Document:

<PAGE>

                                                                   EXHIBIT 10.26

                              SETTLEMENT AGREEMENT

     THIS SETTLEMENT AGREEMENT (the "Agreement") is made and entered into
effective as of April 1, 2000 by and between North American Gaming and
Entertainment Corporation ("North American"); Lamar E. Ozley, Jr. and Chris
Ozley (hereinafter referred to collectively as the "Ozley Group" or as the
"Debenture Holders"); and E.H. Hawes, II, Janice Hawes and International Tours,
Inc. (hereinafter referred to collectively as the "International Group").

     WHEREAS, the Debenture Holders own the number of shares of common stock,
par value $.01 per share (the "Common Stock") of North American set forth on
Exhibit "A", own Subordinated Debentures payable by North American (the
"Subordinated Debentures") in the original principal amounts set forth  on
Exhibit "A", and are owed accumulated dividends by North American on Class A
Preferred Stock previously issued and outstanding (the "Dividends") in the
amounts set forth on Exhibit "A"; and

     WHEREAS, the Debenture Holders desire to receive payments aggregating
$225,000 from North American, and North American desires to make such payments
in consideration of this Agreement and the various actions, agreements and
releases agreed to by the Debenture Holders herein and pursuant to the terms and
conditions hereof; and

     WHEREAS, each member of the Ozley Group agrees to allocate the payment
coming to the group pursuant to separate agreements among the members of the
group and it is not necessary to identify the allocation of such payment in this
Agreement and the Debenture Holders agree that the promissory note referenced in
Section 2.01 shall be made payable to Lamar E. Ozley, Jr. ("L. Ozley") on behalf
of all Debenture Holders and payment shall be made by North American to L. Ozley
who shall then be responsible for allocating payments among the Debenture
Holders pursuant to a separate agreement among the Debenture Holders; and

     WHEREAS, L. Ozley desires to cause that certain note executed by J. Larry
Jordan in the original principal amount of $31,749.36 payable to Lincoln Trust
Company, FBO Lamar E. Ozley, Jr. IRA (including the interest thereon) (the
"Jordan Note") to be assigned to North American and North American desires to
receive assignment of the Jordan Note in consideration of this Agreement and the
various actions, agreements and releases agreed to by North American herein and
pursuant to the terms and conditions hereof;

     WHEREAS, North American and the International Group may have certain claims
against the Debenture Holders and the Debenture Holders may have certain claims
against North American and the International Group; and

                                      -1-
<PAGE>

     WHEREAS, the parties hereto desire to enter into a mutual settlement and
compromise and release of liability as set forth herein.

     NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each party hereto, the parties hereto agree as follows:

                                   ARTICLE I
                   CANCELLATION OF DIVIDENDS AND CANCELLATION
                   AND RETURN OF DEBENTURES AND COMMON STOCK
                         AND ASSIGNMENT OF JORDAN NOTE

     1.01  Upon final execution of this Agreement in partial consideration of
the mutual releases of the parties set forth herein, the payments made to the
Debenture Holders hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Debenture
Holders, the Debenture Holders shall mark each of the Subordinated Debentures as
"Canceled" and return the original thereof to North American and each of the
Debenture Holders hereby agrees that no accrued interest thereunder shall be due
and payable by North American and shall also be considered canceled.

     1.02  Upon final execution of this Agreement in partial consideration of
the mutual releases of the parties set forth herein, the payments made to the
Debenture Holders hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Debenture
Holders, the Debenture Holders further agree that all Dividends shall be deemed
canceled and no such dividends shall ever be required to be declared or paid to
the Debenture Holders or any party claiming through any Debenture Holder.

     1.03  Upon final execution of this Agreement in partial consideration of
the mutual releases of the parties set forth herein, the payments made to the
Debenture Holders hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Debenture
Holders, the Debenture Holders agree that all shares of Common Stock owned by
the Debenture Holders, as set forth on Exhibit "A", shall be deemed to be
repurchased and redeemed by North American and each Debenture Holder agrees to
promptly return to North American all stock certificates representing such
shares of Common Stock so that North American can cancel each such certificate;
provided, however, it is hereby agreed that the failure to return any such
certificate shall have no impact on the repurchase and redemption of the shares
of Common Stock represented by such certificate and that such shares shall be
deemed to be repurchased and redeemed effective as of the date of final
execution of this Agreement and any Debenture Holder not returning a stock
certificate agrees to indemnify and hold harmless North American if such
certificate is at any time hereafter alleged to be outstanding by any party
claiming to be the holder of such certificate.

