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		Project Perseus

Summary of Proposed Transaction

Key Terms and Conditions


Transaction Structure		Cash merger (the “Transaction”)

Consideration		$9.50 per share, which implies an equity value of $199.1M and enterprise value of $263.4M⁽¹⁾

Options Treatment		Options to purchase Perseus shares will be cancelled and settled in cash⁽²⁾

Tax Treatment		Taxable to Perseus shareholders

Break-up Fee		Break-up fee equal to $8.25 million (approximately $0.40 per share, or 3.1% of enterprise value) plus transaction-related expenses capped at $1.0 million


Closing Conditions	n	Perseus shareholder approval (by a simple majority);

	n	Receipt of financing;

	n	Expiration of waiting period under Hart-Scott Rodino Act;

	n	Material consents under agreements;

	n	All consents, approvals and authorizations required by a Government entity have been obtained;

	n	No injunctions, restraints or other legal prohibitions;

	n	Representations and warranties are true and correct in all material respects;

	n	Performance of all obligations to be performed under the Agreement;

	n	Compliance with covenants; and

	n	No material adverse change at Perseus


(1)		Based on 20.959M net diluted shares outstanding, $75.0M of debt and $10.8M of cash (excluding $11.2M of cash related to uncashed commission checks and customer deposits and $6.1M related to SERP funding). The schedule of stock options was provided to us by Perseus management. Other financial data is from the Company’s 9/30/05 10Q or provided by management.

(2)		Option Settlement = (Merger Consideration – Exercise Price of such option) * number of shares, which could have been purchased assuming full vesting of the option.

Confidential


		Project Perseus

Summary of Transaction Financing

Key Terms and Conditions⁽¹⁾


Transaction Financing	n	$110M committed debt financing from JPMorgan (plus a $10M unfunded revolver)

	n	The balance in committed equity from Prides Capital and other investors

Debt Commitment Conditions (in addition to Closing Conditions)	n	Documentation conditions — general requirements for legal opinions, evidences of authority, lien documentation and search results and guarantees, evidence of reasonably satisfactory insurance;

	n	Representations and warranties in the loan documents are true and correct in all material respects;

	n	No existing default or prepayment event is occurring and no liens (other than the bank’s liens) will be created by the transactions;

	n	A rating from each of S&P and Moody’s;

	n	The equity contribution is received⁽²⁾;

	n	No provision of the merger agreement shall be waived in a manner materially adverse to the lenders;

	n	The CEO, CFO and COO shall have contributed at least $1.5 million of the equity contribution;

	n	The Company shall have entered into an employment agreement satisfactory to JPMorgan with each of the CEO, CFO and COO⁽³⁾;

	n	Any payments to senior management made in connection with the merger will be paid by Prides out of additional equity above the amount of committed equity;

	n	All existing debt of Perseus shall have been repaid in full;

	n	All costs and transaction fees shall be paid;

	n	Lenders shall have received a solvency certificate and certain financial information;

	n	Material consents shall be obtained and there shall be no judicial action or proceeding pending or threatened against the deal; and

	n	Pro Forma EBITDA for the most recent LTM shall be at least $32 million.

Equity Commitment Conditions	n	Completion of the merger (only condition)


(1)		We have examined drafts of the lender’s debt commitment and the buyer’s form of equity commitment but have not yet received final versions of these agreements.

(2)		Note that the financing contingency in the Merger Agreement only applies to the debt financing and not receipt of the equity financing.

(3)		Currently being deliberated.

Confidential


		Project Perseus

Perseus Summary Valuation



Summary Valuation		($ in millions, except per share data)


	At Market⁽¹⁾			At Transaction Price of
Price per Share	$8.24			$9.50
Premium					15.3	%

Basic Shares Outstanding		20.766			20.766
Dilutive Effect From “In the Money” Options		0.138			0.193

Fully Diluted Shares Outstanding		20.904			20.959

Equity Value	$	172.2		$	199.1
Plus: Debt		75.0			75.0
Less: Cash⁽²⁾		(10.8	)		(10.8	)

Enterprise Value	$	236.5		$	263.4

Key Valuation Statistics

At Market⁽¹⁾

At Transaction Price of

Price Per Share

Management

$8.24

$9.50

Enterprise Value/EBITDA

CY 2005E

CY 2006E

36.8

6.4

7.2

Enterprise Value/EBIT

CY 2005E

18.5 x

20.6 x

CY 2006E

15.0

15.8

17.5

Price/Earnings

CY 2005E

23.4 x

27.0 x

CY 2006E

0.40

20.8

24.0


Note:		Projections provided by Perseus management.

