MATTHEWS STUDIO EQUIPMENT GROUP
SETTLEMENT AND COMPROMISE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>4
<FILENAME>dex1030.txt
<DESCRIPTION>SETTLEMENT AND COMPROMISE AGREEMENT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.30

                      SETTLEMENT AND COMPROMISE AGREEMENT


          This Settlement and Compromise Agreement (hereinafter the "Agreement")
is entered into as of August 17, 2001, by and among the entities listed on
Exhibit "A" hereto; (collectively, the "Debtors"), The Chase Manhattan Bank as
agent (the "Agent") for PNC Bank, N.A., Wells Fargo Bank, N.A., CIBC, Inc.,
Michigan National Bank (as assignee from Mellon Bank, N.A.), and itself
(collectively, the "Bank Group") and the Official Committee of Creditors Holding
Unsecured Claims (the "Committee", and, collectively with the Debtors and the
Bank Group, the "Parties") in the chapter 11 cases of the Debtors, with
reference to the following facts and recitals:

          A.   The Debtors are the debtors and debtors in possession in cases
(the "Bankruptcy Cases") pending under chapter 11 of Title 11 of the United
States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for
the Central District of California, San Fernando Valley Division (the "Court"),
that are jointly administered under Case No. SV 00-13471-KL. The Debtors filed
their voluntary petitions that commenced the Bankruptcy Cases on April 6, 2000
(the "Petition Date").

          B.   Prior to the Petition Date, certain of the Debtors, the Bank
Group, and ING Equity Partners, L.P. I ("ING") were parties to a series of
agreements pursuant to which certain of the Debtors obtained financing from the
Bank Group and ING, certain of the Debtors guaranteed the primary obligors'
indebtedness to the Bank Group and ING, and certain of the Debtors granted
security interests to the Bank Group and ING in virtually all of such Debtors'
assets. These agreements include, among others, the "Amended and Restated Credit
Agreement Dated as of August 14, 1997, among Matthews Studio Equipment Group,
Matthews Studio Equipment, Inc., Hollywood Rental Co., Inc., Matthews Acceptance
Corporation, Duke City Video, Inc., Certain Guarantors Named Therein, Certain
Lenders Named Therein, and The
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Chase Manhattan Bank, As Agent"; the "Amended and Restated Credit Agreement
Among Matthews Studio Equipment Group, Matthews Studio Equipment, Inc.,
Hollywood Rental Co., Inc., Matthews Acceptance Corporation, Duke City Video,
Inc., HDI Holdings, Inc., Four Star Lighting, Inc., Certain Guarantors Named
Therein, Certain Lenders Named Therein and The Chase Manhattan Bank, As Agent,
Dated as of April 1, 1998"; and "Matthews Studio Equipment Group $10,000,000
Convertible Subordinated Note to ING Equity Partners, L.P. I June 30, 1999".

          C.   In April 1998, the Debtors borrowed approximately $27 million
from the Bank Group to acquire the stock of Four Star Holding, Inc. and Four
Star Lighting, Inc. ("Four Star"). Each of the then existing Debtor affiliates
guaranteed this indebtedness to the Bank Group and pledged their respective
assets as security. The Committee contends that the security interests that the
Bank Group asserts to secure this indebtedness may be avoidable as fraudulent
conveyances pursuant to 11 U.S.C. (S) 544(b) and may be preserved against ING
and others for the benefit of the Debtors' estates pursuant to 11 U.S.C. (S)
551. The Bank Group disputes this contention and maintains, in the alternative,
that even if it were true, the remaining portion of the Bank Group debt is
valid, the liens securing such debt are unavoidable and the amount of such
remaining debt far exceeds the value of the estates and that it would be
entitled to all of the proceeds from the liquidation of its claimed collateral.

          D.   The Debtors proposed to sell the assets of some of the Debtor
entities, namely, Matthews Studio Equipment Group, Hollywood Rental Company,
LLC, HDI Holdings, Inc., and Matthews Studio Sales (collectively, "HRC"), to
Hollywood Rentals Production Services, LLC (the "HRC Sale").  The Court approved
the HRC Sale on January 4, 2001.  The Bank Group asserted that it was entitled
to receive all of the proceeds of the HRC Sale, including all interest earned on
such funds while held by the Debtors, (the "HRC Proceeds") and requested that
the Court direct the Debtors to pay the HRC Proceeds to the Bank Group upon the
close of the HRC Sale.  The HRC Sale closed as of January 23, 2001.  Because the

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Committee disputes the validity of the Bank Group's liens on HRC's assets, the
Committee opposed the payment of the HRC Proceeds to the Bank Group. The Court
entered an Order approving the payment to the Bank Group of one-third of the net
proceeds of the HRC Sale, and the Debtors have paid that amount to the Agent.

