Document:

AGREEMENT AND WAIVER

     THIS  AGREEMENT AND WAIVER WITH RESPECT TO AMENDED AND RESTATED  PROMISSORY
NOTE (the  "Waiver"),  is entered  into as of September  29, 2000,  by SeraNova,
Inc., a New Jersey  corporation  (the "Obligor") and  Intelligroup,  Inc., a New
Jersey corporation (the "Holder").

     WHEREAS,  the Obligor and the Holder entered into that certain  Amended and
Restated Promissory Note dated as of May 31, 2000 (the "Note");

     WHEREAS,  the Obligor has consummated an equity financing with Strong River
Investments, Inc. and certain other investors (the "Financing") for an aggregate
amount of eight million dollars ($8,000,000);

     WHEREAS,  Section 3 of the Note  provides  that in the  event  the  Obligor
consummates  any debt or equity  financing,  the Obligor  shall make a mandatory
prepayment to the Holder in an amount to be determined pursuant to a schedule of
mandatory prepayments contained in Section 3 of the Note;

     WHEREAS,  the Obligor has, following the Financing,  not made to the Holder
the  mandatory  prepayment  required by the mandatory  prepayment  provisions of
Section 3 of the Note to be made in the event of the Financing; and

     WHEREAS,  the  Obligor  and the  Holder  desire,  in light  of the  current
operations  of the  Obligor and the  Holder,  to waive,  subject to and upon the
terms  contained  herein,  the mandatory  prepayment  obligations of the Obligor
under  the terms of the Note  arising  as a result  of the  consummation  of the
Financing.

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency  of which are  hereby  acknowledged,  the  Obligor  and the  Holder,
intending to be legally bound, agree as follows:

1.   Defined Terms.   Capitalized  terms  used in  this  Waiver  shall  have the
     -------------
meanings  assigned to such terms in the Note,  unless a different  definition is
provided in this Waiver.

2.   Conditions to the Waiver of the Holder.  The  effectiveness  of the  waiver
     --------------------------------------
provided by the Holder under this Waiver is subject to the following  conditions
being satisfied:

     (a)  Payment. The Obligor shall pay to the Holder (i) five hundred thousand
          -------
          dollars  ($500,000)  upon the  execution  of this  Waiver;  (ii)  five
          hundred thousand  dollars  ($500,000) on or before each of January 31,
          2001, February 28, 2001, March 31,

<PAGE>

          2001, April 30, 2001 and May 31, 2001; and (iii) four hundred thousand
          dollars ($400,000) on or before December 15, 2000 to be applied either
          as (A) an advance payment towards a contemplated  services arrangement
          between the Holder and the Obligor  relating to hosting  services  for
          business  critical  systems (the "Hosting  Agreement");  or (B) in the
          event that no such Hosting Agreement is executed on or before December
          15,  2000,  an  additional  advance  prepayment  toward the  principal
          balance of the Note.

     (b)  If any payment  pursuant to Section  2(a) of this Waiver  shall become
          due on a Saturday,  Sunday or on any legal holiday, such payment shall
          be made on the next  succeeding  business day. The Obligor shall be in
          default under this Waiver in the event Obligor fails to timely satisfy
          its payment  obligations  pursuant to  Section2(a)  of this Waiver and
          such  failure to pay shall  continue  unremedied  for a period of five
          business  days  following  the due date of such  payment  set forth in
          Section 2(a) of this Waiver;

     (c)  Representations  and Warranties.   The following  representations  and
          -------------------------------
          warranties  of the parties shall be true and correct as of the date of
          this Waiver:

          (i) Of the  Obligor:  Except as set  forth  herein,  to the  Obligor's
              ---------------
     knowledge,  no event or condition  has occurred or exists  which,  with the
     giving of notice or the passage of time, or both, would constitute an Event
     of Default under the Note.

          The execution and delivery of this Waiver and the  consummation of the
     transactions contemplated hereby and by any other documents executed by the
     Obligor  required to be  delivered  to the Holder in  connection  with this
     Waiver has been duly and  validly  authorized  by the  Obligor and all such
     documents together constitute the legal, valid and binding agreement of the
     Obligor,   enforceable   against  the  Obligor  in  accordance  with  their
     respective terms,  except to the extent that  enforceability of any of such
     document  may  be  limited  by  bankruptcy,   insolvency,   reorganization,
     moratorium or other similar laws affecting the  enforceability of creditors
     rights generally or general equitable principles.

          (ii) Of the Holder:  The execution and delivery of this Waiver and the
               -------------
     consummation  of the  transactions  contemplated  hereby  and by any  other
     documents executed by the Holder required to be delivered to the Obligor in
     connection  with this Waiver have been duly and validly  authorized  by the
     Holder and all such  documents  together  constitute  the legal,  valid and
     binding  agreement  of  the  Holder,  enforceable  against  the  Holder  in
     accordance  with  their  respective  terms,   except  to  the  extent  that
     enforceability  of any of  such  document  may be  limited  by  bankruptcy,
     insolvency, reorganization,  moratorium or other similar laws affecting the
     enforceability   of  creditors  rights   generally  or  general   equitable
     principles.

