North American acquires cruise franchisor

Business Wire, June 7, 1996

DALLAS--(BUSINESS WIRE)--June 7, 1996--North American Gaming and Entertainment Corporation (OTC:NAMC), Dallas, Texas, and International Tours, Inc. ("International Tours"), Tulsa, Okla., today announced that they had entered into an agreement pursuant to which North American will acquire two subsidiaries of International Tours. These subsidiaries, GalaxSea Cruises and Tours, Inc. and IT Cruise, Inc., are involved in the retail cruise travel sales and marketing business through a franchising network and in association with independent agencies and business alliances.

GalaxSea will be acquired by virtue of a merger with a newly created wholly-owned subsidiary of North American, under the terms of which North American will issue 4,934,106 shares of Common Stock and 8,000,000 shares of Preferred Stock to International Tours. The 8,000,000 shares of Preferred Stock will be entitled to one vote for each share issued and will vote together with the Common Stock of North American as one class, and not as a separate class. As a result, International Tours will become the largest shareholder of North American, owning approximately 44 percent of the voting stock. Simultaneously with the closing of the Merger, North American will also restructure its existing, outstanding Class A Preferred Stock by redeeming 313,000 of the 1,600,000 outstanding shares for a $939,000 subordinated debenture, placing an agreed moratorium on the accrual of dividends for two years and obtaining from the Class A Preferred shareholders the right to force conversion of the remaining 1,287,000 shares of Class A Preferred Stock into 8,240,000 shares of Common Stock at any time within the next two years. The $780,000 of dividends on the Class A Preferred Stock accumulated and accrued through May 31, 1996 will exist as accrued dividends payable.

In addition to the merger and restructuring, North American will also acquire from International Tours all of the outstanding shares of IT Cruise, Inc. in exchange for cash and a promissory note totaling $1,500,000.

For North American, the acquisitions were an opportunity to diversify its interests and sources of revenue in the entertainment industry. Important factors in North American's first involvement in the travel business are the 27 years of experience in the travel store franchising industry that International Tours brings and the proven GalaxSea system for selling cruises. The merger marks the beginning of an aggressive plan by North American and International Tours to establish GalaxSea as a nation-wide distribution system of cruise products. Said International Tours' President Ron Blaylock, "The merger provides GalaxSea the resources necessary to launch a franchise expansion campaign that calls for adding 300-400 retail cruise stores under the common brand name 'GalaxSea Cruises and Tours'. This will enable GalaxSea to take the lead in the reengineering of the cruise product distribution system that cruise lines are demanding." Blaylock will remain president of both International Tours and GalaxSea as well as IT Cruise, Inc., which will provide cruise marketing programs for International Tours' existing network of retail travel agencies. International Tours is a privately-owned developer and implementor of leisure travel management. The merger will not affect International Tours' relationship with the approximately 1400 travel locations affiliated with the International Tours network.

The acquisition of GalaxSea and IT Cruise, Inc. is contingent on satisfaction of various conditions. It is currently anticipated that such conditions will be satisfied and that the closing will occur in the second week of June 1996.

CONTACT: North American Gaming and Entertainment Corporation

Lamar E. Ozley Jr. or George J. Akmon,

214/423-9113 or fax 214/423-0303