Document:

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                                  ADAPTEC, INC.

                        1986 EMPLOYEE STOCK PURCHASE PLAN

                (amended and restated June 1998 and August 2000)

         The following constitute the provisions of the 1986 Employee Stock
Purchase Plan of Adaptec, Inc.

         1.     PURPOSE. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2.     DEFINITIONS.

                (a)     "BOARD" shall mean the Board of Directors of the Company
or any committee thereof designated by the Board of Directors of the Company in
accordance with Section 14 of the Plan.

                (b)     "CODE" shall mean the Internal Revenue Code of 1986, as
amended.

                (c)     "COMMON STOCK" shall mean the common stock of the
Company.

                (d)     "COMPANY" shall mean Adaptec, Inc. and any Designated
Subsidiary of the Company.

                (e)     "COMPENSATION" shall mean all base straight time gross
earnings and commissions, but exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.

                (f)     "DESIGNATED SUBSIDIARY" shall mean any Subsidiary that
has been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

                (g)     "EMPLOYEE" shall mean any individual who is an Employee
of the Company for tax purposes whose customary employment with the Company is
at least twenty (20) hours per week and more than five (5) months in any
calendar year. For purposes of the Plan, the employment relationship shall be
treated as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company. Where the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.

                (h)     "ENROLLMENT DATE" shall mean the first Trading Day of
each Offering Period.
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                (i)     "EXERCISE DATE" shall mean the last Trading Day of each
Purchase Period.

                (j)     "FAIR MARKET VALUE" shall mean, as of any date, the
value of Common Stock determined as follows:

                        (i)     If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day on the date of such determination, as reported in
THE WALL STREET JOURNAL or such other source as the Board deems reliable;

                        (ii)    If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock prior to the date of determination, as reported in THE WALL STREET
JOURNAL or such other source as the Board deems reliable;

                        (iii)   In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board; or

                (k)     "OFFERING PERIODS" shall mean the periods of
approximately twenty-four (24) months during which an option granted pursuant to
the Plan may be exercised, commencing on the first Trading Day on or after
February 15 and August 15 of each year and terminating on the last Trading Day
in the periods ending twenty-four (24) months later. The duration and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan.

                (l)     "PLAN" shall mean this Employee Stock Purchase Plan.

                (m)     "PURCHASE PERIOD" shall mean the approximately six (6)
month period commencing after one Exercise Date and ending with the next
Exercise Date, except that the first Purchase Period of any Offering Period
shall commence on the Enrollment Date and end with the next Exercise Date.

                (n)     "PURCHASE PRICE" shall mean 85% of the Fair Market Value
of a share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower; provided however, that the Purchase Price may be adjusted by
the Board pursuant to Section 20.

                (o)     "RESERVES" shall mean the number of shares of Common
Stock covered by each option under the Plan which have not yet been exercised
and the number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.

                (p)     "SUBSIDIARY" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

                (q)     "TRADING DAY" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.

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         3.     ELIGIBILITY.

                (a)    Any Employee who shall be employed by the Company on a
given Enrollment Date shall be eligible to participate in the Plan.

                (b)    Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Employee (or any other
person whose stock would be attributed to such Employee pursuant to Section
424(d) of the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of the
capital stock of the Company or of any Subsidiary, or (ii) to the extent that
his or her rights to purchase stock under all employee stock purchase plans
of the Company and its subsidiaries accrues at a rate which exceeds
Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the fair
market value of the shares at the time such option is granted) for each
calendar year in which such option is outstanding at any time.

         4.     OFFERING PERIODS. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after February 15 and August 15 each year, or on such other
date as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.

         5.      PARTICIPATION.

                (a)     An eligible Employee may become a participant in the
Plan by completing a subscription agreement authorizing payroll deductions in
the form of Exhibit A to this Plan and filing it with the Company's payroll
office prior to the applicable Enrollment Date; provided however, that for the
Offering Period beginning August 15, 2000 only, such subscription agreement may
be filed with the Company's payroll office within such period, applied on a
uniform and nondiscriminatory basis, as the Company may announce.

                (b)     Payroll deductions for a participant shall commence on
the first payroll following the Enrollment Date and shall end on the last
payroll in the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10 hereof.

         6.     PAYROLL DEDUCTIONS.

                (a)     At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not less than three percent (3%) and not
exceeding ten percent (10%) of the Compensation which he or she receives on each
pay day during the Offering Period.

                (b)     All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

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                (c)     A participant may discontinue his or her participation
in the Plan as provided in Section 10 hereof, or may increase or decrease the
rate of his or her payroll deductions during the Offering Period by completing
or filing with the Company a new subscription agreement authorizing a change in
payroll deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.

                (d)     Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.

                (e)     At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued under the
Plan is disposed of, the participant must make adequate provision for the
Company's federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.

         7.     GRANT OF OPTION. On the Enrollment Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than 5,000
shares of the Company's Common Stock (subject to any adjustment pursuant to
Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. The Board may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of the Company's Common Stock an Employee may purchase during
each Purchase Period of such Offering Period. Exercise of the option shall occur
as provided in Section 8 hereof, unless the participant has withdrawn pursuant
to Section 10 hereof. The option shall expire on the last day of the Offering
Period.

         8.     EXERCISE OF OPTION.

                (a)     Unless a participant withdraws from the Plan as provided
in Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her

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account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

                (b)     If the Board determines that, on a given Exercise Date,
the number of shares with respect to which options are to be exercised may
exceed (i) the number of shares of Common Stock that were available for sale
under the Plan on the Enrollment Date of the applicable Offering Period, or (ii)
the number of shares available for sale under the Plan on such Exercise Date,
the Board may in its sole discretion (x) provide that the Company shall make a
pro rata allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 20 hereof. The Company may make pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
shareholders subsequent to such Enrollment Date.

         9.     DELIVERY. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, the shares purchased upon exercise of his or
her option.

         10.    WITHDRAWAL.

                (a)     A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering Period. If
a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.

                (b)     A participant's withdrawal from an Offering Period shall
not have any effect upon his or her eligibility to participate in any similar
plan which may hereafter be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the Offering Period from which
the participant withdraws.

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         11.    TERMINATION OF EMPLOYMENT.

                Upon a participant's ceasing to be an Employee, for any reason,
he or she shall be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during the Offering
Period but not yet used to exercise the option shall be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15 hereof, and such participant's option shall be
automatically terminated. The preceding sentence notwithstanding, a participant
who receives payment in lieu of notice of termination of employment shall be
treated as continuing to be an Employee for the participant's customary number
of hours per week of employment during the period in which the participant is
subject to such payment in lieu of notice.

         12.    INTEREST. No interest shall accrue on the payroll deductions of
a participant in the Plan.

         13.    STOCK.

                (a)     Subject to adjustment upon changes in capitalization of
the Company as provided in Section 19 hereof, the maximum number of shares of
the Company's Common Stock which shall be made available for sale under the Plan
shall be 10,600,000 shares.

                (b)     The participant shall have no interest or voting right
in shares covered by his option until such option has been exercised.

                (c)     Shares to be delivered to a participant under the Plan
shall be registered in the name of the participant or in the name of the
participant and his or her spouse.

         14.    ADMINISTRATION. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

         15.    DESIGNATION OF BENEFICIARY.

                (a)     A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.

                (b)     Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company

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shall deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver such shares and/or cash to the spouse or to any one or more dependents
or relatives of the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.

         16.    TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

         17.    USE OF FUNDS. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

         18.    REPORTS. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         19.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION,
LIQUIDATION, MERGER OR ASSET SALE.

                (a)     CHANGES IN CAPITALIZATION. Subject to any required
action by the shareholders of the Company, the Reserves, the maximum number of
shares each participant may purchase each Purchase Period (pursuant to Section
7), as well as the price per share and the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

                (b)     DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board. The New
Exercise Date shall be before the date of the Company's proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the

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New Exercise Date and that the participant's option shall be exercised
automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.

                (c)     MERGER OR ASSET SALE. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any
Purchase Periods then in progress shall be shortened by setting a new Exercise
Date (the "New Exercise Date") and any Offering Periods then in progress shall
end on the New Exercise Date. The New Exercise Date shall be before the date of
the Company's proposed sale or merger. The Board shall notify each participant
in writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant's option has been changed to the New
Exercise Date and that the participant's option shall be exercised automatically
on the New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10 hereof.

         20.    AMENDMENT OR TERMINATION.

                (a)     The Board of Directors of the Company may at any time
and for any reason terminate or amend the Plan. Except as provided in Section 19
hereof, no such termination can affect options previously granted, provided that
an Offering Period may be terminated by the Board of Directors on any Exercise
Date if the Board determines that the termination of the Offering Period or the
Plan is in the best interests of the Company and its shareholders. Except as
provided in Section 19 and this Section 20 hereof, no amendment may make any
change in any option theretofore granted which adversely affects the rights of
any participant. To the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval in such a
manner and to such a degree as required.

                (b)     Without shareholder consent and without regard to
whether any participant rights may be considered to have been "adversely
affected," the Board (or its committee) shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.

                (c)     In the event the Board determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary or
desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:

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                        (i)     altering the Purchase Price for any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price;

                        (ii)    shortening any Offering Period so that Offering
Period ends on a new Exercise Date, including an Offering Period underway at the
time of the Board action; and

                        (iii)   allocating shares.

                Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.

         21.    NOTICES. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         22.    CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

                As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

         23.    TERM OF PLAN. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of twenty
(20) years unless sooner terminated under Section 20 hereof.

         24.    AUTOMATIC TRANSFER TO LOW PRICE OFFERING PERIOD. To the extent
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.

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                                    EXHIBIT A

                                  ADAPTEC, INC.

                        1986 EMPLOYEE STOCK PURCHASE PLAN

                (amended and restated June 1998 and August 2000)

                             SUBSCRIPTION AGREEMENT

_____ Original Application                           Enrollment Date:___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1.       ____________________ hereby elects to participate in the Adaptec, Inc.
         Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
         subscribes to purchase shares of the Company's Common Stock in
         accordance with this Subscription Agreement and the Employee Stock
         Purchase Plan.

2.       I hereby authorize payroll deductions from each paycheck in the amount
         of ____% of my Compensation on each payday (from 3% to 10%) during the
         Offering Period in accordance with the Employee Stock Purchase Plan.
         (Please note that no fractional percentages are permitted.)