<PAGE>

3.   Waiver of  Compliance.  The  following  waiver by Holder shall be effective
     ---------------------
so  long  as the  Obligor  is in  compliance  with  and  satisfies  the  payment
obligations set forth in Paragraph 2(a) of this Waiver:

     (a)  With  respect  to  the  Financing   only,  the  Holder  hereby  waives
          compliance by the Obligor with the mandatory prepayment obligations of
          Section  3 of the Note and the  requirement  that the  Obligor  make a
          mandatory  prepayment of principal to the Holder in an amount equal to
          three  million  dollars  ($3,000,000)  and agrees not to exercise  its
          rights  under  Section 7 of the Note.  Notwithstanding  the  foregoing
          waiver of prepayment, all unpaid amounts of principal and interest due
          under the Note shall remain the obligation of the Obligor and shall be
          due and payable  pursuant to the terms of the Note, as amended by this
          Waiver.  This Waiver shall not apply to any subsequent  equity or debt
          financings by the Obligor.

4.   Notice.  Obligor hereby waives  presentment,  demand,  protest or notice of
     ------
any kind in connection with this Waiver.

5.   Currency.   All references to "$"  or  "dollars"  herein shall mean  United
     --------
States dollars.

6.   Entire Agreement.   The  Note  (including  the  documents  and  instruments
     ----------------
referred  to  therein),  as  modified  by this  Waiver,  constitutes  the entire
agreement and supersedes all other prior  agreements  and  understandings,  both
written and oral, between the parties with respect to the subject matter thereof
and hereof.

7.   Counterparts. This Waiver may be signed in any number of counterpart copies
     ------------
and by the parties  hereto on separate  counterparts,  but all such copies shall
constitute one and the same instrument.

8.   Limitation of Waiver.  This Waiver shall not, except as expressly set forth
     --------------------
above, serve to waive, supplement or amend the Note, which Note shall, except as
amended hereby, remain in full force and effect.

                           [Signature Page to Follow]

<PAGE>

     WITNESS the due  execution of this Waiver as a document  under seal,  as of
the date first written above.

                                          SERANOVA, INC.

                                          By:  /s/ David Rogers
                                              ----------------------------------

                                          Print Name:  David Rogers
                                                      --------------------------

                                          Title:  Sec / Treas
                                                 -------------------------------

                                          INTELLIGROUP, INC.

                                          By:  /s/ Nicholas Visco
                                              ----------------------------------

                                          Print Name:  Nicholas Visco
                                                      --------------------------

                                          Title:      VP Finance and CFO
                                                 -------------------------------State of Delaware                         PAGE 1

                        Office of the Secretary of State
                        --------------------------------

     I,  EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY  THE  ATTACHED  IS  A  TRUE  AND  CORRECT  COPY  OF  THE  CERTIFICATE OF
DESIGNATION  OF  "VSOURCE,  INC.",FILED  IN  THIS  OFFICE  ON  THE EIGHTH DAY OF
NOVEMBER,  A.D.  2000,  AT  9:10  O'CLOCK  A.M.

     A  FILED  COPY  OF  THIS  CERTIFICATE  HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY  RECORDER  OF  DEEDS.

               [SEAL]
                              /s/   Edward  J.  Freel
                              -----------------------
                              Edward  J.  Freel,  Secretarey  of  State
3313408  8100                       AUTHENTICATION:  0781006

001559072                                    DATE:  11-08-00

<PAGE>
                                 VSOURCE, INC.,
                             A DELAWARE CORPORATION

                           Certificate of Designation

           Robert C. McShirley and Sandford T. Waddell, certify that:

A.   They are the duly elected and acting President and Secretary, respectively,
     of Vsource, Inc., a Delaware corporation (the "Company");

B.   The  following  resolution,  which  sets  forth  the  rights,  preferences,
     privileges and  restrictions of the Series 2-A Convertible  Preferred Stock
     of the  Company  determined  by the Board of  Directors  of the  Company in
     accordance with the authorization contained in the Company's Certificate of
     Incorporation  was duly adopted by the Board by unanimous  written  consent
     dated as of November 3, 2000:

             AUTHORIZATION OF SERIES 2-A CONVERTIBLE PREFERRED STOCK

          Resolved that the Board of Directors hereby  determines that 1,672,328
     shares  of  Class  A  Preferred  Stock  shall  be  designated  "Series  2-A
     Convertible Preferred Stock" and that such Series 2-A Convertible Preferred
     Stock  shall have the  rights,  preferences,  privileges  and  restrictions
     hereinafter set forth:

              DESIGNATION OF SERIES 2-A CONVERTIBLE PREFERRED STOCK

          1.          Designation.
                      -----------

          This series of Class A Preferred Stock shall be designated "Series 2-A
Convertible  Preferred  Stock,"  par  value  $0.01  per  share  ("Series  2-A
Preferred").

          2.          Authorized  Number.
                      ------------------

          The  number  of authorized shares of Series 2-A Preferred shall be one
million  six hundred seventy two thousand three hundred twenty eight (1,672,328)
shares.

