
<PAGE>   1
                                                                     Exhibit 3.1

                              AMENDED AND RESTATED

                            ARTICLES OF INCORPORATION

                             OF ACCELGRAPHICS, INC.


         The undersigned, Jeffrey W. Dunn and Michael W. Hall, hereby certify
that:

         ONE: They are the duly elected and acting President and Secretary,
respectively, of AccelGraphics, Inc. (the "CORPORATION").

         TWO: The Articles of Incorporation of the Corporation shall be amended
and restated to read in full as follows:


                                   "ARTICLE I

         The name of the Corporation is AccelGraphics, 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

         (A) Classes of Stock. The 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 Forty Five Million (45,000,000) shares. Twenty Five Million (25,000,000)
shares shall be Common Stock and Twenty Million (20,000,000) shares shall be
Preferred Stock.

         (B) Rights, Preferences, Privileges and Restrictions of Preferred
Stock. The Preferred Stock authorized by these Articles of Incorporation may be
issued from time to time in series. The rights, preferences, privileges and
restrictions granted to and imposed on the Series A Preferred Stock, which
series shall consist of Six Million Nine Hundred Fifty Four Thousand (6,954,000)
shares, the Series A-1 Preferred Stock, which series shall consist of Six
Million Nine Hundred Fifty Four Thousand (6,954,000) shares, the Series B
Preferred Stock, which series shall consist of Two Million Two Hundred Thousand
(2,200,000) shares, and the Series B-1 Preferred Stock, which series shall
consist of Two Million Two Hundred Thousand (2,200,000) shares, are as set forth
below in this Part (B) of Article III.
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Except as to the Series A, Series A-1, Series B, and Series B-1 Preferred Stock
and except as otherwise provided in these Articles of Incorporation, the Board
of Directors is hereby authorized to fix or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly unissued
additional series of Preferred Stock, and the number of shares constituting any
such series and the designation thereof, or any of them. The Board of Directors,
except as otherwise provided in these Articles of Incorporation, is also
authorized to 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 outstanding. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally fixing the number of
shares of such series.

                  1. Dividend Provisions. The holders of shares of Series A,
Series A-1, Series B, and Series B-1 Preferred Stock shall be entitled to
receive dividends, out of any assets legally available therefor, prior and in
preference to any declaration or payment of any dividend (payable other than in
Common Stock or other securities and rights convertible into or entitling the
holder thereof to receive, directly or indirectly, additional shares of Common
Stock of the Corporation) on the Common Stock of the Corporation, at the rate of
$0.083333333 per share for each share of Series A and Series A-1 Preferred Stock
and $0.15 per share for each share of Series B and Series B-1 Preferred Stock
(adjusted to reflect subsequent stock dividends, stock splits or
recapitalizations) per annum or, if greater (as determined on an as-converted
basis), an amount equal to that paid on any other outstanding shares of the
Corporation whenever funds are legally available therefor, payable quarterly
when, as and if declared by the Board of Directors. Such dividends shall not 
be cumulative.

                  2. Liquidation Preference.

                           (a) In the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, the holders of
the Series A, Series A-1, Series B, and Series B-1 Preferred Stock shall be
entitled to receive, prior and in preference to any distribution of any of the
assets of the Corporation to the holders of Common Stock, by reason of their
ownership thereof, an amount per share equal to $0.83333333 for each outstanding
share of Series A and Series A-1 Preferred Stock, respectively, (as adjusted for
stock splits, stock dividends and recapitalizations ) (the "ORIGINAL SERIES A
AND SERIES A-1 ISSUE PRICE") and $1.50 for each outstanding share of Series B
and Series B-1 Preferred Stock ( as adjusted for stock splits, stock dividends
and recapitalizations) (the "ORIGINAL SERIES B AND SERIES B-1 ISSUE PRICE") plus
an amount equal to declared but unpaid dividends thereon. If, upon the
occurrence of such an event, the assets and property thus distributed among the
holders of the Series A, Series A-1, Series B, and Series B-1 Preferred Stock
shall be insufficient to permit the payment to such holders of the full
preferential amount, then the assets and property of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Series A, Series A-1, Series B, and Series B-1 Preferred Stock in proportion to
the aggregate preferential amounts owed such holders upon a liquidation,
dissolution or winding up of the Corporation.

                           (b) After the distributions described in subsections
(a) above have been paid in full, the remaining assets of the Corporation
available for distribution to shareholders shall be distributed among the
holders of Series A, Series A-1, Series B, and Series B-1 Preferred

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Stock and Common Stock pro rata based on the number of shares of Common Stock
held by each (assuming conversion of all such Preferred Stock).

