EXHIBIT 99.1



                         UNITED STATES BANKRUPTCY COURT

                          FOR THE DISTRICT OF COLORADO


IN RE:           )
                 )        Case No. 97-15695-SBB



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PAPONE'S PALACE LLC                                  )
EIN: 84-1204410                                      )        Chapter 11
                                                     )
     Debtor.                                         )

                   PLAN OF REORGANIZATION DATED JULY 22, 1997

         Papone's  Palace  LLC,  Debtor  and  Debtor-in-Possession  pursuant  to
Chapter 11, Title 11 of the United States Code,  proposes the following  Plan of
Reorganization.

                                                          ARTICLE I
                                                        INTRODUCTION
         Papone's  Palace LLC  ("Debtor"  or  "Company")  is a Colorado  limited
liability  company.  The Company  owns a 6,000  square  foot casino  property in
Central City,  Colorado.  The Company  ceased its casino  operation in September
1996.
         This Plan  provides  for the  reorganization  of the Company as a going
concern under Chapter 11 of the Bankruptcy  Code. A more complete history of the
Company,  its  operations,  an explanation of this Plan and a description of the
Company's  financial  condition and future business activity is contained in the
Disclosure  Statement which  accompanies this Plan.  Reference should be made to
the  Disclosure  Statement  by all  creditors  and  parties who intend to cast a
ballot for or against this Plan.

                                                         ARTICLE II
                                                         DEFINITIONS
         2.01 - Allowed  Claim shall mean a claim in respect of which a Proof of
Claim has been  filed  with the  Court  within  the  applicable  time  period of
limitation  fixed by Court Order in this  proceeding or scheduled in the list of
creditors  prepared and filed with the Court pursuant to Bankruptcy Rule 1007(b)
and not listed as disputed,  contingent or unliquidated as to amount,  in either
case as to which no timely  objection  to the  allowance  thereof has been filed
pursuant to Bankruptcy Rules 3001 and 3007 or as to which any such objection has
been  determined  by Order or Judgment  which is no longer  subject to appeal or
certiorari  proceeding  and as to which no appeal or  certiorari  proceeding  is
pending.



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         2.02 - Allowed  Secured  Claim shall mean an allowed claim secured by a
lien, security interest or other charge against or interest in property in which
the Debtor has an interest,  or which is subject to setoff under  Section 553 of
the Code, to the extent the value  (determined in accordance with Section 506(a)
of the Code) of the  interest  of the holder of any such  allowed  claim and the
Debtor's  interests in such  property or to the extent of the amount  subject to
such setoff as the case may be.
         2.03 - Claim shall mean any right to payment, or right to any equitable
remedy  for  breach of  performance  if such  breach  gives rise to the right to
payment,  against the Debtor in existence on or as of the Petition Date, whether
or not such  right to  payment  or right to an  equitable  remedy as  reduced to
judgment,  liquidated,  unliquidated,  fixed,  contingent,  natured,  unmatured,
disputed, undisputed, legal, secured or unsecured.
         2.04 - Class  shall  mean any  class  into  which  allowed  claims  are
         classified pursuant to Article III. 2.05 - Classes 1, 2, 3, 4, 5, 6 and
         7 Claims and Interests shall mean the allowed claims and interests so
classified in Article III.
         2.06 - Code shall mean the  Bankruptcy  Code, 11 U.S.C.  Section 101 et
         seq. and any  amendments  thereof.  2.07 - Company or Debtor shall mean
         the corporation which is a Debtor-in-Possession in Bankruptcy
Case No. 97-15695-SBB.
         2.08 - Confirmation Date shall mean the date upon which the Order of 
confirmation is entered by the
                -----------------
Court.
         2.09 -  Confirmation  Hearing shall mean that hearing held by the Court
pursuant to 11 U.S.C. Section 1128 to confirm the Plan.
         2.10 - Court  shall mean the  United  States  Bankruptcy  Court for the
District of Colorado in which the  Debtor's  Chapter 11 case,  pursuant to which
this Plan is proposed, is pending and any Court having competent jurisdiction to
hear appeal or certiorari proceedings therefrom.
         2.11 - Debtor  shall mean the Debtor who is  proposing  this Chapter 11
         Plan. 2.12 - Disclosure  Statement shall mean the Disclosure  Statement
         which is approved by the Court
according to 11 U.S.C. Section 1125 to be utilized to solicit votes for this 
Plan.
         2.13 -  Effective  Date of the Plan  shall  mean the date ten (10) days
after  entry of the  Order of  Confirmation,  or, if a stay is  entered  pending
appeal of the Order of Confirmation,  the date on which the stay is no longer in
effect.