3.       I understand that said payroll deductions shall be accumulated for the
         purchase of shares of Common Stock at the applicable Purchase Price
         determined in accordance with the Employee Stock Purchase Plan. I
         understand that if I do not withdraw from an Offering Period, any
         accumulated payroll deductions will be used to automatically exercise
         my option.

4.       I have received a copy of the complete Employee Stock Purchase Plan. I
         understand that my participation in the Employee Stock Purchase Plan is
         in all respects subject to the terms of the Plan. I understand that my
         ability to exercise the option under this Subscription Agreement is
         subject to shareholder approval of the Employee Stock Purchase Plan.

5.       Shares purchased for me under the Employee Stock Purchase Plan should
         be issued in the name(s) of (Employee or Employee and Spouse only).

6.       I understand that if I dispose of any shares received by me pursuant to
         the Plan within 2 years after the Enrollment Date (the first day of the
         Offering Period during which I purchased such shares) or one year after
         the Exercise Date, I will be treated for federal income tax purposes as
         having received ordinary income at the time of such disposition in an
         amount equal to the excess of the fair market value of the shares at
         the time such shares were purchased by me over the price which I paid
         for the shares. I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING
<PAGE>

         WITHIN 30 DAYS AFTER THE DATE OF ANY DISPOSITION OF MY SHARES AND I
         WILL MAKE ADEQUATE PROVISION FOR FEDERAL, STATE OR OTHER TAX
         WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON THE DISPOSITION OF
         THE COMMON STOCK. The Company may, but will not be obligated to,
         withhold from my compensation the amount necessary to meet any
         applicable withholding obligation including any withholding necessary
         to make available to the Company any tax deductions or benefits
         attributable to sale or early disposition of Common Stock by me. If I
         dispose of such shares at any time after the expiration of the 2-year
         and 1-year holding periods, I understand that I will be treated for
         federal income tax purposes as having received income only at the time
         of such disposition, and that such income will be taxed as ordinary
         income only to the extent of an amount equal to the lesser of (1) the
         excess of the fair market value of the shares at the time of such
         disposition over the purchase price which I paid for the shares, or (2)
         15% of the fair market value of the shares on the first day of the
         Offering Period. The remainder of the gain, if any, recognized on such
         disposition will be taxed as capital gain.

7.       I hereby agree to be bound by the terms of the Employee Stock Purchase
         Plan. The effectiveness of this Subscription Agreement is dependent
         upon my eligibility to participate in the Employee Stock Purchase Plan.

8.       In the event of my death, I hereby designate the following as my
         beneficiary(ies) to receive all payments and shares due me under the
         Employee Stock Purchase Plan:

         NAME:  (Please print)
                              --------------------------------------------------
                                    (First)            (Middle)         (Last)

         -------------------------       ---------------------------------------
         Relationship
                                         ---------------------------------------
                                         (Address)

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         Employee's Social
         Security Number:
                                        ----------------------------------------

         Employee's Address:
                                        ----------------------------------------

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

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

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
      --------------------------        ----------------------------------------
                                        Signature of Employee

                                        ----------------------------------------
                                        Spouse's Signature (If beneficiary other
                                        than spouse)

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                                    EXHIBIT B

                                  ADAPTEC, INC.

                        1986 EMPLOYEE STOCK PURCHASE PLAN

                (amended and restated June 1998 and August 2000)

                              NOTICE OF WITHDRAWAL

         The undersigned participant in the Offering Period of the Adaptec, Inc.
1986 Employee Stock Purchase Plan which began on ____________, ______ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.

                                           Name and Address of Participant:

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

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

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

                                           Signature:

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

                                           Date:
                                                --------------------------------<PAGE>

        CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES
                                     OF THE
                      SERIES M CONVERTIBLE PREFERRED STOCK
                                       OF
                               ESYNCH CORPORATION

         The undersigned, the Chief Executive Officer of eSynch Corporation, a
Delaware corporation (the "Company"), in accordance with the provisions of the
Delaware General Corporation Law, does hereby certify that, pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Company, the following resolution creating a series of
Series M Convertible Preferred Stock, was duly adopted on December 1, 2000:

         RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company by provisions of the Restated
Certificate of Incorporation of the Company (the "Certificate of
Incorporation"), there hereby is created out of the shares of Preferred Stock,
par value $.001 per share, of the Company authorized in Article IV of the
Certificate of Incorporation (the "Preferred Stock,"), a series of Preferred
Stock of the Company, to be named "Series M Convertible Preferred Stock,"
consisting of Two Hundred Twenty (220) shares, which series shall have the
following designations, powers, preferences and relative and other special
rights and the following qualifications, limitations and restrictions:

         1. DESIGNATION AND RANK. The designation of such series of the
Preferred Stock shall be the Series M Convertible Preferred Stock, par value
$.001 per share (the "Series M Preferred Stock"). The maximum number of shares
of Series M Preferred Stock shall be Two Hundred Twenty (220) Shares. The Series
M Preferred Stock shall rank (i) prior to the common stock, par value $.001 per
share (the "Common Stock"), and to all other classes and series of equity
securities of the Company which by its terms does not rank senior to the Series
M Preferred Stock ("Junior Stock"), (ii) on parity with the Series J Convertible
Preferred Stock, the Series K Convertible Preferred Stock, Series L Convertible
Preferred Stock and with any class and series of equity securities which by its
terms shall rank on parity with the Series M Preferred Stock, and (iii) junior
to any class or series of equity securities which by its terms shall rank senior
to the Series M Preferred Stock. The Series M Preferred Stock shall be
subordinate to and rank junior to all indebtedness of the Company now or
hereafter outstanding.

         2. DIVIDENDS.

                  (a) PAYMENT OF DIVIDENDS. The holders of record of shares of
Series M Preferred Stock shall be entitled to receive, out of any assets at the
time legally available therefor and when and as declared by the Board of
Directors, dividends at the rate of eight percent (8%) of the stated Liquidation
Preference Amount (as defined below) per share per annum (the "Dividend
Payment"), and no more, payable at the option of the Company in cash or in
shares of

<PAGE>

Common Stock in an amount equal to the quotient of (i) the Dividend Payment
divided by (ii) the Conversion Price (as defined in Section 5(d) below). In
the case of shares of Series M Preferred Stock outstanding for less than a
full year, dividends shall be pro rated based on the portion of each year
during which such shares are outstanding. Dividends on the Series M Preferred
Stock shall be cumulative, shall accrue and be payable only at conversion of
the Series M Preferred Stock into shares of Common Stock and shall accrue
until the Mandatory Conversion Date (as defined in Section 5(c)(ii) without
regard to Section 5(c)(ii)(x)(A)). Dividends on the Series M Preferred Stock
are prior and in preference to any declaration or payment of any distribution
(as defined below) on any outstanding shares of Common Stock or any other
equity securities of the Company ranking junior to the Series M Preferred
Stock as to the payment of dividends. Such dividends shall accrue on each
share of Series M Preferred Stock from day to day from the date of initial
issuance thereof whether or not earned or declared so that if such dividends
with respect to any previous dividend period at the rate provided for herein
have not been paid on, or declared and set apart for, all shares of Series M
Preferred Stock at the time outstanding, the deficiency shall be fully paid
on, or declared and set apart for, such shares on a pro rata basis with all
other equity securities of the Company ranking on a parity with the Series M
Preferred Stock as to the payment of dividends before any distribution shall
be paid on, or declared and set apart for Common Stock or any other equity
securities of the Company ranking junior to the Series M Preferred Stock as
to the payment of dividends.

                  (b) So long as any shares of Series M Preferred Stock are
outstanding, the Company shall not declare, pay or set apart for payment any
dividend or make any distribution on any Junior Stock (other than dividends or
distributions payable in additional shares of Junior Stock), unless at the time
of such dividend or distribution the Company shall have paid all accrued and
unpaid dividends on the outstanding shares of Series M Preferred Stock.

                  (c) In the event of a dissolution, liquidation or winding up
of the Company pursuant to Section 4, all accrued and unpaid dividends on the
Series M Preferred Stock shall be payable on the day immediately preceding the
date of payment of the preferential amount to the holders of Series M Preferred
Stock. In the event of (i) a mandatory redemption pursuant to Section 9 or (ii)
a redemption upon the occurrence of a Major Transaction (as defined in Section
8(c)) or a Triggering Event (as defined in Section 8(d)) or at the election of
the Company pursuant to Section 8(h), all accrued and unpaid dividends on the
Series M Preferred Stock shall be payable on the day immediately preceding the
date of such redemption. In the event of a voluntary conversion pursuant to
Section 5(a), all accrued and unpaid dividends on the Series M Preferred Stock
being converted shall be payable on the day immediately preceding the Voluntary
Conversion Date (as defined in Section 5(b)(i)) and in the event of a mandatory
conversion pursuant to Section 5(c), all accrued and unpaid dividends on the
Series M Preferred Stock being converted shall be payable on the day immediately
preceding the Mandatory Conversion Date (as defined in Section 5(c)(ii)).

                  (d) For purposes hereof, unless the context otherwise
requires, "distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or

                                     -2-

<PAGE>

otherwise, payable other than in shares of Common Stock or other equity
securities of the Company, or the purchase or redemption of shares of the
Company (other than redemptions set forth in Section 8 below or repurchases
of Common Stock held by employees or consultants of the Corporation upon
termination of their employment or services pursuant to agreements providing
for such repurchase or upon the cashless exercise of options held by
employees or consultants) for cash or property.

         3.       VOTING RIGHTS.

                  (a) CLASS VOTING RIGHTS. The Series M Preferred Stock shall
have the following class voting rights (in addition to the voting rights set
forth in Section 3(b) hereof). So long as any shares of the Series M Preferred
Stock remain outstanding, the Company shall not, without the affirmative vote or
consent of the holders of at least three-fourths (3/4) of the shares of the
Series M Preferred Stock outstanding at the time, given in person or by proxy,
either in writing or at a meeting, in which the holders of the Series M
Preferred Stock vote separately as a class: (i) authorize, create, issue or
increase the authorized or issued amount of any class or series of stock,
including but not limited to the issuance of any more shares of previously
authorized Common Stock or Preferred Stock, ranking prior to the Series M
Preferred Stock, with respect to the distribution of assets on liquidation,
dissolution or winding up; (ii) amend, alter or repeal the provisions of the
Series M Preferred Stock, whether by merger, consolidation or otherwise, so as
to adversely affect any right, preference, privilege or voting power of the
Series M Preferred Stock; PROVIDED, HOWEVER, that any creation and issuance of
another series of Junior Stock shall not be deemed to adversely affect such
rights, preferences, privileges or voting powers; (iii) repurchase, redeem or
pay dividends on, shares of the Company's Junior Stock; (iv) amend the
Certificate of Incorporation or By-Laws of the Company so as to affect
materially and adversely any right, preference, privilege or voting power of the
Series M Preferred Stock; PROVIDED, HOWEVER, that any creation and issuance of
another series of Junior Stock or any other class or series of equity securities
which by its terms shall rank on parity with the Series M Preferred Stock shall
not be deemed to materially and adversely affect such rights, preferences
privileges or voting powers; (v) effect any distribution with respect to Junior
Stock; or (vi) reclassify the Company's outstanding securities.