                                      -2-
<PAGE>

     1.04  Upon final execution of this Agreement in partial consideration of
the mutual releases of the parties set forth herein, the payments made to the
Debenture Holders hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Debenture
Holders, the Debenture Holders further agree that the Jordan Note shall be
assigned to North American.

                                   ARTICLE II
                          PAYMENT TO DEBENTURE HOLDERS

     2.01  Upon final execution of this Agreement in partial consideration of
the mutual releases of the parties set forth herein, the cancellation of
Subordinated Debentures, accrued interest thereon, Dividends and Common Stock,
the assignment of the Jordan Note, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
North American, North American agrees to pay an aggregate of $225,000 to the
Debenture Holders, payable $31,749.36 to Lincoln Trust Company, FBO Lamar E.
Ozley, Jr. IRA and $18,250.64 to L. Ozley upon final execution of this Agreement
with the remaining balance of $175,000 represented by a promissory note payable
to L. Ozley, for the benefit of all the Debenture Holders, which promissory note
shall be payable in equal quarterly installments of principal plus interest,
with interest at an annual rate of 8.5%, over 20 consecutive quarters, with the
first such quarterly payment to be due on July 1, 2000 and with each succeeding
payment to be due on the following October 1, January 2, April 1 and July 1. A
promissory note in the amount of $175,000 payable to L. Ozley for the benefit of
the Debenture Holders shall be executed by North American and delivered
simultaneously with the final execution hereof. Such promissory note shall be
collateralized by North American's pledge of 75,000 shares of common stock of
Travelbyus.com Ltd. ("Travelbyus") owned by North American. The members of the
Ozley Group hereby agree that they have allocated and will allocate such
payments among the members of such group in such manner as agreed among such
members by virtue of a separate agreement and that the allocation thereof is not
required to be stated in this Agreement, and that payment by North American to
L. Ozley shall discharge North American's responsibilities to the Debenture
Holders and North American shall have no responsibility for ensuring that
payments made by it to L. Ozley are properly distributed among the Debenture
Holders.

                                  ARTICLE III
                         MUTUAL RELEASE AND SETTLEMENT

     The parties set forth below understand and agree that certain claims have
been made between them and that certain additional claims may be asserted
between them, and that such claims are in dispute and that by reason of such
dispute the parties set forth below desire to compromise and settle all claims
set forth below.

                                      -3-
<PAGE>

     3.01  (a)  North American, for itself, and each of its predecessors,
     successors, assigns, administrators, legal representatives, and any entity
     controlled by North American, releases and forever discharges each of the
     Debenture Holders and their respective predecessors, successors, assigns,
     heirs, executors, administrators, and legal representatives, together with
     their respective shareholders, employees, officers, members, partners,
     directors, subsidiaries and insurers, past or present, of and from any and
     all claims, demands, damages, actions, causes of action, or suits in
     equity, of whatsoever kind or nature whether now, heretofore, or hereafter
     accruing or whether now known or not known to the releasing parties, for or
     because of any matter or thing done, omitted, or suffered to be done by any
     of the released parties prior to and including the date hereof.

           (b)  Each of the Debenture Holders, for itself, himself, herself and
     each of their respective predecessors, successors, assigns, heirs,
     executors, administrators, legal representatives, and any entity controlled
     by such Debenture Holder, releases and forever discharges North American
     and its predecessors, successors, assigns, administrators, and legal
     representatives, together with all shareholders, employees, officers,
     members, partners, directors, subsidiaries and insurers, past or present,
     of North American or any entity controlled, past or present, by North
     American, of and from any and all claims, demands, damages, actions, causes
     of action, or suits in equity, of whatsoever kind or nature whether now,
     heretofore, or hereafter accruing or whether now known or not known to the
     releasing parties, for or because of any matter or thing done, omitted, or
     suffered to be done by any of the released parties prior to and including
     the date hereof.

     3.02  (a)  Each member of the International Group, for itself, himself,
     herself and each of their respective predecessors, successors, assigns,
     heirs, executors, administrators, legal representatives, and any entity
     controlled by any such member of the International Group, releases and
     forever discharges each of the Debenture Holders and each of their
     respective predecessors, successors, assigns, heirs, executors,
     administrators, and legal representatives, together with their respective
     shareholders, employees, officers, members, partners, directors,
     subsidiaries and insurers, past or present, of and from any and all claims,
     demands, damages, actions, causes of action, or suits in equity, of
     whatsoever kind or nature whether now, heretofore, or hereafter accruing or
     whether now known or not known to the releasing parties, for or because of
     any matter or thing done, omitted, or suffered to be done by any of the
     released parties prior to and including the date hereof.