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         2.14 - Neudecker Note shall mean that Promissory Note dated January 15,
1992 in the original  principal  amount of $1,450,000 made by Earl Neudecker and
Randall  Gose  payable to George B. Hill and Dolores J. Hill as  co-trustees  of
Hill Family  Trust,  which Note is secured by a Deed of Trust dated  January 15,
1992 encumbering an undivided 49% interest in and to the Property.
         2.15 - Order of Confirmation  shall mean the Order entered by the Court
confirming the Plan in accordance with the provisions of Chapter 11 of the Code.
         2.16 - PPAC shall mean Papone's  Palace  Acquisition  Corp., a Colorado
corporation which owns a 75.5% member interest in the pre-confirmation Debtor.
         2.17 - Petition  Date shall mean April 23, 1997,  the date on which the
         Debtor's order for relief entered.  2.18 - Plan shall mean this Chapter
         11 Plan, as amended in accordance with the terms hereof or modified
in accordance with the Code.
         2.19 - Property  shall mean that real property  including  improvements
and  fixtures  located  at 118 Main  Street,  Central  City,  Colorado  and more
particularly  described as Lots 22 and 23,  Block 3, City of Central,  County of
Gilpin, Colorado.
         2.20 - Pro Rata shall mean with respect to any holder of Plan debt,  in
the same  proportion  that the amount of such Plan debt  bears to the  aggregate
amount of the Plan debt.
         2.21 - Rules shall mean the Federal Rules of  Bankruptcy  Procedure and
Local Bankruptcy Rules for the District of Colorado as adopted by the Court.
         2.22 -  Unclassified  Priority  Claims  shall mean  claims  pursuant to
Section 507(a)(1) which are administrative expenses allowed under Section 503(b)
of the Code and any fees and  charges  against the estate  under  Chapter 123 of
Title 28 of the United  States Code and shall  further  mean  allowed  unsecured
claims of governmental  units to the extent provided for in Section 507(a)(8) of
the Code.

                                                         ARTICLE III
                                             DESIGNATION OF CLAIMS AND INTERESTS
         The following is a  designation  of all classes of claims and interests
other than those claims of a kind specified in Sections 507(a)(1),  507(a)(2) or
507(a)(8) of the Code.
         Class 1 - All allowed claims specified in Sections 507(a)(3), 507(a)(4)
or 507(a)(5) of the Code as having priority.



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         Class 2 - The allowed  secured  claim of the Gilpin  County  Treasurer.
         Class 3 - The allowed  secured claim of Randall F. Gose.  Class 4 - The
         allowed secured claim of Leslie Alexander. Class 5 - The allowed claims
         of unsecured creditors other than those creditors set forth
under Class 6.
         Class 6 - The allowed unsecured claim of LS Capital Corp. Class 7 - The
         interests held by pre-confirmation members of the Debtor.

                                                         ARTICLE IV
           SPECIFICATION AND TREATMENT OF UNCLASSIFIED PRIORITY CLAIMS
         4.1 - The holders of allowed  claims of the type  specified  in Section
507(a)(1) of the Code, costs and expenses of administration,  shall receive cash
equal  to the  allowed  amount  of  such  claim  or a  lesser  amount  as may be
acceptable and agreed to by particular holders of such claims. Such claims shall
be paid in full on the Effective Date of the Plan. Section 507(a)(1) claims that
are  allowed  by the Court  after the  Effective  Date of the Plan shall be paid
within ten (10) days of their allowance.
         4.2 - The allowed  claims of a type  specified in Section  507(a)(8) of
the Code,  unsecured claims of governmental  taxing  authorities,  shall receive
cash equal to the allowed  amount of their claim over a period not to exceed six
years from the date the taxes were assessed,  plus simple interest on the unpaid
balance amortized at the rate of 7.5% per annum until paid in full. Such claims,
which are specified in 11 U.S.C.  507(a)(8) of the Code, will be paid in monthly
installments  of principal and interest  over the six year period  following the
Effective  Date,  and  subsequent  payments  will be due on the same day of each
successive month.
         4.3 - The Debtor will make all payments required to be paid to the U.S.
Trustee pursuant to 28 U.S.C. ss.1930(a)(6) until the case is closed, converted,
or  dismissed.  All  payments  due to the U.S.  Trustee  pursuant  to 28  U.S.C.
ss.1930(a)(6)  shall be paid on the  Effective  Date of the  Plan,  and the U.S.
Trustee shall thereafter be paid fees due on a quarterly basis until the case is
closed, converted, or dismissed.

