World Travel Holdings plc - ss. 74(1)

UPON the application by World Travel Holdings plc ("WTH") to the Ontario Securities Commission (the "Commission") for a ruling pursuant to subsection 74(1) of the Act that certain trades made in connection with the acquisition (the "Acquisition") by WTH, through a company to be incorporated under the laws of a province of Canada and which will be a wholly-owned subsidiary of WTH ("Exchangeco"), of all the issued and outstanding shares of Netfaresonline.com Inc. ("NFO") are not subject to section 25 or 53 of the Act, subject to certain terms and conditions;

AND UPON considering the application and the recommendation of staff of the Commission,

AND UPON WTH having represented to the Commission that:

1. NFO was incorporated under the laws of Canada on September 29, 1999. NFO's head office is located at 3100 Ridgeway Drive, Unit 16, Mississauga, Ontario L5L 5M5.

2. The authorized share capital of NFO consists of an unlimited number of common shares (the "NFO Shares"). As of January 26, 2001, there were 100 NFO Shares issued and outstanding, of which 50 were held by Softvoyage Inc. ("SV") and 50 were held by Flight Network Inc. ("FNI") (SV and FNI are collectively referred to as the "Shareholders").

3. SV is a company incorporated under the laws of Canada. SV's head office is located at 5115 de Gaspé Street, Suite 630, Montreal, Québec H2T 3B7.

4. FNI is a company incorporated under the laws of Ontario. FNI's head office is located at 3100 Ridgeway Drive, Unit 16, Mississauga, Ontario L5L 5M5.

5. NFO is a private company within the meaning of the Act and is not and has no intention of becoming a "reporting issuer" in Ontario or under the securities legislation of any other province or territory of Canada.

6. NFO's principal business activities consist of internet travel booking services.

7. WTH is a public company incorporated under the laws of England and is subject to the various companies and securities laws of England.

8. As of January 26, 2001, the authorized capital of WTH consisted of 70,000,000 ordinary shares (the "WTH Shares") of 1 pence nominal value each, of which 56,918,564 were issued and outstanding.

9. The WTH Shares are listed on the Alternative Investment Market of the London Stock Exchange. As at the date hereof, WTH is not and has no intention of becoming a "reporting issuer" in Ontario as defined in the Act or under the securities legislation of any other province or territory of Canada.

10. Exchangeco will be a wholly-owned subsidiary of WTH. It will be incorporated under the laws of a province of Canada for the purpose of implementing the Acquisition.

11. The authorized capital of Exchangeco shall consist of (i) an unlimited number of common shares without nominal or par value, (ii) an unlimited number of exchangeable shares without nominal or par value in the capital of Exchangeco, exchangeable for WTH Shares (the "Exchangeable Shares"), (iii) two (2) Class A convertible preferred shares without nominal or par value in the capital of Exchangeco convertible into Exchangeable Shares (the "Class A Shares"), (iv) two (2) Class B convertible preferred shares without nominal or par value in the capital of Exchangeco convertible into Exchangeable Shares (the "Class B Shares") and (v) two (2) Class C convertible preferred shares without nominal or par value in the capital of Exchangeco convertible into Exchangeable Shares (the "Class C Shares").

12. WTH, SV, FNI, Louis Mercier ("LM") and Naman Budhdeo ("NB") have entered into a share purchase agreement (the "Share Purchase Agreement") dated January 26, 2001 which provides for the Acquisition of NFO by Exchangeco.

13. Pursuant to the Share Purchase Agreement, and subject to the terms and conditions thereof, Exchangeco will purchase, at closing, all of the NFO Shares in consideration for the issuance to the Shareholders of:

(a) the number of Exchangeable Shares determined by dividing $3,000,000 (the "Closing Payment") converted to pence on the basis of the noon spot rate of the Bank of Canada established on the business day immediately preceding the date on which the determination is made (the "Conversion Ratio") by the lower of (i) the average closing price of a WTH Share on the London Stock Exchange during the ten (10) trading days immediately preceding the date of the Share Purchase Agreement (the "Market Value") of the WTH Shares and (ii) 75p, subject to a minimum of 50p;

(b) one Class A Share to each Shareholder;

(c) one Class B Share to each Shareholder; and

(d) one Class C Share to each Shareholder.

14. A holder of Class A Shares shall be deemed, on a specific date after the closing of the Acquisition to be determined in accordance with the Class A Share, Class B Share and Class C Share provisions (the "Preferred Share Provisions"), to have required Exchangeco to convert its Class A Share(s) registered in the name of such holder and without payment of additional consideration, into its pro rata share of such number of fully paid and non assessable Exchangeable Shares as determined in accordance with the Share Purchase Agreement.

15. A holder of Class B Shares shall be deemed, on a specific date after the closing of the Acquisition to be determined in accordance with the Preferred Share Provisions, to have required Exchangeco to convert its Class B Share(s) registered in the name of such holder and without payment of additional consideration, into its pro rata share of such number of fully paid and non-assessable Exchangeable Shares determined by dividing an earn-out payment determined in accordance with the Share Purchase Agreement (the "First Earn-Out Payment") by the lower of the Market Value of a WTH Share as at the end of a base period and 250p, subject to a minimum of 60p.

