Exhibit 4.1

                          CERTIFICATE OF DESIGNATIONS,
                            PREFERENCES AND RIGHTS OF
                 SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
                                       OF
                              COMPUTONE CORPORATION

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

     That,  pursuant to the authority  conferred  upon the Board of Directors of
Computone  Corporation (the  "Corporation") by Article Fourth of its Certificate
of Incorporation, the Board of Directors of the Corporation adopted a resolution
which  establishes,  designates  and  provides  for the  issuance of a series of
preferred stock,  $.01 par value,  designated  "Series A Cumulative  Convertible
Preferred   Stock",   consisting  of  400,000   shares,   and   establishes  the
designations, preferences,  qualifications,  privileges, limitations, conversion
rights and other rights of the  Corporation's  Series A  Cumulative  Convertible
Preferred Stock, which resolution is as follows:

     RESOLVED,  that  pursuant  to the  authority  conferred  upon the  Board of
Directors  of  the   Corporation  by  Article  Fourth  of  the   Certificate  of
Incorporation,  the Board of Directors  does hereby  establish and designate and
provide  for the  issuance  of a series  of  preferred  stock,  $.01 par  value,
designated  "Series A Cumulative  Convertible  Preferred  Stock" (the "Preferred
Stock"),  consisting  of 400,000  shares,  and does hereby fix and determine the
relative rights, powers and preferences thereof to be as follows:

I.   RIGHTS ON LIQUIDATION, DISSOLUTION OR WINDING UP.

     (a) In the  event of any  liquidation,  dissolution  or  winding  up of the
Corporation,  the  holders  of shares of the  Preferred  Stock (and any class of
capital stock or series of preferred stock issued by the Corporation after March
30, 2001,  the terms of which  expressly  provide that such class or series will
rank on a parity with the  Preferred  Stock as to  liquidation,  winding-up  and
dissolution,  hereinafter  referred to as "Parity  Securities") then outstanding
shall be entitled to be paid out of the assets of the Corporation  available for
distribution  to its  stockholders,  either from  capital,  surplus or earnings,
before any payment shall be made to the holders of shares of any class or series
of securities ranking junior thereto,  including the Corporation's  Common Stock
("Junior Securities"). The amount of such payment shall be $10.00 per share plus
all accrued but unpaid dividends thereon and all interest due thereon.  If, upon
any liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation available for distribution to the holders of the Preferred Stock and
any Parity  Securities shall be insufficient to pay the holders of the Preferred
Stock and any Parity  Securities  the full  amounts  to which they  respectively
shall be entitled  pursuant to this Section  I(a),  the holders of shares of the
Preferred  Stock  and  the  Parity   Securities   shall  share  ratably  in  any
distribution of assets according to the respective amounts that would be payable
in respect of the shares of Preferred  Stock and Parity  Securities held by them
upon such  distribution if all amounts payable on or with respect to said shares
were paid in full.

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     (b) In the  event of any  liquidation,  dissolution  or  winding  up of the
Corporation,  after payment shall have been made to the holders of shares of the
Preferred  Stock and any  Parity  Securities  of the full  amounts to which they
shall have been entitled  pursuant to the first sentence of Section I(a) hereof,
the holders of shares of the Junior Securities shall have the exclusive right to
share in all remaining  assets of the Corporation  available for distribution to
its stockholders.

II.  VOTING.

     (a) On all matters  presented  to the holders of the  Corporation's  Common
Stock,  each  holder of shares  of the  Preferred  Stock  shall be  entitled  to
exercise  such number of votes per share of Preferred  Stock held by such holder
as shall equal the number  (including  any  fraction  to one  decimal  place) of
shares of Common Stock into which each share of Preferred  Stock is  convertible
pursuant  to  Section  III  hereof  on the date as of  which a  record  of those
entitled to vote is taken or, if no such record date is established, on the date
such vote is taken.  In the event such number of votes is not ascertained or not
readily ascertained,  each share of the Preferred Stock shall be entitled to one
vote.  Except as  otherwise  required  by law or  hereunder,  the holders of the
Preferred Stock and the holders of the Common Stock shall vote as a single class
on all such matters.

