PLEDGE AND SECURITY AGREEMENT
                          -----------------------------


     This PLEDGE AND SECURITY AGREEMENT ("Agreement"), dated as of September 18,
2000,  is  made  by  Sandford  T. Waddell, an individual ("Debtor"), in favor of
Vsource,  Inc.,  a  Nevada  corporation  ("Secured  Party").

          In  order  to  induce  Secured  Party  to  extend credit facilities to
Borrower  under  the Promissory Note of even date herewith (the "Note"), and for
other  good and valuable consideration, the receipt and adequacy of which hereby
are  acknowledged,  Debtor  agrees  as  follows:

     1.     Pledge  of  Collateral.  For  valuable  consideration, Debtor hereby
            ----------------------
pledges  to  Secured  Party, and grants to Secured Party a security interest in,
all  of  Debtor's  shares  of  Series 2-A Convertible Preferred Stock of Secured
Party,  and  all cash and non-cash proceeds of all of the foregoing property and
all  rights,  titles,  interests,  privileges  and  references  appertaining  or
incident  to  the  foregoing  property  (collectively,  the  "collateral").

     2.     Indebtedness  Secured.  This  Agreement  and  the  security interest
            ---------------------
created  hereby  are  given  for  the  purpose  of  securing:  (a)  payment  and
performance  of  each  agreement  of  Debtor  contained  herein; (b) payment and
performance  of  all  indebtedness and obligations of Debtor under the Note; and
(c)  any  and all amendments, modifications, supplements, renewals or extensions
of  any  of  the foregoing, whether such amendments, modifications, supplements,
renewals or extensions are evidenced by new or additional instruments, documents
or  agreements or change the rate of interest on any indebtedness secured hereby
or the maturity thereof, or otherwise.  All indebtedness and obligations secured
hereby are hereinafter collectively referred to as the "indebtedness."  The term
"indebtedness"  shall  also  include,  without  limitation on the foregoing, all
interest that accrues on all or any part of the indebtedness after the filing of
any petition or pleading by or against Debtor for a proceeding under any chapter
or  provision  of  any  present  or  future  federal  bankruptcy  legislation or
amendments  thereto.

     3.     Representations  and  Warranties  of  Debtor.  Debtor  represents,
            --------------------------------------------
warrants and agrees that all existing and future collateral is and will be owned
by  Debtor  free  and  clear  of  all liens and rights of others, other than the
security  interest  created  under  this  Agreement.


                                      -1-
<PAGE>
     4.     Covenants  of  Debtor.  As  long  as any of the indebtedness remains
            ---------------------
owing  to  Secured  Party,  unless  Secured Party otherwise consents in writing:

                    (a)     Debtor  shall (i) immediately deliver all collateral
     capable of  delivery,  whether now or hereafter  held or  acquired,  to the
     Secured  Party or its agent,  (ii) at the  request of Secured  Party at any
     time and from time to time,  execute  all  financing  statements  and other
     documents  reasonably  deemed  necessary or  advisable by Secured  Party to
     create and perfect a security  interest in, or  otherwise  relating to, the
     collateral,  (iii) at its sole cost and expense,  defend any claims against
     the  collateral  or any action  that might  affect  the  collateral  or any
     interests  therein,  (iv) do all acts which may be  necessary  to preserve,
     process,  develop,  maintain and protect the collateral and Debtor's rights
     and interests therein, and (v) pay all taxes, assessments and other charges
     imposed on or  relating to the  collateral,  and all  reasonable  costs and
     expenses,  including reasonable  attorneys' fees, incurred by Secured Party
     in connection with the enforcement of this Agreement; and

                    (b)     Debtor  shall  not  (i)  sell,  assign,  exchange,
     transfer,  encumber or otherwise  dispose of, or contract to sell,  assign,
     exchange, transfer, encumber or otherwise dispose of, any of the collateral
     or any part thereof or any interest therein,  (ii) abandon,  alter,  amend,
     cancel, modify,  release,  relinquish,  supplement,  terminate or waive, or
     enter into or give any agreement,  approval or consent with respect to, any
     of the  collateral  or any part thereof or any interest  therein;  or (iii)
     take any action with respect to the collateral  which is inconsistent  with
     the  provisions  or purposes  of this  Agreement  or which would  adversely
     affect the rights of Secured Party hereunder.