                                    ARTICLE V
                  SPECIFICATION AND TREATMENT OF CLASS 1 CLAIMS



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         5.1 - The allowed Class 1 claims shall be paid in full on the Effective
Date of the Plan. The Class 1 claims for certain pre-petition wages and employee
claims are more particularly  described in Sections  507(a)(3),  507(a)(4),  and
507(a)(5)  of the Code.  Class 1  claimants  may agree to be paid on a  deferred
basis following the Effective Date of the Plan.

                                   ARTICLE VI
             SPECIFICATION AND TREATMENT OF SECURED CREDITOR CLAIMS
       6.1 - Gilpin County Treasurer. The Class 2 claim held by the Gilpin
County  Treasurer  is  impaired  by this Plan and will be  treated  as set forth
herein.  Class 2 shall  receive cash equal to the allowed  amount of their claim
over a period  not to  exceed  six  years  from the  date of  assessment  of the
relevant taxes, plus simple interest on the unpaid balance amortized at the rate
of 7.5%  per  annum  until  paid in  full.  The  claim  will be paid in  monthly
installments  of principal and  interest,  beginning 30 days after the Effective
Date,  and  subsequent  payments will be due on the same day of each  successive
month.
         6.2 - Randall  F.  Gose.  The  Class 3 claim  consists  of the  allowed
secured  claim  held by  Randall  F.  Gose.  The Class 3 claim is secured by the
Property. The Class 3 claim is impaired by this Plan. The Class 3 claim shall be
treated as set forth herein:
                  a.       The  principal  amount of the  Class 3 claim  will be
                           allowed in an amount  determined  by the Court at the
                           confirmation hearing or agreed upon by the Debtor and
                           the Class 3 claimant  on or before  the  confirmation
                           date.
                  b.       The  balance  due on  the  Class  3  claim  shall  be
                           amortized  over a  twenty  year  period  at 7.5%  per
                           annum,   and   shall   be  paid  in   equal   monthly
                           installments     of    principal     and    interest.
                           Notwithstanding  the  amortization  term,  the entire
                           balance of the Class 3 claim shall be due and payable
                           on the seventh  anniversary  of the Effective Date of
                           the Plan.
                  c.       The Class 3 claimant shall retain all liens that 
                           secure his claim as of the petition date.
                  d.       The enforcment of guaranties held by the Class 3 
                           claimant against any insider of the Debtor
                           shall be stayed, as provided for in herein.
         6.3 - Leslie  Alexander.  The Class 4 claim  held by  Leslie  Alexander
         shall be  treated  and paid as set forth  herein.  The Class 4 claim is
         impaired by this Plan.



