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                                                                     EXHIBIT 3.2

                              ARTICLES OF AMENDMENT

                                       OF

                              COVENTRY CORPORATION


To the Secretary of State of the State of Tennessee:

         Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act (the "Act"), Coventry Corporation (the "Company")
submits these Articles of Amendment to its Articles of Incorporation (the
"Charter") for the purpose of amending Article IV to authorize the Company to
issue up to 6,000,000 shares of Series A Convertible Preferred Stock and up to
1,000,000 shares of Undesignated Preferred Stock.

FIRST: The name of the Company, a for profit corporation, is Coventry
Corporation.

SECOND: Article IV of the Charter is hereby amended and restated in its entirety
as follows:

                                   ARTICLE IV

                                      STOCK

         The total number of shares of capital stock which the Company shall
have authority to issue is 107,000,000 shares, consisting of 100,000,000 shares
of Common Stock, par value of $0.01 per share ("Common Stock"), 6,000,000 shares
of Series A Convertible Preferred Stock, par value $0.01 per share ("Series A
Preferred Stock"), and 1,000,000 shares of undesignated preferred stock, par
value $0.01 per share ("Undesignated Preferred Stock").

         1.       SERIES A PREFERRED STOCK.

                  A. DESIGNATION AND AMOUNT. The number of shares constituting
the Series A Preferred Stock shall be 6,000,000.

             B.   DIVIDENDS.

                  (1) From the date of issuance hereof, until May 28, 1999 (the
"Dividend Payment Date"), the holders of Series A Preferred Stock shall be
entitled to receive, when and as declared, out 




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of the net profits of the Company, dividends at the rate of $0.83 per annum,
payable in additional shares of Series A Preferred Stock, before any dividends
shall be set apart for or paid upon the Common Stock or any other stock ranking
on liquidation junior to the Series A Preferred Stock (such stock being referred
to hereinafter collectively as "Junior Stock") in any year. Dividends shall be
payable semi-annually on each November 28 and May 28, beginning November 28,
1997, through and including the Dividend Payment Date. The number of shares of
Series A Preferred Stock to be issued in payment of the dividend with respect to
each outstanding share of Series A Preferred Stock shall be determined by
dividing the amount of the dividend that would have been payable had such
dividend been paid in cash by $10.00. To the extent that any such dividend would
result in the issuance of a fractional share of Series A Preferred Stock (which
shall be determined with respect to the aggregate number of shares of Series A
Preferred Stock held of record by each holder) then the amount of such fraction
multiplied by $10.00 shall be paid in cash (unless there are no legally
available funds with which to make such cash payment, in which event such cash
payment shall be made as soon as possible). All dividends declared upon Series A
Preferred Stock shall be declared pro rata per share.

                  (2) Dividends on the Series A Preferred Stock through the
Dividend Payment Date shall be cumulative, whether or not in either fiscal year
there shall be net profits or surplus available for the payment of dividends in
such fiscal year, so that if in either fiscal year, dividends in whole or in
part are not paid upon the Series A Preferred Stock, unpaid dividends shall
accumulate as against the holders of the Junior Stock and no sums in that fiscal
year or any subsequent fiscal year shall be paid to the holders of Junior Stock
unless and until all dividends accrued and payable in respect of the Series A
Preferred Stock have been paid or a sum sufficient for such payment shall have
been set apart.

                  (3) At all times after the Dividend Payment Date, if, as and
when the Board of Directors of the Company declares any cash dividend on the
shares of Common Stock, the Board of Directors shall declare a cash dividend on
each share of Series A Preferred Stock equal to the dividend payable on each
share of Common Stock multiplied by the number of shares of Common Stock into
which such share of Series A Preferred Stock is convertible on the record date
for such dividend. Such dividend shall be payable at the same time and otherwise
on the same terms as any dividend paid on the Common Stock.

             C.   LIQUIDATION, DISSOLUTION OR WINDING UP.

                  (1) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Company available for distribution to its stockholders, after and subject
to the payment in full of all amounts required to be distributed to the holders
of any other Preferred Stock of the Company ranking on liquidation prior and in
preference to the Series A hereinafter as "Senior Preferred Stock") upon such
liquidation, dissolution or winding up, but before any payment shall be made to
the holders of Junior Stock, an amount equal to $10.00 per share (subject to
adjustment in the event of any, dividend, stock split, stock distribution or
combination with respect to such shares), plus any accrued but unpaid dividends
as of the date of such liquidation, dissolution or winding-up. If upon any such
liquidation, dissolution or winding up of the Company the remaining assets of
the Company available for the distribution to its stockholders after payment in
full of amounts 




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required to be paid or distributed to holders of Senior Preferred Stock shall be
insufficient to pay the holders of shares of Series A Preferred Stock the full
amount to which they shall be entitled, the holders of shares of Series A
Preferred Stock, and any class of stock ranking on liquidation on a parity with
the Series A Preferred Stock, shall share ratably in any distribution of the
remaining assets and funds of the Company in proportion to the respective
amounts which would otherwise be payable in respect to the shares held by them
upon such distribution if all amounts payable on or with respect to said shares
were paid in full.

                  (2) After the payment of all preferential amounts required to
be paid to the holders of Senior Preferred Stock and Series A Preferred Stock
and any other series of Preferred Stock upon the dissolution, liquidation or
winding up of the Company, the holders of shares of Common Stock then
outstanding shall be entitled to receive the remaining assets and funds of the
Company available for distribution to its stockholders.