                           (c) For purposes of this Section 2, (i) any
acquisition of the Corporation by means of merger or other form of corporate
reorganization in which the shareholders of the Corporation do not own a
majority of the outstanding shares of the surviving corporation or (ii) a sale
of all or substantially all of the assets of the Corporation shall be treated as
a liquidation, dissolution or winding up of the Corporation and shall entitle
the holders of Preferred Stock and Common Stock to receive at the closing cash,
securities or other property as specified in Sections 2(a) and 2(b) above;
provided that in connection with the distribution of assets contemplated by this
subsection (c) the holders of Series A and Series A-1 Preferred Stock only shall
be entitled to receive a total of $3.33333332 per share (which amount includes
the Original Series A and Series A-1 Issue Price) and the holders of Series B
and Series B-1 Preferred Stock only shall be entitled to receive a total of
$6.00 per share (which amount includes the Original Series B and Series B-1
Issue Price), and if there are any remaining proceeds such remaining proceeds
shall be distributed, among the holders of Common Stock pro rata based on the
number of shares of Common Stock held by each such shareholder.

                           (d) Any securities to be delivered to the holders of
the Preferred Stock and/or Common Stock pursuant to Section 2(c) above shall be
valued as follows:

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

                                            (A) If traded on a national
securities exchange or the Nasdaq Stock Market, the value shall be deemed to be
the average of the closing prices of the securities on such exchange over the
30-day period ending three (3) days prior to the closing;

                                            (B) If actively traded
over-the-counter, the value shall be deemed to be the average of the closing bid
prices over the 30-day period ending three (3) days prior to the closing; and

                                            (C) If there is no active public
market, the value shall be the fair market value thereof, as determined in good
faith by the Board of Directors of the Corporation.

                                    (ii) 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
(i)(A), (B) or (C) to reflect the approximate fair market value thereof, as
determined in good faith by the Board of Directors of the Corporation.

                           (e) In the event the requirements of subsection 2(c)
are not complied with, the Corporation shall forthwith either:

                                    (i) cause such closing to be postponed until
such time as the requirements of Section 2(c) have been complied with, or

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                                    (ii) cancel such transaction, in which event
the rights, preferences, privileges and restrictions of the holders of Preferred
Stock shall revert to and be the same as such rights, preferences, privileges
and restrictions existing immediately prior to the date of the first notice
referred to in Section 2(f) hereof.

                           (f) The Corporation shall give each holder of record
of Preferred Stock written notice of such a Section 2(c) transaction not later
than ten (10) days prior to the shareholders' meeting called to approve such
transaction, or ten (10) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction, and the Corporation
shall thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than ten (10) days after the
Corporation has given the first notice provided for herein or sooner than ten
(10) days after the Corporation has given notice of any material changes
provided for herein; provided, however, that such periods may be shortened upon
the written consent of the holders of a majority of the Series A, Series A-1,
Series B, and Series B-1 Preferred Stock then outstanding.

                  3. Conversion. The holders of the Series A, Series A-1, Series
B, and Series B-1 Preferred Stock shall have conversion rights as follows (the
"CONVERSION RIGHTS"):

                           (a) Right to Convert. Each share of Series A, Series
A-1, Series B, and Series B-1 Preferred Stock shall be convertible, at the
option of the holder thereof, at any time after the date of issuance of such
share, at the office of the Corporation or any transfer agent for the Series A,
Series A-1, Series B, and Series B-1 Preferred Stock, into such number of fully
paid and nonassessable shares of Common Stock as is determined by dividing
$0.83333333 for each share of Series A and Series A-1 Preferred Stock and $1.50
for each share of Series B and Series B-1 Preferred Stock, by the Conversion
Price at the time in effect for such shares. The initial "CONVERSION PRICE" for
shares of Series A and Series A-1 Preferred Stock shall be $0.83333333 per share
and for each share of Series B and Series B-1 Preferred Stock shall be $1.50 per
share; provided, however, in either case, that such Conversion Prices shall be
subject to adjustment as set forth below.

                           (b) Automatic Conversion.

                                    (i) Each share of Series A, Series A-1,
Series B, and Series B-1 Preferred Stock shall automatically be converted into
shares of Common Stock at the Conversion Price at the time in effect for such
series of Preferred Stock immediately upon the consummation of the Corporation's
sale of its Common Stock in a bona fide, firm commitment underwriting pursuant
to a registration statement on Form S-1 under the Securities Act of 1933, as
amended, which results in aggregate gross cash proceeds to the Corporation in
excess of $7,500,000 and the public offering price of which is not less than
$4.67 per share (adjusted to reflect subsequent stock dividends, stock splits or
recapitalization).