                                      -1-
<PAGE>
          3.          Dividends.
                      ---------

          The  holders of shares of Series 2-A Preferred Stock shall be entitled
to  receive,  out  of any assets legally available therefor, and when, as and if
declared  by  the Board of Directors, noncumulative dividends in an amount equal
to  eight  percent  (8%)  of  the Original Issue Price (defined below) per share
annually.  No  dividend  may be declared and paid upon shares of Common Stock in
any  fiscal  year  of  the  Corporation unless dividends of eight percent of the
Original  Issue  Price  (defined  below)  per  share has first been paid upon or
declared  and  set  aside for payment to the holders of the shares of Series 2-A
Preferred  Stock  for  such  fiscal  year  of the Corporation.  No undeclared or
unpaid  dividend  shall  ever  bear  interest.

          4.          Liquidation  Preference.
                      -----------------------

          a. In the event of any  liquidation,  dissolution or winding up of the
     Corporation, either voluntary or involuntary, each holder of the Series 2-A
     Preferred  Stock shall be entitled to receive,  prior and in  preference to
     any  distribution  of any of the assets or surplus funds of the Corporation
     to the holders of the Common Stock by reason of their ownership  thereof, a
     preference  amount for each outstanding share of Series 2-A Preferred Stock
     held by such holder  equal to the sum of (A) the price  originally  paid to
     the  Corporation for that  outstanding  share of Series 2-A Preferred Stock
     (the "Original Issue Price") at the same time and with the same priority as
     the payment to the holders of the Series 1-A  Convertible  Preferred  Stock
     ("Series 1-A Preferred") of $2.50 for each outstanding  share of Series 1-A
     Preferred Stock and (B) an amount equal to declared but unpaid dividends on
     such  share,  if any,  but only to the  extent  of the  Company's  retained
     earnings.  If upon the occurrence of such event,  the assets and funds thus
     distributed  among the  holders of the Series 1-A  Preferred  Stock and the
     Series 2-A Preferred  Stock shall be  insufficient to permit the payment to
     such holders of the full  preferential  amount each such holder is entitled
     to receive,  then the entire  assets and funds of the  Corporation  legally
     available for distribution  shall be distributed among such holders and the
     holders  of the  Series  1-A  Preferred  Stock  in  proportion  to the full
     preferential amount each such holder is otherwise entitled to receive.

          b. After payment to the holders of the Series 2-A Preferred  Stock and
     the Series 1-A Preferred Stock of the amounts to which they are entitled to
     be paid prior and in preference to any distribution of any of the assets or
     surplus  funds of the  Corporation  to the  holders of the Common  Stock by
     reason of their ownership  thereof,  the remaining  assets and funds of the
     Corporation   legally  available  for   distribution,   if  any,  shall  be
     distributed among the holders of the Common Stock, the Series 1-A Preferred
     Stock and the  Series 2-A  Preferred  Stock pro rata based on the number of

                                      -2-
<PAGE>
     shares of Common Stock held by each (assuming conversion of all such Series
     2-A  Preferred  Stock  pursuant to Paragraph 7 below and of all such Series
     1-A  Preferred  Stock  pursuant  to  Paragraph  7  of  the  Certificate  of
     Designation creating the Series 1-A Preferred Stock ).

          c. For  purposes  of this  Section 4, a  liquidation,  dissolution  or
     winding up of the  Corporation  shall be deemed to be  occasioned  by or to
     include (i) the  acquisition of the  Corporation by another entity by means
     of any transaction or series of related  transactions  (including,  without
     limitation, any reorganization,  merger or consolidation but, excluding any
     merger effected exclusively for the purpose of changing the domicile of the
     Corporation),  or (ii) a sale of all or substantially  all of the assets of
     the  Corporation;  unless  the  Corporation's  shareholders  of  record  as
     constituted immediately prior to such acquisition or sale will, immediately
     after  such  acquisition  or  sale  (by  virtue  of  securities  issued  as
     consideration for the Corporation's  acquisition or sale or otherwise) hold
     a majority of the voting power of the surviving or acquiring entity. In any
     of such events, if the consideration  received by the Corporation  received
     is other than cash,  its value will be deemed its fair  market  value.  The
     fair market value of common  stock which is publicly  traded on an exchange
     or the  NASDAQ  National  Market  System or Small Cap  Market  shall be the
     average of the daily  market  prices of that stock over the 20  consecutive
     trading  days  immediately  preceding  (and  not  including)  the  date the
     Corporation or its shareholders  receive such stock. The daily market price
     for each  trading  day shall be: (A) the  closing  price on that day on the
     principal exchange on which such common stock is then listed or admitted to
     trading or on NASDAQ, as applicable;  or (B) if no sale takes place on that
     day on such exchange or NASDAQ, the average of the official closing bid and
     asked  prices for that  stock.  Otherwise,  the fair  market  value of such
     consideration  shall be  determined in good faith by the Board of Directors
     and provided in writing by the Corporation to the holders of the Series 2-A
     Preferred  Stock  within  five (5) days of the date of such  determination;
     provided,  however,  that the fair market value of such consideration shall
     be determined by appraisal in accordance  with the following  provisions if
     the holders of at least two-thirds of then outstanding Series 2-A Preferred
     Stock object in writing to the Board of Director's  determination within 15
     days of their  receipt  of  notice  of such  determination  by the Board of
     Directors.  A single  appraiser shall selected  jointly by the holders of a
     majority  of the Series 2-A  Preferred  Stock and the  Corporation.  If the
     holders of the Series 2-A Preferred Stock and the Corporation are unable to
     agree on an  appraiser  within  twenty (20) days of the Board of  Directors
     receiving  notice of such  holders'  objection  to the Board of  Directors'
     determination,  each  shall  immediately  appoint  an  appraiser  who shall
     determine such fair market value. If the lower of the appraised fair market
     values is not less than ninety  percent (90%) of the higher  appraised fair
     market value,  the final fair market value of such  consideration  shall be

