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Exhibit 3.12          RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                        SIGNATURE HEALTH CARE CORPORATION

                  Originally Filed with the Secretary of State
                            of the State of Delaware
                               on October 13, 1987

               Duly adopted in accordance with Section 245 of the
                General Corporation Law of the State of Delaware

                                    ARTICLE I

                  The name of the corporation is Signature Health Care
Corporation (the "Corporation").

                                   ARTICLE II

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

                                   ARTICLE III

                  The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1,700,000 sh ares, consisting of
700,000 shares of Convertible Preferred Stock, .01 per value (the "Preferred
Stock"), and 1,000,000 shares of Common Stock, .01 per value (the "Common
Stock").

                  The designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations and restrictions thereof in respect of the Preferred Stock and the
Common Stock are as follows:

a.       PREFERRED STOCK

                  i. Dividends. The holder of each share of Preferred Stock
shall be entitled to receive dividends on an as converted basis in an amount per
share equal to the amount per share received by the holders of the Common Stock.
All payments due under this Section A.1 to any holder of shares of Preferred
Stock shall be made to the nearest cent. No rights shall accrue to holders of
Preferred Stock by reason of the fact that dividends on such shares are not
declared in any prior period.

                  ii. Rights on Liquidation, Dissolution, Winding-Up. (i) In the
event of any liquidation, dissolution or winding-up of the affairs of the
Corporation (collectively, a "Liquidation"), the holders of shares of Preferred
Stock then outstanding shall be entitled to be paid out of the assets of the
Corporation legally available for distribution to its stockholders, whether from
capital, surplus or earnings, before any payment shall be made to the holders of
any stock ranking on liquidation junior to the Preferred Stock (with respect to
rights on liquidation, dissolution or winding-up, the Preferred Stock shall rank
prior to the Common Stock) an amount per share equal to 2.86, plus an amount
equal to declared but unpaid dividends, if any, to the date of payment. If upon
any Liquidation, the assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares of the Preferred
Stock the full amounts to which they respectively shall be entitled, the holders
of shares of the Preferred Stock shall share ratably in any distribution of
assets according to the respective amounts which would be payable in respect of
the shares held by them upon such distribution if all amounts payable on or with
respect to said shares were paid in
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full. In the event of any Liquidation, after payment shall have been made to the
holders of shares of Preferred Stock in the full amount to which they are
entitled as aforesaid, the holders of shares of Common Stock shall be entitled
to all remaining assets of the Corporation available for distribution to its
stockholders.

                  (ii) In the event _______ and simultaneously with the closing
of an Event of Sale (as hereinafter defined), the Corporation shall (unless
otherwise prevent by law) redeem all the shares of Preferred Stock then
outstanding for a cash amount per share of Preferred Stock redeemed equal to
$2.86 plus an amount equal to declared and unpaid dividends, if any, to the date
of payment (said redemption being referred to herein as a "Special Redemption").
The date upon which the Special Redemption shall occur is sometimes referred to
herein as the "Special Redemption Date." The Corporation shall cause notice of
such Special Redemption to be sent by first class certified mail, return receipt
requested, postage prepaid, to the holders of record of shares of Preferred
Stock at their respective addresses as the same shall appear on the books of the
Corporation. Such notice shall be mailed prior to or at the same time as any
notice of a stockholders meeting to be held for the purpose of voting on such
Event of Sale or as any request for consent in lieu of such meeting or, if not
such notice or consent is required, the notice of such Special Redemption shall
be mailed no later than 10 days prior to such Special Redemption Date, each
holder of record of shares of Preferred Stock to be redeemed on such Special
Redemption Date shall be entitled to receive the applicable Special Redemption
Price upon actual delivery to the Corporation or its agents of the certificates
representing the shares to be redeemed. Anything contained herein to the
contrary notwithstanding, the provision of this Section 2 with respect to the
redemption of all of the shares of Preferred Stock may be waived, at the option
of the holders of a majority of shares of the Preferred Stock by delivery of
written notice to the Corporation prior to the closing of any Event of Sale
waiving such redemption, in which event the Corporation shall not redeem any
shares of such series of Preferred Stock with respect to which redemption has
been waived. If upon any redemption the assets of the Corporation available for
redemption shall be insufficient to pay the holders of the shares of Preferred
Stock the full amounts to which they shall be entitled, the holders of shares of
Preferred Stock to be redeemed shall share ratably in any such redemption based
upon their respective ownership of outstanding shares of Preferred Stock. On and
after any Special Redemption Date, all rights in respect of the shares of
Preferred Stock to be redeemed, except the right to receive the applicable
Special Redemption Price as herein provided, shall cease and terminate (unless
default shall be made by the Corporation in the payment of the applicable
Special Redemption Price as herein provided, in which event such rights shall be
exercisable until such default is cured), and such shares shall no longer be
deemed to be outstanding, whether or not the certificates representing such
shares have been received by the Corporation. For purposes of this Section 2, an
"Event of Sale" shall mean (A) the merger or consolidation of the Corporation
into or with another corporation,
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partnership, joint venture, trust or other entity or the merger or consolidation
of any other corporation into or with the Corporation (in which consolidation or
merger the shareholders of the Corporation receive distributions of cash or
securities as a result of such consolidation or merger in exchange for their
shares of capital stock of the Corporation), or (B) the sale or other
disposition of all or substantially all the assets of the Corporation or the
purchase or other acquisition of all or substantially all the assets of any
other corporation, partnership, joint venture, trust or other entity, unless,
upon consummation of such merger or consolidation or sale or purchase of assets,
the holders of voting securities of the Corporation immediately prior to such
transaction continue to own directly or indirectly not less than a majority of
the voting power of the surviving corporation.

                  iii. Redemption. (i) The Corporation shall (unless otherwise
prevented by law) redeem on each of the seventh, eighth and ninth anniversaries
of the Original Issuance Date at a redemption price per share equal to $4.30,
the lesser of (i) 1/3 of the shares of Preferred Stock outstanding on the
seventh anniversary of the Original Issuance Date or (ii) all of the share of
Preferred Stock then outstanding. The date on which the Corporation shall redeem
shares of Preferred Stock is hereinafter referred to as a "Redemption Date", the
total sum payable per share of Preferred Stock on the Redemption Date is
hereinafter referred to as the "Redemption Price", and the payment to be made on
the Redemption Date is hereinafter referred to as the "Redemption Payment".

                  (ii) On and after the Redemption Date (unless default shall be
made by the Corporation in the payment of the Redemption Price as hereinafter
provided, in which event such rights shall be exercisable until such default is
cured), all rights in respect to the shares of Preferred Stock to be redeemed,
except the right to receive the Redemption Price as hereinafter provided, shall
cease and terminate; and such shares shall no longer be deemed to be
outstanding, whether or not the certificates representing such shares have been
received by the Corporation.

