) above, and other
than a subdivision or combination of shares of Common Stock as provided in
Section 5(e) above, for an Effective Price (as hereinafter defined) less than
the then effective Conversion Price for the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred, or Series E Preferred, then
and in each such case the then existing Conversion Price for each such series of
Preferred Stock for which the Effective Price is less than the Conversion Price
shall be reduced, as of the opening of business on the date of such issue or
sale, to a price determined by multiplying the Conversion Price for such series
by a fraction (1) the numerator of which shall be (A) the number of shares of
Common Stock deemed outstanding (as defined in the following sentence) at the
close of business on the day preceding the date of such issue or sale, plus (B)
the number of shares of Common Stock which the aggregate consideration received
(as defined in subsection (j)(ii)) by the Company for the total number of
Additional Shares of Common Stock so issued would purchase at such Conversion
Price, and (2) the denominator of which shall be the number of shares of Common
Stock deemed outstanding (as defined below) at the close of business on the date
of such issue. For the purposes of the preceding sentence, all outstanding
shares of Common Stock and all shares of Common Stock issuable upon conversion
of Series A Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred or upon exercise of warrants (excluding any
warrants as to which the exercise price then exceeds the Effective Price for
such Additional Shares of Common Stock) and conversion of the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and Series
E Preferred subject to such warrants that are outstanding as of the close of
business on the day preceding the date of issue or sale of Additional Shares of
Common Stock shall be deemed outstanding.

                             (II) For the purpose of making any adjustment
required under this Section 5(j), the consideration received by the Company for
any issue or sale of securities shall (1) to the extent it consists of cash, be
computed at the net amount of cash

                                       10.
<PAGE>   11
received by the Company after deduction of any underwriting or similar
commissions, compensation or concessions paid or allowed by the Company in
connection with such issue or sale but without deduction of any expenses payable
by the Company, (2) to the extent it consists of property other than cash, be
computed at the fair value of that property as determined in good faith by the
Board of Directors, and (3) if Additional Shares of Common Stock, Convertible
Securities (as hereinafter defined) or rights or options to purchase either
Additional Shares of Common Stock or Convertible Securities are issued or sold
together with other stock or securities or other assets of the Company for a
consideration which covers both, be computed as the portion of the consideration
so received that may be reasonably determined in good faith by the Board of
Directors to be allocable to such Additional Shares of Common Stock, Convertible
Securities or rights or options.

                             (III) For the purpose of the adjustment required
under this Section 5(j), if the Company issues or sells any rights or options
for the purchase of, or stock or other securities then convertible into,
Additional Shares of Common Stock (such convertible stock or securities being
herein referred to as "Convertible Securities") and if the Effective Price of
such Additional Shares of Common Stock is less than the Conversion Price then in
effect with respect to any series of Preferred Stock, in each case the Company
shall be deemed to have issued at the time of the issuance of such rights or
options or Convertible Securities the number of Additional Shares of Common
Stock issuable upon exercise or conversion thereof and to have received as
consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Company for the issuance of
such rights or options or Convertible Securities, plus, in the case of such
rights or options, the amounts of consideration, if any, payable to the Company
upon the exercise of such rights or options, plus, in the case of Convertible
Securities, the amounts of consideration, if any, payable to the Company (other
than by cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion thereof; provided further that if the amount of
consideration payable to the Company upon the exercise or conversion of rights,
options or Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of antidilution
adjustments, the Effective Price shall be recalculated using the figure to which
such amount of consideration is reduced; provided further that if the amount of
consideration payable to the Company upon the exercise or conversion of such
rights, options or Convertible Securities is subsequently increased, the
Effective Price shall be again recalculated using the increased amount of
consideration payable to the Company upon the exercise or conversion of such
rights, options or Convertible Securities. No further adjustment of the
Conversion Price, as adjusted upon the issuance of such rights, options or
Convertible Securities, shall be made as a result of the actual issuance of
Additional Shares of Common Stock on the exercise of any such rights or options
or the conversion of any such Convertible Securities. If any such rights or
options or the conversion privilege represented by any such Convertible
Securities shall expire without having been exercised, the Conversion Price as
adjusted upon the issuance of such rights, options or Convertible Securities
shall be readjusted to the Conversion Price which would have been in effect had
an adjustment been made on the basis that the only Additional Shares of Common
Stock so issued were the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such rights or options or

                                       11.
<PAGE>   12
rights of conversion of such Convertible Securities, and such Additional Shares
of Common Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of all such rights or options,
whether or not exercised, plus the consideration received for issuing or selling
the Convertible Securities actually converted, plus the consideration, if any,
actually received by the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) on the conversion of such
Convertible Securities, provided that such readjustment shall not apply to prior
conversions of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred.

