Document:

<PAGE>

                                                                     Exhibit 4.9

                         REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement, dated as of February 22, 2000
(this "Agreement"), between American TeleSource International, Inc., a Delaware
corporation, with principal executive offices located at 12500 Network
Boulevard, Suite 407, San Antonio 78249 (the "Company"), and The Shaar Fund Ltd.
(the "Initial Investor").

          Whereas, upon the terms and subject to the conditions of the
Securities Purchase Agreement dated as of February 22, 2000, between the Initial
Investor and the Company (the "Securities Purchase Agreement"), the Company has
agreed to issue and sell to the Initial Investor (i) 3,000 shares of its Series
D 6% Convertible Preferred Stock, par value $0.001 per share (the "Preferred
Shares"), which, upon the terms and subject to the conditions of the Company's
Certificate of Designation of Series D 6% Convertible Preferred Stock (the
"Certificate of Designation"), are convertible into shares of the Company's
common stock, par value $0.001 per share (the "Common Stock") and (ii) Common
Stock Purchase Warrants (the "Initial Warrants") to purchase 150,000 shares of
Common Stock;

          Whereas, upon the terms and subject to the conditions of the
Certificate of Designation, the Preferred Shares may be redeemed by the Company
at a redemption price which includes, but is not limited to, the issuance of its
Common Stock Purchase Warrants having the same terms and conditions as the
Initial Warrants and exercisable to purchase an additional 150,000 shares of
Common Stock (the "Redemption Warrants" and, together with the Initial Warrants,
the "Warrants"); and

          Whereas, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide with respect to
the Common Stock issued or issuable in lieu of cash dividend payments on the
Preferred Shares, upon conversion of the Preferred Shares and upon exercise of
the Warrants certain registration rights under the Securities Act;

          Now, Therefore, in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:

          1.   Definitions

          (a)  As used in this Agreement, the following terms shall have the
meanings:

     (i)    "Affiliate," of any specified Person means any other Person who
     directly, or indirectly through one or more intermediaries, is in control
     of, is controlled by, or is under common control with, such specified
     Person.  For purposes of this definition, control of a Person means the
     power, directly or indirectly, to direct or cause the direction of the
     management and policies of such Person whether by contract, securities,
     ownership or otherwise; and the terms "controlling" and "controlled" have
     the respective meanings correlative to the foregoing.

     (ii)   "Commission" means the Securities and Exchange Commission.

     (iii)  "Current Market Price" on any date of determination means the
     closing price of a share of the Common Stock on such day as reported on The
     American Stock Exchange (the "Amex") or, if such security is not listed on
     the Amex, on the principal national security exchange or quotation system
     on which such security is quoted or listed or admitted to trading, or, if
     not quoted or listed

                                      97
<PAGE>

     or admitted to trading on any national securities exchange or quotation
     system, the closing bid price of such security on the over-the-counter
     market on the day in question as reported by Bloomberg LP, or a similar
     generally accepted reporting service, as the case may be.

     (iv)   "Exchange Act" means the Securities Exchange Act of 1934, as
     amended, and the rules and regulations of the Commission thereunder, or any
     similar successor statute.

     (v)    "Investors" means the Initial Investor and any transferee or
     assignee of Registrable Securities who agrees to become bound by all of the
     terms and provisions of this Agreement in accordance with Section 8 hereof.

     (vi)   "Person" means any individual, partnership, corporation, limited
     liability company, joint stock company, association, trust, unincorporated
     organization, or a government or agency or political subdivision thereof.

     (vii)  "Prospectus" means the prospectus (excluding any preliminary
     prospectus but including, without limitation, any final prospectus filed
     pursuant to Rule 424(b) under the Securities Act and any prospectus that
     discloses information previously omitted from a prospectus filed as part of
     an effective registration statement in reliance on Rule 430A under the
     Securities Act) included in the Registration Statement, as amended or
     supplemented by any prospectus supplement with respect to the terms of the
     offering of any portion of the Registrable Securities covered by the
     Registration Statement and by all other amendments and supplements to such
     prospectus, including all material incorporated by reference in such
     prospectus and all documents filed after the date of such prospectus by the
     Company under the Exchange Act and incorporated by reference therein.

     (viii) "Public Offering" means an offer registered with the Commission and
     the appropriate state securities commissions by the Company of its Common
     Stock and made pursuant to the Securities Act.

     (ix)   "Registrable Securities" means the Common Stock issued or issuable
     (i) in lieu of cash dividend payments on the Preferred Shares, (ii) upon
     conversion of the Preferred Shares or (iii) upon exercise of the Warrants;
     provided, however, a share of Common Stock shall cease to be a Registrable
     Security for purposes of this Agreement when it no longer is a Restricted
     Security.

     (x)    "Registration Statement" means a registration statement of the
     Company filed on an appropriate form under the Securities Act providing for
     the registration of, and the sale on a continuous or delayed basis by the
     holders of, all of the Registrable Securities pursuant to Rule 415 under
     the Securities Act, including the Prospectus contained therein and forming
     a part thereof, any amendments to such registration statement and
     supplements to such Prospectus, and all exhibits and other material
     incorporated by reference in such registration statement and Prospectus.

     (xi)   "Restricted Security" means any share of Common Stock issued or
     issuable in lieu of cash dividend payments on the Preferred Shares, upon
     conversion of the Preferred Shares or upon exercise of the Warrants except
     any such share that (i) has been registered pursuant to an effective
     registration statement under the Securities Act and sold in a manner
     contemplated by the prospectus included in such registration statement,
     (ii) has been transferred in compliance with the resale provisions of Rule
     144 under the Securities Act (or any successor provision thereto) or is
     transferable pursuant to paragraph (k) of Rule 144 under the Securities Act
     (or any successor provision thereto), or (iii) otherwise has been
     transferred and a new share of Common Stock not subject to transfer
     restrictions under the Securities Act has been delivered by or on behalf of
     the Company.

     (xii)  "Securities Act" means the Securities Act of 1933, as amended, and
     the rules and regulations of the Commission thereunder, or any similar
     successor statute.

                                      98
<PAGE>

          (b) All capitalized terms used and not defined herein have the
respective meaning assigned to them in the Securities Purchase Agreement.

          2.   Registration

          (a)  Filing and Effectiveness of Registration Statement.  The Company
shall prepare and file with the Commission not later than April 1, 2000, a
Registration Statement relating to the offer and sale of the Registrable
Securities and shall use its best efforts to cause the Commission to declare
such Registration Statement effective under the Securities Act as promptly as
practicable but not later than June 1, 2000, assuming for purposes hereof a
Conversion Price (as defined in the Certificate of Designation) of $2.50.  The
Company shall not include any other securities in the Registration Statement
relating to the offer and sale of the Registrable Securities.  The Company shall
notify the Initial Investor by written notice that such Registration Statement
has been declared effective by the Commission within 24 hours of such
declaration by the Commission.

          (b)  Registration Default.  If the Registration Statement covering the
Registrable Securities or the Additional Registrable Securities (as defined in
Section 2(d) hereof) required to be filed by the Company pursuant to Section
2(a) or 2(d) hereof, as the case may be, is not (i) filed with the Commission on
or before April 1, 2000 or (ii) declared effective by the Commission on or
before June 1, 2000 (either of which, without duplication, an "Initial Date"),
then the Company shall make the payments to the Initial Investor as provided in
the next sentence as liquidated damages and not as a penalty.  The amount to be
paid by the Company to the Initial Investor shall be determined as of each
Computation Date (as defined below), and such amount shall be equal to 2% (the
"Liquidated Damage Rate") of the Purchase Price (as defined in the Securities
Purchase Agreement) from the Initial Date to the first Computation Date and for
each Computation Date thereafter, calculated on a pro rata basis to the date on
which the Registration Statement is filed with (in the event of an Initial Date
pursuant to clause (i) above) or declared effective by (in the event of an
Initial Date pursuant to clause (ii) above) the Commission (the "Periodic
Amount") provided, however, that in no event shall the liquidated damages be
less than $25,000.  The full Periodic Amount shall be paid by the Company to the
Initial Investor by wire transfer of immediately available funds within three
days after each Computation Date.

          As used in this Section 2(b), "Computation Date" means the date which
is 30 days after the Initial Date and, if the Registration Statement required to
be filed by the Company pursuant to Section 2(a) has not theretofore been
declared effective by the Commission, each date which is 30 days after the
previous Computation Date until such Registration Statement is so declared
effective.

          Notwithstanding the above, if the Registration Statement covering the
Registrable Securities or the Additional Registrable Securities required to be
filed by the Company pursuant to Section 2(a) or 2(d) hereof, as the case may
be, is not filed with the Commission by April 1, 2000, the Company shall be in
default of this Registration Rights Agreement, and the Initial Investor shall be
entitled to liquidated damages as set forth above.

          (c)  Eligibility for Use of Form S-3.  The Company agrees that at such
time as it meets all the requirements for the use of Securities Act Registration
Statement on Form S-3 it shall file all reports and information required to be
filed by it with the Commission in a timely manner and take all such other
action so as to maintain such eligibility for the use of such form.

          (d)  Additional Registration Statement.  In the event the Current
Market Price declines to $3.00 per share or less, as the same may be adjusted
from time to time for any subdivision or combination of shares of Common Stock
after the date hereof (the date of such event, the "Decline Date"), the Company
shall, to the extent required by the Securities Act (because the additional
shares were not covered by the Registration Statement filed pursuant to Section
2(a)), as reasonably determined by the Initial Investor, file an additional
Registration Statement with the Commission for such additional number of
Registrable Securities as would be issuable upon conversion of the Preferred
Shares and exercise of the Warrants (the "Additional Registrable Securities") in
addition to those previously registered, assuming a Conversion Price (as defined
in the Certificate of Designation) of $0.30 per share.  The Company shall, to
the extent required by the Securities Act, as reasonably determined by the
Initial Investor, prepare and file with the Commission not later than the 30th
day thereafter, a Registration Statement relating to the offer and sale of such
Additional Registrable Securities and shall use its best efforts to cause the
Commission to declare such Registration Statement effective under the Securities
Act as promptly as practicable but

                                      99
<PAGE>

not later than 60 days thereafter. The Company shall not include any other
securities in the Registration Statement relating to the offer and sale of such
Additional Registrable Securities.

          If the Additional Registration Statement is not (i) filed with the
Commission within 30 days after the Decline Date or (ii) declared effective by
the Commission within 90 days after the Decline Date (either of which, without
duplication, an "Additional Registration Date"), then the Company shall make the
payments to the Initial Investor at the Liquidated Damage Rate from the
Additional Registration Date to the first Additional Computation Date and for
each Additional Computation Date thereafter, calculated on a pro rata basis to
the date on which the Additional Registration Statement is filed with (in the
event of an Additional Registration Date pursuant to clause (i) above) or
declared effective by (in the event of an Additional Registration Date pursuant
to clause (ii) above) the Commission (the "Additional Periodic Amount")
provided, however, that in no event shall the liquidated damages be less than
$25,000.  The full Additional Periodic Amount shall be paid by the Company to
the Initial Investor by wire transfer of immediately available funds within
three days after each Additional Computation Date.

          As used in this Section 2(d), "Additional Computation Date" means the
date which is 30 days after the Additional Registration Date and, if the
Additional Registration Statement required to be filed by the Company pursuant
to this Section 2(d) has not theretofore been declared effective by the
Commission, each date which is 30 days after the previous Additional Computation
Date until such Additional Registration Statement is so declared effective.

          (e)  (i)  If the Company proposes to register any of its warrants,
     Common Stock or any other shares of common stock of the Company under the
     Securities Act (other than a registration (A) on Form S-8 or S-4 or any
     successor or similar forms, (B) relating to Common Stock or any other
     shares of common stock of the Company issuable upon exercise of employee
     share options or in connection with any employee benefit or similar plan of
     the Company or (C) in connection with a direct or indirect acquisition by
     the Company of another Person or any transaction with respect to which Rule
     145 (or any successor provision) under the Securities Act applies), whether
     or not for sale for its own account, it will each such time, give prompt
     written notice at least 20 days prior to the anticipated filing date of the
     registration statement relating to such registration to the Initial
     Investor, which notice shall set forth such Initial Investor's rights under
     this Section 3(e) and shall offer the Initial Investor the opportunity to
     include in such registration statement such number of Registrable
     Securities as the Initial Investor may request. Upon the written request of
     an Initial Investor made within 10 days after the receipt of notice from
     the Company (which request shall specify the number of Registrable
     Securities intended to be disposed of by such Initial Investor), the
     Company will use its best efforts to effect the registration under the
     Securities Act of all Registrable Securities that the Company has been so
     requested to register by the Initial Investor, to the extent requisite to
     permit the disposition of the Registrable Securities so to be registered;
     provided, however, that (A) if such registration involves a Public
     Offering, the Initial Investor must sell its Registrable Securities to the
     underwriters selected as provided in Section 3(b) hereof on the same terms
     and conditions as apply to the Company and (B) if, at any time after giving
     written notice of its intention to register any Registrable Securities
     pursuant to this Section 3 and prior to the effective date of the
     registration statement filed in connection with such registration, the
     Company shall determine for any reason not to register such Registrable
     Securities, the Company shall give written notice to the Initial Investor
     and, thereupon, shall be relieved of its obligation to register any
     Registrable Securities in connection with such registration. The Company's
     obligations under this Section 2(e) shall terminate on the date that the
     registration statement to be filed in accordance with Section 2(a) is
     declared effective by the Commission.

     (ii)   If a registration pursuant to this Section 2(e) involves a Public
     Offering and the managing underwriter thereof advises the Company that, in
     its view, the number of shares of Common Stock, warrants or other shares of
     Common Stock that the Company and the Initial Investor intend to include in
     such registration exceeds the largest number of shares of Common Stock or
     warrants (including any other shares of Common Stock or warrants of the
     Company) that can be sold without having an adverse effect on such Public
     Offering (the "Maximum Offering Size"), the Company will include in such
     registration only that number of shares of Common Stock or warrants, as
     applicable, which does not exceed the Maximum Offering Size, with the
     difference between the number of shares in the Maximum Offering Size and
     the number of shares originally

                                      100
<PAGE>

     intended for inclusion (including the Common Stock covered by this
     Agreement, all shares and warrants originally intended to be issued and
     sold by the Company ("Company Shares") and all shares requested for
     inclusion by selling shareholders other than the Initial Investor pursuant
     to any registration rights agreement now in effect ("Third-Party Shares"))
     to be allocated among the Initial Investor, such other selling shareholders
     and the Company pro rata on the basis of the relative number of shares of
     Common Stock covered by this Agreement, Third-Party Shares and Company
     Shares, respectively.

          If as a result of the proration provisions of this Section 2(e)(ii),
any Initial Investor is not entitled to include all such Registrable Securities
in such registration, such Initial Investor may elect to withdraw its request to
include any Registrable Securities in such registration.  With respect to
registrations pursuant to this Section 2(e), the number of securities required
to satisfy any underwriters' over-allotment option shall be allocated among the
Initial Investor, such other selling shareholders and the Company pro rata on
the basis of the relative number of shares of Common Stock covered by this
Agreement, Third-Party Shares and Company Shares, respectively.

          3.   Obligations of the Company

          In connection with the registration of the Registrable Securities, the
Company shall:

          (a)  Promptly (i) prepare and file with the Commission such amendments
(including post-effective amendments) to the Registration Statement and
supplements to the Prospectus as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the Prospectus forming part
thereof to be current and useable by Investors for resales of the Registrable
Securities for a period of two years from the date on which the Registration
Statement is first declared effective by the Commission (the "Effective Time")
or such shorter period that will terminate when all the Registrable Securities
covered by the Registration Statement have been sold pursuant thereto in
accordance with the plan of distribution provided in the Prospectus, transferred
pursuant to Rule 144 under the Securities Act or otherwise transferred in a
manner that results in the delivery of new securities not subject to transfer
restrictions under the Securities Act (the "Registration Period") and (ii) take
all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, not misleading and
(B) the Prospectus forming part of the Registration Statement, and any amendment
or supplement thereto, does not at any time during the Registration Period
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;

          (b) During the Registration Period, comply with the provisions of the
Securities Act with respect to the Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the Investors as set forth in the Prospectus forming part of the
Registration Statement;

          (c) (i) Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus (including any supplements thereto), provide draft copies thereof
(including a copy of the accountant's consent letter to be included in the
filing) to the Investors and reflect in such documents all such comments as the
Investors reasonably may propose and (ii) furnish to each Investor whose
Registrable Securities are included in the Registration Statement and its legal
counsel identified to the Company, (A) promptly after the same is prepared and
publicly distributed, filed with the Commission, or received by the Company, one
copy of the Registration Statement, each Prospectus, and each amendment or
supplement thereto, and (B) such number of copies of the Prospectus and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;

          (d) (i) Register or qualify the Registrable Securities covered by the
Registration Statement under such securities or "blue sky" laws of such
jurisdictions as the Investors who hold a majority-in-interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in such jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary

                                      101
<PAGE>

to maintain the effectiveness thereof at all times during the Registration
Period, (iii) take all such other lawful actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all such other lawful actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (A) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (B) subject itself to general taxation in any such
jurisdiction or (C) file a general consent to service of process in any such
jurisdiction;

          (e)  As promptly as practicable after becoming aware of such event,
notify each Investor of the occurrence of any event, as a result of which the
Prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver a
number of copies of such supplement and amendment to each Investor as such
Investor may reasonably request;

          (f)  As promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time and take all lawful action
to effect the withdrawal, recession or removal of such stop order or other
suspension;

          (g)  Cause all the Registrable Securities covered by the Registration
Statement to be listed on the principal national securities exchange, and
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

          (h)  Maintain a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement;

          (i)  Cooperate with the Investors who hold Registrable Securities
being offered to facilitate the timely preparation and delivery of certificates
for the Registrable Securities to be offered pursuant to the registration
statement and enable such certificates for the Registrable Securities to be in
such denominations or amounts, as the case may be, as the Investors reasonably
may request and registered in such names as the Investor may request; and,
within three business days after a registration statement which includes
Registrable Securities is declared effective by the Commission, deliver and
cause legal counsel selected by the Company to deliver to the transfer agent for
the Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such registration statement) an appropriate
instruction and, to the extent necessary, an opinion of such counsel;

          (j)  Take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Investors of their Registrable
Securities in accordance with the intended methods therefor provided in the
Prospectus which are customary under the circumstances;

          (k)  Make generally available to its security holders as soon as
practicable, but in any event not later than three (3) months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Registration Statement, and (ii) the effective date of each post-effective
amendment to the Registration Statement, as the case may be, an earnings
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);

          (1)  In the event of an underwritten offering, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;

                                      102
<PAGE>

          (m)  (i) Make reasonably available for inspection by Investors, any
underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by such
Investors or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by such Investors or any such
underwriter, attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
designated in writing by the Company as confidential, proprietary or containing
any material nonpublic information shall be kept confidential by such Investors
and any such underwriter, attorney, accountant or agent (pursuant to an
appropriate confidentiality agreement in the case of any such holder or agent),
unless such disclosure is made pursuant to judicial process in a court
proceeding (after first giving the Company an opportunity promptly to seek a
protective order or otherwise limit the scope of the information sought to be
disclosed) or is required by law, or such records, information or documents
become available to the public generally or through a third party not in
violation of an accompanying obligation of confidentiality; and provided,
further, that, if the foregoing inspection and information gathering would
otherwise disrupt the Company's conduct of its business, such inspection and
information gathering shall, to the maximum extent possible, be coordinated on
behalf of the Investors and the other parties entitled thereto by one firm of
counsel designed by and on behalf of the majority in interest of Investors and
other parties;

          (n)  In connection with any underwritten offering, make such
representations and warranties to the Investors participating in such
underwritten offering and to the managers, in form, substance and scope as are
customarily made by the Company to underwriters in secondary underwritten
offerings;

          (o)  In connection with any underwritten offering, obtain opinions of
counsel to the Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managers) addressed to the
underwriters, covering such matters as are customarily covered in opinions
requested in secondary underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of the opinion and as of the Effective Time of the Registration Statement or
most recent post-effective amendment thereto, as the case may be, the absence
from the Registration Statement and the Prospectus, including any documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, subject to customary
limitations);

          (p)  In connection with any underwritten offering, obtain "cold
comfort" letters and updates thereof from the independent public accountants of
the Company (and, if necessary, from the independent public accountants of any
subsidiary of the Company or of any business acquired by the Company, in each
case for which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each underwriter
participating in such underwritten offering (if such underwriter has provided
such letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed), in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
secondary underwritten offerings;

          (q)  In connection with any underwritten offering, deliver such
documents and certificates as may be reasonably required by the managers, if
any; and

          (r)  In the event that any broker-dealer registered under the Exchange
Act shall be an "Affiliate" (as defined in Rule 2729(b)(1) of the rules and
regulations of the National Association of Securities Dealers, Inc. (the "NASD
Rules") (or any successor provision thereto)) of the Company or has a "conflict
of interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor
provision thereto)) and such broker-dealer shall underwrite, participate as a
member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Registration
Statement, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including, without limitation, by (A)
engaging a "qualified independent underwriter" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor provision thereto)) to participate in the
preparation of the Registration Statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect

                                      103
<PAGE>

thereof and to recommend the public offering price of such Registrable
Securities, (B) indemnifying such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof, and
(C) providing such information to such broker-dealer as may be required in order
for such broker-dealer to comply with the requirements of the NASD Rules.

          4.   Obligations of the Investors

          In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:

          (a)  It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.  As least seven
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if such Investor elects to
have any of its Registrable Securities included in the Registration Statement.
If at least two business days prior to the anticipated filing date the Company
has not received the Requested Information from in Investor (a "Non-Responsive
Investor"), then the Company may file the Registration Statement without
including Registrable Securities of such Non-Responsive Investor and have no
further obligations to the Non-Responsive Investor;

          (b)  Each Investor by its acceptance of the Registrable Securities
agrees to cooperate with the Company in connection with the preparation and
filing of the Registration Statement hereunder, unless such Investor has
notified the Company in writing of its election to exclude all of its
Registrable Securities from the Registration Statement; and

          (c)  Each Investor agrees that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in Section 3(e) or
3(f), it shall immediately discontinue its disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(e) and, if so directed by the Company, such
Investor shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.

          5.   Expenses of Registration

          All expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Section 3, but including, without limitation, all registration, listing, and
qualifications fees, printing and engraving fees, accounting fees, and the fees
and disbursements of counsel for the Company, and the reasonable fees of one
firm of counsel to the holders of a majority in interest of the Registrable
Securities shall be borne by the Company.