16. A holder of the Class C Shares shall be deemed, on a specific date after the closing of the Acquisition to be determined in accordance with the Preferred Share Provisions, to have required Exchangeco to convert its Class C Share(s) registered in the name of such holder and without the payment of additional consideration, into its pro rata share of such number of fully paid and non-assessable Exchangeable Shares determined by dividing a second earn-out payment determined in accordance with the Share Purchase Agreement (the "Second Earn-Out Payment") by the lower of the Market Value of a WTH Share and 400p, subject to a minimum of 60p, as at the end of a second base period.

17. Finally, the occurrence of certain special circumstances will cause the Class A Shares, Class B Shares and Class C Shares outstanding, if any, to be automatically redeemed or converted:

(a) If, before the date of payment of the Second Earn-Out Payment, NB ceases to be Chief Executive Officer of NFO by reason of (i) the termination of his employment without cause, or (ii) his transfer to other functions within WTH's organization without his prior consent, all of the then outstanding Class A Shares, Class B Shares and Class C Shares shall be redeemed against payment of such number of Exchangeable Shares exchangeable for WTH Shares having a Market Value of $7,000,000 as of the date of the termination or transfer, less the amount of the First Earn-Out Payment, if any.

(b) In the event any person, firm or corporation, other than WTH and any of its affiliates or subsidiaries, ceases to own a majority of the common shares of NFO, all of the Class A Shares, Class B Shares and Class C Shares issued and outstanding as of the date of completion of such Acquisition shall be automatically converted into a number of Exchangeable Shares equal to (i) $10,000,000 minus the sum of (A) $3,000,000 and (B) the aggregate value, at the time of conversion, of any Class A Shares, Class B Shares and Class C Shares already converted into Exchangeable Shares, converted to pence on the basis of the Conversion Ratio and divided by (ii) the lower of the Market Value of the WTH Shares as at the date of completion of such Acquisition and (x) 75p, subject to a minimum of 50p if such Acquisition occurs prior to July 31, 2002, (y) 250p, subject to a minimum of 60p, if such Acquisition occurs after July 31, 2002 but on or before July 31, 2003, and (z) 400p, subject to a minimum of 60p if such Acquisition occurs after July 31, 2003.

(c) In the event a transaction occurs as a result of which the WTH Shares cease to be listed on the London Stock Exchange or any other recognised stock exchange or the stockholders of WTH approve a plan of complete liquidation of WTH or an arrangement for the sale or disposition by WTH of all or a substantial portion of WTH's assets, all of the Class A Shares, Class B Shares and Class C Shares issued and outstanding as of the date of completion of such WTH transaction shall, in lieu of being converted as set out in paragraphs 14, 15 or 16 hereof, as the case may be, be redeemed, at the end of such periods, by Exchangeco for a cash amount equal to an amount determined in accordance with the Preferred Share Provisions at the time of redemption of any such Class A Shares, Class B Shares and Class C Shares.

18. If, before the date of payment of the Second Earn-Out Payment, NB ceases to be Chief Executive Officer of NFO by reason of (i) the termination of his employment with cause, or (ii) his resignation, FNI shall transfer, upon cessation of his employment, its Class B Share and Class C Share, if any, in equal portion to SV and WTH for an aggregate amount of one dollar ($1.00).

19. If, at any time before the date on which the Second Earn-Out Payment is made, SV materially breaches its obligations contained in the license agreement which will be entered into at closing among SV, NFO and WTH, whether in respect of the licensed software or the services to be provided pursuant to such agreement, and if that breach materially deprives NFO of the benefit of such licensing agreement or entails significant economic losses for NFO, then SV shall transfer upon receipt by SV of a notice of the breach, its Class B Share and Class C Share to FNI and WTH for an aggregate amount of one dollar ($1.00).

20. The maximum consideration that is payable to SV and FNI under the Share Purchase Agreement is $10,000,000.

21. Contemporaneously with the closing of the Acquisition, WTH and Exchangeco will enter into a support agreement (the "Support Agreement") which will provide that, among other things, WTH and Exchangeco (a) will not declare or pay any dividends on WTH Shares unless (i) Exchangeco has sufficient resources available to declare and pay such dividends on the Exchangeable Shares, and (ii) Exchangeco simultaneously declares or pays, as the case may be, such equivalent dividends; and (b) will ensure that Exchangeco will be able to honour the redemption and retraction rights and entitlements upon liquidation which, as described below, are attributes of Exchangeable Shares.

22. The Exchangeable Shares shall rank on a pari passu basis with the Class A Shares, Class B Shares and Class C Shares and shall have preference over the Exchangeco common shares and any other shares ranking junior to the Exchangeable Shares, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of Exchangeco. Dividends payable on the Exchangeable Shares are to be paid at the same time and in the same amounts as dividends payable on the WTH Shares, although WTH share dividends would be paid to the Holders in Exchangeable Shares.

