Document:

Exhibit 10.34

LEASE AGREEMENT                         Lease No. 3263

For and in consideration of the mutual covenants and promises hereinafter set
forth, the individual, company or other legal person identified on the signature
page of this Lease as the lessor ("Lessor") and the individual, company or other
legal person identified on the signature page of this Lease as the lessee
("Lessee") hereby agree as follows:

    LEASE. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
all machinery, equipment, motor vehicles and other property described in any
schedule or schedules executed by the parties, concurrently herewith or
hereafter, which schedules state they are subject to this Lease (collectively,
the "Schedules"). All machinery, equipment, motor vehicles and other property
described in any Schedule and all replacement parts, additions, repairs and
accessories incorporated in, or attached or affixed to, any such property is
collectively referred to in this Lease as the "Equipment."

2. TERM OF LEASE. This lease shall commence on the date it is executed and,
unless sooner terminated by Lessor as provided in Section 19, shall continue
until the total number of "Payments" shown on each Schedule shall have been made
and all amounts Lessee is required to pay under Section 15 (if any) have been
paid.

3. RENT. As rent for the Equipment described on each Schedule, Lessee agrees to
pay to Lessor the sum of (x) the rent payments shown under "Rent Payment" on
that Schedule, multiplied by the total number of "Payments" shown on that
Schedule, plus (y) any additional rent specified on that Schedule, plus (z)
"Interim Rent" amounts payable with respect to the period between the
Commencement Date and the first Rent Payment Due Date, based on a 30-day month
and the number of days between the Commencement Date and the first Rent Payment
Due Date. Payments are to be made on each and every Rent Payment Due Date shown
on the Schedule until the total number of payments have been made. The first
rent payment with respect to each Schedule is due upon (i) Lessee's execution of
a delivery receipt, if the Equipment described in that Schedule is motor
vehicles, or (ii) upon Lessee's acceptance (as described in Section 9) of any
Equipment other than motor vehicles described in that Schedule. Rent shall be
paid on the dates specified in the Schedule at the office of Lessor or to such
other person or at such other place as Lessor may from time to time designate in
writing. In addition to the rent payments described above, Lessee shall pay the
amount of any personal property taxes or other taxes and all maintenance,
insurance and other costs and expenses with respect to the Equipment (including
amounts, if any, required to be paid under Sections 14 and 16 of this Lease). If
Lessee fails to make any such payment or pay any other expense required to be
paid by Lessee pursuant to this Lease, Lessor, at its option, may pay such
expense, which shall constitute additional rent and be due and payable from
Lessee to Lessor upon demand thereof.

4. LATE CHARGE. The Payments described in Section 3 shall be paid when due to
the person entitled to those payments. In the event Lessee's rental payments or
any sum required to be paid to Lessor shall become past due, Lessee agrees to
pay to Lessor, not later than one month thereafter, an amount equal to 5 % of
the scheduled lease payment or twenty dollars ($20.00), whichever is greater,
but only to the extent allowed by law.

5. ESTIMATED COST. The rent payments specified in each Schedule have been
computed on the basis of the total cost of the Equipment to Lessor, as estimated
at the time that Schedule is executed. Total cost includes the cost to Lessor of
purchasing and delivering the Equipment to Lessee, transportation, installation,
and all other charges with respect to the Equipment. Lessee hereby authorizes
Lessor to correct the rent payments to reflect any difference between the actual
cost of the Equipment and the estimated cost.

6. SECURITY DEPOSIT. Lessee has deposited or will deposit with Lessor the sum
shown as "Security Deposit", if any, on each Schedule as a security deposit and
not as advance rent. Lessor may, at its option, apply any security deposit to
cure any default by Lessee under the Lease, in which event Lessee shall promptly
pay a sufficient amount to Lessor to restore the security deposit to the full
amount specified on the Schedule. Upon termination of this Lease, Lessor shall
return any remaining balance of the security deposit, if any, to Lessee if, and
only if, Lessee has fulfilled all of its obligations under the Lease

7. SELECTION OF EQUIPMENT AND SUPPLIER. Lessee has selected the Equipment and
the supplier of the Equipment. Lessor agrees to order the Equipment from the
supplier in accordance with Lessor's customary practices, and Lessor shall not
be obligated to lease the Equipment to Lessee unless the supplier fills the
order. Lessor will have no liability because of any delay by the supplier in
filling the order. Lessee will accept the Equipment if delivered in good repair
and authorizes Lessor to add to the Schedules any serial numbers or other
identification of the Equipment when known. Any delay, in the delivery of the
Equipment will not affect the validity of this Lease.

8. WARRANTIES. LESSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE
CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF, THE ABSENCE
OR ANY CLAIM OF INFRINGEMENT OR THE LIKE WITH RESPECT TO, OR ANY OTHER MATTER
CONCERNING, THE EQUIPMENT AND EXPRESSLY DISCLAIMS ANY SUCH WARRANTIES OR ANY
OTHER WARRANTIES IMPLIED BY LAW. LESSEE HEREBY WAIVES ANY CLAIM IT MIGHT HAVE
AGAINST LESSOR FOR ANY LOSS, DAMAGE OR EXPENSE CAUSED

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BY THE EQUIPMENT OR BY ANY DEFECT THEREIN, OR BY THE USE OR MAINTENANCE OF, OR
SERVICING OR ADJUSTMENT TO, THE EQUIPMENT AND, AS TO LESSOR, LEASES THE
EQUIPMENT AS-IS AND WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND. LESSOR
WILL NOT BE LIABLE FOR ANY LOSS OR INTERRUPTION OF OR DAMAGE TO LESSEE'S
BUSINESS ON ACCOUNT OF ANY MECHANICAL FAILURE OR DELAY IN CONNECTION WITH THE
FURNISHING OR USE OF THE EQUIPMENT. Lessee acknowledges that Lessor is not a
dealer or manufacturer of equipment of any kind and is not the seller of the
Equipment, and that each unit of Equipment is of a type, size, design and
capacity selected solely by Lessee. Lessee also acknowledges that Lessor
supplies the Equipment without any obligation to install, test, erect, service
or maintain the Equipment. If the Equipment is not properly installed, does not
operate as represented or warranted by the manufacturer or seller thereof, or is
unsatisfactory for any reason, Lessee shall make any claim on account thereof
solely against the manufacturer or seller and no such occurrence shall relieve
Lessee of any of its obligations under this Lease. The only warranty applicable
to any Equipment is the manufacturer's warranty, if any (in the case of new
Equipment), and Lessor makes no warranty to Lessee beyond that contained in the
manufacturer's warranty, if any. Lessee acknowledges receipt of the
manufacturer's warranty with respect to any new Equipment. So long as Lessee is
not in default under this Lease, Lessor assigns to Lessee any manufacturer's,
seller's or other warranty, whether express or implied, on the Equipment and any
claim that Lessor may have as owner of the Equipment against the manufacturer or
supplier or any other person. All claims or actions on any warranty shall be
made or prosecuted by Lessee, at its sole expense, and Lessor shall have no
obligation whatsoever to make any claim on such warranty. Any recovery in cash
or cash equivalents under such warranty shall be made payable jointly to Lessee
and Lessor. At Lessor's option, all cash proceeds or cash equivalents from such
warranty recovery may be used to repair or replace the Equipment. Lessee shall
continue to pay rent to Lessor as specified in this Lease, notwithstanding any
claim for breach of warranty.

9. INSPECTION AND ACCEPTANCE BY LESSEE. Upon delivery of the Equipment, Lessee
shall promptly make all necessary inspections and tests of the Equipment in
order to determine whether the Equipment conforms to specifications and is in
good condition and repair. Lessee shall promptly notify Lessor in writing of any
defect or other objection to the type or condition of the Equipment. If Lessee
fails to notify Lessor in writing of any defect in or objection to the Equipment
within ten (10) days after delivery of the Equipment to Lessee, it shall
conclusively be established, as between Lessor and Lessee, that Lessee has fully
inspected the Equipment and that Lessee is satisfied with and has accepted the
Equipment as in good condition and repair for all purposes of this Lease. If
Lessee determines that the Equipment is in good condition and repair before the
expiration of ten (10) days after the Equipment is delivered, and in all events
prior to placing the Equipment in service, Lessee shall execute and deliver to
Lessor a certificate of acceptance in a form satisfactory to Lessor. Lessee's
acceptance of any Equipment with knowledge of a nonconformity cannot be revoked
because of such nonconformity.

10. LOCATION AND RIGHT OF INSPECTION. The Equipment shall be delivered to and,
with the exception of motor vehicles, at all times be located at the address of
Lessee shown on this Lease, or at such other place as shall be mutually agreed
upon in writing between Lessor and Lessee. Any motor vehicles included in
Equipment are leased principally for use in the United States, and will not be
used outside of the United States and Canada. Lessor shall at any and all times
during business hours have the right to enter into and upon the premises where
the Equipment is located for the purpose of inspecting the Equipment or
observing its use. Lessee shall not move any equipment other than motor vehicles
from the location to which said Equipment is delivered except with the prior
written consent of Lessor. Lessee shall promptly advise Lessor of any
circumstances with respect to location of the Equipment which may in any manner
affect Lessor's title thereto.

11. USE. The Equipment shall be kept by Lessee in its possession and control.
Lessee shall use the Equipment with due care, and shall comply with all laws,
ordinances or regulations applicable to the use, operation or maintenance of the
Equipment and the requirements of any insurer. Lessee shall put the Equipment
only to the use contemplated by the manufacturer. Lessee shall use any motor
vehicles included in the Equipment only in the course of Lessee's own business,
and shall permit any such vehicles to be operated only by Lessee's agents or
employees or members of Lessee's immediate family who, in each case, are legally
licensed to operate such vehicles. No driver of any motor vehicle included in
the Equipment shall have the authority to act on behalf of Lessor without prior
written authorization from Lessor. If Lessor as owner of any motor vehicle
included in the Equipment receives a notice of a parking or traffic violation
which involves the payment of a fine or penalty, Lessor may (but is not required
to) pay the fine or penalty. If Lessor does so, Lessee will immediately repay
Lessor the amount of fine or penalty and an additional $10 handling and
administrative fee. If any Equipment is confiscated by any public authority, or
if Lessor suffers any damage because of Lessee's use of the Equipment for an
illegal purpose, Lessee shall pay to Lessor the amount of any such damage and,
in the case of confiscation, the Stipulated Loss Value determined in accordance
with the relevant Schedule(s) and Lessor may, at its option, terminate this
Lease.

12. INDEMNITY. Lessee shall hold Lessor harmless from, and pay to Lessor the
amount of, any fines, penalties or other amounts for which Lessor is held liable
as a result of, and any legal expenses Lessor has arising out of, the use,
condition, ownership or operation of any items of Equipment, including any
claims made under the strict liability doctrine, and as a result of any lien,
encumbrance or claim made on the Equipment by anyone, including Lessee's
employees and agents. Lessee shall indemnify Lessor against and hold Lessor
harmless from, any and all claims, actions, damages (including reasonable
attorneys' fees), obligations, liabilities and liens (including any of the
foregoing arising or imposed without Lessee's fault or negligence, or in
connection with latent or other defects, or any claim for patent, trademark or
copyright infringement or under the doctrine of "strict liability"), imposed or
incurred by or asserted against Lessor or its successors or assigns, arising out
of the manufacture, purchase, lease, possession, operation, condition,

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return or use of the Equipment by operation of law or by Lessee's failure to
comply with the terms of this Lease. Upon written notice by Lessor of the
assertion of any claim hereby indemnified against, Lessee shall assume full
responsibility for the defense thereof. This section shall survive termination
of this Lease.