     5.     Possession  of  Collateral; Voting Rights.  Secured Party shall hold
            -----------------------------------------
the  share  certificate evidencing the collateral until the indebtedness is paid
in  full.  Debtor  shall  retain  any  rights  to vote the collateral; provided,
however,  upon  the  occurrence  of an Event of Default, Secured Party's nominee
shall  be  entitled  to  vote  the  collateral.

     6.     Action  by  Secured  Party.
            --------------------------


                                      -2-
<PAGE>
                    (a)     In  the  event  that  Debtor  fails  to  perform any
     obligation on its part to be performed  hereunder,  then Secured Party may,
     but without any  obligation  to do so and without  notice to or demand upon
     Debtor,  perform the same and take such other  action as Secured  Party may
     deem necessary to protect the collateral or its security  interest therein,
     Secured Party being hereby authorized  (without limiting the general nature
     of the  authority  hereinabove  conferred)  to pay,  purchase,  contest and
     compromise any encumbrance, charge or lien which in the reasonable judgment
     of Secured Party appears to be prior or superior to its security  interest,
     and in exercising any such powers and authority to pay necessary  expenses,
     employ counsel and pay reasonable  attorneys' fees. Debtor hereby agrees to
     repay  immediately  and without demand all  reasonable  sums so expended by
     Secured  Party,  together with interest from the date of expenditure at the
     highest legal rate ("Default Rate").

                    (b)     Secured  Party  shall be under no duty or obligation
     to (i) preserve,  process,  develop,  maintain or protect the collateral or
     any of  Debtor's  rights  or  interests  therein,  or (ii) make or give any
     notices of  default,  presentments,  demands  for  performance,  notices of
     nonperformance or dishonor,  protests, notices of protest or notices of any
     other nature  whatsoever  in  connection  with the  collateral on behalf of
     Debtor or any other person having any interest  therein;  and Secured Party
     does not assume and shall not be  obligated to perform the  obligations  of
     Debtor,  if any, with respect to the collateral.  Secured Party may, at any
     time and from time to time,  without notice or demand and at the expense of
     Debtor, make reasonable requests for information  concerning the collateral
     from  any  officer,   director,  agent  or  employee  of  any  corporation,
     governmental agency or instrumentality.


     7.     Events  of  Default.  The  occurrence  of  any  one of the following
            -------------------
events  shall  constitute  an  Event  of  Default:

                    (a)     the  occurrence  of  any  Event of Default under the
     Note or any other documents pertaining thereto; or

                    (b)     any  failure  by  Debtor  to  observe or perform any
     covenant or agreement  contained in this  Agreement  for more than five (5)
     calendar  days after  receipt from Secured Party of notice of such default;
     or

                    (c)     any  representation  or  warranty  made by Debtor in
     this Agreement  shall prove to have been false or incorrect in any material
     respect when made.


                                      -3-
<PAGE>
     8.     Remedies  Upon  Default.
            -----------------------

                    (a)     Upon the occurrence and during the continuance of an
     Event of  Default,  Secured  Party  shall  have in any  jurisdiction  where
     enforcement  hereof is sought, in addition to all other rights and remedies
     that Secured Party may have under this Agreement and by law, all rights and
     remedies  of a secured  party  under  the  Uniform  Commercial  Code and in
     addition the following  rights and remedies,  all of which may be exercised
     with or without further notice to Debtor:

                              (i)     to  renew,  extend,  modify,  amend,
          accelerate,   accept   partial   payments  on,  make   allowances  and
          adjustments  and issue  credits  with  respect  to,  release,  settle,
          compromise,   compound,  collect  or  otherwise  liquidate,  on  terms
          acceptable to Secured  Party,  in whole or in part, the collateral and
          any amounts  owing  thereon or any guaranty or security  therefor;  to
          enter  into  any  other   agreement   relating  to  or  affecting  the
          collateral;  and to give all consents,  waivers and  ratifications  in
          respect of the  collateral  and exercise all other rights,  powers and
          remedies  and  otherwise  act with  respect  thereto as if it were the
          owner thereof;