     (b) The Corporation  shall not,  without the affirmative vote or consent of
the holders of shares  representing  at least 60% of the shares of the Preferred
Stock then outstanding, acting as a separate class:

          (i)   in any manner  authorize  or create  any class of capital  stock
                ranking,  either as to payment of dividends or  distribution  of
                assets, prior to the Preferred Stock;

          (ii)  in  any  manner  alter  or  change  the  designations,   powers,
                preferences  or rights  or the  qualifications,  limitations  or
                restrictions of the Preferred Stock;

          (iii) declare   or  make  any   dividend   or   distribution   on  the
                Corporation's  capital stock,  except dividends on the Preferred
                Stock and any  Parity  Securities  as  described  in  Section IV
                hereof;

          (iv)  liquidate the Corporation;

          (v)   redeem or repurchase any Junior Securities; or

          (vi)  sell all or substantially all of the assets of the Corporation.

III. CONVERSION. The holders of the Preferred Stock shall have conversion rights
     as follows (the "Conversion Rights"):

     (a) Each share of Preferred Stock shall be convertible, without the payment
of any additional  consideration  by the holder thereof and at the option of the
holder  thereof,  at any time after the date of issuance  of such share,  at the
office of the  Corporation or any transfer agent for the Preferred  Stock,  into
such  number  of fully  paid and  nonassessable  shares  of  Common  Stock as is
determined by

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dividing the  Conversion  Value per share (as set forth below) by the Conversion
Price per share (as set forth  below) in effect at the time of  conversion.  The
initial Conversion Price with respect to the Preferred Stock shall be subject to
adjustment as hereinafter provided.  The Preferred Stock shall have a Conversion
Value of $10.00 per share and an initial Conversion Price of $0.5883 per share.

     (b) No fractional shares of Common Stock shall be issued upon conversion of
the Preferred Stock. In lieu of any fractional  shares to which the holder would
otherwise be entitled,  the  Corporation  shall pay cash equal to such  fraction
multiplied by the fair market value at the time of the  conversion as determined
in good faith by the Board of Directors.

     (c) Before any holder of  Preferred  Stock shall be entitled to convert the
same into  full  shares  of  Common  Stock,  such  holder  shall  surrender  the
certificate  or  certificates  therefor,  duly  endorsed,  at the  office of the
Corporation  or of its  transfer  agent for the  Preferred  Stock and shall give
written  notice to the  Corporation at such office that he elects to convert the
same and shall  state  therein  his name or the name or names of his  nominee in
which he wishes the certificate or certificates for shares of Common Stock to be
issued.  The  Corporation  shall, as soon as practicable  thereafter,  issue and
deliver at such office to such holder of Preferred  Stock,  or to such  holder's
nominee,  a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid,  together with cash in lieu
of any fraction of a share. Such conversion shall be deemed to have been made on
the date of such surrender of the shares of Preferred  Stock to be converted and
notice as herein  provided,  and the person or persons  entitled  to receive the
shares of  Common  Stock  issuable  upon  conversion  shall be  treated  for all
purposes as the record  holder or holders of such shares of Common Stock on such
date or,  if such  date is a  weekend  or  legal  holiday,  the next  succeeding
business day. From and after such date, all rights of the holder with respect to
the Preferred Stock so converted shall terminate.

     (d)  (i)   For purposes of this Section III(d),  the following  definitions
                shall apply:

          (1)  "Option" shall mean rights, options or warrants to subscribe for,
               purchase or otherwise  acquire either Common Stock or Convertible
               Securities and those  described in clauses (B) and (C) of Section
               III(d)(i)(4) below.

          (2)  "Original Issue Date" shall mean March 30, 2001.

          (3)  "Convertible Securities" shall mean any evidences of indebtedness
               or shares (other than the Preferred  Stock issued on the Original
               Issue  Date or as a  dividend  paid  on the  Preferred  Stock  so
               issued)  directly or indirectly  convertible into or exchangeable
               for Common Stock.

          (4)  "Additional  Shares of Common  Stock"  shall  mean all  shares of
               Common Stock issued by the  Corporation  after the Original Issue
               Date, other than:

               (A)  shares of Common Stock issued or issuable upon conversion of
                    shares of Preferred  Stock or as a dividend,  stock split or
                    other distribution thereon;

               (B)  shares  of  Common   Stock  issued  or  issuable  for  which
                    adjustment  of the  Conversion  Price  is made  pursuant  to
                    Section III(d)(ii)(2) below; and

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<PAGE>

               (C)  shares of Common Stock issued or issuable by way of dividend
                    or other distribution on shares excluded from the definition
                    of  Additional  Shares of Common  Stock  under this  Section
                    III(d)(i)(4).