                  (iii) Notice of redemption pursuant to this Section A.3 shall
be sent by first-class, certified mail, return receipt requested, postage
prepaid, to the holders of shares of Preferred Stock at their respective
addresses appearing on the books of the Corporation. Such notice shall be mailed
not less than 30 nor more than 60 days in advance of the Redemption Date, and
the holders of record of shares of Preferred Stock to be redeemed on such
Redemption Date shall be entitled to receive the Redemption Price upon actual
delivery to the Corporation or its agent of the certificate representing the
shares to be redeemed. If upon any redemption the assets of the Corporation
available for redemption shall be insufficient to pay the holders of the shares
of Preferred Stock the full amount to which they shall be entitled, the holders
of shares of Preferred Stock shall share ratably in any such redemption
according to the respective amounts which would be payable thereof if all
amounts payable on or with respect to such shares were paid in full.
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                  (iv) The Corporation shall not, and shall not permit any
subsidiary of the Corporation to, purchase or acquire any shares of Preferred
Stock otherwise than pursuant to the terms of this Section A.3 or pursuant to an
offer made on the same terms of to all holders of shares of Preferred Stock at
the time outstanding.

                  (v) Anything contained in this Section A.3 to the contrary
notwithstanding, the holders of shares of Preferred Stock shall have the right,
exercisable at any time up to the close of business on the Redemption Date
(unless default shall be made by the Corporation in the payment of the
Redemption Price as herein provided, in which event such right shall be
exercisable until such default is cured), to convert all or any part of such
shares requested by such holder to be redeemed as herein provided into shares of
Common Stock pursuant to Section A.5. If, and to the extent, any shares of
Preferred Stock so entitled to redemption are converted into shares of Common
Stock by the holders thereof prior to the close of business on the Redemption
Date, the total number of shares of Preferred Stock otherwise to be redeemed on
such Redemption Date shall be reduced by the number of shares of Preferred Stock
so converted.

                  iv. Voting. (i) In addition to the rights specified in Section
A.4(b) below and any other rights provided in the Corporation's By-laws or by
law, each share of Preferred Stock shall entitle the holder thereof to such
number of votes per share ash shall equal the number of shares of Common Stock
(including any fraction to one decimal place) into which each share of Preferred
Stock is then convertible, and shall further entitle the holder thereof to vote,
together with the holders of Common Stock as one class, on all matters as to
which holders of Common Stock shall be entitled to vote, in the same manner and
with the same effect as such holders of Common Stock.

                  (ii) (i) the Corporation shall not, without the affirmative
approval of the holders of shares representing at least 60% of the voting power
of the Preferred Stock then outstanding, acting separately as one class, given
by written consent in lieu of a meeting or by vote at a meeting called for such
purpose for which notice shall have been given to the holders of the Preferred
Stock, (A) sell, abandon, transfer, lease or otherwise dispose of all or
substantially all of its properties or assets other than in the ordinary course
of its business, (B) purchase, lease or otherwise acquire all or substantially
all of the assets of another entity, (C) pay any dividend or make any
distribution with respect to any shares of its capital stock or, except as
required by Section B.2 hereof or any agreement with an employee providing for
the repurchase by the Corporation of such employee's capital stock of the
Corporation, make any payment on account of the purchase , redemption or other
retirement of any shares of its capital stock, or distribute to holders of
shares of Common Stock shares of the Corporation's capital stock (other than
Common Stock) or other securities of other entities, evidences of indebtedness
issued by the Corporation or other entities, or other assets or options or
rights (excluding options to purchase and rights to subscribe for shares of
Common Stock or the securities of the Corporation convertible into or
exchangeable for shares of Common Stock), (D)
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merge or consolidate with or into, or permit any subsidiary to merge or
consolidate with or into, any other corporation, corporations or other entity or
entities, (E) create any shares of capital stock which is senior to or on a
parity with the Preferred Stock, (F) in any manner alter or change the
designations, powers, preferences, rights, qualifications, limitations or
restrictions of the Preferred Stock, (G) take any action to cause any amendment,
alteration or repeal of any of the provisions of this Certificate of
Incorporation or the By-laws of the Corporation, (H) except for the issuance of
shares of capital stock or other securities constituting shares of Excluded
Stock (as defined in Section A.5(e)(ii) below), authorize, issue or agree to
issue any shares of the Corporation's capital stock or any security, right,
option or warrant convertible into, or exercisable or exchangeable for, shares
of the Corporation's capital stock or any debt security or capitalized lease
with an equity feature of the Corporation or (I) enter into a Related
Transaction (as defined in the Convertible Preferred Stock Purchase Agreement
(the "Purchase Agreement") dated on or about the Original Issuance Date, among
the Corporation and the other signatories thereto) involving more than $25,000,
individually or in the aggregate or on terms no less favorable than those
available at the same time from non-affiliated persons.

                  (ii) The Corporation shall not, without the affirmative
approval of the Board of Directors of the Corporation, including the Preferred
Representative (A) acquire, purchase, lease or control in any manner any health
care facility or (B) approve any salary or salary increase of any person
employed by the Corporation whose salary is in excess of $75,000 per annum,
including any consultants employed by the Company.

                  v. Conversion. (i) The holder of any shares of Preferred Stock
shall have the right, at any time or from time to time, to convert any or all of
such holder's shares of Preferred Stock into such number of fully paid and
nonassessable shares of Common Stock as is equal to the quotient obtained by
dividing (A) $2.86 multiplied by the number of shares of Preferred Stock being
converted, by (B) the Preferred Conversion Price (as last adjusted and then in
effect) for the shares of Preferred Stock being converted, by surrender of the
certificates representing the shares of Preferred Stock to be converted in the
manner provided in Section A.5(b) below. The Preferred Conversion Price per
share at which shares of Common Stock shall be issuable upon conversion of
shares of Preferred Stock shall be $2.86; provided, however, that such Preferred
Conversion Price shall be subject to adjustment as set forth in Section A.5(e)
below.

                  (ii) The holder of any shares of Preferred Stock may exercise
the conversion right pursuant to Section A.5(a) above by delivering to the
Corporation during regular business hours, at the office of any transfer agent
of the Corporation for the Preferred Stock or at such other place as may be
designated by the Corporation, the certificate or certificates for the shares to
be converted, duly endorsed or assigned in blank or to the Corporation (if
required by it), accompanied by written notice stating that such holder elects
to convert such shares and stating the name or names (with address) in which the
certificate or certificates for 
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the shares of Common Stock are to be issued. Such conversion shall be deemed to
have been effected on the date when the aforesaid delivery is made, and such
date is referred to herein as the "Conversion Date". As promptly as practicable
thereafter, the Corporation shall issue and deliver to or upon the written order
of such holder, at the place designated by such holder, a certificate or
certificates for the number of full shares of Common Stock to which such holder
is entitled and a check or cash in respect of any fractional interest in a
shares of Common Stock, as provided in Section A.5(d) below, payable with
respect to the shares of Preferred Stock so converted up to and including the
Conversion Date. The person in whose name the certificate or certificates for
Common Stock are to be issued shall be deemed to have become a stockholder of
record on the applicable Conversion Date unless the transfer books of the
Corporation are closed on that date, in which event such holder shall be deemed
to have become a stockholder of record on the next succeeding date on which the
transfer books are open, but the Preferred Conversion Price shall be that in
effect on the Conversion Date. Upon conversion of only a portion of the number
of shares covered by a certificate representing shares of Preferred Stock
surrendered for conversion, the Corporation shall issue and deliver to or for
conversion, the Corporation shall issue and deliver to or upon the written order
of the holder of the certificate so surrendered for conversion, at the expense
of the Corporation, a new certificate covering the number of shares of Preferred
Stock representing the unconverted converted portion of the certificate so
surrendered, which new certificate shall entitle the holder thereof to dividends
on the shares of Preferred Stock represented thereby to the same extent as if
the certificate theretofore covering such unconverted shares had not been
surrendered for conversion.

