AMENDED AND RESTATED
 
                          CERTIFICATE OF INCORPORATION
 
                                       OF
 
                           LC ACQUISITION CORPORATION
 
                  LC ACQUISITION CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), hereby
certifies as follows:
 
                  1.       The name of the Corporation is LC ACQUISITION
CORPORATION. The Corporation was originally incorporated under the same name,
and the original Certificate of Incorporation of the Corporation was filed with
the Secretary of State of Delaware on November 2, 1990.
 
                  2.       This Amended and Restated Certificate of
Incorporation restates and integrates and further amends the provisions of the
Certificate of Incorporation of the Corporation as heretofore amended and
restated and was duly adopted by written consent of a majority of the
stockholders of the Corporation, after first having been declared advisable by
the Board of Directors of the Corporation, all in accordance with the provisions
of Sections 242 and 245 of the Delaware General Corporation Law.
 
                  3.       The amendments to the Certificate of Incorporation of
the Corporation effected by this Certificate are to (i) change the name of the
Corporation from LC ACQUISITION CORPORATION to LINCARE HOLDINGS INC. and (ii)
change the authorized capital stock of the Corporation from 5,121,104 shares,
consisting of 106,104 shares of Preferred Stock, $1 par value, 15,000 shares of
Series B Convertible Preferred Stock, $1 par value, and 5,000,000 shares of
Common Stock, $.01 par value, to 55,000,000 shares, consisting of 5,000,000
shares of Preferred Stock, $1 par value (including 105,762 shares of Preferred
Stock designated herein as Series A Preferred Stock and 15,000 shares of
Preferred Stock designated herein as Series B Convertible Preferred Stock), and
50,000,000 shares of Common Stock, $.01 par value.
 
                  4.       The capital of the Corporation will not be reduced
under, or by reason of, any amendments in this Amended and Restated Certificate
of Incorporation of the Corporation.
 
<PAGE>   2
 
                  5.       The text of the Certificate of Incorporation of the
Corporation, as heretofore amended and restated, is hereby restated and further
amended to read in its entirety as follows:
 
                  "FIRST:  The name of the Corporation is
 
                              LINCARE HOLDINGS INC.
 
                  SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1013 Centre Road, in the City of
Wilmington, County of New Castle. The name of the Corporation's registered agent
at such address is Corporation Service Company.
 
                  THIRD: The purposes for which the Corporation is formed are to
engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
 
                  FOURTH: The total number of shares of all classes of stock
which the Corporation shall have the authority to issue is 55,000,000 shares,
consisting of 5,000,000 shares of Preferred Stock, $1 par value (including
105,762 shares of Preferred Stock designated herein as Series A Preferred Stock
and 15,000 shares of Preferred Stock designated herein as Series B Convertible
Preferred Stock) (hereinafter called "Preferred Stock") and 50,000,000 shares of
Common Stock, $.01 par value (herein called "Common Stock"). All
cross-references in each subdivision of this Article FOURTH refer to other
paragraphs in such subdivision unless otherwise indicated.
 
                  The following is a statement of the powers, preferences and
rights, and the qualifications, limitations or restrictions thereof, in respect
of each class of stock of the Corporation:
 
                                       I.
 
                                 PREFERRED STOCK
 
                  1.       The Preferred Stock may be issued from time to time
in one or more series of any number of shares, provided that the aggregate
number of shares issued and not cancelled of any and all such series shall not
exceed the total number of shares of Preferred Stock hereinabove authorized.
 
 
 
                                       2
<PAGE>   3
 
                  2.       Authority is hereby vested in the Board of Directors
from time to time to authorize the issue of one or more series of Preferred
Stock and, in connection with the creation of such series, to fix by resolution
or resolutions providing for the issue of shares thereof the designations,
powers, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of such
series in respect of the matters set forth as follows:
 
                  i)       The maximum number of shares to constitute such
         series and the distinctive designation thereof and the stated value
         thereof if different than the par value thereof;
 
                  ii)      Whether the shares of such series shall have voting
         rights, in addition to any voting rights provided by law, and, if so,
         the terms of such voting rights;
 
                  iii)     The dividend rate, if any, on the shares of such
         series, the conditions and dates upon which such dividends shall be
         payable, the preference or relation which such dividends shall bear to
         the dividends payable on any other class or classes or on any other
         series of capital stock, and whether such dividend shall be cumulative
         or non-cumulative;
 
                  iv)      Whether the shares of such series shall be subject to
         redemption by the Company, and, if made subject to redemption, the
         times, prices and other terms and conditions of such redemption;
 
                  v)       The rights of the holders of shares of such series
         upon the liquidation, dissolution or winding up of the Company;
 
                  vi)      Whether or not the shares of such series shall be
         subject to the operation of a retirement or sinking fund, and, if so,
         the extent to and manner in which any such retirement or sinking fund
         shall be applied to the purchase or redemption of the shares of such
         series for retirement or to other corporate purposes and the terms and
         provisions relative to the operation thereof;
 
                  vii)     Whether or not the shares of such series shall be
         convertible into, or exchangeable for, shares of stock of any other
         class or classes, or of any other series of the
 
 
 
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<PAGE>   4
 
         same class, and if so convertible or exchangeable, the price or prices
         or the rate or rates of conversion or exchange and the method, if any,
         of adjusting the same;
 
                  viii)    The limitations and restrictions, if any, to be
         effective while any shares of such series are outstanding upon the
         payment of dividends or the making of other distributions on, and upon
         the purchase, redemption or other acquisition by the Company of, the
         Common Stock or any other class or classes of stock of the Company
         ranking junior to the shares of such series either as to dividends or
         upon liquidation;
 
                  ix)      The conditions or restrictions, if any, upon the
         creation of indebtedness of the Company or upon the issue of any
         additional stock (including additional shares of such series or of any
         other series or of any other class) ranking on a parity with or prior
         to the shares of such series as to dividends or distribution of assets
         on liquidation, dissolution or winding up; and
 
                  x)       Any other preference and relative, participating,
         optional or other special rights, and the qualifications, limitations
         or restrictions thereof, as shall not be inconsistent with this Article
         FOURTH.
 
                  3.       Subject to the powers, preferences and rights, and
the qualifications, limitations and restrictions thereof, with respect to the
Preferred Stock, as set forth herein in this Article FOURTH, there shall be
designated a series of Preferred Stock to be known as Series A Preferred Stock
(hereinafter referred to as "Series A Preferred Stock") consisting of 105,762
shares of Preferred Stock and a series of Preferred Stock to be known as Series
B Convertible Preferred Stock (hereinafter referred to as "Series B Convertible
Preferred Stock") consisting of 15,000 shares of Preferred Stock. The
designations, powers, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations and restrictions of the
Series A Preferred Stock and the Series B Convertible Preferred Stock, are as
follows:
 
                  A.       SERIES A PREFERRED STOCK
 
                  1.       Dividends. The holders of the Series A Preferred
         Stock shall be entitled to receive, to the extent and in the manner
         provided in paragraphs 2 and 3 below in the event of redemption and
         liquidation, respectively, out of 
 
 
 
                                       4
<PAGE>   5
 
         funds legally available for such purpose, cash dividends at the rate of
         $8.00 per share per annum, and no more. Dividends on the Series A
         Preferred Stock shall be cumulative and shall accrue from the date of
         issue of the Series A Preferred Stock.
 