                              (ii)     to  enforce  payment  and  prosecute  any
          action or proceeding with respect to any and all of the collateral and
          take or bring, in Secured  Party's name or in the name of Debtor,  all
          steps, actions, suits or proceedings deemed by Secured Party necessary
          or  desirable  to  effect   collection  of  or  to  realize  upon  the
          collateral;

                              (iii)     to  endorse,  in the name of Debtor, all
          checks,  notes, drafts, money orders,  instruments and other evidences
          of payment  relating to the collateral;  to transfer any or all of the
          collateral  into the name of Secured Party or its nominee or nominees;
          and to receive,  open and dispose of all mail  addressed to Debtor and
          notify  the postal  authorities  to change the  address  for  delivery
          thereof to such address as Secured Party may designate; and

                              (iv)     to  foreclose  the  liens  and  security
          interests  created under this  Agreement or under any other  agreement
          relating to the  collateral  by any  available  judicial  procedure or
          without judicial process; to sell, assign, lease, or otherwise dispose
          of the  collateral  or any part  thereof,  either at public or private
          sale, in lots or in bulk, for cash, on credit or for future  delivery,
          or otherwise, with or without representations or warranties,  and upon
          such terms as shall be acceptable to Secured Party;

     all at  Secured  Party's  sole  option  and as  Secured  Party  in its sole
     discretion may deem advisable.


                                      -4-
<PAGE>
                    (b)     Secured  Party shall give Debtor at least five days'
     written  notice  of sale of all or any  part  of the  collateral  or of any
     proposal by Secured  Party to retain the  collateral or any part thereof in
     satisfaction of the indebtedness.  Any sale of the collateral shall be held
     at such time or times and at such  place or  places  as  Secured  Party may
     determine in the  exercise of its sole  discretion.  Secured  Party may bid
     (which  bid may be,  in whole or in part,  in the form of  cancellation  of
     indebtedness)  for and  purchase  for the  account of Secured  Party or any
     nominee of Secured Party the whole or any part of the  collateral.  Secured
     Party shall not be obligated to make any sale of the collateral if it shall
     determine  not to do so  regardless  of the fact that notice of sale of the
     collateral  may have been  given.  Secured  Party  may,  without  notice or
     publication, adjourn the sale from time to time by announcement at the time
     and place fixed for sale, and such sale may,  without  further  notice,  be
     made at the time and place to which the same was so adjourned.

                    (c)     Secured  Party  may,  in  its  sole  and  absolute
     discretion,  sell all or any part of the collateral at private sale in such
     manner and under such  circumstances as Secured Party may deem necessary or
     advisable  in  order  that  the sale  may be  lawfully  conducted.  Without
     limiting the foregoing, Secured Party may (i) approach and negotiate with a
     limited number of potential  purchasers,  and (ii) restrict the prospective
     bidders or purchasers to persons who will represent and agree that they are
     purchasing the collateral for their own account for investment and not with
     a view to the distribution or resale thereof.  In the event that any of the
     collateral is sold at private sale (and with the requisite notice to Debtor
     pursuant to Subsection (b) above),  Debtor agrees that if the collateral is
     sold  for a  price  which  Secured  Party  in  good  faith  believes  to be
     reasonable, then (A) the sale shall be deemed to be commercially reasonable
     in all respects,  (B) Debtor shall not be entitled to a credit  against the
     indebtedness  in an amount in excess  of the sale  price,  and (C)  Secured
     Party shall incur no liability or  responsibility  to Debtor in  connection
     therewith,  notwithstanding  the possibility  that a  substantially  higher
     price might have been realized at a public sale.