(1)		Closing price per share at market as of December 14, 2005. Note that after the market closed on April 11, 2005, Perseus announced it was exploring strategic alternatives including a potential sale of the Company.

(2)		Excludes $11.2 million of cash related to uncashed commission checks and customer deposits and $6.1 million related to SERP funding. Source: Perseus management.

Confidential



*		Confidential Treatment Requested


		Project Perseus

Process Summary

On April 11, 2005, the Company announced that it had retained Bear Stearns to explore strategic alternatives.


n		Bear Stearns initially contacted 79 potential buyers beginning in May 2005

	•		16 strategic buyers

	•		56 US financial sponsors

	•		7 European financial sponsors


n		40 potential buyers signed confidentiality agreements and received a copy of the Project Perseus Executive Summary

	•		10 strategic buyers

	•		28 US financial sponsors

	•		2 European financial sponsors


n		We received five preliminary indications of interest for the entire company at the end of June when Perseus’ stock price was $10.75

	•		*: $12.00-$14.00

	•		Financial Sponsor: $12.50-$14.00

	•		Financial Sponsor: $10.50-$12.00 (Market)

	•		Financial Sponsor: $10.75 (Market)

	•		Strategic Buyer: $10.50-$11.00 (Market)


n		In addition, we received indications from five strategic buyers who were interested only in certain parts of the Company


Confidential			5

*	Confidential Treatment Requested


				Project Perseus

Process Summary (cont.)


n		After receiving preliminary indications of interest, six potential buyers were invited into the second round

•

Buyers interested in whole company

			- *

			- Financial Sponsor

•

Buyers interested in whole or in parts of the Company (with specific interest noted)

			- Strategic Buyer —Distribution, Reservation and Financial

			- Strategic Buyer —Representation

			- Strategic Buyer —Representation

			- Strategic Buyer —Representation


n		Management made formal presentations to each of the interested buyers and gave each party access to the online data room and Bear Stearns coordinated follow-up due diligence information and meetings with each of the buyers


n		By the time final bids were due in late August, Prides was the only party that had not dropped out of the auction process


n		Since late August, the process has primarily focused on Prides and their obtaining committed financing

	•		We have had informal subsequent conversations with certain of the parties that dropped out of process but none have expressed interest in reengaging

	•		Prides has gone to multiple sources to obtain its committed debt financing


Confidential			6

*	Confidential Treatment Requested


		Project Perseus

Feedback from Parties that Declined

We received similar feedback from multiple parties with respect to their reasons for dropping out of our process.


n		Weak operating performance relative to the lodging/travel sector

	•		Projected 2005 sales and EBITDA declining

	•		Flat revenues and profits historically relative to projected growth and margin expansion

	•		Growth driven by new product initiatives (HotelBook, uniqueHotels and SPARC) that have not been successful historically (Business Intelligence, Pegasus Central)

	•		Significant effort required to achieve growth and margin targets


n		Not a compelling combination of businesses

	•		Several parties were aligned to either the Representation Services or Technology Offerings

	•		Lack of clear strategic fit with operations of strategic parties (too many additional parts)


n		Valuation at or below current market price

•

Company is trading at a high valuation relative to historical and near-term growth rates and its peers


Confidential			7


		Project Perseus

Perseus Historical Price Performance—Last Twelve Months


A	12/14/2004	Provides Updated Outlook for Fourth Quarter 2004 and Guidance for First Quarter and Full Year 2005

B	2/8/2005	Reports Earnings Results for Fourth Quarter 2004; Provides Updated Outlook for First Quarter and Full Year 2005

C	4/11/2005	Announces Lower Earnings Outlook for First Quarter 2005; Board Announces Intention to Explore Strategic Alternatives

D	5/3/2005	Reports Earnings Results for First Quarter 2005; Provides Earnings Guidance for Second Quarter 2005

E	6/29/2005	Announces Intention to Exit the Property Management System Business

F	7/12/2005	Blum Files 13D Disclosing the Sale of 205,200 Shares of Perseus Stock

G	8/4/2005	Reports Earnings Results for Second Quarter 2005; Provides Earnings Guidance for Third Quarter 2005

H	9/7/2005	Blum Announces Intention Not to Sell Any Additional Shares Until After Release of Third Quarter 2005 Results

I	10/21/05	Multi-Systems Inc. Agrees to Buy Perseus’ Property Management Systems Business

J	11/05/05	Reports Earnings Results for Third Quarter 2005; Provides Earnings Guidance for Fourth Quarter and Full Year 2005


Source:		ThomsonOne Banker.