          (b) Each of the Debenture Holders, for itself, himself, herself and
     each of their respective predecessors, successors, assigns, heirs,
     executors, administrators, legal representatives, and any entity controlled
     by such Debenture Holder, releases and forever discharges each member of
     the International Group, and each of their respective predecessors,
     successors, assigns, heirs, executors,

                                      -4-
<PAGE>

     administrators, and legal representatives, together with their respective
     shareholders, employees, officers, members, partners, directors,
     subsidiaries and insurers, past or present, of and from any and all claims,
     demands, damages, actions, causes of action, or suits in equity, of
     whatsoever kind or nature whether now, heretofore, or hereafter accruing or
     whether now known or not known to the releasing parties, for or because of
     any matter or thing done, omitted, or suffered to be done by any of the
     released parties prior to and including the date hereof.

     3.03 Each of the of the parties hereto acknowledges and agrees that there
is a risk that the facts in respect to which this Agreement is made may
hereafter prove to be other than or different from the facts as now known by
such party or believed by such party to be true, and that as a result thereof,
such party may subsequently discover, incur or suffer claims and/or damages
which were unnamed, unsuspected or unanticipated on the execution date hereof by
such party and which, if known, suspected or anticipated on such date may have
materially affected such party's decision to execute this Agreement.
Notwithstanding the foregoing, however, each party hereto expressly accepts the
risk of such claims and/or damages and agrees that this Agreement shall, in all
respects, be effective with respect thereto.

     3.04 Each of the parties hereto acknowledges and agrees that such party has
read and understands the effect of the above and foregoing mutual releases and
settlements and executes same of such party's own free will and accord for the
purposes and considerations set forth in this Agreement.

                                      IV.
                   REPRESENTATIONS AND WARRANTIES OF PARTIES

     Each of the parties hereto represents and warrants to each of the other
parties hereto that:

          4.01  Such party has full legal power and authority to enter into and
     perform this Agreement and the consummation of the transactions
     contemplated by this Agreement in accordance with its terms will not result
     in the breach or termination of any provision of or constitute a default
     under any contract, agreement, instrument or other document to which such
     party is a party or by which such party or any of such party's property may
     be bound.

          4.02  Each party that is not a natural person is duly organized,
     validly existing and in good standing under the laws of its state of
     organization and is duly authorized under applicable state and federal laws
     to conduct its business as heretofore conducted, and has all requisite
     power and authority to own, lease and operate its properties and carry on
     its business as now being conducted; and the

                                      -5-
<PAGE>

     person signing this Agreement on behalf of such party has been duly
     authorized to sign this Agreement and any further agreements or instruments
     referenced herein.

          4.03  This Agreement has been duly executed by, and constitutes a
     legal, valid and binding obligation of such party, enforceable in
     accordance with its terms, except as such enforceability may be limited by
     bankruptcy, moratorium, insolvency or similar laws of general application
     affecting enforcement of rights of creditors and by general equity
     principles, including, but not limited to, those restricting specific
     enforcement.

                                       V.
                            MISCELLANEOUS PROVISIONS

     5.01 Each of the parties hereto hereby agree that after the closing of the
transactions contemplated herein, it, she or he will from time to time, upon the
reasonable request of any other party hereto, take such further action as such
other party may reasonably request to carry out the transactions contemplated by
this Agreement.

     5.02 This Agreement may be executed in any number of counterparts, each and
all of which shall be deemed for all purposes to be one agreement, and facsimile
signature shall be considered to be original signatures for all purposes
hereunder.

     5.03 This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors and assigns.

     5.04 This Agreement and the agreements referenced herein collectively
contain the entire agreement between the parties hereto with respect to the
transactions contemplated herein, and cannot be amended without the written
consent of the parties hereto.

     5.05 This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.

     5.06 The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.

     5.07 In the event this Agreement or the breach thereof gives rise to any
litigation between the parties hereto, the prevailing party in such litigation
shall be entitled to have and recover from the losing party costs of such
litigation, including reasonable attorneys' fees, as may be determined by the
court and judgment for the recovery of such cost, including attorneys' fees,
shall be included in any final judgment or decree entered by the court where
such litigation is brought.

                                      -6-
<PAGE>

     EXECUTED as of the date and year first above written.

                              NORTH AMERICAN GAMING AND
                              ENTERTAINMENT CORPORATION

                              By:  /s/ E. H. Hawes, II
                                 ------------------------------------------
                                    E. H. Hawes, II, President and Chief
                                    Executive Officer

                                  /s/ Lamar E. Ozley, Jr.
                                 ------------------------------------------
                                 Lamar E. Ozley, Jr., Individually

                                  /s/ Chris Ozley
                                 ------------------------------------------
                                 Chris Ozley, Individually

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

                                  /s/ Janice Hawes
                                 ------------------------------------------
                                 Janice Hawes

                                 INTERNATIONAL TOURS, INC.