13. ALTERATIONS, REPAIRS AND MAINTENANCE. Lessee will, at its expense, keep and
maintain the Equipment in good working order, supply and install all replacement
parts and accessories when required to maintain the Equipment in good working
order, which parts and accessories shall be and become the sole property of
Lessor, and furnish all gasoline, oil, repairs, parts, tires, tubes, batteries,
accessories, service, maintenance and all other items of a similar nature
necessary for the operation of the Equipment. Lessee shall not, without the
prior written consent of Lessor, make any alterations, modifications, additions,
subtractions or improvements to, or mark the Equipment, but if so authorized by
Lessor, any such alterations, modifications, additions or improvements shall
become the property of Lessor and shall be deemed to be a part of the Equipment.
Lessee shall pay all costs required to repair all damage to, or alter, the
Equipment or any accessories, or to make the Equipment conform to any federal,
state or municipal requirements. Lessee shall follow any maintenance program
required or recommended by the manufacturer of the Equipment to make sure that
its warranty remains valid.

14. LICENSING, REGISTRATION AND TAXES. If the Equipment or use of the Equipment
requires licensing by or registration with any governmental authority, Lessee
shall, at its expense, obtain and maintain such license or registration
continuously during the term of this Lease. As additional rent, Lessee shall pay
when due all federal, state or local license and registration fees, assessments,
sales, use, heavy vehicle use, property and other taxes (excluding any tax
measured by Lessor's net income), together with any penalties or interest
applicable thereto, now or hereafter imposed by any governmental authority upon
any item of the Equipment or the rent payable hereunder or by reason of the use,
operation or maintenance of the Equipment. Lessee shall pay all such fees or
taxes whether they are payable by or assessed to Lessor or Lessee but, if under
law or custom such payments shall be made only by Lessor, Lessee shall promptly
notify Lessor and shall reimburse Lessor, upon demand, for all payments thereof
made by Lessor. If by law any such registration, license fee or tax is billed to
Lessor, Lessee, at its expense, will do any and all things required to be done
by Lessor in connection with the licensing or registration procedure and the
levy or assessment of any tax, including the billing or payment thereof. Upon
request, Lessee shall provide Lessor with proof of payment of any such fee or
tax.

15. PURCHASE. Upon the payment of the total number of rent payments specified in
any Schedule under this Lease, Lessee shall (a) Cure any default under this
lease, (b) If there is a dollar amount specified on the "Purchase Option" line
on the Schedule, have the option, upon not less than sixty (60) days prior
written irrevocable notice, to purchase all of the equipment described in that
Schedule for the amount specified, plus applicable sales tax, (c) If the words
"Fair Market Value" appear on the "Purchase Option" line on the Schedule, have
the option, upon not less than sixty (60) days prior written irrevocable notice,
to purchase all of the equipment described in that Schedule for the Fair Market
Value, as defined below, plus applicable sales tax, and (d) If there is a dollar
amount specified on the "Purchase Agreement" line on the Schedule, be required
(and Lessee hereby irrevocably agrees) to purchase all of the Equipment
described in that Schedule for the amount specified, plus applicable sales tax.
Any purchase of any Equipment pursuant to the preceding sentence shall be "as
is, where is", with all faults and without any warranty whatsoever (and Lessor
shall convey the Equipment to Lessee by Bill of Sale containing a disclaimer of
warranties similar to Section 8 above). For purposes of this Lease, "Fair Market
Value" means the Fair Market Value of the Equipment to
as determined either (i) by written agreement of Lessor and Lessee, (ii) at
Lessee's expense, by a professional appraiser acceptable to Lessor , or (iii) if
the Fair Market Value cannot be determined by either of the preceding methods,
as determined by Lessor in a commercially reasonable manner. Lessor may require
payment of the Purchase Option or Purchase Agreement amount at any time not more
than thirty (30) days prior to the expiration of the lease term with respect to
the relevant schedule.

16. INSURANCE. Lessee, at its expense, shall procure, maintain and pay for (a)
with respect to any Equipment other than motor vehicles, insurance against the
loss or theft of or damage to the Equipment, for the "Stipulated Loss Value"
determined in accordance with the relevant Schedule(s), naming Lessor and its
assigns as loss payee, (b) comprehensive general liability insurance providing
coverage for bodily injury and property damage with combined single limits of at
least $1 million not subject to an annual aggregate, naming Lessor and its
assigns as an additional insured, and endorsed to act as primary insurance with
respect to Lessor, (c) in the case of motor vehicles included in the Equipment,
comprehensive and collision damage coverage for the actual cash value of the
motor vehicle(s) and with a deductible not greater than the insurance deductible
specified in the Schedule, naming Lessor and its assigns as loss payee, (d) in
the case of motor vehicles included in the Equipment, motor vehicle liability
insurance covering bodily injury or property damage arising out of the
ownership, maintenance or use of the vehicle with combined single limits of at
least $1 million and naming Lessor and its assigns as additional insured, and
endorsed to act as primary insurance with respect to Lessor, and (e) any other
insurance required by Lessor or any governmental authority. All such insurance
shall be in form and amount, and provided by an insurer, satisfactory to Lessor.
Lessee shall deliver the policies of insurance or duplicates thereof or
certificates of insurance to Lessor at the time the lease is signed or prior to
the delivery of the Equipment and thereafter thirty (30) days prior to each
policy renewal. Each insurer shall agree by endorsement upon the policy or
policies issued by it or by independent instrument furnished to Lessor that the
insurer will provide thirty (30) days prior written notice to Lessor of any
cancellations or non-renewal of the policy or any material change in policy
conditions. Lessee shall comply with all restrictions (including any
geographical limitations) contained in any insurance policies. All insurance
policies shall provide that the insurance shall not be invalidated as to Lessor
by any act, omission or neglect of Lessee. Lessee shall notify Lessor
immediately in writing of any accident involving the Equipment regardless of the

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amount of damage, and shall cooperate fully with Lessor and all insurance
companies in the investigation, prosecution and defense of claims. The proceeds
of any insurance, at the option of Lessor, shall be applied (aa) toward the
replacement, restoration or repair of the Equipment, or (bb) toward payment of
the obligations of Lessee under this Lease. Lessee hereby appoints Lessor as
Lessee's attorney-in-fact to make claim for, receive payment of, and execute and
endorse all documents, checks or drafts for loss or damage under any such
insurance or pay said fees, assessments, charges and taxes, as the case may be.
In that event Lessee shall reimburse Lessor for the cost thereof upon demand,
and failure to repay the same shall constitute an Event of Default under this
Lease.

17. LOSS AND DAMAGE. Lessee hereby assumes and shall bear the entire risk of
loss, theft, damage or destruction of all or any item of the Equipment from any
cause whatsoever; and no loss, theft, damage or destruction of all or any item
of the Equipment shall relieve Lessee of its obligation to pay rent or of any
other obligation under this Lease, which shall continue in full force and
effect, notwithstanding such loss, theft, damage or destruction. This risk of
loss shall pass to Lessee on the earlier of (i) delivery of the Equipment to a
carrier for shipment to Lessee; (ii) tender of the Equipment to Lessee; or (iii)
acknowledgment by a bailee who holds the Equipment of Lessee's right to
possession of the Equipment. In the event of damage to any item of Equipment,
Lessee shall immediately place the same in good repair (ordinary wear and tear
excepted). If Lessor determines that any item of Equipment is lost, stolen,
destroyed or damaged beyond repair, Lessee, at the option of Lessor, will (a)
replace the same with similar equipment in good repair, or (b) pay Lessor in
cash all of the following: (aa) all amounts then owed by Lessee to Lessor under
this Lease, and (bb) the Stipulated Loss Value of said item of Equipment,
determined as of that date in accordance with the Schedule(s), less any proceeds
of insurance thereon received by Lessor. Upon Lessor's receipt of such payment,
Lessee shall be entitled to whatever interest Lessor may have in said item of
Equipment, in its then condition and location, without warranties, express or
implied, and this Lease shall be terminated with respect to such item.

18. DEFAULTS. The occurrence of any one or more of the following events shall
constitute an Event of Default under this Lease:

    (a) Lessee shall fail to make any rent or other payment when due; or
    (b) Lessee shall fail to perform or observe any other covenant, condition or
agreement to be performed or observed by it under this Lease and such failure
shall continue for a period of ten (10) days after written notice thereof is
delivered to Lessee by Lessor; or
    (c) Any representation or warranty made by Lessee in this Lease or in any
document or certificate furnished to Lessor in connection with or pursuant to
this Lease (including but not limited to financial statements) shall have been
false in any material respect when made or furnished; or
    (d) Lessee shall become insolvent or bankrupt or make an assignment for the
benefit of creditors or consent to the appointment of a trustee or receiver, or
a trustee or receiver shall be appointed for Lessee or for a substantial part of
its property without its consent and shall not be dismissed for a period of
thirty (30) days, or bankruptcy, reorganization or insolvency proceedings shall
be instituted by or against Lessee and, if instituted against Lessee shall no be
dismissed for a period of thirty (30) days, or Lessee dies, is dissolved,
terminates its existence or its business is discontinued; or
    (e) Lessee attempts to remove, sell, transfer, encumber, part with
possession of or sublet all or any item of the Equipment; or
    (f) Lessee is liquidated or dissolved, or commences any acts relative
thereto, or, without the prior written consent of Lessor, (i) Lessee sells or
otherwise disposes of all or substantially all of the assets of Lessee, (ii)
Lessee merges or consolidates with any other person, or (iii) if Lessee is a
corporation. ownership, control, or power to vote fifty percent(50%) or more of
the outstanding shares of any class of voting securities of Lessee is
transferred by the current holders, in one or more transactions: or
    (g) Any indebtedness of Lessee (including but not limited to indebtedness to
Lessor or any of its affiliates) is not paid when due, or Lessee defaults under
any bond, debenture, note or other evidence of indebtedness of Lessee or under
any indenture or other instrument under which any such evidence of indebtedness
has been issued or by which it is governed and payment of such indebtedness is
accelerated.

19. REMEDIES. Upon the occurrence and during the continuation of any Event of
Default, Lessor shall have all the rights and remedies provided by applicable
law and by this Lease. In addition to the rights and remedies provided by
applicable law, Lessor may, at its option, declare this Lease to be in default.
Upon declaring this Lease to by in default, Lessor, at its sole discretion, may
exercise any one or more of the following remedies:

    (a) terminate this Lease; or
    (b) declare immediately due and payable, without notice or demand to Lessee,
the sum of (i) the accrued and unpaid rent payments for the period ending on the
date of default; (ii) the present value of any and all rent payments for the
period from the date of default throughout the scheduled expiration of this
lease; (iii) any purchase agreement amount specified on the Purchase Agreement
line on the relevant Schedule(s); (iv) if and only if Lessee has previously
exercised an option to purchase pursuant to Section 15 hereof, any purchase
option amount specified on the Purchase Option line on the relevant Schedule(s);
and (v) any other sums then payable under the Lease; or
    (c) cause Lessee, upon written demand of Lessor and at Lessee's expense, to
return promptly any or all items of Equipment to Lessor in accordance with all
of the terms of Section 22 hereof, or Lessor, at its option, may take possession
of any or all items of Equipment without demand or notice where the same may be
located without any court order or process of law and remove the same without
liability for injuries suffered through or loss caused by such repossession, and
such repossession shall not constitute termination of this Lease unless Lessor
expressly terminates this Lease in writing, and Lessee waives any and all rights
to notice and

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judicial hearing with respect to the repossession or attachment of the Equipment
by Lessor in the event of default under this Lease by Lessee; or
    (d) sell or lease any or all items of Equipment at public or private sale or
lease at such time(s) as Lessor may determine and, if notice thereof is required
by law, any notice in writing of such sale or lease by Lessor to Lessee not less
than ten (10) days prior to the date thereof shall constitute reasonable notice
thereof to Lessee; or otherwise dispose of, hold, use, operate, or keep idle
such Equipment, all as Lessor, at its sole discretion, may determine and all
free and clear of any rights of Lessee and without any duty to account to Lessee
for such action or inaction or for any proceeds with respect thereto; or
    (e) exercise any other right or remedy which may be available to Lessor
under the Uniform Commercial Code or any other applicable law or proceed by
appropriate court action to enforce the terms of this Lease, to recover
possession of the Equipment, to recover damages for the breach of this Lease or
to rescind this Lease as to any or all Equipment. Lessor may elect, whether
before or after recovering possession of the Equipment, by written notice to
Lessee, to cause Lessee to pay Lessor as liquidated damages for loss of a
bargain and not as a penalty, and in lieu of all other sums due to Lessor for
the remaining term of this Lease (except any indemnification obligation under
Section 12, which shall survive the payment of the Stipulated Loss Value) on the
date specified in such notice, an amount equal to the rent payment or payments
and other payments under the Lease that are due and payable as of the date of
the written notice, plus a sum equal to the Stipulated Loss Value of the
Equipment, determined as of the date of the written notice in accordance with
the Schedule(s), reduced by any net proceeds of the disposition of the Equipment
which were previously received by the Lessor. In the event Lessor collects the
liquidated damages specified in the preceding sentence and has not previously
sold or re-leased the Equipment, Lessor shall appoint Lessee as Lessor's agent
to dispose of the Equipment at the best price obtainable on an "as is, where is"
basis and Lessee shall be entitled to the proceeds of such sale of the Equipment
to the extent they do not exceed the Stipulated Loss Value and shall pay any
excess to Lessor.