                  (iii) Upon the occurrence of an Event of Conversion (as
hereinafter defined), all shares of Preferred Stock then outstanding shall, by
virtue of, and simultaneously with the occurrence of the Event of Conversion and
without any action on the part of the holder thereof, be deemed automatically
converted into such whole number of fully paid and nonassessable shares of
Common Stock as is equal to the quotient obtained by dividing (A) $2.86
multiplied by the number of shares of Preferred Stock being converted by (B) the
Preferred Conversion Price (as last adjusted and then in effect) for the shares
of Preferred Stock being converted. As used herein, the term "Event of
Conversion" shall mean the consummation of an underwritten public offering on a
firm commitment basis of shares of Common Stock pursuant to the Securities Act
of 1933 at a net selling price per share of Common Stock (as constituted on the
date hereof) of not less than $8.58 and which results in aggregate gross cash
proceeds (prior to deduction of underwriters' commissions and expenses, if any)
to the Corporation equal to not less than $5,000,000.

                  (iv) No fractional shares of Common Stock shall be issued upon
conversion of shares of Preferred Stock. If more than one share of Preferred
Stock shall be surrendered for conversion at any one time by the same holder,
the number of full shares of Common Stock issuable upon conversion thereof shall
be computed on the 
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basis of the aggregate number of shares of Preferred Stock so surrendered.
Instead of any fractional shares of Common Stock which would otherwise be
issuable upon conversion of any shares of Preferred Stock the Corporation shall
pay a cash adjustment in respect of such fractional interest in an amount equal
to the then Current Market Price (as hereinafter defined) of a share of Common
Stock multiplied by such fractional interest. Fractional interests shall not be
entitled to dividends, and the holders of fractional interests shall not be
entitled to any rights as stockholders of the Corporation in respect of such
fractional interest.

                  (v) The Preferred Conversion Price shall be subject to
adjustment from time to time as follows:

                           (i)      If the Corporation shall at any time or from
time to time after the Original Issuance Date, issue any shares of Common Stock,
Preferred Stock or other securities convertible into or exchangeable or
exercisable for shares of Common Stock, in each case other than Excluded Stock
(as hereinafter defined), without consideration or for a consideration per share
less than the Preferred Conversion Price in effect immediately prior to the
issuance of such Common Stock, Preferred Stock or other security, the Preferred
Conversion Price in effect immediately prior to each such issuance shall
forthwith (except as provided in this clause(i)) be lowered to a price equal to
the quotient obtained by dividing

                           (A) an amount equal to the sum of

                           (x) the total number of shares of Common Stock
outstanding (including any shares of Common Stock deemed to have been issued
pursuant to subdivision (C) of this clause (i) and to clause (ii) below
(including, but not limited to, the shares of Common Stock issuable upon
conversion of the Preferred Stock)) immediately prior to such issuance
multiplied by the Preferred Conversion Price in effect immediately prior to such
issuance, plus

                           (y)  the consideration received by the Corporation
upon such issuance

                           (B)  the total number of shares of Common Stock
outstanding (including any shares of Common Stock deemed to have been issued
pursuant to subdivision (C) of this clause (i) and to clause (ii) below
(including but not limited to, the shares of Common Stock issuable upon
conversion of the Preferred Stock)) immediately after issuance of such Common
Stock.

For the purposes of any adjustment of the Preferred Conversion Price pursuant to
this clause (i), the following provisions shall be applicable:

                           (A) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid therefor
after deducting therefrom any 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.

                           (B) In the case of the issuance of 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 market value thereof as determined in good
faith by the Board of Directors of the Corporation, irrespective of any
accounting treatment; 
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provided, however, that such fair market value as determined by the Board of
Directors shall not exceed the aggregate Current Market Price of the shares of
Common Stock being issued.

                           (C) In the case of the issuance of (I) options to
purchase or rights to subscribe for Common Stock, (II) securities by their terms
convertible into or exchangeable for Common Stock or (III) options to purchase
or rights to subscribe for such convertible or exchangeable securities:

                           (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 subdivisions (A) and (B) 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
conversion 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 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 subdivisions (A) and (B) above;

                           (3) on any change in the number of shares or exercise
price of Common Stock deliverable upon exercise of any such options or rights or
conversions of or exchange for such convertible or exchangeable securities,
other than a change resulting from the antidilution provisions thereof, the
Preferred Conversion Price shall forthwith be readjusted to such Preferred
Conversion Price as would have obtained had the adjustment made upon the
issuance of such options, rights or securities not converted prior to such
change been made upon the basis of such change; and

                           (4) on 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 Preferred Conversion Price shall forthwith be readjusted to such Preferred
Conversion Price as would have been obtained had such options, rights,
securities or options or rights related to such securities not been issued.

                           (ii) "Excluded Stock" shall mean:

                           (A) Common Stock issued upon conversion of any shares
of Preferred Stock;
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                           (B)  Common Stock issued to officers, employees or
directors of, or consultants to, the Corporation, pursuant to any agreement,
plan or arrangement approved by the Board of Directors of the Corporation,
options to purchase or rights to subscribe for such Common Stock, or securities
(other than the Preferred Stock) by their terms convertible into or exchangeable
for such Common Stock, or options to purchase or rights to subscribe for such
convertible or exchangeable securities; and

                           (C)  securities issued pursuant to the acquisition
of another corporation by the Corporation by merger, stock acquisition,
reorganization, purchase of substantially all of the assets or otherwise whereby
the Corporation owns at least 51% of the voting power of such other corporation
after such transaction.

                           (iii) If the number of shares of Common Stock
outstanding at any time after the Original Issuance Date is increased by a stock
dividend payable in shares of Common Stock, then, following the record date
fixed for the determination of holders of Common Stock entitled to receive such
stock dividends, subdivision or split-up, such Preferred Conversion Price shall
be appropriately decreased so that the number of shares of Common Stock issuable
on conversion of each share of Preferred Stock shall be increased in proportion
to such increase in outstanding shares.

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

                           (v) In case, at any time after the Original Issuance
Date, of any capital reorganization, or any reclassification of the capital
stock of the Corporation (other than a change in par value or from par value or
as a result of a stock dividend or subdivision, split-up or combination of
shares), or the consolidation or merger of the Corporation with or into another
person (other than a consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any change in the Common
Stock) or of the sale or other disposition of all or substantially all the
properties and assets of the Corporation as an entirety to any other person,
each share of Preferred Stock shall after such reorganization, reclassification,
consolidation, merger, sale or other disposition be (unless, in the case of a
consolidation, merger, sale or other disposition, payment shall have been made
to the holders of all shares of Preferred Stock of the full amount to which they
shall have been entitled pursuant to Section A.2) convertible into the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold or otherwise disposed
to which the holder of the number of shares of Common Stock deliverable
(immediately prior to the time of such reorganization, reclassification,
consolidation, merger, sale or other disposition) 
<PAGE>   10
upon conversion of such share of Preferred Stock would have been entitled upon
such reorganization, reclassification, consolidation, merger, sale or other
disposition. The provisions of this Section A.5 shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales or
other dispositions.