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                  a.       The  principal  amount of the  Class 4 claim  will be
                           allowed in an amount  determined  by the Court at the
                           Confirmation Hearing or agreed upon by the Debtor and
                           the Class 4 claimant  on or before  the  Confirmation
                           Date.
                  b.       On the  Effective  Date of the Plan,  the Debtor will
                           assign  and  absolutely   transfer  to  the  Class  4
                           claimant,  both  the  Neudecker  Note and the Deed of
                           Trust which secures the Neudecker  Note.  The Class 4
                           claim will be reduced by an amount  determined by the
                           Court at the Confirmation  Hearing to equal the value
                           of the Neudecker  Note. As the value of the Neudecker
                           Note is expected to exceed the amount  owing to Class
                           4, the transfer of the  Neudecker  Note to Class 4 as
                           set forth  herein is  expected to  constitute  a full
                           paydown of the Class 4 claim.
     c. Any remaining  amounts due to Class 4 will bear interest at the rate of:
(i) 7.5% per annum  commencing on the Effective Date of the Plan; or (ii) if the
Class 4  claimant  objects  to such rate in  writing  and  serves a copy of such
objection  on the  Debtor  at least 15 days  prior  to the  commencement  of the
Confirmation  Hearing, such rate as will be determined by the Court as necessary
to satisfy the  requirements of 11 U.S.C.  Section 1129(b) of the Code; or (iii)
such other rate as may be agreed to by the Debtor and the Class 4  claimant.  If
any amount  remains due on the Class 4 claim,  after  credit for transfer of the
Neudecker  Note,  said amount  shall be  amortized  over a 20 year period at the
interest rate determined as above stated and paid in equal monthly  installments
of principal and interest.  Notwithstanding  the  amortization  term, the entire
balance of the Class 4 claim,  if any,  shall be due and  payable on the seventh
anniversary  of the  Effective  Date of the Plan.  d. To the extent any  amounts
remain  owing to the Class 4 claimant,  said claim  shall  retain all liens that
secured its claim as of the petition  date. e. The  enforcment of any guaranties
held by the Class 4 claimant  against any insider of the Debtor shall be stayed,
as provided for herein.
                                   ARTICLE VII
            SPECIFICATION AND TREATMENT OF UNSECURED CREDITOR CLASSES



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         7.1 - Class 5 consists of those  unsecured  creditors  who hold allowed
claims  other  than  LS  Capital  Corp.  Class  5  claims  are  estimated  to be
$39,361.55, without including the disputed claim of Earl Neudecker for an offset
against the Neudecker Note. Class 5 claimants shall receive the lesser of a: the
total amount of their claims,  or b: a pro rate distribution of the total sum of
$50,000,  which will be  provided by LS Capital,  as  provided  for herein.  The
distribution  will be made  within  ten (10) days of the  Effective  Date of the
Plan. The initial  distribution  to Class 5 shall be the sole payment which will
be paid to Class 5, which distribution will be made in total satisfaction of the
Class 5 claims.
         7.2 - Class 6 consists  of the  allowed  unsecured  claim of LS Capital
Corp.  On the Effective  Date of the Plan,  the claim of Class 6 shall be deemed
released,  in exchange for  issuance of new member  interests as provided for in
paragraph 9.3 herein. Class 6 is impaired by this Plan.

                                  ARTICLE VIII
                SPECIFICATION AND TREATMENT OF CLASS 7 INTERESTS
         8.1 - Class 7 consists of the  interests  held by the  pre-confirmation
members of the Debtor.  Class 7 is impaired by this Plan. On the Effective  Date
of the Plan, all member interests in the Debtor will be cancelled. Class 7 shall
neither  receive nor retain any  property or member  interests  in the Debtor on
account of their Class 7 pre-confirmation member interests.
                                                         ARTICLE IX
                                             MEANS FOR IMPLEMENTATION OF A PLAN
         9.1 - Operation  of Business.  The Debtor will retain  ownership of the
Property and will proceed to reopen casino operations at the Property  following
confirmation  of the Plan.  The  Debtor  will  operate as a  reorganized  Debtor
following confirmation.
         9.2 - The Debtor  will  utilize  cash on hand in addition to new equity
provided in connection with  confirmation of the Plan and the Debtor's  issuance
of new member interests for new consideration to fund the Plan.
         9.3 - Recapitalization  of Company.  On the Effective Date of the Plan,
new member interests in the Debtor will be issued for new consideration. The new
member  interests will be issued to the following  entities in proportion to the
relative  value,  determined  on the  Confirmation  Date,  of their new  capital
contributions, for the consideration stated:



