VENTURA, Calif.--(BUSINESS WIRE)--Aug. 29, 2000--Vsource, Inc. (OTCBB:VSRC - news), pioneer and a leading provider of Web-enabled eProcurement solutions, announced today that it has received a commitment from a unit of Mercantile Capital Group, LLC, Northbrook, Ill., to invest in and lead a private placement of Vsource convertible preferred stock projected to raise up to $11 million. Approximately $1.4 million of the total has already been funded, primarily by Vsource shareholders who had invested in earlier equity offerings. The remaining funding is expected to close on or before September 15. Further financial details will be disclosed upon close of the financing. Vsource will use the funds primarily to expand its operations, including capital equipment, technology and staffing. In addition, the funds will support new product development to ensure continued leadership in eProcurement technology. A portion of the funds will also be used to support marketing efforts, primarily in cooperation with strategic partners Qwest and IBM. Vsource plans to leverage its relationships with Qwest and IBM to extend its reach into vertical industries and expand its industry expertise globally. ``A Mercantile affiliate participated in our February financing and we are pleased that they have stepped in to lead this round. We chose Mercantile to lead this round of funding because of their long-term strategic investment objectives and their desire to bring with them other co-investors with similar objectives,'' said Robert ``Jay'' McShirley, chairman and chief executive officer of Vsource. ``Their decision to invest in the technology and company will enable us to take full advantage of the Web-enabled eProcurement opportunities rapidly developing in the market.'' I. Steven Edelson, managing member of Mercantile Capital Group stated, ``Mercantile is very pleased to be part of a long-term partnership with Vsource. We believe that VSN represents a new generation of emerging Web-enablers to provide virtual platforms for collaborating, communicating, purchasing and selling and is the future of eProcurement. We believe their exceptional pure-Internet technology best positions Vsource to capitalize on what we feel can be explosive growth during the next few years.'' About Mercantile Capital Group, LLC Mercantile Capital Group is a private equity investment firm with offices in Chicago and New York. It is an opportunistic fund that focuses on making investments with strategic partners. Mercantile focuses on companies with strong fundamentals, which include achievable earnings models with significant potential, proven management teams, strategic relationships and superior industry reputations. Specific areas of investment interest include telecommunications, data communications, wireless technologies, bandwidth improvement software and hardware, semiconductor design and production, Internet applications and services, e-commerce services and infrastructure, genomics and medical devices. Mercantile also participates in management buyouts and platform industry consolidations. Mercantile Capital Partners I, L.P., the unit leading the current financing, has applied with the U.S. Small Business Administration to become a Small Business Investment Company (``SBIC'') and is currently in the prelicensing stage. The principals of Mercantile also manage two other private equity funds focused on early-stage investments around the globe. About Vsource Vsource, with headquarters in Ventura, provides the first transaction based, pure-Internet solution for eProcurement. Its flagship product, Virtual Source Network (VSN), allows companies to create an Internet-based procurement system to automate all aspects of corporate procurement, such as material requisitions, RFP and RFQ, and direct order from supplier catalogs or contracts at substantial savings. VSN accommodates electronic sending, receiving, approval and payment of supplier invoices. VSN also supports a variety of private label and aggregated buying situations, such as vertical markets, reverse auctions and virtual communities. Unlike current software based eProcurement solutions from other suppliers, Vsource's pure-Internet solution enables companies of any size to lower the cost of purchasing products and services by eliminating the need to install expensive and complex client-side software. Current eProcurement systems typically support only simple catalog-based procurement of indirect products and services. Vsource supports the entire procurement process, for both indirect and direct products and services. Vsource's pure-Internet approach provides companies of any size with a solution for eProcurement that can be implemented significantly faster than current solutions, and with significantly lower risk and cost. For further information, visit http://www.vsource.net.