          6.   Indemnification and Contribution

          (a)  The Company shall indemnify and hold harmless each Investor and
each underwriter, if any, which facilitates the disposition of Registrable
Securities, and each of their respective officers and directors and each person
who controls such Investor or underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes hereinafter referred to as an "Indemnified Person") from and against
any losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, not misleading, or

                                      104
<PAGE>

arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Indemnified Person for all reasonable legal and other expenses
incurred by them in connection with investigating or defending any such action
or claim as and when such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the occurrence of an event of the type specified in Section 3(e), the use by
the Indemnified Person of an outdated or defective Prospectus after the Company
has provided to such Indemnified Person written notice that such Prospectus is
outdated or defective.

          (b)  Indemnification by the Investors and Underwriters.  Each Investor
agrees, as a consequence of the inclusion of any of its Registrable Securities
in a Registration Statement, and each underwriter, if any, which facilitates the
disposition of Registrable Securities shall agree, as a consequence of
facilitating such disposition of Registrable Securities, severally and not
jointly, to (i) indemnify and hold harmless the Company, its directors
(including any person who, with his or her consent, is named in the Registration
Statement as a director nominee of the Company), its officers and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Registration Statement or Prospectus or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
light of the circumstances under which they were made, in the case of the
Prospectus), not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such holder or underwriter expressly for use
therein; provided, however, that no Investor or underwriter shall be liable
under this Section 6(b) for any amount in excess of the net proceeds paid to
such Investor or underwriter in respect of shares sold by it, and (ii) reimburse
the Company for any legal or other expenses incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.

          (c)  Notice of Claims, etc.  Promptly after receipt by a party seeking
indemnification pursuant to this Section 6 (an "Indemnified Party") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 6 is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure.  In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof.  Notwithstanding the assumption of the defense of
any Claim by the Indemnifying Party, the Indemnified Party shall have the right
to employ separate legal counsel and to participate in the defense of such
Claim, and the Indemnifying Party shall bear the reasonable fees, out-of-pocket
costs and expenses of such separate legal counsel to the Indemnified Party if
(and only if): (x) the Indemnifying Party shall have agreed to pay such fees,
costs and expenses, (y) the Indemnified Party and the Indemnifying Party shall
reasonably have concluded that representation of the Indemnified Party by the
Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party, or (z) the Indemnifying Party shall have failed to
employ legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim.  If
the Indemnified Party employs separate legal counsel in circumstances other than
as described in clauses (x), (y) or (z) above, the fees, costs and expenses of
such legal counsel shall be borne exclusively by the Indemnified Party.  Except
as provided above, the Indemnifying Party shall not, in connection with any
Claim in the same jurisdiction, be liable for the fees and expenses of more than
one firm of counsel for the Indemnified Party (together

                                      105
<PAGE>

with appropriate local counsel). The Indemnified Party shall not, without the
prior written consent of the Indemnifying Party (which consent shall not
unreasonably be withheld), settle or compromise any Claim or consent to the
entry of any judgment that does not include an unconditional release of the
Indemnifying Party from all liabilities with respect to such Claim or judgment.

          (d)  Contribution. If the indemnification provided for in this Section
6 is unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnifying Party or by such Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Investors or any underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 6(d).
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Investors and any underwriters in this
Section 6(d) to contribute shall be several in proportion to the percentage of
Registrable Securities registered or underwritten, as the case may be, by them
and not joint.

          (e)  Notwithstanding any other provision of this Section 6, in no
event shall any (i) Investor be required to undertake liability to any person
under this Section 6 for any amounts in excess of the dollar amount of the
proceeds to be received by such Investor from the sale of such Investor's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Registration Statement under which such
Registrable Securities are to be registered under the Securities Act and (ii)
underwriter be required to undertake liability to any Person hereunder for any
amounts in excess of the aggregate discount, commission or other compensation
payable to such underwriter with respect to the Registrable Securities
underwritten by it and distributed pursuant to the Registration Statement.

          (f)  The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 6 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company.  The remedies provided in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

          7.   Rule 144

          With a view to making available to the Investors the benefits of Rule
144 under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to
use its best efforts to:

          (a)  comply with the provisions of paragraph (c) (1) of Rule 144; and

          (b)  file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of any Investor, make available other information as required
by, and so long as necessary to permit sales of, its Registrable Securities
pursuant to Rule 144.

                                      106
<PAGE>

          8.   Assignment

          The rights to have the Company register Registrable Securities
pursuant to this Agreement shall be automatically assigned by the Investors to
any permitted transferee of all or any portion of such Registrable Securities
(or all or any portion of the Preferred Shares or Warrants of the Company which
is convertible into such securities) only if:  (a) the Investor agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment, the securities so transferred or assigned to the
transferee or assignee constitute Restricted Securities, and (d) at or before
the time the Company received the written notice contemplated by clause (b) of
this sentence the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions contained herein.

          9.   Amendment and Waiver

          Any provision of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who hold a majority-in-interest of the Registrable Securities.
Any amendment or waiver effected in accordance with this Section 9 shall be
binding upon each Investor and the Company.

          10.  Miscellaneous

          (a)  A person or entity shall be deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities.  If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

          (b)  If, after the date hereof and prior to the Commission declaring
the Registration Statement to be filed pursuant to Section 2(a) effective under
the Securities Act, the Company grants to any Person any registration rights
with respect to any Company securities which are more favorable to such other
Person than those provided in this Agreement, then the Company forthwith shall
grant (by means of an amendment to this Agreement or otherwise) identical
registration rights to all Investors hereunder.

          (c)  Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid, or
by a nationally recognized overnight courier service, and shall be deemed given
when so delivered personally or by overnight courier service, or, if mailed,
three days after the date of deposit in the United States mails, as follows:

     (i)  if to the Company, to:

                    American TeleSource International, Inc.
                    12500 Network Boulevard, Suite 407
                    San Antonio, Texas 78249
                    (210) 558-6090
                    (210) 558-6095 (Fax)
                    Attention:  H. Douglas Saathoff

                                      107
<PAGE>

                    with a copy to:

                    Alice L. King, Esq.
                    Corporate Counsel
                    American TeleSource International, Inc.
                    12500 Network Boulevard, Suite 407
                    San Antonio, Texas 78249
                    (210) 558-6090
                    (210) 558-6095 (Fax)

     (ii)   if to the Initial Investor, to:

                    The Shaar Fund Ltd.,
                    c/o Levinson Capital Management
                    2 World Trade Center, Suite 1820
                    New York, NY 10048
                    Attention:  Samuel Levinson
                    (212) 432-7711
                    (212) 432-7771 (Fax)

                    with a copy to:

                    Cadwalader, Wickersham & Taft
                    100 Maiden Lane
                    New York, NY 10038
                    Attention:  Dennis J. Block, Esq.
                    (212) 504-5555
                    (212) 504-5557 (Fax)

     (iii)  if to any other Investor, at such address as such Investor shall
     have provided in writing to the Company.

The Company, the Initial Investor or any Investor may change the foregoing
address by notice given pursuant to this Section 10(c).

          (d)  Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

          (e)  This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York.  Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.

          (f)  The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.  It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

                                      108
<PAGE>

          (g)  The Company shall not enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Company is not currently a party to any agreement
granting any registration rights with respect to any of its securities to any
person which conflicts with the Company's obligations hereunder or gives any
other party the right to include any securities in any Registration Statement
filed pursuant hereto, except for such rights and conflicts as have been
irrevocably waived. Without limiting the generality of the foregoing, without
the written consent of the holders of a majority in interest of the Registrable
Securities, the Company shall not grant to any person the right to request it to
register any of its securities under the Securities Act unless the rights so
granted are subject in all respect to the prior rights of the holders of
Registrable Securities set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement. The restrictions on the
Company's rights to grant registration rights under this paragraph shall
terminate on the date the Registration Statement to be filed pursuant to Section
2(a) is declared effective by the Commission.

          (h)  This Agreement, the Securities Purchase Agreement, the Escrow
Instructions, dated as of a date even herewith (the "Escrow Instructions"),
between the Company, the Initial Investor and Cadwalader, Wickersham & Taft, the
Preferred Shares and the Warrants constitute the entire agreement among the
parties hereto with respect to the subject matter hereof.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein.  This Agreement, the Securities Purchase Agreement, the
Escrow Instructions, the Preferred Shares and the Warrants supersede all prior
agreements and undertakings among the parties hereto with respect to the subject
matter hereof.

          (i)  Subject to the requirements of Section 8 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.

          (j)  All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

          (k)  The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.

          (1)  The Company acknowledges that any failure by the Company to
perform its obligations under Section 3, or any delay in such performance could
result in direct damages to the Investors and the Company agrees that, in
addition to any other liability the Company may have by reason of any such
failure or delay, the Company shall be liable for all direct damages caused by
such failure or delay.

          (m)  This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement.  A facsimile transmission of this signed Agreement shall be
legal and binding on all parties hereto.

                        [NO FURTHER TEXT ON THIS PAGE.]

                                      109
<PAGE>

          In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.

                                 American TeleSource International, Inc.

                                 By: /s/ H. Douglas Saathoff
                                    ------------------------------
                                 Name:  H. Douglas Saathoff
                                 Title: Chief Financial Officer

                                 The Shaar Fund Ltd.

                                 By: /s/ Samuel Levinson
                                    ------------------------------
                                 Name:  Samuel Levinson
                                 Title: Managing Director

                                      110<PAGE>

                                                                  EXHIBIT 10.25

                          TRAVELBYUS-IT INCORPORATED

                                      AND

                       TRAVELBYUS-GALAXSEA INCORPORATED

                              PURCHASE OF ASSETS

                                      OF

                           INTERNATIONAL TOURS, INC.

                                      AND

                       GALAXSEA CRUISES AND TOURS, INC.

                                      AND

                             PURCHASE OF SHARES OF

                              I. T. CRUISE, INC.

                               October 13, 1999
<PAGE>

THIS AGREEMENT is made as of the 13/th/ day of October, 1999.

A M O N G:

          INTERNATIONAL TOURS, INC., a corporation incorporated under the laws
          of the State of Oklahoma

          ("International Tours")

                                                               OF THE FIRST PART
                                    - AND -

          GALAXSEA CRUISES AND TOURS, INC., a corporation incorporated under the
          laws of the State of Oklahoma

          ("GalaxSea")
                                                              OF THE SECOND PART

          ("International Tours" and "GalaxSea" sometimes individually referred
          as a "Vendor" and collectively as the "Vendors")

                                    - AND -

          NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION, a corporation
          incorporated under the laws of the State of Delaware

          ("NAGE")

                                                               OF THE THIRD PART

                                    - AND -

          TRAVELBYUS.COM LTD., a corporation incorporated under the laws of the
          Province of Ontario

          ("Travelbyus")

                                                              OF THE FOURTH PART
<PAGE>

2 -

                                    - AND -

          TRAVELBYUS-IT INCORPORATED, a corporation incorporated under the laws
          of the State of Delaware

          ("Travelbyus-IT")

                                                               OF THE FIFTH PART

                                    - AND -

          TRAVELBYUS-GALAXSEA INCORPORATED, a corporation incorporated under the
          laws of the State of Delaware

          ("Travelbyus-GalaxSea")

                                                               OF THE SIXTH PART

WHEREAS International Tours is engaged in the marketing of leisure travel
programs to its network of affiliated retail travel agencies and all business
ancillary thereto (the "International Tours Business"), I.T. Cruise, Inc. ("IT
Cruise"), is engaged in the marketing of cruise programs and promotions to
retail travel agencies affiliated with International Tours and all business
ancillary thereto (the "IT Cruise Business") and GalaxSea is engaged in the
marketing of cruise programs and promotions to retail travel agencies affiliated
with GalaxSea and all business ancillary thereto (the "GalaxSea Business");

AND WHEREAS the Vendors have agreed to sell to Travelbyus-IT and Travelbyus-
GalaxSea (collectively, the "Purchaser") and the Purchaser has agreed to
purchase from the Vendors certain property, assets and undertaking of the
Vendors relating to the Purchased Business (as hereinafter defined), all upon
and subject to the terms and conditions hereof and NAGE has agreed to sell to
Travelbyus-IT and Travelbyus-IT has agreed to purchase from NAGE, all of the
issued and outstanding shares of IT Cruise, all on and subject to the terms and
conditions hereof;

AND WHEREAS NAGE has a direct interest in GalaxSea and will benefit from the
sale of the GalaxSea Assets (as herein defined) and receipt of the GalaxSea
Purchase Price (as herein defined) and has accordingly agreed to provide certain
covenants, agreements, representations and warranties and indemnities in favour
of the Purchaser and Travelbyus as hereinafter provided;
<PAGE>

3 -

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the respective
covenants, agreements, representations, warranties and indemnities of the
parties herein contained and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each party), the parties
hereto hereby covenant and agree as follows:

                          ARTICLE 1 - INTERPRETATION

1.1  Defined Terms

For the purposes of this Agreement, unless the context otherwise requires, the
following terms shall have the meanings set out below and grammatical variations
of such terms shall have corresponding meanings:

     (1)   "Accounts Receivable" means all accounts receivable and trade
           accounts receivable accruing after the Effective Date;

     (a)   "Affiliate" has the meaning set out in the OBCA;

     (b)   "Associate" has the meaning set out in the OBCA;

     (c)   "Assumed Liabilities" has the meaning set out in section 4.1;

     (d)   "Business Day" means any day, other than a Saturday or a Sunday, on
           which the principal chartered banks located in Toronto, Canada are
           open for business during normal banking hours;

     (e)   "Claim" has the meaning set out in section 11.3;

     (f)   "Clearance/Mailing Obligation" means the obligation of NAGE and
           International Tours to:

           (i)   forthwith prepare an information circular in prescribed form
                 outlining the terms and conditions of the sale of the Purchased
                 Shares and the GalaxSea Assets, providing requisite disclosure
                 as to the business and affairs of the Purchaser and Travelbyus
                 and describing the written consent resolution of International
                 Tours as majority shareholder (the "Information Circular");

           (ii)  file forthwith after its prompt preparation the Information
                 Circular with the SEC;
<PAGE>

4 -

           (iii) expeditiously and diligently clear any and all deficiencies
                 raised by the SEC; and

           (iv)  within 10 days after either; (a) clearance of the Information
                 Circular by the SEC; or (b) 10 days after the SEC has duly
                 received the Information Circular and has taken no action, to
                 mail the Information Circular (as revised or amended, if
                 applicable) to shareholders of NAGE in accordance with
                 requisite securities and corporate law and to advise the
                 Purchaser and Travelbyus in writing of the mailing date and the
                 date which will therefore be the Escrow Release Date;

     (g)   "Closing" means, as the case may be: (i) the consummation of the
           purchase and sale of the International Tours Assets effective as of
           the Effective Date commencing as of the Time of Closing on the
           Closing Date; and (ii) the consummation in escrow (pursuant to the
           Closing Escrow Agreement) of the purchase and sale of the Purchased
           Shares and the GalaxSea Assets effective as of the Effective Date,
           commencing as of the Escrow Release Date;

     (h)   "Closing Date" means October 13, 1999 or such other date as the
           Vendors, NAGE, the Purchaser and Travelbyus may mutually determine;

     (i)   "Closing Escrow Agreement" means the Closing Escrow Agreement to be
           entered into by the Parties and GPM on Closing with respect to the
           Purchased Shares and the GalaxSea Assets;

     (j)   "Contract" means any agreement, indenture, contract, lease, deed of
           trust, licence, option, instrument or other commitment, whether
           written or oral;

     (k)   "Date Data" means any data or input  which includes an indicate of or
           reference to date;

     (l)   "Direct Claim" has the meaning set out in section 11.3;

     (m)   "Effective Date" means October 1, 1999;

     (n)   "Employee Plans" means all pension, retirement, disability, medical,
           dental or other health insurance plans, life insurance or other death
           benefit plans, any stock option, bonus or other incentive plans,
           vacation benefit plans, severance plans or other employee benefit
           plans or arrangements to which the applicable company is a party or
           by which the applicable company is bound or with respect to which
           payments or contributions the applicable company may otherwise have
           any liability;

     (o)   "Encumbrance" means any encumbrance, lien, charge, hypothec, pledge,

<PAGE>

5 -

           mortgage, title retention agreement, security interest of any nature,
           adverse claim, exception, reservation, easement, right of occupation,
           any matter capable of registration against title, option, right of
           pre-emption, privilege or any Contract to create any of the
           foregoing;

     (p)   "Escrow Agent" means Montreal Trust Company of Canada;

     (q)   "Escrow Release Date" means the earlier of (i) the date upon which
           the escrow pursuant to the Closing Escrow Agreement is released as a
           result of NAGE's and International Tour's fulfilment of the
           Clearance/Mailing Obligation, whereupon Closing of the purchase and
           sale of the Purchased Shares shall be deemed to have occurred as of
           the Time of Closing on the Closing Date and whereupon Closing of the
           purchase and sale of the GalaxSea Assets shall be deemed to have
           occurred as of the Effective Date; and (ii) March 31, 2000;

     (r)   "Excluded Assets" has the meaning set out in section 2.2;

     (s)   "Excluded Liabilities" has the meaning set out in section 4.2;

     (t)   "GalaxSea Assets" means the following property and assets used in
           connection with or otherwise relating to the GalaxSea Business,
           including for greater certainty and without limitation, those owned,
           leased and/or operated by GalaxSea West;

           Equipment. The machinery, equipment, fixtures, furniture,
                   furnishings, parts, and other fixed assets of or relating to
                   or used in the operation of the GalaxSea Business as
                   described in Schedule 1.1(t)(i);

           Prepaid Expenses. The prepaid expenses and the benefits thereof
                   relating to the GalaxSea Business as described in Schedule
                   1.1(t)(ii);

           Agreements and Contracts. The rights under leases of personal and
                   real property (whether as lessee or lessor), orders or
                   contracts for the provision of goods or services (whether as
                   buyer or seller), distribution, associate, supplier,
                   franchise and agency agreements and all other Contracts of or
                   relating to the GalaxSea Business, described in Schedule
                   1.1(t)(iii) and all Accounts Receivable with respect thereto;

           Licences.  All of the Licences described in Schedule 1.1(t)(iv) and
                   all Accounts Receivable with respect thereto;

           Intellectual Property. All trade or brand names, business names,
                   trade marks, trade mark registrations and applications,
                   service marks,
<PAGE>

6 -
                   service mark registrations and applications, copyrights,
                   copyright registrations and applications, patents, internet
                   domain names and registrations, 1-800 telephone numbers,
                   patent registrations and applications and other patent rights
                   (including any patents issued on such applications or
                   rights), trade secrets, proprietary manufacturing information
                   and know-how, equipment and parts lists and descriptions,
                   instructions manuals, inventions, inventors' notes, research
                   data, unpatented blue prints, drawings and designs, formulae,
                   processes, technology and other intellectual property,
                   together with all rights under licences, registered user
                   agreements, technology transfer agreements and other
                   agreements or instruments relating to any of the foregoing
                   (collectively, the "Intellectual Property"), including
                   without limitation, the trademarks, business names, design
                   marks, copyrights, patents, licences and agreements described
                   in Schedule 1.1(t)(v);

           Computer Software. The computer software, including all rights under
                   licences and other agreements or instruments relating thereto
                   set out in Schedule 1.1(t)(vi);

           Books and Records. All books and records (other than minute books and
                   related corporate records and those required by law to be
                   retained by GalaxSea, copies of which will be made available
                   to the Purchaser and Travelbyus, provided that the minute
                   books and related corporate records of GalaxSea West will be
                   provided to Travelbyus-GalaxSea on Closing) including without
                   limitation, customer lists, sales records, price lists and
                   catalogues, sales literature, vouchers, advertising and
                   related material, employee manuals, (but not personnel
                   records), supply records, inventory records and
                   correspondence files (together with, in the case of any such
                   information that is stored electronically, the media on which
                   the same is stored);

           (viii)  Goodwill. All goodwill, together with the exclusive right for
                   the Purchaser to represent itself as carrying on the GalaxSea
                   Business in succession to GalaxSea and GalaxSea West and the
                   right to use any words indicating that the GalaxSea Business
                   is so carried on, including the Purchaser's right to use the
                   name "GalaxSea", or any variation thereof, as part of the
                   name or style under which the GalaxSea Business or any part
                   thereof is carried on by the Purchaser; and

           (ix)    Shares. All of the issued and outstanding shares (the
                   "GalaxSea West Shares") in the capital of GalaxSea West
                   Corporation ("GalaxSea West").
<PAGE>

7 -

     (u)   "GalaxSea Business" has the meaning set out in the preambles to this
           Agreement;

     (v)   "GalaxSea Financial Statements" means the unaudited financial
           statements of GalaxSea as at the year ended December 31, 1998 and for
           the six months ending June 30, 1999;

     (w)   "GalaxSea Purchase Price" has the meaning set out in section 2.1(b);

     (x)   "GalaxSea Transferred Employees" means the employees listed on
           Schedule 1.1(x);

     (y)   "Governmental Authority" means any government, regulatory authority,
           governmental department, agency, commission, board, tribunal, crown
           corporation or court or other law, rule or regulation-making entity
           having or purporting to have jurisdiction on behalf of any nation or
           province or state or other subdivision thereof or any municipality,
           district or other subdivision thereof;

     (z)   "GPM" means Glast, Phillips & Murray, PC;

     (aa)  "Holdback" means the US$100,000 to be placed in escrow pursuant to
           the Representation and Warranty Escrow Agreement;

     (bb)  "Indemnified Party" has the meaning set out in section 11.3;

     (cc)  "Indemnifying Party" has the meaning set out in section 11.3;

     (dd)  "Information Circular" has the meaning set out in the definition of
           Clearance/Mailing Obligation;

     (ee)  "Intellectual Property" has the meaning set out in subsection
           1.1(t)(v);

     (ff)  "International Tours Assets" means the following property and assets
           used in connection with or otherwise relating to the International
           Tours Business;

           Equipment. The machinery, equipment, fixtures, furniture,
                   furnishings, parts, and other fixed assets of or relating to
                   or used in the operation of the International Tours Business
                   described in Schedule 1.1(ff)(i);

           Prepaid Expenses. The prepaid expenses and benefits thereof relating
                   to the International Tours Business described in Schedule
                   1.1(ff)(ii);

           Agreements and Contracts. The rights under leases of personal and
                   real property (whether as lessee or lessor), orders or
                   contracts for the
<PAGE>

8 -

                   provision of goods or services (whether as buyer or seller),
                   distribution, associate, supplier, franchise, and agency
                   agreements and all other Contracts, of or relating to the
                   International Tours Business described in Schedule
                   1.1(ff)(iii) and all Accounts Receivable with respect
                   thereto;

           Licences. All of the Licences described in Schedule 1.1(ff)(iv) and
                   all Accounts Receivable with respect thereto;

           Intellectual Property. All Intellectual Property including without
                   limitation, the trademarks, business names, design marks,
                   copyrights, patents, licences and agreements described in
                   Schedule 1.1(ff)(v);

           Computer Software. The computer software, including all rights under
                   licences and other agreements or instruments relating thereto
                   set out in Schedule 1.1(ff)(vi);