                                      -3-
<PAGE>
     the average of the appraised  values.  If the lower of the appraised values
     is less than  ninety  percent  (90%) of the higher  appraised  values,  the
     original  appraisers  shall appoint a final appraiser who shall pick one of
     the two prior values determined by the first two appraisers.  All appraisal
     reports  shall be  completed  no later  than  sixty  (60)  days  after  the
     appointment  of  the  appraiser  engaged  to  render  such  appraisal.  All
     appraisal  fees  and  costs  shall  be paid by the  Corporation;  provided,
     however,  that if the final  appraised  value is no more  than ten  percent
     (10%) higher than that  determined  by the Board,  the  appraisal  fees and
     costs shall be subtracted from the liquidation preference to be paid to the
     holders of the Series 2-A Preferred Stock.

     5.  Redemption.
         ----------

          a. Redemption at the Option of the Corporation.  The Corporation shall
             -------------------------------------------------
     not have the right to call or redeem any shares of the Series 2-A Preferred
     Stock.

          b. Redemption at the Option of the Holders.  The holders of the Series
             ---------------------------------------
     2-A Preferred  Stock shall not have any right to require the Corporation to
     redeem all or any part of the Series 2-A Preferred Stock held by them.

     6.  Voting  Rights.  The holder of each share of Series 2-A Preferred Stock
         --------------
shall have the right to one vote for each share of Common  Stock into which such
Series 2-A Preferred  Stock could then be converted  (with any fractional  share
determined  on an aggregate  conversion  basis being rounded down to the nearest
whole share),  and with respect to such vote, such holder shall have full voting
rights and powers equal to the voting rights and powers of the holders of Common
Stock, and shall be entitled, notwithstanding any provision hereof, to notice of
any  shareholders'  meeting in accordance  with the by-laws of the Company,  and
shall be entitled to vote,  together with holders of Common Stock,  with respect
to any question upon which holders of Common Stock have the right to vote.

      7.  Conversion.
          ----------

          The  holders  of  the Series 2-A Preferred Stock shall have conversion
rights  as  follows  (the  "Conversion  Rights"):

          a. Right to Convert. Each share of Series 2-A Preferred Stock shall be
             ----------------
     convertible,  at the  option of the holder  thereof,  at any time after the
     date of  issuance of such share,  at the office of the  Corporation  or any
     transfer  agent  for  such  stock,  into  such  number  of  fully  paid and
     nonassessable  shares of Common  Stock as is  determined  by  dividing  the
     Original Issue Price by the then applicable Conversion Price, determined as
     hereinafter provided, in effect on the date the certificate evidencing such

                                      -4-
<PAGE>
     share is surrendered for conversion. The initial Conversion Price per share
     for  Series  2-A  Preferred  Stock (the  "Conversion  Price")  shall be the
     Original Issue Price.  Such initial  Conversion  Price shall be adjusted as
     hereinafter provided.

          b.  Automatic  Conversion.  Each share of Series 2-A  Preferred  Stock
              ---------------------
     shall  automatically  be converted  into shares of Common Stock at the then
     effective  Conversion Price as provided in Section 7.a. above,  immediately
     upon the closing of a public  offering of the  Corporation's  Common  Stock
     with aggregate gross proceeds of at least $20,000,000 and a per share price
     to the public of at least Thirteen Dollars ($13.00),  or at the election of
     the holders of a majority of the outstanding shares of Series 2-A Preferred
     Stock.

          c. Mechanics of Conversion.  Before any holder of Series 2-A Preferred
             -----------------------
     Stock shall be  entitled  to convert the same into shares of Common  Stock,
     such holder shall surrender the certificate or certificates  thereof,  duly
     endorsed,  at the office of the  Corporation  or of any transfer  agent for
     such stock, and shall give written notice to the Corporation at such office
     that it elects to convert  the same and shall  state  therein the number of
     shares  to be  converted  and the name or names  in  which  it  wishes  the
     certificate or  certificates  for shares of Common Stock to be issued.  The
     Corporation shall, as soon as practicable thereafter,  issue and deliver at
     such office to such holder a certificate or certificates  for the number of
     shares  of  Common  Stock to which  such  holder  shall be  entitled.  Such
     conversion shall be deemed to have been made immediately prior to the close
     of business on the date of surrender of the shares of Series 2-A  Preferred
     Stock to be  converted,  and the person or persons  entitled to receive the
     shares of Common Stock issuable upon such  conversion  shall be treated for
     all purposes as the record holder or holders of such shares of Common Stock
     on such date.