Lessee shall pay Lessor all costs and expenses, including attorneys' fees,
incurred by Lessor in exercising any of its rights or remedies under this Lease
or in enforcing any of the terms or conditions of this Lease. Lessee shall
continue to be liable for all indemnities under this Lease and for all legal
fees and other costs and expenses resulting from an event of Default or the
exercise of Lessor's remedies, including placing any Equipment in the condition
required by Section 22 of this Lease, notwithstanding Lessor's exercise of any
right or remedy under this Lease. Except as expressly provided above, no remedy
is exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Lessor at law or in equity. The
repossession or subsequent sale or lease by Lessor of any item of Equipment
shall not bar an action for a deficiency as herein provided and the bringing of
any action or the entry of judgment against Lessee shall not bar Lessor's right
to repossess any or all items of Equipment. No express or implied waiver by
Lessor of any default shall constitute a waiver of any other default by Lessee
or a waiver of any of Lessor's rights. To the extent permitted by applicable
law, Lessee hereby waives any rights now or hereafter conferred by statute or
otherwise which may require Lessor to sell, lease or otherwise use any Equipment
in mitigation of Lessor's damages as set forth in this Section 19 or may
otherwise limit or modify any of Lessor's rights or remedies under this Section
19.

LESSEE AGREES THAT ANY ACTION BY LESSEE OR LESSOR CONCERNING THE LEASE SHALL BE
VENUED IN THE COURTS OF THE STATE OF MINNESOTA, AND LESSEE HEREBY SUBMITS TO THE
PERSONAL JURISDICTION OF THE COURTS OF MINNESOTA. BOTH FEDERAL AND STATE, IN ANY
ACTION WITH RESPECT TO THIS LEASE AND AGREES THAT ANY STATE COURT ACTION SHALL
BE VENUED IN THE DISTRICT COURT OF HENNEPIN COUNTY, MINNESOTA. LESSOR AND LESSEE
EACH IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS LEASE OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

20. ASSIGNMENT. Lessee shall not assign, pledge or hypothecate this Lease in
whole or in part, nor any interest in this Lease, nor shall Lessee sublet or
lend any item of the Equipment, nor pledge, mortgage or otherwise encumber the
Equipment or permit it to be encumbered, without the prior written consent of
Lessor. Lessee's interest herein may not be assigned or transferred by operation
of the law. Consent to any of the foregoing acts shall not be deemed to be
consent to any subsequent similar act. Lessor may assign this Lease or mortgage
the Equipment or both in whole or in part, without notice to Lessee. If Lessee
is given notice of such assignment, it shall acknowledge receipt of that notice
in writing. Each assignee or mortgagee from Lessor shall have all of the rights,
but none of the obligations, of Lessor under this Lease. Lessee shall not assert
against any assignee and/or mortgagee any defense, counterclaim or offset that
Lessee may have against Lessor. Upon receipt from Lessor of written notice of
assignment, Lessee will pay to the assignee any portion of the rent assigned to
the assignee. Lessee's obligation to pay rent to the assignee shall be absolute
and unconditional and shall not be subject to any defense or offset and said
obligations shall continue until Lessee receives a written notice from the
assignee that all indebtedness secured by such assignment has been paid in full.
Notwithstanding any assignment, Lessor warrants that Lessee shall quietly enjoy
use of the Equipment, subject to the terms and conditions of this Lease. Subject
to this Section 20, this Lease inures to the benefit of and is binding upon the
heirs, legatees, personal representatives, successors and assigns of Lessor and
Lessee.

21.OWNERSHIP. The Equipment is and shall at all times remain the sole and
exclusive property of Lessor. Lessee shall have no right, title or interest
therein or thereto except as expressly set forth in this Lease. Lessee has no
right, title or interest in the property except as Lessee. The Equipment shall
remain personal property regardless of whether it becomes affixed or attached to
real property, or permanently rests upon any real property or any improvement
thereon. Lessee shall not attach the Equipment to any personal or real property
so as to cause the property to become an accession or fixture thereto or take
any action which would confer upon any person having an interest in such real or
personal property an interest in the Equipment. Lessee agrees to execute all
such agreements and other documents, and to obtain the execution thereof, in
recordable form, by all parties having an interest in any real property to

<PAGE>

which any of the Equipment is affixed, as Lessor may, from time to time,
reasonably request with respect to the identity of the Equipment as personal
property, and Lessee further consents to the recordation of all such agreements
and documents. Lessee shall affix to the Equipment and maintain thereon such
labels, plates or decals as may be provided by Lessor, or conspicuously mark the
Equipment with such language as Lessor may reasonably request, to the effect
that such Equipment is owned by Lessor. Lessor is hereby authorized at Lessee's
expense to cause this Lease or any financing statement in respect thereto,
showing the interest of Lessor in the Equipment. to be filed or recorded with
any governmental office deemed appropriate by Lessor. A carbon, photographic or
other reproduction of this Lease or any financing statement filed pursuant to
this Lease may be filed by Lessor as a financing statement. Lessee shall execute
all documents requested by Lessor to effect any filing.

22.       SURRENDER. Upon expiration of this Lease with respect to each unit of
Equipment, Lessee shall (unless Lessee shall have exercised an option, or have
been required, to purchase such unit of Equipment and shall have paid all
amounts payable pursuant to Section 15 with respect thereto) return each unit of
Equipment to Lessor free of all advertising or insignia placed thereon by
Lessee, and in good condition, repair and working order (ordinary wear and tear
resulting from the proper use of the Equipment excepted). Absence or
malfunctioning of a catalytic converter or other pollution control equipment
with respect to any motor vehicle included in the Equipment shall not be
considered ordinary wear and tear. Lessee shall return the Equipment, in
accordance with Lessor's instructions, either (a) by delivering the Equipment at
Lessee's sole cost and expense, to any location selected by Lessor, within the
county to which the Equipment was moved with Lessor's consent, to the nearest
office of Lessor, or the location identified on the relevant Schedule for return
of the Equipment (whichever of the foregoing is selected by Lessor at its sole
discretion); or (b) by loading the Equipment on board any carrier designated by
Lessor and shipping the same, freight collect, to a destination selected by
Lessor. If Lessee fails to return a unit of Equipment to Lessor at the
expiration of this Lease, Lessee shall pay rent at the rate stated on the
Schedule until the Equipment is returned to Lessor. This provision shall not be
construed to be right of renewal, or to authorize Lessee to retain the Equipment
after the expiration of the Lease.

23. NO OFFSET; IRREVOCABLE AND INDEPENDENT PROMISES. Upon Lessee's acceptance of
any Equipment, Lessee's promises to pay rent and perform all other obligations
with respect to such Equipment shall become irrevocable and independent, and
shall not be subject to cancellation, termination, modification, repudiation,
excuse or substitution without the consent of Lessor or any assignee. Lessee
hereby waives any and all existing and future claims and offsets against any
rent or other payments due hereunder, and agrees to pay the rent and other
amounts due hereunder regardless of any offset or claim which may be asserted by
Lessee or on its behalf against Lessor or any other person. This is a net lease
and rent due under this Lease shall not be subject to abatement for any reason
whatsoever. Lessee hereby further acknowledges that the manufacturer or vendor
of the Equipment and their agents and employees were at no time and are not now
the agents or under the supervision of Lessor, and that Lessor was not and is
not the agent of the manufacturer or vendor.

24. WAIVERS. No waiver of Lessee's obligations, conditions or covenants shall be
deemed to take place unless the waiver is in writing and signed by Lessor.
Failure to exercise any remedy which Lessor may have under this Lease or any
acquiescence in the default of Lessee by Lessor shall not constitute a waiver of
any obligation of Lessee, including the obligation as to which Lessee is in
default; and Lessor shall be entitled to pursue any remedy available to it under
this Lease until Lessee has rendered complete performance of all obligations
under this Lease.

25. FINANCIAL AND OTHER REPORTS. During the term of this Lease, Lessee shall
furnish Lessor with annual financial statements within one hundred twenty (120)
days after the end of Lessee's fiscal year, and Lessee shall provide Lessor such
other financial information as Lessor may from time to time request, including,
without limitation, any reports filed with federal or state regulatory agencies.
Lessee hereby warrants and represents that all financial statements previously
delivered or to be delivered to Lessor by or on behalf of Lessee, and any
statements and data submitted in writing to Lessor in connection with this
Lease, are or will be true and correct and did or will fairly present the
financial condition of Lessee for the periods involved.

26. MASTER LEASE. In the event Lessor shall hereafter lease to Lessee additional
Equipment, the Equipment shall be described on a Schedule executed by the
parties which shall refer to this Lease. Each Schedule shall, in addition to
describing the Equipment to be leased thereunder, set forth the term of the
Lease with respect to that Equipment, the amount of rent, the manner of payment
of the rent, the number of rent payments, the commencement of the rent payments,
the amount of any security deposit and the stipulated loss value with respect to
that Equipment, whether Lessee has the option, or shall be required, to purchase
the Equipment and at what price, and may include other provisions. Each such
Schedule when executed by the parties shall be deemed to be a part of this
Lease, and all of the provisions of this Lease, except such provisions as may be
explicitly amended by a Schedule, shall govern such Schedule(s), it being
understood and agreed that this Lease shall be the Master Lease.

27. CROSS DEFAULT. Lessee hereby agrees that any default by Lessee in the
payment of rent or performance of any other term or condition of any lease
between Lessor and Lessee, or under any Schedule, whether previously or
hereafter entered into, shall at the option of Lessor constitute an Event of
Default in all Leases or Schedules, including this Lease between Lessor and
Lessee, and that thereupon the provisions of Section 19 above shall be
applicable.

28. NOTICES. All notices required or permitted under this Lease shall be
sufficient if delivered personally or mailed to the party receiving the notice
at the address set forth below that party's signature, or at such other address
as either party may designate in

<PAGE>

writing delivered to the other party from time to time. Any such notice shall be
effective upon delivery or forty-eight (48) hours after it has been deposited in
the United States mail, duly addressed and postage prepaid.