                                 By:  /s/ E. H. Hawes, II
                                 ------------------------------------------
                                 Its:  President

                                      -7-
<PAGE>

                                  EXHIBIT "A"

     See the attached schedule.

                                      -8-
<PAGE>

<TABLE>
<CAPTION>
                                                             SCHEDULE
                                                       NORTH AMERICAN GAMING
                                             SUBORDINATED DEBENTURE AND DIVIDENDS DUE
                                                            Ozley Group

                                                             Exhibit A

                                    PRINCIPAL AND INTEREST DUE ON DEBENTURE NOTE                    DIVIDENDS DUE
---------------------------------------------------------------------------------------------------------------------------------
<S>                <C>              <C>              <C>             <C>            <C>             <C>              <C>
                     NUMBER OF          ORIG         AT 12/31/97       4/30/00         4/30/00       ORIG PRIN       AT 1/31/00
PREFERRED          COMMON SHARES      PRIN AMT         PRIN BAL      ACCRUED INT     TOTAL DUE         AMOUNT         TOTAL DUE
STOCKHOLDER           12/27/99        DEB NOTE         DEB NOTE       DEB NOTE        DEB NOTE        DIVIDENDS       DIVIDENDS
---------------------------------------------------------------------------------------------------------------------------------
OZLEY GROUP
---------------------------------------------------------------------------------------------------------------------------------
                                                                        21036.69
Ozley, Lamar E., Jr.   1,942,329      $181,931.25      173,498.51      36,363.39      209,861.90      $151,125.00      151,125.00
Chris Ozley               12,000                0               0           0.00               0                0               0
Jennie Ozley               4,500                0               0           0.00               0                0               0
---------------------------------------------------------------------------------------------------------------------------------
TOTAL                  1,958,829      $181,931.25     $173,498.51     $36,363.39     $209,861.90      $151,125.00     $151,125.00
---------------------------------------------------------------------------------------------------------------------------------
</TABLE><PAGE>

                                                                   EXHIBIT 10.27

                              SETTLEMENT AGREEMENT

     THIS SETTLEMENT AGREEMENT (the "Agreement") is made and entered into
effective as of January 1, 2001 by and between North American Gaming and
Entertainment Corporation ("North American"); Ellen S. Robinson and Scott
Robinson, Joint Tenants, Janet C. Robinson and Jeffrey S. Robinson (hereinafter
referred to collectively as the "Robinson Group"); Elisa Heard, Brevely Morton,
D. W. Morton, Ltd., Kristen Morton Heard, Del Morton and Kara Smith (hereinafter
referred to collectively as the "Morton Group"); Marshall H. Kaplan and Karen S.
Kaplan, Joint Tenants, John Gay, Larry Hendricks, Lewis Isaacks and David McCall
(hereinafter referred to collectively as the "McCall Group") (the Robinson
Group, Morton Group and McCall Group are hereinafter collectively referred to as
the "Debenture Holders"); and E.H. Hawes, II, Janice Hawes and International
Tours, Inc. (hereinafter referred to collectively as the "International Group").

     WHEREAS, the Debenture Holders own the number of shares of common stock,
par value $.01 per share (the "Common Stock") of North American set forth on
Exhibit "A", own Subordinated Debentures payable by North American (the
-----------
"Subordinated Debentures") in the original principal amounts set forth  on
Exhibit "A", and are owed accumulated dividends by North American on Class A
Preferred Stock previously issued and outstanding (the "Dividends") in the
amounts set forth on Exhibit "A"; and

     WHEREAS, the Debenture Holders desire to receive payments aggregating
$700,000 from North American, and North American desires to make such payments
in consideration of this Agreement and the various actions, agreements and
releases agreed to by the Debenture Holders herein and pursuant to the terms and
conditions hereof; and

     WHEREAS, North American will deliver to Debenture Holders a promissory note
in the form of the promissory note (the "Promissory Note") attached hereto as
Exhibit "B", and North American will, under the circumstances set forth in
-----------
Section 5.10, execute a Security Agreement (herein so called), in the form
attached hereto as Exhibit "C", with the Debenture Holders, as Secured Party,
                   -----------
and Gay, McCall, Isaacks, Gordon & Roberts, P.C., as Escrow Agent, pursuant to
which the collateral set forth in Section 2.01 hereof and in the Security
Agreement shall, under the circumstances set forth in Section 5.10, be pledged
by North American until such time, if any, that North American shall sell all
such collateral and prepay fifty percent (50%) of the then remaining principal
balance of the Promissory Note, plus all accrued but unpaid interest thereon, at
which time the Security Agreement shall be terminated and the collateral shall
be returned to North American; and

     WHEREAS, North American and the International Group may have certain claims
against the Debenture Holders and the Debenture Holders may have certain claims
against North American and the International Group; and

                                      -1-
<PAGE>

     WHEREAS, the parties hereto desire to enter into a mutual settlement and
compromise and release of liability as set forth herein.

     NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each party hereto, the parties hereto agree as follows:

                                   ARTICLE I
                  CANCELLATION OF DIVIDENDS AND CANCELLATION
                   AND RETURN OF DEBENTURES AND COMMON STOCK

     1.01 Upon final execution of this Agreement in partial consideration of the
mutual releases of the parties set forth herein, the payments made to the
Debenture Holders hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Debenture
Holders, the Debenture Holders shall mark each of the Subordinated Debentures as
"Canceled" and return the original thereof to North American and each of the
Debenture Holders hereby agrees that no accrued interest thereunder shall be due
and payable by North American and shall also be considered canceled, with an
effective date for financial reporting purposes of December 1, 2000.

     1.02 Upon final execution of this Agreement in partial consideration of the
mutual releases of the parties set forth herein, the payments made to the
Debenture Holders hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Debenture
Holders, the Debenture Holders further agree that all Dividends shall be deemed
canceled, with an effective date for financial reporting purposes of December 1,
2000, and no such dividends shall ever be required to be declared or paid to the
Debenture Holders or any party claiming through any Debenture Holder.

     1.03 Upon final execution of this Agreement in partial consideration of the
mutual releases of the parties set forth herein, the payments made to the
Debenture Holders hereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the Debenture
Holders, the Debenture Holders agree that all shares of Common Stock owned by
the Debenture Holders, as set forth on Exhibit "A", shall be deemed to be
repurchased and redeemed by North American and each Debenture Holder agrees to
promptly return to North American all stock certificates representing such
shares of Common Stock so that North American can cancel each such certificate;
provided, however, it is hereby agreed that the failure to return any such
certificate shall have no impact on the repurchase and redemption of the shares
of Common Stock represented by such certificate and that such shares shall be
deemed to be repurchased and redeemed effective as of the date of final
execution of this Agreement, but with an effective date for financial reporting
purposes of December 1, 2000, and any Debenture Holder not returning a stock
certificate agrees to

                                      -2-
<PAGE>

indemnify and hold harmless North American if such certificate is at any time
hereafter alleged to be outstanding by any party claiming to be the holder of
such certificate.

                                  ARTICLE II
                         PAYMENT TO DEBENTURE HOLDERS

     2.01 Upon final execution of this Agreement in partial consideration of the
mutual releases of the parties set forth herein, the cancellation of
Subordinated Debentures, accrued interest thereon, Dividends and Common Stock
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by North American, North American agrees to pay an
aggregate of $700,000 to the Debenture Holders, payable $150,000 upon final
execution of this Agreement in the respective amounts set forth on Exhibit "D",
                                                                   -----------
with the remaining balance of $550,000 represented by the Promissory Note
payable to the Debenture Holders, which Promissory Note shall be payable in
equal quarterly installments of principal of $27,500, together with accrued
interest at an annual rate of 9%, over 20 consecutive quarters, with the first
such quarterly payment to be due on April 1, 2001 and with each succeeding
payment to be due on the following July 1, October 1, January 1 and April 1.
Such Promissory Note shall be an unsecured promissory note; provided, however,
the Promissory Note shall, under the circumstances set forth in Section 5.10, be
collateralized by North American's pledge of the shares of common stock of Ozdon
Investments, Inc. owned by North American, which represent 50% of the
outstanding shares of common stock of Ozdon Investments, Inc., until such time,
if any, that North American shall sell all such shares and prepay fifty percent
(50%) of the then remaining principal balance of the Promissory Note, plus all
accrued but unpaid interest thereon, at which time the Security Agreement shall
be terminated and the collateral shall be returned to North American.  North
American will, under the circumstances set forth in Section 5.10, enter into the
Security Agreement with the Debenture Holders, as Secured Parties, and with Gay,
McCall, Isaacks, Gordon & Roberts, P.C., as Escrow Agent, who shall hold such
collateral under the Security Agreement for the benefit of all of the Debenture
Holders and North American, and North American shall have no responsibility for
ensuring that Gay, McCall, Isaacks, Gordon & Roberts, P.C. properly discharges
its obligations to the Debenture Holders pursuant to the terms of the Security
Agreement.  In addition to the foregoing, upon final execution of this
Agreement, North American agrees to pay the attorneys' fees and costs incurred
by Debenture Holders in connection with this Agreement and the Exhibits attached
hereto, in the amount of $5,000.00 payable to Smith, Stern and Friedman, P.C.