          (ii) (1)  In the event that the  Corporation  at any time or from time
                    to time  after  the  Original  Issue  Date  shall  issue any
                    Options or Convertible Securities or shall fix a record date
                    for the  determination of holders of any class of securities
                    entitled  to  receive  any  such   Options  or   Convertible
                    Securities,  then the maximum number of shares (as set forth
                    in the  instrument  relating  thereto  without regard to any
                    provisions contained therein for a subsequent  adjustment of
                    such number) of Common Stock  issuable  upon the exercise of
                    such Options or, in the case of  Convertible  Securities and
                    Options   therefor,   the   exercise  of  such  Options  and
                    conversion or exchange of such Convertible Securities, shall
                    be deemed to be Additional  Shares of Common Stock issued as
                    of the time of such  issue or,  in case  such a record  date
                    shall have been  fixed,  as of the close of business on such
                    record date, provided that Additional Shares of Common Stock
                    shall  not  be  deemed  to  have  been  issued   unless  the
                    consideration  per share  (determined  pursuant  to  Section
                    III(d)(iv)) of such Additional  Shares of Common Stock would
                    be less than the  Conversion  Price in effect on the date of
                    and immediately prior to such issue, or such record date, as
                    the case may be, and provided  further that in any such case
                    in which Additional  Shares of Common Stock are deemed to be
                    issued:

               (A)  no further  adjustment in the Conversion Price shall be made
                    upon  the   subsequent   issue  of  Options  or  Convertible
                    Securities  or shares of Common  Stock upon the  exercise of
                    such Options or conversion  or exchange of such  Convertible
                    Securities;

               (B)  if such  Options or  Convertible  Securities  by their terms
                    provide,  with the  passage  of time or  otherwise,  for any
                    increase  or decrease  in the  consideration  payable to the
                    Corporation, or increase or decrease in the number of shares
                    of Common Stock issuable,  upon the exercise,  conversion or
                    exchange  thereof,  the  Conversion  Price computed upon the
                    original  issue thereof (or upon the  occurrence of a record
                    date with respect thereto),  and any subsequent  adjustments
                    based  thereon,  shall,  upon any such  increase or decrease
                    becoming  effective,  be recomputed to reflect such increase
                    or  decrease  insofar as it affects  the rights of  exercise
                    under such Options or the rights of  conversion  or exchange
                    under such Convertible Securities;

               (C)  upon the  expiration  of any such  Options  or any rights of
                    conversion  or exchange  under such  Convertible  Securities
                    that shall not have been  exercised,  the  Conversion  Price
                    computed  upon  the  original  issue  thereof  (or  upon the
                    occurrence of a record date with respect  thereto),  and any
                    subsequent  adjustments  based  thereon,  shall,  upon  such
                    expiration, be recomputed as if:

          (i)   in  the  case  of  Options  for  Common  Stock  or   Convertible
                Securities,  the only  Additional  Shares of Common Stock issued
                were the shares of Common Stock,  if any,  actually  issued upon
                the  exercise of such Options or the  conversion  or exchange of
                such  Convertible  Securities  and  the  consideration  received
                therefor  was  the   consideration   actually  received  by  the
                Corporation  for  the  issue  of  all  such  Options,  plus  the
                consideration  actually  received by the  Corporation  upon such
                exercise,   or  the  consideration   actually  received  by  the
                Corporation  for the  issue of all such  Convertible  Securities
                that were actually  converted or exchanged,  plus the additional
                consideration, if any, actually received by the Corporation upon
                such conversion or exchange; and

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<PAGE>

          (ii)  in the case of  Options  for  Convertible  Securities,  only the
                Convertible  Securities,   if  any,  actually  issued  upon  the
                exercise  thereof  were  issued  at the  time of  issue  of such
                Options,  and the consideration  received by the Corporation for
                the  Additional  Shares of Common Stock deemed to have been then
                issued  was  the   consideration   actually   received   by  the
                Corporation  for the issue of all such  Options,  whether or not
                exercised,  plus the consideration  deemed to have been received
                by the Corporation  (determined  pursuant to Section III(d)(iv))
                upon the issue of the  Convertible  Securities  with  respect to
                which such Options were actually exercised;