           Books and Records. All books and records (other than minute books and
                   related corporate records and those required by law to be
                   retained by International Tours, copies of which will be made
                   available to the Purchaser and Travelbyus), including without
                   limitation, customer lists, sales records, price lists and
                   catalogues, sales literature, vouchers, advertising and
                   related material, sales records, employee manuals, (but not
                   personnel records), supply records, inventory records and
                   correspondence files (together with, in the case of any such
                   information that is stored electronically, the media on which
                   the same is stored); and

           Goodwill. All goodwill, together with the exclusive right for the
                   Purchaser to represent itself as carrying on the
                   International Tours Business in succession to International
                   Tours and the right to use any words indicating that the
                   International Tours Business is so carried on, including the
                   Purchaser's right to use the name "International Tours", or
                   any variation thereof, as part of the name or style under
                   which the International Tours Business or any part thereof is
                   carried on by the Purchaser;

     (gg)  "International Tours Business" has the meaning set out in the
           preambles to this Agreement;

     (hh)  "International Tours Financial Statements" means the unaudited
           financial statements of International Tours as at the year ended
           December 31, 1998 and for the six months ended June 30, 1999;
<PAGE>

9 -

     (ii)  "International Tours Purchase Price" has the meaning set out in
           section 2.1(a);

     (jj)  "International Tours Stock Component" has the meaning set out in
           section 2.1(a);

     (kk)  "International Tours Transferred Employees" means the employees who
           are listed in Schedule 1.1(kk);

     (ll)  "IT Cruise Assets" means all property and assets of IT Cruise,
           including for greater certainty and without limitation, the
           following:

           Equipment. The machinery, equipment, fixtures, furniture,
                   furnishings, parts, and other fixed assets of or relating to
                   or used in the operation of the IT Cruise Business described
                   in Schedule 1.1(ll)(i);

           Prepaid Expenses. The prepaid expenses and the benefits thereof
                   relating to IT Cruise described in Schedule 1.1(ll)(ii);

           Agreements and Contracts. The rights under leases of personal and
                   real property (whether as lessee or lessor), orders or
                   contracts for the provision of goods or services (whether as
                   buyer or seller), distribution, associate, supplier,
                   franchise and agency agreements and all other Contracts of or
                   relating to IT Cruise, described in Schedule 1.1(ll)(iii) and
                   all Accounts Receivable with respect thereto;

           Licences. All of the Licences described in Schedule 1.1(ll)(iv) and
                   all Accounts Receivable with respect thereto;

           Intellectual Property. All Intellectual Property including without
                   limitation, the trademarks, business names, design marks,
                   copyrights, patents, licences and agreements described in
                   Schedule 1.1(ll)(v);

           Computer Software. The computer software, including all rights under
                   licences and other agreements or instruments relating thereto
                   set out in Schedule 1.1(ll)(vi);

           Books and Records. All books and records (including minute books and
                   related corporate records) including without limitation,
                   customer lists, sales records, price lists and catalogues,
                   sales literature, vouchers, advertising and related material,
                   sales records, employee manuals, (but not personnel records),
                   supply records, inventory records and correspondence files
                   (together with, in the case of any such information that is
                   stored electronically, the media on which the same is
                   stored); and
<PAGE>

10 -

           Goodwill.  All goodwill;

     (mm)  "IT Cruise Business" has the meaning set out in the preambles to this
           Agreement;

     (nn)  "IT Cruise Purchase Price" has the meaning set out in section 2.3;

     (oo)  "IT Cruise Cash Component" has the meaning set out in section 2.3;

     (pp)  "IT Cruise Financial Statements" means the unaudited financial
           statements of IT Cruise as at the year ended December 31, 1998 and
           for the six months ended June 30, 1999;

     (qq)  "IT Cruise Stock Component" has the meaning set out in section 2.3;

     (rr)  Intentionally Deleted;

     (ss)  "Leased Premises"  has the meaning set out in section 6.1(h);

     (tt)  "Licences" means all licences, permits, approvals, consents,
           certificates, registrations and authorizations (whether governmental,
           regulatory or otherwise;

     (uu)  "LOI" means the letter agreement executed as of March 30, 1999
           between the Vendors, IT Cruise, NAGE and Travelgateways.com Inc., as
           amended April 7, 1999 and assigned to Travelbyus on July 23, 1999;

     (vv)  "Losses" means, in respect of any matter, all claims, demands,
           proceedings, losses, damages, liabilities, deficiencies, costs and
           expenses (including without limitation, all legal and other
           professional fees and disbursements, interest, penalties and amounts
           paid in settlement) arising directly or indirectly as a consequence
           of such matter;

     (ww)  "Management Agreement" means the interim management agreement to be
           entered into by GalaxSea, NAGE, IT Cruise, Travelbyus and the
           Purchaser on Closing, which agreement shall be effective as of the
           Effective Date;

     (xx)  "OBCA" means the Business Corporations Act, Ontario;

     (yy)  "Other Amounts" has the meaning set out in section 11.1(d);

     (zz)  "Parties" means collectively, the Vendors, NAGE, Travelbyus and the
           Purchaser and "Party" means any one of them;
<PAGE>

11 -

     (aaa) "Purchased Assets" means collectively the International Tours Assets
           and the GalaxSea Assets;

     (bbb) "Purchased Business" means collectively, the International Tours
           Business and the GalaxSea Business;

     (ccc) "Purchased Shares" means all of the issued and outstanding shares in
           the capital of IT Cruise;

     (ddd) "Purchaser" has the meaning set out in the preambles to this
           Agreement;

     (eee) "Representation and Warranty Escrow Agreement" means the
           representation and warranty escrow agreement to be entered into by
           the Parties and the Escrow Agent with respect to the Holdback;

     (fff) "SEC" means the Securities and Exchange Commission;

     (ggg) "Taxes" means and includes without limitation, all taxes, duties,
           fees, premiums, assessments, imposts, levies and other charges of any
           kind whatsoever imposed by any Governmental Authority, together with
           all interest, penalties, fines, additions to tax or other additional
           amounts imposed in respect thereof, including without limitation,
           those levied on or measured by or referred to as income, gross
           receipts, profits, capital transfer, land transfer, sales, goods and
           services, use, value-added, excise, stamp, withholding, business,
           franchising, property, payroll, employment, health, social services,
           education and social security taxes, all surtaxes, all customs duties
           and import and export taxes, all license, franchise and registration
           fees and all employment insurance, health insurance and United States
           and other government pension plan premiums;

     (hhh) "Third Party" has the meaning set out in section 11.3;

     (iii) "Third Party Claim" has the meaning set out in section 11.3;

     (jjj) "Time of Closing" means 10:00 a.m. (Toronto time) on the Closing
           Date, or such other time on the Closing Date as the Parties may
           mutually determine;

     (kkk) "Travelbyus Financial Statements" means the audited financial
           statements of Travelbyus as at the year ended December 31, 1998;

     (lll) "TSE" means The Toronto Stock Exchange; and

     (mmm) "WSE" means the Winnipeg Stock Exchange.
<PAGE>

12 -

1.2  Currency

Unless otherwise indicated, all dollar amounts in this Agreement are expressed
in United States funds.

1.3  Sections and Headings

The division of this Agreement into Articles, sections and subsections and the
insertion of headings are for convenience of reference only and shall not affect
the interpretation of this Agreement.  Unless otherwise indicated, any reference
in this Agreement to an Article, section, subsection or Schedule refers to the
specified Article, section or subsection of or Schedule to this Agreement.

1.4  Number, Gender and Persons

In this Agreement, words importing the singular number only shall include the
plural and vice versa, words importing gender and words importing persons shall
include individuals, corporations, partnerships, associations, trusts,
unincorporated organizations, governmental bodies and other legal or business
entities of any kind whatsoever.

1.5  Accounting Principles

Any reference in this Agreement to generally accepted accounting principles
refers to generally accepted accounting principles that have been established in
the United States of America, including those approved from time to time by the
Financial Accounting Standards Board or any successor body thereto.

1.6  Entire Agreement

This Agreement together with the documents contemplated herein constitute the
entire agreement between the Parties with respect to the subject matter hereof
and supersede all prior agreements, understandings, negotiations and
discussions, whether written or oral including for greater certainty and without
limitation, the LOI.  There are no conditions, covenants, agreements,
representations, warranties or other provisions, express or implied, collateral,
statutory or otherwise, relating to the subject matter hereof except as herein
provided.

1.7  Time of Essence

Time shall be the essence of this Agreement.
<PAGE>

13 -

1.8  Applicable Law

This Agreement shall be construed, interpreted and enforced in accordance with,
and the respective rights and obligations of the Parties shall be governed by,
the laws of the State of Texas and each Party irrevocably and unconditionally
submits to the non-exclusive jurisdiction of the state and federal courts
located in Dallas County, Texas and all courts competent to hear appeals
therefrom.

1.9  Successors and Assigns

This Agreement shall enure to the benefit of and shall be binding on and
enforceable by the Parties and, where the context so permits, their respective
successors and permitted assigns.  No Party may assign any of its rights or
obligations hereunder without the prior written consent of the other Parties.

1.10 Amendments and Waivers

No amendment or waiver of any provision of this Agreement shall be binding on
any Party unless consented to in writing by such Party.  No waiver of any
provision of this Agreement shall constitute a waiver of any other provision nor
shall any waiver constitute a continuing waiver unless otherwise provided.

1.11 Schedules

The following Schedules are attached to and form part of this Agreement:

Schedule 1.1(t)(i)     -    Equipment etc. of the GalaxSea Business
Schedule 1.1(t)(ii)    -    Prepaid Expenses of the GalaxSea Business
Schedule 1.1(t)(iii)   -    Agreements and Contracts of the GalaxSea Business
Schedule 1.1(t)(iv)    -    Licenses of the GalaxSea Business
Schedule 1.1(t)(v)     -    Intellectual Property of the GalaxSea Business
Schedule 1.1(t)(vi)    -    Computer Software of the GalaxSea Business
Schedule 1.1(ff)(i)    -    Equipment etc. of the International Tours Business
Schedule 1.1(ff)(ii)   -    Prepaid Expenses of the International Tours Business
Schedule 1.1(ff)(iii)  -    Agreements and Contracts of the International Tours
                            Business
Schedule 1.1(ff)(iv)   -    Licences of the International Tours Business
Schedule 1.1(ff)(v)    -    Intellectual Property of the International Tours
                            Business
Schedule 1.1(ff)(vi)   -    Computer Software of the International Tours
                            Business
Schedule 1.1(kk)       -    International Tours Transferred Employees
Schedule 1.1(ll)(i)    -    Equipment etc. of IT Cruise
Schedule 1.1(ll)(ii)   -    Prepaid Expenses of IT Cruise
Schedule 1.1(ll)(iii)  -    Agreements and Contracts of IT Cruise
Schedule 1.1(ll)(iv)   -    Licences of IT Cruise
Schedule 1.1(ll)(v)    -    Intellectual Property of IT Cruise
<PAGE>

14 -

Schedule 1.1(ll)(vi)   -    Computer Software of IT Cruise
Schedule 1.1(x)        -    GalaxSea Transferred Employees
Schedule 2.2(a)(i)     -    Prepaid Fees, etc. of the GalaxSea Business
Schedule 2.2(a)(ii)    -    Prepaid Fees, etc. of the International Tours
                            Business
Schedule 3.3           -    Allocation of Purchase Price among Purchased Assets
Schedule 6.1(a)        -    Jurisdictions in which International Tours is
                            authorized to carry on business
Schedule 6.1(d)(i)(A)  -    Third Party Contractual Consents for the
                            International Tours Business
Schedule 6.1(f)        -    Location of the International Tours Assets
Schedule 6.1(p)(i)     -    International Tours Financial Statements
Schedule 6.1(p)(iii)   -    Competing Business of the International Tours
                            Business
Schedule 6.1(r)        -    Legal and Regulatory Proceedings
Schedule 6.1(s)        -    Customers of the International Tours Business
Schedule 6.1(t)        -    Suppliers of the International Tours Business
Schedule 6.1(u)        -    Employee Plans and Collective Agreements of the
                            International Tours Business
Schedule 6.2(a)        -    Jurisdictions in which IT Cruise is authorized to
                            carry on business
Schedule 6.2(h)        -    Location of IT Cruise Assets
Schedule 6.2(j)        -    Authorized and Issued Capital of IT Cruise
Schedule 6.2(n)        -    Third Party Consents of IT Cruise
Schedule 6.2(r)        -    IT Cruise Financial Statements
Schedule 6.2(v)        -    Tax Disclosure of IT Cruise
Schedule 6.2(x)        -    Bank Accounts of IT Cruise
Schedule 6.2(aa)(iii)  -    Competing Business of the IT Cruise Business
Schedule 6.2(ac)       -    Customers of IT Cruise
Schedule 6.2(ad)       -    Suppliers of IT Cruise
Schedule 6.3(a)        -    Jurisdictions in which GalaxSea is authorized to
                            carry on business
Schedule 6.3(cc)       -    Bank Accounts of GalaxSea West
Schedule 6.3(d)(i)(A)  -    Third Party Contractual Consents for the GalaxSea
                            Business
Schedule 6.3(e)        -    Location of the GalaxSea Assets
Schedule 6.3(o)(i)     -    GalaxSea Financial Statements
Schedule 6.3(o)(iii)   -    Competing Business of the GalaxSea Business
Schedule 6.3(r)        -    Customers of the GalaxSea Business
Schedule 6.3(s)        -    Suppliers of the GalaxSea Business
Schedule 6.3(t)        -    Employee Plans and Collective Agreements of the
                            GalaxSea Business
Schedule 7.1(f)        -    Travelbyus Financial Statements
Schedule 10.1(d)       -    Third Party Contractual Consents for IT Cruise
Schedule 11            -    Service Marks
Schedule 12            -    Disclosures Regarding International Tours Customers
<PAGE>

15 -

Schedule 13            -    Disclosures Regarding International Tours Suppliers
Schedule 14            -    Disclosures Regarding GalaxSea Suppliers
Schedule 15            -    Disclosures Regarding Accounts Payable

                         ARTICLE 2 - PURCHASE AND SALE

2.1  Purchase and Sale of Purchased Assets

Subject to the terms and conditions of this Agreement:

     (a)  International Tours shall convey, sell, assign and transfer to
          Travelbyus-IT and Travelbyus IT shall purchase from International
          Tours, effective as of the Effective Date commencing on the Time of
          Closing on the Closing Date, the International Tours Assets, free and
          clear of any and all Encumbrances, in exchange for the sum of
          US$666,666 (the "International Tours Cash Component") and 333,333
          common shares in the capital of Travelbyus(the "International Tours
          Stock Component"); provided that on Closing the International Tours
          Stock Component shall be placed in escrow pursuant to the Closing
          Escrow Agreement, to be released on the terms and conditions therein
          contained (the "International Tours Purchase Price"); and

     (b)  GalaxSea shall convey, sell, assign and transfer to Travelbyus-
          GalaxSea and Travelbyus-GalaxSea shall purchase from GalaxSea
          effective as of the Effective Date commencing on the Escrow Release
          Date pursuant to the Closing Escrow Agreement, the GalaxSea Assets,
          free and clear of any and all Encumbrances, in exchange for the sum of
          US$285,000 (the "GalaxSea Purchase Price");

2.2  Excluded Assets

For greater certainty, and without limitation, the Purchased Assets shall not
include any of the following property and assets of the Vendors (collectively,
the "Excluded Assets"):

     Cash.  Save and except in respect of the prepaid fees, commissions and
          royalties identified on Schedules 2.2(a)(i) and 2.2(a)(ii), (which
          amounts will be paid on Closing to the Purchaser) all cash on hand or
          in banks or other depositions of the Vendors as of the Effective Date;

     Accounts Receivable.  All Accounts Receivable due or accruing due to the
          Vendors in connection with the International Tours Business and the
          GalaxSea Business for the period arising prior to the Effective Date
          including without limitation, pro-rated, accrued vendor productivity
          bonuses;
<PAGE>

16 -

     Inter-company Debt.  All indebtedness of NAGE or IT Cruise and any of their
          Associates or Affiliates to any of the Vendors or IT Cruise and/or all
          indebtedness of any of the Vendors or IT Cruise and their Associates
          or Affiliates to any of the Vendors, IT Cruise or NAGE as of the
          Effective Date; and

     Income Taxes.  All income tax or payroll tax instalments paid by either of
          the Vendors and the right to receive any refund of income taxes paid
          by either of the Vendors as of the Effective Date.

2.3  Purchase and Sale of Purchased Shares

Subject to the terms and conditions of this Agreement, NAGE shall convey, sell,
assign and transfer to Travelbyus-IT and Travelbyus-IT shall purchase from NAGE,
effective as of the Effective Date commencing on the Escrow Release Date, the
Purchased Shares, free and clear of any and all Encumbrances, in exchange for
(the "IT Cruise Purchase Price") US$1,048,334 (the "IT Cruise Cash Component")
and 666,667 common shares in the capital of Travelbyus (the "IT Cruise Stock
Component").

                             ARTICLE 3 - PURCHASE

3.1  Purchase Price

The Purchase Price shall be satisfied by the payment of the International Tours
Purchase Price, the GalaxSea Purchase Price and the IT Cruise Purchase Price.

3.2  Payment of Purchase Price

At the Time of Closing, the Purchaser shall satisfy and pay the Purchase Price
to the Vendors and NAGE as follows:

     Travelbyus-IT shall deliver to International Tours a certified cheque or
          bank draft representing the International Tours Cash Component less
          US$83,333 previously advanced as and by way of a deposit pursuant to
          the LOI and less US$33,333 on account of the Holdback;

     Travelbyus-GalaxSea shall deliver to GalaxSea a certified cheque
          representing the GalaxSea Purchase Price less the sum of US$35,000
          previously advanced as and by way of a deposit pursuant to the LOI and
          less US$33,333 on account of the Holdback;

     (a)  Travelbyus-IT shall deliver to NAGE a certified cheque or bank draft
          representing the IT Cruise Cash Component less US$131,667 previously
          advanced as and by way of a deposit pursuant to the LOI and less
<PAGE>

17 -

          US$33,334 on account of the Holdback;

     (b)  Travelbyus-IT shall deliver to International Tours share certificates
          representing the International Tours Stock Component and International
          Tours shall forthwith deposit such share certificates with the Escrow
          Agent pursuant to the Closing Escrow Agreement;

     (c)  Travelbyus-IT shall deliver to NAGE share certificates representing
          the IT Cruise Stock Component and NAGE shall forthwith deposit such
          share certificates with the Escrow Agent pursuant to the Closing
          Escrow Agreement;

     (d)  the Purchaser shall deliver to the applicable Vendor a certified
          cheque or bank draft in the amount of the prepaid deposits listed on
          Schedules 1.1(t)(ii) and 1.1(ff)(ii) against delivery to the Purchaser
          by the Vendors of a certified cheque or bank draft in the amount of
          the prepaid fees listed on Schedules 2.2(a)(i) and 2.2(a)(ii); and

     In addition to payment of the Purchase Price, the Purchaser shall deliver
          to GalaxSea, International Tours IT Cruise and NAGE, as applicable,
          certified cheques or bank drafts in an amount equal to payment made by
          any of them after September 30, 1999 for expenses accruing and paid
          after September 30, 1999 relating to the International Tours Business,
          the GalaxSea Business and the IT Cruise Business.

3.3  Allocation of Purchase Price

Each of the Vendors and the Purchaser covenant and agree to allocate the
Purchase Price among the Purchased Assets in accordance with the terms and
conditions of this Agreement and specifically Schedule 3.3 and to report the
sale and purchase of the Purchased Assets for all federal, state and local tax
purposes in a manner consistent with such allocation.  Travelbyus does hereby
covenant and agree that it is the understanding of Travelbyus that the general
accepted practice in the Province of Ontario, consistent with requisite
securities laws, rules and policies published by the Ontario Securities
Commission and various telephone conversations between counsel to Travelbyus and
the Ontario Securities Commission, is that securities issued outside of the
Province of Ontario (i.e. to non-residents of Ontario) will have a 90 day
restriction on their tradeability, subject always to requisite and applicable
rules relative to the holding and sale of stock by insiders of public companies
such as Travelbyus.
<PAGE>

18 -

3.4  Transfer Taxes

The Purchaser shall be liable for and shall pay all federal and state sales
taxes (including any retail sales taxes) and all other taxes, duties, fees or
other like charges of any jurisdiction properly payable in connection with the
transfer of the Purchased Assets by the Vendors to the Purchaser.

3.5  Payment of Accounts Payable

Each Vendor hereby covenants and agrees to be responsible for and pay upon
demand by the creditor (unless payment has previously been made by suh Vendor or
is disputed in good faith by such Vendor) all debts, liabilities and obligations
in respect of or relating to the Purchased Business and the Purchased Assets of
such Vendor (exclusive of the Assumed Liabilities) up to and including the
Effective Date save and except as set forth on Schedule 15.  At the request of
the Purchaser, the applicable Vendor shall provide written evidence of payment
of accounts payable.  To the extent that there is a dispute with any particular
customer and/or supplier with respect to the validity of a particular account
payable (or a portion thereof), the applicable Vendor shall provide notice to
the Purchaser and Travelbyus together with particular details of such dispute
and the applicable Vendor and the Purchaser shall attempt to resolve the dispute
with the supplier, bearing in mind that such supplier may be a valued supplier
of the Purchased Business.

                     ARTICLE 4 - ASSUMPTION OF LIABILITIES

4.1  Assumption of Certain Liabilities by the Purchaser

Subject to the provisions of this Agreement, as part of the consummation of the
purchase and sale of the Purchased Assets, the Purchaser shall only assume and
pay in the normal course as they fall due and discharge, perform and fulfil, the
obligations and liabilities of each Vendor (the "Assumed Liabilities") in
respect of the Contracts described in Schedules 1.1(t)(iii) and 1.1(ff)(iii),
the Licences described in Schedules 1.1(t)(iv) and 1.1(ff)(iv) and the
employment obligations in respect of the GalaxSea Transferred Employees and the
International Tours Transferred Employees.  For greater certainty and without
limitation, Travelbyus-IT shall assume the Assumed Liabilities with respect to
the International Tours Business, with effect as of the Effective Date, as of
the Time of Closing on the Closing Date and Travelbyus-GalaxSea shall assume the
Assumed Liabilities with respect to the GalaxSea Business, with effect as of the
Effective Date, as of the Escrow Release Date.
<PAGE>

19 -

4.2  Non-Assumption of Excluded Liabilities

For greater certainty and without limitation, the Purchaser shall only be liable
for the Assumed Liabilities and the Purchaser is not assuming and shall not be
liable or responsible for any other debt, liability or obligation of the Vendors
incurred in connection with the Purchased Business or any other business (the
"Excluded Liabilities").