                                      -5-
<PAGE>
                    (d)     Debtor  hereby  acknowledges and agrees that Secured
     Party shall not be limited in any way with  respect to the parties to which
     the  collateral  may be sold,  whether at a public or private sale.  Debtor
     specifically  acknowledges  and agrees that Secured Party may,  without any
     liability whatsoever to Debtor,  contact one or more competitors of Debtor,
     regarding a sale of the  collateral,  and Secured Party may sell all or any
     portion of the  collateral to any one or more of such  competitors or other
     parties,  as Secured Party deems  appropriate  in its capacity as a secured
     party and without  regard to the impact such a sale may have on Debtor,  or
     its management or operations.

                    (e)     Upon  consummation  of  any  sale of the collateral,
     Secured  Party shall have the right to assign,  transfer and deliver to the
     purchaser or purchasers thereof the collateral so sold. Each such purchaser
     at any such sale shall hold the collateral  sold  absolutely  free from any
     claim or right on the part of  Debtor,  and  Debtor  hereby  waives (to the
     extent permitted by law) all rights of redemption, stay and appraisal which
     it now has or may at any time in the  future  have under any rule of law or
     statute now existing or hereafter  enacted.  If the sale of all or any part
     of the collateral is made on credit or for future  delivery,  Secured Party
     shall  not be  required  to apply  any  portion  of the  sale  price to the
     indebtedness  until such amount is actually  received by Secured Party, and
     any  collateral  so sold may be  retained  by Secured  Party until the sale
     price is paid in full by the purchaser or purchasers thereof. Secured Party
     shall not incur any  liability  in case any such  purchaser  or  purchasers
     shall  fail to pay for the  collateral  so sold  and,  in case of any  such
     failure, the collateral may be sold again upon like notice.

                    (f)     The net cash proceeds resulting from the collection,
     liquidation,  sale,  lease or other  disposition of the collateral shall be
     applied first, to the reasonable costs and expenses  (including  reasonable
     attorneys' fees) of retaking,  holding,  storing,  processing and preparing
     for sale,  selling,  collecting,  liquidating and the like;  second, to the
     satisfaction of all  indebtedness  and  obligations  secured hereby in such
     order and manner as Secured Party in its sole and absolute  discretion  may
     determine. Debtor shall be liable to Secured Party and shall pay to Secured
     Party on demand  any  deficiency  which  may  remain  after any such  sale,
     disposition, collection or liquidation of the collateral.


                                      -6-
<PAGE>
     9.     Rights  Independent.  The  security  interest  created  hereunder is
            -------------------
independent  of  any  other security for the indebtedness given by Debtor or any
other  person  or  any  guaranty, and upon the occurrence of an Event of Default
Secured  Party  may proceed in the enforcement hereof independently of any other
right  or  remedy  that  Secured  Party may at any time hold with respect to the
indebtedness or any other security or guaranty therefor.  Secured Party may file
a separate action or actions against Debtor hereunder, whether action is brought
and  prosecuted  with  respect  to any other security or any other person or any
guarantor,  or  whether  any other person or any guarantor is joined in any such
action  or  actions.  Debtor  waives  the  benefit of any statute of limitations
affecting its liability hereunder or the enforcement of the indebtedness secured
hereby.  Secured  Party's  rights hereunder shall be reinstated and revived, and
the  enforceability of this Agreement shall continue, with respect to any amount
at  any  time  paid  on  account  of  the indebtedness which shall thereafter be
required  to  be  restored  or  returned  by  Secured Party upon the bankruptcy,
insolvency, or reorganization of Debtor, or otherwise, all as though such amount
had  not  been  paid.  The  security  interest  created  hereunder  and  the
enforceability  of  this Agreement shall at all times remain effective to secure
the  full  amount  of all indebtedness, including without limitation interest at
the  Default Rate, even though the indebtedness or any part thereof or any other
security  or  guaranty  therefor  may  be  or  may  hereafter  become invalid or
otherwise  unenforceable  against  Debtor or any other party, and whether or not
Debtor  shall  have  any personal liability with respect thereto.  Debtor waives
notice  of default, presentment, demand for payment, protest, notice of protest,
notice  of nonpayment or dishonor, and all other notices and demands of any kind
whatsoever;  and Debtor consents and agrees that Secured Party may, from time to
time,  without  notice  or  demand  and  without affecting the enforceability or
security  hereof:  (a)  take,  alter, enforce or release any additional security
for  the  indebtedness;  or  (b)  release  or substitute any guarantors or other
parties  obligated  with  respect  to  the  indebtedness.