          d. Conversion Price Adjustments. The Conversion Price shall be subject
             ----------------------------
     to the following adjustments:

               (1)  Adjustment  for  Stock  Splits  and  Combinations.   If  the
                    -------------------------------------------------
          Corporation  at any time or from time to time after the first issuance
          of  Series  2-A  Preferred  Stock  (the  "Purchase  Date")  effects  a
          subdivision  of the  outstanding  Common  Stock,  by  stock  split  or
          otherwise, the Conversion Price then in effect immediately before that
          subdivision shall be proportionately  decreased;  and, conversely,  if
          the  Corporation  at any time or from time to time after the  Purchase
          Date combines the outstanding shares of Common Stock, by reverse stock
          split or otherwise,  the Conversion  Price then in effect  immediately
          before  that  combination  shall  be  proportionately  increased.  Any
          adjustment under this Section d(1) shall become effective at the close
          of  business  on the  date  the  subdivision  or  combination  becomes
          effective.

                                      -5-
<PAGE>
               (2) Adjustment for Certain  Dividends and  Distributions.  In the
                   ----------------------------------------------------
          event  the  Corporation  at any time or from  time to time  after  the
          Purchase  Date  either   makes,   or  fixes  a  record  date  for  the
          determination  of holders  of Common  Stock  entitled  to  receive,  a
          dividend or other distribution  payable in additional shares of Common
          Stock, then and in each such event the Conversion Price then in effect
          shall be  decreased  as of the time of such  issuance or, in the event
          such a record  date is  fixed,  as of the  close of  business  on such
          record date, by multiplying  the Conversion  Price then in effect by a
          fraction  (1) the  numerator of which is the total number of shares of
          Common Stock issued and outstanding  immediately  prior to the time of
          such  issuance on the close of business on such record  date,  and (2)
          the  denominator  of which shall be (i) 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 (ii)
          the  number of shares of Common  Stock  issuable  in  payment  of such
          dividend or distribution;  provided, however, that if such record date
          is fixed and such  dividend is not fully paid or if such  distribution
          is not fully made on the date fixed  therefor,  the  Conversion  Price
          shall be  recomputed  accordingly  as of the close of business on such
          record date or date fixed therefor and thereafter the Conversion Price
          shall be  adjusted  pursuant  to this  Section  d(2) as of the time of
          actual payment of such dividend or  distribution.  For purposes of the
          foregoing formula,  "the total number of shares of Common Stock issued
          and  outstanding"  on a particular date shall include shares of Common
          Stock issuable upon conversion of stock or securities convertible into
          Common Stock and the  exercise of warrants,  options or rights for the
          purchase of Common Stock which are outstanding on such date.

               (3)  Adjustments for Other  Dividends and  Distributions.  In the
                    ---------------------------------------------------
          event  the  Corporation  at any time or from  time to time  after  the
          Purchase Date makes, or fixes a record date for the  determination  of
          holders of Common  Stock  entitled  to  receive,  a dividend  or other
          distribution  payable  in  securities  of the  Corporation  other than
          shares of Common Stock,  then and in each such event,  provision shall
          be made so that each  Holder  of  Series  2-A  Preferred  Stock  shall
          receive upon conversion  thereof,  in addition to the number of shares
          of Common Stock receivable thereupon,  the amount of securities of the
          Corporation  which it would have  received had the Holder's  shares of
          Series 2-A Preferred  Stock been converted into Common Stock as of the
          date of such event and had it  thereafter,  during the period from the
          date of such event to and  including  the date of  exercise,  retained
          such  securities  receivable  by it as  aforesaid  during such period,
          subject to all other  adjustments  called for during such period under
          this Section 5 with respect to the rights of such Holder.

                                      -6-
<PAGE>
               (4)  Adjustment  for   Recapitalization,   Reclassification,   or
                    ------------------------------------------------------------
          Exchange.  If the Common Stock  issuable  upon the  conversion  of the
          --------
          Series 2-A  Preferred  Stock is changed  into the same or a  different
          number of shares of any class or classes of stock of the  Corporation,
          whether by recapitalization, reclassification or other exchange (other
          than a subdivision or combination of shares,  or a stock dividend or a
          reorganization,  merger, consolidation or sale of assets, provided for
          elsewhere  in this  Section d), then and in any such event each Holder
          of Series  2-A  Preferred  Stock  shall have the right  thereafter  to
          convert  the  Series 2-A  Preferred  Stock into the kind and amount of
          stock  and  other   securities  and  property   receivable  upon  such
          recapitalization, reclassification or other exchange by holders of the
          number of shares of Common  Stock  into  which the number of shares of
          Series 2-A  Preferred  Stock then by such  Holder  could be  converted
          immediately prior to such recapitalization,  reclassification or other
          exchange, all subject to further adjustment as provided herein.