29. MISCELLAN'EOUS. LESSEE ACKNOWLEDGES, AND AGREES THAT THIS LEASE IS INTENDED
AS A "FINANCE LEASE" AS DETERMINED IN MINN. STAT. SECTION 336.2A-103(l)(G), AND
THAT LESSOR IS ENTITLED TO ALL BENEFITS, PRIVILEGES AND PROTECTIONS OF A LESSOR
UNDER A FINANCE LEASE. This Lease contains the entire agreement between the
parties and embodies any oral representations, negotiations or agreement made in
connection herewith. If more than one party executes this Lease as Lessee, all
obligations to be performed by Lessee shall be the joint and several liability
of all such parties. Wherever the context permits, Lessee's representations,
warranties and covenants under this Lease shall survive the delivery and return
of the Equipment. Any provision of this Lease which may be determined by
competent authority to be prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective, to the extent of such prohibition or
unenforceability, without invalidating the remaining provisions of this Lease,
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provisions in any other jurisdiction. To
the extent permitted by applicable law, Lessee hereby waives any provision of
law which renders any provision of this Lease prohibited or unenforceable in any
respect. No term or provision of this Lease may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination is
sought. To the extent that payments hereunder do constitute interest, the
parties agree that any interest to be paid the Lessor shall in no contingency
exceed the maximum amount permissible under applicable law. If under any
circumstances whatsoever, interest would otherwise be payable to Lessor at a
rate in excess of that permitted under applicable law, then the interest payable
to Lessor shall be reduced to the maximum amount permitted under applicable law,
and if under any circumstance Lessor shall ever receive anything of value deemed
interest by applicable law which would exceed interest at the highest lawful
rate, any amount equal to any excessive interest shall be applied to the
reduction of the principal amount of the obligation owing to Lessor and not to
the payment of interest, or if such excessive interest exceeds the unpaid
principal amount of such obligation, such excess shall be refunded to the
Lessee. All interest paid or agreed to be paid to Lessor shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal amount of the
obligations owing to the Lessor so that the rate of interest thereon for such
full period shall not exceed the maximum amount permitted by applicable law.
Nothing herein contained shall give or convey to Lessee any right, title or
interest in and to any Equipment leased hereunder except as Lessee.
NOTWITHSTANDING THE PRECEDING SENTENCE, LESSEE ACKNOWLEDGES THAT FOR INCOME TAX
PURPOSES ONLY, LESSOR IS TREATING LESSEE AS OWNER OF THE EQUIPMENT AND THAT
LESSEE HAS NEITHER SOUGHT NOR RECEIVED TAX ADVICE FROM LESSOR AS TO THE
AVAILABILITY TO LESSEE OF ANY TAX BENEFITS WITH RESPECT TO THE EQUIPMENT. In the
event this lease is construed by a court as a security agreement rather than as
a lease (which is hereby declared contrary to the intent of the parties), Lessee
hereby grants Lessor a first priority security interest in the Equipment free
and clear of any other liens, encumbrances or security interests and agrees to
execute any financing statements, fixture filings or other instruments necessary
or expedient for filing, recording or perfecting the interest and title of
Lessor and any assignee of Lessor at the request of Lessor, and all costs
incurred in connection therewith (including, without limitation, filing fees and
taxes) shall be paid by Lessee. The captions in this Lease are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof. As used in this Lease, the term "Lease' shall include all exhibits and
schedules related to this Lease. The neuter includes the masculine or feminine,
the singular includes the plural. and the word "Lessor" includes all assignees
of Lessor. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (BUT NOT THE LAW OF CONFLICTS) OF THE STATE
OF MINNESOTA, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Time is of the essence hereof. Lessee's obligations hereunder shall survive the
expiration or earlier termination thereof. This Lease shall not become effective
or binding until executed by Lessor at its place of business in Eden Prairie,
Minnesota. Lessee shall promptly notify Lessor of any changes in Lessee's
address. Lessee warrants and agrees that the Equipment is leased and will be
used for business purposes only and that the Equipment will not be used for
personal, family or household purposes.

IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the 20th day of
March 2000.

ACI TELECENTRICS, INC., LESSEE       LEASE FINANCE GROUP, INC., LESSOR

By: /s/ Russell Jackson                        By: /s/ Kathleen Hanson
    -------------------                            -------------------
Title: CFO                                     Title: Vice President-Operations
       ---                                            -------------------------
Address:  Suite 300                  Address:  Suite 203
          3100 West Lake Street                7700 Equitable Drive
          Minneapolis, MN 55416                Eden Prairie. MN 55344

<PAGE>

                           SCHEDULE TO LEASE AGREEMENT

LESSOR:      LEASE FINANCE GROUP, INC.                   LEASE NO.     3263
       -------------------------------------             -----------------------
LESSEE:      ACI TELECENTRICS, INC.                      SCHEDULE NO.    1
       -------------------------------------             -----------------------

--------------------------------------------------------------------------------
                                    EQUIPMENT

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

                  Computer Equipment, per attached Schedule "A"

--------------------------------------------------------------------------------
Location of Equipment (if other than
Lessee's address on the Lease):         See Exhibit "A"        County:
                               -------------------------------        ----------

 INITIAL LEASE TERM        RENT PAYMENT               RENT PAYMENT DUE DATE

36 Months                  $ 6,530.93   per month,    The __ tenth _X_ twentieth
--                         ----------                      day of each month
36 Payments                  (plus applicable taxes)
--

PAYMENT APPLIES TO:                       STIPULATED LOSS VALUE:
1st Payment            $ 13,061.86           YEAR       YEAR        YEAR
                       -----------
Taxes ____%            $                  $206,353 1 $         4 $       7
                       -----------        ---------- ----------- ---------
Administrative Fee     $     50.00        $161,845 2 $         5 $       8
                       -----------        ---------- ----------- ---------
Other                  $      0.00        $105,200 3 $         6 $       9
                       -----------        ---------- ----------- ---------
Security Deposit       $      0.00
                       -----------
Total                  $ 13,111.86
                       -----------
Amount Received        $      0.00        CHECK APPLICABLE LINE
                       -----------
Amount Due             $ 13,111.86        _____ Purchase Option      $
                       -----------                                   ----------
                                          __X__ Purchase Agreement   $ 1.00
                                                                     ----------

Other Terms:        "1st Payment" refers to the first and thirty-sixth
            --------------------------------------------------------------------
                  lease payments, to be due at lease inception.
--------------------------------------------------------------------------------

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

Rent Payments shall commence upon Lessee's acceptance of the Equipment and shall
be made on each Rent Payment Due Date thereafter until the total number of
Payments has been made. Lessor herebv leases to Lessee and Lessee hereby leases
from Lessor the Equipment described above on the terms and conditions set forth
above and pursuant to and subject to all terms and conditions of the Lease
Agreement between Lessor and Lessee dated March 20, 2000

ACCEPTED                                  DATED AS OF        March 20, 2000
                                                     ----------------------

LEASE FINANCE GROUP, INC. (LESSOR)        ACI TELECENTRICS, INC. (LESSEE)

By:/s/ Kathleen Hanson                    By:/s/ Russell Jackson
   -----------------------------------       -----------------------------------
  Title: Vice President-Operations          Title: CFO
         -----------------------------             -----------------------------

By:                                       By:
   -----------------------------------       -----------------------------------
  Title:                                   Title:
        ------------------------------           -------------------------------

<PAGE>

SCHEDULE A (MULTIPLE EQUIPMENT/MULTIPLE LOCATIONS)         PAGE _1_  OF  _1_

----------------------------------------------- --------------- ----------------
                         LOCATION OF EQUIPMENT
----------------------------------------------- --------------- ----------------
                                                 Equip. Cost      Rental Amount
Street:  3100 West Lake Street, Suite 300       $  44,457.70    $    1,435.20
----------------------------------------------- --------------- ----------------
                                                    Tax %       Tax Amount
City:    Minneapolis
----------------------------------------------- --------------- ----------------

State:   MN                   Zip     55416         TOTAL    $    1,435.20
----------------------------------------------- --------------- ----------------
Manufacturer/
Description:                   See Exhibit "A"
----------------------------------------------- --------------- ----------------

----------------------------------------------- --------------- ----------------
                         LOCATION OF EQUIPMENT
----------------------------------------------- --------------- ----------------
                                                 Equip. Cost      Rental Amount
Street:  2951 Churn Creek Road                  $ 157,849.16    $    5,095.073
----------------------------------------------- --------------- ----------------
                                                    Tax %       Tax Amount
City:    Redding
----------------------------------------------- --------------- ----------------

State:   CA                   Zip     96002         TOTAL    $    5,095.73
----------------------------------------------- --------------- ----------------
Manufacturer/
Description:                   See Exhibit "A"
----------------------------------------------- --------------- ----------------

----------------------------------------------- --------------- ----------------
                         LOCATION OF EQUIPMENT
----------------------------------------------- --------------- ----------------
                                                 Equip. Cost      Rental Amount
Street:                                         $               $
----------------------------------------------- --------------- ----------------
                                                    Tax %       Tax Amount
City:
----------------------------------------------- --------------- ----------------

State:                        Zip                   TOTAL    $
----------------------------------------------- --------------- ----------------
Manufacturer/
Description:
----------------------------------------------- --------------- ----------------

----------------------------------------------- --------------- ----------------
                         LOCATION OF EQUIPMENT
----------------------------------------------- --------------- ----------------
                                                 Equip. Cost      Rental Amount
Street:                                         $               $
----------------------------------------------- --------------- ----------------
                                                    Tax %       Tax Amount
City:
----------------------------------------------- --------------- ----------------

State:                        Zip                   TOTAL    $
----------------------------------------------- --------------- ----------------
Manufacturer/
Description:
----------------------------------------------- --------------- ----------------

----------------------------------------------- --------------- ----------------
                         LOCATION OF EQUIPMENT
----------------------------------------------- --------------- ----------------
                                                 Equip. Cost      Rental Amount
Street:                                         $               $
----------------------------------------------- --------------- ----------------
                                                    Tax %       Tax Amount
City:
----------------------------------------------- --------------- ----------------

State:                        Zip                   TOTAL    $
----------------------------------------------- --------------- ----------------
Manufacturer/
Description:
----------------------------------------------- --------------- ----------------

This Schedule is attached to and made a      This Schedule A is hereby verified
part of that Lease No. 3263-1 dated the      as correct by the Lessee.
20 day of March, 2000, between the
Lessee and LEASE FINANCE GROUP, INC.         LESSEE: ACI TELECENTRICS, INC.

                                             By: /s/ Russell Jackson
                                                 -------------------------------
                                             Title: CFO
                                                    ----------------------------<PAGE>

                                                                   EXHIBIT 10.21

                             EMPLOYMENT AGREEMENT
                             --------------------

     THIS EMPLOYMENT AGREEMENT, dated as of January 24, 2000, is entered into by
and between CHEAP TICKETS, INC., a Delaware corporation (the "Company"), and
PAUL B. HALSTEAD ("Executive").

                                    RECITAL
                                    -------

     The Company desires to employ Executive, and Executive desires to be
employed by the Company, as a senior executive of the Company, in accordance
with and subject to the terms and conditions set forth herein.

                                   AGREEMENT
                                   ---------

     Accordingly, the parties hereby agree as follows:

     1.   Employment Term.  Subject to Section 4, the Company hereby employs
          ---------------              ---------
Executive, and Executive hereby accepts employment by the Company, to render
services on behalf of the Company and all existing and future Affiliated
Companies (as defined in Section 2.1) in the position and with the duties and
                         -----------
responsibilities described in Section 2 for the period commencing on the date of
                              ---------
this Agreement and ending upon the fifth anniversary hereof (the "Initial
Term").  Unless either party notifies the other party of its intention to
terminate this Agreement, at its sole and absolute discretion, within thirty
(30) days prior to the expiration of the Initial Term, this Agreement shall
continue indefinitely on a yearly basis (each extended yearly term referred to
as an "Additional Term"), subject to termination by either party, at its sole
and absolute discretion, upon thirty (30) days' notice prior to the expiration
of any such Additional Term.  The Initial Term and all Additional Terms as set
forth above shall be referred to as the "Employment Term."  Subject to Section
                                                                       -------
4, the Company shall pay Executive the compensation to which Executive is
-
entitled under Section 3.1(a), and reimburse Executive for any business expenses
               --------------
properly incurred by Executive pursuant to Section 3.3, through the end of the
                                           -----------
Employment Term, and thereafter Company's obligations hereunder shall terminate.
Each party shall have the right to terminate the Employment Term pursuant to

Section 4 with or without Cause (as defined therein), subject to the
---------
consequences set forth therein.