                  In no event, so long as any Series A Preferred Stock shall
         remain outstanding, shall any dividend whatsoever be declared or paid
         upon, nor shall any distribution be made upon, any Series B Convertible
         Preferred Stock or Common Stock, other than a dividend or distribution
         payable in shares of Common Stock, nor (without the written consent of
         the holders of 66-2/3% of the outstanding Series A Preferred Stock)
         shall any shares of Series B Convertible Preferred Stock or Common
         Stock be purchased or redeemed by the Corporation (other than a
         repurchase of shares of Common Stock from employees of the Corporation
         following termination of their employment), nor shall any moneys be
         paid to or made available for a sinking fund for the purchase or
         redemption of any Series B Convertible Preferred Stock or Common Stock,
         unless in each instance any arrearage in the mandatory redemption of
         the Series A Preferred Stock shall have been made good.
 
                  2.       Redemption. The shares of Series A Preferred Stock
         shall be redeemable as follows:
 
                  2A.      Mandatory Redemption. The Corporation shall redeem
         (in the manner and with the effect provided in sub-paragraphs 2C
         through 2E below) all shares of Series A Preferred Stock which shall
         then remain outstanding on the first to occur of the following events:
 
                           (1)      November 30, 1995;
 
                           (2)      the consolidation or merger of the
                  Corporation with or into any other corporation (other than a
                  merger in which the Corporation is the surviving corporation
                  and which will not result in more than 50% of the capital
                  stock of the Corporation outstanding immediately after the
                  effective date of such merger being owned of record or
                  beneficially by persons other than the holders of such capital
                  stock immediately prior to such merger);
 
 
 
                                       5
<PAGE>   6
 
                           (3)      the sale of all or substantially all of the
                  properties and assets of the Corporation as an entirety to any
                  other person; or
 
                           (4)      except for the Corporation's initial public
                  offering, the consummation of an underwritten public offering
                  on a firm commitment basis pursuant to an effective
                  registration statement under the Securities Act of 1933,
                  covering the offer and sale of Common Stock for the account of
                  the Corporation in which the aggregate net proceeds to the
                  Corporation equal at least $15,000,000.
 
                  2B.      Optional Redemptions. The Corporation may redeem at
         any time (in the manner and with the effect provided in subparagraphs
         2C through 2E below), any whole number of shares of Series A Preferred
         Stock. Any date on which the Corporation elects to redeem shares of
         Series A Preferred Stock as provided in this subparagraph 2B and each
         date on which the Corporation shall be required to redeem shares of
         Series A Preferred Stock as provided in subparagraph 2A above, shall be
         referred to as a "Redemption Date".
 
                  2C.      Redemption Price. The Series A Preferred Stock to be
         redeemed on a Redemption Date shall be redeemed by paying for each
         share in cash an amount (such amount being herein sometimes referred to
         as the "Redemption Price") equal to (i) $100 per share (the "Base
         Amount"), plus (ii) an amount equal to dividends at the rate of $8.00
         per share per annum, as provided for in paragraph 1 above, from the
         date of issuance of such Series A Preferred Stock to such Redemption
         Date (the "Additional Amount"), provided, however, that if on any such
         Redemption Date the "Common Share Amount", as hereinafter defined,
         shall be equal to or greater than the amount set forth in the table
         below, approximately adjusted for stock splits and dividends and stock
         combinations effected subsequent to December 17, 1991 (prorated on a
         monthly basis to the last day of the preceding calendar month if the
         date of such redemption shall be other than November 30):
 
<TABLE>
<CAPTION>
                           Date                 Common Share Amount
                           ----                 -------------------
 
                  <S>                           <C>    
                  November 30, 1990                  $0.5000
                               1991                   0.6758
                               1992                   0.8657
                               1993                   1.0707
                               1994                   1.2921
                               1995                   1.5313
</TABLE>
 
 
                                       6
<PAGE>   7
 
         the Redemption Price shall be solely the Base Amount and no part of the
         Additional Amount shall be payable. For purposes of this subparagraph
         2C and paragraph 3, the term "Common Share Amount" in respect of any
         redemption or any liquidation, dissolution or winding up, whether
         voluntary or involuntary, of the Corporation shall mean the value of
         one share of outstanding Common Stock as of the date of such event,
         which amount, (x) in the case of redemption pursuant to clause (1), (2)
         or (3) of subparagraph 2A or pursuant to subparagraph 2B, shall be the
         fair market value thereof (computed as if the Redemption Price were
         solely the Base Amount), (y) in the case of redemption pursuant to
         clause (4) of subparagraph 2A, shall be the price to the public in the
         underwritten public offering referred to therein, and (z) in the case
         of such liquidation, dissolution or winding up, shall be the amount
         available for distribution to holders of Common Stock (determined as if
         the Liquidation Price, as defined in paragraph 3, were solely the Base
         Amount). Not less than 30 days before any Redemption Date, written
         notice shall be given by mail, postage prepaid to the holders of record
         of the Series A Preferred Stock to be redeemed, such notice to be
         addressed to each such stockholder at his post office address as shown
         by the records of the Corporation, specifying the number of shares to
         be redeemed, the subparagraph or subparagraphs of this paragraph 2
         pursuant to which such redemption shall be made, the Redemption Price
         and the place and date of such redemption, which date shall not be a
         day on which banks in The City of New York are required or authorized
         to close. If such notice of redemption shall have been duly given and
         if on or before such Redemption Date the funds necessary for redemption
         shall have been set aside so as to be and continue to be available
         therefor, then, notwithstanding that any certificate for shares of
         Series A Preferred Stock to be redeemed shall not have been surrendered
         for cancellation, after the close of business on such Redemption Date,
         the shares so called for redemption shall no longer be deemed
         outstanding, the dividends thereon shall cease to accrue, and all
         rights with respect to such shares shall forthwith after the close of
         business on the Redemption Date, cease, except only the right of the
         holders thereof to receive, upon presentation of the certificate
         representing shares so called for 
 
 
 
                                       7
<PAGE>   8
 
         redemption, the Redemption Price therefor, without interest thereon.
 
                  2D.      Redeemed or Otherwise Acquired Shares to Be Retired.
         Any shares of Series A Preferred Stock redeemed pursuant to this
         paragraph 2 or otherwise acquired by the Corporation in any manner
         whatsoever shall be permanently retired and shall not under any
         circumstances be reissued, and the Corporation may from time to time
         take such appropriate corporate action as may be necessary to reduce
         the number of authorized shares of Series A Preferred stock
         accordingly.
 
                  2E.      Shares to Be Redeemed. In case of the redemption, for
         any reason, of only apart of the outstanding shares of the Series A
         Preferred Stock on a Redemption Date, all shares of Series A Preferred
         Stock to be redeemed shall be selected pro rata, and there shall be so
         redeemed from each registered holder in whole shares, as nearly as
         practicable to the nearest share, that proportion of all of the shares
         to be redeemed which the number of shares held of record by such holder
         bears to the total number of shares of Series A Preferred Stock at the
         time outstanding. Any shares of Series A Preferred Stock not redeemed
         on November 30, 1995 for any reason shall be redeemed as soon
         thereafter as possible and in the manner in which shares are otherwise
         redeemed on a Redemption Date.
 