                           (vi) All calculations under this paragraph (e) shall
be made to the nearest one-tenth of a cent ($.001) or to the nearest one-tenth
of a share, as the case may be.

                           (vii) For the purpose of any computation pursuant to
Section A.5(d) and (e) above, the current market price (the "Current Market
Price") at any date of one share of Common Stock shall be deemed to be the
average of the daily closing prices for the 30 consecutive business days ending
on the fifth business day before the day in question (as adjusted for any stock
dividend, split-up, combination or reclassification that took effect during such
30-business-day period). The closing price for each day shall be the last
reported sales price regular way or, in case no such reported sales took place
on such day, the average of the last reported bid and asked prices regular way,
in either case on the principal national securities exchange on which the Common
Stock is listed or admitted to trading (or if the Common Stock is not at the
time listed or admitted for trading on any such exchange, then such price as
shall be equal to the last reported sale price, or if there is no such sale
price, the average of the last reported bid and asked prices, as reported by the
National Association of Securities Dealers Automated Quotations System (NASDAQ")
on such day, or if, on any day in question, the security shall not be quoted on
the NASDAQ, then such price shall be equal to the last reported bid and asked
prices on such day as reported by the National Quotation Bureau, Inc. or any
similar reputable quotation and reporting service, if such quotation is not
reported by the National Quotation Bureau, Inc.); provided, however, that if the
Common Stock is not traded in such manner that the quotations referred to in
this clause (vii) are available for the period required hereunder, the Current
Market Price shall be determined by a majority of the entire Board of Directors
of the Corporation.

                           (viii) In any case in which the provisions of this
Section A.5(e) shall require that an adjustment shall become effective
immediately after a record date for an event, the Corporation may defer until
the occurrence of such event (i) issuing to the holder of any share of Preferred
Stock converted after such record date and before the occurrence of such event
the additional shares of capital stock issuable upon such event over and above
the shares of capital stock issuable upon such conversion before giving effect
to such adjustment and (ii) paying to such holder any amount in cash in lieu of
a fractional share of capital stock pursuant to Section A.5(d) above; provided,
however, that the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such
adjustment.

                           (vi) Whenever the Preferred Conversion Price shall be
adjusted as provided in Section A.5(e) above, the Corporation shall 
<PAGE>   11
forthwith file, at the office of the transfer agent for the Preferred Stock or
at such other place as may be designated by the Corporation, a statement, signed
by its President or Chief Financial Officer and by its Treasurer, showing in
detail the facts requiring such adjustment and the Preferred Conversion Price
that shall be in effect after such adjustment. The Corporation shall also cause
a copy of such statement to be sent by first-class, certified mail, return
receipt requested, postage prepaid, to each holder of shares of Preferred Stock
at such holder's address appearing on the Corporation's records. Where
appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions of Section A.5 (g) below.

                  (vii) In the event the Corporation shall propose to take any
action of the types described in clauses (i), (iii), (iv), (v) or (vi) of
Section A.5(e) above, the Corporation shall give notice to each holder of shares
of Preferred Stock, in the manner set forth in Section A.5(f) above, which
notice shall specify the record date, if any, with respect to any such action
and the date on which such action is to take place. Such notice shall also set
forth such facts thereto as shall be reasonably necessary to indicate the effect
of such action (to the extent such effect may be known at the date of such
notice) on the Preferred Conversion Price and the number, kind or class of
shares or other securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon conversion of shares of
Preferred Stock. In the case of any action which would require the fixing of a
record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of any such
action.

                  (viii) The Corporation shall pay all documentary, stamp or
other transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Corporation upon conversion of any shares of Preferred
Stock; provided, however, that the Corporation shall not be required to pay any
taxes which may be payable in respect of any transfer involved in the issuance
or delivery of any certificate for such shares in a name other then that of the
holder of the shares of Preferred Stock in respect of which such shares are
being issued.

                  (ix) The Corporation shall reserve, free from preemptive
rights, out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of Preferred Stock
sufficient shares to provide for the conversion of all outstanding shares of
Preferred Stock.

                  (x) All shares of Common Stock which may be issued in
connection with the conversion provisions set forth herein will, upon issuance
by the Corporation, be validly issued, fully paid and nonassessable and free
from all taxes, liens or charges with respect thereto created or imposed by the
Corporation.
<PAGE>   12
                  vi. Definition. As used in this Article Third, the term
"Original Issuance Date" shall mean the date of original issuance of the first
share of Preferred Stock.

b.       COMMON STOCK

                  i. Voting. Each holder of shares of Common Stock shall be
entitled to one vote for each share of Common Stock held on all matters as to
which holders of Common Stock shall be entitled to vote. The number of shares of
Common Stock may be increased or decreased by the affirmative vote of the
holders of all classes of stock entitled to vote thereon voting together as a
single class and not with the Common Stock voting separately as a single class.

                  ii. Other Rights. Each share of Common Stock issued and
outstanding s hall be identical in all respects one with the other, and no
dividends shall be paid on any shares of Common Stock unless the same dividend
is paid on all shares of Common Stock outstanding at the time of such payment
and unless all shares of Preferred Stock have been converted into shares of
Common Stock. Except for and subject to those rights expressly granted to the
holders of the Preferred Stock, or except as may be provided by the laws of the
State of Delaware, the holders of Common Stock s hall have exclusively all other
rights of stockholders including, but not by way of limitation, (i) the right to
receive dividends, when and as declared by the Board of Directors of the
Corporation out of assets lawfully available therefor, and (ii) in the event of
any distribution of assets upon a Liquidation or otherwise, the right to receive
ratably and equally all the assets and funds of the Corporation remaining after
the payment to the holders of sh ares of Preferred Stock of the specific amounts
which they are entitled to receive upon such Liquidation as herein provided.

                                   ARTICLE IV

                  The address of the Corporation's registered office in the
State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware
19801. The Corporation's registered agent at such address is The Corporation
Trust Company.

                                    ARTICLE V

                  The business and affairs of the Corporation shall be managed
by the Board of Directors and the Directors need not be elected by written
ballot unless the By-Laws of the Corporation shall so provide. Meetings of the
Stockholders may be held within or without the State of Delaware, as the By-Laws
may provide. The books of the Corporation may be kept (subject to any provision
contained in the Delaware statutes) outside the State of Delaware at such place
or places as may be designated from time to time by the Board of Directors or in
the By-Laws of the Corporation.

                                   ARTICLE VI

                  Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
matter as the said court directs. If a majority in number representing 3/4 in
value of the creditors or class of creditors, and/or of the 
<PAGE>   13
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.

                                   ARTICLE VII

                  A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law, (iii) under Section 174 of the Delaware Statute,
or (iv) for any transaction for which the director derived an improper personal
benefit. If the Delaware Statute is amended after the date of incorporation of
the Corporation to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware Statute, as so amended.

                  Any repeal or modification of the foregoing paragraph by the
stockholders 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.

                  SIGNATURE HEALTH CARE CORPORATION, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:

                  FIRST: That at a meeting of the Board of Directors of
SIGNATURE HEALTH CARE CORPORATION resolutions were duly adopted setting forth
the proposed Restated Certificate of Incorporation, declaring said restatement
to be advisable and calling a meeting of the stockholders of said corporation
for consideration thereof.