                  (3) The merger or consolidation of the Company into or with
another corporation, the merger or consolidation of any other corporation into
or with the Company, or the sale, conveyance, mortgage, pledge or lease of all
or substantially all the assets of the Company shall be deemed to be a
liquidation, dissolution or winding up of the Company for purposes of this
Paragraph C, unless waived by the holders of a majority of the then outstanding
shares of Series A Preferred Stock or unless, as of the date immediately
preceding such merger or consolidation, the Market Price is such that the
outstanding shares of Series A Preferred Stock would be otherwise redeemable
pursuant to Paragraph H(2) hereof, notwithstanding that such merger or
consolidation occurs prior to the third anniversary of the Second Closing Date
as defined in the Purchase Agreement referred to in Paragraph D(3)(b) hereof.

             D.   VOTING.

                  (1) Each issued and outstanding share of Series A Preferred
Stock shall be entitled to the number of votes equal to the number of shares of
Common Stock into which each such share of Series A Preferred Stock is
convertible (as adjusted from time to time pursuant to Paragraph E hereof), at
each meeting of stockholders of the Company with respect to any and all matters
presented to the stockholders of the Company for their action or consideration
other than the election of directors (as to which the Series A Preferred Stock
shall have rights voting separately as a class as set out in subparagraph (2)
below). Except as provided by law, by the provisions of subparagraphs (2), (3)
and (4) below, holders of Series A Preferred Stock and of any other outstanding
Preferred Stock shall vote together with the holders of Common Stock as a single
class.

                  (2) For so long as at least 1,000,000 shares of Series A
Preferred Stock remain outstanding (subject to adjustment in the event of any
stock dividend, stock split, stock distribution or combination with respect to
such shares), the holders of Series A Preferred Stock shall have the exclusive
right, voting separately as a class, to elect two directors (herein referred to
as the "Series A Directors"). In the event the Board of Directors is increased
to more than nine directors, for so long as any shares of Series A Preferred
Stock remain outstanding, the holders of record of a majority of the outstanding
shares of Series A Preferred Stock shall be entitled to select the whole number
of Series A Directors obtained by multiplying (a) the number of directors on the
Board of Directors (including 




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the Series A Directors) by (b) a fraction, the numerator of which is equal to
the number of shares of Series A Preferred Stock then outstanding and the
denominator of which is equal to the total number of shares of capital stock of
the Company then outstanding measured in each case on an as converted to Common
Stock basis. Each such Series A Director shall be (x)(i) a partner, officer or
employee of Warburg, Pincus Ventures, L.P. or any of its affiliates or (ii) a
person who is not a member of the board of directors or an employee or
consultant of any company which owns, manages or provides services to health
maintenance organizations ("HMOs") or preferred provider organizations ("PPOs")
in any of the geographic markets in which the Company, its subsidiaries, or the
HMOs and PPOs managed by the Company or its subsidiaries operate HMOs or PPOs as
of the date such person agrees to be designated to the Board of Directors of the
Company, and (y) elected by the affirmative vote of the holders of record of a
majority of the outstanding shares of Series A Preferred Stock either at
meetings of stockholders at which directors are elected, a special meeting of
holders of Series A Preferred Stock or by written consent without a meeting in
accordance with the Act. Each Series A Director so elected shall be in a
separate class from the other Series A Director, and each shall serve for the
term of that class. In addition to any other requirement herein, any vacancy in
the position of a Series A Director shall require the affirmative vote of the
holders of a majority of the Series A Preferred Stock in order to be filled. In
addition to any other requirement herein, the removal of a Series A Director
shall require the affirmative vote, at a special meeting of holders of Series A
Preferred Stock called for such purpose, or the written consent, of the holders
of record of a majority of the outstanding shares of Series A Preferred Stock.
Any vacancy created by such removal may also be filled at such meeting or by
such consent.

                  (3) In addition to any other rights provided by law, the
Company shall not, without first obtaining the affirmative vote or written
consent of a majority of the holders of Series A Preferred Stock:

                       (A) amend, alter or repeal any provision of the Company's
         Certificate of Incorporation or amend, alter or repeal any provision of
         the By-Laws that would adversely affect the rights of the holders of
         Series A Preferred Stock, including, without limitation, any increase
         in the number of shares of Series A Preferred Stock;

                       (B) issue any shares of Series A Preferred Stock other
         than upon exchange of the Note (as defined in the Amended and Restated
         Securities Purchase Agreement, dated as of April 2, 1997, by and among
         the Company, Franklin Capital Associates III L.P. and Warburg, Pincus
         Ventures, L.P. (the "Purchase Agreement")) or pursuant to Paragraph
         B(1) hereof; or

                      (C) amend, alter or repeal the preferences, special rights
         or other powers of the Series A Preferred Stock so as to affect
         adversely the Series A Preferred Stock. For this purpose, the
         authorization or issuance of any series of Preferred Stock with
         preference or priority over, or being on a parity with the Series A
         Preferred Stock as to the right to receive dividends or amounts
         distributable upon liquidation, dissolution or winding up of the
         Company shall be deemed so to affect adversely the Series A Preferred
         Stock.