                  3.       Liquidation. Upon any liquidation, dissolution or
         winding up of the Corporation, whether voluntary or involuntary, the
         holders of the shares of Series A Preferred Stock shall be entitled,
         before any distribution or payment is made upon any Series B
         Convertible Preferred stock or Common Stock, to be paid an amount (such
         amount being sometimes referred to in this subdivision I as the
         "Liquidation Price") equal to (i) the Base Amount, plus (ii) the
         Additional Amount, provided, however, that if on the date of such
         liquidation, dissolution or winding up, the Common Share Amount
         (determined as provided in paragraph 2C) shall be equal to or greater
         than the amount set forth in the table in subparagraph 2C above
         (prorated on a monthly basis to the last day of the preceding calendar
         month if the date of such liquidation, dissolution or winding up shall
         be other than November 30), the Liquidation Price shall be solely the
         Base Amount, and no part of the Additional Amount shall be payable in
         respect 
 
 
 
                                       8
<PAGE>   9
 
         of such liquidation, dissolution or winding up. If upon such
         liquidation, dissolution or winding up of the Corporation, whether
         voluntary or involuntary, the assets to be distributed among the
         holders of Series A Preferred Stock shall be insufficient to permit
         payment to such holders of the preferential amount to which they are
         respectively entitled, then the entire assets of the Corporation to be
         so distributed shall be distributed ratably among the holders of Series
         A Preferred Stock. Upon any such liquidation, dissolution or winding up
         of the Corporation, after the holders of Series A Preferred Stock shall
         have been paid in full the amounts to which they shall be entitled, the
         remaining net assets of the Corporation may be distributed to the
         holders of the Series B Convertible Preferred Stock and to the holders
         of Common Stock as their interests may appear. Written notice of such
         liquidation, dissolution or winding up, stating a payment date, the
         amount of the Liquidation Price and the place where said Liquidation
         Price shall be payable, shall be given may mail, postage prepaid, not
         less than 30 days prior to the payment date stated therein, to the
         holders of record of Series A Preferred Stock, such notice to be
         addressed to each such holder at his post office address as shown by
         the records of the Corporation. Neither the consolidation or merger of
         the Corporation into or with any other corporation or corporations, nor
         the sale or transfer by the Corporation of all or substantially all of
         its assets, shall be deemed to be a liquidation, dissolution or winding
         up of the Corporation within the meaning of the provisions of this
         paragraph 3, such transactions being subject to the provisions of
         paragraph 2 above.
 
                  4.       Voting Rights. The holders of Series A Preferred
         Stock shall have no right to vote for the election of directors of the
         Corporation or on any other matter unless a vote of such class of stock
         is required by the General Corporation Law of the State of Delaware or
         this Amended and Restated Certificate of Incorporation.
 
                  5.       Restrictions. At any time when shares of Series A
         Preferred Stock are outstanding, except where the vote or written
         consent of the holders of a grater number of shares of the Corporation
         is required by law or by this Amended and Restated Certificate of
         Incorporation, and in addition to any other vote required by law,
         without the prior consent of the holders of 66-2/3% of the outstanding
         Series A Preferred stock, given in person or by proxy, either in
 
 
 
                                       9
<PAGE>   10
 
         writing or at a special meeting called for that purpose, at which
         meeting the holders of the shares of such Series A Preferred Stock
         shall vote together as a class:
 
                  5A.      The Corporation will not create or authorize the
         creation of any additional class or series of shares unless the same
         ranks junior to the Series A Preferred Stock both as to dividends and
         as to the distribution of assets on liquidation or increase the
         authorized amount of the Series A Preferred Stock or increase the
         authorized amount of any additional class or series of shares unless
         the same ranks junior to the Series A Preferred Stock both as to
         dividends and as to the distribution of assets on liquidation or create
         or authorize any obligation or security convertible into shares of
         Series A Preferred Stock or into shares of any other class or series
         unless the same rank junior to the Series A Preferred Stock both as to
         dividends and as to the distribution of assets on liquidation, whether
         any such creation or authorization or increase shall be by means of
         amendment of the Amended and Restated Certificate of Incorporation,
         merger, consolidation or otherwise, and
 
                  5B.      The Corporation will not amend, alter or repeal the
         Corporation's Amended and Restated Certificate of Incorporation or
         By-laws in any manner, or file any directors' resolutions pursuant to
         Section 151(g) of the General Corporation Law of the State of Delaware
         containing any provision, in either case, which adversely affects the
         respective preferences, qualifications, special or relative rights or
         privileges of the Series A Preferred Stock or which in any manner
         adversely affects the Series A Preferred Stock or the holders thereof.
 
                  B.       SERIES B CONVERTIBLE PREFERRED STOCK
 
                  1.       Dividends. The holders of Series B Convertible
         Preferred Stock shall be entitled to receive, unless otherwise
         prohibited by the terms of the Series A Preferred Stock, when and as
         cash dividends are declared by the Board of Directors of the
         Corporation upon the Common Stock, out of funds legally available for
         such purpose, cash dividends at the rate declared upon the Common Stock
         as if said Series B Convertible Preferred Stock had been converted to
         Common Stock.
 
                  In no event, so long as any Series B Convertible Preferred
         Stock shall remain outstanding, shall any
 
 
 
                                       10
<PAGE>   11
 
         dividend whatsoever be declared or paid upon, nor shall any
         distribution be made upon, any Common Stock, other than a dividend or
         distribution payable in shares of Common Stock, nor shall any shares of
         Common Stock be purchased or redeemed by the Corporation (other than a
         repurchase of shares of Common Stock from employees of the Corporation
         following termination of their employment), nor shall any moneys be
         paid to or made available for a sinking fund for the purchase or
         redemption of any Common Stock, without the written consent of the
         holders of 66-2/3% of the outstanding Series B Convertible Preferred
         Stock and unless in each instance any arrearage in the mandatory
         redemption of the Series B Convertible Preferred Stock shall have been
         made good.
 
                  2.       Redemption. The shares of Series B Convertible
         Preferred Stock shall be redeemable as follows:
 
                  2A.      Mandatory Redemption. The Corporation shall redeem on
         November 30, 2000 (in the manner and with the effect provided in
         subparagraphs 2C through 2E below) all shares of Series B Convertible
         Preferred Stock which shall then remain outstanding. Notwithstanding
         the foregoing, the Corporation shall not be required to and shall not
         redeem shares of Series B Convertible Preferred Stock on such date
         unless all of the Series A Preferred Stock shall theretofore have been
         redeemed. Except as set forth in this paragraph 2, the Series B
         Convertible Preferred Stock shall not be redeemable.
 
                  2B.      Optional Redemptions. The Corporation may redeem at
         any time on or after November 30, 1997 (in the manner and with the
         effect provided in subparagraphs 2C through 2E below), any whole number
         of shares of Series B Convertible Preferred Stock. Any date on which
         the Corporation elects to redeem shares of Series B Convertible
         Preferred Stock as provide in this subparagraph 2B and each date on
         which the Corporation shall be required to redeem shares of Series B
         Convertible Preferred Stock as provided in subparagraph 2A above, shall
         be referred to as a "Redemption Date".
 