                             (IV) "Additional Shares of Common Stock" shall mean
all shares of Common Stock issued by the Company, whether or not subsequently
reacquired or retired by the Company, other than (1) shares of Common Stock
issued upon conversion of the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred; (2) shares of Common Stock
(and/or options, warrants or other Common Stock purchase rights, and the Common
Stock issued pursuant to such options, warrants and other rights) issued or to
be issued to employees, officers or directors of, or consultants or advisors to
the Company or any subsidiary pursuant to stock purchase or stock option plans
or other arrangements not to exceed an aggregate of 600,000 shares of Common
Stock as such number may be increased from time to time by the Company's Board
of Directors with the approval of at least four members of the Company's Board
of Directors; (3) shares of Common Stock issued pursuant to the exercise of
options, warrants or convertible securities outstanding as of the Original Issue
Date; (4) shares of Common Stock (and/or options, warrants, preferred stock or
other common stock issued pursuant to such options, warrants, preferred stock or
other rights) issued in connection with leasing arrangements not to exceed an
aggregate of 200,000 shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights, and the Common Stock issued pursuant to such
options, warrants or other rights) as such number may be increased from time to
time by the Company's Board of Directors with the approval of at least four
members of the Company's Board of Directors; and (5) shares of Common Stock
issued as a function of antidilution or similar protective clauses. The
"Effective Price" of Additional Shares of Common Stock shall mean the quotient
determined by dividing the total number of Additional Shares of Common Stock
issued or sold, or deemed to have been issued or sold by the Company under this
Section 5(j), into the aggregate consideration received, or deemed to have been
received by the Company for such issue under this Section 5(j), for such
Additional Shares of Common Stock.

                        K. ACCOUNTANTS' CERTIFICATE OF ADJUSTMENT. In each case
of an adjustment or readjustment of the Conversion Price for the number of
shares of Common Stock or other securities issuable upon conversion of the
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred,
or Series E Preferred, if the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, or Series E Preferred is then convertible
pursuant to this Section 5, the Company, at its expense, shall compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a

                                       12.
<PAGE>   13
certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each registered holder of
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred,
or Series E Preferred at the holder's address as shown in the Company's books.
The certificate shall set forth such adjustment or readjustment, showing in
detail the facts upon which such adjustment or readjustment is based, including
a statement of (i) the consideration received or deemed to be received by the
Company for any Additional Shares of Common Stock issued or sold or deemed to
have been issued or sold, (ii) the Conversion Price with respect to such series
of Preferred Stock at the time in effect, (iii) the number of Additional Shares
of Common Stock and (iv) the type and amount, if any, of other property which at
the time would be received upon conversion of the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred, or Series E Preferred.

                        L. AUTOMATIC CONVERSION.

                             (I) Each share of Preferred Stock shall
automatically be converted into shares of Common Stock, based on the
then-effective Conversion Price with respect to such share; at any time (1) more
than two-third of the shares of Preferred Stock authorized and issued and
outstanding have converted into Common Stock pursuant to this Section 5, or (2)
immediately upon the closing of a firmly underwritten public offering pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, covering the offer and sale of Common Stock for the account of the
Company in which the per share price is at least $13.13, appropriately adjusted
for any stock splits, stock combinations, stock dividends, recapitalizations and
the like, and the gross cash proceeds to the Company, less underwriting
discounts, commissions and fees, are at least $10,000,000.

                             (II) Upon the occurrence of the event specified in
paragraph (i) above, the outstanding shares of Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred 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 Company or its transfer agent; provided, however, that the
Company shall not be obligated to issue certificates evidencing the shares of
Common Stock issuable upon such conversion unless the certificates evidencing
such shares of Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred are either delivered to the Company or
its transfer agent as provided below, or the holder notifies the Company or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the Company to indemnify the Company from
any loss incurred by it in connection with such certificates. Upon the
occurrence of such automatic conversion of the Preferred Stock, the holders of
Preferred Stock shall surrender the certificates representing such shares at the
office of the Company or any transfer agent for the Preferred Stock. Thereupon,
there shall be issued and delivered 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 Preferred Stock surrendered were convertible on the date on which
such automatic conversion occurred, and the Company shall promptly pay in

                                       13.
<PAGE>   14
cash or, at the option of the Company, Common Stock (at the Common Stock's fair
market value determined by the Board as of the date of such conversion), or, at
the option of the Company, both, all declared and unpaid dividends on the shares
of Preferred Stock being converted, to and including the date of such
conversion.