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a. LS Capital  Corp.  - New  consideration  consisting  of:  (i)  release of its
administrative expense claim; (ii) payment of up to $50,000 in additional funds;
(iii)  release  of its  unsecured  Class 6  claim;  and (iv)  guaranty  of up to
$200,000  of payments  due under this Plan,  which  guaranty  will be applied to
creditors  pari  passu with  other  creditors.  Any  amounts  funded  ----------
pursuant to the LS Capital Guaranty will constitute a post-confirmation  debt of
the reorganized  Debtor.  The obligation will be subject to the following terms:
(a)  interest at 7.5% per annum;  (b) paid in monthly  installments,  (c) due in
full on the  seventh  anniversary  of the  Effective  Date of the  Plan;  (d) LS
Capital shall have the option to convert the obligation to membership  interests
in the  reorganized  Debtor  on terms to be  determined  by LS  Capital  and the
reorganized  Debtor. b. PPAC - New  consideration  consisting of transfer to the
Debtor on the Effective  Date of the  Neudecker  Note and related Deed of Trust.
The transfer of the Neudecker Note will only be treated as new  consideration to
the extent  that the Court  finds that the Note has a value on the  Confirmation
Date of an amount in excess of the  account  receivable  due to the Debtor  from
PPAC. If the Court finds that the Neudecker  Note has a value less than or equal
to the account receivable,  PPAC will not receive any new member interest in the
Debtor.
 9.4 - Once the Plan is confirmed and new member interests are issued,
the new members will apply for  appropriate  licenses from the Colorado  Limited
Stakes Gaming Commission to enable the Debtor to reopen its casino.
         9.5 - Settlement of Account  Receivable.  On the Effective  Date of the
Plan, PPAC shall assign to the Debtor,  all of its right,  title and interest in
and to the  Neudecker  Note and the Deed of Trust which  secures  the  Neudecker
Note.  Such assignment  shall be made in satisfaction of the account  receivable
owed by PPAC to the Debtor. In the event that the Court finds that the Neudecker
Note has a value on the  Effective  Date in excess of the amount of the  account
receivable,  the difference shall represent a capital contribution to the Debtor
which will entitle PPAC to receive a new member  interest in the Debtor computed
as set forth herein.
         9.6 - Disputed Claim Procedure.  Distributions to any class of creditor
will only be made on account of Allowed Claims. In the event that  distributions
are made at a time  that a claim  objection  is  pending  before  the Court or a
judgment  has  entered to  establish  a claim and the  judgment  is on appeal or
subject to a certiorari



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proceeding,  the portion of the distribution  that would be paid to the disputed
claimant  will be held by the Debtor in an interest  bearing Bank account  until
the claim is  allowed  or  disallowed.  If  allowed,  the claim will be paid its
appropriate  share of the withheld  payment with interest.  If  disallowed,  the
withheld  distribution will be paid on a pro rata basis to the remaining allowed
claimants.
         9.7 - Claims and Litigation. All claim objections and avoidance actions
in the case must be filed no later than 120 days following the Effective Date of
the Plan.
         9.8 - All  applications  for  allowance  and payment of  administrative
expenses,  including  professional  fees, must be filed within 45 days following
the Effective Date of the Plan.
         9.9 - Monthly  Installments.  Whenever the Plan provides for payment in
monthly  installments or a payment due in a certain month,  the payment shall be
due on the last day of the  calendar  month in which  the  payment  is due.  The
Debtor shall then have a five day grace period within which the monthly  payment
must be received by the payee before the Debtor shall be in default.
         9.10 - Final  Decree.  The Debtor will request  entry of a final decree
closing the case on or before the later of the date all claim objections and any
pending  litigation  is  concluded or 180 days after the  Effective  Date of the
Plan.
         9.11 - Liquidation  Option.  In the event the Debtor determines that it
is prudent to close its casino or sell the Property, the Debtor has the right to
do so. The Debtor will provide notice to all remaining  creditors as of the date
the decision is made to close the casino or sell the Property.
         9.12 - Injunction.  Except as expressly  provided for in the Plan,  all
persons and entities,  including, but not limited to, the holders of any and all
charges, debts, liabilities,  encumbrances,  security interests,  Claims, equity
interests, contingent or unliquidated, known or unknown, foreseen or unforeseen,
existing or hereafter  arising,  (including any claims of successor or successor
liability),  shall be precluded and permanently  enjoined from asserting against
the Reorganized Debtor, PPAC, LS Capital Corp., the officers,  directors, agents
and  professionals  of either PPAC or LS Capital Corp.,  their  designee  and/or
participants, the Debtor, and any successors and assigns of any of the foregoing
and/or the respective assets and property, including the Property, of any of the
foregoing any Claim, charge, debt, liability, encumbrance, security interest, or
lien  based  on  any  document,  instrument,   judgment  award,  act,  omission,
transaction  or other  activity of any kind or nature that occurred prior to the
Confirmation  Date. Such injunction  shall also preclude any act, in any manner,
at any place whatsoever,  that does not conform to or comply with the provisions
of the Plan. The injunction, discharge and