                  2C.      Redemption Price. The Series B Convertible Preferred
         Stock to be redeemed on a Redemption Date shall be redeemed upon notice
         given as hereinafter provided, by paying for each share in cash the sum
         of $100, plus an amount per share equal to any declared but unpaid
         dividends thereon to such Redemption Date, such amounts being
 
 
 
                                       11
<PAGE>   12
 
         sometimes referred to as the "Redemption Price". Not less than 30 days
         before any Redemption Date, written notice shall be given by mail,
         postage prepaid, to the holders of records of the Series B Convertible
         Preferred Stock to be redeemed, such notice to contain a statement of
         or reference to the conversion right set forth in paragraph 4 and to be
         addressed to each such holder at his post office address as shown by
         the records of the Corporation, specifying the number of shares to be
         redeemed, the subparagraph or subparagraphs of this paragraph 2
         pursuant to which such redemption shall be made, the Redemption Price
         and the place and date of such redemption, which date shall not be a
         day on which banks in The City of New York are required or authorized
         to close. If such notice of redemption shall have been duly given and
         if on or before such Redemption Date the funds necessary for redemption
         shall have been set aside so as to be and continue to be available
         therefor, then, notwithstanding that any certificate for shares of
         Series B Convertible Preferred Stock to be redeemed shall not have been
         surrendered for cancellation, after the close of business on such
         Redemption Date, the shares so called for redemption shall no longer be
         deemed outstanding, the dividends thereon shall cease to accrue, and
         all rights with respect to such shares, including, without limitation,
         the conversion right set forth in paragraph 4 and the rights, if any,
         to receive notice and vote, shall forthwith after the close of business
         on the Redemption Date, cease, except only the right of the holders
         thereof to receive, upon presentation of the certificate representing
         shares so called for redemption, the Redemption Price therefor, without
         interest thereon.
 
                  2D.      Redeemed, Converted or Otherwise Acquired Shares to
         Be Retired. Any shares of Series B Convertible Preferred Stock redeemed
         pursuant to this paragraph 2 or converted into Common Stock pursuant to
         paragraph 4 below or otherwise acquired by the Corporation in any
         manner whatsoever shall be permanently retired and shall not under any
         circumstances be reissued; and the Corporation may from time to time
         take such appropriate corporate action as may be necessary to reduce
         the number of authorized shares of Series B Convertible Preferred Stock
         accordingly.
 
                  2E.      Shares to Be Redeemed. In case of redemption of only
         a part of the outstanding shares of Series B Convertible Preferred
         Stock, all shares of Series B
 
 
 
                                       12
<PAGE>   13
 
         Convertible Preferred Stock to be redeemed shall be selected pro rata,
         and there shall be so redeemed from each registered holder in whole
         shares, as nearly as practicable to the nearest share, the proportion
         of all the shares to be redeemed which the number of shares held of
         records by such holder bears to the total number of shares of Series B
         Convertible Preferred Stock at the time outstanding. Any shares of
         Series B Convertible Preferred Stock not redeemed on November 30, 2000
         for any reason shall be redeemed as soon thereafter as possible, but
         not before all of the Series A Preferred Stock shall have been
         redeemed, and such redemption shall be in the manner in which shares
         are otherwise redeemed on a Redemption Date.
 
                  3.       Liquidation. Upon any liquidation, dissolution or
         winding up of the Corporation, whether voluntary or involuntary, the
         holders of the shares of Series B Convertible Preferred Stock shall be
         entitled, after all preferential amounts shall have been paid with
         respect to the Series A Preferred Stock, but before any distribution or
         payment is made upon any Common Stock, to be paid an amount equal to
         $100 per share plus an amount equal to any declared but unpaid
         dividends thereon to such date of liquidation, dissolution or winding
         up, and the holders of Series B Convertible Preferred Stock shall not
         be entitled to any further payment, such amounts being sometime
         referred to in this subdivision II as the "Liquidation Payments". If
         upon such liquidation, dissolution or winding up of the Corporation,
         whether voluntary or involuntary, the assets of the Corporation to be
         distributed among the holders of Series B Convertible Preferred Stock
         shall be insufficient to permit payment to the holders of Series B
         Convertible Preferred Stock of the Liquidation Payments, then the
         entire assets of the Corporation to be distributed (after all
         preferential amounts (including without limitation accrued dividends)
         shall have been paid with respect to the Series A Preferred stock)
         shall be distributed ratably among the holders of Series B Convertible
         Preferred Stock. Upon any such liquidation, dissolution or winding up
         of the Corporation, after the holders of the Series A Preferred Stock
         and Series B Convertible Preferred Stock shall have been paid in full
         the amounts to which they shall be entitled, the remaining net assets
         of the Corporation may be distributed to the holders of Common Stock.
         Written notice of such liquidation, dissolution or winding up, stating
         a payment date, the amount of Liquidation Payments and the place
 
 
 
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<PAGE>   14
 
         where said Liquidation Payments shall be payable, a statement of or
         reference to the conversion right set forth in paragraph 4, shall be
         given by mail, postages prepaid, not less than 30 days prior to the
         payment date stated therein, to the holders of record of Series B
         Convertible Preferred Stock, such notice to be addressed to each such
         holder at his post office address as shown by the records of the
         Corporation. Neither the consolidation or merger of the Corporation
         into or with any other corporation or corporations, nor the sale or
         transfer by the Corporation of all or any part of its assets, shall be
         deemed to be a liquidation, dissolution or winding up of the
         Corporation within the meaning of any of the provisions of this
         paragraph 3.
 
                  4.       Conversion.
 
                  4A.      Conversion of Series B Convertible Preferred Stock
         Into Common Stock. Subject to the provisions of paragraphs 2 and 3
         hereof regarding redemption and liquidation, and subject to the terms
         and conditions of this paragraph 4, the holder of any share or shares
         of Series B Convertible Preferred Stock shall have the right, at its
         option at any time, to convert any such shares of Series B Convertible
         Preferred Stock (except that (i) in respect of any such shares which
         shall have been called for redemption such shares which shall have been
         called for redemption such right shall terminate at the close of
         business on the last full business day next preceding the day fixed for
         redemption unless the Corporation shall default in the payment of the
         redemption price and (ii) upon any liquidation of the Corporation the
         right of conversion shall terminate at the close of business on the
         last full business day next preceding the date fixed for payment of the
         amount distributable on the Series B Convertible Preferred Stock) into
         such number of fully paid and nonassessable whole shares of Common
         Stock as is obtained by multiplying the number of shares of Series B
         Convertible Preferred Stock so to be converted by $100 and dividing the
         result by the conversion price of $7.26 per share or, in case an
         adjustment of such price has taken place pursuant to the further
         provisions of this paragraph 4, then by the conversion price as last
         adjusted and in effect at the date any share or shares of Series B
         Convertible Preferred Stock are surrendered for conversion (such price
         or such price as last adjusted, as the case may be, being referred to
         as the "Conversion Price"). Such 
 
 
 
                                       14
<PAGE>   15
 
         rights of conversion shall be exercised by the holder thereof by giving
         written notice that the holder elects to convert a stated number of
         shares of such Series B Convertible Preferred Stock into Common Stock,
         and by surrender of a certificate or certificates for the Series B
         convertible Preferred Stock so to be converted to the Corporation at
         its principal office (or such other office or agency of the Corporation
         as the Corporation may designate by notice in writing to the holder or
         holders of the Series B Convertible Preferred Stock) at any time during
         its usual business hours on the date set forth in such notice, together
         with a statement of the name or names (with address) in which the
         certificate or certificates for shares of Common Stock shall be issued.
 