    2.  Position, Duties, Responsibilities.
        ----------------------------------
        2.1.  Position.  Executive shall be employed by the Company as the Chief
              --------
Technology Officer (or in such other position(s) as the Board of Directors of
the Company (the "Board") shall designate in consultation with Executive,
provided that such position shall have authority commensurate with the position
of a senior executive officer of the Company).  Executive shall devote
Executive's best efforts and Executive's full time and attention to the
performance of the services customarily incident to such office, including,
without limitation, to the Company's and any Affiliated Company's operations,
strategic planning and to such other services as may be reasonably requested by
the Board (collectively, the "Services").  The term

                                       1
<PAGE>

"Affiliated Company" as used in this Agreement means any corporation or other
business entity that, now or hereafter, directly or indirectly, controls, is
controlled by or is under common control with the Company. The Company shall
retain full direction and control of the means and methods by which Executive
performs the Services. Executive shall be based in Honolulu, Hawaii or such
other place(s) as mutually agreed between the Company and Executive.

          2.2.  Other Activities.  Executive, during the Employment Term, shall
                ----------------
not (i) accept any other employment, or (ii) engage, directly or indirectly, in
any other business activity (whether or not pursued for pecuniary advantage)
that is or may be competitive with, or that might place Executive in a competing
position to that of the Company or any Affiliated Company. Notwithstanding the
foregoing, Executive may (a) with the written consent of the Board, serve on one
or more boards of directors of other corporations, (b) serve on civic or
charitable boards or committees, and (c) manage personal investments; provided
that any such activity shall not significantly interfere with Executive's
performance of his duties and responsibilities hereunder.

     3.  Compensation, Benefits, Expenses.
         --------------------------------

         3.1.  Compensation.  In consideration of the Services to be rendered
               ------------
hereunder, including, without limitation, Services to any Affiliated Company,
Executive shall receive:

               (a)  Salary.  An annual salary in the amount of Two Hundred
                    ------
Seventy-Five Thousand Dollars ($275,000), payable in twenty-four (24) equal
installments at the time and pursuant to the procedures regularly established,
and as they may be amended, by the Company during the course of this Agreement.
The Board shall review Executive's salary annually and in light of such review
may, in its sole and absolute discretion, increase such salary taking into
account any change in Executive's then responsibilities, increases in the cost
of living, performance by Executive, performance of the Company and other
pertinent factors.

               (b)  Bonus.  Upon attainment by the Company and Executive of
                    -----
financial and operational goals determined annually in advance by the Board in
consultation with Executive, an annual bonus in the amount of twenty-five
percent (25%) of the annual salary, payable at the time and pursuant to the
procedures regularly established, and as they may be amended, by the Company
during the course of this Agreement. If the Company and Executive exceed such
financial and operational goals, the bonus shall be at an increased percentage
of the annual salary, not to exceed fifty percent (50%) thereof, on a graduated
scale, as determined annually in advance by the Board in consultation with
Executive.

               (c)  Stock Options.  A grant of stock options representing one
                    -------------
hundred thousand (100,000) shares of Common Stock of the Company, in accordance
with and subject to the terms and conditions of that certain Stock Option Award
Agreement (the "Stock Option Award Agreement") of even date herewith between the
Company and Executive, a copy of which is attached hereto as Exhibit A and
                                                             ---------
incorporated by reference herein.

               (d)  Loan.  A loan, bearing no stated interest until maturity, in
                    ----
the amount of Two Hundred Thousand Dollars ($200,000), to be evidenced by a
Promissory Note

                                       2
<PAGE>

made by Executive in favor of the Company (the "Note"), a form of which is
attached hereto as Exhibit B. At each of the first three (3) anniversaries of
                   ---------
the Note, one-third (1/3) of the principal amount payable by Executive under the
Note shall be forgiven by the Company, provided that Executive is employed with
the Company on such anniversary. On the first such anniversary, the Company
shall pay Executive an amount equal to all income taxes accrued to or payable by
Executive with respect to the first year's amount forgiven under the Note.
Notwithstanding the foregoing, Executive shall be entitled to forgiveness of
one-third (1/3) of the principal amount payable by Executive under the Note on
any of the three (3) anniversaries if in the year preceding such anniversary,
Executive was employed with the Company for at least six (6) months. Executive
agrees to use at least 75% of the loan amount for the purposes of purchasing a
residence in Honolulu, Hawaii.

          3.2.  Benefits.  The Company shall provide Executive with the right to
                --------
participate in and to receive benefits from all present and future life,
accident, disability, medical, pension, stock and savings plans and all similar
benefits made available generally to senior executive officers of the Company.
Executive shall be entitled to three (3) weeks of vacation per year, exclusive
of Company holidays.  The amount and extent of benefits to which Executive is
entitled shall be governed by the specific benefit plan, as it may be amended
from time to time.

          3.3.  Expenses.  The Company shall reimburse Executive for reasonable
                --------
travel and other business expenses incurred by Executive in the performance of
his duties hereunder in accordance with the Company's general policies, as they
may be amended from time to time during the course of this Agreement. In
addition, the Company shall reimburse (or pay on behalf of Executive) for the
following expenses:

               (a)  Moving Expenses.  Reimbursement of up to Forty Thousand
                    ---------------
Dollars ($40,000) incurred by Executive in relocating himself and his family
from Atlanta, Georgia to Honolulu, Hawaii. Executive agrees to provide
appropriate documentation to the Company evidencing such relocation expenses.

               (b)  Temporary Lodging Expenses.  Prior to Executive's relocation
                    --------------------------
from Atlanta, Georgia to Honolulu, Hawaii, reimbursement of up to Three Thousand
Dollars ($3,000) per month for Executive's temporary lodging expenses in
Honolulu, Hawaii (e.g., hotels or other suitable housing selected by Executive)
for a period not to exceed six (6) months from the date hereof. Executive agrees
to provide documentation to the Company evidencing such temporary lodging
expenses.

               (c)  Automobile Allowance.  Reimbursement of up to Five Hundred
                    --------------------
Dollars ($500) per month, including reasonable costs for maintenance and
insurance.

     4.  Termination of Employment.
         -------------------------

         4.1.  By Death.  The Employment Term shall terminate automatically upon
               --------
the death of Executive. The Company shall pay to Executive's beneficiaries or
estate, as appropriate, (i) the compensation to which Executive is entitled
pursuant to Section 3.1(a) (including any accrued vacation) through the end of
            --------------
the month in which death occurs, (ii) the bonus to which Executive is entitled
pursuant to Section 3.1(b) for the year immediately prior to
            --------------

                                       3
<PAGE>

Executive's death, provided that Executive had not previously been paid such
bonus, (iii) in the event that Executive's death occurs prior to completion of a
calendar year, a bonus in the amount set forth in Section 3.1(b) multiplied by a
                                                  --------------
fraction, the numerator of which is the number of days Executive was employed
during such calendar year and the denominator of which is the number of days in
such calendar year, provided that in such calendar year, Executive was employed
with the Company for at least six (6) months, and (iv) reimbursement for any
expenses properly incurred by Executive pursuant to Section 3.3 through the end
                                                    -----------
of the month in which death occurs. Thereafter, the Company's obligations
hereunder shall terminate. Nothing in this Section shall affect any entitlement
of Executive's heirs to the benefits of any life insurance plan.

          4.2.  By Disability.  If, in the sole and reasonable opinion of the
                -------------
Board, Executive shall be prevented from properly performing his duties
hereunder by reason of any physical or mental incapacity for a period of more
than ninety (90) days in the aggregate in any twelve-month (12-month) period,
then, to the extent permitted by law, the Employment Term shall terminate on,
and the Company shall pay to Executive the compensation to which Executive is
entitled pursuant to Section 3.1(a) (including any accrued vacation), and
                     --------------
reimburse Executive for any expenses properly incurred by Executive pursuant to
Section 3.3, in each case through the last day of the month in which the 90th
-----------
day of incapacity occurs, and thereafter the Company's obligations hereunder
shall terminate. Nothing in this Section shall affect Executive's rights under
any disability plan in which he is a participant.

          4.3.  By the Company with Cause. The Company may terminate, without
                -------------------------
liability, the Employment Term with Cause (as defined below) solely pursuant to
this Section 4.3. In the event the Company intends to terminate Executive with
     -----------
Cause, the Company shall give Executive notice thereof, such notice to state in
reasonable detail the particular act(s) or failure(s) that constitute the
grounds on which the proposed termination with Cause is based. Executive shall
have ten (10) days after the date that such notice has been given to Executive
to cure such act(s) or failure(s), to the extent such act(s) or failure(s) are
capable of being cured. If Executive fails to cure such act(s) or failure(s), or
such cure is not possible, the Company may thereupon terminate Executive's
employment with Cause immediately upon notice to Executive. In such event, the
Company shall (i) pay Executive the compensation to which Executive is entitled
pursuant to Section 3.1(a) (including any accrued vacation); and (ii) reimburse
            --------------
Executive for any expenses properly incurred by Executive pursuant to Section
                                                                      -------
3.3, in each case through the end of the day on which the Company terminates
---
Executive.

          Termination shall be "with Cause" if:

               (a)  in the reasonable opinion of the Board, Executive refuses or
fails to act in accordance with any lawful direction or order of the Board;

               (b)  Executive exhibits, in the reasonable opinion of the Board,
unfitness or unavailability for service (other than disability, as provided for
in Section 4.2), unsatisfactory performance, misconduct, dishonesty, habitual
   -----------
neglect, or incompetence in the management of the affairs of the Company or any
Affiliated Company;

                                       4
<PAGE>

               (c)  Executive is convicted of a felony crime or a crime
involving moral turpitude; or

               (d)  Executive materially breaches any term of this Agreement.

          4.4. By Executive For Good Reason. Executive may terminate, without
               ----------------------------
liability, the Employment Term for Good Reason (as defined below) solely
pursuant to this Section 4.4. In the event Executive intends to terminate
                 -----------
Executive's employment for Good Reason, Executive shall give the Company notice
thereof, such notice to state in reasonable detail the particular act(s) or
failure(s) that constitute the grounds on which the proposed termination for
Good Reason is based. The Company shall have ten (10) days after the date that
such notice has been given to the Company to cure such act(s) or failure(s), to
the extent such act(s) or failure(s) are capable of being cured. If the Company
fails to cure such act(s) or failure(s), or such cure is not possible, Executive
may thereupon terminate Executive's employment for Good Reason immediately upon
notice to the Company. In such event, the Company shall: (i) pay Executive the
compensation to which Executive is entitled pursuant to Section 3.1(a)
                                                        --------------
(including any accrued vacation) through the end of the day on which Executive
terminates Executive's employment; (ii) reimburse Executive for any expenses
properly incurred by Executive pursuant to Section 3.3 through the end of the
                                           -----------
day on which Executive terminates Executive's employment; and (iii) pay
Executive the severance payment as set forth in Section 5. Thereafter the
                                                ---------
Company's obligations hereunder shall terminate.

          Good Reason shall exist under any of the following events (unless
Executive has consented to the occurrence of such event):

               (a)  There is an assignment to Executive of any duties materially
inconsistent with or which constitute a material change in Executive's position,
duties, responsibilities, or status with the Company, or a material change in
Executive's reporting responsibilities, title, or offices, or removal of
Executive from or failure to re-elect Executive to any of such positions, except
in connection with the termination of the Employment Term with Cause, or due to
disability, early or normal retirement as defined by the Company's pension plan,
death, or termination of the Employment Term by Executive other than for Good
Reason.