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             E. OPTIONAL CONVERSION. Each share of Series A Preferred Stock may
be converted at any time, at the option of the holder thereof, in the manner
hereinafter provided, into fully-paid and nonassessable shares of Common Stock,
provided, however, that on any redemption of any Series A Preferred Stock or any
liquidation of the Company, the right of conversion shall terminate at the close
of business on the full business day next preceding the date fixed for such
redemption or for the payment of any amounts distributable on liquidation to the
holders of Series A Preferred Stock.

                  (1) The initial conversion rate for the Series A Preferred
Stock shall be one share of Common stock for each one share of Series A
Preferred Stock surrendered for conversion, representing an initial Conversion
Price (for purposes of Paragraph F hereof) of $10.00 per share of the Company's
Common Stock plus a number of additional shares of Common Stock equal to the
amount of accrued but unpaid dividends (whether or not currently payable)
through the date of such conversion divided by the Conversion Price then in
effect. The applicable conversion rate and Conversion Price from time to time in
effect is subject to adjustment as hereinafter provided.

                  (2) The Company shall not issue fractions of shares of Common
Stock upon conversion of Series A Preferred Stock or scrip in lieu thereof. If
any fraction of a share of Common Stock would, except for the provisions of this
subparagraph (2), be issuable upon conversion of any Series A Preferred Stock,
the Company shall in lieu thereof pay to the person entitled thereto an amount
in cash equal to the average Market Price for the ten-day trading period
preceding such issuance and sale of such fraction, calculated to the nearest
one-hundredth (1/100) of a share. For purposes hereof, the term "Market Price"
shall mean (i) if the Common Stock is traded on a national securities exchange,
the last reported sale price of a share of Common Stock, regular way on such
date or, in case no such sale takes place on such date, the average of the
closing bid and asked prices thereof regular way on such date, in either case as
officially reported on the principal national securities exchange on which the
Common Stock is then listed or admitted for trading, or, (ii) if the Common
Stock is not then listed or admitted for trading on any national securities
exchange but is designated as a national market system security by the NASD, the
last reported trading price of the Common Stock on such date, or (iii) if not
listed or admitted to trading on any national securities exchange or designated
as a national market system security, the average of the reported bid and asked
price of the Common Stock on such date in the over-the-counter market as
furnished by the National Quotation Bureau, Inc., or, if such firm is not then
engaged in the business of reporting such prices, as furnished by any member of
the National Association of Securities Dealers, Inc. selected by the Company or,
(iv) if the shares of Common Stock are not so publicly traded, the fair market
value thereof, as determined in good faith by the Board of Directors of the
Company.

                  (3) Whenever the Conversion Price shall be adjusted as
provided in Paragraph F hereof, the Company shall forthwith file at each office
designated for the conversion of Series A Preferred Stock, a statement, signed
by the Chairman of the Board, the President, any Vice President or Treasurer of
the Company, showing in reasonable detail the facts requiring such adjustment.
The Company shall also cause a notice setting forth any such adjustments to be
sent by mail, first class, postage prepaid, to each record holder of Series A
Preferred Stock at his or its address appearing on the stock register. If such
notice relates to an adjustment resulting from an event referred to in Paragraph





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F(7), such notice shall be included as part of the notice required to be mailed
and published under the provisions of Paragraph F(7) hereof.

                  (4) In order to exercise the conversion right, the holder of
any Series A Preferred Stock to be converted shall surrender his or its
certificate or certificates therefore to the principal office of the transfer
agent for the Series A Preferred Stock (or if no transfer agent be at the time
appointed, then the Company at its principal office), and shall give written
notice to the Company at such office that the holder elects to convert the
Series A Preferred Stock represented by such certificates, or any number
thereof. Such notice shall also state the name or names (with address) in which
the certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued, subject to any restrictions on
transfer relating to shares of the Series A Preferred Stock or shares of Common
Stock upon conversion thereof. If so required by the Company, certificates
surrendered for conversion shall be endorsed or accompanied by written
instrument or instruments of transfer, in form reasonably satisfactory to the
Company, duly authorized in writing. The date of receipt by the transfer agent
(or by the Company if the Company serves as its own transfer agent) of the
certificates and notice shall be the conversion date. As soon as practicable
after receipt of such notice and the surrender of the certificate or
certificates for Series A Preferred Stock as aforesaid, the Company shall cause
to be issued and delivered at such office to such holder, or on his or its
written order, a certificate or certificates for the number of full shares of
Common Stock issuable on such conversion in accordance with the provisions
hereof and cash as provided in Paragraph E(2) hereof in respect of any fraction
of a share of Common Stock otherwise issuable upon such conversion.

                  (5) The Company shall at all times when the Series A Preferred
Stock shall be outstanding reserve and keep available out of its authorized but
unissued stock, for the purposes of effecting the conversion of the Series A
Preferred Stock, such number of its duly authorized shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding Series A Preferred Stock. Before taking any action which would cause
an adjustment reducing the Conversion Price below the then par value of the
shares of Common Stock issuable upon conversion of the Series A Preferred Stock,
the Company will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully-paid and nonassessable shares of such Common Stock at such adjusted
Conversion Price.

                  (6) All shares of Series A Preferred Stock which shall have
been surrendered for conversion as herein provided shall no longer be deemed to
be outstanding and all rights with respect to such shares, including the rights,
if any, to receive notices and to vote, shall forthwith cease and terminate
except only the right of the holder thereof to receive shares of Common Stock in
exchange therefor. Any shares of Series A Preferred Stock so converted shall be
retired and canceled and shall not be reissued, and the Company may from time to
time take such appropriate action as may be necessary to reduce the authorized
Series A Preferred Stock accordingly.