              ARTICLE 5 - CLOSING DATE AND TRANSFER OF POSSESSION

5.1  Closing Date and Place of Closing

Closing shall occur on the Closing Date at the offices of Cassels Brock &
Blackwell, Suite 2100, 40 King Street West, Toronto, Ontario, M5H 3C2 or at such
other place as the Parties may agree upon as the place of Closing.

5.2  Transfer and Delivery of Purchased Assets

Subject to compliance with the terms and conditions hereof:  (i) the transfer of
possession of the GalaxSea Assets shall be deemed to take effect as of the
Effective Date, commencing at midnight on the Escrow Release Date; and (ii) the
transfer of possession of the International Tours Assets shall be deemed to take
effect as of midnight on the Closing Date as of the Effective Date.

5.3  Further Assurances

From time to time subsequent to Closing and both before and after the Escrow
Release Date, each of the Vendors and NAGE shall at all times, promptly execute
and deliver all such documents, including without limitation, all such
additional conveyances, transfers, consents and other assurances and shall do
all such other acts and things as the Purchaser and Travelbyus, acting
reasonably, may from time to time request be executed or done in order to better
evidence, perfect or effectuate any provision of this Agreement or of any
agreement or other document executed pursuant to this Agreement or any of the
respective obligations intended to be created hereby or thereby.

                  ARTICLE 6 - REPRESENTATIONS AND WARRANTIES

6.1  Representations and Warranties relating to the International Tours Business
     and International Tours

International Tours represents and warrants to Travelbyus-IT and Travelbyus as
follows, and acknowledges that Travelbyus-IT and Travelbyus are relying on such
representations and warranties in connection with the purchase of the
International Tours Assets:

     Organization.  International Tours is a corporation duly incorporated and
          organized
<PAGE>

20 -

          and validly existing under the laws of the State of Oklahoma and has
          the corporate power to own or lease the International Tours' Assets,
          to carry on the International Tours Business and to enter into this
          Agreement and to perform its obligations hereunder. International
          Tours is duly qualified as a corporation to do business in each
          jurisdiction in which the nature of the International Tours Business
          or the International Tours Assets makes such qualification necessary
          and as set out in Schedule 6.1(a), except where the failure to be so
          qualified would not have a material adverse effect on the
          International Tours Business or the International Tours Assets.

     Authorization.  The execution and delivery of this Agreement and the
          consummation of the transactions contemplated hereunder have been duly
          authorized by all necessary corporate action on the part of
          International Tours.  This Agreement has been duly authorized,
          executed and delivered by International Tours and is a legal, valid
          and binding obligation of International Tours, enforceable against
          International Tours in accordance with its terms, except as
          enforcement may be limited by bankruptcy, insolvency and other laws
          affecting the rights of creditors generally and except that equitable
          remedies may be granted only in the discretion of a court of competent
          jurisdiction.

     No Other Agreements to Purchase.  No person other than Travelbyus-IT or
          Travelbyus has any written or oral agreement or option or any right or
          privilege (whether by law, pre-emptive or contractual) capable of
          becoming an agreement or option for the purchase or acquisition from
          International Tours of any of the International Tours Assets.

     No Violation.  The execution and delivery of this Agreement by
          International Tours and the consummation of the transactions herein
          provided for will not result in:

          (i)  the breach or violation of any of the provisions of, or
               constitute a default under, or conflict with or cause the
               acceleration of any obligation of International Tours under:

               (A)  any Contract to which International Tours is a party or by
                    which International Tours is or its properties or assets are
                    bound, following receipt of the consents to assignment
                    contemplated hereby in Schedule 6.1(d)(i)(A);

               (B)  any provision of the Articles of Incorporation (and any
                    amendments thereto) or by-laws or resolutions of the board
                    of directors (or any committee thereof) or shareholders of
                    International Tours;
<PAGE>

21 -

               (C)  any judgment, decree, order or award of any court,
                    governmental body or arbitration body having jurisdiction
                    over International Tours;

               (D)  any Licence or authorization held by International Tours or
                    necessary for the operation of the International Tours
                    Business; or

               (E)  any applicable law, statute, ordinance, regulation or rule
                    applicable to International Tours, the International Tours
                    Business or any of the International Tours Assets; or

          (ii) the creation or imposition of any Encumbrance against the
               International Tours Business or any of the International Tours
               Assets.

          Except as set forth on Schedule 12 or 13, International Tours has no
          reason to believe that consents to the assignment of the Contracts
          which are to be procured post-Closing, as identified on Schedule
          6.1(d)(i)(A) will not be duly received, but makes no guarantees or
          assurances in this regard.

     (e)  Acts of Bankruptcy.  International Tours is not insolvent, has not
          proposed a compromise or arrangement to its creditors generally, has
          not taken any proceeding with respect to a compromise or arrangement,
          has not taken any proceeding to have itself declared bankrupt or
          wound-up, has not taken any proceeding to have a receiver appointed of
          any part of its assets and at present, no encumbrancer or receiver has
          taken possession of any of its property and no execution or distress
          is enforceable or levied upon any of its property and no petition for
          a receiving order in bankruptcy is filed against it.

     (f)  Sufficiency of International Tours Assets.  The International Tours
          Assets are sufficient to carry on the International Tours Business.
          Any equipment, computers and other tangible assets comprising the
          International Tours Assets are in good operating condition and are in
          a state of good repair and maintenance.  All tangible assets of the
          International Tours Business are situated at the locations set out in
          Schedule 6.1(f).

     (g)  Title to Personal Property.  The International Tours Assets are
          owned beneficially and, where appropriate, of record by International
          Tours with good and marketable title thereto, free and clear of all
          Encumbrances.  No person has any written or oral agreement, option,
          understanding or commitment or any right or privilege capable of
          becoming an agreement, for the purchase from International Tours of
          any of the International Tours Assets and there has been no
          assignment, subletting or granting of any licence (of occupation or
          otherwise) of or in respect of any of the
<PAGE>

22 -

          International Tours Assets. International Tours does not own any real
          property or any shares in the capital of IT Cruise.

     (h)  Leased Property.  International Tours is not a party to any lease or
          agreement to lease in respect of any real property, whether as lessor
          or lessee, other than the right that has been granted by NAGE to
          occupy a portion of the premises leased by NAGE and located at 13150
          Coit Road, Suite 125, Dallas, Texas (the "Leased Premises").
          International Tours has the right to occupy and use a portion of the
          Leased Premises, subject to the rights of GalaxSea and IT Cruise to
          occupy a portion of the Leased Premises and the right of NAGE to
          occupy the remainder of the Leased Premises.

     (i)  Intellectual Property.  Schedule 1.1(ff)(v) sets out all registered or
          pending or unregistered Intellectual Property (including particulars
          of registration or application for registration) and all licences,
          registered user agreements and other Contracts that comprise or relate
          to the Intellectual Property of International Tours.  The Intellectual
          Property of International Tours comprises all registered and
          unregistered, trade or brand names, business names, trade marks,
          service marks, copyrights, patents, trade secrets, know-how,
          inventions, designs and other industrial or intellectual property
          necessary to conduct the International Tours Business.  International
          Tours is the beneficial and, where applicable, the registered owner of
          its Intellectual Property, free and clear of all Encumbrances, and is
          not a party to or bound by any Contract or any other obligation
          whatsoever that limits or impairs its ability to sell, transfer,
          assign or convey, or that otherwise affects, its Intellectual
          Property.  Save as provided for in Schedule 1.1(ff)(v), no person has
          been granted any interest in or right to use all or any portion of the
          Intellectual Property.  The conduct of the International Tours
          Business does not infringe upon the industrial or intellectual
          property rights, domestic or foreign, of any other person, nor has
          International Tours received any notice that the conduct of the
          International Tours Business, including the use of its Intellectual
          Property, infringes upon or breaches any industrial or intellectual
          property rights of any other person, and International Tours, after
          due inquiry, has no knowledge of any infringement or violation of any
          of its rights in its Intellectual Property.  International Tours is
          not aware of any state of facts that casts doubt on the validity of
          enforceability of any of its Intellectual Property.  International
          Tours has provided to Travelbyus-IT and Travelbyus a true and complete
          copy of all agreements, instruments and amendments thereto that
          comprise or relate to its Intellectual Property.

     (j)  Insurance.  International Tours has the International Tours Assets and
          the International Tours Business insured against loss or damage on a
          replacement cost basis and such insurance coverage will be continued
          in full force and effect to and including the Closing Date.
          International Tours is not
<PAGE>

23 -

          in default with respect to any of the provisions contained in any such
          insurance policy and has not failed to give any notice or to present
          any claim under such insurance policy, in a due and timely fashion.

     (k)  Agreements and Commitments.  Except as described in Schedule
          1.1(ff)(iii), International Tours is not a party to or bound by any
          Contract relating to the International Tours Business or the
          International Tours Assets. There is no oral agreement or Contract
          relating to the International Tours Business or the International
          Tours Assets which is material to the International Tours Business
          which has not been disclosed in writing to Travelbyus-IT and
          Travelbyus.  International Tours has performed all of the obligations
          required to be performed by it and is entitled to all benefits under,
          and is not in default or alleged to be in default in respect of, any
          Contract relating to the International Tours Business or the
          International Tours Assets to which it is a party or by which it is
          bound; all such Contracts are in good standing and in full force and
          effect, and no event, condition or occurrence exists that, after
          notice or lapse of time or both, would constitute a default under any
          of the foregoing, except as set forth on Schedule 1.1(ff)(iii).
          International Tours has made available to Travelbyus-IT and Travelbyus
          a true and complete copy of each Contract listed or described in
          Schedule 1.1(ff)(iii) and all amendments, variations, extensions and
          modifications thereto.  There is no requirement under any Contract
          relating to the International Tours Business or the International
          Tours Assets to which International Tours is a party or by which it is
          bound and which constitute part of the International Tours Assets to
          give any notice to, or to obtain the consent or approval of, any party
          to such Contract relating to the consummation of the transactions
          contemplated by this Agreement, except for the notifications, consents
          and approvals described in Schedule 6.1(d)(i)(A).  Except as set forth
          on Schedule 12 or Schedule 13, International Tours has no reason to
          believe that any of the Contracts relating to the International Tours
          Business or the International Tours Assets will not be renewed, in the
          ordinary course of business, from and after their respective expiry
          dates on similar terms and conditions, but makes no guarantees or
          assurances in this regard.

     (l)  Compliance with Laws; Governmental Authorization.  International Tours
          has complied in all material respects with all laws, statutes,
          ordinances, regulations, rules, judgments, decrees or orders
          applicable to the International Tours Business and/or the
          International Tours Assets, including without limitation, those
          relating to anti-competition and anti-combines. Neither International
          Tours nor any of its directors, officers, agents, employees or other
          persons acting on behalf of International Tours have, directly or
          indirectly, used any corporate funds for unlawful contributions,
          gifts, entertainment or other unlawful expenses relating to political
          activity,
<PAGE>

24 -

          made any unlawful payments on behalf of International Tours to foreign
          or domestic government officials or employees or to foreign or
          domestic political parties or campaigns from corporate funds or
          knowingly made any false or fictitious entry on the books or records
          of International Tours or made any bribe, rebate, pay-off, influence
          payment, kickback or other unlawful payment on behalf of International
          Tours. Schedule 1.1(ff)(iv) sets out a complete and accurate list of
          all Licences held by or granted to International Tours and there are
          no other Licences necessary to carry on the International Tours
          Business or to own or lease any of the International Tours Assets.
          Each Licence is valid, subsisting and in good standing and
          International Tours is not in default or in breach of any Licence and,
          to the knowledge of International Tours, no proceeding is pending or
          threatened to revoke or limit any Licence. International Tours has
          made available a true and complete copy of each Licence and all
          amendments thereto to Travelbyus-IT and Travelbyus.

     (m)  Regulatory Consents and Approvals.  There is no requirement to make
          any filing with, give any notice to or to obtain any Licence, from any
          governmental or regulatory agency or authority as a condition to the
          lawful consummation of the transactions contemplated by this
          Agreement, except for the filings, notifications, licences, permits,
          certificates, registrations, consents and approvals that relate solely
          to the identity of Travelbyus-IT or the nature of any business carried
          on by Travelbyus-IT.

     (n)  Books and Records.  The books and records of International Tours
          fairly and correctly set out and disclose, in accordance with
          generally accepted accounting principles, the financial position of
          International Tours as at the date hereof and all material financial
          transactions of International Tours relating to the International
          Tours Business have been accurately recorded in such books and
          records.

     (o)  Absence of Changes.  Since June 30, 1999, the International Tours
          Business has carried on only in the ordinary and normal course
          consistent with past practice and there has not been; (i) any material
          adverse change in the condition (financial or otherwise), assets,
          liabilities, operations, earnings, business or prospects of the
          International Tours Business; (ii) any damage, destruction or loss
          (whether or not covered by insurance) affecting the International
          Tours Assets; or (iii) any obligation or liability (whether absolute,
          accrued, contingent or otherwise, and whether due or to become due)
          incurred by International Tours in connection with the International
          Tours Business, other than those incurred in the ordinary and normal
          course of the International Tours Business and consistent with past
          practice.

     (p)  Non-Arm's Length Transactions.  With respect to the International
          Tours
<PAGE>

25 -

          Business:

          (i)   Since June 30, 1999, International Tours has not made any
                payment or loan to, or borrowed any moneys from and is not
                otherwise indebted to, any officer, director, employee,
                shareholder or any other person not dealing at arm's length with
                International Tours or any Affiliate or Associate of any of the
                foregoing, except as disclosed on the International Tours
                Financial Statements attached as Schedule 6.1(p)(i) and except
                for usual employee reimbursements and compensation paid in the
                ordinary course of the International Tours Business; and

          (ii)  International Tours is not party to any Contract with any
                officer, director, employee, shareholder or any other person not
                dealing at arm's length with International Tours or any
                Affiliate or Associate of any of the foregoing.

          (iii) No officer, director, employee or shareholder of International
                Tours or any other person not dealing at arm's length with
                International Tours and no entity that is an Affiliate or
                Associate of one or more of such individuals:

                (a) owns, directly or indirectly, any interest in (except for
                    shares representing less than 1% of the outstanding shares
                    of any class or series of any publicly traded company), or
                    is an officer, director, employee or consultant or, any
                    person that is, or is engaged in business as, a competitor
                    of the International Tours Business (other than IT Cruise
                    and GalaxSea and other than as set forth on Schedule
                    6.1(p)(iii)) or a lessor, lessee, supplier, distributor,
                    sales agent or customer of the International Tours Business
                    (other than IT Cruise and GalaxSea);

                (b) owns, directly or indirectly, in whole or in part, any
                    property that International Tours uses in the operation of
                    the International Tours Business (other than IT Cruise and
                    GalaxSea); or

                (c) has any cause of action or other claim whatsoever against,
                    or owes any amount to, International Tours in connection
                    with the International Tours Business, except for any
                    liabilities reflected in the International Tours Financial
                    Statements and claims in the ordinary course of business,
                    consistent with past practice.

                (d) The International Tours Financial Statements have been
<PAGE>

26 -

                    prepared in accordance with generally accepted accounting
                    principles (except that the unaudited financial statements
                    do not have footnotes and are subject to year end audit
                    adjustment) applied on a basis consistent with that of the
                    preceding period and present fairly:

                    1. all of the assets, liabilities and financial position of
                       International Tours as at the dates indicated; and

                    2. the sales, earnings, results of operation and changes in
                       financial position of International Tours for all of the
                       dates indicated.

     (q)  Taxes.  International Tours has duly filed on a timely basis all tax
          returns required to be filed by it and has paid all Taxes that are due
          and payable, and all assessments, reassessments, governmental charges,
          penalties, interest and fines due and payable by it, except for those
          Taxes International Tours may be contesting in good faith.
          International Tours has made adequate provision for Taxes payable in
          respect of the International Tours Business for the current period and
          any previous period for which Tax returns are not yet required to be
          filed. There are no actions, suits, proceedings, investigations or
          claims pending or, to the knowledge of International Tours, threatened
          against International Tours in respect of Taxes, nor are any material
          matters under discussion with any Governmental Authority with regard
          to Taxes asserted by any such authority. International Tours has
          withheld from each payment made to any of its past or present
          employees, officers or directors, and to any non-residents of the
          United States, the amount of all Taxes and other deductions required
          to be withheld therefrom, and has paid the same to the proper tax or
          other receiving officers within the time required under applicable
          legislation.

     (r)  Litigation.  Except as described in Schedule 6.1(r), there are no
          actions, claims, suits or proceedings (whether or not purportedly on
          behalf of International Tours) pending or, to the knowledge of
          International Tours, threatened against or affecting International
          Tours at law or in equity or before or by any federal, state,
          municipal or other governmental department, court, commission, board,
          bureau, agency or instrumentality, domestic or foreign, or before or
          by an arbitrator or arbitration board, the resolution of which is
          expected to have a material adverse effect on the International Tours
          Business.  International Tours is not aware of any grounds on which
          any such action, suit or proceeding might be commenced with any
          reasonable likelihood of success.

     (s)  Customers.  Schedule 6.1(s) sets out all of the revenue generating
<PAGE>

27 -

          customers of the International Tours Business and the basis upon which
          they are a customer (i.e. franchise agreement, agency agreement,
          informal agreement, etc.).  There has been no termination or
          cancellation of, and no material modification or change thereto except
          as described on Schedule 6.1(s).  International Tours is not currently
          aware and has no reason to believe that the benefits of any
          relationship with a material number of the customers of the
          International Tours Business will not continue after Closing in
          substantially the same manner as prior to the date of this Agreement.

     (t)  Suppliers.  Schedule 6.1(t) sets out all the suppliers of the
          International Tours Business (those suppliers of the International
          Tours Business that account for more than 5% of revenue for calendar
          1998 are marked with an "m") and, except as described on Schedule
          6.1(t), there has been no termination or cancellation of, and no
          material modification or change in, International Tours' relationship
          with any of the material suppliers. International Tours is not
          currently aware and has no reason to believe that the benefits of any
          relationship with a material number of the suppliers of the
          International Tours Business will not continue after Closing in the
          same manner as prior to the date of this Agreement. Notwithstanding
          the foregoing, Travelbyus-IT acknowledges that supplier contracts are
          negotiated annually at the end of each calendar year for the next
          following year.

     (u)  Employee Plans.  There are no Employee Plans with respect to the
          International Tours Business other than those listed in Schedule
          6.1(u).

     (v)  Collective Agreements.  Save and except as disclosed on Schedule
          6.1(u), International Tours has not made any agreements with any
          labour union or employee association nor made commitments to or
          conducted negotiations with any labour union or employee association
          with respect to any future agreements and International Tours is not
          aware of any current attempts to organize or to establish any labour
          union or employee association.  There are no material controversies
          pending or threatened between any labour union or employee
          organization and International Tours.  There are no pending or
          threatened representation questions respecting the employees of
          International Tours and there are no pending arbitration proceedings
          arising out of or under any union contract.

     (w)  Year 2000 Readiness.  To the knowledge of International Tours, the
          software currently utilized by International Tours in connection with
          the International Tours Business in its operation and the software
          developed by or on behalf of International Tours in connection with
          the International Tours Business and supplied to clients of
          International Tours in connection with the International Tours
          Business will function without error or interruption related
<PAGE>

28 -

          to Date Data, specifically including errors or interruptions from
          functions which may involve Date Data from more than one century. To
          the knowledge of International Tours, the software currently utilized
          by International Tours in connection with the International Tours
          Business, in its operation and developed by or on behalf of
          International Tours in connection with the International Tours
          Business and or otherwise supplied to clients of International Tours
          in connection with the International Tours Business does not contain
          any routines or devices introduced by International Tours or to the
          knowledge of International Tours introduced by any other person or in
          any other manner that could interfere with their use (including
          without limitation, time locks, keys or bombs) or interfere with,
          delete or corrupt data (commonly known as "viruses").

     (x)  Full Disclosure.  Neither this Agreement nor any document to be
          delivered by International Tours nor any certificate, report,
          statement or other document furnished by International Tours in
          connection with the negotiation of this Agreement contains or will
          contain any untrue statement of a material fact or omits or will omit
          to state a material fact necessary to make the statements contained
          herein or therein not misleading.  There has been no event,
          transaction or information that has come to the attention of
          International Tours that has not been disclosed to Travelbyus-IT and
          Travelbyus in writing and that could reasonably be expected to have a
          material adverse effect on the assets, business, earnings, prospects,
          properties or condition (financial or otherwise) of the International
          Tours Business and/or the International Tours Assets.

6.2  Representations and Warranties relating to the Purchased Shares, IT Cruise
     and NAGE

NAGE represents and warrants to Travelbyus-IT and Travelbyus as follows, and
acknowledges that Travelbyus-IT and Travelbyus are relying on such
representations and warranties in connection with its purchase of the Purchased
Shares and its purchase of the GalaxSea Assets including without limitation, the
GalaxSea West Shares:

     (a)  Organization.  IT Cruise is a corporation duly incorporated and
          organized and validly existing under the laws of the State of Oklahoma
          and has the corporate power to own or lease its property and assets,
          to carry on the IT Cruise Business.  IT Cruise is duly qualified as a
          corporation to do business in each jurisdiction in which the nature of
          the IT Cruise Business or the IT Cruise Assets makes such
          qualification necessary and as set out in Schedule 6.2(a), except
          where the failure to be so qualified would not have a material adverse
          effect on IT Cruise or the IT Cruise Business.

     (b)  Organization.  NAGE is a corporation duly incorporated and validly
          existing
<PAGE>

29 -

          under the laws of the State of Delaware and has the corporate power to
          own or lease its property, to carry on its business as now being
          conducted by it, to enter into this Agreement and to perform its
          obligations hereunder.

     (c)  Authorization.  The execution and delivery of this Agreement and the
          consummation of the transactions contemplated hereunder have been duly
          authorized by all necessary corporate action on the part of NAGE save
          and except as contemplated by the Clearance/Mailing Obligation.  This
          Agreement has been duly authorized, executed and delivered by NAGE and
          is a legal, valid and binding obligation of NAGE, enforceable against
          NAGE by Travelbyus-IT and Travelbyus in accordance with its terms,
          except as enforcement may be limited by bankruptcy, insolvency and
          other laws affecting the rights of creditors generally and except that
          equitable remedies may be granted only in the discretion of a court of
          competent jurisdiction.