                                  ARTICLE III
                         MUTUAL RELEASE AND SETTLEMENT

     The parties set forth below understand and agree that certain claims have
been made between them and that certain additional claims may be asserted
between them, and that such claims are in dispute and that by reason of such
dispute the parties set forth below desire to compromise and settle

                                      -3-
<PAGE>

all claims set forth below.

     3.01  (a)  North American, for itself, and each of its predecessors,
     successors, assigns, administrators, legal representatives, and any entity
     controlled by North American, releases and forever discharges each of the
     Debenture Holders and their respective predecessors, successors, assigns,
     heirs, executors, administrators, and legal representatives, together with
     their respective shareholders, employees, officers, members, partners,
     directors, subsidiaries and insurers, past or present, of and from any and
     all claims, demands, damages, actions, causes of action, or suits in
     equity, of whatsoever kind or nature whether now, heretofore, or hereafter
     accruing or whether now known or not known to the releasing parties, for or
     because of any matter or thing done, omitted, or suffered to be done by any
     of the released parties prior to and including the date hereof.

          (b)   Each of the Debenture Holders, for itself, himself, herself and
     each of their respective predecessors, successors, assigns, heirs,
     executors, administrators, legal representatives, and any entity controlled
     by such Debenture Holder, releases and forever discharges North American
     and its predecessors, successors, assigns, administrators, and legal
     representatives, together with all shareholders, employees, officers,
     members, partners, directors, subsidiaries and insurers, past or present,
     of North American or any entity controlled, past or present, by North
     American, of and from any and all claims, demands, damages, actions, causes
     of action, or suits in equity, of whatsoever kind or nature whether now,
     heretofore, or hereafter accruing or whether now known or not known to the
     releasing parties, for or because of any matter or thing done, omitted, or
     suffered to be done by any of the released parties prior to and including
     the date hereof.

     3.02  (a)  Each member of the International Group, for itself, himself,
     herself and each of their respective predecessors, successors, assigns,
     heirs, executors, administrators, legal representatives, and any entity
     controlled by any such member of the International Group, releases and
     forever discharges each of the Debenture Holders and each of their
     respective predecessors, successors, assigns, heirs, executors,
     administrators, and legal representatives, together with their respective
     shareholders, employees, officers, members, partners, directors,
     subsidiaries and insurers, past or present, of and from any and all claims,
     demands, damages, actions, causes of action, or suits in equity, of
     whatsoever kind or nature whether now, heretofore, or hereafter accruing or
     whether now known or not known to the releasing parties, for or because of
     any matter or thing done, omitted, or suffered to be done by any of the
     released parties prior to and including the date hereof.

          (b)   Each of the Debenture Holders, for itself, himself, herself and
     each of their respective predecessors, successors, assigns, heirs,
     executors, administrators, legal representatives, and any entity controlled
     by such Debenture Holder, releases

                                      -4-
<PAGE>

     and forever discharges each member of the International Group, and each of
     their respective predecessors, successors, assigns, heirs, executors,
     administrators, and legal representatives, together with their respective
     shareholders, employees, officers, members, partners, directors,
     subsidiaries and insurers, past or present, of and from any and all claims,
     demands, damages, actions, causes of action, or suits in equity, of
     whatsoever kind or nature whether now, heretofore, or hereafter accruing or
     whether now known or not known to the releasing parties, for or because of
     any matter or thing done, omitted, or suffered to be done by any of the
     released parties prior to and including the date hereof.

     3.03 Each of the of the parties hereto acknowledges and agrees that there
is a risk that the facts in respect to which this Agreement is made may
hereafter prove to be other than or different from the facts as now known by
such party or believed by such party to be true, and that as a result thereof,
such party may subsequently discover, incur or suffer claims and/or damages
which were unnamed, unsuspected or unanticipated on the execution date hereof by
such party and which, if known, suspected or anticipated on such date may have
materially affected such party's decision to execute this Agreement.
Notwithstanding the foregoing, however, each party hereto expressly accepts the
risk of such claims and/or damages and agrees that this Agreement shall, in all
respects, be effective with respect thereto.

     3.04 Each of the parties hereto acknowledges and agrees that such party has
read and understands the effect of the above and foregoing mutual releases and
settlements and executes same of such party's own free will and accord for the
purposes and considerations set forth in this Agreement.

                                      IV.
                   REPRESENTATIONS AND WARRANTIES OF PARTIES

     Each of the parties hereto represents and warrants to each of the other
parties hereto that:

          4.01  Such party has full legal power and authority to enter into and
     perform this Agreement and the consummation of the transactions
     contemplated by this Agreement in accordance with its terms will not result
     in the breach or termination of any provision of or constitute a default
     under any contract, agreement, instrument or other document to which such
     party is a party or by which such party or any of such party's property may
     be bound.