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             F.   ANTI-DILUTION PROVISIONS.

                  (1) In order to prevent dilution of the right granted
hereunder, the Conversion Price shall be subject to adjustment from time to time
in accordance with this Paragraph F(1). At any given time the Conversion Price
shall be that dollar (or part of a dollar) amount the payment of which shall be
sufficient at the given time to acquire one share of the Company's Common Stock
upon conversion of shares of Series A Preferred Stock. Upon each adjustment of
the Conversion Price pursuant to Paragraph F, the registered Holder of shares of
Series A Preferred Stock shall thereafter be entitled to acquire upon exercise,
at the Conversion Price resulting from such adjustment, the number of shares of
the Company's Common Stock obtainable by multiplying the Conversion Price in
effect immediately prior to such adjustment by the number of shares of the
Company's Common Stock acquirable immediately prior to such adjustment and
dividing the product thereof by the Conversion Price resulting from such
adjustment. For purposes of this Paragraph F, the term "Number of Common Shares
Deemed Outstanding" at any given time shall mean the sum of (x) the number of
shares of the Company's Common Stock outstanding at such time, (y) the number of
shares of the Company's Common Stock issuable assuming conversion at such time
of the Company's other series of convertible preferred stock, if any, and (z)
the number of shares of the Company's Common Stock deemed to be outstanding
under subparagraphs F(2)(i) to (ix), inclusive, at such time.

                  (2) Except as provided in Paragraph F(3) or F(5) below, if and
whenever on or after the date of initial issuance of the Series A Preferred
Stock (the "Initial Issuance Date"), the Company shall issue or sell, or shall
in accordance with Paragraphs F(2)(i) to (ix), inclusive, be deemed to have
issued or sold any shares of its Common Stock for a consideration per share less
than the average Market Price for the ten trading days immediately preceding
such issuance or sale, then forthwith upon such issue or sale (the "Triggering
Transaction"), the Conversion Price shall, subject to subparagraphs (i) to (ix)
of this Paragraph F(2), be reduced to the Conversion Price (calculated to the
nearest tenth of a cent) determined by multiplying the Conversion Price in
effect immediately prior to the time of such Triggering Transaction by a
fraction, the numerator of which shall be the sum of (x) the Number of Shares
Deemed Outstanding immediately prior to such Triggering Transaction and (y) the
number of shares of Common Stock which the aggregate consideration received by
the Company upon such Triggering Transaction would purchase at the average
Market Price for the ten-day period immediately preceding such Triggering
Transaction, and the denominator of which shall be the Number of Shares Deemed
Outstanding immediately after such Triggering Transaction.

                  For purposes of determining the adjusted Conversion Price
under this Paragraph F(2), the following subparagraphs (i) to (ix), inclusive,
shall be applicable:

                      (I) In case the Company at any time shall in any manner
         grant (whether directly or by assumption in a merger or otherwise) any
         rights to subscribe for or to purchase, or any options for the purchase
         of, Common Stock or any stock or other securities convertible into or
         exchangeable for Common Stock (such rights or options being herein
         called "Options" and such convertible or exchangeable stock or
         securities being herein called "Convertible Securities"), whether or
         not such Options or the right to convert or exchange any such
         Convertible Securities are immediately exercisable and the price per
         share for which the Common Stock is issuable 




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         upon exercise, conversion or exchange (determined by dividing (x) the
         total amount, if any, received or receivable by the Company as
         consideration for the granting of such Options, plus the aggregate
         amount of additional consideration payable to the Company upon the
         exercise of all such Options, plus, in the case of such Options which
         relate to Convertible Securities, the aggregate amount of additional
         consideration, if any, payable upon the issue or sale of such
         Convertible Securities and upon the conversion or exchange thereof, by
         (y) the total maximum number of shares of Common Stock issuable upon
         the exercise of such Options or the conversion or exchange of such
         Convertible Securities) shall be less than the average Market Price in
         effect for the ten-day trading period immediately prior to the time of
         the granting of such Option, then the total maximum amount of Common
         Stock issuable upon the exercise of such Options or in the case of
         Options for Convertible Securities, upon the conversion or exchange of
         such Convertible Securities shall (as of the date of granting of such
         Options) be deemed to be outstanding and to have been issued and sold
         by the Company for such price per share. No adjustment of the
         Conversion Price shall be made upon the actual issue of such shares of
         Common Stock or such Convertible Securities upon the exercise of such
         Options, except as otherwise provided in subparagraph (iii) below.

                  (II) In case the Company at any time shall in any manner issue
         (whether directly or by assumption in a merger or otherwise) or sell
         any Convertible Securities, whether or not the rights to exchange or
         convert thereunder are immediately exercisable, and the price per share
         for which Common Stock is issuable upon such conversion or exchange
         (determined by dividing (x) the total amount received or receivable by
         the Company as consideration for the issue or sale of such Convertible
         Securities, plus the aggregate amount of additional consideration, if
         any, payable to the Company upon the conversion or exchange thereof, by
         (y) the total maximum number of shares of Common Stock issuable upon
         the conversion or exchange of all such Convertible Securities) shall be
         less than the average Market Price in effect for the ten-day trading
         period immediately prior to the time of such issue or sale, then the
         total maximum number of shares of Common Stock issuable upon conversion
         or exchange of all such Convertible Securities shall (as of the date of
         the issue or sale of such Convertible Securities) be deemed to be
         outstanding and to have been issued and sold by the Company for such
         price per share. No adjustment of the Conversion Price shall be made
         upon the actual issue of such Common Stock upon exercise of the rights
         to exchange or convert under such Convertible Securities, except as
         otherwise provided in subparagraph (iii) below.