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                                    (ii) Conversion Into Series A-1 and Series
B-1 Preferred.

                                            (A) Each share of Series A Preferred
Stock held by a Non-Participating Investor who does not purchase such holder's
full Pro Rata Share of New Securities in a Series A Dilutive Issuance, in
accordance with the procedures set forth in Section 3(b)(ii)(C) hereof, shall
automatically be converted into a share of Series A-1 Preferred Stock at a
conversion rate of one fully paid and nonassessable share of Series A-1
Preferred Stock for each share of Series A Preferred Stock held by such holder.
Each share of Series B Preferred Stock held by a Non-Participating Investor who
does not purchase such holder's full Pro Rata Share of New Securities in a
Series B Dilutive Issuance, in accordance with the procedures set forth in
Section 3(b)(ii)(C) hereof, shall automatically be converted into a share of
Series B-1 Preferred Stock at a conversion rate of one fully paid and
nonassessable share of Series B-1 Preferred Stock for each share of Series B
Preferred Stock held by such holder.

                                            (B) For purposes of this Section
3(b)(ii), the following definitions shall apply:

                                                      (1) "NEW SECURITIES" shall
mean any Additional Stock of Common Stock, as such term is defined in Section
3(d)(ii) below, sold in any financing transaction after the Initial Purchase
Date (as defined in Section 3(d)(i)(A) below).

                                                      (2) "PRO RATA SHARE" shall
mean the ratio of (X) the sum of the number of shares of Common Stock issuable
upon the conversion of the particular series of Preferred Stock held by a holder
of such series of Preferred Stock to (Y) the sum of the total number of shares
of Common Stock outstanding (assuming conversion of all of the outstanding
shares of Preferred Stock of the Corporation).

                                                      (3) "PARTICIPATING
INVESTOR" shall mean any holder of Series A Preferred Stock that agrees to
purchase at least its Pro Rata Share of a Series A Dilutive Issuance or a holder
of Series B Preferred Stock that agrees to purchase at least its Pro Rata share
of a Series B Dilutive Issuance, in each case pursuant to Section 3(b)(ii)(C)
hereof.

                                                      (4) "NON-PARTICIPATING
INVESTOR" shall mean any holder of Series A Preferred Stock or Series B
Preferred Stock that is not a Participating Investor.

                                                      (5) "SERIES A DILUTIVE
ISSUANCE" shall mean an issuance of New Securities for a consideration per share
less than the Conversion Price of the Series A Preferred Stock in effect on the
date of and immediately prior to such issue.

                                                      (6) "SERIES B DILUTIVE
ISSUANCE" shall mean an issuance of New Securities for a consideration per share
less than the Conversion Price of the Series B Preferred Stock in effect on the
date of and immediately prior to such issue.

                                            (C) In the event that the
Corporation shall propose to undertake a Series A Dilutive Issuance or Series B
Dilutive Issuance, it shall give each holder of the particular series of
Preferred Stock, as appropriate, a written notice (the "PAY-TO-PLAY

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NOTICE") of its intention to sell New Securities at least thirty (30) days prior
to the anticipated date of first sale of such New Securities (the "NEW
SECURITIES CLOSING DATE"). The Pay-to-Play Notice shall describe the type of New
Securities, the price of such New Securities and the general terms upon which
the Corporation proposes to issue such New Securities. Each holder of such
series of Preferred Stock shall have a right to purchase its Pro Rata Share of
such New Securities (a "PURCHASE RIGHT"), which Purchase Right shall expire
fifteen (15) days prior to the New Securities Closing Date. Each holder of such
series of Preferred Stock shall be entitled to exercise its Purchase Right by
providing written notice to the Corporation that such holder agrees to become a
Participating Investor in accordance with the terms specified in the Pay-to-Play
Notice. Any holder of the particular series of Preferred Stock (in the event of
a Series A Dilutive Issuance or Series B Dilutive Issuance, as appropriate) who
fails to provide such written notice to the Corporation prior to the expiration
of such holder's Purchase Right shall be deemed to be a Non-Participating
Investor.

                                            (D) Upon the conversion of Series A
or Series B Preferred Stock into Series A-1 or Series B-1 Preferred Stock held
by a Non-Participating Investor as set forth herein, such shares of Series A or
Series B Preferred Stock shall no longer be outstanding on the books of the
Corporation and the Non-Participating Investor shall be treated for all purposes
as the record holder of shares of Series A-1 Preferred Stock or Series B-1
Preferred Stock, as appropriate, as of the date of closing of the applicable
Series A Dilutive Issuance or Series B Dilutive Issuance.

