1 EXHIBIT 2.0 AGREEMENT AND PLAN OF REORGANIZATION

1
EXHIBIT 2.0

AGREEMENT AND PLAN OF REORGANIZATION

AMONG

U.S. GAMES, INC.,

LEISURE TIME CASINOS & RESORTS, INC.,

LEISURE ACQUISITIONS, INC.

AND

CERTAIN HOLDERS OF U.S. GAMES, INC.
OUTSTANDING STOCK, OPTIONS AND WARRANTS

TABLE OF CONTENTS

Page
ARTICLE I PLAN OF MERGER

Section 1.01. Merger..............................................................1

Section 1.02. Filing..............................................................5

Section 1.03. Effective Date......................................................5

Section 1.04. Effect of Merger....................................................5

Section 1.05. Further Assurances..................................................5

Section 1.06. Escrow Deposit......................................................6

Section 1.07. Closing.............................................................6

ARTICLE II REPRESENTATIONS AND WARRANTIES OF HOLDERS

Section 2.01. Authority of Holder.................................................6

Section 2.02. No Conflict or Breach...............................................6

Section 2.03. Ownership of Shares.................................................7

Section 2.04. Financial Advisors..................................................7

ARTICLE III REPRESENTATIONS AND WARRANTIES CONCERNING USG

Section 3.01. Effect of Agreement.................................................7

Section 3.02. Organization........................................................8

Section 3.03. Capital Stock.......................................................8

Section 3.04. Financial Statements................................................8

Section 3.05. Absence of Certain Changes..........................................8

Section 3.06. Litigation..........................................................9

Section 3.07. Brokers' Fees.......................................................9

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LEISURE AND ACQUISITION SUB

Section 4.01. Organization; Good Standing; Power..................................9

Section 4.02. Authority Relative to Agreement.....................................9

Section 4.03. Effect of Agreement.................................................9

Section 4.04. No Other Representations...........................................10

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ARTICLE V CERTAIN COVENANTS

Section 5.01. Conduct of Business.....................................................10

Section 5.02. Access to Books, Records, and Properties................................10

Section 5.03. Confidentiality.........................................................10

Section 5.04. Settlement of Certain Claims............................................11

ARTICLE VI NATURE AND SURVIVAL OF COVENANTS, REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION

Section 6.01. Survival of Representations.............................................11

Section 6.02. Indemnification by Holders..............................................11

Section 6.03. Indemnification by Leisure and Acquisition Sub..........................12

Section 6.04. Notice of Claim.........................................................12

Section 6.05. Limits of Indemnification...............................................12

ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
USG AND THE HOLDERS

Section 7.01. Accuracy of Representations and Warranties..............................13

Section 7.02. Resolutions of the Boards of Directors of Leisure and Acquisition Sub...13

Section 7.03. Delivery of Merger Consideration........................................13

Section 7.04. Other Deliveries........................................................13

Section 7.05. Repurchase of Options...................................................13

Section 7.06. Deferred Compensation Agreements........................................14

Section 7.07. Time....................................................................14

ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF
LEISURE AND ACQUISITION SUB

Section 8.01. Accuracy of Representations and Warranties..............................14

Section 8.02. Performance of Agreements...............................................14

Section 8.03. Corporate Approval......................................................14

Section 8.04. Repurchase of Options...................................................14

Section 8.05. Termination of Agreements...............................................14

Section 8.06. Deferred Compensation Agreements........................................14

Section 8.07. Other Agreements........................................................14

Section 8.08. Available Cash..........................................................15

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Section 8.09. Discharge of Obligations.................................................15

Section 8.10. Resolution of License Application........................................15

Section 8.11. Other Deliveries.........................................................15

ARTICLE IX TERMINATION OF AGREEMENT

Section 9.01. Conditions for Termination...............................................15

Section 9.02. Deposit; Liquidated Damages..............................................16

ARTICLE X MISCELLANEOUS PROVISIONS

Section 10.01. Brokerage................................................................16

Section 10.02. Expenses.................................................................16

Section 10.03. Governing Law............................................................16

Section 10.04. Entire Agreement.........................................................16

Section 10.05. Amendments and Modifications.............................................16

Section 10.06. Assignment...............................................................16

Section 10.07. Captions.................................................................16

Section 10.08. Execution in Counterparts................................................16

Section 10.09. Number and Gender........................................................17

Section 10.10. Notices..................................................................17

Section 10.11. Successors and Assigns...................................................18

Section 10.12. Post Merger Operations...................................................18

Section 10.13. Insurance................................................................19

Section 10.14. Definition of "Knowledge"................................................19

Section 10.15. Public Announcement......................................................19

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Exhibit A - Form of Certificate of Merger
Exhibit B - Financial Statements
Exhibit C - Form of Note
Exhibit D - Security Agreement
Exhibit E - Paying Agent Agreement
Exhibit F - Form of Deferred Compensation Agreement
Exhibit G - Form of Noncompetition Agreement
Exhibit H - Form of Employment Agreement Amendment for Xxxxxxx X. Xxxxxxxx
Exhibit I - Form of Employment Agreement Amendment for Xxxxxxx Xxxxxx
Exhibit J - Form of Release

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6
AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (together with all
Schedules and Exhibits hereto, the "Agreement"), made and entered into as of the
30th day of August, 1996, by and among U. S. GAMES, INC., a Georgia corporation
("USG" or the "Surviving Corporation"), LEISURE TIME CASINOS & RESORTS, INC., a
Colorado corporation ("Leisure"), LEISURE ACQUISITION, INC., a Georgia
corporation and wholly owned subsidiary of Leisure ("Acquisition Sub" or the
"Merging Corporation"), the undersigned sole shareholder of USG and the
undersigned holders of certain outstanding options or warrants (the "Purchase
Rights") to purchase shares of USG common stock, no par value (the "Shares").
The sole shareholder and such option and warrant holders are referred to herein
each individually as a "Holder" and collectively as the "Holders." USG and
Acquisition Sub are sometimes referred to individually as a Constituent
Corporation and collectively as the Constituent Corporations.

RECITAL:

The Board of Directors of each of the Constituent Corporations
deems it advisable that Acquisition Sub merge with and into USG on the terms and
conditions set forth herein (the "Merger"), and the Board of Directors of each
of the Constituent Corporations has duly approved and authorized the execution
and delivery of this Agreement.

THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto do hereby agree as follows:

ARTICLE I
PLAN OF MERGER

SECTION 1.01. MERGER. This Section 1.01 shall constitute the
"plan of merger" within the meaning of the Georgia Business Corporation Act
(the "BCA").

(A) The name of the corporation proposing to merge is Leisure
Acquisition, Inc., a Georgia corporation (the "Merging Corporation"), and the
name of the corporation into which the Merging Corporation proposes to merge is
U.S. Games, Inc., a Georgia corporation (the "Surviving Corporation" or "USG").
The Merging Corporation and the Surviving Corporation are hereinafter referred
to collectively as the "Constituent Corporations." Leisure Time Casinos &
Resorts, Inc., a Colorado corporation ("Leisure"), owns all the issued and
outstanding capital stock of the Merging Corporation.

(B) Until the effective time of the Merger (the "Effective
Time"), each of the Constituent Corporations shall continue to conduct its
business without material change and shall not make any distribution or other
disposition of assets, capital or surplus, except in the ordinary course of
business or with the consent of the other Constituent Corporation.

(C) As of the Effective Time, the Merging Corporation's
liabilities and assets of every nature shall become those of the Surviving
Corporation by operation of law.