Confidential			8


		Project Perseus

Premium/(Discount) Analysis—Last Twelve Months


	Premium/(Discount) to Average Stock Price
	At Transaction Price			At Market⁽¹⁾
Period	$9.50			$ 8.24
One Month		28.7	%		11.7	%
Three Months		16.9			1.4
Six Months		1.7			(11.8	)
Since Announcement⁽²⁾		(2.4	)		(15.4	)
One Year		(9.2	)		(21.2	)


Source: ThomsonOne Banker.

(1) Closing price per share at market as of December 14, 2005.

(2) After the market closed on April 11, 2005, Perseus announced it was exploring strategic alternatives including a potential sale of the Company.


Confidential			10


		Project Perseus

Perseus Historical and Projected Income Statement

($ in millions)


	Historical Year Ended December 31,									Projected Calendar Year Ending December 31,																	CAGR		CAGR
	2002⁽¹⁾			2003⁽²⁾			2004⁽³⁾			2005		2006			2007			2008			2009			2010			‘02–’05		‘05–’10
Revenue	$	186.5		$	172.7		$	190.1			*	$	183.6		$	192.8		$	202.4		$	213.6		$	224.8			*		*
% Growth					(7.4	%)		10.1	%		*		3.6	%		5.0	%		5.0	%		5.5	%		5.3	%

EBITDA	$	37.6		$	34.8		$	36.9			*	$	36.8		$	39.1		$	43.6		$	49.9	%	$	56.0			*		*
Margin		20.2	%		20.1	%		19.4	%		*		20.0	%		20.3	%		21.5	%		23.4	%		24.9	%
% Growth					(7.5	)		6.3			*		15.0			6.3			11.4			14.5			12.3

EBITA	$	21.0		$	17.2		$	20.1			*	$	18.2		$	20.5		$	25.0		$	31.3	%	$	37.4			*		*
Margin		11.3	%		9.9	%		10.6	%		*		9.9	%		10.7	%		12.3	%		14.7	%		16.7	%
% Growth					(18.3	)		17.3			*		14.5			12.8			21.7			25.3			19.6

EBIT	$	3.0		$	12.1		$	18.1			*	$	15.0		$	17.4		$	23.1		$	30.6	%	$	36.8			*		*
Margin		1.6	%		7.0	%		9.5	%		*		8.2	%		9.0	%		11.4	%		14.3	%		16.4	%
% Growth					301.0			50.4			*		17.3			16.2			32.4			32.6			20.3

Net Income	$	2.7		$	7.6		$	10.6			*	$	8.6		$	10.7		$	14.8		$	20.2	%	$	24.6			*		*
Margin		1.5	%		4.4	%		5.6	%		*		4.7	%		5.5	%		7.3	%		9.5	%		11.0	%
% Growth					181.8			39.0			*		15.6			24.4			38.7			36.4			21.9

EBITDA – CapEx	$	7.2		$	15.4		$	14.3			*	$	16.8		$	19.1		$	23.6		$	29.9	%	$	36.0			*		*
% Growth					111.8	%		(6.6	%)		*		40.1	%		13.9	%		23.2	%		26.8	%		20.5	%


Note:		Projections provided by Perseus management.

(1)		Excludes a $3.5 million one-time customer termination fee revenue from Reservation Services.

(2)		Excludes $5.9 million of one-time restructuring expenses. In addition, EBITDA excludes $3.8 million of non-recurring expenses related to severance, the Company’s strategic integration and facilities moving costs.

(3)		Excludes $2.3 million of restructuring expenses related to the Company’s IT organization and a $2.0 million gain on the sale of Travelweb, LLC.



Confidential		13

*	Confidential Treatment Requested


		Project Perseus

Financial Outlook Has Declined

Since launching the process with potential buyers in May, the financial outlook for the Company has declined and the Company has subsequently lowered its projections.


Revenue		EBITDA



EBIT⁽¹⁾		Net Income⁽¹⁾


Note: $ in millions.