                           (c) Mechanics of Conversion. Before any holder of
Series A, Series A -1, Series B, and Series B-1 Preferred Stock shall be
entitled to convert the same into shares of Common Stock, such holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for such series of Preferred Stock,
and shall give written notice by mail, postage prepaid, to the Corporation at
its principal corporate office, of the election to convert the same and shall
state therein the name or names in which the certificate or certificates for
shares of Common Stock are to be issued. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office such holder of
Preferred Stock, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of 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 or holders of such shares of
Common Stock as of such date. If the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities Act of
1933, as amended, the conversion will be conditioned upon the closing with the
underwriter of the sale of securities pursuant to such offering, unless
otherwise designated in writing by the holders of such Preferred Stock, in which
event the person(s) entitled 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.

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                           (d) Conversion Price Adjustments of Preferred Stock.

                                    (i)    (A) If the Corporation, at any time 
or from time to time after the date of the first issuance of Series A Preferred
Stock (the "SERIES A INITIAL PURCHASE DATE") or the first issuance of Series B
Preferred Stock (the "SERIES B INITIAL PURCHASE DATE"), shall issue any
Additional Stock (as defined below) without consideration or for a consideration
per share less than the Conversion Price for the Series A Preferred Stock or
Series B Preferred Stock in effect immediately prior to the issuance of such
Additional Stock, the Conversion Price for the Series A and/or the Series B
Preferred Stock in effect immediately prior to each such issuance shall
forthwith be adjusted to a price determined by multiplying such Conversion Price
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issuance plus the number of shares
of Common Stock which the aggregate consideration received by the Corporation
for the total number of shares of Additional Stock so issued would purchase at
such Conversion Price, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issuance plus the
number of such shares of Additional Stock so issued; provided that for the
purposes of this subsection, all shares of Common Stock issuable upon conversion
of outstanding Preferred Stock shall be deemed to be outstanding, and
immediately after any Additional Stock is deemed issued, such Additional Stock
shall be deemed to be outstanding.

                                           (B) No adjustment of the Conversion
Price for the Series A or Series B Preferred Stock 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
three years from the date of the event giving rise to the adjustment being
carried forward, or shall be made at the end of three years from the date of the
event giving rise to the adjustment being carried forward. Except to the limited
extent provided for in subsections 3(d)(i)(E)(3) and 3(d)(i)(E)(4) below, no
adjustment of such Conversion Price pursuant to this subsection 3(d)(i) shall
have the effect of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.

                                           (C) In the case of the issuance of
Common Stock for cash, the consideration shall be deemed to be the amount of
cash paid therefor before deducting any reasonable discounts, commissions or
other expenses allowed, paid or incurred by the Corporation for any underwriting
or otherwise in connection with the issuance and sale thereof.

                                           (D) In the case of the issuance of
the Common Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair value thereof as
determined by the Board of Directors irrespective of any accounting treatment.

                                           (E) In the case of the issuance,
whether before, on or after the Series A Initial Purchase Date or Series B
Initial Purchase Date, of options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for Common
Stock or options to purchase or rights to subscribe for such 

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convertible or exchangeable securities (which are not excluded from the
definition of Additional Stock), the following provisions shall apply:

                                                      (1) The aggregate maximum
number of shares of Common Stock deliverable upon exercise of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in subsections
3(d)(i)(C) and 3(d)(i)(D) above), if any, received by the Corporation upon the
issuance of such options or rights plus the minimum purchase price provided in
such options or rights for the Common Stock covered thereby.

                                                      (2) The aggregate maximum
number of shares of Common Stock deliverable upon conversion of or in exchange
for any such convertible or exchangeable securities or upon the exercise of
options to purchase or rights to subscribe for such convertible or exchangeable
securities and subsequent conver sion or exchange thereof shall be deemed to
have been issued at the time such securities were issued or such options or
rights were issued and for a consideration equal to the consideration, if any,
received by the Corporation for any such securities and related options or
rights (excluding any cash received on account of accrued interest or accrued
dividends), plus the additional consideration, if any, to be received by the
Corporation upon the conversion or exchange of such securities or the exercise
of any related options or rights (the consideration in each case to be
determined in the manner provided in subsections 3(d)(i)(C) and 3(d)(i)(D)
above).

                                                      (3) In the event of any
change in the number of shares of Common Stock deliverable or any increase in
the consideration payable to the Corporation upon exercise of such options or
rights or upon conversion of or in exchange for such convertible or exchangeable
securities, including, but not limited to, a change resulting from the
antidilution provisions thereof, the Conversion Price of the Series A or Series
B Preferred Stock obtained with respect to the adjustment which was made upon
the issuance of such options, rights or securities, and any subsequent
adjustments based thereon, shall be recomputed to reflect such change, but no
further adjustment shall be made for the actual issuance of Common Stock or any
payment of such consideration upon the exercise of any such options or rights or
the conversion or exchange of such securities.