     (d)  No Violation.  The execution and delivery of this Agreement by NAGE
          and the consummation of the transactions herein provided for will not
          result in:

          (i)  the breach or violation of any of the provisions of, or
               constitute a default under, or conflict with or cause the
               acceleration of any obligation of NAGE or IT Cruise, as the case
               may be, under:

               (A)  any Contract to which NAGE or IT Cruise is a party or by
                    which NAGE or IT Cruise or their respective properties or
                    assets are bound;

               (B)  any provision of the Articles of Incorporation or by-laws or
                    resolutions of the board of directors (or any committee
                    thereof) or shareholders of NAGE or IT Cruise, subject to
                    satisfaction of the Clearance/Mailing Obligation;

               (C)  any judgment, decree, order or award of any court,
                    governmental body or arbitration body having jurisdiction
                    over NAGE or IT Cruise;

               (D)  any licence, permit, approval, consent or authorization held
                    by NAGE or IT Cruise or necessary to the operation of their
                    respective businesses; or

               (E)  any applicable law, statute, ordinance, regulation or rule
                    applicable to NAGE or IT Cruise, their respective businesses
                    or assets; or
<PAGE>

30 -

          (ii) the creation or imposition of any Encumbrance against the
               business or the assets of NAGE, including for greater certainty
               and without limitation, the Purchased Shares and/or the business
               or the assets of IT Cruise including for greater certainty and
               without limitation, the IT Cruise Assets and the IT Cruise
               Business.

     (e)  Right to Sell.  NAGE is the sole registered and beneficial owner of
          the Purchased Shares with good and marketable title thereto free and
          clear of all Encumbrances.  NAGE has the exclusive right to sell,
          transfer and assign the Purchased Shares to Travelbyus-IT as provided
          in this Agreement subject to the Clearance/Mailing Obligation.  The
          Purchased Shares are not subject to the terms of any shareholders'
          agreement, voting trust or voting agreement.

     (f)  No Other Agreements to Purchase.  No person other than Travelbyus-IT
          or Travelbyus has any written or oral agreement or option or any right
          or privilege (whether by law, pre-emptive or contractual) capable of
          becoming an agreement or option for the purchase or acquisition of the
          Purchased Shares or any of the issued and outstanding shares in the
          capital of IT Cruise.

     (g)  Acts of Bankruptcy.  Neither NAGE nor IT Cruise is insolvent, has
          proposed a compromise or arrangement to its creditors generally, has
          taken any proceeding with respect to a compromise or arrangement, has
          taken any proceeding to have itself declared bankrupt or wound-up, has
          taken any proceeding to have a receiver appointed of any part of its
          respective assets and at present, no encumbrancer or receiver has
          taken possession of any of its respective property and no execution or
          distress is enforceable or levied upon any of its respective property
          and no petition for a receiving order in bankruptcy is filed against
          it.

     (h)  Sufficiency of IT Cruise Assets.  The IT Cruise Assets are sufficient
          to carry on the IT Cruise Business.  All equipment, computers and
          other tangible assets comprising the IT Cruise Assets are in good
          operating condition and are in a state of good repair and maintenance.
          All tangible assets of the IT Cruise Business are situated at the
          locations set out in Schedule 6.2(h).

     (i)  No Litigation.  There are no outstanding claims at law or in equity or
          before any Governmental Authority pending or to NAGE's knowledge,
          proposed or threatened, which would prevent NAGE from completing the
          transaction contemplated by this Agreement.

     (j)  Capitalization.  The authorized capital and the issued capital of IT
          Cruise
<PAGE>

31 -

          are as set forth in Schedule 6.2(j). All of the outstanding shares in
          the capital of IT Cruise have been duly and validly issued and are
          outstanding as fully paid and non-assessable shares. No options,
          warrants or other rights to purchase shares or other securities of IT
          Cruise and no securities or obligations convertible into or
          exchangeable for shares or other securities of IT Cruise have been
          authorized or agreed to be issued or are outstanding.

     (k)  Title to Personal Property. The IT Cruise Assets are owned
          beneficially and, where appropriate, of record by IT Cruise with good
          and marketable title thereto, free and clear of all Encumbrances. No
          person has any written or oral agreement, option, understanding or
          commitment or any right or privilege capable of becoming an agreement
          for the purchase from IT Cruise of any of the IT Cruise Assets and
          there has been no assignment, subletting or granting of any licence
          (of occupation or otherwise) of or in respect of any of the IT Cruise
          Assets. IT Cruise does not own or lease any real property.

     (l)  Intellectual Property.  Schedule 1.1(ll)(v) sets out all registered or
          pending or unregistered Intellectual Property of IT Cruise (including
          particulars or registration or application for registration) and all
          licences, registered user agreements and other Contracts that comprise
          or relate to the Intellectual Property of IT Cruise.  The Intellectual
          Property of IT Cruise comprises all registered and unregistered, trade
          or brand names, business names, trade marks, service marks,
          copyrights, patents, trade secrets, know-how, inventions, designs and
          other industrial or intellectual property necessary to conduct the IT
          Cruise Business.  IT Cruise is the beneficial and, where applicable,
          the registered owner of its Intellectual Property, free and clear of
          all Encumbrances, and is not a party to or bound by any Contract or
          any other obligation whatsoever that limits or impairs its ability to
          sell, transfer, assign or convey, or that otherwise affects, its
          Intellectual Property, save as provided for in Schedule 1.1(ll)(v).
          No person has been granted any interest in or right to use all or any
          portion of the Intellectual Property of IT Cruise. The conduct of the
          IT Cruise Business does not infringe upon the industrial or
          intellectual property rights, domestic or foreign, of any other
          person. NAGE is not aware of a claim of any infringement or breach of
          any industrial or intellectual property rights of any person, nor has
          NAGE received any notice that the conduct of the IT Cruise Business,
          including the use of its Intellectual Property, infringes upon or
          breaches any industrial or intellectual property rights of any other
          person, and NAGE, after due inquiry, has no knowledge of any
          infringement or violation of any of the rights of IT Cruise in its
          Intellectual Property. NAGE is not aware of any state of facts that
          casts doubt on the validity or enforceability of any of the
          Intellectual Property of IT Cruise. NAGE has provided to Travelbyus-IT
          and Travelbyus a true and complete copy of all agreements, instruments
          and amendments thereto that comprise or relate to the Intellectual
          Property of IT Cruise.
<PAGE>

32 -

     (m)  Insurance.  IT Cruise has the IT Cruise Assets and the IT Cruise
          Business insured against loss or damage on a replacement cost basis
          and such insurance coverage will be continued in full force and effect
          to and including the Escrow Release Date.  IT Cruise is not in default
          with respect to any of the provisions contained in any such insurance
          policy and has not failed to give any notice or to present any claim
          under any such insurance policy, in a due and timely fashion.

     (n)  Agreements and Commitments.  Except as described in Schedule
          1.1(ll)(iii), IT Cruise is not a party to or bound by any Contract
          relating to the IT Cruise Business or the IT Cruise Assets.  There is
          no oral agreement or Contract relating to the IT Cruise Business or
          the IT Cruise Assets which is material to the IT Cruise Business which
          has not been disclosed in writing to Travelbyus-IT and Travelbyus.  IT
          Cruise has performed all of the obligations required to be performed
          by it and is entitled to all benefits under, and is not in default or
          alleged to be in default in respect of, any Contract relating to the
          IT Cruise Business or the IT Cruise Assets to which it is a party or
          by which it is bound; all such Contracts are in good standing and in
          full force and effect, and no event, condition or occurrence exists
          that, after notice or lapse of time or both, would constitute a
          default under any of the foregoing, except as set forth on Schedule
          1.1(ll)(iii).  NAGE has made available to Travelbyus-IT and Travelbyus
          a true and complete copy of each Contract listed or described in
          Schedule 1.1(ll)(iii) and all amendments, variations, extensions and
          modifications thereto.  There is no requirement under any Contract
          relating to the IT Cruise Business or the IT Cruise Assets to which IT
          Cruise is a party or by which it is bound and which constitute part of
          the IT Cruise Assets to give any notice to, or to obtain the consent
          or approval of, any party to such Contract relating to the
          consummation of the transactions contemplated by this Agreement,
          except for the notifications, consents and approvals described in
          Schedule 6.2(n).  Except as set forth on Schedule 12 or Schedule 13,
          NAGE has no reason to believe that any of the Contracts relating to
          the IT Cruise Business or the IT Cruise Assets will not be renewed in
          the ordinary course of business from and after their respective expiry
          dates on similar terms and conditions but makes no guarantees or
          assurances in this regard.

     (o)  Compliance with Laws; Governmental Authorization.  IT Cruise has
          complied in all material respects with all laws, statutes, ordinances,
          regulations, rules, judgments, decrees or orders applicable to the IT
          Cruise Business and/or the IT Cruise Assets, including without
          limitation, those relating to anti-combines or anti-competition.
          Neither IT Cruise or NAGE nor any of their respective directors,
          officers, agents, employees or other persons acting on behalf of IT
          Cruise have, directly or indirectly, used any corporate funds for
          unlawful contributions, gifts, entertainment or other
<PAGE>

33 -

          unlawful expenses relating to political activity, made any unlawful
          payments on behalf of IT Cruise to foreign or domestic government
          officials or employees or to foreign or domestic political parties or
          campaigns from corporate funds or knowingly made any false or
          fictitious entry on the books or records of IT Cruise or made any
          bribe, rebate, pay-off, influence payment, kickback or other unlawful
          payment on behalf of IT Cruise. Schedule 1.1(ll)(iv) sets out a
          complete and accurate list of all Licences held by or granted to IT
          Cruise, and there are no other licences, permits, approvals, consents,
          certificates, registrations or authorizations necessary to carry on
          the IT Cruise Business or to own or lease any of the IT Cruise Assets.
          Each Licence is valid, subsisting and in good standing and IT Cruise
          is not in default or in breach of any Licence and, to the knowledge of
          NAGE, no proceeding is pending or threatened to revoke or limit any
          Licence. NAGE has made available a true and complete copy of each
          Licence and all amendments thereto to Travelbyus-IT and Travelbyus.

     (p)  Regulatory Consents and Approvals.  There is no requirement to make
          any filing with, give any notice to or to obtain any Licence or
          approval of, any Governmental Authority as a condition to the lawful
          consummation of the transactions contemplated by this Agreement,
          except for the filings, notifications, licences, permits, certificates
          that relate solely to the identity of Travelbyus-IT or the nature of
          any business carried on by Travelbyus-IT.

     (q)  Books and Records.  The books and records of IT Cruise fairly and
          correctly set out and disclose, in accordance with generally accepted
          accounting principles, the financial position of IT Cruise as at the
          date hereof and all material financial transactions of IT Cruise
          relating to the IT Cruise Business have been accurately recorded in
          such books and records.

     (r)  IT Cruise Financial Statements.  The IT Cruise Financial Statements
          attached as Schedule 6.2(r) have been prepared in accordance with
          generally accepted accounting principles (except that the unaudited
          financial statements do not have footnotes and are subject to year end
          audit adjustment) and present fairly:

          (i)  all of the assets, liabilities and financial position of IT
               Cruise as at the dates indicated; and

          (ii) the sales, earnings, results of operation and changes in
               financial position of IT Cruise for all of the dates indicated.

     (s)  No Joint Venture Interests, etc.  IT Cruise is not a partner,
          beneficiary, trustee, co-tenant, joint venturer or otherwise a
          participant in any partnership, trust, joint venture, co-tenancy or
          other similar jointly owned business
<PAGE>

34 -

          undertaking and IT Cruise has no significant investment interests in
          any business owned or controlled by any third person.

     (t)  Absence of Guarantees.  IT Cruise has not given or agreed to give and
          is not a party to or bound by any guarantee or indemnity in respect of
          indebtedness or other obligations of any person or any other
          commitment by which IT Cruise is, or is contingently, responsible for
          such indebtedness or other obligations.

     (u)  Restrictive Covenants.  IT Cruise is not a party to and is not bound
          or affected by any commitment, agreement or document containing any
          covenant expressly limiting the freedom of IT Cruise to compete in any
          line of business anywhere in the world, transfer or move any of its
          assets or operations or which materially or adversely affects the
          business practices, operations or conditions of IT Cruise or the
          continued operation of the IT Cruise Business after Closing on
          substantially the same basis as the IT Cruise Business is presently
          carried on.

     (v)  Tax Matters.  IT Cruise has filed on a timely basis (within the time
          and manner required by law) all federal and state income Tax returns
          and election forms and the Tax returns of any other jurisdiction
          required to be filed and all such returns and forms have been
          completed accurately and correctly in all respects.  As of the
          Effective Date IT Cruise will have paid all Taxes (including for
          greater certainty and without limitation, all federal, state and local
          Taxes, assessments and reassessments or other imposts in respect of
          income, business, assets or property) and all interest and penalties
          thereon, for all previous years and all required quarterly instalments
          due for the current fiscal year have been paid for which Tax returns
          are not yet required to be filed.  As of the Effective Date IT Cruise
          will have provided adequate reserves for all Taxes for the periods
          covered thereby, and such reserves are reflected in the IT Cruise
          Financial Statements or in the books and records of IT Cruise.  There
          are no agreements, waivers or other arrangements providing for an
          extension of time with respect to the filing of any Tax return by, or
          payment of any Tax, governmental charge or deficiency by IT Cruise nor
          are there any actions, suits, proceedings, investigations or claims
          now threatened or pending against IT Cruise in respect of, or
          discussions under way with any Governmental Authority relating to, any
          such Tax or governmental charge or deficiency.

          Except as set forth in Schedule 6.2(v), IT Cruise has not:

          (i)  acquired or had the use of any property from a person with whom
               it was not dealing at arm's length other than at fair market
               value;
<PAGE>

35 -

          (ii)  disposed of any property to a person with whom it was not
                dealing at arm's length for proceeds less than the fair market
                value thereof; or

          (iii) discontinued carrying on any business in respect of which non-
                capital losses were incurred, and any non-capital losses which
                IT Cruise has are not losses from property or business
                investment losses;

          There are no contingent Tax liabilities nor any grounds which would
          prompt a reassessment.  The schedules attached to the corporate income
          Tax returns by IT Cruise for each taxation year reflect and disclose
          all transactions to which IT Cruise was a party as required by
          applicable revenue laws and all of the transactions to which IT Cruise
          was a party and required by applicable revenue laws to be included
          therein are reflected or disclosed in such financial statements and
          schedules and the corporate income Tax returns and schedules have been
          duly and accurately completed as required by such Acts.

     (w)  Corporate Records and Minute Books.  The corporate records and minute
          books of IT Cruise have been delivered or made available to
          Travelbyus-IT and Travelbyus.  The articles and by-laws of IT Cruise
          are in full force and effect and no amendments have been made to the
          same.  The minute books, including the articles and by-laws of IT
          Cruise include complete and accurate minutes of all meetings of the
          directors or shareholders of IT Cruise, as applicable, held to date or
          resolutions passed by the directors or shareholders on consent, since
          the date of incorporation of IT Cruise.  The share certificate book,
          register of shareholders, register of transfers and register of
          directors of IT Cruise are complete and accurate.

     (x)  Bank Accounts, etc.  Schedule 6.2(x) sets forth a complete list of
          every financial institution in which IT Cruise maintains any
          depository account, trust account or safety deposit box and the names
          of all persons authorized to draw on or who have access to such
          accounts or safety deposit box.

     (y)  Judgments and Executions and Insolvency Proceedings.  There are no
          judgments or executions against IT Cruise which are outstanding and
          unsatisfied.  IT Cruise has not made any assignment for the benefit of
          creditors nor has any receiving order been made against IT Cruise
          under the provisions of any applicable bankruptcy or insolvency
          legislation nor has any petition for such an order been served upon IT
          Cruise.

     (z)  Absence of Changes.  Since June 30, 1999, the IT Cruise Business has
          been carried on only in the ordinary and normal course consistent with
          past practice and there has not been; (i) any material adverse change
          in the condition (financial or otherwise), assets, liabilities,
          operations, earnings,
<PAGE>

36 -

          business or prospects of the IT Cruise Business; (ii) any damage,
          destruction or loss (whether or not covered by insurance) affecting
          the IT Cruise Assets; or (iii) any obligation or liability (whether
          absolute, accrued, contingent or otherwise, and whether due or to
          become due) incurred by IT Cruise in connection with the IT Cruise
          Business, other than those incurred in the ordinary and normal course
          of the IT Cruise Business and consistent with past practice.

     (aa) Non-Arm's Length Transactions.  With respect to the IT Cruise
          Business:

          (i)   Since June 30, 1999, IT Cruise has not made any payment or loan
                to, or borrowed any moneys from and is not otherwise indebted
                to, any officer, director, employee, shareholder or any other
                person not dealing at arm's length with IT Cruise or any
                Affiliate or Associate of any of the foregoing, except as
                disclosed on the IT Cruise Financial Statements and except for
                usual employee reimbursements and compensation paid in the
                ordinary course of the IT Cruise Business; and

          (ii)  IT Cruise is not party to any Contract with any officer,
                director, employee, shareholder or any other person not dealing
                at arm's length with IT Cruise or any Affiliate or Associate of
                any of the foregoing.

          (iii) No officer, director, employee or shareholder of IT Cruise or
                any other person not dealing at arm's length with IT Cruise and
                no entity that is an Affiliate or Associate of one or more of
                such individuals:

                (a) Owns, directly or indirectly, any interest in (except for
                    shares representing less than 1% of the outstanding shares
                    of any class or series of any publicly traded company), or
                    is an officer, director, employee or consultant of, any
                    person that is, or is engaged in business as, a competitor
                    of the IT Cruise Business or a lessor, lessee, supplier,
                    distributor, sales agent or customer of the IT Cruise
                    Business (other than International Tours and GalaxSea and
                    the persons or entities set forth on Schedule 6.2(aa)(iii));

                (b) Owns, directly or indirectly, in whole or in part, any
                    property that IT Cruise uses in the operation of the IT
                    Cruise Business (other than International Tours and
                    GalaxSea);

                (c) Has any cause of action or other claim whatsoever against,
                    or owes any amount to, IT Cruise in connection with the IT
                    Cruise
<PAGE>

37 -

                    Business, except for any liabilities reflected in the IT
                    Cruise Financial Statements and claims in the ordinary
                    course of business, consistent with past practice.

     (ab) Litigation.  Except as described in Schedule 6.1(r), there are no
          actions, claims, suits or proceedings (whether or not purportedly on
          behalf of IT Cruise) pending or, to the best knowledge of NAGE, after
          due enquiry, threatened against or affecting IT Cruise at law or in
          equity or before or by any federal, state, municipal or other
          governmental department, court, commission, board, bureau, agency or
          instrumentality, domestic or foreign, or before or by an arbitrator or
          arbitration board the resolution of which is expected to have a
          material adverse effect on the IT Cruise Business and/or the IT Cruise
          Assets.  NAGE is not aware of any ground on which any such action,
          suit or proceeding might be commenced with any reasonable likelihood
          of success.

     (ac) Customers.  Schedule 6.2(ac) sets out all of the revenue generating
          customers of IT Cruise and the basis upon which they are a customer
          (i.e. franchise agreement, agency agreement, informal arrangement,
          etc.).  There has been no termination or cancellation of, and no
          material modification or change in IT Cruise's relationship with any
          such customer or group of customers. NAGE is currently not aware and
          has no reason to believe that the benefits of any relationship with a
          material number of the customers of IT Cruise will not continue after
          Closing in substantially the same manner as prior to the date of this
          Agreement.

     (ad) Suppliers. Schedule 6.2(ad) sets out all of the suppliers of IT Cruise
          (those suppliers of IT Cruise accounting for more than 5% of revenue
          for calendar 1998 are marked with an "m") and, except as described in
          Schedule 6.2(d), there has been no termination or cancellation of, and
          no material modification or change in, IT Cruise's relationship with
          any of the material suppliers. NAGE is not currently aware and has no
          reason to believe that the benefits of any relationship with a
          material number of the suppliers of IT Cruise will not continue after
          Closing in the same manner as prior to the date of this Agreement.
          Notwithstanding the foregoing, Travelbyus-IT acknowledges that
          supplier contracts are negotiated annually as at the end of each
          calendar year for the following year.

     (ae) Permits and Licenses.  IT Cruise has all necessary Licenses and other
          authorizations required to carry on and conduct the IT Cruise Business
          and to own, lease or operate the IT Cruise Assets at the places and in
          the manner in which the IT Cruise Business is conducted.  Schedule
          1.1(ll)(iv) contains a full, complete and accurate list of such
          Licenses and other authorizations.
<PAGE>

38 -

     (af) Employee Plans.  There are no Employee Plans in force.

     (ag) Collective Agreements.  IT Cruise has not made any agreements with any
          labour union or employee association nor made commitments to or
          conducted negotiations with any labour union or employee association
          with respect to any future agreements and NAGE is not aware of any
          current attempts to organize or to establish any labour union or
          employee association.  There are no material controversies pending or
          threatened between any labour union or employee organization and IT
          Cruise.  There are no pending or threatened representation questions
          respecting the employees of IT Cruise and there are no pending
          arbitration proceedings arising out of or under any union contract.

     (ah) Vacation Pay, etc.  All vacation pay, bonuses, commissions and other
          emoluments due or payable to any employees of IT Cruise are reflected
          and have been accrued in the books of account of IT Cruise.

     (ai) Year 2000 Readiness.  To the knowledge of NAGE the software currently
          utilized by IT Cruise in its operation and the software developed by
          or on behalf of IT Cruise and supplied to clients of IT Cruise will
          function without error or interruption related to Date Data,
          specifically including errors or interruptions from functions which
          may involve Date Data from more than one century.  To the knowledge of
          NAGE, the software currently utilized by IT Cruise in its operation
          and developed by or on behalf of IT Cruise and or otherwise supplied
          to clients of IT Cruise does not contain any routines or devices
          introduced by IT Cruise or to the knowledge of NAGE introduced by any
          other person or in any other manner that could interfere with their
          use (including without limitation, time locks, keys or bombs) or
          interfere with, delete or corrupt data (commonly known as "viruses").

     (aj) Full Disclosure.  Neither this Agreement nor any document to be
          delivered by NAGE in connection with IT Cruise or the GalaxSea Assets
          nor any certificate, report, statement or other document furnished by
          NAGE with respect to IT Cruise or the GalaxSea Assets in connection
          with the negotiation of this Agreement contains or will contain any
          untrue statement of a material fact or omits or will omit to state a
          material fact necessary to make the statements contained herein or
          therein not misleading.  There has been no event, transaction or
          information that has come to the attention of NAGE that has not been
          disclosed to Travelbyus-IT and Travelbyus in writing and that could
          reasonably be expected to have a material adverse effect on the
          assets, business, earnings, prospects, properties or condition
          (financial or otherwise) of IT, the IT Cruise Business, the IT Cruise
          Assets, the GalaxSea Assets or the GalaxSea Business.
<PAGE>

39 -

6.3  Representations and Warranties relating to the GalaxSea Business and
     GalaxSea Assets

GalaxSea and NAGE, jointly and severally, represent and warrant to Travelbyus-
GalaxSea and Travelbyus as follows, and acknowledge that Travelbyus-GalaxSea and
Travelbyus are relying on such representations and warranties in connection with
the purchase of the GalaxSea Assets including for greater certainty and without
limitation, the GalaxSea West Shares:

     Organization.  Each of GalaxSea and GalaxSea West is a corporation duly
          incorporated and organized and validly existing under the laws of the
          State of Oklahoma and the State of California, respectively, and has
          the corporate power to own or lease its property and the GalaxSea
          Assets, to carry on the GalaxSea Business as now being conducted by it
          and, with respect to GalaxSea, to enter into this Agreement and to
          perform its obligations hereunder. Each of GalaxSea and GalaxSea West
          is duly qualified as a corporation to do business in each jurisdiction
          in which the nature of the GalaxSea Business or the GalaxSea Assets
          makes such qualification necessary and as set out in Schedule 6.3(a),
          except where the failure to be so qualified would not have a material
          adverse effect on the GalaxSea Business and/or the GalaxSea Assets.