(1)		Excludes amortization of software and intangibles obtained through acquisitions.

(2)		Projections that were included in the selling memorandum.



Confidential

* Confidential Treatment Requested


		Project Perseus

Financial Outlook Has Declined (cont.)

The Company also missed the financial guidance it issued publicly in early 2005.

n		In February 2005, the Company issued calendar year 2005 and Q1 2005 revenue and EPS guidance

n		When the Company announced it had retained Bear Stearns to explore strategic alternatives in April, it announced that it would miss its Q1 guidance and did not offer updated full-year guidance

n		In November, the Company gave Q4 and calendar year 2005 revenue and EPS guidance

Calendar Year 2005 Guidance


	February 2005		November 2005		% Change⁽¹⁾
Revenue ($M)	$	199-$207	$	175-$177		(13.7	%)
EPS	$	0.55-$0.65	$	0.42-$0.45		(27.5	%)


Source:		Company press releases.

(1)		Based on midpoint of ranges.



Confidential		15


		Project Perseus

Declining Operating Performance

Most P&L metrics in 2005 are down on a quarter-over-quarter basis from the prior year.


Revenue		EBITDA


EBIT⁽¹⁾		Net Income^{(1) (2)}


Note:		$ in millions.

Source:		Perseus management.

(1)		Excludes amortization of software and intangibles obtained through acquisitions.

(2)		From continuing operations, does not include results of discontinued operations.



Confidential		16


*		Confidential Treatment Requested


		Project Perseus

Perseus Ownership Shareholder Profile⁽¹⁾


Shareholder	# of Shares		% of Total
Blum Capital		2,883,000		13.9	%
Columbia Wanger Asset Mgmt		2,324,000		11.2
Prides Capital Partners		2,066,000		10.0
Dimensional Fund Advisors		1,771,000		8.5
Barclays Bank PLC		1,369,000		6.6
Tudor Investment Corp.		1,234,000		5.9
Par Investment Partners		1,000,000		4.8
AXA		682,136		3.3
Fidelity		528,540		2.5
Vanguard		463,936		2.2

Top 10 Shareholders		14,321,612		69.0	%
Management⁽²⁾		175,818		0.9
All Other Shareholders		6,243,577		30.1

Total Shareholders		20,741,007		100.0	%


(1)		Source: Bloomberg. Share ownership as of 12/14/2005.

(2)		Source: Proxy dated 3/17/2005. Excludes shares underlying options.



Confidential		17


		Project Perseus

Valuation Overview

We observed that the purchase price is within or above the range of per share values implied from the valuation methodologies shown below.

Valuation Ranges Based on Perseus Projections


(1)		As of December 14, 2005. Note that after the market closed on April 11, 2005, Perseus announced it was exploring strategic alternatives including a potential sale of the Company.

(2)		Based on CY 2006 management projections.

(3)		Implied share prices based on DCF analysis using a discount rate of 17.0% and a terminal EBIT multiple of 12.0x.



Confidential		18


		Project Perseus


Summary Comparable Company Analysis

We identified five publicly traded companies that are engaged in travel distribution and reselling

	•		We consider Cendant, Sabre and TRX to be the most comparable peers given their supplier-side operations

	•		Expedia and Priceline are also generally comparable, although they focus on travel reselling

P/E Multiples


Note:		Perseus projections provided by management. Comparable company projections based on FirstCall consensus.



Confidential		19


		Project Perseus

Summary Comparable Company Analysis (cont.)

n		On this page, we examined EBIT multiples as opposed to EBITDA multiples due to different accounting policies related to internally generated software costs

n		Perseus capitalizes a higher percentage of its internally developed software costs than peers resulting in lower relative operating expenses as outlined in Appendix A

EBIT Multiples


Note:		Perseus projections provided by management. Comparable company projections based on FirstCall consensus.