          4.02  Each party that is not a natural person is duly organized,
     validly existing and in good standing under the laws of its state of
     organization and is duly authorized under applicable state and federal laws
     to conduct its business as heretofore conducted, and has all requisite
     power and authority to own, lease and

                                      -5-
<PAGE>

     operate its properties and carry on its business as now being conducted;
     and the person signing this Agreement on behalf of such party has been duly
     authorized to sign this Agreement and any further agreements or instruments
     referenced herein.

          4.03  This Agreement has been duly executed by, and constitutes a
     legal, valid and binding obligation of such party, enforceable in
     accordance with its terms, except as such enforceability may be limited by
     bankruptcy, moratorium, insolvency or similar laws of general application
     affecting enforcement of rights of creditors and by general equity
     principles, including, but not limited to, those restricting specific
     enforcement.

                                      V.
                           MISCELLANEOUS PROVISIONS

     5.01 Each of the parties hereto hereby agree that after the closing of the
transactions contemplated herein, it, she or he will from time to time, upon the
reasonable request of any other party hereto, take such further action as such
other party may reasonably request to carry out the transactions contemplated by
this Agreement.

     5.02 This Agreement may be executed in any number of counterparts, each and
all of which shall be deemed for all purposes to be one agreement, and facsimile
signature shall be considered to be original signatures for all purposes
hereunder.

     5.03 This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors and assigns.

     5.04 This Agreement and the agreements referenced herein collectively
contain the entire agreement between the parties hereto with respect to the
transactions contemplated herein, and cannot be amended without the written
consent of the parties hereto.

     5.05 This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.

     5.06 The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.

     5.07 In the event this Agreement or the breach thereof gives rise to any
litigation between the parties hereto, the prevailing party in such litigation
shall be entitled to have and recover from the losing party costs of such
litigation, including reasonable attorneys' fees, as may be determined by the
court and judgment for the recovery of such cost, including attorneys' fees,
shall be included in any final judgment or decree entered by the court where
such litigation is brought.

                                      -6-
<PAGE>

     5.08 The representations, warranties, covenants, obligations and
liabilities of the Robinson Group, the Morton Group and the McCall Group are
joint and several within each group, but are several only among the groups.

     5.09 Each of the Debenture Holders acknowledges that North American is
involved in discussions with other parties that could result in substantial
assets being acquired by North American in exchange for equity which could also
result in significant changes in ownership percentages and possible control of
North American.  As an inducement to cause North American to enter into this
Agreement, each of the Debenture Holders waives any rights such Debenture Holder
may have to seek rescission of any or all of the transactions contemplated by
this Agreement or damages of any kind relating to any theory of nondisclosure of
material information, or similar theories, relating to the redemption of the
securities held by the Debenture Holders pursuant to this Agreement with respect
to the aforementioned possible transaction or any other transaction which may be
entered into by North American after the date of this Agreement.  It is the
expressed intent and desire of the Debenture Holders that their securities be
redeemed regardless what transactions may or may not be entered into by North
American in the future, and regardless what transactions may or may not be
pending or under discussion at the time of execution of this Agreement.

     5.10 Each of the Debenture Holders acknowledges that North American is
involved in settlement discussions with Donald I. Williams, Loy S. Weaver, OM
Operating, L.L.C., River Port Truck Stop, L.L.C. and other persons and entities
(the "OM Settlement").  If the OM Settlement is finalized as presently
contemplated, North American anticipates receiving a cash payment in excess of
$275,000 after North American has complied with applicable SEC regulations by
filing an Information Statement with the SEC, responding to any comments by the
SEC and mailing the definitive Information Statement to the stockholders of
North American the required minimum time period prior to the final effective
date of the OM Settlement required under applicable SEC regulations.  In the
event definitive legally binding agreements finalizing the OM Settlement are
executed by all parties to the OM Settlement prior to April 1, 2001 and North
American receives a cash payment in excess of $275,000, North American agrees to
make a principal prepayment on the Promissory Note in the amount of $275,000, or
if North American receives an amount equal to or less than $275,000, then North
American agrees to make a principal payment or the Promissory Note equal to the
lesser payment received by North American from the OM Settlement, in either case
within three (3) business days after North American's receipt of the cash
payment in connection with the OM Settlement.  In the event definitive legally
binding agreements finalizing the OM Settlement are not executed prior to April
1, 2001, or North American does not receive a cash payment in connection with
the OM Settlement in excess of $275,000 on or before July 1, 2001, then North
American agrees to execute the Security Agreement, provided the execution by
North American of the Security Agreement and the pledge of the Collateral (as
defined in the Security Agreement) pursuant to the Security Agreement has been
approved and authorized by, and North American has received the consent thereof
from, the Louisiana Gaming Control Board or the Video Gaming Division of the
Gaming Enforcement Section of the Office of State Police within the Department
of Public Safety and Corrections of the State of Louisiana and/or such other
gaming regulatory authorities in the State of Louisiana having jurisdiction over
Ozdon Investments, Inc. and the operation of its video poker truck stop casino.
North American agrees to submit the Security Agreement and the pledge of the
Collateral