               (5) Reorganizations,  Mergers, Consolidations or Sales of Assets.
                   ------------------------------------------------------------
          If at any time or from time to time there is a capital  reorganization
          of the Common Stock (other than a subdivision or combination of shares
          or a stock dividend or a  recapitalization,  reclassification or other
          exchange of shares,  provided  for  elsewhere  in this Section d) or a
          merger  or  consolidation  of the  Corporation  with or  into  another
          corporation,   or  the  sale  of  all  or  substantially  all  of  the
          Corporation's  assets to any  other  person,  then,  as a part of such
          capital reorganization, merger, consolidation or sale, provision shall
          be made so that each  Holder of the Series 2-A  Preferred  Stock shall
          thereafter  be entitled to receive upon  conversion  of the Series 2-A
          Preferred  Stock the number of shares of stock or other  securities or
          property of the Corporation, or of the successor corporation resulting
          from such capital  reorganization,  merger,  consolidation or sale, to
          which a holder of the  number of  shares of Common  Stock  deliverable
          upon  such   exercise   would  have  been  entitled  on  such  capital
          reorganization,  merger,  consolidation  or sale.  In any  such  case,
          appropriate  adjustment  shall  be  made  in  the  application  of the
          provisions of this Section d with respect to the rights of each Holder
          of  Series  2-A  Preferred  Stock  after the  capital  reorganization,
          merger,  consolidation  or sale to the end that the provisions of this
          Section d (including the number of shares  deliverable upon conversion
          of the Series 2-A  Preferred  Stock) shall  continue to be  applicable
          after that event and shall be as nearly  equivalent to the  provisions
          hereof as may be practicable.

                                      -7-
<PAGE>
               (6) Sale of Shares Below Conversion Price.
                   -------------------------------------

                    (a) If at any time or from time to time  after the  Purchase
               Date,  the  Corporation  issues  or  sells,  or is  deemed by the
               express  provisions  of this Section d(6) to have issued or sold,
               Additional Shares of Common Stock (as hereinafter defined), other
               than as a dividend or other distribution on any class of stock as
               provided  in Section  d(2) and other than upon a  subdivision  or
               combination  of shares of Common  Stock as  provided  in  Section
               d(1), for an Effective Price (as  hereinafter  defined) less than
               the then existing  Conversion  Price,  then and in each such case
               the then existing  Conversion  Price shall be reduced,  as of the
               opening of business on the date of such issue or sale, to a price
               determined by multiplying that Conversion Price by a fraction the
               numerator  of which  shall be (A) the  number of shares of Common
               Stock  outstanding  at the  close  of  business  on the day  next
               preceding the date of such issue or sale,  plus (B) the number of
               shares of Common Stock which the aggregate consideration received
               (or by the  express  provisions  hereof  is  deemed  to have been
               received) by the  Corporation  for the total number of Additional
               Shares  of  Common  Stock  so  issued  would   purchase  at  such
               Conversion  Price,  plus (C) the number of shares of Common Stock
               underlying  Other  Securities  (as  hereinafter  defined) and the
               denominator  of which shall be (X) the number of shares of Common
               Stock  outstanding  at the close of  business on the date of such
               issue after giving effect to such issue of  Additional  Shares of
               Common  Stock,  plus (Y) the  number of  shares  of Common  Stock
               underlying  the Other  Securities at the close of business on the
               date of such issue or sale.

                    (b) For the purpose of making any adjustment  required under
               this Section d(6), the consideration  received by the Corporation
               for any issue or sale of  securities  shall (A) to the  extent it
               consists of cash be  computed  at the amount of cash  received by
               the Corporation,  (B) to the extent it consists of property other
               than cash,  be  computed  at the fair value of that  property  as
               determined in accordance  with the procedure set forth in Section
               4.c.  above,  and  (C) if  Additional  Shares  of  Common  Stock,
               Convertible  Securities  (as  hereinafter  defined)  or rights or

                                      -8-
<PAGE>
               options to purchase either  Additional  Shares of Common Stock or
               Convertible  Securities  are issued or sold  together  with other
               stock or  securities  or other  assets of the  Corporation  for a
               consideration  which covers  both,  be computed as the portion of
               the  consideration so received that may be reasonably  determined
               in good  faith by the Board to be  allocable  to such  Additional
               Shares  of  Common  Stock,  Convertible  Securities  or rights or
               options under the procedure set forth in Section 4.c. above.