Confidential		20


		Project Perseus

Travel Marketing and Distribution Trading Statistics



Selected Comparable Company Valuations		($ in millions, except per share data)


	Perseus						Travel Processing & Distribution												Online Travel Resellers
	Market			Transaction			Cendant			Sabre			TRX			Mean			Expedia			Priceline			Mean
Price (as of 12/14/05)	$	8.24		$	9.50		$	16.73		$	24.16		$	8.88					$	25.36		$	23.70
Equity Value	$	172.2		$	199.1		$	17,425.9		$	3,195.8		$	156.8					$	8,699.4		$	953.9
Enterprise Value		236.5	⁽¹⁾		263.4	⁽¹⁾		21,883.9			4,201.4			133.7						8,542.6			1,061.9
Enterprise Value / EBITDA LTM		7.6	x		8.4	x		7.7	x		10.5	x		16.8	x		11.6	x		12.5	x		16.0	x		14.3	x
CY2005E		*			*			8.1			9.7			12.4			10.1			12.6			15.4			14.0
CY2006E		6.4			7.2			6.9			8.2			6.9			7.3			11.0			12.3			11.7
Enterprise Value / EBITDA-CapEx LTM		37.0	x		41.2	x		9.1	x		13.3	x	NM				11.2	x		13.6	x		18.9	x		16.3	x
CY2005E		*			*			9.5			12.1		NM				10.8			13.7			18.1			15.9
CY2006E		14.1			15.7			8.0			10.2			13.6			10.6			11.7			14.0			12.8
Enterprise Value / EBITA LTM		17.5	x		19.5	x		9.0	x		12.9	x	NM				11.0	x		13.2	x		19.5	x		16.3	x
CY2005E		*			*			9.6			12.7		NM				11.2			13.3			17.6			15.5
CY2006E		13.0			14.5			8.0			10.6			13.8			10.8			11.4			14.0			12.7
Enterprise Value / EBIT LTM		19.7	x		21.9	x		9.5	x		14.6	x	NM				12.1	x		21.9	x		26.5	x		24.2	x
CY2005E		18.5			20.6			10.1			14.5		NM				12.3			21.7			24.2			22.9
CY2006E		15.8			17.5			8.4			11.9			13.9			11.4			17.0			22.3			19.7
Price / Earnings CY2005E		23.4	x		27.0	x		12.8	x		16.4	x	NM				14.6	x		21.0	x		17.4	x		19.2	x
CY2006E		20.8			24.0			11.2			14.6			17.1			14.3			19.5			15.2			17.4
Long-Term Growth		*	%⁽²⁾		*	%⁽²⁾		13.2	%		10.0	%		22.5	%		15.2	%		15.1	%		16.3	%		15.7	%
PEG CY2006		0.77	x		0.89	x		0.85	x		1.46	x		0.76	x		1.02	x		1.29	x		0.93	x		1.11	x


Note:		Perseus projections provided by management. Comparable company projections based on FirstCall consensus.

(1)		Excludes $11.2 million of cash related to uncashed commission checks and customer deposits and $6.1 million related to SERP funding. Source: Perseus management.

(2)		Represents 2005E-2010E net income CAGR based on projections provided to us by management. No Wall Street equity analyst has published long-term EPS growth rate estimates.



Confidential		21


*		Confidential Treatment Requested


		Project Perseus

Summary Selected Precedent Transactions Analysis


n		Identified three precedent transactions in the travel processing and distribution sector

	•		Transaction values ranged from $900M to $5.4B

	•		Completed transactions were announced between June 2001 and January 2005

($ in millions)

LTM

Date Announced-

Transaction

Transaction Value / LTM

Transaction Value/Forward

EBITDA

LTM EBIT

Effective

Target/Acquiror

Value

Revenue

EBITDA

EBIT

Revenue

EBITDA

EBIT

EPS

Margin

1/12/05–7/4/05

Amadeus/Cinven-BC Partners

5,430.1

2.21

8.3

13.2

2.05

7.6

12.0

15.6

26.7

16.7

3/4/03–7/1/03

Worldspan/Travel Trans. Processing

901.5

0.99

4.6

7.6

21.6

12.9

6/18/01–10/1/01

Galileo International/Cendant

2,340.0

1.42

4.1

6.6

1.26

3.9

10.2

34.9

21.7

Mean

1.54

5.6

9.1

1.65

5.8

12.0

12.9

27.7

17.1

Median

1.42

4.6

7.6

1.65

5.8

12.0

12.9

26.7

16.7

Perseus (At Transaction)

1.43

8.4

21.9

1.43

x⁽¹⁾

7.2

x⁽¹⁾

17.5

x⁽¹⁾

24.0

x⁽¹⁾

16.9

6.5


n		Although there were M&A transactions in the online travel space, we do not consider them to be comparable to Perseus given the higher growth and margin characteristics of those companies


(1)		Based on CY2006 management projections.