                  SECOND: That the stockholders of said corporation, acting by
unanimous written consent in accordance with Section 228 of the General
Corporation Law of the State of Delaware approved the restatement.

                  THIRD: That said restatement was duly adopted in accordance
with the provisions of Section 242 and 245 of the General Corporation Law of the
State of Delaware.

                  IN WITNESS WHEREOF, SIGNATURE HEALTH CARE CORPORATION has
caused this certificate to be signed by __________________________, its
President and attested by _____________________________, its Secretary, this 3rd
day of September, 1988.

                                    SIGNATURE HEALTH CARE CORPORATION

                                    /S/
                                    --------------------------------
                                    Its:  President

ATTEST:

/S/
--------------------------------
Secretary
<PAGE>   14
                            CERTIFICATE OF AMENDMENT
                    TO RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                        SIGNATURE HEALTH CARE CORPORATION

                        Filed with the Secretary of State
                            of the State of Delaware
                               on October 4, 1988

         SIGNATURE HEALTH CARE CORPORATION, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

         FIRST: That the Restate Certificate of Incorporation of the Corporation
originally filed with the Secretary of the State of Delaware on October 4, 1988
(the "Restated Certificate") be and hereby is amended by deleting Article III of
the Restated Certificate in its entirety and inserting the following in lieu
thereof as a new Article III:

                                   ARTICLE III

         The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1,900,000 shares, consisting of
700,000 shares of Convertible Preferred Stock, $.01 par value (the "Preferred
Stock"), and 1,200,000 shares of Common Stock, $.01 par value (the "Common
Stock").

         The designations, powers, preferences, and relative, participating,
optional or other special rights, and the qualifications, limitations and
restrictions thereof in respect of the Preferred Stock and the Common Stock are
as follows:

A.       PREFERRED STOCK

         1. Dividends. The holder of each share of Preferred Stock shall be
entitled to receive dividends on an as converted basis in an amount per share
equal to the amount per share received by the holders of the Common Stock. All
payments due under this Section A.1 to any holder of shares of Preferred Stock
shall be made to the nearest cent. No rights shall accrue to holders of
Preferred Stock by reason of the fact that dividends on such shares are not
declared in any prior period.

         2. Rights on Liquidation, Dissolution, Winding-Up. (a) In the event of
any liquidation, dissolution of winding-up of the affairs of the Corporation
(collectively, a "Liquidation"), the holders of shares of Preferred Stock then
outstanding shall be entitled to be paid out of the asserts of the Corporation
legally available for distribution to its stockholders, whether from capital,
surplus or earnings, before any payment shall be made to the holders of any
stock ranking on liquidation junior to the Preferred Stock (with respect to
rights on liquidation, dissolution or winding-up, the Preferred Stock shall rank
prior to the Common Stock) an amount per share equal to $2.86, plus an amount
equal to declared but unpaid dividends, if any, to the date of payment. If, upon
any Liquidation, the assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares of the Preferred
Stock the full amounts to which they respectively shall be entitled, the holders
of shares of the Preferred Stock shall share ratably in any distribution of
assets 
<PAGE>   15
according to the respective amounts which would be payable in respect of the
shares held by them upon such distribution if all amounts payable on or with
respect to said shares were paid in full. In the event of any Liquidation, after
payment shall have been made to the holders of shares of Preferred Stock in the
full amount to which they are entitled as aforesaid, the holders of shares of
Common Stock shall be entitled to all remaining assets of the Corporation
available for distribution to its stockholders.

         (b) In the event of and simultaneously with the closing of an Event of
Sale (as hereinafter defined), the Corporation shall (unless otherwise prevented
by law) redeem all the shares of Preferred Stock then outstanding for a cash
amount per share of Preferred Stock redeemed equal to $2.86 plus an amount equal
to declared and unpaid dividends, if any, to the date of payment (said
redemption being referred to herein as a "Special Redemption"). The date upon
which the Special Redemption shall occur is sometimes referred to herein as the
"Special Redemption Date." The Corporation shall cause notice of such Special
Redemption to be sent by first class certified mail, return receipt requested,
postage prepaid, to the holders of record of shares of Preferred Stock at their
respective addresses as the same shall appear on the books of the Corporation.
Such notice shall be mailed prior to or at the same time as any notice of a
stockholders meeting to be held for the purpose of voting on such Event of Sale
or as any request for consent in lieu of such meeting or, if no such notice or
consent is required, the notice of such Special Redemption shall be mailed o
later than 10 days prior to such Special Redemption Date. At any time on or
after the Special Redemption Date, each holder of record of shares of Preferred
Stock to be redeemed on such Special Redemption Date shall be entitled to
receive the applicable Special Redemption Price upon actual delivery to the
Corporation or its agents of the certificates representing the shares to be
redeemed. Anything contained herein to the contrary notwithstanding, the
provision of this Section 2 with respect to the redemption of all of the shares
of Preferred Stock may be waived, at the option of the holders of a majority of
shares of the Preferred Stock by delivery of written notice to the Corporation
prior to the closing of any Event of Sale waiving such redemption, in which
event the Corporation shall not redeem any shares of such series of Preferred
Stock with respect to which redemption has been waived. If upon any redemption
the assets of the Corporation available for redemption shall be insufficient to
pay the holders of the shares of Preferred Stock the full amounts to which they
shall be entitled, the holders of shares of Preferred Stock to be redeemed shall
share ratably in any such redemption based upon their respective ownership of
outstanding shares of Preferred Stock. On and after any Special Redemption Date,
all rights in respect of the shares of Preferred Stock to be redeemed, except
the right to receive the applicable Special Redemption Price as herein provided,
shall cease and terminate (unless default shall be made by the Corporation in
the payment of the applicable Special Redemption Price as herein provided, in
which event such rights shall be exercisable until such default is cured), and
such shares shall no longer be deemed to be outstanding, whether or not the
certificates
<PAGE>   16
representing such shares have been received by the Corporation. For purposes on
this Section 2, an "Event of Sale" shall mean (A) the merger or consolidation of
the Corporation into or with another corporation, partnership, joint venture,
trust or other entity or the merger or consolidation of any other corporation
into or with the Corporation (in which consolidation or merger the shareholders
of the Corporation receive distributions of cash or securities as a result of
such consolidation or merger in exchange for their shares of capital stock of
the Corporation), or (B) the sale or other disposition of all or substantially
all the assets of the Corporation or the purchase or other acquisition of all or
substantially all the assets of any other corporation, partnership, joint
venture, trust or other entity, unless, upon consummation of such merger or
consolidation or sale or purchase of assets, the holders of voting securities of
the Corporation immediately prior to such transaction continue to own directly
or indirectly not less than a majority of the voting power of the surviving
corporation.

         3. Redemption. (a) The Corporation shall (unless otherwise prevented by
law) redeem on May 31, 1997 at a redemption price per share equal to $4.30, all
of the shares of Preferred Stock then outstanding. The date on which the
Corporation shall redeem shares of Preferred Stock is hereinafter referred to as
a "Redemption Date," the total sum payable per share of Preferred Stock on the
Redemption Date is hereinafter referred to as the "Redemption Price," and the
payment to be made on the Redemption Date is hereinafter referred to as the
"Redemption Payment."