     10.     Attorney-in-Fact.  Debtor  hereby  nominates  and  appoints Secured
             ----------------
Party  as  attorney-in-fact for the following purposes and to perform any of the
following  powers,  which are coupled with an interest and are irrevocable until
termination  of  this  Agreement:  (a) to do all acts and things and execute all
documents  which  Secured  Party  may deem necessary or advisable to perfect and
continue perfected the security interest created by this Agreement, to preserve,
process,  develop, maintain and protect the collateral and the value thereof and
Secured  Party's  interest  therein,  and  to  enable Secured Party to preserve,
protect  or  exercise  any  or  all of the rights, powers or remedies granted to
Secured  Party  under  this  Agreement  or  to  which Secured Party is otherwise
entitled  under  applicable  law;  (b)  to  do any and every act which Debtor is
obligated to do under this Agreement; (c) to prepare, sign, file and record, for
Debtor  in  Debtor's  name, any financing statement covering the collateral; and
(d)  upon  the occurrence and during the continuance of any Event of Default, to
endorse  and  transfer  the collateral upon foreclosure; provided, however, that
                                                         --------
Secured  Party  shall  be  under  no  obligation  whatsoever  to take any of the
foregoing  actions,  and Secured Party shall have no liability or responsibility
for  any  act  or  omission taken with respect thereto.  Debtor hereby agrees to
repay  immediately and without demand all reasonable costs and expenses incurred
or expended by Secured Party in exercising any rights or taking any action under
this Section, together with interest from the date of expenditure at the Default
Rate.


                                      -7-
<PAGE>
     11.     Amendments;  Waivers.  Neither  this  Agreement  nor  any provision
             --------------------
hereof may be amended, modified, waived, discharged or terminated nor may any of
the  collateral be released except by an instrument in writing duly signed by or
on  behalf  of  Secured  Party  and  Debtor.  No failure or delay on the part of
Secured  Party in exercising any right, power or remedy may be, or may be deemed
to  be,  a  waiver thereof; nor may any single or partial exercise of any right,
power  or  remedy preclude any other or further exercise thereof or the exercise
of  any other right, power or remedy hereunder.  Debtor warrants and agrees that
each  of  the  waivers  set  forth in this Agreement are made with Debtor's full
knowledge  of  their  significance  and  consequences,  and  that  under  the
circumstances,  the  waivers are reasonable and not contrary to public policy or
law.  If any of such waivers are determined to be contrary to any applicable law
or  public  policy,  such  waivers shall be effective only to the maximum extent
permitted  by  law.

     12.     Cumulative  Remedies.  The  rights,  powers and remedies of Secured
             --------------------
Party  hereunder  are  cumulative and not exclusive of any other right, power or
remedy  which  it  would  otherwise  have.

     13.     Costs and Expenses in Enforcement.  Debtor agrees to pay to Secured
             ---------------------------------
Party all reasonable advances, charges, costs and expenses, including reasonable
attorneys'  fees,  incurred  or  paid  by Secured Party in exercising any right,
power  or  remedy  conferred  by  this  Agreement, or in the enforcement hereof,
regardless  of  whether  an  action  is  filed  hereon.

     14.     Notices.  All  notices,  requests,  demands,  directions  and other
             -------
communications  provided for hereunder must be in writing and must be personally
delivered  or  mailed  to  the appropriate party at the address set forth on the
signature  pages  of this Agreement or, as to any party, at any other address as
may  be  designated  by  it  in  a  written  notice sent to all other parties in
accordance  with  this Section.  Any notice, request, demand, direction or other
communication  given  by mail will be deemed effective on the third calendar day
after  deposited in the United States mails with first class postage prepaid; or
if  given  by  personal  delivery,  when  delivered.