Confidential		23


		Project Perseus

Discounted Cash Flow Methodology

We applied a discounted cash flow analysis to the Perseus projections. The following outlines our approach:


n		Projected results for 2006 through 2010 are based on projections provided by Perseus management

n		The annual after-tax unlevered free cash flows for fiscal year 2006 through 2010 were valued using discount rates ranging from 16.0% to 18.0%

n		The terminal value was calculated using LTM EBIT multiples of 11x to 13x

n		*Valuation based on the DCF is highly sensitive to the achievement of the underlying projections*

•

For instance, a 5% EBITDA shortfall from projected levels results in approximately $1 per share of net present value



Confidential		24


		Project Perseus

Illustrative Perseus DCF Analysis Based on 17.0% Discount Rate

Perseus Projected Free Cash Flow


	($ in millions)
	Years Ending December 31,
	2006E			2007E			2008E			2009E			2010E
EBITDA	$	36.8		$	39.1		$	43.6		$	49.9		$	56.0
Annual Growth		*			6.3	%		11.4	%		14.5	%		12.3	%
Margin		20.0			20.3			21.5			23.4			24.9

Less: Depreciation and Amortization	($	21.8	)	($	21.7	)	($	20.5	)	($	19.3	)	($	19.2	)

EBIT	$	15.0		$	17.4		$	23.1		$	30.6		$	36.8
Annual Growth		*			16.2	%		32.4	%		32.6	%		20.3	%
Margin		8.2			9.0			11.4			14.3			16.4

NOPAT⁽¹⁾	$	15.0		$	17.4		$	23.1		$	19.6		$	23.6
Plus: Depreciation and Amortization		21.8			21.7			20.5			19.3			19.2
Less: Capital Expenditures		(20.0	)		(20.0	)		(20.0	)		(20.0	)		(20.0	)
Plus: Decrease/(Increase) in Working Capital		(1.5	)		1.1			0.5			0.0			0.0

Unlevered Free Cash Flow	$	15.3		$	20.2		$	24.1		$	18.9		$	22.8
Annual Growth					32.2	%		19.0	%		(21.6	%)		20.6	%

Value Based on Terminal EBIT Multiple



PV of 2006–2010 Free Cash Flows	$	68.6		25.4	%
PV of Terminal Value⁽²⁾		201.7		74.6

Enterprise Value	$	270.3		100.0	%
Less: Net Debt⁽³⁾		(64.3	)

Equity Value	$	206.0


Basic Shares Outstanding⁽⁴⁾		20.766
Net Dilutive Effect of In the Money Options⁽⁵⁾		0.205

Fully Diluted Shares Outstanding		20.971
Implied Price per Share	$	9.82


		Note: Present value of unlevered free cash flow calculated using the mid-year discounting convention.

(1)		Assumes there are no taxes paid in 2006-2008 due to a net operating loss carryforward. Assumes a 36.0% tax rate in 2009 and 2010.

(2)		Based on a terminal LTM EBIT multiple of 12.0x.

(3)		Includes debt of $75.0 million and cash of $10.8 million as of September 30, 2005. Cash excludes $11.2 million of cash related to uncashed commission checks and customer deposits and $6.1 million related to SERP funding.

(4)		Per Company’s 10-Q dated September 30, 2005.

(5)		In-the-money options and shares repurchased under the treasury method are based on the implied price per share. The options schedule was provided by the Company.



Confidential		25


*		Confidential Treatment Requested


		Project Perseus

Discounted Cash Flow Sensitivity Analysis

Equity Value per Share


	EBIT Exit Multiple
WACC	11.0x		11.5x		12.0x		12.5x		13.0x
16.00%	$	9.48	$	9.89	$	10.30	$	10.70	$	11.10
16.50		9.26		9.66		10.06		10.46		10.85
17.00		9.04		9.43		9.82		10.22		10.60
17.50		8.82		9.21		9.59		9.98		10.36
18.00		8.61		8.99		9.37		9.74		10.12

Sensitivity to Projected Performance⁽¹⁾


Realization	EBIT Exit Multiple
Rate⁽²⁾	11.0x		11.5x		12.0x		12.5x		13.0x
110%	$	10.95	$	11.39	$	11.81	$	12.24	$	12.65
105		10.00		10.42		10.83		11.24		11.65
100		9.04		9.43		9.82		10.22		10.60
95		8.07		8.43		8.80		9.16		9.53
90		7.09		7.43		7.77		8.11		8.44