23. So long as any of the Exchangeable Shares are outstanding and any dividends required to have been declared and paid on the outstanding Exchangeable Shares have not been declared and paid in full, Exchangeco shall not at any time without, but may at any time with, the approval of the Holders of the Exchangeable Shares given in accordance with the share provisions:

(a) pay any dividends on the Exchangeco common shares, or any other shares ranking junior to the Exchangeable Shares, other than share dividends payable in any such other shares ranking junior to the Exchangeable Shares;

(b) redeem, retract or purchase or make any capital distribution in respect of Exchangeco common shares or any other shares ranking junior to the Exchangeable Shares with respect to the payment of dividends or on any liquidation distribution; or

(c) redeem, retract or purchase any other shares of Exchangeco ranking equally with the Exchangeable Shares with respect to the payment of dividends or on any liquidation distribution.

24. On the liquidation of Exchangeco, each Holder has the right to receive an amount for each Exchangeable Share equal to (i) the average closing price per WTH Share over the 20 consecutive trading days ending five trading days before such day on the London Stock Exchange, or if the WTH Shares have not been listed on the London Stock Exchange, on such other principal stock exchange or automatic quotation system on which WTH Shares are listed or quoted, as the case may be, as may be selected by the board of directors of Exchangeco (the "Current Market Price"), plus (ii) an additional amount equal to the full amount of all cash dividends declared, payable and unpaid on such Exchangeable Share, plus (iii) an additional amount equal to all dividends declared and payable on a WTH Share which have not been declared on Exchangeable Shares in accordance with the share provisions plus (iv) an additional amount representing non-cash dividends, payable and unpaid on such Exchangeable Share (the "Exchangeable Share Price") subject to WTH's overriding call right (the "Liquidation Call Right") to acquire the Exchangeable Shares in consideration for an amount per share equal to the Exchangeable Share Price applicable on the last business day prior to the liquidation date.

25. Exchangeable Shares can also be retracted by the Holder (the "Retraction Right") for a retraction price per share equal to the Exchangeable Share Price, subject to WTH's overriding call right (the "Retraction Call Right") to acquire the Exchangeable Shares in consideration for the Exchangeable Share Price applicable on the last business day prior to the retraction date.

26. The Exchangeable Shares must be redeemed by Exchangeco on the earlier of (the "Automatic Redemption Date"): (i) if there is outstanding a proposed transaction as a result of which the WTH Shares would cease to be listed on the London Stock Exchange or any other recognised stock exchange or if the stockholders of WTH shall have approved a plan of complete liquidation of WTH or an agreement for the sale or disposition by WTH of all or a substantial portion of WTH's assets, (ii) if there are less than a certain number of Exchangeable Shares outstanding, which number shall be determined prior to closing, and (iii) six years from the date of first issue of the Exchangeable Shares, subject to WTH's overriding call right (the "Redemption Call Right") to acquire the Exchangeable Shares from the Holder in consideration of an amount per Exchangeable Share equal to the Exchangeable Share Price applicable on the last business day prior to the Automatic Redemption Date.

27. Subject to applicable law, the Exchangeable Shares are non-voting except in certain circumstances described in the share provisions.

28. In addition to the acquisition of all of the NFO Shares by Exchangeco and the issuance of the Exchangeable Shares, Class A Shares, Class B Shares and Class C Shares, certain trades or potential trades in Exchangeable Shares, Class A Shares, Class B Shares, Class C Shares and WTH Shares will or may take place in connection with the various exchange and call rights created under the Exchangeable Share provisions, the Preferred Share Provisions, the Support Agreement and the exchange agreement to be entered into at closing among WTH, Exchangeco, SV and FNI. To the extent that there are no statutory exemptions from sections 25 and 53 of the Act available for such trades (the "Non-Exempt Trades"), exemptive relief is required.

29. It is expected that all Ontario residents holding Exchangeable Shares (which will only consist of FNI) will constitute less than 10% of the total number of Holders of WTH Shares, holding less than 10% of the total issued and outstanding WTH Shares.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest:

IT IS RULED pursuant to subsection 74(1) of the Act that the Non-Exempt Trades shall not be subject to sections 25 or 53 of the Act provided that:

(i) WTH shall provide, or cause to be provided, to each recipient or proposed recipient of Exchangeable Shares, Class A Shares, Class B Shares, Class C Shares or WTH Shares resident in Ontario, an explanation of the limitations imposed upon the disposition of such securities; and

(ii) the first trade in any securities acquired pursuant to this ruling (or upon exchange, retraction or redemption of the Exchangeable Shares) shall be a distribution under the Act unless:

(a) such trade is made in compliance with subsection 72(5) of the Act and Section 2.18(3) of Ontario Securities Commission Rule 45-501 - Exempt Distributions as if the securities had been issued pursuant to one of the exemptions referenced in section 72(5) of the Act; or

(b) with respect to the WTH Shares, such trade is made in accordance with Ontario Securities Commission Rule 72-501 - Prospectus Exemptions for First Trade Over a Market Outside Ontario ("Rule 72-501") as if the security were a Restricted Security as defined in Rule 72-501.

February 23^rd, 2001.

J. A. Geller, Theresa McLeod