               (b)  The Company acts in any way that would adversely affect
Executive's participation in or materially reduce Executive's benefit under any
benefit plan of the Company in which Executive is participating or would deprive
Executive of any material fringe benefit enjoyed by Executive, except those
changes generally affecting similarly situated senior executive officers of the
Company.

               (c)  The Company materially breaches the terms of this Agreement.

               (d)  The Company relocates Executive's permanent place of work to
a location other than Honolulu, Hawaii or its vicinity, without Executive's
consent.

          4.5. At Will.  At any time, either the Company or Executive may
               -------
terminate, without liability, the Employment Term for any reason, with or
without Cause, by giving fifteen (15) days' advance written notice to the other
party. If Executive terminates Executive's

                                       5
<PAGE>

employment pursuant to this Section 4.5, the Company shall have the option, in
                            -----------
its sole discretion, to terminate Executive immediately without the running of
the notice period. In the event that Executive's employment is terminated by
either party pursuant to this Section 4.5, the Company shall: (i) pay Executive
                              -----------
the compensation to which Executive is entitled pursuant to Section 3.1(a)
                                                            --------------
(including any accrued vacation) through the end of the day on which Executive's
employment is terminated; and (ii) reimburse Executive for any expenses properly
incurred by Executive pursuant to Section 3.3 through the end of the day on
                                  -----------
which Executive's employment is terminated. In the event that Executive's
employment is terminated by the Company pursuant to this Section 4.5, the
                                                         -----------
Company shall also pay Executive the severance payment as set forth in Section
                                                                       -------
5. Thereafter the Company's obligations hereunder shall terminate. Executive
-
hereby agrees that the Company may dismiss Executive under this Section 4.5
                                                                -----------
without regard (i) to any general or specific policies (whether written or oral)
of the Company relating to the employment or termination of its employees, or
(ii) to any statements made to Executive, whether made orally or contained in
any document, pertaining to Executive's relationship with the Company.

          4.6.  Termination Due to Bankruptcy, Receivership. The Employment Term
                -------------------------------------------
shall terminate and the Company's obligations hereunder shall cease (including
without limitation the obligation to pay Executive's compensation under Section
                                                                        -------
3.1(a)) upon the occurrence of: (i) the appointment of a receiver, liquidator,
------
or trustee for the Company by decree of competent authority in connection with
any adjudication or determination by such authority that the Company is bankrupt
or insolvent; (ii) the filing by the Company of a petition in voluntary
bankruptcy, the making of an assignment for the benefit of its creditors, or the
entering into of a composition with its creditors; or (iii) any formal action of
the Board to terminate the Company's existence or otherwise to wind up the
Company's affairs.

     4.7.  Termination of Obligations.
           --------------------------

          (a)  Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals, records, reports,
notes, contracts, lists, blueprints, and other documents, or materials, or
copies thereof, Proprietary Information (as defined in Section 7.1), and
                                                       -----------
equipment furnished to or prepared by Executive in the course of or incident to
his employment, including, without limitation, records and any other materials
pertaining to Invention Ideas (as defined below), belong to the Company and
shall be promptly returned to the Company upon termination of the Employment
Term. Following termination, Executive will not retain any written or other
tangible material containing any Proprietary Information.

          (b)  Upon termination of the Employment Term, Executive shall be
deemed to have resigned from all offices and directorships, if any, then held
with the Company or any Affiliated Company.

          (c)  Executive's obligations under Sections 4.7 and 7 shall survive
                                             ------------------
termination of the Employment Term and the expiration of this Agreement.

     5.  Severance.  In the event Executive's employment with the Company
         ---------
is terminated either by the Company without Cause or by Executive for Good
Reason, the Company shall pay and provide to Executive a severance in an amount
equal to the annual salary set forth in

                                       6
<PAGE>

Section 3.1(a), as applicable at the time of termination, payable over a period
--------------
of twelve (12) months from the effective date of termination, in twenty-four
(24) equal semi-monthly installments.

     6.  Existing Obligations of Executive.  Executive represents and warrants
         ---------------------------------
that Executive has not entered into any agreement prohibiting, restricting or
otherwise limiting Executive's employment with the Company.

     7.  Proprietary Information.
         -----------------------

          7.1.  Defined.  "Proprietary Information" is all information and any
                -------
idea in whatever form, tangible or intangible, pertaining in any manner to the
business of the Company or any Affiliated Company, or to its clients,
consultants, or business associates, unless: (i) the information is or becomes
publicly known through lawful means; (ii) the information was rightfully in
Executive's possession or part of his general knowledge prior to his employment
by the Company; or (iii) the information is disclosed to Executive without
confidential or proprietary restriction by a third party who rightfully
possesses the information (without confidential or proprietary restriction) and
did not learn of it, directly or indirectly, from the Company.

          7.2.  General Restrictions on Use.  Executive agrees to hold all
                ---------------------------
Proprietary Information in strict confidence and trust for the sole benefit of
the Company and not to, directly or indirectly, disclose, use, copy, publish,
summarize, or remove from Company's premises any Proprietary Information (or
remove from the premises any other property of the Company), except (i) during
the Employment Term to the extent necessary to carry out Executive's
responsibilities under this Agreement and (ii) after termination of the
Employment Term as specifically authorized in writing by the Board.

          7.3.  Interference with Business; Competitive Activities.  Executive
                --------------------------------------------------
acknowledges that the pursuit of the activities forbidden by this Section 7.3
                                                                  -----------
would necessarily involve the use or disclosure of Proprietary Information in
breach of Section 7.2, but that proof of such breach would be extremely
          -----------
difficult.  To forestall such disclosure, use, and breach, and in consideration
of the employment under this Agreement, Executive agrees that during the
Employment Term and for a period of two (2) years thereafter, Executive shall
not, for Executive or any third party, directly or indirectly

               (a)  interfere with the relationship between the Company or an
Affiliated Company (together, the "Corporation") and any employee of the
Corporation engaged in management or sales or any agent or representative of the
Corporation;

               (b)  divert or attempt to divert from the Corporation any
business related to the sale of discount airline tickets to domestic or
international customers or any related business in which the Corporation has
been actively engaged during the Employment Term, nor interfere with the
relationships of the Corporation with customers, dealers, distributors, or
sources of supply; or

                                       7
<PAGE>

               (c)  own, manage, operate, control, be employed by, participate
in, or be connected in any manner with the ownership, management, operation or
control of, any business or enterprise other than the Corporation which is
engaged in the business of discount airline ticket sales, hotel reservations or
car rentals to domestic or international customers; provided, however, that
Executive may own Five Percent (5%) or less of a public company so engaged as
long as such ownership is otherwise passive in nature.

     8.  Assignment; Successors and Assigns.  Each party agrees that such party
         ----------------------------------
will not assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement, nor shall such party's rights be subject to encumbrance or
the claims of creditors. Any purported assignment, transfer, or delegation shall
be null and void. Nothing in this Agreement shall prevent the consolidation of
the Company with, or its merger into, any other corporation, or the sale by the
Company of all or substantially all of its properties or assets, or the
assignment by the Company of this Agreement and the performance of its
obligations hereunder to any successor in interest or any Affiliated Company.
Subject to the foregoing, this Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective heirs, legal representatives,
successors, and permitted assigns, and shall not benefit any person or entity
other than those enumerated above.

     9.  Notices.  Unless otherwise agreed to, all notices, requests,
         -------
instructions or other documents to be given hereunder shall be in writing or by
written telecommunication, and shall be deemed to have been duly given if

          (a)  delivered personally (effective upon delivery);

          (b)  mailed by certified mail, return receipt requested, postage
prepaid (effective five (5) business days after dispatch);

          (c)  sent by a reputable, established courier service that guarantees
next business day delivery (effective the next business day); or

          (d)  sent by telecopier followed within 24 hours by confirmation by
one of the foregoing methods (effective upon receipt of the telecopy in
complete, readable form), addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance notice to the other
parties.

     All notices and other documents hereunder shall be given to the Company at:
             Cheap Tickets, Inc.
             1440 Kapiolani Boulevard, Suite 800
             Honolulu, Hawaii  96814
             Attn:  Sam E. Galeotos
             Fax:  (808) 946-3844

                                       8
<PAGE>

     with a copy to:
             Morrison & Foerster LLP
             555 West Fifth Street, Suite 3500
             Los Angeles, California  90013-1024
             Attn:  Henry M. Fields, Esq.
             Fax:  (213) 892-5454

     and to Executive at:
             Paul B. Halstead
             605 Forest Hills Drive
             Atlanta, Georgia  30342

     with a copy to:
             Edward J. Hardin
             Rogers & Hardin
             2700 International Tower
             229 Peachtree Street
             Atlanta, Georgia  30303
             Fax:  (404) 525-2224

Notice of change of address shall be effective only when done in accordance with
this Section 9.
     ---------

     10.  Governing Law; Conciliation and Arbitration.
          -------------------------------------------

          10.1.   Governing Law.  The validity, interpretation, enforceability,
                  -------------
and performance of this Agreement, the Stock Option Award Agreement and the Note
shall be governed by and construed in accordance with the law of the State of
Hawaii, without giving effect to its conflict of laws rules.

          10.2.   Conciliation and Arbitration.
                  ----------------------------

                  (a)  In the event of any dispute, controversy or claim arising
out of or relating in any manner to the employment or termination of Executive,
or any provision of this Agreement, the Stock Option Award Agreement or the
Note, or the interpretation, enforceability, performance, breach, termination or
validity hereof or thereof, including, without limitation, this Section 10.2 (a
                                                                ------------
"Dispute"), the parties shall attempt, in good faith, to amicably resolve the
Dispute. Either party may give the other party written notice of any Dispute not
resolved in the normal course of business. Within five (5) business days after
receipt of said notice, the Chief Executive Officer of the Company (or a
reasonable substitute therefor) and Executive shall negotiate in good faith to
resolve the Dispute for a period of thirty (30) days.

                  (b)  Except as specifically stated in Sections 10.2(a) and
                                                        --------------------
10.2(f), all Disputes shall be resolved by arbitration. Disputes shall include,
-------
but are not limited to, contract (express or implied) and tort claims of all
kinds, as well as all claims based on any federal, state, or local law, statute,
or regulation, excepting only claims under applicable workers' compensation law
and unemployment insurance claims. By way of example and not in

                                       9
<PAGE>

limitation of the foregoing, Disputes shall include any claims arising under
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act, the Americans with Disabilities Act, and the California Fair Employment and
Housing Act, as well as any claims asserting wrongful termination, breach of
contract, breach of the covenant of good faith and fair dealing, negligent or
intentional infliction of emotional distress, negligent or intentional
misrepresentation, negligent or intentional interference with contract or
prospective economic advantage, defamation, invasion of privacy, and claims
related to disability. Arbitration shall be final and binding upon the parties
and shall be the exclusive remedy for all Disputes. THE PARTIES HEREBY WAIVE ANY
RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ANY DISPUTE.

                  (c)  Arbitration of Disputes shall be in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association
("AAA Employment Rules"), except as provided otherwise in this Agreement.
Arbitration shall be initiated by providing written notice to the other party
with a statement of the claim(s) asserted, the facts upon which the claim(s) are
based, and the remedy sought. The burden of proof in any arbitration shall be
allocated as provided by applicable law, unless otherwise specified in this
Agreement. Either party may bring an action in court to compel arbitration under
this Agreement, the Stock Option Award Agreement or the Note and to enforce an
arbitration award. Otherwise, neither party shall initiate or prosecute any
lawsuit or administrative action in any way related to any Dispute. All
arbitration hearings under this Agreement, the Stock Option Award Agreement or
the Note shall be conducted in Honolulu, Hawaii. The Federal Arbitration Act
shall govern the interpretation and enforcement of this Section 10.2, if
                                                        ------------
applicable; otherwise, this Section 10.2 shall be governed, interpreted and
                            ------------
enforced under Chapter 658 of the Hawaii Revised Statutes.