                                                      (4) Upon the expiration of
any such options or rights, the termination of any such rights to convert or
exchange or the expiration of any options or rights related to such convertible
or exchangeable securities, the Conversion Price of the Series A or Series B
Preferred Stock obtained with respect to the adjustment which was made upon the
issuance of such options, rights or securities or options or rights related to
such securities, and any subsequent adjustments based thereon, shall be
recomputed to reflect the issuance of only the number of shares of Common Stock
actually issued upon the exercise of such options or rights, upon the conversion
or exchange of such securities or upon the exercise of the options or rights
related to such securities. Upon the expiration of any such options or rights,
the termination of any such rights to convert or exchange or the expiration of
any options or rights related to such convertible or exchangeable securities,
only the number of shares of Common Stock actually issued upon the exercise of
such options or rights, upon the conversion or exchange of such 

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securities or upon the exercise of the options or rights related to such
securities shall continue to be deemed to be issued.

                                                      (5) All Common Stock
deemed issued pursuant to this subsection 3(d)(i)(E) shall be considered issued
only at the time of its deemed issuance and any actual issuance of such stock
shall not be an actual issuance or a deemed issuance of the Corporation's Common
Stock under the provisions of this Section 3.

                                            (F) No adjustment of the Conversion
Price for the Series A-1 or Series B-1 Preferred Stock shall be made upon the
issuance of any Additional Stock without consideration or for consideration per
share less than the Conversion Price of the Series A-1 or Series B-1 Preferred
Stock in effect immediately prior to the issuance of such Additional Stock.

                                    (ii) "ADDITIONAL STOCK" shall mean any
shares of Common Stock issued (or deemed to have been issued pursuant to
subsection 3(d)(i)(E)) by the Corporation on or after the Series A Initial
Purchase Date or Series B Initial Purchase Date other than shares of Common
Stock issued or issuable

                                            (A) pursuant to a transaction
described in subsection 3(d)(iii) below,

                                            (B) up to 4,000,000 shares of Common
Stock (as adjusted for stock splits, stock dividends and recapitalizations) to
officers, directors, employees and consultants of the Corporation directly or
pursuant to benefit plans approved by the shareholders and directors of the
Corporation,

                                            (C) in connection with capital
equipment leases, commercial debt financing, technology acquisitions and other
comparable transactions approved by the Board of Directors, or

                                            (D) upon conversion of the Series A,
Series A-1, Series B, or Series B-1 Preferred Stock.

                                    (iii) In the event the Corporation should at
any time or from time to time after the Series A Initial Purchase Date or Series
B Initial Purchase 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 other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"COMMON STOCK EQUIVALENTS") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Conversion
Price of each series of Series A, Series A-1, Series B and Series B-1 Preferred
Stock shall be appropriately decreased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be increased in

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proportion to such increase of outstanding shares determined in accordance with
subsection 3(d)(i)(E).

                                    (iv) If the number of shares of Common Stock
outstanding at any time after the Series A Initial Purchase Date or Series B
Initial Purchase Date is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date of such combination, the
Conversion Price for each series of Series A, Series A-1, Series B and Series
B-1 Preferred Stock shall be appropri ately increased so that the number of
shares of Common Stock issuable on conversion of each share of such series shall
be decreased in proportion to such decrease in outstanding shares.

                           (e) Other Distributions. In the event the Corporation
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by the Corporation or other persons, assets (excluding
cash dividends) or options or rights not referred to in subsection 3(d)(iii),
then, in each such case for the purpose of this subsection 3(e), the holders of
Series A, Series A-1, Series B and Series B-1 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, Series A-1, Series B and Series B-1 Preferred Stock
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 a
subdivision, combination or merger or sale of assets transaction provided for
elsewhere in Section 2 or this Section 3) provision shall be made so that the
holders of each series of Series A, Series A-1, Series B and Series B-1
Preferred Stock shall thereafter be entitled to receive upon conversion of such
series of Series A, Series A-1, Series B and Series B-1 Preferred Stock the
number of shares of stock or other securities or property of the Company or
otherwise, to which a holder of Common Stock deliverable upon 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 3
with respect to the rights of the holders of each series of Series A, Series
A-1, Series B and Series B-1 Preferred Stock after the recapitalization to the
end that the provisions of this Section 3 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of such series of Series A, Series A-1, Series B and Series B-1
Preferred Stock) shall be applicable after that event as nearly equivalent as
may be practicable.