                      (III) If the purchase price provided for in any Options
         referred to in subparagraph (i), the additional consideration, if any,
         payable upon the conversion or exchange of any Convertible Securities
         referred to in subparagraphs (i) or (ii), or the rate at which any
         Convertible Securities referred to in subparagraph (i) or (ii) are
         convertible into or exchangeable for Common Stock shall change at any
         time (other than under or by reason of provisions designed to protect
         against dilution of the type set forth in Paragraphs F(2) or F(4)), the
         Conversion Price in effect at the time of such change shall forthwith
         be readjusted to the Conversion Price which would have been in effect
         at such time had such Options or Convertible Securities still
         outstanding provided for such changed purchase price, additional
         consideration at the time initially granted, issued or sold. If the
         purchase price provided for in any Option referred to in subparagraph
         (i) or the 




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         rate at which any Convertible Securities referred to in subparagraphs
         (i) or (ii) are convertible into or exchangeable for Common Stock,
         shall be reduced at any time under or by reason of provisions with
         respect thereto designed to protect against dilution, then in case of
         the delivery of Common Stock upon the exercise of any such Option or
         upon conversion or exchange of any such Convertible Security, the
         Conversion Price then in effect hereunder shall forthwith be adjusted
         to such respective amount as would have been obtained had such Option
         or Convertible Security never been issued as to such Common Stock and
         had adjustments been made upon the issuance of the shares of Common
         Stock delivered as aforesaid, but only if as a result of such
         adjustment the Conversion Price then in effect hereunder is hereby
         reduced.

                      (IV) On the expiration of any Option or the termination of
         any right to convert or exchange any Convertible Securities, the
         Conversion Price then in effect hereunder shall forthwith be increased
         to the Conversion Price which would have been in effect at the time of
         such expiration or termination had such Option or Convertible
         Securities, to the extent outstanding immediately prior to such
         expiration or termination, never been issued.

                      (V) In case any Options shall be issued in connection with
         the issue or sale of other securities of the Company, together
         comprising one integral transaction in which no specific consideration
         is allocated to such Options by the parties thereto, such Options shall
         be deemed to have been issued without consideration.

                      (VI) In case any shares of Common Stock, Options or
         Convertible Securities shall be issued or sold or deemed to have been
         issued or sold for cash, the consideration received therefor shall be
         deemed to be the amount received by the Company therefor (before
         deduction for expenses or underwriters discounts or commissions related
         to such issue or sale). In case any shares of Common Stock, Options or
         Convertible Securities shall be issued or sold for a consideration
         other than cash, the amount of the consideration other than cash
         received by the Company shall be the fair value of such consideration
         as determined in good faith by the Board of Directors of the Company.
         In case any shares of Common Stock, Options or Convertible Securities
         shall be issued in connection with any merger in which the Company is
         the surviving corporation, the amount of consideration therefor shall
         be deemed to be the fair value of such portion of the net assets and
         business of the non-surviving corporation as shall be attributable to
         such Common Stock, Options or Convertible Securities, as the case may
         be as determined in good faith by the Board of Directors of the
         Company.

                      (VII) The number of shares of Common Stock outstanding at
         any given time shall not include shares owned or held by or for the
         account of the Company and the disposition of any shares so owned or
         held shall be considered an issue or sale of Common Stock for the
         purpose of this Paragraph F(2).

                      (VIII) In case the Company shall declare a dividend or
         make any other distribution upon the stock of the Company payable in
         Common Stock, Options, or Convertible Securities, then in such case any
         Common Stock, Options or Convertible Securities, as the case may be,





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         issuable in payment of such dividend or distribution shall be deemed to
         have been issued or sold without consideration.

                      (IX) For purposes of this Paragraph F(2), in case the
         Company shall take a record of the holders of its Common Stock for the
         purpose of entitling them (x) to receive a dividend or other
         distribution payable in Common Stock, Options or in Convertible
         Securities, or (y) to subscribe for or purchase Common Stock, Options
         or Convertible Securities, then such record date shall be deemed to be
         the date of the issue or sale of the shares of Common Stock deemed to
         have been issued or sold upon the declaration of such dividend or the
         making of such other distribution or the date of the granting of such
         right or subscription or purchase, as the case may be.

                  (3) In the event the Company shall declare a dividend upon the
Common Stock (other than a dividend payable in Common Stock covered by Paragraph
F(2)(viii)) payable otherwise than out of earnings or earned surplus, determined
in accordance with generally accepted accounting principles, including the
making of appropriate deductions for minority interests, if any, in subsidiaries
(herein referred to as "Liquidating Dividends"), then, as soon as possible after
the conversion of any Series A Preferred Stock, the Company shall pay to the
person converting such Series A Preferred Stock an amount equal to the aggregate
value at the time of such exercise of all Liquidating Dividends (including but
not limited to the Common Stock which would have been issued at the time of such
earlier exercise and all other securities which would have been issued with
respect to such Common Stock by reason of stock splits, stock dividends, mergers
or reorganizations, or for any other reason). For the purposes of this Paragraph
F(3), a dividend other than in cash shall be considered payable out of earnings
or earned surplus only to the extent that such earnings or earned surplus are
charged an amount equal to the fair value of such dividend as determined in good
faith by the Board of Directors of the Company.