                  (b) On and after the Redemption Date (unless default shall be
made by the Corporation in the payment of the Redemption Price as hereinafter
provided, in which event such rights shall be exercisable until such default is
cured), all rights in respect of the shares of Preferred Stock to be redeemed,
except the right to receive the Redemption Price as hereinafter provided, shall
cease and terminate; and such shares shall no longer be deemed to be
outstanding, whether or not the certificates representing such shares have been
received by the Corporation.

                  (c) Notice of redemption pursuant to this Section A.3 shall be
sent by first-class, certified mail, return receipt requested, postage prepaid,
to the holders of shares of Preferred Stock at their respective addresses
appearing on the books of the Corporation. Such notice shall be mailed not less
than 30 nor more than 60 days in advance of the Redemption Date, and the holders
of record of shares of Preferred Stock shall be entitled to receive the
Redemption Price upon actual delivery to the Corporation or its agent of the
certificate representing the shares to be redeemed. If upon any redemption the
assets of the Corporation available for redemption shall be insufficient to pay
the holders of the shares of Preferred Stock the full amount to which they shall
be entitled, the holders of shares of Preferred Stock shall share ratably in any
such redemption according to the respective amounts which would be payable
thereof if all amounts payable on or with respect to such shares were paid in
full.

                  (d) The Corporation shall not, and shall not permit any
subsidiary of the Corporation to, purchase or acquire any shares of Preferred
Stock otherwise than pursuant to the terms of this
<PAGE>   17
Section A.3 or pursuant to an offer made on the same terms to all holders of
shares of Preferred Stock at the time outstanding.

                  (e) Anything contained in this Section A.3 to the contrary
notwithstanding, the holders of shares of Preferred Stock shall have the right,
exercisable at any time up to the close of business on the Redemption Date
(unless default shall be made by the Corporation in the payment of the
Redemption Price as herein provided, in which event such right shall be
exercisable until such default is cured), to convert all or any part of such
shares requested by such holder to be redeemed as herein provided into shares of
Common Stock pursuant to Section A.5. If, and to the extent, any shares of
Preferred Stock so entitled to redemption are converted into shares of Common
Stock by the holders thereof prior to the close of business on the Redemption
Date, the total number of shares of Preferred Stock otherwise to be redeemed on
such Redemption Date shall be reduced by the number of shares of Preferred Stock
so converted.

         4. Voting. (a) In addition to the rights specified in Sections A.4(b)
below and any other rights provided in the Corporation's By-laws or by law, each
share of Preferred Stock shall entitle the holder thereof to such number of
votes per share as shall equal the number of shares of Common Stock (including
any fraction to one decimal place) into which each share of Preferred Stock is
then convertible, and shall further entitle the holder thereof to vote, together
with the holders of Common Stock as one class, on all matters as to which
holders of Common Stock shall be entitled to vote, in the same manner and with
the same effect as such holders of Common Stock.

                  (b) (i) The Corporation shall not, without the affirmative
approval of the holders of shares representing at least 60% of the voting power
of the Preferred Stock then outstanding, acting separately as one class, given
by written consent in lieu of a meeting or by vote at a meeting called for such
purpose for which notice shall have been given to the holders of the Preferred
Stock, (A) sell, abandon, transfer, lease or otherwise dispose of all or
substantially all of its properties or assets other than in the ordinary course
of its business, (B) purchase, lease or otherwise acquire all or substantially
all of the assets of another entity, (C) pay any dividend or make any
distribution with respect to any shares of its capital stock or, except as
required by Section B.2 hereof or any agreement with an employee providing for
the repurchase by the Corporation of such employee's capital stock of the
Corporation, make any payment on account of the purchase, redemption or other
retirement of any shares of its capital stock, or distribute to holders of
shares of Common Stock shares of the Corporation's capital stock (other than
Common Stock) or other securities of other entities, evidences of indebtedness
issued by the Corporation or other entities, or other assets or options or
rights (excluding options to purchase and rights to subscribe for shares of
Common Stock or the securities of the Corporation convertible into or
exchangeable for shares of Common Stock), (D) merge or consolidate with or into,
or permit any subsidiary to merge or consolidate with or into, any other
corporation, corporations or other entity or entities, (E) create any shares of
<PAGE>   18
capital stock which are senior to or on a parity with the Preferred Stock, (F)
in any manner alter or change the designations, powers, preferences, rights,
qualifications, limitations or restrictions of the Preferred Stock, (G) take any
action to cause any amendment, alteration or repeal of any of the provisions of
this Certificate of Incorporation or the By-laws of the Corporation, (H) except
for the issuance of shares of capital stock or other securities constituting
shares of Excluded Stock (as defined in Section A.5(e)(ii) below), authorize,
issue or agree to issue or agree to issue any shares of the Corporation's
capital stock or any security, right, option or warrant convertible into, or
exercisable or exchangeable for, shares of the Corporation's capital stock or
any debt security or capitalized lease with an equity feature of the Corporation
or (I) enter into a Related Transaction (as defined in the Convertible Preferred
Stock Purchase Agreement (the "Purchase Agreement") dated on or about the
Original Issuance Date, among the Corporation and the other signatories thereto)
involving more than $25,000, individually or in the aggregate or on terms no
less favorable than those available at the same time from non-affiliated
persons.

                           (ii) The Corporation shall not, without the
affirmative approval of the Board of Directors of the Corporation, including the
Preferred Representative (A) acquire, purchase, lease or control in any manner
any health care facility or (B) approve any salary or salary increase of any
person employed by the Corporation whose salary is in excess of $75,000 per
annum, including any consultants employed by the Company.

         5. Conversion. (a) The holder of any shares of Preferred Stock shall
have the right, at any time or from time to time, to convert any or all of such
holder's share or Preferred Stock into such number of fully paid nonassessable
shares of Common Stock as is equal to the quotient obtained by dividing (A)
$2.86 multiplied by the number of shares of Preferred Stock being converted, by
(B) the Preferred Conversion Price (as last adjusted and then in effect) for the
shares of Preferred Stock being converted, by surrender of the certificates
representing the shares of Preferred Stock to be converted in the manner
provided in Section A.5(b) below. The Preferred Conversion Price per share at
which shares of Common Stock shall be issuable upon conversion of shares of
Preferred Stock shall be $2.86; provided, however, that such Preferred
Conversion Price shall be subject to adjustment as set forth in Section A.5(e)
below.