                           (g) No Impairment. The Corporation will not, by
amendment of its 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 3 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of each series of Series A, Series A-1, Series
B and Series B-1 Preferred Stock against impairment.

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                           (h) No Fractional Shares and Certificate as to
Adjustments.

                                    (i) No fractional shares shall be issued
upon conversion of the 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 Preferred Stock the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.

                                    (ii) Upon the occurrence of each adjustment
or readjustment of any Conversion Price of any series of Preferred Stock
pursuant to this Section 3, the Corporation, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder of such series of Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any holder of Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth
(A) such adjustment and readjustment, (B) the Conversion Price at the time in
effect, 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 such series of Preferred Stock.

                (i) Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, the
Corporation shall mail to each holder of Preferred Stock, at least 20 days
prior to the date specified therein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right.

                (j) Reservation of Stock Issuable Upon Conversion. The 
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of 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 Preferred Stock; and 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 Preferred Stock, in
addition to such other remedies as shall be available to the holder of such
Preferred Stock, the Corporation 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
purposes. The Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Series A-1 and Series B-1 Preferred Stock
solely for the purpose of effecting the conversion of the shares of Series A
and Series B Preferred Stock, respectively, such number of its shares of Series
A-1 and Series B-1 Preferred Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series A and Series B
Preferred Stock; and if at any time the number of authorized but unissued
shares of Series A-1 and Series B-1 Preferred Stock shall not be sufficient to
effect the conversion of all then outstanding shares of such Series A and 

                                      -11-
<PAGE>   12
Series B Preferred Stock, respectively, in addition to such other remedies as
shall be available to the holder of such Series A and/or Series B Preferred
Stock, the Corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Series A-1 and/or Series B-1 Preferred Stock to such number of shares as shall
be sufficient for such purposes.

                           (k) Notices. Any notice required by the provisions of
this Section 3 to be given to the holders of shares of Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of the
Corporation.

                  4. Redemption Rights.

                           (a) Redemption. On or at any time after the sixth
anniversary of the Series A Initial Purchase Date for the Series A or Series A-1
Preferred Stock or the Series B Initial Purchase Date for the Series B or Series
B-1 Preferred Stock, the Corporation may redeem all or a portion of the then
outstanding shares of each series of Preferred Stock at the Original Series A
and Series A-1 Issue Price plus declared and unpaid dividends and Original
Series B and Series B-1 Issue Price plus declared and unpaid dividends (the
"REDEMPTION PRICE"). In the event the Corporation determines to redeem a portion
of the outstanding shares of a particular series of Preferred Stock, the
Corporation shall effect such redemption pro rata according to the number of
shares held by each holder thereof. In addition, on or at any time after the
sixth anniversary of the Series A Initial Purchase Date for the Series A or
Series A-1 Preferred Stock or on or after the sixth anniversary of the Series B
Initial Purchase Date for the Series B or Series B-1 Preferred Stock, at the
option of and upon the written request of the holders of not less than sixty
percent (60%) of the respective series of Preferred Stock then outstanding and
at such dates as such holders may so elect (the "REDEMPTION DATE"), the
Corporation shall redeem one-third of the outstanding shares of the respective
series of Preferred Stock that are requested to be redeemed (or any lesser
percentage as such holders shall elect) per year until all of such shares of
Preferred Stock that are requested to be redeemed are redeemed by paying
therefor in cash the Redemption Price. In the event that the Corporation is
unable on any Redemption Date to effect the redemption of all such series of
Preferred Stock for which redemption is so requested pursuant to this Section
4(a), the Corporation shall effect such redemption pro rata according to the
number of shares held by each requesting holder thereof. Notwithstanding the
foregoing, however, holders of each series of Preferred Stock shall be entitled
to request redemption only one time per calendar year.

                           (b) Notice for Company Initiated Redemption. With
respect to a redemption of Preferred Stock initiated by the Corporation, at
least 30 days' previous written notice by certified or registered mail, postage
prepaid, shall be given to the holders of record of the Preferred Stock to be
redeemed, such notice to be addressed to each such shareholder at the address of
such holder given to the Corporation for the purpose of notice, or if no such
address appears or is so given, at the place where the principal office of the
Corporation is located. Such notice shall state the Redemption Date, the
Redemption Price, the then current Conversion Rate and the date of termination
of the right to convert (which date shall not be earlier than thirty (30) days
and not later than sixty (60) days after the above written notice by mail has
been given) and