(D)(1) At the Effective Time, by virtue of the Merger and
without any action on the part of the shareholders of the Surviving
Corporation, each share (the "Shares") of the Surviving Corporation's
common stock, no par value ("USG Stock"), issued and outstanding as of
the Effective Time shall be converted into and shall represent the
right to receive, upon surrender of the certificate representing such
Share, (i) $5.26163, in cash payable to the holders thereof by wire
transfer of

immediately available funds to the accounts designated by such
holders, (ii) the Surviving Corporation's Promissory Note in the
principal amount of $4.78 having a payment term of six years and in a
form mutually acceptable to such holders and the Surviving Corporation
(collectively, the "Notes") and (iii) the right to receive certain
additional payments from the Surviving Corporation after the Effective
Time as specified in Section (E) below (the "Post Merger Payments").

(2) At the Effective Time, by virtue of the Merger and without
any action on the part of the holders of any outstanding options to
purchase shares of USG Stock (the "Options"), the Options shall be
converted into and shall represent the right to receive, upon surrender
of the corresponding option agreement evidencing such Options, on an
as-if-converted, per share basis (based on the number of shares of USG
Stock for which such Options could be exercised), (i) $5.26163, in cash
payable to the holders thereof by wire transfer of immediately
available funds to the accounts designated by such holders, (ii) a Note
in the principal amount of $4.78 and (iii) the right to receive Post
Merger Payments as specified in Section (E) below.

(3) At the Effective Time, by virtue of the Merger and without
any action on the part of the holders of any outstanding warrants to
purchase shares of USG Stock (the "Warrants"), the Warrants shall be
converted into and shall represent the right to receive, upon surrender
of the corresponding warrant agreement evidencing such Warrants, on an
as-if-converted, per share basis (based on the number of shares of USG
Stock for which such Warrants could be exercised), (i) $5.02, in cash
payable to the holders thereof by wire transfer of immediately
available funds to the accounts designated by such holders, (ii) a Note
in the principal amount of $4.78 and (iii) the right to receive Post
Merger Payments as specified in Section (E) below. As used herein, the
term "Purchase Rights" shall mean the Options and Warrants
collectively.

(4) As used herein, the term "Merger Consideration" shall mean
the aggregate cash consideration, aggregate principal amount of Notes
and aggregate Post Merger Payments payable in the Merger in exchange
for all outstanding USG Stock and Purchase Rights as provided in
Sections (D)(1), (D)(2) and (D)(3) above. Subject to Section 5.04
hereof, 42% ($1,900,000) of the cash portion of the Merger
Consideration shall be paid by or on behalf of Leisure and 58%
($2,623,656) of the cash portion of the Merger Consideration shall be
paid from the Surviving Corporation's accounts (which shall be
considered payments in redemption of a portion of the Shares and
Purchase Rights which together with the other Merger Consideration
results in a complete termination of the recipients' equity interest in
the Surviving Corporation pursuant to and in accordance with Section
302(b)(3) of the Internal Revenue Code of 1986, as amended). The cash
portion of the Merger Consideration shall be increased by $.82 for each
$1.00 of unrestricted cash on hand at the Surviving Corporation as of
the Effective Time in excess of $250,000 after giving effect to the
payment of the cash portion of the Merger Consideration as provided in
Sections (D)(1), (D)(2) and (D)(3) above. Each Holder shall share in
the increase pro rata based on his or its relative interest in USG
immediately prior to the Merger, calculated on a fully diluted,
as-if-converted basis.

(5) At the Effective Time, by virtue of the Merger and without
any action on the part of Leisure, each share of the Merging
Corporation's Common Stock, no par value, issued and outstanding as of
the Effective Time shall be converted into and shall represent the
right to receive, upon surrender of the certificate representing such
share, 8,643.04 shares of USG Stock.

(6) Promptly after the Effective Time, each person who was, at
the Effective Time, a holder of record of Shares, shall surrender to
Leisure the certificate or certificates representing such

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Shares, duly endorsed for transfer in blank or accompanied by a
separate stock power and such other documents as may be reasonably
requested. Each holder of a Purchase Right shall also surrender the
original executed copy of the option agreement or warrant agreement
evidencing such Purchase Right, duly endorsed for transfer in blank
and such other documents as may be reasonably requested. Upon
surrender of the foregoing, Leisure shall promptly pay or cause the
payment of the cash portion of the Merger Consideration, and shall
cause the Surviving Corporation to issue the Notes, to the persons
entitled thereto. The Surviving Corporation shall make the Post Merger
Payments as specified in Section (E) below.

(7) Until surrendered, each certificate or other instrument
which prior to the Effective Time represented Shares or a Purchase
Right shall be deemed upon the Effective Time for all purposes to
represent only the right to receive a portion of the Merger
Consideration as provided in Sections (D)(1), (D)(2) and (D)(3) above.
Except for interest accrued under the Notes, no interest will be paid
or accrued on the Merger Consideration upon the surrender of the
certificates or other instruments representing Shares or Purchase
Rights. If payment of any Merger Consideration is to be made to a
person other than the one in whose name a certificate or instrument
surrendered is registered, it shall be a condition of such payment that
the certificate or instrument so surrendered shall be properly endorsed
or otherwise in proper form for transfer, and that the person
requesting such payment shall pay to Leisure or the Surviving
Corporation any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the certificate
or instrument surrendered or establish to the satisfaction of Leisure
and the Surviving Corporation that such tax has been paid or is not
applicable. With respect to any certificate or instrument that has been
lost or destroyed, Leisure shall pay or cause payment of the Merger
Consideration attributable to the Shares or Purchase Rights represented
by such certificate or instrument upon receipt of evidence and
indemnity reasonably satisfactory to it of ownership of the Shares or
Purchase Rights represented thereby. After the Effective Time, no
transfer of Shares or Purchase Rights shall be made on the stock
transfer books of the Surviving Corporation.

(E)(1) The parties agree that up to $2,893,963 of Post Merger
Payments shall be payable as provided in this Section (E), the provisions of
which shall survive the Effective Time forever. Amounts available for payment to
the Holders hereunder shall be payable pro rata based on his or its relative
interest in USG immediately prior to the Merger, calculated on a fully diluted,
as-if-converted basis. Post Merger Payments shall be payable to the Holders
based on sales by the Surviving Corporation after the Effective Time of its
"Pot-O-Gold" video devices (as produced at the Effective Time or as thereafter
renamed or replaced) (the "POGs"). The Holders shall be entitled to receive an
aggregate payment as provided below for each such device sold up to an aggregate
of $2,893,963 (the "Maximum Proceeds"), which amount shall be payable at the
times and in the manner provided in Section E(2) below. The aggregate payment
made with respect to each POG sale shall be determined based on the number of
POGs sold as follows:

---------------------------------------------------------------------
Units of POGs Sold Aggregate Post Merger Payments
Each Month After the Effective
Time
---------------------------------------------------------------------

201-400 $661
---------------------------------------------------------------------
401-500 $744
---------------------------------------------------------------------
501-600 $827
---------------------------------------------------------------------
601-700 $909
---------------------------------------------------------------------
701 and greater $992
---------------------------------------------------------------------

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The Surviving Corporation's obligation to pay the Post Merger Payments shall be
secured by a first lien on its assets and a requirement to maintain a cash
collateral account as more particularly described in a Security Agreement to be
executed by the Surviving Corporation in a form acceptable to the Holders.