                                      -8-
<PAGE>
     15.     Further  Assurances.  Debtor  agrees  to  do  such further acts and
             -------------------
things,  and  to  execute  and deliver such additional conveyances, assignments,
agreements,  documents  and  instruments  as  Secured  Party  may  at  any  time
reasonably  request in connection with the administration or enforcement of this
Agreement or related to the collateral or any part thereof or in order to better
assure and confirm unto Secured Party its rights, powers and remedies hereunder.
Debtor  hereby  consents  and  agrees that the trustee for any of the collateral
shall  be  entitled  to  accept  the  provisions of this Agreement as conclusive
evidence  of  the  right of Secured Party to effect any transfer or exercise any
right  hereunder,  notwithstanding any other notice or direction to the contrary
heretofore  or  hereafter given by Secured Party or any other person to any such
trustee.

     16.     Binding  Agreement.  This  Agreement  and  the terms, covenants and
             ------------------
conditions  hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that Debtor shall not
be permitted to transfer, convey or assign this Agreement or any interest herein
without  the  prior  written consent of Secured Party.  Secured Party may assign
its  interest  hereunder  or  in  the  collateral  in whole or in part.  Without
limiting  the  foregoing,  Debtor  hereby  consents to the assignment by Secured
Party  of all or any portion of its rights under this Agreement and all notices,
agreements  and  other  documents which are secured hereby or referenced herein.
Debtor  acknowledges  and  agrees that any and all rights of Secured Party under
this  Agreement  may be exercised from time to time by any assignee or successor
of Secured Party.  Debtor agrees that any assignee's rights shall be free of all
defenses, set-offs or counterclaims which Debtor may have against Secured Party.

     17.     Severability.  In  case  any lien, security interest or other right
             ------------
of  Secured  Party  shall  be held to be invalid, illegal or unenforceable, such
invalidity,  illegality  or  unenforceability  shall  not affect any other lien,
security  interest  or  other  right  granted  hereby.

     18.     Miscellaneous.  All words used herein in the plural shall be deemed
             -------------
to  have  been  used  in the singular, and all words used herein in the singular
shall  be  deemed  to  have  been  used  in  the  plural,  where the context and
construction  so  require.  Section  headings in this Agreement are included for
convenience of reference only and are not a part of this Agreement for any other
purpose.  Time is of the essence with respect to each provision of this Security
Agreement.  As  used  herein  the  term  "Debtor" shall include any successor to
Debtor,  including  without  limitation  any  successor  by  merger.


                                      -9-
<PAGE>
     19.     Governing  Law.  This Agreement shall be governed by, and construed
             --------------
and  enforced  in  accordance  with,  the  laws  of  the  State  of  California.
Notwithstanding  the  above,  in  the event that any law or laws of the State of
California  shall  require  or  otherwise  dictate  that  the  laws of any other
jurisdiction  be  applied  in  any proceeding involving this Agreement, such law
shall  be  disregarded  with  the result that the remaining laws of the State of
California  shall  be  applied  to  such  proceeding.



                                      -10-
<PAGE>
     IN  WITNESS WHEREOF, Debtor and Secured Party have caused this Agreement to
be  duly  executed  as  of  September  18,  2000.


                                      "Debtor"


                                      /s/  Sandford  T.  Waddell
                                      --------------------------
                                      SANDFORD  T.  WADDELL

                                      Address:
                                      -------

                                      1822  Marisol  Drive
                                      Ventura,  CA  93001


                                      -11-
<PAGE>
                                      "Secured  Party"


                                      VSOURCE,  INC.


                                      By:  /s/  Robert  C.  McShirley
                                           --------------------------
                                      Name:
                                      Title:  CEO

                                      Address:
                                      -------

                                      5740  Ralston  Street,  Suite  110
                                      Ventura,  California  93003


                                      -12-
<PAGE>