                                      -12-
<PAGE>   13
shall call upon such holder to surrender to the Corporation on said date at the
place designated in the notice such holder's certificate or certificates
representing the shares to be redeemed. On or after the Redemption Date stated
in such notice, the holder of each share of Preferred Stock called for
redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the Redemption Price for the series of Preferred
Stock surrendered. If less than all the shares represented by any such
surrendered certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. If such notice of redemption shall have been
duly given, and if on the Redemption Date funds necessary for the redemption
shall be available therefor, then, as to any certificates evidencing any
Preferred Stock so called for redemption and not surrendered, all rights of the
holders of such shares so called for redemption and not surrendered shall cease
with respect to such shares, except only the right of the holders to receive the
Redemption Price for such series of Preferred Stock which they hold, without
interest, upon surrender of their certificates therefor.

                           (c) Notice for Holder Initiated Redemption.

                                    (i) With respect to a redemption initiated
by the holders of Preferred Stock, at least 30 but no more than 60 days prior to
the Redemption Date of the Series A, Series A-1, Series B and Series B-1
Preferred Stock, 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, Series A-1, Series
B or Series B-1 Preferred Stock to be redeemed, at the address last shown on the
records of the Corporation for such holder or given by the holder to the
Corporation for the purpose of notice, 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 the date on which such holder's Conversion Rights (as previously
defined) as to such shares terminate and calling upon such holder to surrender
to the Corporation, in the manner and at the place designated, the certificate
or certificates representing the shares to be redeemed (the "REDEMPTION
NOTICE"). Except as provided in Section (4)(c)(ii) below, on or after the
Redemption Date, each holder of Series A, Series A-1, Series B or Series B-1
Preferred Stock to be redeemed shall surrender to the 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 appears on
such certificate or certificates as the owner thereof and each surrendered
certificate shall be canceled. 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.

                                    (ii) From and after the Redemption Date,
unless there shall have been a default in payment of the Redemption Price, all
dividends on the Series A, Series A-1, Series B or Series B-1 Preferred Stock
designated for redemption in the Redemption Notice shall cease to accrue, all
rights of the holders of such shares (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, Series A-1, Series B and Series 

                                      -13-
<PAGE>   14
B-1 Preferred Stock on any Redemption Date are insufficient to redeem the total
number of shares of Series A, Series A-1, Series B, or Series B-1 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 in accordance with
the provisions of Section (6)(c) hereof. The shares of Series A, Series A-1,
Series B, and Series B-1 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 Company are legally available for the
redemption of shares of Series A, Series A-1, Series B, and Series B-1 Preferred
Stock, such funds will immediately be used to redeem the balance of the shares
which the Company has become obligated to redeem on any Redemption Date but
which it has not redeemed.

                           (d) Trust Fund. On or prior to any Redemption Date,
the Corporation shall deposit, with any bank or trust company in the State of
California, as a trust fund, a sum sufficient to redeem, on the Redemption Date
thereof, the shares called for redemption, with irrevocable instructions and
authority to the bank or trust company to give the notice of redemption thereof
(or to complete the giving of such notice if theretofore commenced) and to pay,
on or after the Redemption Date or prior hereto, the Redemption Price of the
shares to their respective holders upon the surrender of their share
certificates, then from and after the date of the deposit (although prior to the
Redemption Date), the shares so called shall be redeemed. The deposit shall
constitute full payment of the shares to their holders and from and after the
date of the deposit the shares shall no longer be 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 right to notice pursuant to
paragraph (b) above and to receive from the bank or trust company payment of the
Redemption Price for the Preferred Stock which they hold, without interest, upon
the surrender of their certificates therefor and the right to convert said
shares as provided herein at any time up to but not after the close of business
on the fifth day prior to the Redemption Date of such shares (which date will
not be earlier than thirty (30) days after the written notice of redemption has
been mailed to holders of record of the Preferred Stock called for redemption).
Any monies so deposited on account of the Redemption Price of Preferred Stock
converted subsequent to the making of such deposit shall be repaid to the
Corporation forthwith upon the conversion of such Preferred Stock. Any interest
accrued on any funds so deposited shall be the property of, and paid to, the
Corporation. If the holders of Preferred Stock so called for redemption shall
not, at the end of six (6) years from the Redemption Date thereof, have claimed
any funds so deposited, such bank or trust company shall thereupon pay over to
the Corporation such unclaimed funds, and such bank or trust company shall
thereafter be relieved of all responsibility in respect thereof to such holders
and such holders shall look only to the Corporation for payment of the
Redemption Price for the Preferred Stock which they hold.