(E)(2) The Post Merger Payments shall be payable in arrears on
the 10th business day of each calendar month based on the number of POGs for
which the Surviving Corporation collected payment during the preceding month,
provided that (i) the Surviving Corporation may prepay such amounts in full at
any time without penalty or premium and (ii) no payments shall be due with
respect to any month in which less than 201 POGs are sold. If the Surviving
Corporation shall prepay in full all amounts due under this Section 1.01(E)(2)
on or before the sixth-month anniversary of the date on which occurred the
Effective Time, such amount shall be discounted by 14.28%. Beginning March 1,
1997, however, the Post Merger Payment for each month shall equal the greater of
the amount determined as provided in Section 1.01(E)(1), or 4.14% of the
Surviving Corporation's gross sales of Gaming Products during the month. Gaming
Products shall mean any electronic gaming, lottery, wagering or amusement device
(including software related to any of the foregoing) sold by the Surviving
Corporation or any other entity controlled by Leisure (or its successors in
interest), but not including sales or royalties with respect to the accounting
software produced under the name "Table Trac". Each Post Merger Payment shall be
accompanied by appropriate evidence of the volume of product sales and
collections by the Surviving Corporation during the preceding month. Payment
shall be made by delivery of a bank check in the amount then due and shall be
payable to the order of Gaming Equipment Finance Corp., as agent (the "Agent")
for Holders at 0000 Xxxxxxxxxxxx Xxxxxx, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, or such other address as the Agent shall designate in writing
to the Surviving Corporation. Prior to or following the Closing, Leisure may
substitute a nationally recognized commercial bank reasonably acceptable to
Holders in place of the Agent; provided, that the Holders agree that First Union
National Bank is acceptable for this purpose. The Agent shall distribute the
proceeds thereof to the Holders in accordance with the terms of a Paying Agent
Agreement in a form acceptable to the Holders. The Surviving Corporation shall
keep and maintain full, true and accurate books of account and other records
with sufficient detail to permit the computation and verification of the amounts
to be paid hereunder. Upon prior written notice to the Surviving Corporation,
the Agent (and if the Agent is a bank, one representative designated by a
majority in interest of the Holders determined by reference to their interests
in the Post Merger Payments) shall be permitted at the expense of the Holders,
to inspect such books and records at the Surviving Corporation's premises during
normal business hours, to verify the accuracy of the amounts paid hereunder. In
the event that such inspection reveals an underpayment in the amount of 5% or
more of any payment, then the Surviving Corporation shall promptly reimburse the
costs of such inspection to the parties who bore such expense. In the event any
payment is not paid on the date due pursuant to the terms hereof, the amount
that should have been so paid shall bear interest from the date due until paid
at the prime rate plus one percentage point as announced from time to time in
the Southeastern Edition of The Wall Street Journal. If any Post Merger Payment
is not paid within five days of a Holder's demand therefor, Holders may exercise
their rights under the Security Agreement and, to the extent permitted by and in
accordance with the terms of the Security Agreement, declare the entire
remaining maximum proceeds (regardless of the amount of POGs sold and
collections made as of such date) immediately due and payable without
presentment, demand, protest or notice of any kind, all of which shall be
deemed waived by the Surviving Corporation.

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(F) The Articles of Incorporation and Bylaws of the Surviving
Corporation shall continue as the Articles of Incorporation and Bylaws,
respectively, of the Surviving Corporation, except that the name of the
Surviving Corporation shall be amended and become "Leisure Time Technology,
Inc." The officers and directors of the Surviving Corporation shall resign as of
the Effective Time and the officers and directors of the Merging Corporation
immediately prior to the Effective Time shall by virtue of the Merger become the
officers and directors of the Surviving Corporation.

(G) The Effective Time shall be 11:59:59 p.m. on the day the
Certificate of Merger is filed with the Georgia Secretary of State.

SECTION 1.02. FILING. Upon fulfillment or waiver of the
conditions specified in ARTICLES VII and VIII and provided that this Agreement
has not been terminated pursuant to ARTICLE IX, the Constituent Corporations
will cause a Certificate of Merger in substantially the form of Exhibit A
attached hereto (the "Certificate of Merger") to be executed and filed with the
Secretary of the State of Georgia.

SECTION 1.03. EFFECTIVE DATE. The Merger shall be effective
at the Effective Time.

SECTION 1.04. EFFECT OF MERGER. From and after the Effective
Time, the separate existence of the Merging Corporation shall cease, and the
Surviving Corporation shall thereupon and thereafter, to the extent consistent
with its Articles of Incorporation as established or changed by the Merger,
possess all the rights, privileges, immunities and franchises, of a public as
well as of a private nature, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due on whatever account, and
all other choses in action, and all and every other interest, of or belonging to
or due to each of the Constituent Corporations shall be taken and deemed to be
transferred to and vested in the Surviving Corporation without further act or
deed; and the title to any real estate or any interest therein, vested in either
of the Constituent Corporations shall not revert or be in any way impaired by
reason of the Merger. The Surviving Corporation shall thenceforth be responsible
and liable for all the liabilities, obligations and penalties of each of the
Constituent Corporations; and any claim existing or action or proceeding, civil
or criminal, pending by or against either of the Constituent Corporations may be
prosecuted as if the Merger had not taken place, or the Surviving Corporation
may be substituted in its place; and any judgment rendered against either of the
Constituent Corporations may be enforced against the Surviving Corporation.
Neither the rights of creditors nor any liens upon the property of either of the
Constituent Corporations shall be impaired by reason of the Merger.

SECTION 1.05. FURTHER ASSURANCES. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
further deeds, assignments or assurances in law or any other actions are
necessary, desirable or proper to vest, perfect or confirm of record or
otherwise, in it, the title to any property or rights of the Constituent
Corporations acquired or to be acquired by reason of, or as a result of, the
Merger, the Constituent Corporations agree that such Constituent Corporations
and their proper officers and directors shall and will execute and deliver all
such proper deeds, assignments and assurances in law and do all things
necessary, desirable or proper to vest, perfect or confirm title to such
property or rights in the Surviving Corporation and otherwise to carry out the
purpose of this Agreement, and that the proper officers and directors of the
Surviving Corporation are fully authorized and directed in the name of the
Constituent Corporations or otherwise to take any and all such actions.

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SECTION 1.06. ESCROW DEPOSIT. Prior to the date of this
Agreement, Leisure has placed into escrow, in accordance with an Escrow
Agreement dated August 7, 1996, as amended, One Million Six Hundred Thousand
Dollars ($1,600,000.00) (such amount being referred to as the "Escrow Deposit").
At Closing, such amount, together with all additions thereto, if any, will be
credited against the cash portion of the Merger Consideration.

SECTION 1.07. CLOSING. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, P.L.L.C., 3250 One Ninety One Peachtree
Tower, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000 at 11:00 A.M. on the
business day following the satisfaction of the conditions to closing set forth
in ARTICLES VII and VIII (the "Closing Date") unless the parties hereto agree in
writing upon a different time, date or place. The Closing shall not be deemed to
have occurred until all actions necessary to complete the Closing have occurred.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOLDERS

Subject to the limitations and qualifications set forth in
this Agreement, including the Disclosure Schedule attached hereto, each Holder,
severally with respect to itself or himself only and not jointly, represents and
warrants to Leisure and Acquisition Sub as follows:

SECTION 2.01. AUTHORITY OF HOLDER. Following the consummation
of the actions described in item 1 on Schedule 3.01 of the Disclosure Schedule,
Holder has full capacity, power and authority to execute and deliver this
Agreement and to perform the transactions contemplated hereby. Holder's
execution, delivery and performance of this Agreement has been duly and validly
authorized by all necessary action on the part of Holder. This Agreement has
been duly executed and delivered by Holder. Following the consummation of the
actions described in item 1 on Schedule 3.01 of the Disclosure Schedule, this
Agreement constitutes the legal, valid and binding obligation of Holder,
enforceable in accordance with its terms, except that enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by principles of equity regarding the
availability of remedies.