                  4B.      Issuance of Certificates; Time Conversion Effected.
         Promptly after the receipt of the written notice referred to in
         subparagraph 4A and surrender of the certificate or certificates for
         the share or shares of Series B Convertible Preferred Stock to be
         converted, the Corporation shall issue and deliver, or cause to be
         issued and delivered, to the holder, registered in such name or names
         as such holder may direct, a certificate or certificates for the number
         of whole shares of Common Stock, issuable upon the conversion of such
         share or shares thereof. To the extent permitted by law, such
         conversion shall be deemed to have been effected and the Conversion
         Price shall be determined as of the close of business on the date on
         which such written notice shall have been received by the Corporation
         and the certificate or certificates for such share or shares shall have
         been surrendered as aforesaid, and at such time the rights of the
         holder of such share or shares as such holder shall cease, and the
         person or persons in whose name or names any certificate or
         certificates for shares of Common Stock shall be issuable upon such
         conversion shall be deemed to have become the holder or holders of
         record of the shares represented thereby.
 
                  4C.      Fractional Shares; Dividends; Partial Conversion. No
         fractional shares shall be issued upon conversion of Series B
         Convertible Preferred Stock into Common Stock and no payment or
         adjustment shall be made upon any conversion on account of any cash
         dividends on the shares of Series B Convertible Preferred Stock
         surrendered for conversion or the shares of Common Stock issued upon
         such conversion. In case the number of shares of Series B Convertible
         Preferred 
 
 
 
                                       15
<PAGE>   16
 
         Stock represented by the certificate or certificates surrendered
         pursuant to subparagraph 4A exceeds the number of shares converted, the
         Corporation shall, upon such conversion, execute and deliver to the
         holder thereof, at the expense of the Corporation, a new certificate or
         certificates for the number of shares of Series B Convertible Preferred
         Stock represented by the certificate or certificates surrendered which
         are not to be converted. If any fractional interest in a share of
         Common Stock would, except for the provisions of the first sentence of
         this subparagraph 4C, be deliverable upon any such conversion, the
         Corporation, in lieu of delivering the fractional share thereof, shall
         pay to the holder surrendering Series B Convertible Preferred Stock for
         conversion an amount in cash equal to the current market price of such
         fractional interest as determined by the Board of Directors of the
         Corporation.
 
                  4D.      Adjustment of Price Upon Issuance of Common Stock.
         Except as provided in subparagraph 4F hereof, if and whenever the
         Corporation shall issue or sell, or is in accordance with subparagraphs
         4D(1) through 4D(7) deemed to have issued or sold, any shares of its
         Common Stock for a consideration per share less than the Conversion
         Price in effect immediately prior to the time of such issue or sale,
         then, forthwith upon such issue or sale, the Conversion Price shall be
         reduced to an amount equal to the aggregate consideration received, or
         deemed to have been received pursuant to subparagraphs 4D(1) through
         4D(7), by the Corporation upon such issue or sale, or deemed issuance
         or sale, divided by the number of shares so issued or sold or deemed to
         be so issued or sold. For purposes of this subparagraph 4D, the
         following subparagraphs 4D(1) to 4D(7), shall also be applicable:
 
                  4D(1).   Issuance of Rights or Options. In case at any time
         the Corporation 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 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 Common Stock is issuable upon the
 
 
                                       16
<PAGE>   17
 
         exercise of such Options or upon conversion or exchange of such
         Convertible Securities (determined by dividing (i) the total amount, if
         any, received or receivable by the Corporation as consideration for the
         granting of such Options, plus the minimum aggregate amount of
         additional consideration payable to the Corporation upon the exercise
         of all such Options, plus, in the case of such Options which relate to
         Convertible Securities, the minimum 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
         (ii) the total maximum number of shares of Common Stock issuable upon
         the exercise of such Options or upon the conversion or exchange of all
         such Convertible Securities issuable upon the exercise of such
         Options)shall be less than the Conversion Price in effect immediately
         prior to the time of the granting of such Options, then the total
         maximum number of shares of Common Stock issuable upon the exercise of
         such Options or upon conversion or exchange of the total maximum amount
         of such Convertible Securities issuable upon the exercise of such
         Options shall be deemed to have been issued for such price per share as
         of the date of granting of such Options and thereafter shall be deemed
         to be outstanding. Except as otherwise provided in subparagraph 4D(3),
         no adjustment of the Conversion Price shall be made upon the actual
         issue of such Options or upon the actual issue of such Common Stock
         upon conversion or exchange of such Convertible Securities.
 
                  4D(2).   Issuance of Convertible Securities. In case the
         Corporation 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 (i) to total amount received or receivable by the Corporation
         as consideration for the issue or sale of such Convertible Securities,
         plus the minimum aggregate amount of additional consideration, if any,
         payable to the Corporation upon the conversion or exchange thereof, by
         (ii) the total maximum number of shares of Common Stock issuable upon
         conversion or exchange of all such Convertible Securities) shall be
         less than the Conversion Price in effect 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
 
 
 
                                       17
<PAGE>   18
 
         Convertible Securities shall be deemed to have been issued for such
         price per share as of the date of the issue or sale of such Convertible
         Securities and thereafter shall be deemed to be outstanding, provided
         that (a) except as otherwise provided in subparagraph 4D(3) below, no
         adjustment of the Conversion Price shall be made upon the actual issue
         of such Common Stock upon conversion or exchange of such Convertible
         Securities, and (b) if any such issue or sale of such Convertible
         Securities is made upon exercise of any Option to purchase any such
         Convertible Securities for which adjustments of the Conversion Price
         have been or are to be made pursuant to other provisions of this
         subparagraph 4D, no further adjustment of the Conversion Price shall be
         made by reason of such issue or sale.
 
                  4D(3).   Change in Option Price or Conversion Rate. If (i) the
         purchase price provided for in any Option referred to in subparagraph
         4D(1), (ii) the additional consideration, if any, payable upon the
         conversion or exchange of any Convertible Securities referred to in
         subparagraph 4D(1) or 4D(2) or (iii) the rate at which any Convertible
         Securities referred to in subparagraph 4D(1) or 4D(2) are convertible
         into or exchangeable for Common Stock shall change at any time (in each
         case other than under or by reason of provisions designed to protect
         against dilution), then the Conversion Price in effect at the time of
         such event shall, as required, forthwith be readjusted to such
         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 or conversion rate, as
         the case may be, at the time initially granted, issued or sold; and on
         the expiration of any such Option or the termination of any such right
         to convert or exchange such Convertible Securities, the Conversion
         Price then in effect hereunder shall, as required, 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, and the Common Stock
         issuable thereunder shall no longer be deemed to be outstanding. If the
         purchase price provided for in any such Option referred to in
         subparagraph 4D(1) or the rate at which any Convertible Securities
         referred to in subparagraph 4D(1) 4D(2) are convertible into or
         exchangeable for Common Stock shall be 
 
 
 
                                       18
<PAGE>   19
 
         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 Securities, the
         Conversion Price then in effect hereunder shall, as required, forthwith
         be adjusted to such respective amount as would have been obtained had
         such Option or Convertible Securities 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
         thereby reduced.
 
                  4D(4).   Stock Dividends. In case the Corporation shall
         declare a dividend or make any other distribution upon any stock of the
         Corporation payable in Common Stock, Options or Convertible Securities,
         any Common Stock, Options or Convertible Securities, as the case may
         be, issuable in payment of such dividend or distribution shall be
         deemed to have been issued or sold without consideration, and the
         Conversion Price shall be reduced as if the Corporation had subdivided
         its outstanding shares of Common Stock into a greater number of shares,
         as provided in subparagraph 4E hereof.
 