     Authorization.  The execution and delivery of this Agreement and the
          consummation of the transactions contemplated hereunder have been
          authorized by all necessary corporate action on the part of GalaxSea
          save and except for the Clearance/Mailing Obligation.  This Agreement
          has been duly authorized, executed and delivered by GalaxSea and is a
          legal, valid and binding obligation of GalaxSea, enforceable against
          GalaxSea by Travelbyus-GalaxSea and Travelbyus in accordance with its
          terms, except as enforcement may be limited by bankruptcy, insolvency
          and other laws affecting the rights of creditors generally and except
          that equitable remedies may be granted only in the discretion of a
          court of competent jurisdiction.

     No Other Agreements to Purchase.  No person other than Travelbyus-
          GalaxSea or Travelbyus has any written or oral agreement or option or
          any right or privilege (whether by law, pre-emptive or contractual)
          capable of becoming an agreement or option for the purchase or
          acquisition from GalaxSea of any of the GalaxSea Assets or from
          GalaxSea West of any of the issued or unissued shares in the capital
          of GalaxSea West.

     No Violation.  The execution and delivery of this Agreement by GalaxSea
          and the consummation of the transactions herein provided for will not
          result in:

          (i)  The breach or violation or any of the provisions of, or
               constitute a
<PAGE>

40 -

               default under, or conflict with or cause the acceleration of any
               obligation of GalaxSea or GalaxSea West under:

               (A)  any Contract to which GalaxSea or GalaxSea West is a party
                    or by which GalaxSea or GalaxSea West is or their respective
                    properties or assets are bound, following receipt of the
                    consents to assignment contemplated hereby as set out in
                    Schedule 6.3(d)(i)(A);

               (B)  any provision of the Articles of Incorporation (and any
                    amendments thereto) or by-laws or resolutions of the board
                    of directors (or any committee thereof) or shareholders of
                    GalaxSea or GalaxSea West;

               (C)  any judgment, decree, order or award of any court,
                    governmental body or arbitration body having jurisdiction
                    over GalaxSea or GalaxSea West;

               (D)  any licence, permit, approval, consent or authorization held
                    by GalaxSea or GalaxSea West or necessary to the operation
                    of the GalaxSea Business; or

               (E)  any applicable law, statute, ordinance, regulation or rule
                    applicable to GalaxSea, GalaxSea West, the GalaxSea Business
                    or any of the GalaxSea Assets; or

          (ii) the creation or imposition of any Encumbrance against the
               GalaxSea Business or on any of the GalaxSea Assets, including
               without limitation, the GalaxSea West Shares or the assets or
               business of GalaxSea West.

          Except as set forth on Schedule 6.3(r) or Schedule 14 GalaxSea has no
          reason to believe that consents to the assignment of the Contracts
          which are to be procured post-Closing as identified on Schedule
          6.3(d)(i)(A) will not be duly received but makes no guarantees or
          assurances in this regard.

     (e)  Sufficiency of GalaxSea Assets.  The GalaxSea Assets are sufficient to
          carry on the GalaxSea Business.  All equipment, computers and other
          tangible assets comprising the GalaxSea Assets are in good operating
          condition and are in a state of good repair and maintenance.  All
          tangible assets of the GalaxSea Business are situated at the locations
          set out in Schedule 6.3(e). GalaxSea is the sole registered and
          beneficial owner of the GalaxSea West Shares with good and marketable
          title thereto, free and clear of all Encumbrances.  GalaxSea has the
          exclusive right to sell, transfer and
<PAGE>

41 -

          assign the GalaxSea West Shares to Travelbyus-GalaxSea as provided in
          this Agreement subject to the Clearance/Mailing Obligation. The
          GalaxSea West Shares are not subject to the terms of any shareholders'
          agreement, voting trust or voting agreement. No person other than
          Travelbyus-GalaxSea or Travelbyus has any written or oral agreement or
          option or any right or privilege (whether by law, pre-emptive or
          contractual) capable of becoming an agreement or option for the
          purchase or acquisition of the GalaxSea West Shares or any of the
          issued and outstanding shares in the capital of GalaxSea West.

     (f)  Acts of Bankruptcy. Neither GalaxSea nor GalaxSea West is insolvent,
          has proposed a compromise or arrangement to its respective creditors
          generally, has taken any proceeding with respect to a compromise or
          arrangement, has taken any proceeding to have itself declared bankrupt
          or wound-up, has taken any proceeding to have a receiver appointed of
          any part of its respective assets and at present, no encumbrancer or
          receiver has taken possession of any of its respective property and no
          execution or distress is enforceable or levied upon any of its
          respective property and no petition for a receiving order in
          bankruptcy is filed against it.

     (g)  Title to Personal Property.  The GalaxSea Assets are owned
          beneficially and, where appropriate, of record by GalaxSea or GalaxSea
          West with good and marketable title thereto, free and clear of all
          Encumbrances.

     (h)  Intellectual Property.  Schedule 1.1(t)(v) sets out all registered or
          pending or unregistered Intellectual Property of GalaxSea and GalaxSea
          West (including particulars of registration or application for
          registration) and all licences, registered user agreements and other
          Contracts that comprise or relate to the Intellectual Property of
          GalaxSea and GalaxSea West.  The Intellectual Property of GalaxSea and
          GalaxSea West comprises all registered and unregistered, trade or
          brand names, business names, trade marks, service marks, copyrights,
          patents, trade secrets, know-how, inventions, designs and other
          industrial or intellectual property necessary to conduct the GalaxSea
          Business. GalaxSea and/or GalaxSea West is the beneficial and, where
          applicable, the registered owner of the Intellectual Property of
          GalaxSea and GalaxSea West, free and clear of all Encumbrances, and is
          not a party to or bound by any Contract or any other obligation
          whatsoever that limits or impairs its ability to sell, transfer,
          assign or convey, or that otherwise affects, the Intellectual Property
          of GalaxSea and GalaxSea West.  No person has been granted any
          interest in or right to use all or any portion of the Intellectual
          Property of GalaxSea or GalaxSea West.  The conduct of the GalaxSea
          Business does not infringe upon the industrial or intellectual
          property rights, domestic or foreign, of any other
<PAGE>

42 -

          person. GalaxSea is not aware of a claim of any infringement or breach
          of any industrial or intellectual property rights of any other person,
          nor has GalaxSea received any notice that the conduct of the GalaxSea
          Business, including the use of the Intellectual Property of GalaxSea
          or GalaxSea West, infringes upon or breaches any industrial or
          intellectual property rights of any other person, and GalaxSea, after
          due inquiry, has no knowledge of any infringement or violation of any
          rights in the Intellectual Property of GalaxSea or GalaxSea West.
          GalaxSea is not aware of any state of facts that casts doubt on the
          validity or enforceability of any of the Intellectual Property of
          GalaxSea or GalaxSea West. GalaxSea has provided to Travelbyus-
          GalaxSea and Travelbyus a true and complete copy of all agreements,
          instruments and amendments thereto that comprise or relate to the
          Intellectual Property of GalaxSea and GalaxSea West.

     (i)  Insurance. GalaxSea and GalaxSea West have the GalaxSea Assets and the
          GalaxSea Business insured against loss or damage by all insurable
          hazards or risks on a replacement cost basis and such insurance
          coverage will be continued in full force and effect to and including
          the Escrow Release Date. Neither GalaxSea nor GalaxSea West is in
          default with respect to any of the provisions contained in any such
          insurance policy and has not failed to give any notice or to present
          any claim under any such insurance policy, in a due and timely
          fashion.

     (j)  Agreements and Commitments. Except as described in Schedule
          1.1(t)(iii), neither GalaxSea nor GalaxSea West is a party to or bound
          by any Contract relating to the GalaxSea Business or the GalaxSea
          Assets. There is no oral agreement or Contract relating to the
          GalaxSea Business or the GalaxSea Assets which is material to the
          GalaxSea Business which has not been disclosed in writing to
          Travelbyus-GalaxSea and Travelbyus. GalaxSea and GalaxSea West have
          performed all of the obligations required to be performed by them and
          are entitled to all benefits under, and are not in default or alleged
          to be in default in respect of, any Contract relating to the GalaxSea
          Business or the GalaxSea Assets to which they are a party or by which
          they are bound; all such Contracts are in good standing and in full
          force and effect, and no event, condition or occurrence exists that,
          after notice or lapse of time or both, would constitute a default
          under any of the foregoing, except as set forth on Schedule
          1.1(t)(iii). GalaxSea has made available to Travelbyus-GalaxSea and
          Travelbyus a true and complete copy of each Contract listed or
          described in Schedule 1.1(t)(iii) and all amendments, variations,
          extensions and modifications thereto. There is no requirement under
          any Contract relating to the GalaxSea Business or the GalaxSea Assets
          to which GalaxSea or GalaxSea West is a party or by which they are
          bound and which constitute part of the GalaxSea Assets to give any
          notice to, or to obtain the consent or approval of, any party to such
<PAGE>

43-

          Contract relating to the consummation of the transactions contemplated
          by this Agreement, except for the notifications, consents and
          approvals described in Schedule 6.3(d)(i)(A). Except as set forth on
          Schedule 6.3(r) or Schedule 14, GalaxSea has no reason to believe that
          any of the Contracts relating to the GalaxSea Business or the GalaxSea
          Assets will not be renewed in the ordinary course of business from and
          after their respective expiry dates on similar terms and conditions
          but makes no guarantees or assurances in this regard.

     (k)  Compliance with Laws:  Governmental Authorization. Each of GalaxSea
          and GalaxSea West has complied in all material respects with all laws,
          statutes, ordinances, regulations, rules, judgments, decrees or orders
          applicable to the GalaxSea Business and/or the GalaxSea Assets,
          including without limitation, those relating to anti-combines or anti-
          competition. Neither GalaxSea nor GalaxSea West nor any of their
          respective directors, officers, agents, employees or other persons
          acting on behalf of GalaxSea or GalaxSea West have, directly or
          indirectly, used any corporate funds for unlawful contributions,
          gifts, entertainment or other unlawful expenses relating to political
          activity, made any unlawful payments on behalf of GalaxSea or GalaxSea
          West to foreign or domestic government officials or employees or to
          foreign or domestic political parties or campaigns from corporate
          funds or knowingly made any false or fictitious entry on the books or
          records of GalaxSea or GalaxSea West or made any bribe, rebate, pay-
          off, influence payment, kickback or other unlawful payment on behalf
          of GalaxSea or GalaxSea West.  Schedule 1.1(t)(iv) sets out a complete
          and accurate list of all Licences held by or granted to GalaxSea and
          GalaxSea West and there are no other Licences necessary to carry on
          the GalaxSea Business or to own or lease any of the GalaxSea Assets.
          Each Licence is valid, subsisting and in good standing and neither
          GalaxSea nor GalaxSea West is in default or breach of any Licence and,
          to the knowledge of GalaxSea, no proceeding is pending or threatened
          to revoke or limit any Licence.  GalaxSea has made available a true
          and complete copy of each Licence and all amendments thereto to
          Travelbyus-GalaxSea and Travelbyus. For greater certainty and without
          limitation, notwithstanding the disclosure set forth in Schedule
          6.3(k), to the knowledge of GalaxSea, neither GalaxSea nor GalaxSea
          West is in default of any franchise legislation as GalaxSea and
          GalaxSea West have discontinued selling franchise and as applicable
          legislation with respect to the filing of Uniform Franchise Offering
          Circulars only applies to entities that actively sell and/or market
          franchises and therefore at the present time, neither GalaxSea nor
          GalaxSea West must be registered in any state under applicable
          franchise legislation in order to conduct the GalaxSea Business.  The
          notation that GalaxSea "must also obtain approvals from certain of the
          fifteen states prior to selling
<PAGE>

44 -

          its Marketing Associates Program in order to confirm the program no
          longer constitutes a franchise" should in no way be taken to mean that
          GalaxSea and/or GalaxSea West can not carry on the GalaxSea Business
          as currently conducted.

     (l)  Regulatory Consents and Approvals.  There is no requirement to make
          any filing with, give any notice to or to obtain any licence, permit,
          certificate, registration, authorization, consent or approval of, any
          governmental or regulatory agency or authority as a condition to the
          lawful consummation of the transactions contemplated by this
          Agreement, except for the filings, notifications, licences, permits,
          certificates, registrations, consents and approvals that relate solely
          to the identity of Travelbyus-GalaxSea or the nature of any business
          carried on by Travelbyus-GalaxSea.

     (m)  Books and Records.  The books and records of GalaxSea and GalaxSea
          West fairly and correctly set out and disclose, in accordance with
          generally accepted accounting principles, the financial position of
          GalaxSea and GalaxSea West as at the date hereof, and all material
          financial transactions of GalaxSea and GalaxSea West relating to the
          GalaxSea Business have been accurately recorded in such books and
          records.

     (n)  Absence of Changes.  Since June 30, 1999, the GalaxSea Business has
          been carried on only in the ordinary and normal course consistent with
          past practice and there has not been; (i) any material adverse change
          in the condition (financial or otherwise), assets, liabilities,
          operations, earnings, business or prospects of the GalaxSea Business;
          (ii) any damage, destruction or loss (whether or not covered by
          insurance affecting the GalaxSea Assets; or (iii) any obligation or
          liability (whether absolute, accrued, contingent other otherwise, and
          whether due or to become due) incurred by GalaxSea of GalaxSea West in
          connection with the GalaxSea Business, other than those incurred in
          the ordinary and normal course of the GalaxSea Business and consistent
          with past practice.

     (o)  Non-Arm's Length Transactions.  With respect to the GalaxSea Business:

          (i)  Since June 30, 1999, neither GalaxSea nor GalaxSea West has made
               any payment or loan to, or borrowed any moneys from and is not
               otherwise indebted to any officer, director, employee,
               shareholder or any other person not dealing at arm's length with
               GalaxSea or GalaxSea West or any Affiliate or Associate of any of
               the foregoing, except as disclosed on the GalaxSea Financial
               Statements attached as Schedule 6.3(o)(i) and except for usual
               employee reimbursements and compensation paid in the ordinary
               course of the GalaxSea Business; and
<PAGE>

45 -

         (ii)  Neither GalaxSea nor GalaxSea West is a party to any Contract
               with any officer, director, employee, shareholder or any other
               person not dealing at arm's length with GalaxSea or GalaxSea West
               or any Affiliate or Associate of any of the foregoing.

         (iii) No officer, director, employee or shareholder of GalaxSea or
               GalaxSea West or any other person not dealing at arm's length
               with GalaxSea or GalaxSea West and no entity that is an Affiliate
               or Associate or one or more of such individuals:

               (a)  owns, directly or indirectly, any interest in (except for
                    shares representing less than 1% of the outstanding shares
                    of any class or series of any publicly traded company), or
                    is an officer, director, employee or consultant of, any
                    person that is, or is engaged in business as, a competitor
                    of the GalaxSea Business or a lessor, lessee, supplier,
                    distributor, sales agent or customer of the GalaxSea
                    Business (other than International Tours, IT Cruise and the
                    persons or entities set forth on Schedule 6.3(o)(iii));

               (b)  owns, directly or indirectly, in whole or in part, any
                    property that GalaxSea or GalaxSea West uses in the
                    operation of the GalaxSea Business (other than International
                    Tours or IT Cruise); or

               (c)  has any cause of action or other claim whatsoever against,
                    or owes any amount to, GalaxSea or GalaxSea West in
                    connection with the GalaxSea Business, except for any
                    liabilities reflected in the GalaxSea Financial Statements
                    and claims in the ordinary course of business.

               (d)  The GalaxSea Financial Statements have been prepared in
                    accordance with generally accepted accounting principles
                    (except that the unaudited financial statements do not have
                    financial notes and are subject to year end audit
                    adjustment) applied on a basis consistent with that of the
                    preceding period and present fairly:

                    (i)  all of the assets, liabilities and financial position
                         of GalaxSea and GalaxSea West as at the dates
                         indicated; and

                    (ii) the sales, earnings, results of operation and changes
                         in financial position of GalaxSea and GalaxSea West for
<PAGE>

46 -
                         all of the dates indicated.

     (p)  Taxes.  GalaxSea has duly filed on a timely basis all Tax returns
          required to be filed by it and has paid all Taxes that are due and
          payable, and all assessments, reassessments, governmental charges,
          penalties, interest and fines due and payable by it, except for those
          GalaxSea may be contesting in good faith. GalaxSea has made adequate
          provision for Taxes payable in respect of the GalaxSea Business for
          the current period and any previous period for which Tax returns are
          not yet required to be filed.  There are no actions, suits,
          proceedings, investigations or claims pending or, to the knowledge of
          GalaxSea, threatened against GalaxSea in respect of Taxes nor are any
          material matters under discussion with any Governmental Authority with
          regard to Taxes asserted by any such authority. GalaxSea has withheld
          from each payment made to any of its past or present employees,
          officers or directors, and to any non-residents of the United States,
          the amount of all Taxes and other deductions required to be withheld
          therefrom, and has paid the same to the proper Tax or other receiving
          officers within the time required under any applicable legislation.

     (q)  Litigation.  Except as described in Schedule 6.1(r), there are no
          actions, suits, claims or proceedings (whether or not purportedly on
          behalf of GalaxSea or GalaxSea West) pending or, to the best knowledge
          of GalaxSea, after due enquiry, threatened against or affecting
          GalaxSea or GalaxSea West at law or in equity or before or by any
          federal, state, municipal or other governmental department, court,
          commission, board, bureau, agency or instrumentality, domestic or
          foreign, or before or by an arbitrator or arbitration board the
          resolution of which is expected to have a material adverse effect on
          the GalaxSea Business and/or the GalaxSea Assets.  GalaxSea is not
          aware of any ground on which any such action, suit or proceeding might
          be commenced with any reasonable likelihood of success.

     (r)  Customers.  Schedule 6.3(r) sets out all of the revenue generating
          customers of the GalaxSea Business and the basis upon which they are a
          customer (i.e. franchise agreement, agency agreement, informal
          arrangement, etc.).  There has been no termination or cancellation of,
          and no material modification or change in, GalaxSea's or GalaxSea
          West's relationship with any such customer or group of customers,
          except as described in Schedule 6.3(r).  GalaxSea is not currently
          aware and has no reason to believe that the benefits of any
          relationship with a material number of customers of the GalaxSea
          Business will not continue after Closing in substantially the same
          manner as prior to the date of this Agreement.

     (s)  Suppliers.  Schedule 6.3(s) sets out all of the material suppliers of
          the
<PAGE>

47 -

          GalaxSea Business (those suppliers of the GalaxSea Business accounting
          for more than five percent of revenue for calendar 1998 are marked
          with an "m") and, except as described on Schedule 6.3(s), there has
          been no termination or cancellation of, and no material modification
          or change in, GalaxSea's or GalaxSea West's relationship with the
          material suppliers. GalaxSea is not currently aware and has no reason
          to believe that the benefits of any relationship with a material
          number of the suppliers of the GalaxSea Business will not continue
          after Closing in substantially the same manner as prior to the date of
          this Agreement. Notwithstanding the foregoing, Travelbyus-GalaxSea
          acknowledges that supplier contracts are negotiated annually at the
          end of each calendar year for the following year.

     (t)  Employee Plans. There are no Employee Plans with respect to the
          GalaxSea Business other than those listed in Schedule 6.3(t).
          GalaxSea West has no employees.

     (u)  Collective Agreements.  Save and except as disclosed on Schedule
          6.3(t), neither GalaxSea nor GalaxSea West has made any agreements
          with any labour union or employee association nor made commitments to
          or conducted negotiations with any labour union or employee
          association with respect to any future agreements and GalaxSea is not
          aware of any current attempts to organize or to establish any labour
          union or employee association.  There are no material controversies
          pending or threatened between any labour union or employee
          organization and GalaxSea or GalaxSea West.  There are no pending or
          threatened representation questions respecting the employees of
          GalaxSea and there are no pending arbitration proceedings arising out
          of or under any union contract.

     (v)  Year 2000 Readiness. To the knowledge of GalaxSea, the software
          currently utilized by GalaxSea or GalaxSea West in connection with the
          GalaxSea Business in its operation and the software developed by or on
          behalf of GalaxSea or GalaxSea West in connection with the GalaxSea
          Business and supplied to clients of GalaxSea or GalaxSea West in
          connection with the GalaxSea Business: will function without error or
          interruption related to Date Data, specifically including errors or
          interruptions from functions which may involve Date Data from more
          than one century.  To the knowledge of GalaxSea, the software
          currently utilized by GalaxSea and GalaxSea West in connection with
          the GalaxSea Business, in its operation and developed by or on behalf
          of GalaxSea or GalaxSea West in connection with the GalaxSea Business
          and or otherwise supplied to clients of GalaxSea or GalaxSea West in
          connection with the GalaxSea Business does not contain any routines or
          devices introduced by GalaxSea or GalaxSea West or to the knowledge of
          GalaxSea introduced by any other person or in any other manner that
          could interfere with their use (including without limitation,
<PAGE>

48 -

          time locks, keys or bombs) or interfere with, delete or corrupt data
          (commonly known as "viruses").

     (w)  Capitalization.  The authorized capital and the issued capital of
          GalaxSea West consists of 1,000 shares of authorized common stock, of
          which 100 shares are issued and outstanding.  All of the outstanding
          shares in the capital of GalaxSea West have been duly and validly
          issued and are outstanding as fully paid and non-assessable shares.
          No options, warrants or other rights to purchase shares or other
          securities of GalaxSea West and no securities or obligations
          convertible into or exchangeable for shares or other securities of
          GalaxSea West have been authorized or agreed to be issued or are
          outstanding.

     (x)  No Joint Venture Interests, etc.  GalaxSea West is not a partner,
          beneficiary, trustee, co-tenant, joint venturer or otherwise a
          participant in any partnership, trust, joint venture, co-tenancy or
          other similar jointly owned business undertaking and GalaxSea West has
          no significant investment interests in any business owned or
          controlled by any third person.

     (y)  Absence of Guarantees.  GalaxSea West has not given or agreed to give
          and is not a party to or bound by any guarantee or indemnity in
          respect of indebtedness or other obligations of any person or any
          other commitment by which GalaxSea West is, or is contingently,
          responsible for such indebtedness or other obligations.