                  5. Voting Rights. The holder of each share of Preferred Stock
shall have the right to one vote for each share of Common Stock into which such
Preferred Stock could then be converted (with any fractional share determined on
an aggregate conversion basis being rounded to the nearest whole share), and
with respect to such vote, such holder shall have full voting rights and powers
equal to the voting rights and powers of the holders of Common Stock, and shall
be entitled, notwithstanding any provision hereof, to notice of any
shareholders' meeting in accordance with the Bylaws of the Corporation, and
shall be entitled to vote, together with

                                      -14-
<PAGE>   15
holders of Common Stock, with respect to any question upon which holders of
Common Stock have the right to vote.

                  6. Protective Provisions. So long as at least 900,000 shares
of Series A, Series A-1, Series B, and Series B-1 Preferred Stock (as adjusted
for stock splits, stock dividends or recapitalizations) are outstanding and have
not been converted into Common Stock, the Corporation shall not, without first
obtaining the approval (by vote or written consent, as provided by law) of the
holders of at least a majority of the then outstanding shares of Preferred
Stock, voting together as one class except where otherwise required by law:

                           (a) amend or repeal any provision of the
Corporation's Articles of Incorporation or Bylaws if such action would alter or
change the designations, preferences and relative, participating, optional and
other special rights, or the restrictions provided for the benefit of the
Preferred Stock;

                           (b) authorize a merger, sale of all or substantially
all the assets, consolidation, recapitalization or reorganization of the
Corporation;

                           (c) authorize or issue shares of any class of stock
having a preference over, or being on a parity with, the Preferred Stock with
respect to dividends or assets;

                           (d) pay or declare any dividend on shares of Common
Stock if current dividends on Preferred remain unpaid, except dividends solely
in Common Stock; or

                           (e) any repurchase or other acquisition by the
Corporation of its own shares other than pursuant to the Articles of
Incorporation or repurchases contemplated by Section 8 below.

                  7. Status of Converted Stock. In the event any shares of
Preferred Stock shall be converted pursuant to Section 3 hereof or redeemed
pursuant to Section 4 hereof, the shares so converted or redeemed shall be
canceled and shall not be issuable by the Corporation, and the Articles of
Incorporation of the Corporation shall be appropriately amended to effect the
corresponding reduction in the Corporation's authorized capital stock.

                  8. Repurchase of Shares. In connection with repurchases by the
Corporation of its Common Stock pursuant to its agreements with certain of the
holders thereof providing for such repurchases in the event of the termination
of the status of such holder as an employee, director or consultant to the
Company, each holder of Preferred Stock shall be deemed to have consented, for
purposes of Sections 502, 503 and 506 of the California General Corporation Law,
to distributions made by the Corporation with respect to such repurchases.

                                      -15-
<PAGE>   16
         (C) 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 Corporation
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 Corporation, the assets of the Corporation shall be
distributed as provided in Section 2 of Part (B) of this Article III.

                  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 Corporation, and shall
be entitled to vote upon such matters and in such manner as may be provided by
law.

                                   ARTICLE IV

         (A) Limitation of Directors, Liability. The liability of the directors
of the Corporation for monetary damages shall be eliminated to the fullest
extent permissible under California law.

         (B) Indemnification of Corporate Agents. The Corporation is authorized
to indemnify the directors and officers of the Corporation to the fullest extent
permissible under California law.

         (C) Repeal or Modification. Any repeal or modification of the foregoing
provisions of this Article IV 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."

                                     * * *

         THREE: The foregoing amendment and restatement has been approved by the
Board of Directors of the Corporation.

         FOUR: The foregoing amendment and restatement was approved by the
holders of the requisite number of shares of the Corporation in accordance with
Sections 902 and 903 of the California General Corporation Law. The total number
of outstanding shares entitled to vote with respect to the foregoing amendment
was 2,417,235 shares of Common Stock; 6,893,999 shares of Series A Preferred
Stock and 2,123,334 shares of Series B Preferred Stock. The number of shares
voting in favor of the foregoing amendment equaled or exceed the vote required,
such required vote being a majority of the outstanding shares of Common Stock, a
majority of the outstanding shares of Series A Preferred Stock and a majority of
the outstanding shares of Series B Preferred Stock, each voting separately as a
class.

                                      -16-
<PAGE>   17
         We further declare under penalty of perjury under the laws of the State
of California that we have read the foregoing Amended and Restated Articles of
Incorporation and know the contents thereof and that the same are true of our
own knowledge.




Dated:  November 27, 1996


                                                      /s/ Jeffrey W. Dunn
                                             ----------------------------------
                                             Jeffrey W. Dunn, President


                                                      /s/ Michael W. Hall
                                             ----------------------------------
                                             Michael W. Hall, Secretary

                                      -17-