                  (b) GENERAL VOTING RIGHTS. Except with respect to transactions
upon which the Series M Preferred Stock shall be entitled to vote separately as
a class pursuant to Section 3(a) above and except as otherwise required by
Delaware law, the Series M Preferred Stock shall have no voting rights. The
Common Stock into which the Series M Preferred Stock is convertible shall, upon
issuance, have all of the same voting rights as other issued and outstanding
Common Stock of the Company.

                                     -3-

<PAGE>

         4. LIQUIDATION PREFERENCE.

                  (a) In the event of the liquidation, dissolution or winding up
of the affairs of the Company, whether voluntary or involuntary, after payment
or provision for payment of the debts and other liabilities of the Company, the
holders of shares of the Series M Preferred Stock then outstanding shall be
entitled to receive, out of the assets of the Company whether such assets are
capital or surplus of any nature, an amount equal to $10,000 per share (the
"Liquidation Preference Amount") of the Series M Preferred Stock plus any
accrued and unpaid dividends before any payment shall be made or any assets
distributed to the holders of the Common Stock or any other Junior Stock. If the
assets of the Company are not sufficient to pay in full the Liquidation
Preference Amount plus any accrued and unpaid dividends payable to the holders
of outstanding shares of the Series M Preferred Stock and any series of
preferred stock or any other class of stock on a parity, as to rights on
liquidation, dissolution or winding up, with the Series M Preferred Stock, then
all of said assets will be distributed among the holders of the Series M
Preferred Stock and the other classes of stock on a parity with the Series M
Preferred Stock, if any, ratably in accordance with the respective amounts that
would be payable on such shares if all amounts payable thereon were paid in
full. The liquidation payment with respect to each outstanding fractional share
of Series M Preferred Stock shall be equal to a ratably proportionate amount of
the liquidation payment with respect to each outstanding share of Series M
Preferred Stock. All payments for which this Section 4(a) provides shall be in
cash, property (valued at its fair market value as determined by the Company's
independent, outside accountant) or a combination thereof; PROVIDED, HOWEVER,
that no cash shall be paid to holders of Junior Stock unless each holder of the
outstanding shares of Series M Preferred Stock has been paid in cash the full
Liquidation Preference Amount plus any accrued and unpaid dividends to which
such holder is entitled as provided herein. After payment of the full
Liquidation Preference Amount plus any accrued and unpaid dividends to which
each holder is entitled, such holders of shares of Series M Preferred Stock will
not be entitled to any further participation as such in any distribution of the
assets of the Company.

                  (b) A consolidation or merger of the Company with or into any
other corporation or corporations, or a sale of all or substantially all of the
assets of the Company, or the effectuation by the Company of a transaction or
series of transactions in which more than 50% of the voting shares of the
Company is disposed of or conveyed, shall not be deemed to be a liquidation,
dissolution, or winding up within the meaning of this Section 4. In the event of
the merger or consolidation of the Company with or into another corporation, the
Series M Preferred Stock shall maintain its relative powers, designations and
preferences provided for herein and no merger shall result inconsistent
therewith.

                  (c) Written notice of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, stating a
payment date and the place where the distributable amounts shall be payable,
shall be given by mail, postage prepaid, no less than forty-five (45) days prior
to the payment date stated therein, to the holders of record of the Series

                                     -4-

<PAGE>

M Preferred Stock at their respective addresses as the same shall appear on
the books of the Company.

         5. CONVERSION. The holder of Series M Preferred Stock shall have the
following conversion rights (the "Conversion Rights"):

                  (a) RIGHT TO CONVERT. At any time on or after the Closing Date
(as such term is defined in the Series M Convertible Preferred Stock Purchase
Agreement dated as of January 18, 2001 between the Company and the initial
holders of the Series M Preferred Stock (the "Purchase Agreement")), the holder
of any such shares of Series M Preferred Stock may, at such holder's option,
subject to the limitations set forth in Section 7 herein, elect to convert (a
"Voluntary Conversion") all or any portion of the shares of Series M Preferred
Stock held by such person into a number of fully paid and nonassessable shares
of Common Stock (the "Conversion Rate") equal to the quotient of (i) the
Liquidation Preference Amount of the shares of Series M Preferred Stock being
converted divided by (ii) the Conversion Price (as defined in Section 5(d)(iii)
below) then in effect as of the date of the delivery by such holder of its
notice of election to convert.

                  (b) MECHANICS OF VOLUNTARY CONVERSION. The Voluntary
Conversion of Series M Preferred Stock shall be conducted in the following
manner:

                           (i) HOLDER'S DELIVERY REQUIREMENTS. To convert Series
M Preferred Stock into full shares of Common Stock on any date (the "Voluntary
Conversion Date"), the holder thereof shall (A) transmit by facsimile (or
otherwise deliver), for receipt on or prior to 5:00 p.m., Pacific Time on such
date, a copy of a fully executed notice of conversion in the form attached
hereto as EXHIBIT I (the "Conversion Notice"), to the Company, and (B) surrender
to a common carrier for delivery to the Company as soon as practicable following
such Voluntary Conversion Date but in no event later than six (6) business days
after such date the original certificates representing the shares of Series M
Preferred Stock being converted (or an indemnification undertaking with respect
to such shares in the case of their loss, theft or destruction) (the "Preferred
Stock Certificates") and the originally executed Conversion Notice.

                           (ii) COMPANY'S RESPONSE. Upon receipt by the Company
of a facsimile copy of a Conversion Notice, the Company shall immediately send,
via facsimile, a confirmation of receipt of such Conversion Notice to such
holder. Upon receipt by the Company of the Preferred Stock Certificates to be
converted pursuant to a Conversion Notice, together with the originally executed
Conversion Notice, the Company or its designated transfer agent (the "Transfer
Agent"), as applicable, shall, within six (6) business day following the date of
receipt by the Company of both, issue and surrender to a common carrier for
overnight delivery to the address as specified in the Conversion Notice, a
certificate, registered in the name of the holder or its designee, for the
number of shares of Common Stock to which the holder shall be entitled. If the
number of shares of Preferred Stock represented by the Preferred Stock
Certificate(s) submitted for conversion is greater than the number of shares of
Series M Preferred

                                     -5-

<PAGE>

Stock being converted, then the Company shall, as soon as practicable and in
no event later than six (6) business days after receipt of the Preferred
Stock Certificate(s) and at the Company's expense, issue and deliver to the
holder a new Preferred Stock Certificate representing the number of shares of
Series M Preferred Stock not converted.

                           (iii) DISPUTE RESOLUTION. In the case of a dispute as
to the determination of the Average Share Price (as defined in Section 5(d)
below) or the Conversion Price or the arithmetic calculation of the number of
shares of Common Stock to be issued upon conversion, the Company shall promptly
issue to the holder the number of shares of Common Stock that is not disputed
and shall submit the disputed determinations or arithmetic calculations to the
holder via facsimile as soon as possible, but in no event later than two (2)
business days after receipt of such holder's Conversion Notice. If such holder
and the Company are unable to agree upon the determination of the Average Share
Price or the Conversion Price or the arithmetic calculation of the number of
shares of Common Stock to be issued upon such conversion within one (1) business
day of such disputed determination or arithmetic calculation being submitted to
the holder, then the Company shall within one (1) business day submit via
facsimile (A) the disputed determination of the Average Share Price or the
Conversion Price to an independent, reputable investment bank mutually
acceptable to the Company and applicable holder or (B) the disputed arithmetic
calculation of the number of shares of Common Stock to be issued upon such
conversion to the Company's independent, outside accountant. The Company shall
cause the investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the holder of the
results no later than seventy-two (72) hours from the time it receives the
disputed determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent manifest error. The reasonable expenses of such investment bank
or accountant in making such determination shall be paid by the Company, in the
event the holder's calculation or determination was correct, or by the holder,
in the event the Company's calculation or determination was correct, or equally
by the Company and the holder in the event that neither the Company's or the
holder's calculation or determination was correct. The period of time in which
the Company is required to effect conversions or redemptions under this
Certificate of Designation shall be tolled with respect to the subject
conversion or redemption pending resolution of any dispute by the Company made
in good faith and in accordance with this Section 5(b)(iii).

                           (iv) RECORD HOLDER. The person or persons entitled to
receive the shares of Common Stock issuable upon a conversion of the Series M
Preferred Stock shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on the Conversion Date.

                           (v) COMPANY'S FAILURE TO TIMELY CONVERT. If within
six (6) business days of the Company's receipt of the Conversion Notice and the
Preferred Stock Certificates to be converted (the "Share Delivery Period") the
Company shall fail to issue a certificate to a holder for the number of shares
of Common Stock to which such holder is entitled upon such

                                      -6-

<PAGE>

holder's conversion of the Series M Preferred Stock or to issue a new
Preferred Stock Certificate representing the number of shares of Series M
Preferred Stock to which such holder is entitled pursuant to Section 5(b)(ii)
(a "Conversion Failure"), in addition to all other available remedies which
such holder may pursue hereunder and under the Purchase Agreement (including
indemnification pursuant to Article thereof), the Company shall pay
additional damages to such holder on each business day after such sixth (6th)
business day that such conversion is not timely effected in an amount equal
0.5% of the product of (A) the sum of the number of shares of Common Stock
not issued to the holder on a timely basis pursuant to Section 5(b)(ii) and
to which such holder is entitled and, in the event the Company has failed to
deliver a Preferred Stock Certificate to the holder on a timely basis
pursuant to Section 5(b)(ii), the number of shares of Common Stock issuable
upon conversion of the shares of Series M Preferred Stock represented by such
Preferred Stock Certificate, as of the last possible date which the Company
could have issued such Preferred Stock Certificate to such holder without
violating Section 5(b)(ii) and (B) the Closing Bid Price (as defined in
Section 5(d) below) of the Common Stock on the last possible date which the
Company could have issued such Common Stock and such Preferred Stock
Certificate, as the case may be, to such holder without violating Section
5(b)(ii). If the Company fails to pay the additional damages set forth in
this Section 5(b)(v) within five (5) business days of the date incurred, then
such payment shall bear interest at the rate of 2% per month (pro rated for
partial months) until such payments are made.