                  (b) The holder of any shares of Preferred Stock may exercise
the conversion right pursuant to Section A.5(a) above by delivering to the
Corporation during regular business hours, at the office of any transfer agent
of the Corporation for the Preferred Stock or at such other place as may be
designated by the Corporation, the certificate or certificates for the shares to
be converted, duly endorsed or assigned in blank to the Corporation (if required
by it), accompanied by written notice stating that such holder elects to convert
such shares and stating the name or names (with address) in which the
certificate or certificates for the shares of Common Stock are to be issued.
Such conversion shall be deemed to have been effected on the date when the
aforesaid
<PAGE>   19
delivery is made, and such date is referred to herein as the "Conversion Date."
As promptly as practicable thereafter, the Corporation shall issue and deliver
to or upon the written order of such holder, at the place designated by such
holder, a certificate or certificates for the number of full shares of Common
Stock to which such holder is entitled and a check or cash in respect of any
fractional interest in a share of Common Stock, as provided in Section A.5(d)
below, payable with respect to the shares of Preferred Stock so converted up to
and including the Conversion Date. The person in whose name the certificate or
certificates for Common Stock are to be issued shall be deemed to have become a
stockholder of record on the applicable Conversion Date unless the transfer
books of the Corporation are closed on that date, in which event such holder
shall be deemed to have become a stockholder of record on the next succeeding
date on which the transfer books are open, but the Preferred Conversion Price
shall be that in effect on the Conversion Date. Upon conversion of only a
portion of the number of shares covered by a certificate representing shares of
Preferred Stock surrendered fore conversion, the Corporation shall issue and
deliver to or upon the written order of the holder of the certificate so
surrendered for conversion, at the expense of the Corporation, a new certificate
covering the number of shares of Preferred Stock representing the unconverted
portion of the certificate so surrendered which new certificate shall entitle
the holder thereof to dividends on the shares of Preferred Stock represented
thereby to the same extent as if the certificate theretofore covering such
unconverted shares had not been surrendered for conversion.

                  (c) Upon the occurrence of an Event of Conversion (as
hereinafter defined), all shares of Preferred Stock then outstanding shall, by
virtue of, and simultaneously with the occurrence of the Event of Conversion and
without any action on the part of the holder thereof, be deemed automatically
converted into such whole number of fully paid and nonassessable shares of
Common Stock as is equal to the quotient obtained by dividing (A) $2.86
multiplied by the number of shares of Preferred Stock being converted by (B) the
Preferred Conversion (as last adjusted and then effect) for the shares of
Preferred Stock being converted. As used herein, the term "Event of Conversion"
shall mean the consummation of an underwritten public offering on a firm
commitment basis of shares of Common Stock pursuant to the Securities Act of
1933 at a net selling price per share of Common Stock (as constituted on the
date hereof) of not less than $8.58 and which results in aggregate gross cash
proceeds (prior to deduction of underwriters' commissions and expense, if any)
to the Corporation equal to not less than $5,000,000.

                  (d) No fractional shares of Common Stock shall be issued upon
conversion of shares of Preferred Stock. If more than one share of Preferred
Stock shall be surrendered for conversion at any one time by the same holder,
the number of full shares of Common Stock issuable upon conversion thereof shall
be computed on the basis of the aggregate number of shares of Preferred Stock so
surrendered. Instead of any fractional shares of Common Stock which would
otherwise be issuable upon conversion of any shares of
<PAGE>   20
Preferred Stock the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to the then Current Market Price (as
hereinafter defined) of a share of Common Stock multiplied by such fractional
interest. Fractional interests shall not be entitled to dividends, and the
holders of fractional interests shall not be entitled to any rights as
stockholders of the Corporation in respect of such fractional interest.

                  (e) The Preferred Conversion Price shall be subject to
adjustment from time to time as follows:

                           (i) If the Corporation shall at any time or from time
to time after the Original Issuance Date, issue any shares of Common Stock or
other securities convertible into or exchangeable or exercisable for shares of
Common Stock, in each case other than Excluded Stock (as hereinafter defined),
without consideration or for a consideration per share less than the Preferred
Conversion Price in effect immediately prior to the issuance of such Common
Stock, Preferred Stock or other security, the Preferred Conversion Price in
effect immediately prior to each such issuance shall forthwith (except as
provided in this clause (i)) be lowered to a price equal to the quotient
obtained by dividing

                           (A) an amount equal to the sum of

                                    (x) the total number of shares of Common
Stock outstanding (including any shares of Common Stock deemed to have been
issued pursuant to subdivision (C) of this clause (i) and to clause (ii) below
(including, but not limited to, the shares of Common Stock issuable upon
conversion of the Preferred Stock)) immediately prior to such issuance
multiplied by the Preferred Conversion Price in effect immediately prior to such
issuance, plus

                                    (y) the consideration received by the
Corporation upon such issuance,

                           (B) The total number of shares of Common Stock
outstanding (including any shares of Common Stock deemed to have been issued
pursuant to subdivision (C) of this clause (i) and to clause (ii) below
(including, but not limited to, the shares of Common Stock issuable upon
conversion of the Preferred Stock)) immediately after issuance of such Common
Stock. For purposes of any adjustment of the Preferred Conversion Price pursuant
to this clause (i), the following provisions shall be applicable:

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

                           (B) In the case of the issuance of 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 market value thereof as determined in good
faith by the Board of Directors of the Corporation, irrespective of any
accounting treatment; provided, however, that such fair market value as
determined by the Board of Directors shall not exceed the aggregate Current
Market Price of the shares of Common Stock being issued.
<PAGE>   21
                           (C) In the case of the issuance of (I) options to
purchase or rights to subscribe for Common Stock, (II) securities by their terms
convertible into or exchangeable for Common Stock or (III) options to purchase
or rights to subscribe for such convertible or exchangeable securities:

                                    (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 subdivisions (A) and (B)
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 conversion 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 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 subdivisions (A) and (B) above);

                                    (3) on any change or in the number of shares
or exercise price of Common Stock deliverable upon exercise of any such options
or rights or conversions of or exchange for such convertible or exchangeable
securities, other than a change resulting from the antidilution provisions
thereof, the Preferred Conversion Price shall forthwith be readjusted to such
Preferred Conversion Price as would have obtained had the adjustment made upon
the issuance of such options, rights or securities not converted prior to such
change been made upon the basis of such change; and

                                    (4) on 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 Preferred Conversion Price shall forthwith be readjusted to such
Preferred Conversion Price as would have been obtained had such options, rights,
securities or options or rights related to such securities not been issued.

                           (ii) "Excluded Stock" shall mean:

                                    (A) Common Stock issued upon conversion of
any shares of Preferred Stock;

                                    (B) Common Stock issued to officers,
employees or directors of, or consultants to, the Corporation, pursuant to any
agreement, plan or arrangement approved by the Board of Directors of the
Corporation, options to purchase or rights to
<PAGE>   22
subscribe for such Common Stock, or securities (other than the Preferred Stock)
by their terms convertible into or exchangeable for such Common Stock, or
options to purchase or rights to subscribe for such convertible or exchangeable
securities; and

                                    (C) securities issues pursuant to the
acquisition of another corporation by the Corporation by merger, stock
acquisition, reorganization, purchase or substantially all of the assets or
otherwise whereby the Corporation owns at least 51% of the voting power of such
other corporation after such transaction.

                                    (iii) If the number of shares of Common
Stock outstanding at any time after the Original Issuance Date is increased by a
stock dividend payable in shares of Common Stock or by a subdivision or split-up
of shares of Common Stock, then, following the record date fixed for the
determination of holders of Common Stock entitled to receive such stock
dividend, subdivision or split-up, such Preferred Conversion Price shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of each share of Preferred Stock shall be increased in proportion to
such increase in outstanding shares.