SECTION 2.02. NO CONFLICT OR BREACH. To the Holder's knowledge
and except as otherwise disclosed on Schedule 2.02 of the Disclosure Schedule,
the execution, delivery and performance of this Agreement do not and will not:

(a) conflict with or constitute a violation of any law,
statute, judgment, order, decree or regulation of any legislative body,
court, administrative agency, governmental authority or arbitrator
applicable to or relating to Holder;

(b) conflict with, constitute a default under, result in a
breach or acceleration of or require notice to or the consent of any
third party under any material contract, agreement, commitment,
mortgage, note, license or other instrument or obligation to which
Holder is party or by which Holder is bound; or

(c) in the case of any Shares held for the benefit of Xxxxxxx
X. Xxxx, conflict with or constitute a violation of that certain Stock
Ownership Trust Agreement dated April 18, 1995, as amended (the "Trust
Agreement"), under which such Shares are held;

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except in the cases of any of the foregoing that do not and will not have a
material adverse effect on the ability of Holder to consummate the transactions
contemplated by this Agreement.

SECTION 2.03. OWNERSHIP OF SHARES. Except as provided in the
Trust Agreement, Holder is the owner, beneficially and of record, of all right,
title and interest in and to, or Holder has the right to acquire, the number of
Shares set forth beside such Holder's name on Schedule 2.03 of the Disclosure
Schedule. Holder has, or will have at the Closing, good and marketable title to
his or its Shares or Purchase Rights and the absolute right to sell, assign and
transfer the same in the Merger, free and clear of all liens, pledges,
encumbrances, security interests, options or other restrictions except as
provided on Schedule 2.02 of the Disclosure Schedule. Holder is not a party to
any option, warrant, right, contract, call, put or other agreement or commitment
providing for the disposition or acquisition of any of his or its Shares or
Purchase Rights other than this Agreement and Holder is not a party to any
voting trust, proxy or other agreement or understanding (other than the Trust
Agreement with respect to the Shares held in accordance therewith) with respect
to his or its Shares or Purchase Rights. Except as disclosed on Schedule 3.06,
Holder is not a party to any litigation regarding Holder's ownership of his or
its Shares or Purchase Rights.

SECTION 2.04. FINANCIAL ADVISORS. Holder is solely responsible
for the payment of the fees and expenses of any finder, broker, agent or other
intermediary who has acted for or on behalf of Holder in connection with the
negotiation or consummation of this Agreement (the "Holder's Broker"), and
Holder agrees to indemnify, defend and hold Purchaser and Acquisition Sub
harmless from and against any claims for any brokerage commission, finder's fee
or similar payment with respect to the Holder's Broker.

ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING USG

Subject to the limitations and qualifications set forth in
this Agreement, including the Disclosure Schedule attached hereto, the Holders
represent and warrant, severally and not jointly, to Leisure and Acquisition Sub
as follows:

SECTION 3.01. EFFECT OF AGREEMENT. Following the consummation
of the actions described in item 1 on Schedule 3.01 of the Disclosure Schedule,
this Agreement is a legal, valid and binding obligation of USG and is
enforceable against USG in accordance with its terms, except that enforceability
hereof may be limited by bankruptcy, insolvency, reorganization or other similar
laws affecting creditors' rights generally and by principles of equity regarding
the availability of remedies. USG has the requisite corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby and the execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary corporate
action on the part of USG. Except as set forth on Schedule 3.01 of the
Disclosure Schedule or to the extent the following would reasonably not be
expected to have a material adverse effect on the business of USG ("Material
Adverse Effect"), the execution, delivery and performance of this Agreement by
USG and the consummation of the transactions contemplated hereby will not (i)
require the consent, approval or authorization of any person, corporation,
partnership, joint venture or other business association or public authority;
(ii) violate, with or without the giving of notice or the passage of time, or
both, any provisions of law applicable to USG; (iii) with or without the giving
of notice or the passage of time, or both, conflict with or result in a breach
or termination of any provision of, or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any of the properties or
assets of USG pursuant to any corporate charter or bylaw or material indenture,
note, bond, pledge, mortgage, deed of trust, lease, license, contract,
agreement, commitment or other instrument, or obligation, or any order,
judgment, award,

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decree, statute, ordinance, regulation or any other restriction of any kind or
character, to which USG is a party or by which USG or any of its assets or
properties may be bound; or (iv) result in the acceleration of any indebtedness
of USG or increase the rate of interest payable by USG with respect to any
indebtedness. It is, however, expressly understood and agreed that neither USG
nor any Holder is making or has made any representation or warranty that USG is
licensed in any jurisdiction or by any authority, government or agency (except
as provided on Schedule 3.02 of the Disclosure Schedule solely with respect to
the status of its licenses as of the date of this Agreement) or as to the effect
of the consummation of the transactions contemplated by this Agreement
(including without limitation the withdrawal of USG's appeal of the license
denial in Arizona and the surrender of its Mississippi license as described in
Section 8.10 below) on the licensability of USG and that Leisure and Acquisition
Sub agree to undertake any and all risk that USG may not be or remain licensable
in any jurisdiction or by any authority, government or agency.

SECTION 3.02. ORGANIZATION. USG is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia. USG has all requisite corporate power and authority to own, operate and
lease its properties and to carry on its business as now being conducted. USG
neither owns nor has the right to acquire an equity interest in any corporation,
partnership or other organization. As of the date of this Agreement, USG is
qualified to conduct business and holds licenses as provided on Schedule 3.02 of
the Disclosure Schedule.

SECTION 3.03. CAPITAL STOCK. The authorized capital stock of
USG consists of 5,000,000 shares of common stock, no par value, of which 688,500
shares of common stock are issued, outstanding, fully paid and nonassessable and
356,804 shares are issuable upon exercise of valid purchase options or warrants
and are owned of record (or otherwise subject to purchase) by those persons set
forth on Schedule 2.03 of the Disclosure Schedule. Except as provided on such
Schedule 2.03, there are no outstanding or authorized subscriptions, options,
warrants, calls, rights, commitments or any other agreements of any character
obligating USG to issue any additional shares of its capital stock or any
securities convertible into or evidencing the right to subscribe for, purchase
or acquire any shares of capital stock, nor are there any voting trusts or any
other agreements or understandings with respect to the voting of the capital
stock of USG except the Trust Agreement.

SECTION 3.04. FINANCIAL STATEMENTS. Complete copies of the
audited financial statements of USG as of June 30, 1995 and for the year then
ended and USG's interim unaudited financial statements as of April 30, 1996 and
for the ten-month period then ended previously have been delivered to Leisure
and are attached hereto as Exhibit B. Such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly in all material respects the financial
position and results of operation of USG as of such dates and for the periods
then ended, subject to year end adjustments in the case of interim financial
statements; provided, that such statements (i) do not contain footnotes or a
statement of cash flow, (ii) do not reflect any liability for the settlement of
the matters disclosed on Schedule 3.06 of the Disclosure Schedule, the payment
of any bonuses or other amounts reflected on Schedule 5.01 or income taxes
payable with respect to prior periods, (iii) do not reflect the value of
purchased capitalized software which may or may not be recoverable and (iv) did
not involve a review of inventory, or any assessment of the recoverability or
valuation thereof, or pricing or the undertaking of any physical count. The
balance sheet of USG at April 30, 1996 is referred to herein as the "Balance
Sheet" and April 30,1996 is referred to herein as the "Balance Sheet Date."