                  4D(5).   Consideration for Stock. In case any shares of Common
         Stock, Options or Convertible Securities shall be issued or sold for
         cash, the consideration received therefor shall be deemed to be the
         amount received by the Corporation therefor, without deduction
         therefrom of any expenses incurred or any underwriting commissions or
         concessions paid or allowed by the Corporation in connection therewith.
         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 Corporation shall
         be deemed to be the fair value of such consideration as determined in
         good faith by the Board of Directors of the Corporation, without
         deduction therefrom of any expenses incurred or any underwriting
         commissions or concessions paid or allowed by the Corporation in
         connection therewith. The amount of consideration deemed to be received
         by the Corporation pursuant to the foregoing provisions of this
         subparagraph 4D(5) upon any issuance and/or sale of shares of Common
         Stock, Options or Convertible Securities, pursuant to an established
 
 
 
                                       19
<PAGE>   20
 
         compensation plan of the Corporation, to directors, officers or
         employees of the Corporation in connection with their employment shall
         be increased by the amount of any tax benefit realized by the
         Corporation as a result of such issuance and/or sale, the amount of
         such tax benefit being the amount by which the Federal and/or state
         income or other tax liability of the Corporation shall be reduced by
         reason of any deduction or credit in respect of such issuance and/or
         sale. In case any Options shall be issued in connection with the issue
         and sale of other securities of the Corporation, together comprising
         one integral transaction in which no specific consideration is
         allocated to such Options by the Corporation, such Options shall be
         deemed to have been issued without consideration, and the Conversion
         Price shall be reduced as if the Corporation had subdivided its
         outstanding shares of Common Stock into a greater number of shares, as
         provided in subparagraph 4E hereof.
 
                  4D(6).   Record Date. In case the Corporation shall take a
         record of the holders of its Common Stock for the purpose of entitling
         them (i) to receive a dividend or other distribution payable in Common
         Stock, Options or Convertible Securities, or (ii) 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 of subscription or purchase,
         as the case may be.
 
                  4D(7).   Treasury Shares. 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 Corporation, and the disposition of any such
         shares shall be considered an issue or sale of Common Stock for the
         purposes of this subparagraph 4D.
 
                  4E.      Subdivision or Combination of Stock. In case the
         Corporation shall at any time subdivide (by any stock split, stock
         dividend; recapitalization or otherwise) its outstanding shares of
         Common Stock into a greater number of shares, then 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 Corporation shall be combined (by reverse  
 
 
                                       20
<PAGE>   21
         stock split or otherwise) into a smaller number of shares, then the
         Conversion Price in effect immediately prior to such combination shall
         be proportionately increased.
 
                  4F.      Certain Issues of Common Stock Excepted. Anything
         herein to the contrary notwithstanding, the Corporation shall not be
         required to make any adjustment of the Conversion Price upon the
         occurrence of any of the following events: (i) the issuance of Common
         Stock upon conversion of outstanding shares of Series B Convertible
         Preferred Stock, (ii) the issuance of options to employees, officers
         and directors of the Corporation pursuant to any stock option plan of
         the Corporation approved by the Board of Directors, and (iii) the
         issuance of Common Stock upon the exercise of the options permitted to
         be issued pursuant to clause (ii) above.
 
                  4G.      Reorganization, Reclassification, Consolidation,
         Merger or Sale. If any capital reorganization or reclassification of
         the capital stock of the Corporation or any consolidation or merger of
         the Corporation with another corporation, or the sale of all or
         substantially all of its assets to another corporation shall be
         effected in such a way (including, without limitation, by way of
         consolidation or merger) that holders of Common Stock shall be entitled
         to receive stock, securities or assets with respect to or in exchange
         for Common Stock, then, as a condition of such reorganization,
         reclassification, consolidation, merger or sale, lawful and adequate
         provisions (in form reasonably satisfactory to the holders of at least
         a majority of the outstanding shares of Series B Convertible Preferred
         Stock) shall be made whereby each holder of a share or shares of Series
         B Convertible Preferred Stock shall thereafter have the right to
         receive, upon the basis and upon the terms and conditions specified
         herein and in lieu of the shares of Common Stock of the Corporation
         immediately theretofore receivable upon the conversion of such share or
         shares of Series B Convertible Preferred Stock, such shares of stock,
         securities or assets as may be issued or payable with respect to or in
         exchange for a number of outstanding shares of such Common Stock equal
         to said number of shares of such stock immediately theretofore so
         receivable, and in any such case appropriate provision shall be made
         with respect to the rights and interests of such holder to the end that
         the provisions hereof (including without limitation provisions for
         adjustments of the Conversion Price) shall thereafter be applicable, as
         nearly as
 
 
 
                                       21
<PAGE>   22
 
         practicable, in relation to any shares of stock, securities or assets
         thereafter deliverable upon the exercise of such conversion rights
         (including, if necessary to effect the adjustments contemplated herein,
         an immediate adjustment, by reason of such reorganization,
         reclassification, consolidation, merger or sale, of the Conversion
         Price to the value for the Common Stock reflected by the terms of such
         reorganization, reclassification, consolidation, merger or sale if the
         value so reflected is less than the Conversion Price in effect
         immediately prior to such reorganization, reclassification,
         consolidation, merger or sale). In the event of a merger or
         consolidation of the Corporation as a result of which a greater or
         lesser number of shares of common stock of the surviving corporation is
         issuable to holders of Common Stock of the Corporation outstanding
         immediately prior to such merger or consolidation, the Conversion Price
         in effect immediately prior to such merger or consolidation shall be
         adjusted in the same manner as though there were a subdivision or
         combination of the outstanding shares of Common Stock of the
         Corporation. The Corporation will not effect any such consolidation,
         merger or sale, unless prior to the consummation thereof the successor
         corporation (if other than the Corporation) resulting from such
         consolidation or merger or the corporation purchasing such assets shall
         assume by written instrument (in form reasonably satisfactory to the
         holders of at least a majority of the outstanding shares of Series B
         Convertible Preferred Stock) executed and mailed or delivered to each
         holder of shares of Series B Convertible Preferred Stock at the last
         address of such holder appearing on the books of the Corporation, the
         obligation to deliver to such holder such shares of stock, securities
         or assets as, in accordance with the foregoing provisions, such holder
         may be entitled to receive.
 
                  4H.      Notice of Adjustment. Upon any adjustment of the
         Conversion Price, then and in each such case the Corporation shall give
         written notice thereof, by first class mail, postage prepaid, addressed
         to each holder of shares of Series B Convertible Preferred Stock at the
         address of such holder as shown on the books of the Corporation, which
         notice shall state the Conversion Price resulting from such adjustment,
         setting forth in reasonable detail the method of calculation and the
         facts upon which such calculation is based.
 
