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CUSTODY AGREEMENT

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CUSTODY AGREEMENT



CUSTODY AGREEMENT, effective as of the ____ day of _________, 1999, by and among certain of the shareholders (the "Shareholders" or "Shareholder") of LEISURE TIME CASINOS & RESORTS, INC., a Colorado corporation, (the "Company"), SCHNEIDER SECURITIES, INC. (the "Representative") and AMERICAN SECURITIES TRANSFER & TRUST, INC. (the ""Custodian").



WHEREAS, the Shareholders are the record and beneficial owners of certain of the Company's $0.001 par value common stock ("Common Stock") or of options to purchase shares of Common Stock, all as more fully reflected on Exhibit A to this Custody Agreement;



WHEREAS, the Company and the Representative of the several underwriters (the "Underwriters") intend to enter into an underwriting agreement (the "Underwriting Agreement") pursuant to which the Company will sell in a public offering pursuant to the registration provisions of the Securities Act of 1933, as amended (the "1933 Act");



WHEREAS, as a condition to closing the proposed public offering of the Company (the "Offering"), the Representative has required the Shareholders to deposit an aggregate of 500,000 shares of Common Stock and/or shares of Common Stock underlying options to purchase Common Stock owned by such Shareholders in custody with the Custodian as reflected on Exhibit A (the "Custodial Shares"); and



WHEREAS, the Shareholders wish to deposit the Custodial Shares in custody in order to fulfill the requirements of the Underwriting Agreement.



NOW, THEREFORE, in consideration of the premises and of the mutual covenants, terms and conditions hereinafter set forth, the parties to this Custody Agreement agree as follows:



SECTION 1. DESIGNATION AND DEPOSIT OF CUSTODIAL SHARES.



a. The Custodial Shares to be deposited in custody pursuant to

this Custody Agreement consist of 500,000 shares of Common Stock of the

Company and are owned of record as of the date of this Custody

Agreement by the Shareholders identified on Exhibit A.



b. On or before the date on which the Securities and Exchange

Commission declares the Company's Registration Statement on Form S-1

(Reg. No. 333-77737) effective under the 1933 Act (the "Effective

Date"), the Shareholders shall deliver to the Custodian any and all

certificates representing the Custodial Shares and a stock power

endorsed in blank. Promptly after the Effective Date, the Custodian

shall deliver a receipt therefor and, if requested by a Shareholder, a

new certificate representing each







Shareholder's shares of Common Stock represented by the certificates

delivered but which are not subject to this Custody Agreement.



SECTION 2. TITLE OF ACCOUNT. All certificates representing the Custodial Shares delivered to the Custodian pursuant to this Agreement shall be deposited on the Effective Date by the Custodian in an account designated substantially as follows: "Leisure Time Casinos & Resorts, Inc. Custodial Share Account" (the "Custody Account").



SECTION 3. TRANSFER OF CUSTODIAL SHARES DURING CUSTODY PERIOD.



a. During the Custody Period (as defined below) none of the

Custodial Shares deposited in the Custody Account shall be sold,

pledged, hypothecated or otherwise transferred or delivered out of the

Custody Account except as follows:



i. transfers by operation of law occasioned by the

death or incapacity of the Shareholder shall be recorded upon

presentation to the Company by the personal representative or

guardian of a deceased or incapacitated Shareholder of

appropriate documents regarding the necessity for transfer and

of which transfer the Company has notified the Custodian and

the Representative; and



ii. transfers of ownership of certificates

representing the Custodial Shares, certificates for which have

been deposited to the Custody Account, shall remain subject to

the restrictions imposed hereby, including those persons, if

any, who become holders, by any means provided herein, of the

Custody Shares during the Custody Period.



SECTION 4. DURATION OF CUSTODY PERIOD.



a. The Custody Period shall commence on the Effective Date and

shall terminate on the earlier of the date on which all Custodial

Shares have been returned to the Shareholders pursuant to Sections

6(a), 6(b), 6(c), 6(d), 6(e), 6(f), or 6(g) below.



b. This Agreement shall be of no force or effect in the event

the Underwriting Agreement is not executed on the Effective Date in

accordance with its terms.



SECTION 5. RECEIPT OF DISTRIBUTIONS AND DIVIDENDS. During the term of the Custody Period, if the Company issues any distributions, dividends, rights or other property with respect to the Common Stock, then, in such event, the Company shall be authorized to send evidence of such distributions, dividends, rights or other property directly to the Custodian, which is hereby authorized to hold and retain possession of all such evidences of distributions, dividends, rights or other property until termination of the Custody Period in accordance with Section 6 below. In the event the Custodial Shares are distributed to the Shareholders pursuant to Sections 6(a), 6(b), 6(c), 6(d), 6(e), 6(f) or 6(g) below, then the Custodian will distribute evidences of such distributions, dividends, rights, or other property in the form the Custodian received such





distributions, dividends, rights or other property from the Company. If the Company recapitalizes, splits or combines its shares, such shares shall be substituted, on a pro rata basis for the Custodial Shares.



SECTION 6. RELEASE AND DELIVERY OF CUSTODIAL SHARES.





a. In the event the Custodian receives written advice from the

Representative and the Company confirming the approval of the South

Carolina referendum on November 2, 1999 that will permit video gaming

machine payouts to continue in South Carolina, the Custodian shall

return to each Shareholder his or her pro rata share of the Custodial

Shares. The Custodian shall return the Custodial Shares only to the

person named as the holder of record in Exhibit A to this Custody

Agreement, as modified by any transfers made pursuant to Section 3







b. In the event that on or prior to a date that is twelve

months from the Effective Date the Custodian receives written advice

from the Representative and the Company confirming that the Governor of

California has entered into a gaming compact with at least 10 Native

American tribes located in California, the Custodian shall return to

each Shareholder his or her pro rata share of the Custodial Shares. The

Custodian shall return the Custodial Shares only to the person named as

the hol
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