               (D)  no  readjustment  pursuant  to clause (B) or (C) above shall
                    have the effect of  increasing  the  Conversion  Price to an
                    amount that exceeds the lower of (i) the Conversion Price on
                    the original  adjustment  date, or (ii) the Conversion Price
                    that  would  have  resulted  from  any  actual  issuance  of
                    Additional  Shares  of Common  Stock  between  the  original
                    adjustment date and such readjustment date;

               (E)  in the case of any  Options  that  expire by their terms not
                    more  than 30 days  after  the  date of  issue  thereof,  no
                    adjustment of the  Conversion  Price shall be made until the
                    expiration or exercise of all such Options,  whereupon  such
                    adjustment  shall be made in the  same  manner  provided  in
                    clause (C) above; and

               (F)  if such record  date shall have been fixed and such  Options
                    or  Convertible  Securities are not issued on the date fixed
                    therefor,  the adjustment  previously made in the Conversion
                    Price that  became  effective  on such  record date shall be
                    canceled as of the close of  business  on such record  date,
                    and  thereafter  the  Conversion  Price  shall  be  adjusted
                    pursuant to this Section III(d)(ii) as of the actual date of
                    their issuance.

          (2)  In the  event  the  Corporation  at any time or from time to time
               after the Original  Issue Date shall  declare or pay any dividend
               or make any other  distribution  on the Common  Stock  payable in
               Common  Stock  or in  any  Convertible  Securities  or  effect  a
               subdivision,  combination  or  consolidation  of the  outstanding
               shares of Common Stock (by  reclassification  or otherwise  other
               than by payment of a dividend in Common  Stock),  then and in any
               such event,  Additional Shares of Common Stock shall be deemed to
               have been issued:

               (A)  in  the  case  of  any  such   dividend   or   distribution,
                    immediately  after the close of  business on the record date
                    for the  determination of holders of any class of securities
                    entitled to receive such dividend or distribution, or

               (B)  in  the  case  of  any  such  subdivision,   combination  or
                    consolidation, when such corporate action becomes effective.

If such  record  date  shall  have been  fixed and no part of such  dividend  or
distribution  shall  have  been  paid or made on the date  fixed  therefor,  the
adjustment previously made in the Conversion Price that became effective on such
record date shall be  canceled as of the close of business on such record  date,
and

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thereafter  the  Conversion  Price  shall be adjusted  pursuant to this  Section
III(d)(ii)  as of the time of actual  payment of such dividend or making of such
distribution.

          (iii) In the event the Corporation  shall issue  Additional  Shares of
                Common Stock (including,  without limitation,  Additional Shares
                of  Common  Stock  deemed  to  be  issued  pursuant  to  Section
                III(d)(ii)),  without  consideration or for a consideration  per
                share  less than the  Conversion  Price in effect on the date of
                and  immediately  prior to such  issue,  then and in such event,
                such Conversion Price shall be reduced,  concurrently  with such
                issue, to a price (calculated to the nearest cent) determined by
                multiplying such Conversion  Price by a fraction,  the numerator
                of  which  shall  be  the  number  of  shares  of  Common  Stock
                outstanding  immediately  prior to such issue plus the number of
                shares  of  Common  Stock  which  the  aggregate   consideration
                received or deemed to have been received by the  Corporation for
                the total number of Additional  Shares of Common Stock so issued
                or deemed to be issued would purchase at such  Conversion  Price
                and the  denominator  of which  shall be the number of shares of
                Common Stock  outstanding  immediately  prior to such issue plus
                the number of such  Additional  Shares of Common Stock so issued
                or deemed to be issued;  provided  that for the  purpose of this
                Section  III(d)(iii),  all shares of Common Stock  issuable upon
                conversion of shares of Preferred Stock outstanding  immediately
                prior to such  issue  shall be  deemed  to be  outstanding,  and
                immediately  after any  Additional  Shares  of Common  Stock are
                deemed issued  pursuant to Section  III(d)(ii),  such Additional
                Shares of Common  Stock shall be deemed to be  outstanding,  but
                not  including  in such  calculation  any  additional  shares of
                Common Stock  issuable  solely as a result of the  adjustment of
                the respective  Conversion  Price of such  securities  resulting
                from the issuance of  Additional  Shares of Common Stock causing
                such  adjustment;  provided  further,  that  in  the  event  the
                Corporation,  without  receiving any  consideration,  declares a
                dividend on Common  Stock  payable in Common  Stock or effects a
                subdivision  of the  outstanding  shares of Common  Stock into a
                greater number of shares of Common Stock,  the Conversion  Price
                in  effect   immediately   prior  to  such  stock   dividend  or
                subdivision  shall, on the date that Additional Shares of Common
                Stock are deemed issued  pursuant to Section  III(d)(ii)(2),  be
                decreased  proportionately;   and  provided  further,  that  the
                Conversion  Price  shall not be so  reduced  at such time if the
                amount of such reduction  would be an amount less than $.01, but
                any such  amount  shall be carried  forward and  reduction  with
                respect  thereto  shall be made at the time of and together with
                any subsequent  reduction  which,  together with such amount and
                any other amount or amounts so carried forward,  shall aggregate
                $.01 or more.