                  (c) MANDATORY CONVERSION.

                           (i) Subject to the Exchange Cap (as defined in
Section 7 hereof), each share of Series M Preferred Stock outstanding on the
Mandatory Conversion Date shall, automatically and without any action on the
part of the holder thereof, convert into a number of fully paid and
nonassessable shares of Common Stock equal to the quotient of (i) the
Liquidation Preference Amount of the shares of Series M Preferred Stock
outstanding on the Mandatory Conversion Date divided by (ii) the Conversion
Price in effect on the Mandatory Conversion Date.

                           (ii) As used herein, a "Mandatory Conversion Date"
shall be the date which is three (3) years after the date of issuance of the
Series M Preferred Stock (the "Issuance Date"), PROVIDED that the Mandatory
Conversion Date shall be extended for the following periods for any shares of
Series M Preferred Stock: (x) for as long as (A) the conversion of such share of
Preferred Stock would violate Section 7, (B) a Triggering Event (as defined in
Section 8(d) hereof) shall have occurred and be continuing or (C) any event
shall have occurred and be continuing which with the passage of time and the
failure to cure would result in a Triggering Event, (y) for those number of days
that the Registration Statement was not in effect during the period between the
Effectiveness Date (as defined in the Registration Rights Agreement) and the
third (3rd) anniversary of the Issuance Date and (z) one day for each day in any
Blackout Period (as defined in Section 3(n) of the Registration Rights
Agreement). The Mandatory Conversion Date and the Voluntary Conversion Date
collectively are referred to in this Certificate of Designation as the
"Conversion Date."

                                     -7-

<PAGE>

                           (iii) On the Mandatory Conversion Date, the
outstanding shares of Series M Preferred Stock shall be converted automatically
without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Company or its
transfer agent; PROVIDED, HOWEVER, that the Company shall not be obligated to
issue certificates evidencing the shares of Common Stock issuable upon
conversion of any shares of Series M Preferred Stock unless certificates
evidencing such shares of Series M Preferred Stock are either delivered to the
Company or the holder notifies the Company that such certificates have been
lost, stolen, or destroyed, and executes an agreement satisfactory to the
Company to indemnify the Company from any loss incurred by it in connection
therewith. Upon the occurrence of the automatic conversion of the Series M
Preferred Stock pursuant to this Section 5, the holders of the Series M
Preferred Stock shall surrender the Preferred Stock Certificates representing
the Series M Preferred Stock for which the Mandatory Conversion Date has
occurred to the Company and the Company shall deliver the shares of Common Stock
issuable upon such conversion (in the same manner set forth in Section 5(b)(ii))
to the holder within three (3) business days of the holder's delivery of the
applicable Preferred Stock Certificates.

                  (d) CONVERSION PRICE.

                           (i) The term "Fixed Conversion Price" shall mean
$1.375.

                           (ii) The term "Average Share Price" shall mean the
average of the three (3) lowest Closing Bid Prices of the Company's shares of
Common Stock (as reported by Bloomberg) in the OTC Bulletin Board (or on such
Alternative Exchange on which the shares of the Company trade if, at the time of
the conversion, they are not trading in the OTC Bulletin Board), during the
twenty (20) consecutive trading days ending on the trading day immediately
preceding the Conversion Date.

                           (iii) The term "Conversion Price" shall mean, with
respect to any conversion of Series M Preferred Stock, the lesser of (A) the
Fixed Conversion Price, or (B) the "Floating Conversion Price" where "Floating
Conversion Price" shall mean 78% of the Average Share Price on the Voluntary
Conversion Date or Mandatory Conversion Date for such conversion, as applicable.

                           (iv) The term "Closing Bid Price" shall mean, for any
security as of any date, the last closing bid price of such security in the OTC
Bulletin Board for such security as reported by Bloomberg, or, if no closing bid
price is reported for such security by Bloomberg, the last closing trade price
of such security as reported by Bloomberg, or, if no last closing trade price is
reported for such security by Bloomberg, the average of the bid prices of any
market makers for such security as reported in the "pink sheets" by the National
Quotation Bureau, Inc. If the Closing Bid Price cannot be calculated for such
security on such date on any of the foregoing bases, the Closing Bid Price of
such security on such date shall be the fair market

                                      -8-

<PAGE>

value as mutually determined by the Company and the holders of a majority of
the outstanding shares of Series M Preferred Stock. If the Company and the
holders of Series M Preferred Stock are unable to agree upon the fair market
value of the Common Stock, then such dispute shall be resolved pursuant to
Section 5(b)(iii) above with the term "Closing Bid Price" being substituted
for the term "Average Share Price." (All such determinations to be
appropriately adjusted for any stock dividend, stock split or other similar
transaction during such period).

                  (e) ADJUSTMENTS OF CONVERSION PRICE.

                           (i) ADJUSTMENTS FOR STOCK SPLITS AND COMBINATIONS. If
the Company shall at any time or from time to time after the Issuance Date,
effect a stock split of the outstanding Common Stock, the applicable Fixed
Conversion Price in effect immediately prior to the stock split shall be
proportionately decreased. If the Company shall at any time or from time to time
after the Issuance Date, combine the outstanding shares of Common Stock, the
applicable Fixed Conversion Price in effect immediately prior to the combination
shall be proportionately increased. Any adjustments under this Section 5(e)(i)
shall be effective at the close of business on the date the stock split or
combination occurs.

                           (ii) ADJUSTMENTS FOR CERTAIN DIVIDENDS AND
DISTRIBUTIONS. If the Company shall at any time or from time to time after the
Issuance Date, make or issue or set a record date for the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in shares of Common Stock, then, and in each event, the applicable Fixed
Conversion Price in effect immediately prior to such event shall be decreased as
of the time of such issuance or, in the event such record date shall have been
fixed, as of the close of business on such record date, by multiplying, as
applicable, the applicable Fixed Conversion Price then in effect by a fraction:

                                    (1) the numerator of which shall be the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date; and

                                    (2) the denominator of which shall be the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such dividend or
distribution.

                           (iii) ADJUSTMENT FOR OTHER DIVIDENDS AND
DISTRIBUTIONS. If the Company shall at any time or from time to time after the
Issuance Date, make or issue or set a record date for the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in other than shares of Common Stock, then, and in each event, an
appropriate revision to the applicable Conversion Price shall be made and
provision shall be made (by adjustments of the Conversion Price or otherwise) so
that the holders of Series M Preferred Stock shall receive upon conversions
thereof, in addition to the number of shares of

                                      -9-

<PAGE>

Common Stock receivable thereon, the number of securities of the Company
which they would have received had their Series M Preferred Stock been
converted into Common Stock on the date of such event and had thereafter,
during the period from the date of such event to and including the Fixed
Conversion Date, retained such securities (together with any distributions
payable thereon during such period), giving application to all adjustments
called for during such period under this Section 5(e)(iii) with respect to
the rights of the holders of the Series M Preferred Stock.

                           (iv) ADJUSTMENTS FOR RECLASSIFICATION, EXCHANGE OR
SUBSTITUTION. If the Common Stock issuable upon conversion of the Series M
Preferred Stock at any time or from time to time after the Issuance Date shall
be changed to the same or different number of shares of any class or classes of
stock, whether by reclassification, exchange, substitution or otherwise (other
than by way of a stock split or combination of shares or stock dividends
provided for in Sections 5(e)(i), (ii) and (iii), or a reorganization, merger,
consolidation, or sale of assets provided for in Section 5(e)(v)), then, and in
each event, an appropriate revision to the Fixed Conversion Price shall be made
and provisions shall be made (by adjustments of the Conversion Price or
otherwise) so that the holder of each share of Series M Preferred Stock shall
have the right thereafter to convert such share of Series M Preferred Stock into
the kind and amount of shares of stock and other securities receivable upon
reclassification, exchange, substitution or other change, by holders of the
number of shares of Common Stock into which such share of Series M Preferred
Stock might have been converted immediately prior to such reclassification,
exchange, substitution or other change, all subject to further adjustment as
provided herein.

                           (v) ADJUSTMENTS FOR REORGANIZATION, MERGER,
CONSOLIDATION OR SALES OF ASSETS. If at any time or from time to time after the
Issuance Date there shall be a capital reorganization of the Company (other than
by way of a stock split or combination of shares or stock dividends or
distributions provided for in Section 5(e)(i), (ii) and (iii), or a
reclassification, exchange or substitution of shares provided for in Section
5(e)(iv)), or a merger or consolidation of the Company with or into another
corporation, or the sale of all or substantially all of the Company's properties
or assets to any other person (an "Organic Change"), then as a part of such
Organic Change an appropriate revision to the Fixed Conversion Price shall be
made and provision shall be made (by adjustments of the Conversion Price or
otherwise) so that the holder of each share of Series M Preferred Stock shall
have the right thereafter to convert such share of Series M Preferred Stock into
the kind and amount of shares of stock and other securities or property of the
Company or any successor corporation resulting from Organic Change. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 5(e)(v) with respect to the rights of the holders of the Series
M Preferred Stock after the Organic Change to the end that the provisions of
this Section 5(e)(v) (including any adjustment in the applicable Conversion
Price then in effect and the number of shares of stock or other securities
deliverable upon conversion of the Series M Preferred Stock) shall be applied
after that event in as nearly an equivalent manner as may be practicable.