     (z)  Restrictive Covenants.  GalaxSea West is not a party to and is not
          bound or affected by any commitment, agreement or document containing
          any covenant expressly limiting the freedom of GalaxSea West to
          compete in any line of business anywhere in the world, transfer or
          move any of its assets or operations or which materially or adversely
          affects the business practices, operations or conditions of GalaxSea
          West or the continued operation of the GalaxSea Business after Closing
          on substantially the same basis as the GalaxSea Business is presently
          carried on.

     (aa) Tax Matters.  GalaxSea West has filed on a timely basis (within the
          time and manner required by law) all federal and state income Tax
          returns and election forms and the Tax returns of any other
          jurisdiction required to be filed and all such returns and forms have
          been completed accurately and correctly in all respects.  As of the
          Effective Date GalaxSea West will have paid all Taxes (including for
          greater certainty and without limitation, all federal, state and local
          Taxes, assessments and reassessments or other imposts in respect of
          income, business, assets or property) and all interest and penalties
          thereon, for all previous years and all required quarterly
<PAGE>

49 -

          instalments due for the current fiscal year have been paid for which
          Tax returns are not yet required to be filed. As of the Effective Date
          GalaxSea West will have provided adequate reserves for all Taxes for
          the periods covered thereby, and such reserves are reflected in the
          GalaxSea Financial Statements or in the books and records of GalaxSea
          West. There are no agreements, waivers or other arrangements providing
          for an extension of time with respect to the filing of any Tax return
          by, or payment of any Tax, governmental charge or deficiency by
          GalaxSea West nor are there any actions, suits, proceedings,
          investigations or claims now threatened or pending against GalaxSea
          West in respect of, or discussions under way with any Governmental
          Authority relating to, any such Tax or governmental charge or
          deficiency.

          GalaxSea West has not:

          (i)   acquired or had the use of any property from a person with whom
                it was not dealing at arm's length other than at fair market
                value;

          (ii)  disposed of any property to a person with whom it was not
                dealing at arm's length for proceeds less than the fair market
                value thereof; or;

          (iii) discontinued carrying on any business in respect of which non-
                capital losses were incurred, and any non-capital losses which
                GalaxSea West has are not losses from property or business
                investment losses;

          There are no contingent Tax liabilities nor any grounds which would
          prompt a reassessment.  The schedules attached to the corporate income
          Tax returns by GalaxSea West for each taxation year reflect and
          disclose all transactions to which GalaxSea West was a party as
          required by applicable revenue laws and all of the transactions to
          which GalaxSea West was a party and required by applicable revenue
          laws to be included therein are reflected or disclosed in such
          financial statements and schedules and the corporate income Tax
          returns and schedules have been duly and accurately completed as
          required by such Acts.

     (bb) Corporate Records and Minute Books.  The corporate records and minute
          books of GalaxSea West have been delivered or made available to
          Travelbyus-GalaxSea and Travelbyus.  The articles and by-laws of
          GalaxSea West are in full force and effect and no amendments have been
          made to the same.  The minute books, including the articles and by-
          laws of GalaxSea West include complete and accurate minutes of all
          meetings of the directors or shareholders of GalaxSea West, as
          applicable, held to date or resolutions
<PAGE>

50 -

          passed by the directors or shareholders on consent, since the date of
          incorporation of GalaxSea West. The share certificate book, register
          of shareholders, register of transfers and register of directors of
          GalaxSea West are complete and accurate.

     (cc) Bank Accounts, etc.  Schedule 6.3(cc) sets forth a complete list of
          every financial institution in which GalaxSea West maintains any
          depository account, trust account or safety deposit box and the names
          of all persons authorized to draw on or who have access to such
          accounts or safety deposit box.

     (dd) Judgments and Executions and Insolvency Proceedings.  There are no
          judgments or executions against GalaxSea West which are outstanding
          and unsatisfied.  GalaxSea West has not made any assignment for the
          benefit of creditors nor has any receiving order been made against
          GalaxSea West under the provisions of any applicable bankruptcy or
          insolvency legislation nor has any petition for such an order been
          served upon GalaxSea West.

     (ee) Permits and Licenses.  GalaxSea West has all necessary Licenses and
          other authorizations required to carry on and conduct the GalaxSea
          Business and to own, lease or operate its respective GalaxSea Assets
          at the places and in the manner in which the GalaxSea Business is
          conducted.

     (ff) Full Disclosure.  Neither this Agreement nor any document to be
          delivered by GalaxSea nor any certificate, report, statement or other
          document furnished by GalaxSea in connection with the negotiation of
          this Agreement contains or will contain any untrue statement of a
          material fact or omits or will omit to state a material fact necessary
          to make the statements contained herein or therein not misleading.
          There has been no event, transaction or information that has come to
          the attention of GalaxSea and/or NAGE that has not been disclosed to
          Travelbyus-GalaxSea and Travelbyus in writing and that could
          reasonably be expected to have a material adverse effect on the
          assets, business, earnings, prospects, properties or condition
          (financial or otherwise) of the GalaxSea Business and/or the GalaxSea
          Assets, including without limitation, the GalaxSea West Shares or the
          assets, business, earnings, prospects properties or condition
          (financial or otherwise) of GalaxSea West.

  ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF TRAVELBYUS AND THE PURCHASER

7.1  Representations and Warranties of Travelbyus and the Purchaser

Each of the Purchaser and Travelbyus, jointly and severally, represents and
warrants to
<PAGE>

51 -

the Vendors and NAGE as follows and acknowledges and confirms that the Vendors
and NAGE are relying on such representations and warranties in connection with
their sale of the Purchased Assets and the Purchased Business:

     (a)  Organization.  Each of the Purchaser and Travelbyus is a corporation
          duly incorporated and organized and validly existing under the laws of
          its jurisdiction of incorporation and has the corporate power to own
          or lease its property, to carry on its business as now being conducted
          by it and to enter into this Agreement and to perform its obligations
          hereunder.  Each of the Purchaser and Travelbyus is duly qualified as
          a corporation to do business in each jurisdiction in which the nature
          of its business or the location of its assets make such qualification
          necessary, except where the failure to be so qualified would not have
          a material adverse effect on the Purchaser or Travelbyus.

     (b)  Authorization.  The execution and delivery of this Agreement and the
          consummation of the transactions contemplated hereunder have been duly
          authorized by all necessary corporate action on the part of each of
          the Purchaser and Travelbyus.  This Agreement has been duly
          authorized, executed and delivered by the Purchaser and Travelbyus and
          is a legal, valid and binding obligation of each of the Purchaser and
          Travelbyus, enforceable against the Purchaser and Travelbyus by the
          Vendors and NAGE in accordance with its terms, except as such
          enforcement may be limited by bankruptcy, insolvency and other laws
          affecting the rights of creditors generally and except that equitable
          remedies may only be granted in the discretion of a court of competent
          jurisdiction.

     (c)  No Violation.  The execution and delivery of this Agreement by the
          Purchaser and Travelbyus and the consummation of the transactions
          herein provided for will not result in the violation of, or constitute
          a default under, or conflict with or cause the acceleration of any
          obligation of the Purchaser or Travelbyus, as the case may be, under:

          (i)   any Contract to which the Purchaser or Travelbyus is a party or
                by which the Purchaser or Travelbyus is bound;

          (ii)  any provision of the constating documents or by-laws or
                resolutions of the board of directors (or any committee thereof)
                or shareholders of either the Purchaser or Travelbyus;

          (iii) any judgment, decree, order or award of any court, governmental
                body or arbitrator having jurisdiction over the Purchaser or
                Travelbyus;
<PAGE>

52 -

          (iv)  any licence, permit, approval, consent or authorization held by
                the Purchaser or Travelbyus or necessary to the operation of
                their respective businesses; or

          (v)   any applicable law, statute, ordinance, regulation or rule
                applicable to each of the Purchaser and Travelbyus.

     (d)  Authorized Capital.  The authorized capital of Travelbyus consists of
          an unlimited number of common shares without par value, of which as at
          October 4, 1999  43,539,178 common shares have been duly issued and
          are outstanding as fully paid and non-assessable as at the date hereof
          together with options to officers, directors and employees to purchase
          an aggregate of 2,675,000 common shares and warrants to purchase an
          aggregate of 10,260,270 common shares at an exercise price of CDN$0.68
          expiring on September 9, 2001.

     (e)  Title to Property.  Travelbyus is the owner, directly and/or
          indirectly, and beneficially and of record, of its leased assets and
          its owned assets, with good and marketable title thereto free and
          clear of any and all Encumbrances subject to a trust indenture in
          favour of Montreal Trust Company of Canada dated September 9, 1999
          pursuant to which an aggregate of CDN$11,950,000 principal amount of
          12.5% senior secured redeemable debentures were issued.

     (f)  Financial Statements.  The Travelbyus Financial Statements attached as
          Schedule 7.1(f) have been prepared in accordance with Canadian
          generally accepted accounting principles applied on a basis consistent
          with that of the preceding period and present fairly:

          (i)  all of the assets, liabilities and financial position of
               Travelbyus as at the dates indicated; and

          (ii) the sales, earnings, results of operation and changes in
               financial position of Travelbyus for all of the dates indicated.

     (g)  Shares.  The issued and outstanding shares in the capital of
          Travelbyus form part of a class of shares that are listed and posted
          for trading on the TSE, the WSE and the Frankfurt stock exchange.

     (h)  Regulatory Approvals.  No Governmental Authorization is required on
          the part of Travelbyus and/or the Purchaser in connection with the
          execution, delivery and performance of this Agreement or any other
          agreements to be entered into under the terms of this Agreement.
<PAGE>

53 -

     (i)  Reporting Issuer Status.  Travelbyus is a "reporting issuer" within
          the meaning of the Securities Act (Alberta), (British Columbia),
          (Manitoba), (Ontario) and (Quebec) and is not in default of any
          requirement of applicable laws and no material change relating to
          Travelbyus has occurred with respect to which the requisite material
          change report has not been filed and no such disclosure has been made
          on a confidential basis.  No securities commission or similar
          regulatory authority has issued any order preventing or suspending
          trading in any securities of Travelbyus or prohibiting the issue and
          sale of the common shares in the capital of Travelbyus and to the
          knowledge of the Purchaser and Travelbyus no such proceedings for such
          purposes are pending or threatened.

     (j)  Compliance with Laws; Governmental Authorization.  Each of the
          Purchaser and Travelbyus has complied in all material respects with
          all laws, statutes, ordinances, regulations, rules, judgments, decrees
          or orders applicable to each of the Purchaser and Travelbyus.

     (k)  Litigation.  There are no actions, claims, suits or proceedings
          (whether or not purportedly on behalf of the Purchaser or Travelbyus)
          pending or, to the best knowledge of the Purchaser and Travelbyus,
          after due enquiry, threatened against or affecting the Purchaser or
          Travelbyus at law or in equity or before or by any federal, state,
          municipal or other governmental department, court, commission, board,
          bureau, agency or instrumentality, domestic or foreign, or before or
          by an arbitrator or arbitration board.  The Purchaser and Travelbyus
          are not aware of any ground on which any such action, suit or
          proceeding might be commenced with any reasonable likelihood of
          success.

     (l)  Full Disclosure.  Neither this Agreement nor any document to be
          delivered by the Purchaser or Travelbyus nor any certificate, report,
          statement or other document furnished by the Purchaser or Travelbyus
          in connection with the negotiation of this Agreement contains or will
          contain any untrue statement of a material fact or omits or will omit
          to state a material fact necessary to make the statements contained
          herein or therein not misleading.  There has been no event,
          transaction or information that has come to the attention of the
          Purchaser and/or Travelbyus that has not been disclosed to the Vendors
          and/or NAGE in writing and that could reasonably be expected to have a
          material adverse effect on the assets, business, earnings, prospects,
          properties or condition (financial or otherwise) of the Purchaser or
          Travelbyus.
<PAGE>

54 -

       ARTICLE 8 - SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES

8.1  Survival of Representations and Warranties of the Vendors and NAGE

The representations and warranties of the Vendors and NAGE contained in this
Agreement and in all certificates and documents delivered pursuant to or
contemplated by this Agreement shall survive Closing and shall continue in full
force and effect for the benefit of the Purchaser and Travelbyus provided
however that no Claim in respect thereof shall be valid unless it is made within
the following time periods:

     (a)  in the case of any Claim in respect of a representation or warranty
          relating to a matter other than a matter relating to title to the
          Purchased Assets or the Purchased Shares, within a period of 18 months
          from Closing;

     (b)  in the case of any Claim in respect of a representation or warranty
          relating to title of any of the Vendors or NAGE to the Purchased
          Assets or the Purchased Shares and those matters set forth in sections
          11.1(c), (d), (e), (f), (g), (h), (i), (j) and (k) there shall be no
          time limit within which such a Claim may be made; and

     (c)  in the case of any Claim in respect of any representation or warranty
          including fraud or fraudulent misrepresentation subject only to
          applicable limitations imposed by law;

and any such Claim as aforesaid shall be made in accordance with the provisions
set forth in Article 11, and upon the expiry of the relevant limitation period
referred to in clauses (a) and (c) above, the Vendors and NAGE shall have no
further liability to the Purchaser and Travelbyus with respect to the
representations and warranties referred to in such clauses, respectively, except
in respect of Claims which have theretofor been made in accordance with the
provisions set forth above. The survival of such representations and warranties
shall continue for the applicable limitation period notwithstanding any
investigation made by or on behalf of the Purchaser and/or Travelbyus.

8.2  Survival of Representations and Warranties of the Purchaser and Travelbyus

The representations and warranties of the Purchaser and Travelbyus contained in
this Agreement and in all certificates and documents delivered pursuant to or
contemplated by this Agreement shall survive Closing and shall continue in full
force and effect for the benefit of the Vendors and NAGE provided however that
no Claim in respect thereof shall be valid unless it is made within the
following time periods:

     (a)  in the case of any Claim in respect of a representation or warranty
          relating to a matter other than (b) or (c) below, within a period of
          18 months from
<PAGE>

55 -

          Closing;

     (b)  in the case of any claim in respect of any representation or warranty
          including fraud or fraudulent misrepresentation subject only to
          applicable limitations imposed by law; and

     (c)  in the case of any Claim in respect of those matters set forth in
          sections 11.2(c), (d) and (e), there shall be no time limit within
          which such a Claim may be made;

and any such claim as aforesaid shall be made in accordance with the provisions
set forth in Article 11, and upon the expiry of the relevant limitation period
referred to in clause (a) and (b) above, the Purchaser and Travelbyus shall have
no further liability to the Vendors and NAGE with respect to the representations
and warranties referred to in such clauses, respectively, except in respect of
Claims which have theretofor been made in accordance with the provisions set
forth above.  The survival of such representations and warranties shall continue
for the applicable limitation period notwithstanding any investigation made by
or on behalf of the Vendors and NAGE.

                             ARTICLE 9 - COVENANTS

9.1  Delivery of Books and Records

At the Time of Closing there shall be delivered to the Purchaser by the Vendors
and NAGE all books and records relating to the Purchased Business, the Purchased
Assets and the Purchased Shares provided that any and all books and records
relating to the GalaxSea Assets and the Purchased Shares shall be deposited in
escrow with the Escrow Agent pursuant to the Closing Escrow Agreement.  The
Purchaser agrees that it will preserve the books and records delivered to it for
a period of three years from Closing or for such longer period as is required by
any applicable law and will permit the applicable Vendor and NAGE or their
authorized representatives reasonable access thereto in connection with the
affairs of such Vendor or NAGE relating to its matters, but the Purchaser shall
not be responsible or liable to the applicable Vendor or NAGE for or as a result
of any accidental loss or destruction of or damage to any such books or records.
<PAGE>

56 -

9.2  Change of Name

International Tours agrees to change its corporate name and the names of any of
its Associates or Affiliates except for those businesses set forth on Schedules
6.1(p)(iii) and 6.3(o)(iii) that include the words International Tours or any
derivative thereof to names that do not include such words or any part thereof
or any similar words, within 10 days after Closing.  GalaxSea and NAGE jointly
and severally covenant and agree that GalaxSea shall change its corporate name
and the name of any Associates or Affiliates [except for those businesses set
forth on Schedules 6.1(p)(iii) and 6.3(o)(iii) that include the words GalaxSea
or any derivative thereof to names that do not include such words or any part
thereof or any similar words, within 10 days after the Escrow Release Date.

9.3  Expenses

All costs and expenses (including fees and disbursements of legal counsel and
accountants) incurred in connection with this Agreement and the transaction
contemplated thereby shall be borne by the Party incurring such expenses.

9.4  Transferred Employees

     (a)  Each Vendor and NAGE hereby agree and acknowledge that save and except
          for the GalaxSea Transferred Employees and the International Tours
          Transferred Employees all other employees (full-time and part-time)
          and all other contractors who are, or have at some point in time, been
          retained by such Vendor in respect of the Purchased Business shall be
          the sole responsibility of such Vendor and such Vendor shall discharge
          and pay any and all liabilities, debts and obligations with respect to
          such employees and contractors, including without limitation, any
          severance, termination notice or payment in lieu of notice.

     (b)  Travelbyus-IT agrees that effective as at the Effective Date but to
          take effect as of the Time of Closing on the Closing Date it shall
          offer employment to the International Tours Transferred Employees on
          the terms and conditions as set out in Schedule 1.1(kk).  Travelbyus-
          IT shall only have obligation or liability with respect to the
          International Tours Transferred Employees who accept such offer of
          employment Travelbyus-GalaxSea agrees that effective as at the
          Effective Date but to take effect as of the Escrow Release Date, it
          shall offer employment to the GalaxSea Transferred Employees on the
          terms and conditions set out in Schedule 1.1(x).  Travelbyus-GalaxSea
          shall only have obligation or liability with respect to the GalaxSea
          Transferred Employees who accept such offer of employment.
<PAGE>

57 -

     (c)  The Vendors and NAGE covenant and agree not to solicit directly or
          indirectly, the services of Ronald Blaylock during the two year period
          following Closing or while Ronald Blaylock is employed by Travelbyus-
          IT, its Associates or Affiliates whichever period is shorter, without
          the prior written consent of Travelbyus-IT, which consent may be
          unreasonably withheld.

9.5  Clearance/Mailing Obligation

NAGE, IT Cruise and GalaxSea shall do all such acts and things and shall use
their commercial efforts in good faith to fulfil the Clearance/Mailing
Obligation.

                      ARTICLE 10 - CONDITIONS OF CLOSING

10.1 Conditions of Closing in Favour of the Purchaser and Travelbyus

The purchase and sale of the Purchased Assets and the Purchased Shares is
subject to the following terms and conditions for the exclusive benefit of the
Purchaser and Travelbyus, to be performed or fulfilled at or prior to the Time
of Closing:

     (a)  Covenants.  All of the terms, covenants and conditions of this
          Agreement to be complied with or performed by the Vendors and NAGE at
          or before the Time of Closing (save and except for the
          Clearance/Mailing Obligation) shall have been complied with or
          performed.

     (b)  Receipt of Closing Documents.  All instruments of conveyance and other
          documentation relating to the transfer, assignment and sale of the
          Purchased Assets and the Purchased Shares including without
          limitation, assignments of the Contracts and the Intellectual Property
          (and consents thereto where required), bills of sale and documentation
          relating to the authorization and completion of the purchase and sale
          of the Purchased Assets and the Purchased Shares and the taking of all
          actions and proceedings (corporate or otherwise) on or prior to
          Closing in connection with the performance by each of the Vendors and
          NAGE of their obligations under this Agreement shall be satisfactory
          to the Purchaser and Travelbyus and their counsel, acting reasonably
          and the Purchaser and Travelbyus shall have received copies of all
          such other documentation or other evidence as the Purchaser and
          Travelbyus may reasonably request in order to establish the
          consummation of the transactions contemplated hereby by each of the
          Vendors and NAGE of all corporate proceedings in connection herewith
          and compliance with the terms, warranties and conditions hereof in
          form and substance satisfactory to the Purchaser and Travelbyus and
          their counsel acting reasonably provided that the only condition with
          respect to the
<PAGE>

58 -

          consummation of the sale of the Purchased Shares and the GalaxSea
          Assets that shall remain outstanding shall be the Clearance/Mailing
          Obligation.

     (c)  Regulatory Consents.  These shall have been obtained from all
          appropriate federal, state, municipal or other governmental or
          administrative bodies such Licences and authorizations as are required
          to be obtained by each of the Vendors to permit the completion of the
          transaction as herein contemplated in  form and substance satisfactory
          to the Purchaser and Travelbyus, acting reasonably.

     (d)  Contractual Consents.  Each of the Vendors and NAGE shall have given
          or obtained the notices, consents and approvals described in Schedules
          6.1(d)(i)(A), 10.1(d), and 6.2(n), in each case in form and substance
          satisfactory to the Purchaser and Travelbyus,  acting reasonably.

     (e)  Employment Agreement.  Ronald Blaylock shall have executed an
          employment agreement with Travelbyus-IT setting out the terms and
          conditions of his employment, in form and substance satisfactory to
          the Purchaser and Travelbyus acting reasonably.

     (f)  Escrow Agreements.  Each of the Vendors, NAGE and GMP or the Escrow
          Agent, as applicable shall have executed and delivered to the
          Purchaser and Travelbyus the Closing Escrow Agreement and the
          Representation and Warranty Escrow Agreement.

     (g)  No Action or Proceeding.  No legal or regulatory action or proceeding
          shall be pending or threatened by any person to enjoin, restrict or
          prohibit the purchase and sale of the Purchased Assets and the
          Purchased Shares contemplated hereby.

     (h)  Legal Opinion.  Each of the Vendors and NAGE shall have delivered to
          the Purchaser and Travelbyus a favourable opinion of counsel in form
          and substance satisfactory to the Purchaser and Travelbyus and their
          counsel, acting reasonably.

     (i)  Legal Matters.  All actions, proceedings, instruments and documents
          required to implement this Agreement, or instrumental thereto and NAGE
          shall have been approved as to form and legality by counsel for the
          Purchaser and Travelbyus, acting reasonably.

     If any of the conditions precedent contained in this section 10.1 shall not
     be performed or fulfilled at or prior to the Time of Closing to the
     satisfaction of the Purchaser and Travelbyus, acting reasonably, the
     Purchaser and Travelbyus may,
<PAGE>

59 -

     by notice to the Vendors and NAGE, terminate this Agreement and the
     obligations of the Vendors and NAGE as well as the Purchaser and Travelbyus
     under this Agreement, other than the obligations with respect to the
     payment of brokerage fees and commissions and the obligations contained in
     section 12.3. Any such condition may be waived in whole or in part by the
     Purchaser and Travelbyus without prejudice to any claims they may have for
     breach of covenant, representation or warranty.

10.2 Conditions of Closing in Favour of the Vendors and NAGE

The sale and purchase of the Purchased Assets and the Purchased Shares of the
Vendors are subject to the following terms and conditions for the exclusive
benefit of the Vendors and NAGE, to be performed or fulfilled at or prior to the
Time of Closing:

     (a)  Covenants.  All of the terms, covenants and conditions of this
          Agreement to be complied with or performed by the Purchaser and
          Travelbyus at or before the Time of Closing shall have been complied
          with or performed.