          (iv)  For purposes of this Section III(d), the consideration  received
                by the  Corporation  for the issue of any  Additional  Shares of
                Common Stock shall be computed as follows:

          (1)  Such consideration shall:

               (A)  insofar as it consists of cash, be computed at the aggregate
                    amounts  of  cash  received  by  the  Corporation  excluding
                    amounts  paid or payable  for  accrued  interest  or accrued
                    dividends;

               (B)  insofar as it  consists  of  property  other  than cash,  be
                    computed  at the  fair  value  thereof  at the  time of such
                    issue, as determined in good faith by the Board of Directors
                    of the Corporation; and

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               (C)  in the event  Additional  Shares of Common  Stock are issued
                    together  with other shares or securities or other assets of
                    the Corporation for  consideration  that covers both, be the
                    proportion of such  consideration  so received,  computed as
                    provided in clauses (A) and (B) above, as determined in good
                    faith by the Board of Directors of the Corporation.

          (2)  The  consideration  per share  received  by the  Corporation  for
               Additional  Shares of  Common  Stock  deemed to have been  issued
               pursuant  to  Section  III(d)(ii)(1),  relating  to  Options  and
               Convertible  Securities,  shall be determined by dividing (x) the
               total amount,  if any,  received or receivable by the Corporation
               as consideration  for the issuance of such Options or Convertible
               Securities,  plus the  minimum  aggregate  amount  of  additional
               consideration (as set forth in the instruments  relating thereto,
               without  regard  to  any  provision   contained   therein  for  a
               subsequent  adjustment  of  such  consideration)  payable  to the
               Corporation  upon the exercise of such Options or the  conversion
               or exchange  of such  Convertible  Securities,  or in the case of
               Options for Convertible Securities,  the exercise of such Options
               for Convertible Securities and the conversion or exchange of such
               Convertible  Securities,  by (y) the maximum  number of shares of
               Common Stock (as set forth in the instruments  relating  thereto,
               without  regard  to  any  provision   contained   therein  for  a
               subsequent  adjustment of such number) issuable upon the exercise
               of such Options or the conversion or exchange of such Convertible
               Securities.

          (v)  (1)  In the event the Corporation  shall issue Additional  Shares
                    of Common Stock pursuant to Section III(d)(ii)(2) in a stock
                    dividend, stock distribution or subdivision, such Additional
                    Shares of Common  Stock  shall be deemed to have been issued
                    for no consideration.

               (2)  In the event the outstanding shares of Common Stock shall be
                    combined or consolidated,  by reclassification or otherwise,
                    into  a  lesser  number  of  shares  of  Common  Stock,  the
                    applicable  Conversion  Price with respect to the  Preferred
                    Stock in effect  immediately  prior to such  combination  or
                    consolidation shall,  concurrently with the effectiveness of
                    such  combination  or  consolidation,   be   proportionately
                    increased.