Implied Perpetuity Growth Rate


	EBIT Exit Multiple
WACC	11.0x			11.5x			12.0x			12.5x			13.0x
16.00%		9.6	%		9.9	%		10.1	%		10.4	%		10.6	%
16.50		10.1			10.4			10.6			10.8			11.0
17.00		10.6			10.8			11.1			11.3			11.5
17.50		11.0			11.3			11.6			11.8			12.0
18.00		11.5			11.8			12.0			12.3			12.5


(1)		Based on a discount rate of 17.0%.
(2)		Represents realization of EBITDA in each projected period.



Confidential		26


		Project Perseus

Perseus—Weighted Average Cost of Capital Analysis


Assumptions
Risk-free Rate⁽¹⁾	4.7	%

Market Risk Premium⁽²⁾	7.2

Market Capitalization Premium⁽³⁾	4.5

Perseus Marginal Tax Rate	36.0

Pre-Tax Cost of Debt⁽⁴⁾	8.5

Unlevered Beta Calculation


			Historical Observed
			Adjusted Beta⁽⁶⁾
										Unlevered
Comparable Company	Barra Beta⁽⁵⁾		2-Year Weekly		5-Year Monthly		Debt/Equity⁽⁷⁾			Beta⁽⁸⁾
Cendant		1.28		0.98		1.45		27.6	%		1.08
Sabre		1.15		1.35		1.54		43.5			0.90
TRX		0.86	NA		NA			4.2			0.84
Expedia		1.86		1.56		1.38		0.0			1.86
Priceline		1.93		1.68		2.72		23.4			1.67

Mean⁽⁹⁾		1.42		1.39		1.77		19.8	%		1.27
Perseus		1.15		1.09		1.12		43.5			0.90

WACC Calculation


Debt/	Debt/			Unlevered Betas
Equity⁽⁷⁾		Capitalization			0.90		1.00		1.20			1.40			1.60
10.0%		9.1	%		14.2	%	14.9	%		16.1	%		17.4	%		18.7	%
20.0		16.7			14.6		15.3			16.6			17.9			19.3
30.0		23.1			14.9		15.6			17.1			18.5			19.9
40.0		28.6			15.2		16.0			17.5			19.0			20.5
50.0		33.3			15.6		16.4			18.0			19.5			21.1


		Note: WACC = Kd * D/(D+E) + Ke * E/(D+E).

(1)		Yield on 20-year Treasury Bond as of 12/14/05.

(2)		Long-term horizon expected equity risk premium. Source: Ibbotson Associates.

(3)		Source: Ibbotson Associates.

(4)		BSC HY Capital Markets estimate for Perseus’ long-term fixed borrowing rate.

(5)		Barra Beta as of 12/14/05.

(6)		Source: ThomsonOne Banker.

(7)		Total debt divided by market value of equity.

(8)		Unlevered Beta = Barra Beta/(1+ (1-tax)*D/E).

(9)		Mean excludes Perseus.



Confidential		26


		Project Perseus

Capitalized Internally Developed Software Costs

Perseus capitalizes a larger portion of its internally developed software costs than its peers. This results in lower operating expenses but higher depreciation for Perseus vis-à-vis its peers. We believe this difference in accounting results in incomparable EBITDA margins and multiples.


Capitalized Software Cost as a Percent of Revenue		Capitalized Software Cost as a Percent of Total PP&E


Confidential		29


Section
1		Transaction Overview

2		Process Overview

3		Perseus Overview

4		Valuation Analysis

	A		Valuation Summary

	B		Comparable Company Analysis

	C		Precedent Transactions Analysis

	D		Discounted Cash Flow Analysis

Appendices

	A		Depreciation Expense Analysis


Three Months		Since Announcement⁽¹⁾



One Year		Two Years


Source: ThomsonOne Banker.

(1) April 11,2005.

(2) Includes Cendant and Sabre.

(3) Includes Expedia and Priceline.


(1) Source: ThomsonOne Analytics, Thomson Research.

(2) Bear Stearns, JP Morgan, Citigroup, Legg Mason, CIBC and Sidoti.

(3) Bear Stearns, Legg Mason, CIBC and Thomas Weisel.

(4) Bear Stearns.