     (b)  Receipt of Closing Documents.  All instruments of conveyance and other
          documentation relating to the transfer, assignment and sale of the
          Purchased Assets and the Purchased Shares including without
          limitation, assignments of the Contracts and the Intellectual Property
          (and consents thereto where required), bills of sale and documentation
          relating to the authorization and completion of the purchase and sale
          of the Purchased Assets and the Purchased Shares and the taking of all
          actions and proceedings (corporate or otherwise) on or prior to
          Closing in connection with the performance by the Purchaser and
          Travelbyus of their obligations under this Agreement shall be
          satisfactory to the Vendors and NAGE and their counsel, acting
          reasonably and the Vendors and NAGE shall have received copies of all
          such other documentation or other evidence as the Vendors and NAGE may
          reasonably request in order to establish the consummation of the
          transactions contemplated hereby by the Purchaser and Travelbyus, of
          all corporate proceedings in connection herewith and compliance with
          the terms, warranties and conditions hereof in form and substance and
          satisfactory to the Vendors and NAGE and their counsel acting
          reasonably.

     (c)  Regulatory Consents.  There shall have been obtained from all
          appropriate federal, state, municipal or other governmental or
          administrative bodies such licences and authorizations as are required
          to be obtained by the Purchaser and Travelbyus to permit the
          completion of the transaction as herein contemplated, in form and
          substance satisfactory to the Vendors and NAGE, acting reasonably.

     (d)  No Action or Proceeding.  No legal or regulatory action or proceeding
          shall
<PAGE>

60 -

          be pending or threatened by any person to enjoin, restrict or prohibit
          the purchase and sale of the Purchased Assets or the Purchased Shares
          contemplated hereby.

     (e)  Legal Matters.  All actions, proceedings, instruments and documents
          required to implement this Agreement or instrumental hereto, shall
          have been approved as to form and legality by counsel for the Vendors
          and NAGE, acting reasonably.

     (f)  Legal Opinion.  The Purchaser and Travelbyus shall have delivered to
          the Vendors and NAGE a favourable opinion of counsel to the Purchaser
          and Travelbyus in form and substance satisfactory to the Vendors and
          NAGE and their counsel, acting reasonably.

     (g)  Employment Agreement. International Tours shall have executed an
          employment agreement with Ron Blaylock setting out the terms and
          conditions of employment, in form and substance satisfactory to Ron
          Blaylock, acting reasonably.

     (h)  Escrow Agreements.  The Purchaser, Travelbyus and GMP or the Escrow
          Agent, as applicable, shall have executed and delivered to the Vendors
          and NAGE the Closing Escrow Agreement and the Representation and
          Warranty Escrow Agreement.

     If any of the conditions precedent contained in this section 10.2 shall not
     be performed or fulfilled at or prior to the Time of Closing to the
     satisfaction of the Vendors and NAGE acting reasonably, the Vendors and
     NAGE may, by notice to the Purchaser and Travelbyus terminate this
     Agreement as well as the obligations of the Vendors and NAGE and the
     Purchaser and Travelbyus under this Agreement other than the obligations
     with respect to the payment of brokerage fees and commissions and the
     obligations set forth in section 12.3.  Any such condition may be waived in
     whole or in part by the Vendors and NAGE without prejudice to any claims it
     may have for breach of covenant, representation or warranty.
<PAGE>

61 -

                                  ARTICLE 11
                                INDEMNIFICATION

11.1  Indemnification by the Vendors and NAGE

Subject to the provisions of sections 8.1 and 11.9, each of the Vendors and NAGE
jointly and severally (except that GalaxSea and NAGE are not indemnifying with
respect to any liability relating to International Tours and International Tours
is not indemnifying with respect to any liability relating to GalaxSea or NAGE)
indemnify and save harmless Travelbyus and the Purchaser without duplication
from all Losses suffered or incurred by Travelbyus and the Purchaser as a result
of or arising directly or indirectly out of or in connection with:

     (a)  any breach by a Vendor and/or NAGE of or any inaccuracy of any
          representation or warranty of such Vendor and/or NAGE contained in
          this Agreement or in any agreement, certificate or other document
          delivered pursuant hereto (provided that such Vendor and/or NAGE shall
          not be required to indemnify or save harmless the Purchaser and
          Travelbyus in respect of any breach or inaccuracy of any
          representation or warranty unless the Purchaser and Travelbyus shall
          have provided notice to the Vendors and NAGE in accordance with
          section 12.1 on or prior to the expiration of the applicable time
          period related to such representation and warranty as set out in
          section 8.1);

     (b)  any breach or non-performance by a Vendor or NAGE of any covenant to
          be performed by it that is contained in this Agreement or in any
          agreement, certificate or other document delivered pursuant hereto;

     (c)  any debt, liability or obligation in respect of or arising from the
          operation of the Purchased Business and/or the Purchased Assets and/or
          IT Cruise of a Vendor or NAGE up to the Effective Date;

     (d)  except to the extent Taxes are reserved for on the IT Cruise Financial
          Statements or the GalaxSea Financial Statements, as the case may be,
          or in the books and records of IT Cruise or GalaxSea West, as the case
          may be; (i) for any and all Taxes of IT Cruise or GalaxSea West, as
          the case may be, with respect to all taxation years of IT Cruise or
          GalaxSea West, as the case may be, ending on or prior to the Effective
          Date; (ii) all Taxes allocated to NAGE or GalaxSea, as the case may
          be, pursuant hereto; and (iii) any Losses, with respect to all
          taxation years of IT Cruise or GalaxSea West, as the case may be, on
          or prior to the Effective Date, arising out of or incidental to the
          imposition, assessment or assertion of any such Taxes, including
<PAGE>

62 -

          those incurred in connection with the assertion or defense of any
          claim or assessment for such Taxes (collectively, the "Other
          Amounts"). If, with respect to any Taxes, the taxation year of IT
          Cruise or GalaxSea West, as the case may be, does not terminate on the
          Effective Date, the notional Taxes (whether based on income, capital,
          sale, transfer of ownership or provision of property or services or
          otherwise) attributable to the taxation year of IT Cruise or GalaxSea
          West, as the case may be, that includes the Effective Date shall be
          allocated to; (i) NAGE or GalaxSea, as the case may be, for the period
          up to and including the Effective Date; and (ii) Travelbyus-IT or
          Travelbyus-GalaxSea, as the case may be, for the period subsequent to
          the Effective Date. For the purposes of the section, Taxes for the
          period up to and including the Effective Date shall be determined on
          the basis of a closing of the books of IT Cruise or GalaxSea West, as
          the case may be, as of the Effective Date. Any additional Taxes due up
          to and including the Effective Date will be paid by NAGE or GalaxSea,
          as the case may be, through an adjustment of the IT Cruise Purchase
          Price or the GalaxSea Purchase Price, as the case may be. The notional
          Tax calculations will be prepared based on the provisions of United
          States and state income tax legislation in effect at the Effective
          Date as if IT Cruise or GalaxSea West, as the case may be, had a year
          end on the Effective Date. For greater certainty and without
          limitation, each of Travelbyus-IT, Travelbyus-GalaxSea and NAGE shall
          prepare or cause to be prepared in a manner consistent with past
          practice and file or cause to be filed, all Tax Returns of NAGE or
          GalaxSea with respect to periods ending on or before the Effective
          Date. Tax Returns shall be subject to the review and approval of
          Travelbyus-IT, Travelbyus-GalaxSea and Travelbyus provided that such
          review and approval of NAGE Tax Returns shall be limited to the
          reporting of the GalaxSea Assets and the GalaxSea Business and the
          Purchased Shares and the IT Cruise Business. Tax Returns shall be
          delivered to Travelbyus-IT, Travelbyus-GalaxSea and Travelbyus at
          least 30 days prior to the due date for approval. Whenever any taxing
          authority sends a notice of an audit, initiates an examination of IT
          Cruise or GalaxSea West, as the case may be or otherwise asserts a
          claim, makes an assessment, or disputes the amounts of Taxes for which
          NAGE or GalaxSea is or may be liable under this Agreement, Travelbyus-
          IT or Travelbyus-GalaxSea, as the case may be, shall promptly notify
          NAGE or GalaxSea, as the case may be, and NAGE or GalaxSea, as the
          case may be, shall have the right to control, at their own cost and
          expense any resulting proceedings and to determine whether and when to
          settle any such claim, assessment or dispute to the extent
<PAGE>

63 -

          such proceedings or determinations affect the amount of Taxes for
          which NAGE or GalaxSea, as the case may be, is liable under this
          Agreement. For greater certainty and without limitation, each of
          Travelbyus-IT, Travelbyus-GalaxSea, GalaxSea and NAGE shall inform and
          provide the other Party with such assistance as may reasonably be
          requested by either of them in connection with the preparation of any
          Tax return, any audit or other examination in connection with the
          preparation of any Tax return, any audit or other examination by any
          taxing authority or any judicial or administrative proceedings
          relating to liability for Taxes and each will retain and provide the
          other Party with any records or information which may be relevant to
          such Tax Return, audit or examination, proceedings or determination;

     (e)  for greater certainty and without limitation, the failure by the
          Vendors and/or NAGE to file Tax returns as contemplated pursuant to
          section 3.3;

     (f)  for greater certainty and without limitation, the breach by the
          Vendors and/or NAGE of the provisions of section 3.5;

     (g)  for greater certainty and without limitation, the failure by the
          Vendors and/or NAGE to pay or satisfy any of the Excluded Liabilities;

     (h)  for greater certainty and without limitation, the failure by the
          Vendors and/or NAGE to fulfil their obligations as provided in section
          9.4(a);

     (i)  for greater certainty and without limitation, the failure by the
          Vendors and/or NAGE to pay any commission or other remuneration
          payable or alleged to be payable to any broker, agent or other
          intermediary who purports to act or have acted for or on behalf of the
          Vendors and/or NAGE;

     (j)  any Claim that may be brought by Hickory Travel Systems, Inc., its
          Associates and/or Affiliates, successors and assigns, arising by
          reason of, from and/or under that certain agreement between
          International Tours and Hickory Travel Systems, Inc. dated February 8,
          1997 and the termination thereof pursuant to a a termination letter
          from Hickory Travel Systems, Inc. dated July 31, 1998; and

     (k)  any Claim that may be brought by Woodside Travel Trust, its Associates
          and/or Affiliates, successors and assigns, arising by reason of, from
          and/or under that certain agreement between WTT, Inc. doing business
          as Woodside Travel Trust and International Tours
<PAGE>

64 -

          dated July 20, 1993 and the termination thereof pursuant to a mutually
          agreed upon agreement dated on or about July 9, 1999.

11.2 Indemnification by Travelbyus and the Purchaser

Subject to the provisions of sections 8.2 and 11.9 the Purchaser and Travelbyus
jointly and severally indemnify and save harmless each of the Vendors and NAGE
without duplication from all Losses suffered or incurred by such Vendors and
NAGE as a result of or arising directly or indirectly out of or in connection
with:

     any breach by the Purchaser or Travelbyus of or any inaccuracy of any
          representation or warranty contained in this Agreement or in any
          agreement, instrument, certificate or other document delivered
          pursuant hereto (provided that the Purchaser or Travelbyus shall not
          be required to indemnify or save harmless such Vendor and NAGE in
          respect of any breach or inaccuracy of any representation or warranty
          unless such Vendor or NAGE, as applicable, shall have provided notice
          to the Purchaser or Travelbyus in accordance with section 12.1 on or
          prior to the expiration of the applicable time period related to such
          representation and warranty as set out in section 8.2);

     any breach or non-performance by the Purchaser or Travelbyus of any
          covenant to be performed by it that is contained in this Agreement or
          in any agreement, certificate or other document delivered pursuant
          hereto;

     any debt, liability or obligation in respect of or arising from the
          operation of the Purchased Business and/or the Purchased Business
          and/or IT Cruise after the Effective Date including without
          limitation, any failure by the Purchaser to pay, satisfy, discharge,
          perform or fulfill on a timely basis any of the Assumed Liabilities;

     for greater certainty and without limitation, the failure by the Purchaser
          to file Tax returns as contemplated pursuant to section 2.3; and

     for greater certainty and without limitation, the failure by the Purchaser
          and/or Travelbyus to pay any commission or other remuneration payable
          or alleged to be payable to any broker, agent or other intermediary
          who purports to act or have acted for or on behalf of the Purchaser
          and/or Travelbyus.
<PAGE>

65 -

11.3 Notice of Claim

In the event that a Party (the "Indemnified Party") shall become aware of any
claim, proceeding or other matter (a "Claim") in respect of which the other
Party (the "Indemnifying Party") agreed to indemnify the Indemnified Party
pursuant to this Agreement, the Indemnified Party shall promptly give written
notice thereof to the Indemnifying Party.  Such notice shall specify whether the
Claim arises as a result of a claim by a person against the Indemnified Party (a
"Third Party Claim") or whether the Claim does not so arise (a "Direct Claim")
and shall also specify with reasonable particularity (to the extent that the
information is available) the factual basis for the Claim and the amount of the
Claim, if known.  If, through the fault of the Indemnified Party, the
Indemnifying Party does not receive notice of a Claim in time to effectively
contest the determination of any liability susceptible of being contested, the
Indemnifying Party shall be entitled to set off against the amount claimed by
the Indemnified Party the amount of any Losses incurred by the Indemnifying
Party resulting from the Indemnified Party's failure to give such notice on a
timely basis.

11.4 Direct Claims

With respect to any Direct Claim, following receipt of notice from the
Indemnified Party of the Claim, the Indemnifying Party shall have 30 days to
make such investigation of the Claim as is considered necessary or desirable.
For the purpose of such investigation, the Indemnified Party shall make
available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request.  If both Parties
agree at or prior to the expiration of such 30 day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim (and for grater certainty and without
limitation, the procedures in the Representation and Warranty Agreement and
section 11.8 hereof shall be utilized.
<PAGE>

66 -

11.5 Third Party Claims

With respect to any Third Party Claim, the Indemnifying Party shall have the
right, at its expense, to participate in or assume control of, the negotiation,
settlement or defence of the Claim and, in such event, the Indemnifying Party
shall reimburse the Indemnified Party for the Indemnified Party's out-of-pocket
expenses incurred up to the point the Indemnifying Party assumed such control.
If the Indemnifying Party elects to assume such control, the Indemnified Party
shall have the right to participate in the negotiation, settlement or defence of
such Third Party Claim and to retain counsel to act on its behalf, provided that
the fees and disbursements of such counsel shall be paid by the Indemnified
Party unless the Indemnifying Party consents to the retention of such counsel or
unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and a representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to the actual or potential differing interests between them
(such as the availability of different defense).  If the Indemnifying Party,
having elected to assume such control, thereafter fails to defend the Third
Party Claim within a reasonable time, the Indemnified Party shall be entitled to
assume such control and the Indemnifying Party shall be bound by the results
obtained by the Indemnified Party with respect to such Third Party Claim.  If
any Third Party Claim is of a nature such that the Indemnified Party is required
by applicable law to make a payment to any person (a "Third Party") with respect
to the Third Party Claim before the completion of settlement negotiations or
related legal proceedings, the Indemnified Party may make such payment with the
written consent of the Indemnifying Party and the Indemnifying Party shall,
forthwith after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment.  If the amount of any liability of the Indemnified Party under
the Third Party Claim in respect of which such a payment was made, as finally
determined, is less than the amount that was paid by the Indemnifying Party to
the Indemnified Party, the Indemnified Party shall, forthwith after receipt of
the difference from the Third Party, pay the amount of such difference to the
Indemnifying Party.
<PAGE>

67 -

11.6 Settlement of Third Party Claims

If the Indemnifying Party assumes control of the defence of any Third Party
Claim, the Indemnifying Party shall have the exclusive right to contest, settle
or pay the amount claimed, provided that the Indemnifying Party shall not settle
any Third Party Claim without the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld or delayed; provided however
that the liability of the Indemnifying Party shall be limited to the proposed
settlement amount if any such consent is not obtained for any reason.  If the
Indemnified Party assumes control of the defence of any Third Party Claim, the
Indemnified Party shall have the exclusive right to contest, settle or pay the
amount claimed, provided that the Indemnified Party shall not settle any Third
Party Claim without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed; provided however that the
liability of the Indemnified Party shall be limited to the proposed settlement
amount if any such consent is not obtained for any reason.

11.7 Co-operation

The Indemnified Party and the Indemnifying Party shall co-operate fully with
each other with respect to Third Party Claims, and shall keep each other fully
advised with respect thereto (including supplying copies of all relevant
documentation as promptly as it becomes available).

11.8 Set-Off under Representation and Warranty Escrow Agreement

     In addition to any other rights and remedies available to Travelbyus and
          the Purchaser under this Agreement or any agreement delivered
          hereunder or available to Travelbyus and the Purchaser at law,
          Travelbyus and the Purchaser shall, subject to a final determination
          of any such Claims as set forth in (b) below, have the right to deduct
          from and set-off against (and thereby reduce or extinguish entirely)
          any monies owing by Travelbyus and the Purchaser to the Vendors and
          NAGE hereunder the amount of any Claims which the Purchaser and
          Travelbyus shall bona fide allege are owing as a result of a breach of
          any of the representations, warranties, covenants or agreements or
          claim for indemnification of the Vendors and/or NAGE contained in this
          Agreement or in any agreement or instrument delivered hereunder.

     No deduction or set-off may be made by Travelbyus and/or the Purchaser
          until it is determined, either by agreement between the Purchaser and
          Travelbyus and the Vendors and NAGE or by final order or judgment of a
          court of competent jurisdiction, as to the legitimacy of any Claim and
          the amount of damages or other relief available as a consequence of
          such Claim.
<PAGE>

68 -

     The provisions of this section 11.8 shall not affect any other legal remedy
          available to Travelbyus or the Purchaser to enforce payment by the
          Vendors and NAGE or any other Party of any amounts which they may
          become liable to pay to Travelbyus or the Purchaser as a result of
          their breach of any of the representations, warranties, covenants,
          indemnities or agreements contained in this Agreement.

     Subject to a final determination of any such Claim as set forth in (b)
          above, the Vendors and NAGE hereby covenant and agree to authorize the
          Escrow Agent under the Representation and Warranty Escrow Agreement to
          release to Travelbyus or the Purchaser (or as directed) any monies
          necessary to satisfy such Claim from the escrowed amount held by the
          Escrow Agent under the Representation and Warranty Escrow Agreement
          and the escrowed amount shall be reduced accordingly, all in
          accordance and subject to the terms of the Representation and Warranty
          Escrow Agreement.

     The Vendors and NAGE shall be liable for any deficiency in respect of any
          Claim in accordance with the terms hereof.

11.9 Exclusivity

The provisions of this Article 11 shall apply to any Claim for a breach of any
covenant, representation, warranty or other provision of this Agreement or any
agreement, certificate or other document delivered pursuant to this Agreement
(other than a Claim for specific performance or injunctive relief) with the
intent that all such Claims shall be subject to the provisions contained in this
Article 11.

                          ARTICLE 12 - MISCELLANEOUS

12.1 Notices

Any notice or other communication required or permitted to be given hereunder
shall be in writing and shall be delivered in person, transmitted by telecopy or
by similar means of recorded electronic communication or sent by registered
mail, charges prepaid, addressed as follows:

     if to the Vendors and NAGE:

          13150 Coit Road
          Suite 125
          Dallas, Texas
          75240
          U.S.A.
<PAGE>

69 -

          Attention:       Mr. Ed H. Hawes II
          Telecopier No.:  (972) 671-1134

          with a copy to:

          Glast, Phillips & Murray, PC
          2200 One Gallena Tower
          13355 Noel Road
          Dallas, Texas  75240

          Attention:       Mike Parsons
          Telecopier No.:  (972) 419-8329

     if to the Purchaser or Travelbyus:

          204 - 3237 King George Highway
          South Surrey, BC V4P 1BY

          Attention:       Bill Kerby
          Telecopier No.:  (604) 541-2450

          with a copy to:

          Cassels Brock & Blackwell
          Barristers and Solicitors
          Scotia Plaza, Suite 2100
          40 King Street West
          Toronto ON  M5H 3C2

          Attention:       John H. Craig
          Telecopier No.:  (416) 360-8877

Any such notice or communication shall be deemed to have been given and received
on the day on which it was delivered by overnight courier of recognized standing
or transmitted by facsimile transmission if confirmation of receipt is received
(or if such day is not a Business Day, on the next following Business Day) or,
if mailed, certified mail, return receipt requested, on the third Business Day
following the date of mailing; provided however that if at the time of mailing
or within three Business Days thereafter there is or there occurs a labour
dispute or other event that might reasonably be expected to disrupt the delivery
of documents by mail, any notice or other communication hereunder shall be
delivered or transmitted by means of recorded electronic communication as
aforesaid.  Any Party may at any time change its address for service from time
to time by giving notice to the other Parties in accordance with this section
12.1.
<PAGE>

70 -

12.2 Public Notices

All public notices to third persons and all other publicity concerning the
transaction contemplated herein shall be jointly planned and co-ordinated by the
Vendors, NAGE, Travelbyus and the Purchaser and no Party shall act unilaterally
in this regard without the prior approval of the other Parties, such approval
not to be unreasonably withheld, except:

     in the case of the Purchaser or Travelbyus, for communications made in
          confidence to GalaxSea Transferred Employees and International Tours
          Transferred Employees affected by the transaction contemplated hereby
          who shall be informed of the confidential nature of the transaction
          and who agree to keep such information confidential; or

     where required to do so by law or by the applicable regulations or
          policies of any regulatory agency of competent jurisdiction or any
          stock exchange in circumstances where prior consultation with the
          other Parties is not practicable.

12.4 Counterparts and Facsimile

This Agreement may be executed in counterparts, each of which shall constitute
an original and all of which taken together shall constitute one and the same
instrument.
<PAGE>

71 -

IN WITNESS WHEREOF this Agreement has been executed by the parties hereto.

                              INTERNATIONAL TOURS, INC.

                              Per: /s/ Ron Blaylock
                                   ---------------------------------------------

                              GALAXSEA CRUISES AND TOURS, INC.

                              Per: /s/ Ted C. Parker, Jr.
                                   ---------------------------------------------

                              NORTH AMERICAN GAMING AND ENTERTAINMENT
                              CORPORATION

                              Per: /s/ E.H. Hawes, II
                                   ---------------------------------------------

                              TRAVELBYUS-IT INCORPORATED

                              Per: /s/ William Kerby
                                   ---------------------------------------------

                              TRAVELBYUS-GALAXSEA INCORPORATED

                              Per: /s/ William Kerby
                                   ---------------------------------------------

                              TRAVELBYUS.COM LTD.

                              Per: /s/ William Kerby
                                   ---------------------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00007-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00007-of-00352.parquet"}]]