                  (4) In case the Company shall at any time subdivide (other
than by means of a dividend payable in Common Stock covered by Paragraph
F(2)(viii)) its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision
shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock of the Company shall be combined into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination
shall be proportionately increased.

                  (5) If any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities, cash or other property with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, 




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<PAGE>   11
merger or sale, lawful and adequate provision shall be made whereby the holders
of the Series A Preferred Stock shall have the right to acquire and receive upon
conversion of the Series A Preferred Stock, which right shall be prior to the
rights of the holders of Junior Stock (but after and subject to the rights of
holders of Senior Preferred Stock, if any), such shares of stock, securities,
cash or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in exchange
for such number of outstanding shares of the Company's Common Stock as would
have been received upon conversion of the Series A Preferred Stock at the
Conversion Price then in effect. The Company will not effect any such
consolidation, merger or sale, unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume
by written instrument mailed or delivered to the holders of the Series A
Preferred Stock at the last address of each such holder appearing on the books
of the Company, the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase. If a purchase, tender or exchange offer
is made to and accepted by the holders of more than fifty percent (50%) of the
outstanding shares of Common Stock of the Company, the Company shall not effect
any consolidation, merger or sale with the person having made such offer or with
any Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holders of the Series A Preferred Stock shall
have been given a reasonable opportunity to then elect to receive upon the
conversion of the Series A Preferred Stock either the stock, securities or
assets then issuable with respect to the Common Stock of the Company or the
stock, securities or assets, or the equivalent, issued to previous holders of
the Common Stock in accordance with such offer. For purposes hereof, the term
"Affiliate" with respect to any given person shall mean any person controlling,
controlled by or under common control with the given person.

                  (6) The provisions of this Paragraph F shall not apply to any
Common Stock issued, issuable or deemed outstanding under Paragraphs F(2)(i) to
(ix) inclusive: (i) to any person pursuant to any stock option, stock purchase
or similar plan or arrangement for the benefit of employees, consultants or
directors of the Company or its subsidiaries in effect on the Initial Issuance
Date or thereafter adopted by the Board of Directors of the Company (or
physicians or providers contracting with the Company or any of its Subsidiaries)
(ii) pursuant to options, warrants and conversion rights in existence on the
Initial Issuance Date, (iii) upon exercise of the Warrants issued to Franklin
Capital Associates, III L.P. ("Franklin") and Warburg, Pincus Ventures, L.P.
("Warburg") pursuant to the Purchase Agreement, (iv) on conversion of the Series
A Preferred Stock or the sale of any additional shares of Series A Preferred
Stock or the issuance of additional shares of Series A Preferred Stock as
dividends pursuant to Paragraph B(2) hereof, or (v) in connection with
underwritten public offerings for cash pursuant to a registration statement
filed under the Securities Act of Common Stock, Options or Convertible
Securities.

                  (7)      In the event that:

                      (A) the Company shall declare any cash dividend upon its
         Common Stock, or

                      (B) the Company shall declare any dividend upon its Common
         Stock payable in stock or make any special dividend or other
         distribution to the holders of its Common Stock, or

                      (C) the Company shall offer for subscription pro rata to
         the holders of its Common Stock any additional shares of stock of any
         class or other rights, or





                                       11
<PAGE>   12
                      (D) there shall be any capital reorganization or
         reclassification of the capital stock of the Company, including any
         subdivision or combination of its outstanding shares of Common Stock,
         or consolidation or merger of the Company with, or sale of all or
         substantially all of its assets to, another corporation, or

                      (E) there shall be a voluntary or involuntary dissolution,
         liquidation or winding up of the Company;

then, in connection with such event, the Company shall give to the holders of
the Series A Preferred Stock:

         (I)      at least 20 days prior written notice of the date on which the
                  books of the Company shall close or a record shall be taken
                  for such dividend, distribution or subscription rights or for
                  determining rights to vote in respect of any such
                  reorganization, reclassification, consolidation, merger, sale,
                  dissolution, liquidation or winding up; and

         (II)     in the case of any such reorganization, reclassification,
                  consolidation, merger, sale, dissolution, liquidation or
                  winding up, at least 20 days prior written notice of the date
                  when the same shall take place. Such notice in accordance with
                  the foregoing clause (i) shall also specify, in the case of
                  any such dividend, distribution or subscription rights, the
                  date on which the holders of Common Stock shall be entitled
                  thereto, and such notice in accordance with the foregoing
                  clause (ii) shall also specify the date on which the holders
                  of Common Stock shall be entitled to exchange their Common
                  Stock for securities or other property deliverable upon such
                  reorganization, reclassification consolidation, merger, sale,
                  dissolution, liquidation or winding up, as the case may be.
                  Each such written notice shall be given by first class mail,
                  postage prepaid, addressed to the holders of the Series A
                  Preferred Stock at the address of each such holder as shown on
                  the books of the Company.