          (vi)  No adjustment in the number of shares of Common Stock into which
                the Preferred Stock is convertible  shall be made, by adjustment
                in the Conversion Price in respect of the issuance of Additional
                Shares of Common Stock,  unless the  consideration per share for
                an  Additional  Share of  Common  Stock  issued  or deemed to be
                issued by the Corporation is less than the applicable Conversion
                Price in effect on the date of,  and  immediately  prior to, the
                issuance of such Additional Share.

     (g) Except for an  amendment  approved in  accordance  with Section II, the
Corporation  shall not, by  amendment of its  Certificate  of  Incorporation  or
through  any  reorganization,   transfer  of  assets,   consolidation,   merger,
dissolution, issuance or sale of securities or any other voluntary action, avoid
or seek to  avoid  the  observance  or  performance  of any of the  terms  to be
observed or  performed  hereunder by the  Corporation  but shall at all times in
good faith assist in the carrying out of all the  provisions of this Section III
and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of the Preferred Stock set forth
herein against impairment.

     (h)  Upon  the  occurrence  of  each  adjustment  or  readjustment  of  the
Conversion  Price  pursuant to this Section III, the  Corporation at its expense
shall promptly compute such adjustment or

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readjustment  in accordance  with the terms hereof and furnish to each holder of
Preferred Stock a certificate  setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The  Corporation  shall,  upon the written  request at any time of any holder of
Preferred  Stock,  furnish  or  cause  to be  furnished  to such  holder  a like
certificate  setting  forth (i) such  adjustments  and  readjustments,  (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the  amount,  if any,  of other  property  which at the time  would be
received upon the conversion of each share of Preferred Stock.

     (i) In the  event of any  taking  by the  Corporation  of a  record  of the
holders of any class or series of securities for the purpose of determining  the
holders  thereof who are  entitled to receive  any  dividend  (other than a cash
dividend that is the same as cash dividends paid in previous  quarters) or other
distribution,  the Corporation shall mail to each holder of the Preferred Stock,
at least 10 days prior to such  record  date,  a notice  specifying  the date on
which  any such  record  is to be taken  for the  purpose  of such  dividend  or
distribution.

     (j) The Corporation  shall reserve and keep available out of its authorized
but  unissued  Common  Stock such number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of the Preferred Stock.

     (k) The  Corporation  shall  pay any issue or  transfer  taxes  payable  in
connection with the conversion of the Preferred Stock;  provided,  however, that
the  Corporation  shall not be  required  to pay any tax that may be  payable in
respect of any transfer to a name other than that of the holder of the Preferred
Stock,  and no issuance or delivery need be made unless the Corporation has been
paid the  amount  of such tax or it has been  established  to the  Corporation's
satisfaction that the tax has been paid.

IV.  DIVIDENDS.  The  holder  of each  share  of the  Preferred  Stock  shall be
     entitled to receive,  before any dividend shall be declared or paid upon or
     set aside for the Junior  Securities,  when and as declared by the Board of
     Directors  of the  Corporation,  out of funds  legally  available  for that
     purpose,  quarterly  dividends  in cash at the rate of $.60 per  share  per
     annum,  and no more;  provided,  however,  that if the Corporation does not
     register for resale  pursuant to the  provisions of the  Securities  Act of
     1933, as amended,  and the rules and  regulations  thereunder the shares of
     Common  Stock  into  which the shares of  Preferred  Stock are  convertible
     within 120 days after the date of their  issuance,  the dividend rate shall
     be $.80 per share per annum;  provided  that the dividend  rate of $.80 per
     share per annum shall  remain at the higher rate for the period  commencing
     on such  120th  day  until the date  that  such  registration  is  declared
     effective,  and on the date of effectiveness the dividend rate shall revert
     to $.60 per share per annum.  Dividends  on shares of the  Preferred  Stock
     shall be payable in quarterly  installments on March 31, June 30, September
     30 and  December  31 in each  year  commencing  June  30,  2001;  provided,
     however,  that  during the period  commencing  March 30, 2001 and ending on
     February  28,  2003,  the  Corporation  may  satisfy the  dividend  payment
     obligations under this Section IV by payment, in lieu of cash, of shares of
     Preferred  Stock at the rate of $10.00 per share,  and in such  event,  the
     Conversion  Price under  Section III hereof shall be adjusted to the lesser
     of (i) the Conversion Price then in effect and (ii) the weighted average of
     the previously  outstanding  Preferred Stock times the Conversion Price and
     the amount of the dividend  times 95% of the average  closing  price of the
     Corporation's  Common  Stock for the ten trading days prior to the Dividend
     Repayment  Date.  Dividends  on  shares  of the  Preferred  Stock  shall be
     cumulative  (whether or not there shall be net profits or net assets of the
     Corporation legally available for the payment