 
 
                                       22
<PAGE>   23
 
                  4I.      Other Notices.  In case at any time:
 
                  (1)      the Corporation shall declare any cash dividend upon
         its Common Stock;
 
                  (2)      the Corporation shall declare any dividend upon its
         Common Stock payable in stock or make any dividend or other
         distribution (other than regular cash dividends) to the holders of its
         Common Stock;
 
                  (3)      the Corporation shall offer for subscription pro rata
         to the holders of its Common Stock any additional shares of stock of
         any class or other rights;
 
                  (4)      there shall be any capital reorganization, or
         reclassification of the capital stock of the Corporation, or
         consolidation or merger of the Corporation with, or sale of all or
         substantially all of its assets to, another corporation;
 
                  (5)      there shall be a voluntary or involuntary
         dissolution, liquidation or winding up of the Corporation; or
 
                  (6)      the Corporation shall take any action that would
         result in an automatic conversion of the Series B Convertible Preferred
         Stock pursuant to paragraph 4J;
 
         then, in any one or more of said cases, the Corporation shall give, by
         first class mail, postage prepaid, addressed to each holder of any
         shares of Series B Convertible Preferred Stock at the address of such
         holder as shown on the books of the Corporation, (a) at least 20 days'
         prior written notice of the date on which the books of the Corporation
         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, (b) 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, and (c) in the case
         of any event which would result in an automatic conversion of the
         Series B Convertible Preferred Stock pursuant to subparagraph 4J, at
         last 20 days' prior written notice of the date on which the same is
         expected to be completed.
 
 
                                       23
<PAGE>   24
 
         Such notice in accordance with the foregoing clause (a) 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 (b)
         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.
 
                  4J.      Automatic Conversion. In the event that, at any time
         while any of the Series B Convertible Preferred Stock shall be
         outstanding, the Corporation shall consummate an underwritten public
         offering on a firm commitment basis pursuant to an effective
         registration statement under the Securities Act of 1933, covering the
         offer and sale of Common Stock (i) at a per share price to the public
         equal to not less than $10.00 per share of Common Stock, appropriately
         adjusted for stock splits and dividends and stock combinations, and
         (ii) providing aggregate net proceeds to the Corporation equal at least
         $15,000,000, then all outstanding shares of Series B Convertible
         Preferred Stock shall, automatically and without further action on the
         part of the holders of the Series B Convertible Preferred Stock, be
         converted into shares of Common Stock in accordance with the terms of
         this paragraph 4 with the same effect as if the certificates evidencing
         such shares had been surrendered for conversion, such conversion to be
         effective simultaneously with the closing of such public offering;
         provided, however, that certificates evidencing the shares of common
         Stock issuable upon such conversion shall not be issued except on
         surrender of the certificates for the shares of the Series B
         Convertible Preferred Stock so converted.
 
                  4K.      Stock to Be Reserved. The Corporation will at all
         times reserve and keep available out of its authorized Common Stock or
         its treasury shares, solely for the purpose of issue upon the
         conversion of the Series B Convertible Preferred Stock as herein
         provided, such number of shares of Common Stock as shall then be
         issuable upon the conversion of all outstanding shares of Series B
         Convertible Preferred Stock. The Corporation covenants that all shares
         of Common Stock which shall be so issued shall be duly and validly
         issued and fully paid and non-
 
 
 
                                       24
<PAGE>   25
 
         assessable and free from all taxes, liens and charges with respect to
         the issue thereof, and, without limiting the generality of the
         foregoing, the Corporation covenants that it will from time to time
         take all such action as may be requisite to assure that the par value
         per share of the Common Stock is at all times equal to or less than the
         effective Conversion Price. The Corporation will take all such action
         as may be necessary to assure that all such shares of Common Stock may
         be so issued without violation of any applicable law or regulation, or
         of any requirements of any national securities exchange upon which the
         Common Stock of the Corporation may be listed. The Corporation will not
         take any action which results in any adjustment of the Conversion Price
         if the total number of shares of Common Stock issued and issuable after
         such action upon conversion of the Series B Convertible Preferred Stock
         would exceed the total number of shares of Common Stock of such class
         then authorized by this Amended and Restated Certificate of
         Incorporation.
 
                  4L.      Issue Tax. The issuance of certificates for shares of
         Common Stock upon conversions of the Series B Convertible Preferred
         Stock shall be made without charge to the holders of such Series B
         Convertible Preferred Stock for any issuance tax in respect thereof,
         provided that the Corporation shall not be required to pay any tax
         which may be payable in respect of any transfer involved in the
         issuance and delivery of any certificate in a name other than that of
         the holder of the Series B Convertible Preferred Stock which is being
         converted.
 
                  4M.      Closing of Books. The Corporation will at no time
         close its transfer books against the transfer of any Series B
         Convertible Preferred Stock or of any shares of Common Stock issued or
         issuable upon the conversion of any shares of Series B Convertible
         Preferred Stock in any manner which interferes with the timely
         conversion of such Series B Convertible Preferred Stock.
 
                  4N.      Definition of Common Stock. As used in this paragraph
         4, the term "Common Stock" shall mean and include the Corporation's
         authorized Common Stock, $.01 par value, as constituted on December 17,
         1991, and shall also include any capital stock of any class of the
         Corporation thereafter authorized which shall not be limited to a fixed
         sum or percentage of par value in respect of the rights of the holders
         thereof to participate in dividends or in the 
 
 
 
                                       25
<PAGE>   26
 
         distribution of assets upon the voluntary or involuntary liquidation,
         dissolution or winding up of the Corporation; provided that the shares
         of Common Stock receivable upon conversion of shares of the Series B
         Convertible Preferred Stock of the Corporation, or in case of any
         reorganization or reclassification of the outstanding shares thereof,
         the stock, securities or assets provided for in subparagraph 4G, shall
         include only shares designated as Common Stock of the Corporation on
         December 17, 1991.
 
                  5.       Voting Rights. The holders of Series B Convertible
         Preferred Stock and Common Stock shall vote together as a class for the
         election of all the directors of the Corporation and, except as
         otherwise provided by law and this Amended and Restated Certificate of
         Incorporation, on all other matters to be voted on by the stockholders
         of the Corporation on the following basis: (1) each holder of Series B
         Convertible Preferred Stock shall be entitled to one vote for each
         share of Common Stock which would be issuable to such holder upon the
         conversion of all the shares of Series B Convertible Preferred Stock so
         held on the record date for the determination of stock holders entitled
         to vote, and (2) each holder of Common Stock shall be entitled to one
         vote per share.
 
                  6.       Restrictions. At any time when shares of Series B
         Convertible Preferred Stock are outstanding, except where the vote or
         written consent of the holders of a greater number of shares of the
         Corporation is required by law or by this Amended and Restated
         Certificate of Incorporation, and in addition to any other vote
         required by law, without the prior consent of the holders of 66-2/3% of
         the outstanding Series B Convertible Preferred Stock, given in person
         or by proxy, either in writing or at a special meeting called for that
         purpose, at which meeting the holders of the shares of such Series B
         Convertible Preferred Stock shall vote together as a class;
 
                  6A.      The Corporation will not create or authorize the
         creation of any additional class or series of shares unless the same
         ranks junior to the Series B Convertible Preferred Stock both as to
         dividends and as to the distribution of assets on liquidation or
         increase the authorized amount of the Series B Convertible Preferred
         Stock or increase the authorized amount of any additional class or
         series of shares unless the same ranks junior to the Series B
         Convertible Preferred Stock both as to dividends and as to 
 
 
 
                                       26
<PAGE>   27
 
         the distribution of assets on liquidation or create or authorize any
         obligation or security convertible into shares of Series B Convertible
         Preferred Stock or into shares of any other class or series unless the
         same rank junior to the Convertible Preferred Stock both as to
         dividends and as to the distribution of assets on liquidation, whether
         any such creation or authorization or increase shall be by means of
         amendment of the Amended and Restated Certificate of Incorporation,
         merger, consolidation or otherwise, and
 
                  6B.      The Corporation will not amend, alter or repeal the
         Corporation's Amended Restated Certificate of Incorporation or By-laws
         in any manner, or file any directors' resolutions pursuant to Section
         151(g) of the Delaware General Corporation Law, containing any
         provision, in either case, which adversely affects the respective
         preferences, qualifications, special or relative rights or privileges
         of the Series B Convertible Preferred Stock or the Common Stock or
         which in any manner adversely affects the Series B Convertible
         Preferred Stock or the Common Stock or the holders thereof.
 