                        M. FRACTIONAL SHARES. No fractional shares of Common
Stock shall be issued upon conversion of Preferred Stock and the number of
shares of Common Stock to be issued shall be rounded to the nearest whole share.
Whether or not fractional shares are issuable upon such conversion shall be
determined on the basis of the total number of shares of Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred, or Series E
Preferred the holder is at the time converting into Common Stock and the number
of shares of Common Stock issuable upon such aggregate conversion.

                        N. RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Preferred Stock. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Preferred Stock, the
Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.

                        O. OTHER ADJUSTMENTS. No adjustment of the Conversion
Price for the Series A Preferred, Series B Preferred, Series C Preferred, Series
D Preferred, or Series E Preferred shall be made in an amount less than one cent
per share, provided that any adjustments which are not required to be made by
reason of this sentence shall be carried forward and shall be either taken into
account in any subsequent adjustment made prior to 3 years from the date of the
event giving rise to the adjustment being carried forward, or shall be made at
the end of 3 years from the date of the event giving rise to the adjustment
being carried forward. Except to the limited extent provided for in subsections
5(j)(iii), no adjustment of such Conversion Price pursuant to subsection 5(j)
shall have the effect of increasing the Conversion Price above the Conversion
Price in effect immediately prior to such adjustment.

                        P. NOTICES. Any notice required by the provisions of
this Section 5 to be given to the holders of shares of the Preferred Stock shall
be deemed given upon the earlier of actual receipt or seventy-two (72) hours
after the same has been deposited in the United States mail, by certified or
registered mail, return receipt requested, or first class mail postage prepaid,
and addressed to each holder of record at the address of such holder appearing
on the books of the Company.

                        Q. PAYMENT OF TAXES. The Company will pay all taxes
(other than taxes based upon income) and other governmental charges that may be
imposed with respect

                                       14.
<PAGE>   15
to the issue or delivery of shares of Common Stock upon conversion of shares of
Preferred Stock, excluding any tax or other charge imposed in connection with
any transfer involved in the issue and delivery of shares of Common Stock in a
name other than that in which the shares of Preferred Stock so converted were
registered.

                        R. NO DILUTION OR IMPAIRMENT. The Company shall not
amend its Articles of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, for the purpose of avoiding or seeking
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but shall at all times in good faith assist
in carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Preferred Stock
against dilution or other impairment.

              6. NOTICES OF RECORD.

                   A. Upon any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or upon any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company, any merger or consolidation of the Company
with or into any other corporation, or any transfer of all or substantially all
the assets of the Company to any other person, or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, or any shareholders'
meeting to approve the terms thereof, the Company shall mail to each holder of
Preferred Stock at least twenty (20) days prior to the record date specified
therein a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend or distribution and a description of such
dividend or distribution, (ii) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and the date of the shareholders
meeting to approve the terms thereof, if applicable, (iii) the date, if any,
that is to be fixed as to when the holders of record of Common Stock (or other
securities) shall be entitled to exchange their shares of Common Stock (or other
securities) for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up, and (iv) the material terms thereof.

              7. NO REISSUANCE OF PREFERRED STOCK. No share or shares of Series
A Preferred, Series B Preferred, Series C Preferred, Series D Preferred, or
Series E Preferred acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued. The Articles of
Incorporation shall be appropriately amended to reflect the consequent valuation
in the Company's authorized capital stock.

                                       15.
<PAGE>   16
                                       V.

                   A. The following is applicable to the Common Stock:

                        1. DIVIDEND RIGHTS. Subject to the prior rights of
holders of all classes of stock at the time outstanding having prior rights as
to dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of the Company
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.

                        2. LIQUIDATION RIGHTS. Upon the liquidation, dissolution
or winding up of the Company, the assets of the Company shall be distributed as
provided in Section 3, Division C of Article III hereof.

                        3. REDEMPTION. The Common Stock is not redeemable.

                        4. VOTING RIGHTS. The holder of each share of Common
Stock shall have the right to one vote, and shall be entitled to notice of any
shareholders' meeting in accordance with the Bylaws of the Company, and shall be
entitled to vote upon such matters and in such manner as may be provided by law.

                                       VI.

                  For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation and regulation
of the powers of the Corporation, of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided that:

                   A.