                  (8) If at any time or from time to time on or after the
Initial Issuance Date, the Company shall grant, issue or sell any Options,
Convertible Securities or rights to purchase property (the "Purchase Rights")
pro rata to the record holders of any class of Common Stock of the Company and
such grants, issuances or sales do not result in an adjustment of the Conversion
Price under Paragraph F(2) hereof, then each holder of Series A Preferred Stock
shall be entitled to acquire (within 30 days after the later to occur of the
initial exercise date of such Purchase Rights or receipt by such holder of the
notice concerning Purchase Rights to which such holder shall be entitled under
Paragraph F(7)) and upon the terms applicable to such Purchase Rights either:

         (A)      the aggregate Purchase Rights which such holder could have
                  acquired if it had held the number of shares of Common Stock
                  acquirable upon conversion of the Series A Preferred Stock
                  immediately before the grant, issuance or sale of such
                  Purchase Rights; provided that if any Purchase Rights were
                  distributed to holders of Common Stock without the payment of
                  additional consideration by such holders, corresponding
                  Purchase Rights shall be distributed to the exercising holders
                  of the Series A Preferred 




                                       12
<PAGE>   13

                  Stock as soon as possible after such exercise and it shall not
                  be necessary for the exercising holder of the Series A
                  Preferred Stock specifically to request delivery of such
                  rights; or

         (B)      in the event that any such Purchase Rights shall have expired
                  or shall expire prior to the end of said 30-day period, the
                  number of shares of Common Stock or the amount of property
                  which such holder could have acquired upon such exercise at
                  the time or times at which the Company granted, issued or sold
                  such expired Purchase Rights.

                  (9) If any event occurs as to which, in the opinion of the
Board of Directors of the Company, the provisions of this Paragraph F are not
strictly applicable or if strictly applicable would not fairly protect the
rights of the holders of the Series A Preferred Stock in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such rights as
aforesaid, but in no event shall any adjustment have the effect of increasing
the Conversion Price as otherwise determined pursuant to any of the provisions
of this Paragraph F except in the case of a combination of shares of a type
contemplated in Paragraph F(d) and then in no event to an amount larger than the
Conversion Price as adjusted pursuant to Paragraph F(d).

             G.   MANDATORY CONVERSION.

                  (1) Each share of Series A Preferred Stock shall automatically
be converted into shares of Common Stock at the then effective Conversion Price
for such shares upon the vote to so convert of the holders of at least a
majority of the shares of Series A Preferred Stock then outstanding.

                  (2) All holders of record of shares of Series A Preferred
Stock will be given at least ten days' prior written notice of the date fixed
and the place designated for mandatory conversion of all of such shares of
Series A Preferred Stock pursuant to this Paragraph G. Such notice will be sent
by mail, first class, postage prepaid, to each record holder of shares of Series
A Preferred Stock at such holder's address appearing on the stock register. On
or before the date fixed for conversion each holder of shares of Series A
Preferred Stock shall surrender his or its certificates or certificates for all
such shares to the Company at the place designated in such notice, and shall
thereafter receive certificates for the number of shares of Common Stock to
which such holder is entitled pursuant to this Paragraph G. On the date fixed
for conversion, all rights with respect to the Series A Preferred Stock so
converted will terminate, except only the right of the holders thereof, upon
surrender of their certificate or certificates therefore, to receive
certificates for the number of shares of Common Stock into which such Series A
Preferred Stock has been converted. If so required by the Company, certificates
surrendered for conversion shall be endorsed or accompanied by written
instrument or instruments of transfer, in form satisfactory to the Company, duly
executed by the registered holder or by his attorneys duly authorized in
writing. All certificates evidencing shares of Series A Preferred Stock which
are required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the date such certificates are so required to be
surrendered, be deemed to have been retired and canceled and the shares of
Series A Preferred Stock represented thereby converted into Common Stock for all
purposes, notwithstanding the failure of the holder or holders thereof to
surrender such certificates on or prior to 




                                       13
<PAGE>   14

such date. As soon as practicable after the date of such mandatory conversion
and the surrender of the certificate or certificates for Series A Preferred
Stock as aforesaid, the Company shall cause to be issued and delivered to such
holder, or on his or its written order, a certificate or certificates for the
number of full shares of Common Stock issuable on such conversion in accordance
with the provisions hereof and cash as provided in Paragraph E(2) in respect of
any fraction of a share of Common Stock otherwise issuable upon such conversion.

             H.   REDEMPTION.

                  (1) The Company shall redeem (to the extent that such
redemption shall not violate any applicable provisions of the laws of the State
of Tennessee) at a price of $10.00 per share (subject to adjustment in the event
of any stock dividend, stock split, stock distribution or combination with
respect to such shares), plus an amount equal to any dividends accrued but
unpaid thereon (such amount is hereinafter referred to as the "Redemption
Price"), on May 15 (the "Redemption Date") of each of the years 2002 through
2004 thirty-three and one-third percent (33 1/3%) of the shares of Series A
Preferred Stock outstanding on the first Redemption Date or such lesser number
of shares as shall then be outstanding. If the Company is unable at any
Redemption Date to redeem any shares of Preferred Stock then to be redeemed
because such redemption would violate the applicable laws of the State of
Tennessee, then the Company shall redeem such shares as soon thereafter as
redemption would not violate such laws.