                                       II.
 
                                  COMMON STOCK
 
                  1.       Voting Rights. Except as otherwise provided by law,
         the voting rights of the Common Stock shall be governed by paragraph 5
         of subdivision I.3.B. of this Article FOURTH.
 
                  2.       Dividends. Subject to the prior rights of the holders
         of Preferred Stock as stated and expressed herein or as may be stated
         and expressed pursuant hereto, dividends may be paid on the Common
         Stock as and when declared out of any funds legally available therefor.
 
                  3.       Liquidation. In the event of any liquidation,
         dissolution or winding up of the Corporation, whether voluntary or
         involuntary, after payment shall have been made to holders of Preferred
         Stock of the full amount to which they shall be entitled as stated and
         expressed herein or as may be stated and expressed pursuant hereto, the
         holders of Common Stock shall be entitled, to the exclusion of the
         holders of Preferred Stock, to share ratably according to the number of
         shares of Common Stock held by
 
 
 
                                       27
<PAGE>   28
 
         them in all remaining assets of the Corporation available for
         distribution to its stockholders.
 
                                      III.
 
                                OTHER PROVISIONS
 
                  No holder of any of the shares of any class or series of stock
         or of options, warrants or other rights to purchase shares of any class
         or series of stock or of other securities of the Corporation shall have
         any preemptive right to purchase or subscribe for any unissued stock of
         any class or series or any additional shares of any class or series to
         be issued by reason of any increase of the authorized capital stock of
         the Corporation of any class or series, or bonds, certificates of
         indebtedness, debentures or other securities convertible into or
         exchangeable for stock of the Corporation of any class or series, or
         carrying any right to purchase stock or any class or series, but,
         subject to the provisions of subparagraph 4K of subdivision I.3.B. of
         this Article FOURTH, any such unissued stock, additional authorized
         issue of shares of any class or series of stock or securities
         convertible into or exchangeable for stock, or carrying any right to
         purchase stock, may be issued and disposed of pursuant to resolution of
         the Board of Directors to such persons, firms, corporations or
         associations, whether such holders or others, and upon such terms as
         may be deemed advisable by the Board of Directors in the exercise of
         its sole discretion.
 
                  FIFTH: In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of Directors of the
Corporation is expressly authorized and empowered to make, alter or repeal the
By-laws of the Corporation, subject to the power of the stockholders of the
Corporation to alter or repeal any By-law made by the Board of Directors.
 
                  SIXTH: The Corporation reserves the right at any time and from
time to time to amend, alter, change or repeal any provisions contained in this
Amended and Restated Certificate of Incorporation; and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner now or hereafter prescribed by law; and all
rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons
 
 
 
                                       28
<PAGE>   29
 
whomsoever by and pursuant to this Amended and Restated Certificate of
Incorporation in its present form or as hereafter amended are granted subject to
the right reserved in this Article.
 
                  SEVENTH: No person shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided, however, that the foregoing shall not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware or (iv) for any transaction from which the director derived an improper
personal benefit."
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       29
<PAGE>   30
 
 
 
                  IN WITNESS WHEREOF, LC ACQUISITION CORPORATION has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
Howard R. Deutsch, its Executive Vice President, who hereby acknowledges under
penalties of perjury that the facts here in stated are true and that this
certificate is his act and deed, and attested by James M. Emanuel, its
Secretary, this 17th day of December 1991.
 
 
                                           LC ACQUISITION CORPORATION
 
 
                                           By:    /s/ Howard R. Deutsch
                                               --------------------------
                                               Executive Vice President
 
[CORPORATE SEAL]
 
Attest:
 
 
 
BY:  /s/ James M. Emanuel
   ------------------------
         Secretary

 

 

 



                            CERTIFICATE OF AMENDMENT

                                       OF

                              AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                              LINCARE HOLDINGS INC.

 

         Lincare Holdings Inc. (the "Corporation"), a corporation organized and

existing under and by virtue of the General Corporation Law of the State of

Delaware, hereby certifies as follows:

 

         FIRST: That the Board of Directors of the Corporation, by unanimous

written consent adopted on April 15, 1998, duly adopted resolutions setting

forth a proposed amendment to the Amended and Restated Certificate of

Incorporation of the Corporation, declaring said amendment to be advisable and

directing that said amendment be considered for approval by the stockholders of

the Corporation at the next Annual Meeting of Stockholders or any adjournments

thereof (the "Annual Meeting"). The resolutions setting forth the proposed

amendment are as follows:

 

                  RESOLVED, that there is hereby adopted an amendment to the

         Corporation's Amended and Restated Certificate of Incorporation

         pursuant to which the authorized capital stock of the Corporation shall

         be increased from 55,000,000 shares, consisting of 50,000,000 shares of

         common stock, par value $0.01, and 5,000,000 shares of preferred stock,

         par value $1.00, to 205,000,000 shares, consisting of 200,000,000

         shares of common stock, par value $0.01, and 5,000,000 shares of

         preferred stock, par value $1.00; and be it further

 

                  RESOLVED, that in connection with such increase, the first

         sentence of the first paragraph of Article Fourth of the Corporation's

         Amended and Restated Certificate of Incorporation shall be deleted in

         its entirety and the following substituted in lieu thereof:

 

                           FOURTH: The total number of shares of all classes of

                  stock which the Corporation shall have the authority to issue

                  is two hundred five million (205,000,000) shares, consisting

                  of two

 

<PAGE>   2

 

                  hundred million (200,000,000) shares of Common Stock, $0.01

                  par value (herein called the "Common Stock"), and five million

                  (5,000,000) shares of Preferred Stock, $1.00 par value

                  (including any shares of Preferred Stock designated herein as

                  a particular series of Preferred Stock)(hereinafter referred

                  to as "Preferred Stock").

 

         SECOND: That at the Annual Meeting, which was duly called and held, a

majority of the outstanding capital stock of the Corporation was voted by the

holders thereof, in person or by proxy, in favor of the proposed amendment to

the Amended and Restated Certificate of Incorporation of the Corporation.

 

         THIRD: That said amendment is duly adopted in accordance with the

provisions of Section 242 of the General Corporation Law of the State of

Delaware.

 

         IN WITNESS WHEREOF, said Lincare Holdings Inc. has caused this

Certificate of Amendment of Amended and Restated Certificate of Incorporation to

be signed by John P. Byrnes, its President and Chief Executive Officer, this

14th day of May, 1998.

 

 

 

 

                                   By:  /s/ John P. Byrnes

                                      ---------------------------------

                                        John P. Byrnes

                                        President & Chief Executive

                                        Officer

 

[As Filed: 08-12-1998]