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releases  described  in Article  VIII of this Plan  shall  apply  regardless  of
whether or not a proof of claim or proof of interest  based on any Claim,  debt,
liability,  security  interest or equity  interests is filed or whether or not a
Claim or equity interest based on such Claim, debt, liability or equity interest
is allowed.  Therefore,  on the Effective  Date of the Plan, a Co-Debtor stay or
Injunction, will be imposed to protect PPAC and LS Capital Crop. from collection
activity  from Class 3 and Class 4  claimants.  LS Capital  Crop.  and PPAC,  as
parties  providing new consideration to facilitate the Plan, are critical to the
success of the Plan.  The  Co-Debtor  stay will be limited in time to five years
following the  Effective  Date of the Plan.  The intent of this  provision is to
allow  PPAC  and LS to  participate  meaningfully  in the  Plan,  to  fund  Plan
payments,  and to  facilitate  reorganization  of the  Debtor.  In the event the
Debtor defaults under the terms of the Plan with respect to payments due Class 3
or Class 4, this Injunction will terminate.

                                    ARTICLE X
                    EXECUTORY CONTRACTS AND UNEXPIRED LEASES
         10.1 - The Debtor hereby assumes those executory contracts and
unexpired leases listed in Exhibit A attached hereto and incorporated  herein by
reference  which have not been  assumed by prior Order of the Court prior to the
date of confirmation.  On the date of the entry of an Order confirming the Plan,
the Debtor  shall be the holder of all right,  title and interest to the assumed
leases and  contracts  and such assumed  leases and  contracts  shall be in full
effect and binding upon the Debtor and the respective  lessees.  Confirmation of
the Plan shall  constitute a determination  that the payments to be made to said
creditors  pursuant to the Plan satisfy all  conditions  precedent to assumption
set forth in 11 U.S.C. Section 365(b).
         10.2 - On the  Effective  Date of the Plan,  the Debtor will reject all
executory contracts and unexpired leases to which it is a party which are listed
in Exhibit B, attached  hereto and  incorporated  herein by reference which have
not been  rejected by prior Order of the  Bankruptcy  Court prior to the date of
confirmation. Executory contracts and unexpired leases will be rejected pursuant
to the provisions of 11 U.S.C. Section 365.
         10.3 - An Order confirming this Plan constitutes  approval by the Court
of the assumption or rejection of the executory  contracts and unexpired  leases
described herein in accordance with the provisions of 11 U.S.C.
Section 365 and the Rules.