                  (2) The Series A Preferred Stock may not be redeemed before
the third anniversary of the Second Closing Date. Thereafter, the Series A
Preferred Stock shall be subject to redemption, in whole but not in part, at the
option of the Company, if the Market Price of the Common Stock on each of the 20
consecutive days on which there was a price for such shares during the period
ending within five days prior to the giving of written notice of redemption as
provided in subparagraph (4) below is at least $17.00 per share (appropriately
adjusted for any stock split, stock dividend or similar event) at a price in
cash equal to the Redemption Price then in effect.

                  (3) In the event of any redemption of only a part of the then
outstanding Series A Preferred Stock, the Company shall effect such redemption
pro rata among the holders thereof (based on the number of shares of Series A
Preferred Stock held on the date of notice of redemption).

                  (4) At least 30 days prior to each Redemption Date, written
notice shall be mailed, postage prepaid, to each holder of record of Series A
Preferred Stock to be redeemed, at his or its post office address last shown on
the records of the Company, notifying such holder of the number of shares so to
be redeemed, specifying the Redemption Date and the date on which such holder's
conversion rights (pursuant to Paragraph E hereof) as to such shares terminate
and calling upon such holder to surrender to the Company, in the manner and at
the place designated, his or its certificate or certificates representing the
shares to be redeemed (such notice is hereinafter referred to as the "Redemption
Notice"). On or prior to each Redemption Date, each holder of Series A Preferred
Stock to be redeemed shall surrender his or its certificate or certificates
representing such shares to the Company, 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 




                                       14
<PAGE>   15

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. From and after the Redemption Date, unless there shall have
been a default in payment of the Redemption Price, all rights of the holders of
the Series A Preferred Stock designated for redemption in the Redemption Notice
as holders of Series A Preferred Stock of the Company (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 Company or be
deemed to be outstanding for any purpose whatsoever.

                  (5) Except as provided in subparagraph (1) above, the Company
shall have no right to redeem the shares of Series A Preferred Stock. Any shares
of Series A Preferred Stock so redeemed shall be permanently retired, shall no
longer be deemed outstanding and shall not under any circumstances be reissued,
and the Company may from time to time take such appropriate corporate action as
may be necessary to reduce the authorized Series A Preferred Stock accordingly.
Nothing herein contained shall prevent or restrict the purchase by the Company,
from time to time either at public or private sale, of the whole or any part of
the Series A Preferred Stock at such price or prices as the Company may
determine, subject to the provisions of applicable law.

         2.       UNDESIGNATED PREFERRED STOCK.

             A. Except as set forth herein or otherwise required by law, the
Board of Directors is authorized to provide for the issuance of shares of
Undesignated Preferred Stock in one or more series and, by filing with the
Secretary of State an Articles of Amendment, which will be effective without
shareholder action in accordance with the provisions of Section 48-16-102(d) of
the Act, to establish from time to time the number of shares to be included in
each such series and to fix the designation, powers, preferences and rights of
the shares of each such series and the qualifications, limitations or
restrictions thereof.

             B. The authority of the Board of Directors with respect to each
such series shall include, but not be limited to, the authority to provide that
the shares of any such series may:

                  (1) have special, confidential or limited voting rights or no
         voting rights; provided, however, that the shares, if not convertible
         into Common Stock, will not have more than one vote per share, except
         as otherwise required by law, and if convertible into Common Stock will
         not have more votes per share than they would have if they were so
         converted, except as otherwise required by law;

                  (2) be redeemable or convertible: (a) at the option of the
         Company, by the shareholder or another person on the occurrence of a
         designated event; (b) for cash, indebtedness, securities, or other
         property; or (c) in a designated amount or in an amount determined in
         accordance with a designated formula or by reference to extrinsic data
         or events;






                                       15
<PAGE>   16

                  (3) entitle the holders to distributions calculated in any
         manner, including dividends that may be cumulative, noncumulative, or
         partially cumulative; and

                  (4) have a preference over any other classes or series with
         respect to distributions, including dividend and distributions upon the
         dissolution of the Company, all as the Board of Directors may deem
         advisable.

         3. COMMON STOCK. The designation, powers, preferences and rights, and
the qualifications, limitations and restrictions thereof in respect to shares of
Common Stock are as follows:

             A. VOTING RIGHTS. Except as set forth herein or otherwise required
by law, each outstanding share of Common Stock shall be entitled to vote on each
matter on which the shareholders of the Company shall be entitled to vote, and
each holder of Common Stock shall be entitled to one vote for each share of
Common Stock held by such holder.

             B. DIVIDENDS. The Board of Directors of the Company may cause
dividends or other distributions to be paid to holders of Common Stock out of
funds legally available therefor.

         4. PREEMPTIVE RIGHTS. The shareholders of the Company shall not have
preemptive rights.

THIRD: This amendment was duly authorized by the Board of Directors and was
adopted by the shareholders of the Company on August 20, 1997.

FOURTH: This amendment, which will constitute an amendment to the Charter, is to
be effective when filed with the Secretary of State.

         IN WITNESS WHEREOF, COVENTRY CORPORATION has caused these Articles of
Amendment to be signed by Dale B. Wolf, its Senior Vice President and Chief
Financial Officer, this 28th day of August, 1997.

                                        COVENTRY CORPORATION


                                        /s/ DALE B. WOLF
                                            ------------------------------------
                                            DALE B. WOLF, SENIOR VICE PRESIDENT 
                                            AND CHIEF FINANCIAL OFFICER


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