                        1. The management of the business and the conduct of the
affairs of the Corporation shall be vested in its Board of Directors. The number
of directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions adopted by the Board of Directors.

                        2. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified circumstances,
following the closing of the initial public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "1933
Act"), covering the offer and sale of Common Stock to the public (the "Initial
Public Offering"), the directors shall be divided into three classes designated
as Class I, Class II and Class III, respectively. Directors shall be assigned to
each class in accordance with a resolution or resolutions adopted by the Board
of Directors. At the first annual meeting of stockholders following the closing
of the Initial Public Offering, the term of office of the Class I directors
shall expire and Class I directors shall be elected for a full term of three
years. At the second annual meeting of stockholders

                                       16.
<PAGE>   17
following the Closing of the Initial Public Offering, the term of office of the
Class II directors shall expire and Class II directors shall be elected for a
full term of three years. At the third annual meeting of stockholders following
the closing of the Initial Public Offering, the term of office of the Class III
directors shall expire and Class III directors shall be entered for a full-term
of three years. At each succeeding annual meeting of stockholders, directors
shall be elected for a full term of three years to succeed the directors of the
class whose terms expire at such annual meeting.

                        Notwithstanding the foregoing provisions of this
Article, each director shall serve until his successor is duly elected and
qualified or until his death, resignation or removal. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.

                        3. Subject to the rights of the holders of any series of
Preferred Stock, the Board of Directors or any individual director may be
removed from office at any time (i) with cause by the affirmative vote of the
holders of a majority of the voting power of all the then-outstanding shares of
voting stock of the Corporation, entitled to vote at an election of directors
(the "Voting Stock") or (ii) without cause by the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting
power of all the then-outstanding shares of the Voting Stock.

                        4. Subject to the rights of the holders of any series of
Preferred Stock, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors, shall,
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by the stockholders, except as
otherwise provided by law, be filled only by the affirmative vote of a majority
of the directors then in office, even though less than a quorum of the Board of
Directors, and not by the stockholders. Any director elected in accordance with
the preceding sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and until such
director's successor shall have been elected and qualified.

                   B.

                        1. Subject to paragraph (h) of Section 43 of the Bylaws,
the Bylaws may be altered or amended or new Bylaws adopted by the affirmative
vote of at least sixty-six and two-thirds percent (66-2/3%) of the voting power
of all of the then-outstanding shares of the Voting Stock. The Board of
Directors shall also have the power to adopt, amend, or repeal Bylaws.

                        2. The directors of the Corporation need not be elected
by written ballot unless the Bylaws so provide.

                        3. No action shall be taken by the stockholders of the
Corporation except at an annual or special meeting of stockholders called in
accordance with the Bylaws and

                                       17.
<PAGE>   18
following the closing of the Initial Public Offering no action shall be taken by
the stockholders by written consent.

                        4. Advance notice of stockholder nominations for the
election of directors and of business to be brought by stockholders before any
meeting of the stockholders of the Corporation shall be given in the manner
provided in the Bylaws of the Corporation.

                                      VII.

                   A. A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty as a director, except for liability (i) for any breach
of the 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 the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is amended
after approval by the stockholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.

                   B. Any repeal or modification of this Article VII shall be
prospective and shall not affect the rights under this Article VII in effect at
the time of the alleged occurrence of any act or omission to act giving rise to
liability or indemnification.

                                      VIII.

                   A. The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, except as provided in paragraph B
of this Article VIII, and all rights conferred upon the stockholders herein are
granted subject to this reservation.

                   B. Notwithstanding any other provisions of this Certificate
of Incorporation or any provision of law which might otherwise permit a lesser
vote or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the Voting Stock, voting together
as a single class, shall be required to alter, amend or repeal Articles VI, VII
and VIII.

                                       18.
<PAGE>   19
                  The name and the mailing address of the Sole Incorporator is
as follows:


       NAME                              MAILING ADDRESS

       Mitchell R. Truelock              Cooley Godward Castro Huddleson &
                                         Tatum
                                         One Maritime Plaza
                                         20th Floor
                                         San Francisco, CA  94111

                  IN WITNESS WHEREOF, this Certificate has been subscribed this
30th day of July, 1996 by the undersigned who affirms that the statements made
herein are true and correct.


                                            /s/ Mitchell R. Truelock
                                            -----------------------------------
                                            Mitchell R. Truelock
                                            SOLE INCORPORATOR

                                       19.