                    (c) For the purpose of the  adjustment  required  under this
               Section  d(6), if the  Corporation  issues or sells any rights or
               options  for the  purchase  of,  or  stock  or  other  securities
               convertible  into,   Additional  Shares  of  Common  Stock  (such
               convertible stock or securities being hereinafter  referred to as
               "Convertible  Securities")  and if the  Effective  Price  of such
               Additional  Shares  of Common  Stock is less than the  Conversion
               Price then in effect,  then in each case the Corporation shall be
               deemed to have issued at the time of the  issuance of such rights
               or  options  or  Convertible  Securities  the  maximum  number of
               Additional  Shares of Common  Stock  issuable  upon  exercise  or
               conversion  thereof and to have received as consideration for the
               issuance  of such shares an amount  equal to the total  amount of
               the  consideration,  if any,  received by the Corporation for the
               issuance  of such  rights or options or  Convertible  Securities,
               plus, in the case of such rights or options,  the minimum amounts
               of  consideration,  if any,  payable to the Corporation  upon the
               exercise  of  such  rights  or  options,  plus,  in the  case  of
               Convertible Securities, the minimum amounts of consideration,  if
               any,  payable to the  Corporation  (other than by cancellation of
               liabilities   or  obligations   evidenced  by  such   Convertible
               Securities) upon the conversion thereof. No further adjustment of
               the Conversion Price,  adjusted upon the issuance of such rights,
               options or Convertible  Securities,  shall be made as a result of
               the actual  issuance of Additional  Shares of Common Stock on the
               exercise of any such rights or options or the  conversion  of any
               such Convertible Securities. If any such rights or options or the
               conversion   privilege   represented  by  any  such   Convertible
               Securities  shall  expire  without  having  been  exercised,  the
               Conversion  Price  adjusted  upon the  issuance  of such  rights,
               options or  Convertible  Securities  shall be  readjusted  to the
               Conversion   Price  which  would  have  been  in  effect  had  an
               adjustment been made on the basis that the only Additional Shares
               of Common  Stock so issued were the  Additional  Shares of Common
               Stock,  if any,  actually  issued or sold on the exercise of such
               rights or options  or rights of  conversion  of such  Convertible

                                      -9-
<PAGE>
               Securities,  and such Additional  Shares of Common Stock, if any,
               were issued or sold for the  consideration  actually  received by
               the Corporation upon such exercise,  plus the  consideration,  if
               any, actually received by the Corporation for the granting of all
               such  rights  or  options,  whether  or not  exercised,  plus the
               consideration  received  for issuing or selling  the  Convertible
               Securities  actually converted,  plus the consideration,  if any,
               actually received by the Corporation  (other than by cancellation
               of  liabilities  or  obligations  evidenced  by such  Convertible
               Securities) on the conversion of such Convertible Securities.

                    (d)  "Additional  Shares of  Common  Stock"  shall  mean all
               shares  of  Common  Stock  issued  by the  Corporation  after the
               Purchase Date, whether or not subsequently  reacquired or retired
               by the Corporation, other than: (A) shares of Common Stock issued
               upon  conversion of the Series 2-A  Preferred  Stock or any other
               options or  warrants or  convertible  securities  outstanding  or
               issuable  on the  Purchase  Date;  (B)  shares  of  Common  Stock
               issuable or issued to the directors, officers and employees of or
               consultants  to the  Corporation;  (C)  shares  of  Common  Stock
               issuable or issued as part of an acquisition  by the  Corporation
               of all of or  certain  assets  (including  technology  rights) or
               shares of another  company or entity whether  through a purchase,
               merger,  exchange,  reorganization  or the  like;  (D)  shares of
               Common Stock issuable or issued  pursuant to equipment  financing
               or  leasing  arrangements;  or  (E)  shares  issued  in a  public
               offering of the Corporation's  securities.  The "Effective Price"
               of  Additional  Shares of Common  Stock  shall mean the  quotient
               determined by dividing the total number of  Additional  Shares of
               Common  Stock  issued or sold,  or deemed to have been  issued or
               sold  by the  Corporation  under  this  Section  d(6),  into  the
               aggregate consideration received, or deemed to have been received
               by the  Corporation  for such issue under this Section d(6),  for
               such Additional Shares of Common Stock.  "Other  Securities" with
               respect to an issue or sale of Additional  Shares of Common Stock
               shall mean (i) preferred stock,  debentures and notes convertible
               into  Common  Stock,  and (ii)  options or  warrants  to purchase
               Common  Stock  at a price  that  is no  greater  than  95% of the
               Effective  Price of such  issue or sale of  Additional  Shares of
               Common  Stock.  The "number of shares of Common Stock  underlying
               Other  Securities" on a particular  date shall mean the number of
               shares of Common Stock  issuable upon the exercise or conversion,
               as the case may be,  of such  Other  Securities  at the  close of
               business  on such date but only to the  extent  that the  holders
               thereof  have the fully vested legal right to exercise or convert
               such Other Securities on such date and to retain the Common Stock
               issued upon such exercise or conversion.

                                      -10-
<PAGE>
                    (7) Upon the occurrence of each  adjustment or  readjustment
               of the  Conversion  Price,  the  Corporation at its expense shall
               promptly  compute such  adjustment or  readjustment in accordance
               with the terms  hereof,  and shall  prepare  and  furnish  to the
               holders of the Series 2-A Preferred  Stock a certificate  setting
               forth such adjustment or  readjustment  and showing in detail the
               facts upon which such adjustment or readjustment is based.