                                     -10-

<PAGE>

                           (vi) ADJUSTMENTS FOR ISSUANCE OF ADDITIONAL SHARES OF
COMMON STOCK. If the Company, at any time after the Issuance Date, shall issue
any additional shares of Common Stock (otherwise than as provided in the
foregoing subsections (i) through (v) of this Section 5(e)) (the "Additional
Shares of Common Stock"), at a price per share less than the lesser of (a) the
applicable Conversion Price then in effect and (b) the Closing Bid Price then in
effect (the "Per Share Market Value") or without consideration, then the
applicable Fixed Conversion Price upon each such issuance shall be adjusted to
that price (rounded to the nearest cent) determined by multiplying the
applicable Fixed Conversion Price then in effect by a fraction:

                           (1) the numerator of which shall be equal to the sum
of (A) the number of shares of Common Stock outstanding immediately prior to the
issuance of such Additional Shares of Common Stock PLUS (B) the number of shares
of Common Stock (rounded to the nearest whole share) which the aggregate
consideration for the total number of such Additional Shares of Common Stock so
issued would purchase at a price per share equal to the greater of the Per Share
Market Value then in effect and the applicable Fixed Conversion Price then in
effect, and

                           (2) the denominator of which shall be equal to the
number of shares of Common Stock outstanding immediately after the issuance of
such Additional Shares of Common Stock.

The provisions of this subsection (vi) shall not apply under any of the
circumstances for which an adjustment is provided in subsections (i), (ii),
(iii), (iv) or (v) of this Section 5(e). No adjustment of the applicable Fixed
Conversion Price shall be made under this subsection (e)(vi) upon the issuance
of any Additional Shares of Common Stock which are issued pursuant to any Common
Stock Equivalent (as such term is defined hereinafter) if upon the issuance of
such Common Stock Equivalent (x) any adjustment shall have been made pursuant to
subsection (vii) of this Section 5(e) or (y) no adjustment was required pursuant
to subsection (vii) of this Section 5(e). No adjustment of the applicable Fixed
Conversion Price shall be made under this subsection (vi) in an amount less than
$.01 per share, but any such lesser adjustment shall be carried forward and
shall be made at the time and together with the next subsequent adjustment, if
any, which together with any adjustments so carried forward shall amount to $.01
per share or more; PROVIDED that upon any adjustment of the applicable Fixed
Conversion Price as a result of any dividend or distribution payable in Common
Stock or Convertible Securities (as defined below) or the reclassification,
subdivision or combination of Common Stock into a greater or smaller number of
shares, the foregoing figure of $.01 per share (or such figure as last adjusted)
shall be adjusted (to the nearest one-half cent) in proportion to the adjustment
in the applicable Fixed Conversion Price.

                           (vii) ISSUANCE OF COMMON STOCK EQUIVALENTS. If the
Company, at any time after the Issuance Date, shall issue any securities
convertible into or exchangeable for, directly or indirectly, Common Stock
("Convertible Securities"), other than the Series M Preferred Stock, or any
rights or warrants or options to purchase any such Common Stock or

                                    -11-

<PAGE>

Convertible Securities, shall be issued or sold (collectively, the "Common
Stock Equivalents") and the price per share for which Additional Shares of
Common Stock may be issuable thereafter pursuant to such Common Stock
Equivalent shall be less than the lesser of (a) the applicable Fixed
Conversion Price then in effect or (b) the Per Share Market Value then in
effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable
thereafter is amended or adjusted, and such price as so amended shall be less
than the lesser of (a) the applicable Fixed Conversion Price or (b) the Per
Share Market Value in effect at the time of such amendment, then the
applicable Fixed Conversion Price upon each such issuance or amendment shall
be adjusted as provided in the first sentence of subsection (vi) of this
Section 5(e) on the basis that (1) the maximum number of Additional Shares of
Common Stock issuable pursuant to all such Common Stock Equivalents shall be
deemed to have been issued (whether or not such Common Stock Equivalents are
actually then exercisable, convertible or exchangeable in whole or in part)
as of the earlier of (A) the date on which the Company shall enter into a
firm contract for the issuance of such Common Stock Equivalent, or (B) the
date of actual issuance of such Common Stock Equivalent, and (2) the
aggregate consideration for such maximum number of Additional Shares of
Common Stock shall be deemed to be the minimum consideration received or
receivable by the Company for the issuance of such Additional Shares of
Common Stock pursuant to such Common Stock Equivalent. No adjustment of the
applicable Fixed Conversion Price shall be made under this subsection (vii)
upon the issuance of any Convertible Security which is issued pursuant to the
exercise of any warrants or other subscription or purchase rights therefor,
if any adjustment shall previously have been made to the exercise price of
such warrants then in effect upon the issuance of such warrants or other
rights pursuant to this subsection (vii). If no adjustment is required under
this subsection (vii) upon issuance of any Common Stock Equivalent or once an
adjustment is made under this subsection (vii) based upon the Per Share
Market Value in effect on the date of such adjustment, no further adjustment
shall be made under this subsection (vii) based solely upon a change in the
Per Share Market Value after such date.

                           (viii) CONSIDERATION FOR STOCK. In case any shares of
Common Stock or Convertible Securities other than the Series M Preferred Stock,
or any rights or warrants or options to purchase any such Common Stock or
Convertible Securities, shall be issued or sold:

                                    (1) in connection with any merger or
consolidation in which the Company is the surviving corporation (other than any
consolidation or merger in which the previously outstanding shares of Common
Stock of the Company shall be changed to or exchanged for the stock or other
securities of another corporation), the amount of consideration therefore shall
be, deemed to be the fair value, as determined reasonably and in good faith by
the Board of Directors of the Company, of such portion of the assets and
business of the nonsurviving corporation as such Board may determine to be
attributable to such shares of Common Stock, Convertible Securities, rights or
warrants or options, as the case may be; or

                                    (2) in the event of any consolidation or
merger of the Company in which the Company is not the surviving corporation or
in which the previously outstanding

                                     -12-

<PAGE>

shares of Common Stock of the Company shall be changed into or exchanged for
the stock or other securities of another corporation, or in the event of any
sale of all or substantially all of the assets of the Company for stock or
other securities of any corporation, the Company shall be deemed to have
issued a number of shares of its Common Stock for stock or securities or
other property of the other corporation computed on the basis of the actual
exchange ratio on which the transaction was predicated, and for a
consideration equal to the fair market value on the date of such transaction
of all such stock or securities or other property of the other corporation.
If any such calculation results in adjustment of the applicable Conversion
Price, or the number of shares of Common Stock issuable upon conversion of
the Series M Preferred Stock, the determination of the applicable Conversion
Price or the number of shares of Common Stock issuable upon conversion of the
Series M Preferred Stock immediately prior to such merger, consolidation or
sale, shall be made after giving effect to such adjustment of the number of
shares of Common Stock issuable upon conversion of the Series M Preferred
Stock.

                           (ix) RECORD DATE. In case the Company shall take
record of the holders of its Common Stock or any other Preferred Stock for the
purpose of entitling them to subscribe for or purchase Common Stock or
Convertible Securities, then the date of the issue or sale of the shares of
Common Stock shall be deemed to be such record date.

                           (x) CERTAIN ISSUES EXCEPTED. Anything herein to the
contrary notwithstanding, the Company shall not be required to make any
adjustment of the Conversion Price or the number of shares of Common Stock
issuable upon conversion of the Series M Preferred Stock upon the grant after
the Issuance Date of, or the exercise after the Issuance Date of, options or
warrants or rights to purchase stock under the Company's stock option plan.

                  (f) NO IMPAIRMENT. The Company shall not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith, assist in the carrying out of all the provisions of this
Section 5 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
Series M Preferred Stock against impairment. In the event a holder shall elect
to convert any shares of Series M Preferred Stock as provided herein, the
Company cannot refuse conversion based on any claim that such holder or any one
associated or affiliated with such holder has been engaged in any violation of
law, unless, an injunction from a court, on notice, restraining and/or adjoining
conversion of all or of said shares of Series M Preferred Stock shall have been
issued and the Company posts a surety bond for the benefit of such holder in the
amount of the difference between the Conversion Price and the Closing Bid Price
on the trading day preceding the date of the attempted conversion multiplied by
the number of shares of Series M Preferred Stock sought to be converted, which
bond shall remain in effect until the completion of arbitration/litigation of
the dispute and the proceeds of which shall be payable to such holder in the
event it obtains judgment.

                                     -13-

<PAGE>

                  (g) CERTIFICATES AS TO ADJUSTMENTS. Upon occurrence of each
adjustment or readjustment of the Fixed Conversion Price or number of shares of
Common Stock issuable upon conversion of the Series M Preferred Stock pursuant
to this Section 5, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of such Series M Preferred Stock a certificate setting forth such
adjustment and readjustment, showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon written request of
the holder of such affected Series M Preferred Stock, at any time, furnish or
cause to be furnished to such holder a like certificate setting forth such
adjustments and readjustments, the applicable Fixed Conversion Price in effect
at the time, and the number of shares of Common Stock and the amount, if any, of
other securities or property which at the time would be received upon the
conversion of a share of such Series M Preferred Stock. Notwithstanding the
foregoing, the Company shall not be obligated to deliver a certificate unless
such certificate would reflect an increase or decrease of at least one percent
of such adjusted amount.

                  (h) ISSUE TAXES. The Company shall pay any and all issue and
other taxes, excluding federal, state or local income taxes, that may be payable
in respect of any issue or delivery of shares of Common Stock on conversion of
shares of Series M Preferred Stock pursuant thereto; PROVIDED, HOWEVER, that the
Company shall not be obligated to pay any transfer taxes resulting from any
transfer requested by any holder in connection with any such conversion.

                  (i) NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
facsimile or three (3) business days following being mailed by certified or
registered mail, postage prepaid, return-receipt requested, addressed to the
holder of record at its address appearing on the books of the Company. The
Company will give written notice to each holder of Series M Preferred Stock at
least twenty (20) days prior to the date on which the Company closes its books
or takes a record (I) with respect to any dividend or distribution upon the
Common Stock, (II) with respect to any pro rata subscription offer to holders of
Common Stock or (III) for determining rights to vote with respect to any Organic
Change, dissolution, liquidation or winding-up and in no event shall such notice
be provided to such holder prior to such information being made known to the
public. The Company will also give written notice to each holder of Series M
Preferred Stock at least twenty (20) days prior to the date on which any Organic
Change, dissolution, liquidation or winding-up will take place and in no event
shall such notice be provided to such holder prior to such information being
made known to the public.

                  (j) FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of the Series M Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the Company
shall pay cash equal to the product of such fraction multiplied by the average
of the Closing Bid Prices of the Common Stock for the five (5) consecutive
trading days immediately preceding the Voluntary Conversion Date or Mandatory
Conversion Date, as applicable.