SECTION 3.05. ABSENCE OF CERTAIN CHANGES. Except as set forth
on Schedule 3.05 of the Disclosure Schedule or otherwise contemplated by the
terms of this Agreement, since the Balance Sheet

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Date, to the Holders' knowledge, no material adverse change has occurred to USG
or its business, properties, financial condition or prospects.

SECTION 3.06. LITIGATION. Except as set forth on Schedule 3.06
of the Disclosure Schedule, to the knowledge of Holders, there is no claim,
action, suit, proceeding (legal, administrative or otherwise), investigation or
inquiry (by an administrative agency, governmental body or otherwise) pending
or, to the knowledge of USG, threatened by or against, or otherwise affecting,
USG, its capital stock, properties or assets or the transactions contemplated
hereby, at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, agency, instrumentality or
authority, domestic or foreign.

SECTION 3.07. BROKERS' FEES. Except as provided on Schedule
3.07 of the Disclosure Schedule, USG has not incurred any liability for brokers'
fees, finders' fees, agents' commissions, financial advisory fees or other
similar forms of compensation in connection with this Agreement or any
transaction contemplated by this Agreement.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LEISURE AND ACQUISITION SUB

Subject to the limitations and qualifications set forth in
this Agreement, Leisure and Acquisition Sub, jointly and severally, represent
and warrant to USG and the Holders as follows:

SECTION 4.01. ORGANIZATION; GOOD STANDING; POWER. Each of
Leisure and Acquisition Sub is a corporation duly organized, validly existing,
and in good standing under the laws of the States of Colorado and Georgia,
respectively, and has all requisite corporate power and authority to own, lease
and operate its properties, to carry on its business as now being conducted and
to enter into this Agreement and perform its obligations hereunder. Acquisition
Sub has no assets or liabilities and will have no assets or liabilities as of
the Effective Time. Neither Leisure nor Acquisition Sub has any knowledge that
Leisure, Acquisition Sub or any person associated with either of them would not
be licensable, qualified or otherwise suitable to be a shareholder, officer,
director, employee or agent of the Surviving Corporation as of and after the
Effective Time under any law, rule or regulation, including those which regulate
gaming activities, in the locations in which USG conducts or has an application
pending for a license to conduct, business immediately prior to the Effective
Time.

SECTION 4.02. AUTHORITY RELATIVE TO AGREEMENT. The execution,
delivery and performance of this Agreement have been duly and effectively
authorized by all necessary corporate action on the part of Leisure and
Acquisition Sub and are valid, legally binding and enforceable obligations of
Leisure and Acquisition Sub, except that enforceability hereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by principles of equity regarding the
availability of remedies.

SECTION 4.03. EFFECT OF AGREEMENT. Except as provided on
Schedule 4.03 of the Disclosure Schedule, the execution, delivery and
performance of this Agreement by Leisure and Acquisition Sub and the
consummation of the transactions contemplated hereby will not (i) require the
consent, approval or authorization of any person, corporation, partnership,
joint venture or other business association or public authority; (ii) violate,
with or without the giving of notice or the passage of time, or both, any
provision of law now applicable to Leisure or Acquisition Sub; (iii) with or
without the giving of notice or the passage of time, or both, conflict with or
result in a breach or termination of any provision of, or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any of
the property or assets of Leisure or

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Acquisition Sub pursuant to any corporate charter, bylaw, indenture, note, bond,
pledge, mortgage, deed of trust, lease, license, contract, agreement, commitment
or other instrument or obligation or any order, judgment, award, decree,
statute, ordinance, regulation, or any other restriction of any kind or
character, to which Leisure or Acquisition Sub is a party, or by which Leisure
or Acquisition Sub or any of their assets or properties are bound; or (iv)
result in the acceleration of any indebtedness of Leisure or increase the rate
of interest payable by Leisure with respect to any indebtedness.

SECTION 4.04. NO OTHER REPRESENTATIONS. Leisure and
Acquisition Sub specifically acknowledge that neither USG nor any Holder shall
be deemed to have made to Leisure or Acquisition Sub any representation or
warranty not expressly set forth herein or otherwise with respect to
projections, estimates or budgets, if any, heretofore delivered or made
available to them concerning future revenues, expenses, results or anticipated
results of operations or the financial condition of USG or regarding the
licensability of USG. Leisure and Acquisition Sub confirm that they have been
given full access to all material information concerning the condition,
properties, operations and prospects of USG and have had an opportunity to ask
questions of, and to receive information from, USG and persons acting on its
behalf concerning USG and to verify the accuracy of the information and data
received by them. Leisure and Acquisition Sub have made such independent
investigation of USG, its management and related matters as they have, in their
sole discretion, deemed to be necessary or advisable in connection with the
consummation of the transactions contemplated by this Agreement. It is agreed
that matters disclosed on any Schedule of the Disclosure Schedule shall be
deemed disclosed for purposes of each other Schedule, whether or not
specifically cross-referenced.

ARTICLE V
CERTAIN COVENANTS

SECTION 5.01. CONDUCT OF BUSINESS. Between the date hereof and
the Closing Date, USG covenants and agrees that except as set forth herein or as
otherwise approved in writing by Leisure and except as set forth on Schedule
5.01 of the Disclosure Schedule, (i) the business of USG will be conducted in a
manner not materially different from its past practice and only in the ordinary
course, and (ii) it will refrain from incurring any material debt, liability or
obligation, contingent or otherwise except that it may settle the litigation
described in Section 5.04 below with Leisure's consent, which shall not be
unreasonably withheld.

SECTION 5.02. ACCESS TO BOOKS, RECORDS, AND PROPERTIES. USG
has previously and shall continue to afford to Leisure and its representatives
reasonable access to the properties, books and records of USG at reasonable
times in order that Leisure may have full opportunity to make such reasonable
investigation as it desires of the affairs of USG.

SECTION 5.03. CONFIDENTIALITY. In recognition of the
confidential nature of certain of the information which will be provided to
Leisure and its affiliates by USG and the Holders, Leisure agrees to retain in
confidence, and to require its directors, officers, employees, consultants,
accountants, attorneys, lenders, other professional representatives and agents
(collectively, "Purchaser Representatives") to retain in confidence all
information transmitted or disclosed to it by USG and the Holders, and further
agrees that it will not use for its own benefit or for the benefit of any of its
affiliates and will not use or disclose to any third party, or permit the use or
disclosure to any third party of, any information so obtained or revealed,
except that Leisure may disclose the information to those of the Purchaser
Representatives who need the information for the proper performance of their
assigned duties with respect to the consummation of the transactions
contemplated hereby. In making such information available to the Purchaser
Representatives, Leisure shall take any and all precautions necessary to ensure
that the Purchaser Representatives use the information only

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as permitted hereby. Notwithstanding anything to the contrary in the foregoing
provisions, such information may be disclosed (a) where it is required by court
order or decree or applicable law, (b) if it is ascertainable or obtained from
public or published information (c) if the recipient can demonstrate that such
information was properly in its possession prior to disclosure thereof and (d)
following successful consummation of the Closing to the extent required in
connection with the operation of USG's business. If Leisure or any Purchaser
Representative shall be required to make disclosure of any such information by
court order or decree or applicable law, Leisure shall give the affected party
or parties prior notice of the making of such disclosure and shall use all
efforts to afford them an opportunity to contest the making of such disclosure.
The restrictions under this Section shall survive Closing; provided further,
that in the event this Agreement is terminated prior to Closing, the
restrictions under this Section shall survive such termination notwithstanding
anything contained herein to the contrary. In the event that the Closing shall
not occur, Leisure shall immediately deliver, or cause to be delivered, to USG
(without retaining any copies thereof) any and all documents, statements or
other written information obtained containing confidential information of USG or
any Holder.