                                   ARTICLE XI



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                                  MISCELLANEOUS
         11.1     Revestment
         The entry of an Order  confirming  this Plan shall revest in the Debtor
all property of the estate free and clear of all liens except those specifically
set forth in the Plan.
         11.2     Retention of Jurisdiction
         Notwithstanding confirmation of the Plan, the Court shall retain 
         jurisdiction for the following purposes:
         1.       Determination of the allowability of claims upon objection to 
                  such claims by the Debtor-in-Possession or by any other party 
                  in interest;
         2.       Determination of the request for payment of claims entitled to
                  priority  under  11  U.S.C.   Section   507(a)(1),   including
                  compensation of the parties entitled thereto;
         3.       Resolution  of any disputes  regarding  interpretation  of the
                  Plan,  including  enforcement  of  Injunction  pursuant to the
                  Plan;
         4.       Implementation  of the  provisions  of the Plan  and  entry of
                  orders in aid of consummation of the Plan,  including  without
                  limitation,  appropriate orders to protect the revested Debtor
                  from action by creditors;
         5. Modification of the Plan pursuant to 11 U.S.C. Section 1127;
         6.       Adjudication  of any  causes  of  action,  including  avoiding
                  powers actions,  brought by the Debtor-in- Possession,  by the
                  representative  of  the  estate  or  by  a  Trustee  appointed
                  pursuant to the Code;
         7.       Adjudication   of  any   cause  of  action   brought   by  the
                  Debtor-in-Possession,  by the representative of the estate, or
                  by a Trustee  appointed  pursuant to the Code, or the revested
                  Debtor  exercising  rights and powers as provided in 11 U.S.C.
                  Sections 542-549. This section shall not be construed to limit
                  any other power or right  which the Debtor may  possess  under
                  any section of the Code; and
         8. Entry of a final decree. 11.3 Satisfaction of Claims.
                  The confirmation of this Plan shall constitute a discharge of 
                  the Debtor from all dischargeable debts in accordance with 11 
                  U.S.C. Section 1141(d).  Confirmation of the Plan shall 
                  constitute a modification of any note or obligation for which 
                  specification and treatment is provided under the Plan as set 
                  forth in the Plan. Any obligation or note, previously in 
                  default, so modified, shall be cured as of the Confirmation 
                  Date.  This



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provision  shall be operable  regardless  of whether the Plan  provides  for any
obligation to be evidenced by a rewritten  loan or security  document  following
confirmation of the Plan.
         11.4     Headings
                  The headings used in the Plan are for convenience of reference
only and shall not limit or in any manner  affect the meaning or  interpretation
of the Plan.
         11.5     Severability
                  In the event a Court of competent jurisdiction determines that
any provision in the Plan is  unenforceable  for any reason,  the  determination
shall not affect the enforceability of any other provision of the Plan.




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         11.6     Notices
                  All  notices,  requests,   demands,  or  other  communications
required or permitted in this Plan must be given in writing to the party(ies) to
be notified.  All  communications  will be deemed delivered when received at the
following addresses:

                  a.       To the Debtor at:

                           Papone's Palace LLC
                           15915 Katy Freeway
                           Suite 250
                           Houston, TX 77094

                           With a copy to:

                           Lee M. Kutner, Esq.
                           Rubner & Kutner, P.C.
                           303 East 17th Avenue
                           Suite 500
                           Denver, CO 80203


                  b.       To an allowed claimant, at the addresses set forth in
                           the allowed Proof of Claim,  if filed,  other, at the
                           address set forth for the  claimant  in the  Debtor's
                           Schedules filed with the Court.
         11.7     Successors and Assigns
                  The  Plan  will be  binding  upon  the  Debtor,  any  creditor
affected  by  the  Plan  and  their   heirs,   successors,   assigns  and  legal
representatives.
         11.8     Unclaimed Payments
                  If a person  or  entity  entitled  to  receive  a  payment  or
distribution  pursuant  to this  Plan  fails  to  negotiate  a  check,  accept a
distribution  or leave a  forwarding  address  in the  event  notice  cannot  be
provided as set forth in paragraph  11.6,  within one (1) year of the  Effective
Date of the Plan, the person or entity is deemed to have released the Debtor and
abandoned any right to payment or distribution under the Plan.





<PAGE>






                                   ARTICLE XII
                              CONFIRMATION REQUEST
         12.1 - The Debtor, as proponent of the Plan,  requests  confirmation of
the Plan pursuant to 11 U.S.C.  Section 1129. The Debtor will solicit acceptance
of the Plan after its Disclosure Statement has been approved by the Court and is
transmitted to the creditors,  interest holders and parties in interest.  In the
event the Debtor does not obtain the necessary  acceptances  of its Plan, it may
make application to the Court for confirmation of the Plan pursuant to 11 U.S.C.
Section  1129(b).  The Court may  confirm  the Plan if it does not  discriminate
unfairly  and is fair and  equitable  with  respect  to each  class of claims or
interests that is impaired and has not voted to accept the Plan.

         DATED:  July 23, 1997                        PAPONE'S PALACE LLC



                                                       By: /s/ Paul Montle
                                                       Paul J. Montle, Manager