                                      -7-
<PAGE>

to such gaming regulatory authorities, and to use its best faith efforts to
obtain approval from such authorities, a sufficient period in advance of April
1, 2001 so that a decision may be rendered on or before April 1, 2001. If such
gaming regulatory authorities do not approve the Security Agreement and the
pledge of the Collateral, then the Security Agreement shall not be executed by
North American, the Collateral shall not be pledged to the Debenture Holders and
the Promissory Note shall continue to be an unsecured promissory note of North
American. If, on the other hand, execution of the Security Agreement and the
pledge of the Collateral are approved and authorized by such gaming regulatory
authorities, North American will execute the Security Agreement and deliver the
stock certificate evidencing the Collateral and a duly executed stock power of
attorney to Gay, McCall, Isaacks, Borden & Roberts, P.C., as Escrow Agent in the
form attached hereto as Exhibit "E".
                        -----------

     EXECUTED as of the date and year first above written.

                              NORTH AMERICAN:

                              NORTH AMERICAN GAMING AND
                              ENTERTAINMENT CORPORATION

                              By:  /s/ E.H. Hawes, II
                                 ----------------------------------------
                                    E.H. Hawes, II, President and Chief
                                    Executive Officer

                                DEBENTURE HOLDERS:

                                  /s/ Ellen S. Robinson
                                -----------------------------------------
                                Ellen S. Robinson, Individually

                                  /s/ Scott Robinson
                                -----------------------------------------
                                Scott Robinson, Individually

                                  /s/ Janet C. Robinson
                                -----------------------------------------
                                Janet C. Robinson, Individually

                                      -8-
<PAGE>

                                  /s/ Jeffrey S. Robinson
                                -----------------------------------------
                                Jeffrey S. Robinson, Individually

                                  /s/ Elisa Heard
                                -----------------------------------------
                                Elisa Heard, Individually

                                  /s/ Breverly Morton
                                -----------------------------------------
                                Brevely Morton, Individually

                                D.W. MORTON, LTD.

                                By:
                                    -------------------------------------
                                Its:
                                    -------------------------------------

                                  /s/ Kristin Morton Heard
                                -----------------------------------------
                                Kristen Morton Heard, Individually

                                  /s/ Del Morton
                                -----------------------------------------
                                Del Morton, Individually

                                  /s/ Kara Smith
                                -----------------------------------------
                                Kara Smith, Individually

                                  /s/ Marshall H. Kaplan
                                -----------------------------------------
                                Marshall H. Kaplan, Individually

                                  /s/ Karen S. Kaplan
                                -----------------------------------------
                                Karen S. Kaplan, Individually

                                  /s/ John Gay
                                -----------------------------------------
                                John Gay, Individually

                                      -9-
<PAGE>

                                  /s/ Larry Hendricks
                                -----------------------------------------
                                Larry Hendricks, Individually

                                  /s Lewis Isaacks
                                -----------------------------------------
                                Lewis Isaacks, Individually

                                  /s/ David McCall
                                -----------------------------------------
                                David McCall, Individually

                                INTERNATIONAL GROUP:

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

                                  /s/ Janice Hawes
                                -----------------------------------------
                                Janice Hawes

                                INTERNATIONAL TOURS, INC.

                                By:  /s/ E. H. Hawes, II
                                   --------------------------------------
                                Its:  President

                                      -10-
<PAGE>

                                  EXHIBIT "A"

     See the attached schedule of Common Stock, Subordinated Debentures and
Dividends.

                                      -11-
<PAGE>

                                  EXHIBIT "B"

     See the attached form of Promissory Note

                                      -12-
<PAGE>

                                  EXHIBIT "C"

     See the attached form of Security Agreement.

                                      -13-
<PAGE>

                                  EXHIBIT "D"

     See the attached schedule for the cash payments to be paid to each
Debenture Holder simultaneously with the full execution and delivery hereof.

                                      -14-
<PAGE>

                                  EXHIBIT "E"

                  See attached form of stock power of attorney

                                      -15-

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