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<PAGE>

     of such  dividends) so that if Full  Cumulative  Dividends (as  hereinafter
     defined) upon the Preferred Stock to the end of the last completed Dividend
     Period (as  hereinafter  defined)  have not been paid or declared and a sum
     sufficient for payment thereof set apart, then the amount of the deficiency
     in such  dividends  must be fully paid or  dividends in such amount must be
     declared on the shares of the Preferred  Stock and a sum sufficient for the
     payment thereof must be set apart for such payment, before any dividend may
     be  declared  or paid or any other  distribution  ordered  or made upon the
     Junior  Securities  (other  than a dividend  payable  on the  Corporation's
     Common  Stock in Common  Stock) and before any sum or sums may be set aside
     for or applied to the  purchase or  redemption  of any shares of any Common
     Stock or the Preferred  Stock.  All  dividends  declared upon the Preferred
     Stock shall be declared pro rata per share.  Dividends accruing during each
     Dividend  Period  shall  be  payable  on  the  Dividend  Payment  Date  (as
     hereinafter  defined)  of such  Dividend  Period.  Holders of shares of the
     Preferred Stock shall not be entitled to any dividends,  whether payable in
     cash, property or stock, in excess of the Full Cumulative  Dividends at the
     rate set forth herein.  As long as any Preferred  Stock is outstanding  and
     the  dividends  set forth herein have not been paid in full, no dividend or
     distribution  shall be declared  or made with  respect to any other type or
     class of securities issued by the Corporation.  The Parity Securities shall
     be of equal rank with the Preferred  Stock with respect to the  declaration
     and payment of dividends. All dividends declared on the Preferred Stock and
     the Parity  Securities  shall be  declared  pro rata per share based on the
     respective dates of original issuance thereof.

     For purposes of this Section IV:

     "Dividend Payment Date" means, as to each respective  Dividend Period,  the
last day of such Dividend Period.

     "Full  Cumulative  Dividends" means (whether or not in any Dividend Period,
or any part thereof, in respect of which such term is used there shall have been
net profits or net assets of the Corporation  legally  available for the payment
of such  dividends)  that amount  which shall be equal to  dividends at the full
rate fixed for the  Preferred  Stock as  provided  herein for the period of time
elapsed  from March 30, 2001 to the date as of which Full  Cumulative  Dividends
are to be computed.

     "Dividend  Period" means each calendar  quarter or portion  thereof  during
which the relevant share of the Preferred Stock is outstanding.

V.   REDEMPTION.

     (a)  After  February  28,  2003 and on or before  February  29,  2004,  the
Corporation shall have the right, at its option, to redeem all or any portion of
the shares of Preferred  Stock then  outstanding  at a price per share of $11.50
plus an  amount  equal to all  accrued  but  unpaid  dividends  thereon  and any
interest due  thereon.  After  February  29, 2004 and on or before  February 28,
2005, the Corporation  shall have the right, at its option, to redeem all or any
portion of the shares of Preferred  Stock then  outstanding at a price per share
of $11.00 plus an amount equal to all accrued but unpaid  dividends  thereon and
any interest due thereon.  After February 28, 2005 and on or before February 28,
2006, the Corporation shall have the right, at its option, to

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<PAGE>

redeem all or any portion of the shares of Preferred Stock then outstanding at a
price  per  share of  $10.50  plus an amount  equal to all  accrued  but  unpaid
dividends  thereon and any interest due thereon.  After  February 28, 2006,  the
Corporation shall have the right, at its option, to redeem all or any portion of
the shares of Preferred  Stock then  outstanding  at a price per share of $10.00
plus an  amount  equal to all  accrued  but  unpaid  dividends  thereon  and any
interest due thereon.  The respective prices per share set forth in this Section
V(a) are  hereinafter  referred to as the  "Redemption  Price." If less than all
outstanding  shares of  Preferred  Stock  then  outstanding  are  redeemed,  the
Corporation shall redeem a like percentage of the shares of Preferred Stock held
by each holder thereof.