                                     -14-

<PAGE>

                  (k) RESERVATION OF COMMON STOCK. The Company shall, so long as
any shares of Series M Preferred Stock are outstanding, reserve and keep
available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Series M Preferred Stock, such number
of shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all of the Series M Preferred Stock then outstanding; PROVIDED
that the number of shares of Common Stock so reserved shall at no time be less
than 200% of the number of shares of Common Stock for which the shares of Series
M Preferred Stock are at any time convertible. The initial number of shares of
Common Stock reserved for conversions of the Series M Preferred Stock and each
increase in the number of shares so reserved shall be allocated pro rata among
the holders of the Series M Preferred Stock based on the number of shares of
Series M Preferred Stock held by each holder at the time of issuance of the
Series M Preferred Stock or increase in the number of reserved shares, as the
case may be. In the event a holder shall sell or otherwise transfer any of such
holder's shares of Series M Preferred Stock, each transferee shall be allocated
a pro rata portion of the number of reserved shares of Common Stock reserved for
such transferor. Any shares of Common Stock reserved and which remain allocated
to any person or entity which does not hold any shares of Series M Preferred
Stock shall be allocated to the remaining holders of Series M Preferred Stock,
pro rata based on the number of shares of Series M Preferred Stock then held by
such holder. The Company shall, from time to time in accordance with the
Delaware General Corporation Law, as amended, increase the authorized number of
shares of Common Stock if at any time the unissued number of authorized shares
shall not be sufficient to satisfy the Company's obligations under this Section
5(k).

                  (l) RETIREMENT OF SERIES M PREFERRED STOCK. Conversion of
Series M Preferred Stock shall be deemed to have been effected on the applicable
Voluntary Conversion Date or Mandatory Conversion Date, and such date is
referred to herein as the "Conversion Date". Upon conversion of only a portion
of the number of shares of Series M Preferred Stock represented by a certificate
surrendered for conversion, the Company shall issue and deliver to such holder
at the expense of the Company, a new certificate covering the number of shares
of Series M Preferred Stock representing the unconverted portion of the
certificate so surrendered as required by Section 5(b)(ii).

                  (m) REGULATORY COMPLIANCE. If any shares of Common Stock to be
reserved for the purpose of conversion of Series M Preferred Stock require
registration or listing with or approval of any governmental authority, stock
exchange or other regulatory body under any federal or state law or regulation
or otherwise before such shares may be validly issued or delivered upon
conversion, the Company shall, at its sole cost and expense, in good faith and
as expeditiously as possible, endeavor to secure such registration, listing or
approval, as the case may be.

         6. NO PREEMPTIVE RIGHTS. Except as provided in Section 5 hereof and in
the Purchase Agreement, no holder of the Series M Preferred Stock shall be
entitled to rights to

                                     -15-

<PAGE>

subscribe for, purchase or receive any part of any new or additional shares
of any class, whether now or hereinafter authorized, or of bonds or
debentures, or other evidences of indebtedness convertible into or
exchangeable for shares of any class, but all such new or additional shares
of any class, or any bond, debentures or other evidences of indebtedness
convertible into or exchangeable for shares, may be issued and disposed of by
the Board of Directors on such terms and for such consideration (to the
extent permitted by law), and to such person or persons as the Board of
Directors in their absolute discretion may deem advisable.

         7.       CONVERSION RESTRICTIONS.

                  (a) Notwithstanding any other provision herein, the Company
shall not be obligated to issue any shares of Common Stock upon conversion of
the Series M Preferred Stock if the issuance of such shares of Common Stock
would exceed that number of shares of Common Stock which the Company may issue
upon conversion of the Series M Preferred Stock (the "Exchange Cap") without
breaching the Company's obligations under the rules or regulations of The Nasdaq
Stock Market, Inc. or any Alternative Exchange, except that such limitation
shall not apply in the event that the Company (a) obtains the approval of its
stockholders as required by applicable rules of The Nasdaq Stock Market, Inc. or
any Alternative Exchange, for issuances of Common Stock in excess of such amount
(the "Shareholder Approval") or (b) obtains a written opinion from outside
counsel to the Company that such approval is not required, which opinion shall
be reasonably satisfactory to the holders of a majority of the shares of Series
M Preferred Stock then outstanding; PROVIDED, HOWEVER, that notwithstanding
anything herein to the contrary, the Company, will issue such number of shares
of Common Stock issuable upon conversion of the Series M Preferred Stock at the
then current Conversion Price up to the Exchange Cap. If the conversion of any
shares of Series M Preferred Stock would result in the issuance of Common Stock
which in the aggregate would equal or exceed the Exchange Cap, the Company shall
within thirty (30) days of such conversion request, (i) call a meeting of its
stockholders in order to seek the Shareholder Approval as required by the
applicable rules or regulations of Nasdaq or the Alternative Exchange, as
applicable (the "Stockholders Meeting"), which Stockholders Meeting shall take
place within sixty (60) days of the conversion request and (ii) file a proxy
statement with the Securities and Exchange Commission. Until such approval or
written opinion is obtained, no holder of Series M Convertible Preferred Stock
pursuant to the Purchase Agreement shall be issued, upon conversion of shares of
Series M Preferred Stock, shares of Common Stock in an amount greater than the
product of (i) the Exchange Cap amount multiplied by (ii) a fraction, the
numerator of which is the number of shares of Series M Preferred Stock issued to
such holder pursuant to the Purchase Agreement and the denominator of which is
the aggregate amount of all the shares of Series M Preferred Stock issued to the
holders pursuant to the Purchase Agreement (the "Cap Allocation Amount"). In the
event that any holder of Series M Preferred Stock shall convert all of such
holder's shares of Series M Preferred Stock into a number of shares of Common
Stock which, in the aggregate, is less than such holder's Cap Allocation Amount,
then the difference between such holder's Cap Allocation Amount and the number
of shares of Common Stock actually issued to such holder shall be allocated to
the respective Cap Allocation Amounts of the remaining holders of Series M
Preferred Stock on a

                                    -16-

<PAGE>

pro rata basis in proportion to the number of shares of Series M Preferred
Stock then held by each such holder. If the Company obtains the Shareholder
Approval, the Company shall be obligated to issue upon conversion of the
Series M Preferred Stock, in the aggregate, shares of Common Stock in excess
of the Exchange Cap. If the Company fails to obtain the Shareholder Approval
or call the Stockholder Meeting within the time period set forth herein, any
holder of Series M Preferred Stock may exercise its rights pursuant to
Section 9(a) hereof. Nothing in this Section 7(a) shall limit a holder's
right to request conversion of its shares of Series M Preferred Stock or such
holder's rights under Section 9 hereof.

                  (b) Notwithstanding anything to the contrary set forth in
Section 5 of this Certificate of Designation, at no time may a holder of shares
of Series M Preferred Stock convert shares of the Series M Preferred Stock if
the number of shares of Common Stock to be issued pursuant to such conversion
would exceed, when aggregated with all other shares of Common Stock owned by
such holder at such time, the number of shares of Common Stock which would
result in such holder owning more than 9.99% of all of the Common Stock
outstanding at such time; PROVIDED, HOWEVER, that upon a holder of Series M
Preferred Stock providing the Company with seventy-five (75) days notice
(pursuant to Section 5(i) hereof) (the "Waiver Notice") that such holder would
like to waive Section 7(b) of this Certificate of Designation with regard to any
or all shares of Common Stock issuable upon conversion of Series M Preferred
Stock, this Section 7(b) shall be of no force or effect with regard to those
shares of Series M Preferred Stock referenced in the Waiver Notice.

         8.       REDEMPTION.

                  (a) REDEMPTION OPTION UPON MAJOR TRANSACTION. In addition to
all other rights of the holders of Series M Preferred Stock contained herein,
simultaneous with the occurrence of a Major Transaction (as defined below), each
holder of Series M Preferred Stock shall have the right, at such holder's
option, to require the Company to redeem all or a portion of such holder's
shares of Series M Preferred Stock at a price per share of Series M Preferred
Stock equal to the greater of (i) 120% of the Liquidation Preference Amount plus
any accrued but unpaid dividends and liquidated damages and (ii) the product of
(A) the Conversion Rate and (B) the Closing Bid Price of the Common Stock on the
trading date immediately preceding such Major Transaction (the "Major
Transaction Redemption Price").

                  (b) REDEMPTION OPTION UPON TRIGGERING EVENT. In addition to
all other rights of the holders of Series M Preferred Stock contained herein,
after a Triggering Event (as defined below), each holder of Series M Preferred
Stock shall have the right, at such holder's option, to require the Company to
redeem all or a portion of such holder's shares of Series M Preferred Stock at a
price per share of Series M Preferred Stock equal to the greater of (i) 120% of
the Liquidation Preference Amount plus any accrued but unpaid dividends and
liquidated damages and (ii) the product of (A) the Conversion Rate (as defined
in Section 5(a)) at such time and (B) the Closing Bid Price of the Common Stock
calculated as of the date immediately preceding such Triggering Event on which
the exchange or market on which the Common Stock is traded is

                                     -17-

<PAGE>

open (the "Triggering Event Redemption Price" and, collectively with the
"Major Transaction Redemption Price," the "Redemption Price").

                  (c) "MAJOR TRANSACTION". A "Major Transaction" shall be deemed
to have occurred at such time as any of the following events:

                           (i) the consolidation, merger or other business
combination of the Company with or into another Person (other than (A) pursuant
to a migratory merger effected solely for the purpose of changing the
jurisdiction of incorporation of the Company or (B) a consolidation, merger or
other business combination in which holders of the Company's voting power
immediately prior to the transaction continue after the transaction to hold,
directly or indirectly, the voting power of the surviving entity or entities
necessary to elect a majority of the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities).

                           (ii) the sale or transfer of all or substantially all
of the Company's assets; or

                           (iii) consummation of a purchase, tender or exchange
offer made to the holders of more than 30% of the outstanding shares of Common
Stock.

                  (d) "TRIGGERING EVENT". A "Triggering Event" shall be deemed
to have occurred at such time as any of the following events:

                           (i) the occurrence of an Event of Default (as such
term is defined in the Secured Convertible Debenture issued pursuant to the
Securities Purchase Agreement dated as of December 7, 2000.