                  (d)  All Disputes shall be decided by a single arbitrator. The
arbitrator shall be selected by mutual agreement of the parties within thirty
(30) days of the effective date of the notice initiating the arbitration. If the
parties cannot agree on an arbitrator, then the complaining party shall notify
the AAA and request selection of an arbitrator in accordance with the AAA
Employment Rules. The arbitrator shall have only such authority to award
equitable relief, damages, costs, and fees as a court would have for the
particular claim(s) asserted. The fees and expenses of any arbitration
(including the fees and expenses of the arbitrator, attorneys and expert
witnesses) shall be paid by the losing party, as identified by the arbitrator.
The arbitrator shall have exclusive authority to resolve all Disputes,
including, but not limited to, any claim or allegation that all or any part of
this Agreement, the Stock Option Award Agreement or the Note is void or
unenforceable.

          (e)  All proceedings and all documents prepared in connection with any
Dispute shall be confidential and, unless otherwise required by law, the subject
matter thereof shall not be disclosed to any person other than the parties to
the proceedings, their counsel, witnesses and experts, the arbitrator, and, if
involved, the court and court staff. All documents filed with the arbitrator or
with a court shall be filed under seal. The parties shall stipulate to all
arbitration and court orders necessary to effectuate fully the provisions of
this subsection concerning confidentiality.

                                       10
<PAGE>

          (f)  If Executive breaches Section 2.2 or 7, the parties acknowledge
                                     ----------------
that the damage or imminent damage to the Company's business or its goodwill
would be irreparable and extremely difficult to estimate, making any remedy at
law or in damages inadequate. Accordingly, notwithstanding any other provision
in this Agreement, the Company shall have the right to pursue a claim for
injunctive relief, damages and attorneys' fees in a court of competent
jurisdiction for Executive's breach of Executive's obligations pursuant to
Section 2.2 or 7 of this Agreement, in addition to any other relief available to
----------------
the Company under this Agreement or under law. If Executive prevails in any such
litigation, Executive shall be entitled to the fees and expenses incurred in
connection with Executive's defense thereunder, including expert witness costs
and attorneys' fees.

     11.  Entire Agreement.  The terms of this Agreement are intended by the
          ----------------
parties to be the final expression of their agreement with respect to the
employment of Executive by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement.

     12.  Amendments; Waivers. This Agreement may not be modified, amended, or
          -------------------
terminated except by an instrument in writing, signed by Executive and by a duly
authorized representative of the Company other than Executive. By an instrument
in writing similarly executed, either party may waive compliance by the other
party with any provision of this Agreement that such other party was or is
obligated to comply with or perform; provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. No failure to exercise and no delay in exercising any right, remedy, or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, or power hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, or power
provided herein or by law or in equity.

     13.  Severability; Enforcement. If any provision of this Agreement, or the
          -------------------------
application thereof to any person, place, or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect. It is the
intention of the parties that the covenants contained in Section 7 shall be
enforced to the greatest extent (but to no greater extent) in time, area, and
degree of participation as is permitted by the law of that jurisdiction whose
law is found to be applicable to any acts allegedly in breach of these
covenants. It being the purpose of this Agreement to govern competition by
Executive anywhere throughout the world, these covenants shall be governed by
and construed according to that law (from among those jurisdictions arguably
applicable to this Agreement and those in which a breach of this Agreement is
alleged to have occurred or to be threatened) which best gives them effect.

     14.  Executive Acknowledgment.  Executive acknowledges (i) that Executive
          ------------------------
has consulted with or has had the opportunity to consult with independent
counsel of his own choice concerning this Agreement and has been advised to do
so by the Company, and (ii) that

                                       11
<PAGE>

Executive has read and understands the Agreement, is fully aware of its legal
effect, and has entered into it freely based on Executive's own judgment.

     15.  Counterparts.  This Agreement may be signed in multiple counterparts,
          ------------
each of which shall be deemed an original but all of which together shall be
deemed one and the same instrument.

                                       12
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed this Employment
Agreement as of the date first written above.

                                 CHEAP TICKETS, INC.,
                                 a Delaware corporation

                                 By: /s/ Sam E. Galeotos
                                    -----------------------------
                                 Name:   Sam E. Galeotos
                                 Title:  President

                                 /s/ Paul B. Halstead
                                 --------------------------------
                                     PAUL B. HALSTEAD

                               [SIGNATURE PAGE]
<PAGE>

                                   Exhibit A
                                   ---------

                          Stock Option Award Agreement

                      [standard Company option agreement]
<PAGE>

                                                                       EXHIBIT A

                 CHEAP TICKETS, INC. 1999 STOCK INCENTIVE PLAN
                          NOTICE OF STOCK OPTION AWARD
                          ----------------------------

     Grantee's Name and Address:  Paul B. Halstead

                                  605 Forest Hills Drive

                                  Atlanta, Georgia  30342

     You have been granted an option to purchase shares of Common Stock of the
Company, subject to the terms and conditions of this Notice of Stock Option
Award (the "Notice"), the Plan and the Stock Option Award Agreement (the "Option
Agreement") attached hereto, as follows:

     Award Number:                          82
     Date of Award:                         January 24, 2000
     Vesting Commencement Date:             January 24, 2000
     Exercise Price per Share:              $12.3125
     Total Number of Shares subject
     to the Option:                         100,000
     Total Exercise Price:                  $1,231,250
     Type of Option:                        (X) Incentive Stock Option
                                            ( ) Non-Qualified Stock Option
     Expiration Date:                       January 24, 2006

     Post-Termination Exercise Period:      Three (3) Months

Vesting Schedule:
----------------

     Subject to Grantee's Continuous Service and other limitations set forth in
this Notice, the Plan and the Option Agreement, the Option may be exercised, in
whole or in part, in accordance with the following schedule:

     20% of the Shares subject to the Option shall vest twelve (12) months after
the Vesting Commencement Date, and an additional 20% of the Shares subject to
the Option shall vest on each anniversary of the Vesting Commencement Date
thereafter.

     During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence exceeds a
period of ninety (90) days.  Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity.

     In the event of the Grantee's change in status from Employee to Consultant,
vesting of the Option shall continue only to the extent determined by the
Administrator as of such change in status.

                                       1
<PAGE>

     In the event of termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Option shall terminate concurrently with the
termination of the Grantee's Continuous Service.

     IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and conditions of this
Notice, the Plan, and the Option Agreement.

                                 Cheap Tickets, Inc.,
                                 a Delaware corporation

                                 By:
                                    -----------------------------

                                 Title:
                                       --------------------------

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER).  THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE COMPANY'S 1999 STOCK INCENTIVE PLAN SHALL
CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF GRANTEE'S
CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT
OR THE COMPANY'S RIGHT TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR
WITHOUT CAUSE.

     The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof.  The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under this Notice, the Plan or the Option Agreement.  The Grantee further agrees
to notify the Company upon any change in the residence address indicated in this
Notice.

Dated:                        Signed:
      ---------------------          -------------------------------
                                            Paul B. Halstead

                                       2
<PAGE>

                                                               Award Number:  82

                 CHEAP TICKETS, INC. 1999 STOCK INCENTIVE PLAN

                          STOCK OPTION AWARD AGREEMENT
                          ----------------------------

     1.  Grant of Option.  Cheap Tickets, Inc., a Delaware corporation (the
         ---------------
"Company"), hereby grants to Paul B. Halstead (the "Grantee") named in the
Notice of Stock Option Award (the "Notice"), an option (the "Option") to
purchase the Total Number of Shares of Common Stock subject to the Option (the
"Shares") set forth in the Notice, at the Exercise Price per Share set forth in
the Notice (the "Exercise Price") subject to the terms and provisions of the
Notice, this Stock Option Award Agreement (the "Option Agreement") and the
Company's 1999 Stock Incentive Plan (the "Plan") adopted by the Company, which
are incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.

     If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code.  However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options.  For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.

     2.  Exercise of Option.
         ------------------

         (a)   Right to Exercise.  The Option shall be exercisable during its
               -----------------
term in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Option Agreement. The Option shall be
subject to the provisions of Section 11 of the Plan relating to the
                             ----------
exercisability or termination of the Option in the event of a Corporate
Transaction, Change in Control or Related Entity Disposition. No partial
exercise of the Option may be for less than the lesser of five percent (5%) of
the total number of Shares subject to the Option or the remaining number of
Shares subject to the Option. In no event shall the Company issue fractional
Shares.

         (b)   Method of Exercise. The Option shall be exercisable only by
               ------------------
delivery of an Exercise Notice (attached as Exhibit A) which shall state the
                                            ---------
election to exercise the Option, the whole number of Shares in respect of which
the Option is being exercised, such other representations and agreements as to
the holder's investment intent with respect to such Shares and such other
provisions as may be required by the Administrator. The Exercise Notice shall be
signed by the Grantee and shall be delivered in person or by certified mail to
the Secretary of the Company accompanied by payment of the Exercise Price. The
Option shall be deemed to be

                                       1
<PAGE>

exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price, which, to the extent selected, shall be deemed to be satisfied
by use of the broker-dealer sale and remittance procedure to pay the Exercise
Price provided in Section 3(d) below.
                  ------------

          No Shares will be issued pursuant to the exercise of the Option unless
such issuance and such exercise shall comply with all Applicable Laws.  Assuming
such compliance, for income tax purposes, the Shares shall be considered
transferred to the Grantee on the date on which the Option is exercised with
respect to such Shares.

          (c)  Taxes.  No Shares will be delivered to the Grantee or other
               -----
person pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Administrator for the satisfaction of
foreign, federal, state and local income and employment tax withholding
obligations.

     3.  Method of Payment.  Payment of the Exercise Price shall be by any of
         -----------------
the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Laws and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

         (a)  cash;

         (b)  check;

         (c)  surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require (including
withholding of Shares otherwise deliverable upon exercise of the Option) which
have a Fair Market Value on the date of surrender or attestation equal to the
aggregate Exercise Price of the Shares as to which the Option is being exercised
(but only to the extent that such exercise of the Option would not result in an
accounting compensation charge with respect to the Shares used to pay the
exercise price); or

         (d)  through a broker-dealer sale and remittance procedure pursuant to
which the Grantee (A) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased Shares and (B) shall provide written directives to the Company
to deliver the certificates for the purchased Shares directly to such brokerage
firm in order to complete the sale transaction.

     4.  Restrictions on Exercise.  The Option may not be exercised if the
         ------------------------
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws. In addition, the Option, if an Incentive
Stock Option, may not be exercised until such time as the Plan has been approved
by the stockholders of the Company.

     5.  Termination or Change of Continuous Service. In the event the Grantee's
         -------------------------------------------
Continuous Service terminates, other than for Cause, the Grantee may, to the
extent otherwise so

                                       2
<PAGE>

entitled at the date of such termination (the "Termination Date"), exercise the
Option during the Post-Termination Exercise Period. In the event of termination
of the Grantee's Continuous Service for Cause, the Grantee's right to exercise
the Option shall, except as otherwise determined by the Administrator, terminate
concurrently with the termination of the Grantee's Continuous Service. In no
event shall the Option be exercised later than the Expiration Date set forth in
the Notice. In the event of the Grantee's change in status from Employee,
Director or Consultant to any other status of Employee, Director or Consultant,
the Option shall remain in effect and, except to the extent otherwise determined
by the Administrator, continue to vest; provided, however, with respect to any
Incentive Stock Option that shall remain in effect after a change in status from
Employee to Director or Consultant, such Incentive Stock Option shall cease to
be treated as an Incentive Stock Option and shall be treated as a Non-Qualified
Stock Option on the day three (3) months and one (1) day following such change
in status. Except as provided in Sections 6 and 7 below, to the extent that the
                                 ----------------
Grantee is not entitled to exercise the Option on the Termination Date, or if
the Grantee does not exercise the Option within the Post-Termination Exercise
Period, the Option shall terminate.