SECTION 5.04. SETTLEMENT OF CERTAIN CLAIMS. It is understood
and agreed that USG shall set aside at Closing a special reserve equal to the
lesser of (A) $421,000 or (B) the actual amount of payment then owed to Xxxxx
Distributing Co., Inc. ("Xxxxx") in connection with the settlement of the
litigation described in item 2 on Schedule 3.06 of the Disclosure Schedule (the
"Xxxxx Reserve"); provided, that no amount payable to Xxxxx with respect to
sales of any gaming devices after the Effective Time shall be taken into account
in determining (B) above. The proceeds of the Xxxxx Reserve shall not be
considered "Available Cash" for purposes of Section 8.08 hereof. Furthermore,
(i) no Xxxxx Reserve shall be required if the matter is settled prior to the
Effective Time as provided in Section 5.01 above and (ii) USG may reduce the
Xxxxx Reserve by the amount by which the cash portion of the Merger
Consideration paid by or on behalf of Leisure is less than $1,900,000. Leisure
shall be obligated in any event to pay or cause to be paid at least $1,600,000
of the Merger Consideration in immediately available funds at the Closing.

ARTICLE VI
NATURE AND SURVIVAL OF COVENANTS, REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION

SECTION 6.01. SURVIVAL OF REPRESENTATIONS. Except as otherwise
expressly provided herein, all representations, warranties, indemnities,
covenants and agreements made in this Agreement and the remedies of the parties
with respect thereto, shall, except to the extent notice is given prior to the
expiration of the applicable period, survive the Closing hereunder for a period
of one year. Such notice shall specify, in reasonable detail, the factual
details underlying the claim or liability and the basis for the claim of
indemnification, together with copies of any complaint or other documents
relevant to such claim or liability.

SECTION 6.02. INDEMNIFICATION BY HOLDERS. Subject to Section
6.05 below, Holders, severally and not jointly, shall indemnify, defend and hold
harmless Leisure (and, after the Closing, the Surviving Corporation) and their
affiliates, officers, directors, agents and employees (collectively, the
"Leisure Indemnitees") from, against, and with respect to any and all losses,
damages, claims, obligations, liabilities, costs and expenses of any kind or
character (a "Loss") arising out of or in connection with any of the following:

(a) any breach of any of the representations or warranties of
any Holder contained in or made pursuant to this Agreement; and

(b) any failure by any Holder to perform or observe, in full,
any covenant, agreement or condition to be performed or observed by him
or it pursuant to this Agreement.

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SECTION 6.03. INDEMNIFICATION BY LEISURE AND ACQUISITION SUB.
Subject to Section 6.05 below, Leisure and Acquisition Sub shall indemnify,
defend and hold harmless the Holders from, against and with respect to any Loss
arising out of or in connection with any of the following:

(a) any breach of any of the representations and warranties
of Leisure or Acquisition Sub contained in or made pursuant to this
Agreement;

(b) any failure by Leisure or Acquisition Sub to perform or
observe, in full, any covenant, agreement or condition to be performed
or observed by it pursuant to this Agreement; and

(c) any action by Xxxxx or its affiliates related to the
reduction in the Xxxxx Reserve as provided in Section 5.04 hereof or
otherwise in connection with the matter disclosed in item 2 of Schedule
3.06 of the Disclosure Schedule.

SECTION 6.04. NOTICE OF CLAIM. Any party seeking to be
indemnified hereunder (the "Indemnified Party") shall, within 15 days following
discovery of the matters giving rise to a Loss, notify the party from whom
indemnity is sought (the "Indemnity Obligor") in writing of any claim for
recovery, specifying in reasonable detail the nature of the Loss and the amount
of the liability estimated to arise therefrom. Failure to give such notice shall
constitute a waiver of the Loss attributable to such matters.

SECTION 6.05. LIMITS OF INDEMNIFICATION.

(A) In no event shall any Holder be liable for any Losses in
excess of his or its share of the aggregate Merger Consideration (exclusive of
interest on the Notes) that has been liquidated to cash and actually received by
such Holder (reduced by amounts paid pursuant to the second sentence of Section
1.01(D)(4) from the proceeds of USG's accounts as opposed to payments made by or
on behalf of Leisure). To the extent the Losses attributable to a Holder exceed
the Merger Consideration received that had been liquidated to cash, the Leisure
Indemnitees shall be entitled to recover any Losses from the Holder as follows:
(i) first, by reducing the amount of any remaining unpaid Post Merger Payments;
(ii) second, as a set-off against the Notes by reducing the principal amount of
the Notes in inverse order of payment on a dollar-of-principal for
dollar-of-Loss basis; and (iii) third, as a set-off against the Notes by
reducing any accrued but unpaid interest payments under the Notes on a
dollar-of-accrued-interest for dollar-of-Loss basis. No Loss shall be
indemnifiable by any Holder unless and until (and then only to the extent that)
the aggregate of all Losses claimed by all Leisure Indemnitees exceeds $250,000
in the aggregate.

(B) The amount payable with respect to any Loss by any
Indemnified Party (i) shall be reduced by the amount of any insurance proceeds
received with respect to the Loss, and each of the parties hereby agrees to use
its best efforts to collect any and all insurance proceeds to which it may be
entitled in respect of any Loss; (ii) shall be net of any federal, state or
local tax benefit derived by the Indemnified Party by reason of the Loss and
(iii) shall not include any amounts related to special or consequential damages.

(C) No Holder shall be required to indemnify any Indemnified
Party for any Loss resulting from the breach of a representation or warranty
hereunder if Leisure or Acquisition Sub knew or had reason to know at the time
of Closing of the existence of the facts or circumstances giving rise to such
breach and elected to proceed with the Closing notwithstanding such facts.

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(D) Notwithstanding anything in this Article VI to the
contrary, each Holder shall be solely responsible (and no other Holder shall
have any liability on account thereof) for any Loss arising out of the breach by
him or it of the representations, warranties and/or covenants made by such
Holder in Article II hereof or otherwise pursuant to this Agreement which
pertain solely to himself or itself and not to USG. Any other Loss giving rise
to indemnification under Section 6.02 shall be charged pro rata against the
Holders based upon their relative Ownership Percentages as set forth opposite
their names on Schedule 2.03 of the Disclosure Schedule. It is also expressly
agreed that the sole shareholder shall be solely responsible for any breach of
Section 3.04 hereof.

(E) It is specifically understood and agreed that the trustees
under that certain Stock Ownership Trust Agreement dated April 18, 1995 shall
have no personal liability to any Leisure Indemnitee in their respective
capacities as trustees thereunder.

ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF USG AND THE HOLDERS

The obligations of USG and the Holders under this Agreement
are, except to the extent expressly waived in writing by them, subject to the
satisfaction at or prior to the Closing Date (including satisfaction thereof
simultaneously with the Closing, it being agreed that no action to be taken at
the Closing shall be deemed consummated until all actions to be taken at the
Closing are consummated) of each of the following conditions:

SECTION 7.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Leisure and Acquisition Sub herein contained
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect as though made on and as of the Closing
Date, except as affected by the transactions contemplated hereby and there shall
be delivered to USG at the Closing a certificate to such effect signed by the
President of each of Leisure and Acquisition Sub.

SECTION 7.02. RESOLUTIONS OF THE BOARDS OF DIRECTORS OF
LEISURE AND ACQUISITION SUB. USG shall have received from each of Leisure and
Acquisition Sub certified copies of the resolutions of its Board of Directors
approving this Agreement and authorizing the consummation of the transactions
contemplated hereby.