     (b)  Notwithstanding  the  foregoing,  upon  a  change  of  control  of the
Corporation,  holders of  Preferred  Stock  shall,  if the  market  value of the
Corporation's  Common Stock at such time is less than the Conversion Price, have
a one-time  option,  exercisable  upon not less than 30 days notice and not more
than 60 days notice, to require the Corporation to redeem the Preferred Stock at
a price per share of  $11.50,  plus an amount  equal to all  accrued  but unpaid
dividends  thereon.  A change of control shall mean any of the following events:
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger  or   consolidation),   in  one   transaction  or  a  series  of  related
transactions,  of all or  substantially  all of the assets of the Corporation or
the adoption of a plan relating to the Corporation's liquidation or dissolution.

     (c) After 12 months  following the Original Issue Date, the Corporation may
redeem the Preferred Stock at 100% of the liquidation  preference thereon,  plus
all accumulated and unpaid  dividends,  if any, whether or not declared,  to the
redemption  date,  if all of the following  conditions  are met: (i) the trading
price of the Corporation's Common Stock equals or exceeds $2.00 per share for 20
consecutive trading days and (ii) there is an effective  registration  statement
covering  the  shares  of  Common  Stock  into  which  the  Preferred  Stock  is
convertible.

     (d) At  least  30 days  prior  to the  date  of any  such  redemption  (the
"Redemption  Date"),  written notice thereof (the "Redemption  Notice") shall be
given by the  Corporation by mail,  postage  prepaid,  or by telex to non-United
States  residents,  to each  holder of record (at the close of  business  on the
business day next preceding the day on which the Redemption  Notice is given) of
shares  of  Preferred  Stock  notifying  such  holder  of  the  redemption.  The
Redemption  Notice  shall be addressed to each holder at his address as shown by
the  records of the  Corporation.  From and after the close of  business  on the
Redemption  Date,  unless  there shall have been a default in the payment of the
Redemption Price, all rights of holders of shares of Preferred Stock, except the
right to receive the Redemption Price,  shall cease with respect to such shares,
and  such  shares  shall  not  thereafter  be  transferred  on the  books of the
Corporation or be deemed to be outstanding for any purpose whatsoever.

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<PAGE>

     (e) For each share of the Preferred  Stock to be redeemed  pursuant to this
Section V, the Corporation shall be obligated on the applicable  Redemption Date
to pay the holder  thereof,  upon surrender by such holder at the  Corporation's
principal  office  (or  at  such  other  place  as  may  be  designated  by  the
Corporation)  of the  certificate or  certificates  representing  such shares an
amount in  immediately  available  funds equal to the Redemption  Price.  If the
funds of the Corporation  legally  available for the redemption of shares of the
Preferred Stock on any Redemption Date are  insufficient to redeem the number of
shares to be redeemed on such date, those funds that are legally available shall
be used to redeem the maximum  number of shares of the  Preferred  Stock ratably
among  the  holders  of the  shares to be  redeemed  based  upon the  respective
aggregate  Redemption  Prices of the shares held by each  holder,  and an amount
equal to the  balance  that would have been  payable to each such  holder  shall
become an obligation of the Corporation to the respective  holder, the amount of
which shall bear simple  interest at a floating  rate equal to the prime rate of
interest  announced  by Bank of America as in effect  from time to time.  At any
time after such  Redemption  Date when  additional  funds of the Corporation are
legally  available for the redemption of such shares,  such funds shall promptly
be used to redeem the maximum  number of shares of the Preferred  Stock that the
Corporation had become obligated to redeem but has not redeemed.

     IN WITNESS WHEREOF, Computone Corporation has caused this Certificate to be
signed by E. Leo Bebeau, its President,  and attested by Gregory Roseberry,  its
Assistant Secretary, this 2nd day of April, 2001.

                                        COMPUTONE CORPORATION.

(SEAL)
                                        By: /s/ E. Leo Bebeau
                                            ------------------------
                                            E. Leo Bebeau, President

ATTEST:


/s/ Gregory Roseberry
------------------------
Gregory Roseberry,
Assistant Secretary

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