     6.  Disability of Grantee.  In the event the Grantee's Continuous Service
         ---------------------
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the Option to the extent he or she was otherwise
entitled to exercise it on the Termination Date; provided, however, that if such
Disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code and the Option is an Incentive Stock Option, such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Grantee is not
entitled to exercise the Option on the Termination Date, or if the Grantee does
not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.

     7.  Death of Grantee.  In the event of the termination of the Grantee's
         ----------------
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period, the Grantee's
estate, or a person who acquired the right to exercise the Option by bequest or
inheritance, may exercise the Option, but only to the extent the Grantee could
exercise the Option at the date of termination, within twelve (12) months from
the date of such termination (but in no event later than the Expiration Date).
To the extent that the Grantee is not entitled to exercise the Option on the
date of death, or if the Option is not exercised to the extent so entitled
within the time specified herein, the Option shall terminate.

     8.  Transferability of Option.  The Option, if an Incentive Stock Option,
         -------------------------
may not be transferred in any manner other than by will or by the laws of
descent or distribution and may be exercised during the lifetime of the Grantee
only by the Grantee. The Option, if a Non-Qualified Stock Option, may be
transferred by the Grantee in a manner and to the extent acceptable to the
Administrator as evidenced by a writing signed by the Company and the Grantee.
The terms of the Option shall be binding upon the executors, administrators,
heirs and successors of the Grantee.

     9.  Term of Option.  The Option may be exercised no later than the
         --------------
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.

                                       3
<PAGE>

     10.  Tax Consequences.  Set forth below is a brief summary as of the date
          ----------------
of this Option Agreement of some of the federal tax consequences of exercise of
the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.

         (a)  Exercise of Incentive Stock Option. If the Option qualifies as an
              ----------------------------------
Incentive Stock Option, there will be no regular federal income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as income for purposes of the alternative minimum tax for federal tax
purposes and may subject the Grantee to the alternative minimum tax in the year
of exercise.

         (b)  Exercise of Incentive Stock Option Following Disability. If the
              -------------------------------------------------------
Grantee's Continuous Service terminates as a result of Disability that is not
total and permanent disability as defined in Section 22(e)(3) of the Code, to
the extent permitted on the date of termination, the Grantee must exercise an
Incentive Stock Option within three (3) months of such termination for the
Incentive Stock Option to be qualified as an Incentive Stock Option.

         (c)  Exercise of Non-Qualified Stock Option. On exercise of a Non-
              --------------------------------------
Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. If the Grantee is an Employee or a former Employee, the Company
will be required to withhold from the Grantee's compensation or collect from the
Grantee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.

         (d)  Disposition of Shares.  In the case of a Non-Qualified Stock
              ---------------------
Option, if Shares are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes and subject to tax at a maximum rate of twenty percent
(20%). In the case of an Incentive Stock Option, if Shares transferred pursuant
to the Option are held for more than one year after receipt of the Shares and
are disposed more than two years after the Date of Award, any gain realized on
disposition of the Shares also will be treated as capital gain for federal
income tax purposes and subject to the same tax rates and holding periods that
apply to Shares acquired upon exercise of a Non-Qualified Stock Option. If
Shares purchased under an Incentive Stock Option are disposed of prior to the
expiration of such one-year or two-year periods, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the difference between the Exercise Price and the lesser
of (i) the Fair Market Value of the Shares on the date of exercise, or (ii) the
sale price of the Shares.

     11.  Entire Agreement: Governing Law.  The Notice, the Plan and this Option
          -------------------------------
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof

                                       4
<PAGE>

and supersede in their entirety all prior undertakings and agreements of the
Company and the Grantee with respect to the subject matter hereof, and may not
be modified adversely to the Grantee's interest except by means of a writing
signed by the Company and the Grantee. These agreements are to be construed in
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the parties. Should any provision of the
Notice or this Option Agreement be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.

     12.  Headings.  The captions used in the Notice and this Option Agreement
          --------
are inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.

     13.  Interpretation.  Any dispute regarding the interpretation of the
          --------------
Notice, the Plan, and this Option Agreement shall be submitted by the Grantee or
by the Company forthwith to the Administrator, which shall review such dispute
at its next regular meeting. The resolution of such dispute by the Administrator
shall be final and binding on all persons.

                                       5
<PAGE>

                                   EXHIBIT A
                                   ---------

                 CHEAP TICKETS, INC. 1999 STOCK INCENTIVE PLAN
                                EXERCISE NOTICE
                                ---------------

Cheap Tickets, Inc.
1440 Kapiolani Boulevard, Suite 800
Honolulu, Hawaii  96814

Attention:  Secretary

     1.  Exercise of Option.  Effective as of today,____________________,
         ------------------
________, the undersigned, Paul B. Halstead (the "Grantee") hereby elects to
exercise the Grantee's option to purchase ____________ shares of the Common
Stock (the "Shares") of Cheap Tickets, Inc. (the "Company") under and pursuant
to the Company's 1999 Stock Incentive Plan (the "Plan") and the [X] Incentive [
] Non-Qualified Stock Option Award Agreement (the "Option Agreement") and Notice
of Stock Option Award (the "Notice") dated January 24, 2000.

     2.  Representations of the Grantee. The Grantee acknowledges that the
         ------------------------------
Grantee has received, read and understood the Notice, the Plan, and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

     3.  Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 10 of the Plan.
                      ----------
     4.   Delivery of Payment. The Grantee herewith delivers to the Company the
          -------------------
full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 3(d) of the Option Agreement.
                                      ------------

     5.   Tax Consultation.  The Grantee understands that the Grantee may suffer
          ----------------
adverse tax consequences as a result of the Grantee's purchase or disposition of
the Shares. The Grantee represents that the Grantee has consulted with any tax
consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for
any tax advice.

     6.   Taxes.  The Grantee agrees to satisfy all applicable federal, state
          -----
and local income and employment tax withholding obligations and herewith
delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such

                                       1
<PAGE>

obligations. In the case of an Incentive Stock Option, the Grantee also agrees,
as partial consideration for the designation of the Option as an Incentive Stock
Option, to notify the Company in writing within thirty (30) days of any
disposition of any shares acquired by exercise of the Option if such disposition
occurs within two (2) years from the Award Date or within one (1) year from the
date the Shares were transferred to the Grantee. If the Company is required to
satisfy any federal, state or local income or employment tax withholding
obligations as a result of such an early disposition, the Grantee agrees to
satisfy the amount of such withholding in a manner that the Administrator
prescribes.

     7.  Successors and Assigns.  The Company may assign any of its rights
         ----------------------
under this Exercise Notice to single or multiple assignees, and this Exercise
Notice shall inure to the benefit of the successors and assigns of the Company.
This Exercise Notice shall be binding upon the Grantee and his or her heirs,
executors, administrators, successors and assigns.

     8.  Headings. The captions used in this Exercise Notice are inserted for
         --------
convenience and shall not be deemed a part hereof for construction or
interpretation.

     9.  Interpretation.  Any dispute regarding the interpretation of this
         --------------
Exercise Notice shall be submitted by the Grantee or by the Company forthwith to
the Administrator, which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and binding
on all persons.

     10. Governing Law; Severability. This Exercise Notice is to be construed in
         ---------------------------
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
the other provisions shall nevertheless remain effective and shall remain
enforceable.

     11. Notices. Any notice required or permitted hereunder shall be given in
         -------
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.

     12. Further Instruments. The parties agree to execute such further
         -------------------
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent hereof.

                                       2
<PAGE>

     13. Entire Agreement. The Notice, the Plan, and the Option Agreement are
         ----------------
incorporated herein by reference, and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee.

Submitted by:                               Accepted by:

PAUL B. HALSTEAD                            CHEAP TICKETS, INC.
                                            By:
                                               ----------------------------
----------------------------------          Title:
  (Signature)                                     -------------------------

Address:                                    Address:
----------------------------------          -------
                                            1440 Kapiolani Boulevard, Suite 800
----------------------------------          Honolulu, Hawaii  96814

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

                                       3
<PAGE>

                                   Exhibit B
                                   ---------

                            Form of Promissory Note

                                [see next page]
<PAGE>

                                PROMISSORY NOTE

$200,000.00                                           ____________________, 2000

--------------------------------------------------------------------------------
     1. FOR VALUE RECEIVED, the undersigned, Paul B. Halstead, an individual
(the "Borrower"), hereby promises to pay to the order of Cheap Tickets, Inc., a
Delaware corporation (the "Lender"), at the Lender's address of 1440 Kapiolani
Boulevard, Suite 800, Honolulu, Hawaii 96814, or at such other place as the
Lender from time to time may designate, in lawful money of the United States and
in immediately available funds, the principal amount of TWO HUNDRED THOUSAND AND
NO/100 DOLLARS ($200,000.00) with no interest thereon from the date the proceeds
of the loan evidenced by this Promissory Note (this "Note") are disbursed until
maturity (whether such maturity is scheduled or accelerated).

     2. The entire unpaid principal balance and any other sums outstanding under
this Note shall be due and payable upon ____________________, 2003.

     3. Principal, any interest, and all other sums owed to the Lender under
this Note shall be evidenced by entries in records maintained by the Lender for
such purpose.

     4. Any interest and fees shall be calculated for actual days elapsed on the
basis of a 365-day year. In no event shall the Borrower be obliged to pay
interest at a rate in excess of the highest rate permitted by applicable law
from time to time in effect.

     5. The Borrower may prepay some or all of the principal under this Note
without penalty or premium.

     6. From and after maturity of this Note, whether scheduled or accelerated,
all sums then due and payable under this Note, including all principal and all
accrued interest, shall bear interest at a rate of Ten Percent (10%) per annum
until paid in full.

     7. This Note is issued pursuant to and governed by Section 3.1(d) of that
certain Employment Agreement dated as of January 24, 2000, by and between the
Lender and the Borrower (the "Employment Agreement").

     8. If the Lender delays in exercising or fails to exercise any of its
rights under this Note, that delay or failure shall not constitute a waiver of
any of the Lender's rights, or of any breach, default or failure of condition of
or under this Note. All of the Lender's remedies in connection with this Note or
under applicable law shall be cumulative, and the Lender's exercise of any one
or more of those remedies shall not constitute an election of remedies. The
illegality or unenforceability of any provision of this Note or any related
document shall not in any way affect or impair the legality or enforceability of
the remaining provisions of this Note or any related document.

     9. This Note inures to and binds the heirs, legal representatives,
successors and assigns of the Borrower and the Lender; provided, however, that
the Borrower may not assign
<PAGE>

this Note, or assign or delegate any of its rights or obligations, without the
prior written consent of the Lender in each instance. The Lender in its sole
discretion may transfer this Note without notice to or the consent of the
Borrower.

     10. This Note is governed by the laws of the State of Hawaii, without
regard to the choice of law rules of that State.

     11. Any dispute, controversy or claim arising out of or relating in any
manner to this Note or the loan shall be resolved pursuant to Section 10 of the
                                                              ----------
Employment Agreement.

                              By:
                                 ------------------------------------------
                              Name:   Paul B. Halstead
                              Address: 1440 Kapiolani Boulevard, Suite 800
                                       Honolulu, Hawaii  96814

NOTEHOLDER:

CHEAP TICKETS, INC.,
a Delaware corporation

By:
   -------------------
Name:   Sam E. Galeotos
Title:  President

MAILING ADDRESS:

Cheap Tickets, Inc.
1440 Kapiolani Boulevard, Suite 800
Honolulu, Hawaii  96814
Attn:  Sam E. Galeotos

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