SECTION 7.03. DELIVERY OF MERGER CONSIDERATION. Leisure shall
have delivered to the Holders the aggregate cash Merger Consideration and the
Notes in substantially the form of Exhibit C hereto as more particularly
provided for in Section 1.01(D) of this Agreement.

SECTION 7.04. OTHER DELIVERIES. Leisure shall cause the
Surviving Corporation to execute and deliver a Security Agreement in
substantially the form of Exhibit D hereto, UCC financing statements as
contemplated thereby and a Paying Agent Agreement in substantially the form of
Exhibit E hereto.

SECTION 7.05. REPURCHASE OF OPTIONS. Immediately prior to the
Closing, USG shall have redeemed all outstanding options to purchase USG Stock
from all persons other than the Holders listed on Schedule 2.03 of the
Disclosure Schedule.

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SECTION 7.06. DEFERRED COMPENSATION AGREEMENTS. USG shall have
entered into Deferred Compensation Agreements in substantially the form of
Exhibit F hereto with the persons listed on Schedule 8.06 of the Disclosure
Schedule providing for payments to such persons following the Closing.

SECTION 7.07. TIME. The Closing shall have occurred on or
before September 13, 1996.

ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF LEISURE AND ACQUISITION SUB

The obligations of Leisure and Acquisition Sub under this
Agreement are subject to the satisfaction at or prior to the Closing Date
(including satisfaction thereof simultaneously with the Closing, it being agreed
that no action to be taken at the Closing shall be deemed consummated until all
actions to be taken at the Closing shall be deemed consummated) of each of the
following conditions:

SECTION 8.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of USG and the Holders herein contained shall be
true and correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date, except as
affected by transactions contemplated hereby and there shall be delivered to
Leisure and Acquisition Sub a certificate to such effect signed by the President
of USG and each Holder.

SECTION 8.02. PERFORMANCE OF AGREEMENTS. USG shall have
complied with the covenants set forth in Sections 5.01 and 5.02 and there shall
be delivered to Leisure and Acquisition Sub a certificate to such effect signed
by the President of USG and each Holder.

SECTION 8.03. CORPORATE APPROVAL. Leisure and Acquisition Sub
shall have received from USG certified copies of the resolutions of the Board of
Directors and sole shareholder approving the Agreement and authorizing the
consummation of the transactions contemplated hereby.

SECTION 8.04. REPURCHASE OF OPTIONS. Immediately prior to the
Closing, USG shall have redeemed all outstanding options to purchase USG Stock
from all persons other than the Holders listed on Schedule 2.03 of the
Disclosure Schedule and shall deliver evidence of such redemption in a form
reasonably satisfactory to Leisure at the Closing.

SECTION 8.05. TERMINATION OF AGREEMENTS. Prior to or
concurrent with the Closing, that certain Consulting and Noncompetition
Agreement between USG and Xxxxxxx X. Xxxx dated as of April 18, 1995, as
amended, shall be terminated and that certain Agreement between USG and Xxxxxx
X. Xxxxxxx dated as of April 18, 1995, as amended, shall also have been
terminated and all payments due by USG thereunder paid in full.

SECTION 8.06. DEFERRED COMPENSATION AGREEMENTS. USG shall have
entered into Deferred Compensation Agreements in substantially the form of
Exhibit F hereto with the persons listed on Schedule 8.06 of the Disclosure
Schedule providing for payments to such persons following the Closing.

SECTION 8.07. OTHER AGREEMENTS. USG and Xxxxxxx X. Xxxx shall
have entered into a Noncompetition Agreement in substantially the form of
Exhibit G hereto and USG and each of Xxxxxxx X. Xxxxxxxx and Xxxxxxx Xxxxxx
shall have entered into the Employment Agreement Amendments in the Forms
attached hereto as Exhibit H and I, respectively, and all amounts due thereunder
shall have been paid. Each Holder shall have executed and delivered a Receipt
and Release in substantially the form of Exhibit J hereto.

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SECTION 8.08. AVAILABLE CASH. After giving effect to the
transactions contemplated by this Agreement, USG shall have on hand at the
Closing not less than $250,000 in unrestricted cash ("Available Cash"). If,
however, Available Cash is less than $250,000, the aggregate cash portion of the
Merger Consideration will be reduced by an amount equal to the difference
between $250,000 and the actual amount of Available Cash (provided each Holder's
cash proceeds will be reduced pro rata based on his or its relative interest in
USG immediately prior to the Merger, calculated on a fully diluted,
as-if-converted basis). In such event, the condition set forth in this Section
8.08 shall be deemed satisfied.

SECTION 8.09. DISCHARGE OF OBLIGATIONS. USG shall have paid in
full or otherwise been released from all liability for all attorneys',
accountants', brokers' and other fees and expenses related to the transactions
contemplated by this Agreement; including without limitation, all amounts
disclosed on Schedule 3.07 and the bonus payments described on Schedule 5.01 of
the Disclosure Schedule.

SECTION 8.10. RESOLUTION OF LICENSE APPLICATION. USG shall
have withdrawn its appeal from the action denying licensure in Arizona and such
denial shall have become effective and USG shall have taken the actions
described in item 1 of Schedule 3.01 of the Disclosure Schedule.

SECTION 8.11. OTHER DELIVERIES. Each officer and director of
USG holding such positions immediately prior to the Closing shall tender their
resignations therefrom to be effective prior to or as of the Closing.
Notwithstanding the foregoing, Leisure agrees to cause the Surviving Corporation
to keep in effect the applicable provisions of its Articles of Incorporation and
Bylaws (as in effect immediately prior to the Effective Time) concerning
exculpation and indemnification of its officers and directors. The provisions of
this Section 8.11 shall survive the Closing forever.

ARTICLE IX
TERMINATION OF AGREEMENT

SECTION 9.01. CONDITIONS FOR TERMINATION. Notwithstanding
anything to the contrary herein, this Agreement may be terminated and the
transactions hereby may be abandoned:

(A) by the mutual consent of the Boards of Directors
of Leisure and USG at any time prior to the Effective Time;

(B) by action of the Board of Directors of Leisure or
USG if the Merger has not been consummated or the other party shall
have failed to satisfy the conditions to Closing to be satisfied by
such party on or before September 13, 1996;

(C) by action of the Board of Directors of Leisure if
there exists a material breach of any representation, warranty or
covenant made to Leisure or Acquisition Sub by USG or any Holder
following notice thereof and failure by such party to cure such breach
with 15 days thereafter; or

(D) by action of the Board of Directors of USG if
there exists a material breach of any representation, warranty or
covenant made to USG or the Holders by Leisure or Acquisition Sub
following notice thereof and failure by such party to cure such breach
within 15 days thereafter.

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SECTION 9.02. DEPOSIT; LIQUIDATED DAMAGES. The parties agree
that the injury which would be caused to USG and the Holders on account of such
termination would be difficult or impossible to determine. They desire to
provide a means to compensate USG and the Holders for such damage and they have
concluded that the Escrow Deposit is a reasonable pre-estimate of the probable
loss. Thus, if this Agreement is terminated other than in accordance with
Section 9.01(A) or 9.01(C), USG shall be entitled to be paid the Escrow Deposit,
which, together with the other amounts described in Section 1.06 hereof, shall
be the sole remedy of USG and the Holders in connection with the termination of
this Agreement. Neither USG nor any Holder shall have any liability to Leisure
or Acquisition Sub or any of their affiliates, officers, directors, shareholders
or employees upon the termination of this Agreement.