                           (ii) the failure of the Registration Statement to be
declared effective by the SEC on or prior to the date which is 120 days after
the date the Registration Statement is filed with the SEC;

                           (iii) while the Registration Statement is required to
be maintained effective pursuant to the terms of the Registration Rights
Agreement, the effectiveness of the Registration Statement lapses for any reason
(including, without limitation, the issuance of a stop order) or is unavailable
to the holder of the Series M Preferred Stock for sale of the Registrable
Securities (as defined in the Registration Rights Agreement) in accordance with
the terms of the Registration Rights Agreement, and such lapse or unavailability
continues for a period of ten consecutive trading days, PROVIDED that the cause
of such lapse or unavailability is not due to factors solely within the control
of such holder of Series M Preferred Stock;

                           (iv) the suspension from listing or the failure of
the Common Stock to be listed on the OTC Bulletin Board, the Nasdaq SmallCap
Market, the Nasdaq National Market,

                                     -18-

<PAGE>

The New York Stock Exchange, Inc. or The American Stock Exchange, Inc., as
applicable, for a period of five (5) consecutive days;

                           (v) the Company's notice to any holder of Series M
Preferred Stock, including by way of public announcement, at any time, of its
inability to comply (including for any of the reasons described in Section 9) or
its intention not to comply with proper requests for conversion of any Series M
Preferred Stock into shares of Common Stock;

                           (vi) the Company's failure to comply with a
Conversion Notice tendered in accordance with the provisions of this Certificate
of Designation within ten (10) business days after the receipt by the Company of
the Conversion Notice and the Preferred Stock Certificates; or

                           (vii) the Company breaches any representation,
warranty, covenant or other term or condition of the Purchase Agreement, the
Registration Rights Agreement, this Certificate of Designation or any other
agreement, document, certificate or other instrument delivered in connection
with the transactions contemplated thereby or hereby, except to the extent that
such breach would not have a Material Adverse Effect (as defined in Section
2.1(e) of the Purchase Agreement) and except, in the case of a breach of a
covenant which is curable, only if such breach continues for a period of a least
ten (10) days.

                  (e) MECHANICS OF REDEMPTION AT OPTION OF BUYER UPON MAJOR
TRANSACTION. No sooner than fifteen (15) days nor later than ten (10) days prior
to the consummation of a Major Transaction, but not prior to the public
announcement of such Major Transaction, the Company shall deliver written notice
thereof via facsimile and overnight courier ("Notice of Major Transaction") to
each holder of Series M Preferred Stock. At any time after receipt of a Notice
of Major Transaction (or, in the event a Notice of Major Transaction is not
delivered at least ten (10) days prior to a Major Transaction, at any time
within ten (10) days prior to a Major Transaction), any holder of Series M
Preferred Stock then outstanding may require the Company to redeem, effective
immediately prior to the consummation of such Major Transaction, all of the
holder's Series M Preferred Stock then outstanding by delivering written notice
thereof via facsimile and overnight courier ("Notice of Redemption at Option of
Buyer Upon Major Transaction") to the Company, which Notice of Redemption at
Option of Buyer Upon Major Transaction shall indicate (i) the number of shares
of Series M Preferred Stock that such holder is electing to redeem and (ii) the
applicable Major Transaction Redemption Price, as calculated pursuant to Section
8(a) above.

                  (f) MECHANICS OF REDEMPTION AT OPTION OF BUYER UPON TRIGGERING
EVENT. Within one (1) day after the occurrence of a Triggering Event, the
Company shall deliver written notice thereof via facsimile and overnight courier
("Notice of Triggering Event") to each holder of Series M Preferred Stock. At
any time after the earlier of a holder's receipt of a Notice of Triggering Event
and such holder becoming aware of a Triggering Event, any holder of Series M
Preferred Stock then outstanding may require the Company to redeem all of the
Series M

                                     -19-

<PAGE>

Preferred Stock by delivering written notice thereof via facsimile and
overnight courier ("Notice of Redemption at Option of Buyer Upon Triggering
Event") to the Company, which Notice of Redemption at Option of Buyer Upon
Triggering Event shall indicate (i) the number of shares of Series M
Preferred Stock that such holder is electing to redeem and (ii) the
applicable Triggering Event Redemption Price, as calculated pursuant to
Section 8(b) above.

                  (g) PAYMENT OF REDEMPTION PRICE. Upon the Company's receipt of
a Notice(s) of Redemption at Option of Buyer Upon Triggering Event or a
Notice(s) of Redemption at Option of Buyer Upon Major Transaction from any
holder of Series M Preferred Stock, the Company shall immediately notify each
holder of Series M Preferred Stock by facsimile of the Company's receipt of such
Notice(s) of Redemption at Option of Buyer Upon Triggering Event or Notice(s) of
Redemption at Option of Buyer Upon Major Transaction and each holder which has
sent such a notice shall promptly submit to the Company such holder's Preferred
Stock Certificates which such holder has elected to have redeemed. The Company
shall deliver the applicable Triggering Event Redemption Price, in the case of a
redemption pursuant to Section 8(f), to such holder within five (5) business
days after the Company's receipt of a Notice of Redemption at Option of Buyer
Upon Triggering Event and, in the case of a redemption pursuant to Section 8(e),
the Company shall deliver the applicable Major Transaction Redemption Price
immediately prior to the consummation of the Major Transaction; PROVIDED that a
holder's Preferred Stock Certificates shall have been so delivered to the
Company; PROVIDED FURTHER that if the Company is unable to redeem all of the
Series M Preferred Stock to be redeemed, the Company shall redeem an amount from
each holder of Series M Preferred Stock being redeemed equal to such holder's
pro-rata amount (based on the number of shares of Series M Preferred Stock held
by such holder relative to the number of shares of Series M Preferred Stock
outstanding) of all Series M Preferred Stock being redeemed. If the Company
shall fail to redeem all of the Series M Preferred Stock submitted for
redemption (other than pursuant to a dispute as to the arithmetic calculation of
the Redemption Price), in addition to any remedy such holder of Series M
Preferred Stock may have under this Certificate of Designation and the Purchase
Agreement, the applicable Redemption Price payable in respect of such unredeemed
Series M Preferred Stock shall bear interest at the rate of 2.0% per month
(prorated for partial months) until paid in full. Until the Company pays such
unpaid applicable Redemption Price in full to a holder of shares of Series M
Preferred Stock submitted for redemption, such holder shall have the option (the
"Void Optional Redemption Option") to, in lieu of redemption, require the
Company to promptly return to such holder(s) all of the shares of Series M
Preferred Stock that were submitted for redemption by such holder(s) under this
Section 8 and for which the applicable Redemption Price has not been paid, by
sending written notice thereof to the Company via facsimile (the "Void Optional
Redemption Notice"). Upon the Company's receipt of such Void Optional Redemption
Notice(s) and prior to payment of the full applicable Redemption Price to such
holder, (i) the Notice(s) of Redemption at Option of Buyer Upon Triggering Event
or the Notice(s) of Redemption at Option of Buyer Upon Major Transaction, as the
case may be, shall be null and void with respect to those shares of Series M
Preferred Stock submitted for redemption and for which the applicable Redemption
Price has not been paid, (ii) the Company shall immediately return any Series M
Preferred Stock submitted to the Company

                                     -20-

<PAGE>

by each holder for redemption under this Section 8(g) and for which the
applicable Redemption Price has not been paid and (iii) the Fixed Conversion
Price of such returned shares of Series M Preferred Stock shall be adjusted
to the lesser of (A) the Fixed Conversion Price as in effect on the date on
which the Void Optional Redemption Notice(s) is delivered to the Company and
(B) the lowest Closing Bid Price during the period beginning on the date on
which the Notice(s) of Redemption of Option of Buyer Upon Major Transaction
or the Notice(s) of Redemption at Option of Buyer Upon Triggering event, as
the case may be, is delivered to the Company and ending on the date on which
the Void Optional Redemption Notice(s) is delivered to the Company; PROVIDED
that no adjustment shall be made if such adjustment would result in an
increase of the Fixed Conversion Price then in effect. Notwithstanding the
foregoing, in the event of a dispute as to the determination of the Closing
Bid Price or the arithmetic calculation of the Redemption Price, such dispute
shall be resolved pursuant to Section 5(b)(iii) above with the term "Closing
Bid Price" being substituted for the term "Average Share Price" and the term
"Redemption Price" being substituted for the term "Conversion Price". A
holder's delivery of a Void Optional Redemption Notice and exercise of its
rights following such notice shall not effect the Company's obligations to
make any payments which have accrued prior to the date of such notice.
Payments provided for in this Section 8 shall have priority to payments to
other stockholders in connection with a Major Transaction.

                  (h) COMPANY'S REDEMPTION OPTION. The Company may redeem all or
a portion of the Series M Preferred Stock outstanding upon five (5) days prior
written notice (the "Company's Redemption Notice") at a price per share of
Series M Preferred Stock equal to 120% of the Liquidation Preference Amount plus
any accrued but unpaid dividends and liquidated damages; PROVIDED, that if a
holder has delivered a Conversion Notice to the Company or delivers a Conversion
Notice within twenty-four (24) hours of receipt of the Company's Redemption
Notice, up to fifty percent (50%) of the shares of Series M Preferred Stock
designated to be redeemed may be converted by such holder; PROVIDED FURTHER that
if during the period between delivery of the Company's Redemption Notice and the
Redemption Date a holder shall become entitled to deliver a Notice of Redemption
at Option of Buyer Upon Major Transaction or Notice of Redemption at Option of
Buyer upon Triggering Event, then the right of such holder shall take precedence
over the previously delivered Company Redemption Notice. The Company's
Redemption Notice shall state the date of redemption which date shall be the
sixth (6th) day after the Company has delivered the Company's Redemption Notice
(the "Company's Redemption Date"), the Company's Redemption Price and the number
of shares to be redeemed by the Company. The Company shall not send a Company's
Redemption Notice unless it has good and clear funds for a minimum of the amount
it intends to redeem in a bank account controlled by the Company; PROVIDED that
if the redemption is expected to be made contemporaneous with the closing of a
public underwritten offering of the Company, then the Company may not have good
and clear funds in the bank account at the time of the Company's Redemption
Notice and may not send any such Company's Redemption Notice earlier than the
day immediately prior to the date the public offering is priced. The Company
shall deliver the Company's Redemption Price to the Escrow Agent (as defined in
the Purchase Agreement) within five (5) business days after the Company has
delivered the Company's Redemption

                                     -21-

<PAGE>

Notice, PROVIDED, that if the holder(s) delivers a Conversion Notice before
the Company's Redemption Date, then the portion of the Company's Redemption
Price which would be paid to redeem the shares of Series M Preferred Stock
covered by such Conversion Notice shall be returned to the Company upon
delivery of the Common Stock issuable in connection with such Conversion
Notice to the holder(s). On the Redemption Date, the Escrow Agent shall pay
the Company's Redemption Price, subject to any adjustment pursuant to the
immediately preceding sentence, to the holder(s) on a pro rata basis,
PROVIDED, however, that upon receipt by the Escrow Agent of the Preferred
Stock Certificates to be redeemed pursuant to this Section 8(h), the Escrow
Agent shall, on the next business day following the date of receipt by the
Escrow Agent of such Preferred Stock Certificates, pay the Company's
Redemption Price to the holder(s) on a pro rata basis. If the Company fails
to pay the Company's Redemption Price by the sixth (6th) business day after
the Company has delivered the Company's Redemption Notice (or in the case of
a public offering, the closing of the public offering), the redemption will
be declared null and void and the Company shall lose its right to serve a
Company's Redemption Notice in the future.

