EXHIBIT 10.46

                                    AGREEMENT

         THIS AGREEMENT is dated this 30th day of June, 1997, by and between GFL
         Ultra Fund, Ltd. ("Ultra"),  a British Virgin Islands corporation,  and
         LS Capital Corporation ("LS"), a Delaware corporation.

                                       I.
                              PURPOSE OF AGREEMENT


         The purpose of this Agreement is (1) to settle and resolve all disputes
         between the parties,  including  but not limited to, those  allegations
         raised in the  litigation  entitled  GFL Ultra Fund v. Lone Star Casino
         Corporation, Cause No. H-96-1423 presently pending in the United States
         District  Court for the Southern  District of Texas,  Houston  Division
         (the "Litigation") and (2) to establish a procedure by which Ultra will
         convert the preferred shares it presently holds in LS.

                                       II.
                            SETTLEMENT OF LITIGATION


LS  agrees to pay Ultra  $100,000,  $25,000  of which is to be paid on or before
July 15, 1997,  $50,000 of which is to be paid on or before  September 30, 1997,
and  $25,000  of which is to be paid on or  before  December  31,  1997.  If all
payments  are made on or before the  described  date,  there will be no interest
owed on the payments. The payments will be secured by an Agreed Judgment, a copy
of which is attached  hereto as Exhibit A, which LS will  execute at the time of
the signing of this  Agreement.  Ultra  hereby  covenants  not to execute on the
Agreed  Judgment so long as payments  are made  timely.  If any payment is 
not
made timely,  GFL will  immediately  execute on the Agreed Judgment after giving
5-days' notice to L-S. Notice shall be sent to 15915 Katy Freeway #250, Houston,
Texas  77084 and shall be deemed  received  by LS 3 days after  said  notice was
deposited  by  Ultra  in the U.S.  mails,  first  class,  postage  prepaid.  Any
execution on the Agreed Judgment  entered shall give credit for all amounts paid
by LS prior  to the  entry  of the  Agreed  Judgment.  However,  Ultra  shall be
entitled to its costs and attorneys'  fees in the event  execution on the Agreed
Judgment becomes necessary,  as well as interest at the rate of 18% per annum on
any late payments.

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                                      III.
                              CONVERSION PROCEDURE


         3.1 Simultaneously  with the execution of this Agreement,  Ultra agrees
         to provide a legal opinion to the Escrow Agent and LS that the Escrowed
         Shares can be resold under the  securities  laws of the United  States.
         The parties hereby agree that at the time of execution of
 this Agreement, Ultra will convert its remaining Preferred shares in return for
600,000 shares of common stock of LS, which shall be deposited in escrow with an
escrow agent mutually agreed to by the parties (the "Escrowed  Shares").  Escrow
fees  shall be borne by  Ultra.  Attached  hereto  as  Exhibit B are the form of
Escrow  Instructions  which will be provided to the Escrow Agent  regarding  the
Escrowed  Shares.  On or before June 30, 1997,  LS shall prepare and execute any
and all other  documents  necessary  to  effectuate  the  transfer of the common
shares to Ultra,  including but not limited to the following  document Letter of
Instruction.  The common shares  deposited shall be in 25 certificates of 24,000
shares each for a total of 600,000  shares.  Ultra shall be entitled to sell the
remaining shares,  24,000 per month for the next 24 months.  All shares shall be
unlegended and shall not be subject to any stop-transfer restriction.

         3.2 Dividend and Shares: if LS distributes shares of any other publicly
traded company to its  shareholders,  the shares received by Ultra shall be held
by the Escrow Agent and can only be sold in monthly  amounts  equal to the total
number of shares  received  divided  by the number of months  remaining  on this
Agreement.

                  3.3  Ultra  agrees to  provide  the  Escrow  Agent and LS with
                  confirmations  of sales of the  Escrowed  Shares at least once
                  each month.  Once Ultra  receives  $600,000 in proceeds net of
                  commissions from the sale of the Escrowed  Shares,  the escrow
                  agent shall return the balance of the Escrowed Shares to LS.

                                       IV.

                                 MUTUAL RELEASES

                  With  the  exception  of the  obligations  undertaken  in this
                  Agreement  and in the  document  necessary to  effectuate  the
                  transfer of the common  shares to Ultra,  the parties agree to
                  release  and  discharge  the  other  from any and all  claims,
                  demands  or  suits,  known or  unknown,  fixed or  contingent,
                  liquidated  or  unliquidated,  whether or not asserted in this
                  Litigation,  as of this date,  arising from or relating to the
                  events and  transactions  which are the subject  matter to the
                  Litigation.  This  Mutual  Release  runs to the benefit of all
                  attorneys,    agents,    employees,    officers,    directors,
                  shareholders,   parents,   affiliates,  and  partners  of  the
                  parties.  Ultra  acknowledges that LS is not guaranteeing that
                  Ultra  will  receive  $600,000  for the  sale  of the  600,000
                  shares,


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                                       V.

                                  MISCELLANEOUS


         5.1 Each party agrees that the terms of this  settlement are to be held
         confidential  and not to be  disclosed  to any third  party  unless the
         other party hereto  consent in writing or unless  ordered to do so by a
         court of competent jurisdiction.

                  5.2 Each signatory  hereto  warrants and represents that he or
                  she has  authority  to bind the party for whom that  signature
                  purports  to act and  that the  claims,  suits,  right  and/or
                  interest  which are the subject matter hereto are owned by the
                  party asserting  same, have not been assigned,  transferred or
                  sold, and are free of encumbrance.

                           5.3 This agreement is made and  performable in Harris
                  County,  Texas and shall be construed in  accordance  with the
                  laws of the State of Texas as they presently exist.

                           5.4 Each  Signatory  to this  settlement  has entered
                  into the same freely  without  duress,  having  consulted with
                  professionals of his/her choice.

5.5 The parties agree that this Agreement is made pursuant to Section 154-071 of
the Civil Practice and Remedies Code and is not subject to revocation.

5.6 This Agreement  represents the entire  agreement of the par-ties  hereto and
may not be changed orally, but only in writing,

LS CAPITAL CORPORATION

         By: s/s Paul J. Montle
---------------------------
Paul J. Montle, President


GFL ULTRA FUND. LTD,

By: s/s A.P. deGroot
---------------------------
A.P. deGroot, President