          e.  Notices  of  Record  Date.  In  the  event  of any  taking  by the
              -------------------------
     Corporation  of a record of the holders of any class of securities  for the
     purpose of determining  the holders thereof who are entitled to receive any
     dividend (other than a cash dividend) or other  distribution,  any security
     or right convertible into or entitling the holder thereof to receive or any
     right to subscribe for,  purchase or otherwise  acquire any shares of stock
     of any class or any other  securities or property,  or to receive any other
     right,  the  Corporation  shall mail to each holder of Series 2-A Preferred
     Stock at least  twenty  (20) days prior to the date  specified  therein,  a
     notice  specifying the date on which any such record is to be taken for the
     purpose of such dividend,  distribution,  security or right, and the amount
     and character of such dividend, distribution, security or right.

          f.  Reservation of Stock  Issuable Upon  Conversion.  The  Corporation
              ------------------------------------------------
     shall at all times  reserve and keep  available out of its  authorized  but
     unissued  shares of Common  Stock,  solely for the purpose of effecting the
     conversion of the shares of the Series 2-A Preferred Stock,  such number of
     its  shares of Common  Stock as shall  from time to time be  sufficient  to
     effect the conversion of all outstanding shares of the Series 2-A Preferred
     Stock and if at any time the number of  authorized  but unissued  shares of
     Common Stock shall not be sufficient  to effect the  conversion of all then
     outstanding  shares of the Series 2-A Preferred Stock, the Corporation will
     take such  corporate  action as may,  in the  opinion  of its  counsel,  be
     necessary to increase its authorized but unissued shares of Common Stock to
     such number of shares as shall be sufficient  for such purpose,  including,
     without  limitation,  engaging  in best  efforts  to obtain  the  requisite
     stockholder  approval  of any  necessary  amendment  to  this  Articles  of
     Incorporation.

          g.  Fractional  Shares.  No fractional  share shall be issued upon the
              ------------------
     conversion of any share or shares of Series 2-A Preferred Stock. All shares
     of Common Stock (including  fractions  thereof) issuable upon conversion of
     more than one share of Series 2-A Preferred Stock by a holder thereof shall

                                      -11-
<PAGE>
     be aggregated  for purposes of  determining  whether the  conversion  would
     result  in  the   issuance  of  any   fractional   share.   If,  after  the
     aforementioned aggregation,  the conversion would result in the issuance of
     a fraction of a share of Common Stock,  the  Corporation  shall, in lieu of
     issuing any fractional  share,  pay the holder  otherwise  entitled to such
     fraction a sum in cash equal to the fair market  value of such  fraction on
     the date of conversion (determined as provided in Section 5.c.).

          h. Notices. Any notice required by the provisions of this Section 5 to
             -------
     be given to the  holders of shares of Series 2-A  Preferred  Stock shall be
     deemed  given if  deposited in the United  States  mail,  postage  prepaid,
     return  receipt  requested,  and  addressed to each holder of record at his
     address appearing on the books of the Corporation.

     8. Amendment.
        ---------

     Any term relating to the Series 2-A Preferred  Stock may be amended and the
observance of any term relating to the Series 2-A Preferred  Stock may be waived
(either  generally  or in a particular  instance)  only with the vote or written
consent of holders of a  majority  of the  outstanding  shares of the Series 2-A
Preferred Stock. Any amendment so effected shall be binding upon the Corporation
and any holder of the Series 2-A Preferred Stock.

     9. Restrictions and Limitations.
        ----------------------------

     So long as any shares of Series 2-A Preferred Stock remain outstanding, the
Corporation  shall not,  without the vote or written consent by the holders of a
majority  of the  outstanding  shares  of Series  2-A  Preferred  Stock,  voting
together as a single class:

          a. Increase or decrease (other than by conversion) the total number of
     authorized shares of Series 2-A Preferred Stock; or

          b. Amend the Articles of  Incorporation  of the  Corporation to change
     the  rights,  preferences,  privileges  or  limitations  of the  Series 2-A
     Preferred Stock.

     10. No Reissuance of Series 2-A Preferred Stock.
         -------------------------------------------

     No  share  or  shares  of  Series  2-A  Preferred  Stock  acquired  by  the
Corporation by reason of redemption,  purchase, conversion or otherwise shall be
reissued,  and all such shares  shall be returned to the status of  undesignated
shares of Preferred Stock.

                                      -12-
<PAGE>
     11. Residual Rights.
         ---------------

     Holders  of  shares  of  Series  2-A  Preferred  Stock  shall  not have any
pre-emptive rights. All rights accruing to the outstanding shares of the Company
not expressly  provided for to the contrary herein shall be vested in the Common
Stock.

C.          That  the  number  of  shares  of  Series  2-A  Preferred  Stock  is
1,672,328;  and

D.          That  none  of  such  shares  of Series 2-A Preferred Stock has been
issued.

                                      -13-
<PAGE>
          IN  WITNESS  WHEREOF  Vsource,  Inc. has caused this certificate to be
executed  by  Robert  C.  McShirley,  its President and Sandford T. Waddell, its
Secretary,  on  the  date  set  forth  below.

Dated:  11/3,  2000
        ----

                              /s/  Robert  C.  McShirley
                              -----------------------------
                              Robert  C.  McShirley,  President

                              /s/  Sandford  T.  Waddell
                              -----------------------------
                              Sandford  T.  Waddell,  Secretary

                                      -14-
<PAGE>

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