         9.       INABILITY TO FULLY CONVERT.

                  (a) HOLDER'S OPTION IF COMPANY CANNOT FULLY CONVERT. If, upon
the Company's receipt of a Conversion Notice or on the Mandatory Conversion
Date, the Company cannot issue shares of Common Stock registered for resale
under the Registration Statement for any reason, including, without limitation,
because the Company (w) does not have a sufficient number of shares of Common
Stock authorized and available, (x) failed to call the Stockholder Meeting
within the time period set forth in Section 7 hereof, (y) is otherwise
prohibited by applicable law or by the rules or regulations of any stock
exchange, interdealer quotation system or other self-regulatory organization
with jurisdiction over the Company or its securities from issuing all of the
Common Stock which is to be issued to a holder of Series M Preferred Stock
pursuant to a Conversion Notice or (z) fails to have a sufficient number of
shares of Common Stock registered for resale under the Registration Statement,
then the Company shall issue as many shares of Common Stock as it is able to
issue in accordance with such holder's Conversion Notice and pursuant to Section
5(b)(ii) above and, with respect to the unconverted Series M Preferred Stock,
the holder, solely at such holder's option, can elect, within five (5) business
days after receipt of notice from the Company thereof to:

                           (i) require the Company to redeem from such holder
those Series M Preferred Stock for which the Company is unable to issue Common
Stock in accordance with such holder's Conversion Notice ("Mandatory
Redemption") at a price per share equal to the Triggering Event Redemption Price
as of such Conversion Date (the "Mandatory Redemption Price");

                           (ii) if the Company's inability to fully convert
Series M Preferred Stock is pursuant to Section 9(a)(z) above, require the
Company to issue restricted shares of Common Stock in accordance with such
holder's Conversion Notice and pursuant to Section 5(b)(ii) above;

                                      -22-

<PAGE>

                           (iii) void its Conversion Notice and retain or have
returned, as the case may be, the shares of Series M Preferred Stock that were
to be converted pursuant to such holder's Conversion Notice (provided that a
holder's voiding its Conversion Notice shall not effect the Company's
obligations to make any payments which have accrued prior to the date of such
notice).

                  (b) MECHANICS OF FULFILLING HOLDER'S ELECTION. The Company
shall immediately send via facsimile to a holder of Series M Preferred Stock,
upon receipt of a facsimile copy of a Conversion Notice from such holder which
cannot be fully satisfied as described in Section 9(a) above, a notice of the
Company's inability to fully satisfy such holder's Conversion Notice (the
"Inability to Fully Convert Notice"). Such Inability to Fully Convert Notice
shall indicate (i) the reason why the Company is unable to fully satisfy such
holder's Conversion Notice, (ii) the number of Series M Preferred Stock which
cannot be converted and (iii) the applicable Mandatory Redemption Price. Such
holder shall notify the Company of its election pursuant to Section 9(a) above
by delivering written notice via facsimile to the Company ("Notice in Response
to Inability to Convert").

                  (c) PAYMENT OF REDEMPTION PRICE. If such holder shall elect to
have its shares redeemed pursuant to Section 9(a)(i) above, the Company shall
pay the Mandatory Redemption Price in cash to such holder within thirty (30)
days of the Company's receipt of the holder's Notice in Response to Inability to
Convert, PROVIDED that prior to the Company's receipt of the holder's Notice in
Response to Inability to Convert the Company has not delivered a notice to such
holder stating, to the satisfaction of the holder, that the event or condition
resulting in the Mandatory Redemption has been cured and all Conversion Shares
issuable to such holder can and will be delivered to the holder in accordance
with the terms of Section 2(g). If the Company shall fail to pay the applicable
Mandatory Redemption Price to such holder on a timely basis as described in this
Section 9(c) (other than pursuant to a dispute as to the determination of the
arithmetic calculation of the Redemption Price), in addition to any remedy such
holder of Series M Preferred Stock may have under this Certificate of
Designation and the Purchase Agreement, such unpaid amount shall bear interest
at the rate of 2.0% per month (prorated for partial months) until paid in full.
Until the full Mandatory Redemption Price is paid in full to such holder, such
holder may (i) void the Mandatory Redemption with respect to those Series M
Preferred Stock for which the full Mandatory Redemption Price has not been paid,
(ii) receive back such Series M Preferred Stock, and (iii) require that the
Fixed Conversion Price of such returned Series M Preferred Stock be adjusted to
the lesser of (A) the Fixed Conversion Price as in effect on the date on which
the holder voided the Mandatory Redemption and (B) the lowest Closing Bid Price
during the period beginning on the Conversion Date and ending on the date the
holder voided the Mandatory Redemption. Notwithstanding the foregoing, if the
Company fails to pay the applicable Mandatory Redemption Price within such
thirty (30) days time period due to a dispute as to the determination of the
arithmetic calculation of the Redemption Rate, such dispute shall be resolved
pursuant to Section 5(b)(iii) above with the term "Redemption Price" being
substituted for the term "Conversion Price".

                                     -23-

<PAGE>

                  (d) PRO-RATA CONVERSION AND REDEMPTION. In the event the
Company receives a Conversion Notice from more than one holder of Series M
Preferred Stock on the same day and the Company can convert and redeem some, but
not all, of the Series M Preferred Stock pursuant to this Section 9, the Company
shall convert and redeem from each holder of Series L Convertible Preferred
Stock electing to have Series M Preferred Stock converted and redeemed at such
time an amount equal to such holder's pro-rata amount (based on the number
shares of Series M Preferred Stock held by such holder relative to the number
shares of Series M Preferred Stock outstanding) of all shares of Series M
Preferred Stock being converted and redeemed at such time.

         10. VOTE TO CHANGE THE TERMS OF OR ISSUE PREFERRED STOCK. The
affirmative vote at a meeting duly called for such purpose or the written
consent without a meeting, of the holders of not less than three-fourths (3/4)
of the then outstanding shares of Series M Preferred Stock, shall be required
(a) for any change to this Certificate of Designation or the Company's
Certificate of Incorporation which would amend, alter, change or repeal any of
the powers, designations, preferences and rights of the Series M Preferred Stock
or (b) for the issuance of shares of Series M Preferred Stock other than
pursuant to the Purchase Agreement.

         11. LOST OR STOLEN CERTIFICATES. Upon receipt by the Company of
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Preferred Stock Certificates representing the shares of Series
M Preferred Stock, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the holder to the Company and, in the case of
mutilation, upon surrender and cancellation of the Preferred Stock
Certificate(s), the Company shall execute and deliver new preferred stock
certificate(s) of like tenor and date; PROVIDED, HOWEVER, the Company shall not
be obligated to re-issue Preferred Stock Certificates if the holder
contemporaneously requests the Company to convert such shares of Series M
Preferred Stock into Common Stock.

         12. REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND
INJUNCTIVE RELIEF. The remedies provided in this Certificate of Designation
shall be cumulative and in addition to all other remedies available under this
Certificate of Designation, at law or in equity (including a decree of specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy and
nothing herein shall limit a holder's right to pursue actual damages for any
failure by the Company to comply with the terms of this Certificate of
Designation. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the holder thereof and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the holders of the Series M Preferred
Stock and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the holders of the Series M Preferred Stock shall be entitled, in
addition to

                                     -24-

<PAGE>

all other available remedies, to an injunction restraining any breach,
without the necessity of showing economic loss and without any bond or other
security being required.

         13. SPECIFIC SHALL NOT LIMIT GENERAL; CONSTRUCTION. No specific
provision contained in this Certificate of Designation shall limit or modify any
more general provision contained herein. This Certificate of Designation shall
be deemed to be jointly drafted by the Company and all initial purchasers of the
Series M Preferred Stock and shall not be construed against any person as the
drafter hereof.

         14. FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part
of a holder of Series M Preferred Stock in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

                                     -25-

<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and does affirm the foregoing as true this 18th day of January,
2001.

                                        ESYNCH CORPORATION

                                        By: /s/ Thomas Hemingway
                                           -----------------------------
                                        Name:    Thomas Hemingway
                                        Title:   Chief Executive Officer

                                     -26-

<PAGE>

                                                                      EXHIBIT I

                               ESYNCH CORPORATION
                                CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights
and Preferences of the Series M Preferred Stock of eSynch Corporation (the
"Certificate of Designations"). In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the
number of shares of Series M Preferred Stock, par value $.001 per share (the
"Preferred Shares"), of eSynch Corporation, a Delaware corporation (the
"Company"), indicated below into shares of Common Stock, par value $.001 per
share (the "Common Stock"), of the Company, by tendering the stock
certificate(s) representing the share(s) of Preferred Shares specified below
as of the date specified below.

         Date of Conversion:
                                ----------------------------------------------
         Number of Preferred Shares to be converted:
                                                     --------------
         Stock certificate no(s). of Preferred Shares to be converted:
                                                                      --------
         The Common Stock have been sold pursuant to the Registration Statement
(as defined in the Registration Rights Agreement): YES ____ NO____

Please confirm the following information:

         Conversion Price:
                                ----------------------------------------------
         Number of shares of Common Stock
         to be issued:
                                ----------------------------------------------
Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

         Issue to:
                                ----------------------------------------------

                                ----------------------------------------------
         Facsimile Number:
                                ----------------------------------------------

         Authorization:
                                ----------------------------------------------
                                By:
                                        --------------------------------------
                                Title:
                                        --------------------------------------
         Dated:

                                 PRICES ATTACHED

                                     -27-

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