ARTICLE X
MISCELLANEOUS PROVISIONS

SECTION 10.01. BROKERAGE. Except as disclosed on Schedule 3.07
of the Disclosure Schedule, Leisure and USG each represent and warrant to the
other that they have not dealt with any business broker, real estate agent,
finder, or other third party broker or intermediary in connection with the
subject of this Agreement or the transactions contemplated hereby, and Leisure
and USG each hereby agree to indemnify and hold each other harmless for any
obligation or liability sustained by either party on account of the breach by
the other party of such representation and warranty.

SECTION 10.02. EXPENSES. Except to the extent contemplated by
Section 8.09 hereof or as otherwise expressly provided herein, each party will
bear its own expenses in connection with the accounting, legal, investment
banking and professional services required in the negotiation and preparation of
this Agreement and the consummation of the transaction provided for in this
Agreement.

SECTION 10.03. GOVERNING LAW. This Agreement and the
transactions contemplated herein shall be governed by, interpreted, construed
and enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed entirely within the State of Georgia.

SECTION 10.04. ENTIRE AGREEMENT. This Agreement (including the
Schedules and any subsidiary agreements incorporated herein as Exhibits)
contains the entire agreement of the parties with respect to the subject matter
hereof and supersedes any prior agreement between or among the parties hereto,
including that certain letter of intent between Leisure and USG dated May 10,
1996, except as provided in paragraphs C, F, G and H thereof.

SECTION 10.05. AMENDMENTS AND MODIFICATIONS. This Agreement
shall not be modified, amended or changed in any respect except in writing duly
signed by the parties hereto and each party hereby waives any right to amend
this Agreement in any other way.

SECTION 10.06. ASSIGNMENT. This Agreement may not be assigned
by any of the parties hereto without the express written consent of the other
parties, except to the extent assigned to any transferee of a Holder's USG Stock
or Purchase Rights.

SECTION 10.07. CAPTIONS. Captions in this Agreement are solely
for purposes of identification and shall not in any manner alter or vary the
interpretation or construction of this Agreement.

SECTION 10.08. EXECUTION IN COUNTERPARTS. This Agreement may
be executed in more than one counterpart, each of which shall be deemed to be an
original, but all of which shall be deemed to

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constitute one instrument. It shall not be necessary for all parties to have
signed the same counterpart provided that all parties have signed at least one
counterpart.

SECTION 10.09. NUMBER AND GENDER. Throughout this Agreement,
wherever the context so requires, the singular shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and vice versa.

SECTION 10.10. NOTICES. All notices or other communications
that are required or permitted hereunder shall be given in writing and shall be
given either by personal delivery, by Federal Express or other overnight courier
or by telecopy, shall be deemed to have been given when personally delivered,
when deposited with charges prepaid with Federal Express or other nationally
recognized overnight courier service, or when transmitted to telecopy machine,
addressed to the respective parties as follows:

LEISURE AND ACQUISITION SUB:

Leisure Time Casinos and Resorts, Inc.
X.X. Xxx 000
0000 Xxxxxx Xxxx
Xxxx, Xxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxx X. Xxxxxxx

WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:

Xxxxxxx, Muething & Klekamp
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Telecopy: (000) 000-0000
Attn: Xxx Xxxxxxxx, Esquire

USG:

U.S. Games, Inc.
0000-X Xxxxxxxxx Xxxxxxx, Xxxx, X.X.
Xxxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx

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HOLDERS:

Xxxxxx X. Xxxx, III, Trustee
Xxxxxx X. Xxxxxxx, Trustee
Xxxxxxx X. Xxxxxxxx, Trustee
c/o 0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000

Xxxxxx X. Xxxxx
x/x 00 Xxxxxxxx Xxxx Xxxxx, Xxx. 000
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000

Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxx Xxxxxxx
c/o Gaming Equipment Finance Corp.
0000 Xxxxxxxxxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telecopy: (000) 000-0000

WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:

Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, P.L.L.C.
1600 BB&T Financial Center
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attn: Xxxxxxx X. Xxxx, Esquire

Any party may by notice change the address to which notice or other
communications to such party are to be delivered or mailed.

SECTION 10.11. SUCCESSORS AND ASSIGNS. All of the terms and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their heirs, personal representatives,
transferees, successors and, to the extent permitted herein, their assigns. No
third parties are intended to benefit, however, from the terms and provisions
hereof or from any representation, warranty, covenant or obligation set forth
herein or in any schedule, exhibit or other writing delivered pursuant hereto.

SECTION 10.12. POST MERGER OPERATIONS. Following the Merger,
Leisure covenants that at no time shall the Surviving Corporation conduct
business under the name "U.S. Games" or any name substantially similar thereto
except that products, stationery and other items in USG's inventory as of the
Closing Date may be used until depleted and the Surviving Corporation may
identify itself verbally by its name including a reference that it was formerly
known as "U.S. Games." No Holder shall conduct business under the name "U.S.
Games." The provisions of this Section 10.12 shall survive the Closing forever.

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SECTION 10.13. INSURANCE. Leisure covenants to cause the
Surviving Corporation to maintain at its or Leisure's own expense in force and
effect (with the same or greater coverage) all insurance policies that were in
effect at the Closing for the period set forth in Section 6.01, and the
provisions hereof shall survive the Closing for such period.

SECTION 10.14. DEFINITION OF "KNOWLEDGE". As used in this
Agreement, the term "to the best knowledge of USG" and similar terms shall mean
the actual knowledge of those persons who are members of USG's Board of
Directors as of the date hereof.

SECTION 10.15. PUBLIC ANNOUNCEMENT. Prior to the Closing, no
public announcements of the transactions contemplated hereby shall be made by
any of the parties hereto without the written agreement of all other parties.

[Remainder of page left blank intentionally]

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IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement on the day and year first above written.

U. S. GAMES, INC.

By: /s/
-------------------------------------
Its:
-----------------------------

LEISURE TIME CASINOS & RESORTS, INC.

By: /s/
-------------------------------------
Its:
-----------------------------

LEISURE ACQUISITION, INC.

By: /s/
-------------------------------------
Its:
-----------------------------

/s/
-----------------------------------------
Xxxxxx X. Xxxxxxx, Trustee u/a dated
April 18, 1995 between Xxxxxxx X. Xxxx,
Grantor, and Xxxxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxx, III,
Trustees

/s/
-----------------------------------------
Xxxxxx X. Xxxx, III, Trustee u/a dated
April 18, 1995 between Xxxxxxx X. Xxxx,
Grantor, and Xxxxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxx, III,
Trustees

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/s/
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, Trustee u/a dated
April 18, 1995 between Xxxxxxx X. Xxxx,
Grantor, and Xxxxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxx, III,
Trustees

/s/
-----------------------------------------
Xxxx X. Xxxxxxx

/s/
-----------------------------------------
Xxxxxxx X. Xxxxxxx

/s/
-----------------------------------------
Xxxx Xxxxxxx

/s/
-----------------------------------------
Xxxxxx X. Xxxxx

XXXXXX PRESBYTERIAN CHURCH

By: /s/
-------------------------------------
Its:
-------------------------------------

CHURCH INNOVATIONS INSTITUTE

By: /s/
-------------------------------------
Its:
-------------------------------------

HOPE LUTHERAN CHURCH

By: /s/
-------------------------------------
Its:
-------------------------------------

CHILDREN'S HEALTH CARE FOUNDATION

By: /s/
-------------------------------------
Its:
-------------------------------------

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Table of Contents

1 EXHIBIT 2.0 AGREEMENT AND PLAN OF REORGANIZATION

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