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

                                    (v) In case, at any time after the Original
Issuance Date, of any capital reorganization, or any reclassification of the
capital stock of the Corporation (other than a change in par value or from par
value to no par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), or the
consolidation or merger of the Corporation with or into another person (other
than a consolidation or merger in which the Corporation is the continuing
corporation and which does not result in any change in the Common Stock) or of
the sale or other disposition of all or substantially all the properties and
assets of the Corporation as an entirety to any other person, each share of
Preferred Stock shall after such reorganization, reclassification,
consolidation, merger, sale or other disposition be (unless, in the case of a
consolidation, merger, sale or other disposition, payment shall have been made
to the holders of all shares of Preferred Stock of the full amount to which they
shall have been entitled pursuant to Section A.2.) convertible into the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold or otherwise disposed
to which the holder of the number of shares of Common Stock deliverable
(immediately prior to the time of such reorganization, reclassification,
consolidation, merger, sale or other disposition) upon conversion of such share
of Preferred Stock would have been
<PAGE>   23
entitled upon such reorganization, reclassification, consolidation, merger, sale
or other disposition. The provisions of this Section A.5. shall similarly apply
to successive reorganizations, reclassifications, consolidations, mergers, sales
or other disposition.

                                    (vi) All calculations under this paragraph
(e) shall be made to the nearest one-tenth of a cent ($.001) or to the nearest
one-tenth of a share, as the case may be.

                                    (vii) For the purpose of any computation
pursuant to Section A.5(d) and (e) above, the current market price (the "Current
Market Price") at any date of one share of Common Stock shall be deemed to be
the average of the daily closing prices for the 30 consecutive business days
ending on the fifth business day before the day in question (as adjusted for any
stock dividend, split-up, combination or reclassification that took effect
during such 30-business-day period). The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sales took
place on such day, the average of the last reported bid and asked prices regular
way, in either case on the principal national securities exchange on which the
Common Stock is listed or admitted to trading (or if the Common Stock is not at
the time listed or admitted for trading on any such exchange, then such price as
shall be equal to the last reported sale price, or if there is no such sale
price, the average of the last reported bid and asked prices, as reported by the
National Association of Securities Dealers Automated Quotations System
("NASDAQ") on such day, or if on any day in question, the security shall not be
quoted on the NASDAQ, then such price shall be equal to the last reported bid
and asked prices on such day as reported by the National Quotation Bureau, Inc.
or any similar reputable quotation and reporting service, if such quotation is
not reported by the National Quotation Bureau, Inc.); provided, however, that if
the Common Stock is not traded in such manner that the quotations referred to in
this clause (vii) are available for the period required hereunder, the Current
Market Price shall be determined by a majority of the entire Board of Directors
of the Corporation.

                                    (viii) If any case in which the provisions
of this Section A.5(e) shall require that an adjustment shall become effective
immediately after a record date for an event, the Corporation may defer until
the occurrence of such event (i) issuing to the holder of any share of Preferred
Stock converted after such record date before the occurrence of such event the
additional shares of capital stock issuable upon such conversion by reason of
the adjustment required by such event over and above the shares of capital stock
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of a fractional share of
capital stock pursuant to Section A.5(d) above; provided, however, that the
Corporation shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares, and
such cash, upon the occurrence of the event requiring such adjustment.

                  (f) Whenever the Preferred Conversion Price shall be adjusted
as provided in Section A.5(e) above, the Corporation shall
<PAGE>   24
forthwith file, at the office of the transfer agent for the Preferred Stock or
at such other place as may be designated by the Corporation, a statement, signed
by its President or Chief Financial Officer and by its Treasurer, showing in
detail the facts requiring such adjustment and the Preferred Conversion Price
that shall be in effect after such adjustment. The Corporation shall also cause
a copy of such statement to be sent by first-class, certified mail, return
receipt requested, postage prepaid, to each holder of shares of Preferred Stock
at such holder's address appearing on the Corporation's records. Where
appropriate, such copy may be given in advance and may be included as part of a
notice required to be mailed under the provisions of Section A.5(g) below.

                  (g) In the event the Corporation shall propose to take any
action of the types described in classes (i), (iii), (iv), (v) or (vi) of
Section A.5(e) above, the Corporation shall give notice to each holder of such
shares of Preferred Stock, in the manner set forth in Section A.5(f) above,
which notice shall specify the record date, if any, with respect to any such
action and the date on which such action is to take place. Such notice shall
also set forth such facts with respect thereto as shall be reasonably necessary
to indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Preferred Conversion Price and the number, kind
of class of shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon conversion of
shares of Preferred Stock. In the case of any action which would require the
fixing of a record date, such notice shall be given at least 10 days prior to
the date so fixed, and in case of all other action, such notice shall be given
at least 15 days prior to the taking of such proposed action. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
any such action.

                  (h) The Corporation shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Corporation upon conversion of any shares of Preferred
Stock; provided, however, that the Corporation shall not be required to pay any
taxes which may be payable in respect of any transfer involved in the issuance
or delivery of any certificate for such shares in a name other than that of the
holder of the shares of Preferred Stock in respect of which such shares are
being issued.

                  (i) The Corporation shall reserve, free from preemptive
rights, out of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of Preferred Stock
sufficient shares to provide for the conversion of all outstanding shares of
Preferred Stock.

                  (j) All shares of Common Stock which may be issued in
connection with the conversion provisions set forth herein will, upon issuance
by the Corporation, be validly issued, fully paid and nonassessable and free
from all taxes, liens or charges with respect thereto created or imposed by the
Corporation.
<PAGE>   25
         6. Definition. As used in this Article III, the term "Original Issuance
Date" shall mean the date of original issuance of the first share of Preferred
Stock.

B.       COMMON STOCK.

         1. Voting. Each holder of shares of Common Stock shall be entitled to
one vote for each share of Common Stock held on all matters as to which holders
of Common Stock shall be entitled to vote. The number of shares of Common Stock
may be increased or decreased by the affirmative vote of the holders of all
classes of stock entitled to vote thereon voting together as a single class and
not with the Common Stock voting separately as a single class.

         2. Other Rights. Each share of Common Stock issued and outstanding
shall be identical in all respects one with the other, and no dividends shall be
paid on any shares of Common Stock unless the same dividend is paid on all
shares of (i) Common Stock and (ii) Preferred Stock outstanding at the time of
such payment, said shares of Preferred Stock being entitled to receive dividends
on an as converted basis under Section A.1 of this Article III. Except for and
subject to those rights expressly granted to the holders of the Preferred Stock,
or except as may be provided by the laws of the State of Delaware, the holders
of Common Stock shall have exclusively all other rights of stockholders
including, but not by way of limitation, (i) the right to receive dividends,
when and as declared by the Board of Directors of the Corporation out of assets
lawfully available therefor, and (ii) in the event of any distribution of assets
upon a Liquidation or otherwise, the right to receive ratably and equally all
the assets and funds of the Corporation remaining after the payment to the
holders of shares of Preferred Stock of the specific amounts which the holders
of shares of Preferred Stock of the specific amounts which they are entitled to
receive upon such Liquidation as herein provided.

         SECOND: That the aforesaid amendment was duly adopted in accordance
with the provisions of Sections 141(f), 242 and 228 of the General Corporation
Law of the State of Delaware.

         THIRD:  That the capital of the Corporation will not be
reduced under or by reason of the aforesaid amendment.

         IN WITNESS WHEREOF, SIGNATURE HEALTH CARE CORPORATION has caused this
certificate to be signed by its President and attested by its Secretary as of
this 23rd day of April, 1992.

                                    SIGNATURE HEALTH CARE CORPORATION
                                    
                                    By /s/
                                       ---------------------------------
                                       Its President

ATTEST:

/s/
---------------------------------