          E.   The Debtors proposed to sell the assets of Debtor Four Star to
Four Star Acquisition Company, LLC (the "Four Star Sale"). The Court approved
the Four Star Sale on or about May 15, 2001. The Bank Group asserted that it was
entitled to receive all of the proceeds of the Four Star Sale, including all
interest earned on such funds while held by the Debtors (the "Four Star
Proceeds" and together with the HRC Proceeds, the "Sale Proceeds"). Because the
Committee disputes the validity of the Bank Group's liens on the Four Star's
assets, the Committee opposed the payment of the Four Star proceeds to the Bank
Group. The Order approving the Four Star Sale provided that one-third of the net
proceeds of the Four Star Sale were to be paid to the Agent for the benefit of
the Bank Group. That portion of the Four Star Proceeds have been paid to the
Agent.

          F.   The Debtors have undertaken an analysis of payments made to
unsecured creditors during the ninety days preceding the Petition Date. The
Debtors shared with the Parties an analysis from ASK Financial Services
indicating that approximately $6.9 million of payments made by Duke City Video,
Inc. and Duke City Holdings, Inc. (collectively, the "Duke City Debtors") and
approximately $4.7 million in payments made by the Debtors other than the Duke
City Debtors (the "Non-Duke City Debtors") could be avoidable as preferences
pursuant to section 547 of the Bankruptcy Code (respectively, the "Duke City
Preference Recovery Claims" and "Non-Duke City Preference Recovery Claims," and,
collectively, the "Preference Recovery Claims"). Some of the Creditors who
received payments that might be avoidable as preferences are members of the
Committee. As a result, the Committee undertook its own analysis of some of the
payments made by the Non-Duke City Debtors, including those made to Committee
members, and has concluded that the Debtors' analysis of

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the payments made by the Non-Duke City Debtors and the analysis conducted by ASK
Financial Services failed to take into account the extent to which these
payments represented contemporaneous exchanges of new consideration, were in the
ordinary course of business, or were followed by a creditor's extension of new
credit on an unsecured basis to one or more of the Non-Duke City Debtors.
Therefore, the Committee believes that, pursuant to section 547(c) of the
Bankruptcy Code, most of the payments included in the Non-Duke City Debtors'
preference analysis would not be avoidable. Based upon this analysis, the
Committee believes that the filing of actions to recover alleged Non-Duke City
Preference Recovery Claims would result in very modest recoveries and would
create significant expense to the creditors who received such payments that
would not be offset by amounts recovered by the Non-Duke City Debtors' estates.
The Debtors and the Bank Group disagree with the Committee's conclusions but
agree to compromise the Non-Duke City Preference Actions on the terms of this
Agreement.

          G.   As of July 24, 2001, the Debtors held approximately $ 18,863,500
of cash in the estates, not including amounts in the Existing Fee Reserve. The
Bank Group maintains that the Debtors do not have any equity in property of the
estates, including the above-referenced cash, that such property is not
necessary to an effective reorganization and that, accordingly, the Bank Group
is entitled to relief from the automatic stay to foreclose upon such property
forthwith, in satisfaction of the Bank Group's claims. The Committee disputes
some of these contentions.

          H.   The Committee, the Debtors and the Bank Group desire to resolve
all disputes which exist among them relating to (i) the amount of the Debtors'
indebtedness to the Agent and the Bank Group, and any setoffs, counterclaims or
defenses to such indebtedness, (ii) the validity or invalidity of the Bank
Group's security interests on the Debtors' assets, including, without
limitation, the Sale Proceeds, (iii) the distribution of the Sale Proceeds and
the proceeds from the sale of the Debtors' other assets, (iv) the prosecution or
waiver of the Preference Recovery Claims, and (v) the payments to be made by the
Debtors to creditors

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based upon enforcement of any of the Preference Recovery Claims. In furtherance
of that objective, and in consideration of the following mutual promises, the
Committee, the Debtors and the Bank Group enter into the Agreement set forth
below.

          NOW, THEREFORE, the Parties hereto hereby agree as follows:

          1.   Definitions. "Accrued Liability Reserve" shall have the meaning
               -----------
     given to such term in the definition of "Administrative Reserve".

               b.   "Administrative Reserve" shall mean the amount of  $700,000
     of the Sale Proceeds retained by the Debtors for the purposes set forth in
     section 4 hereof.  The Administrative Reserve shall be allocated into three
     sub-reserves: (i) the "Administrative Operating Reserve" in the amount of
     $250,000 (ii) the "Accrued Liability Reserve" in the amount of $ 375,000;
     and (iii) the "Unsecured Claim Expense Reserve" in the amount of $75,000.

               c.   "Administrative Operating Reserve" shall have the meaning
     given to such term in the definition of "Administrative Reserve".

               d.   "Agent" shall have the meaning given to such term in the
     Preamble to this Agreement.

               e.   "Allowed Administrative Expenses" shall have the meaning
     given to such term in section 4b(1) hereof.

               f.   "Allowed Priority Claims" shall mean the pre-petition
     unsecured claims against the Debtors which are entitled to priority
     pursuant to 11 U.S.C. (S)(S)507(a)(3) - (8) and, as to which, no objection
     is asserted by the applicable deadline therefor or, if an objection is
     filed, such claim is thereafter allowed by a Final Order of the Court.

               g.   "Bank Group" shall have the meaning given to such term in
     the Preamble to this Agreement.

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               h.   "Bankruptcy Cases" shall have the meaning given to such term
     in Recital A above, and shall include any chapter 7 case which supersedes
     any of the pending cases under chapter 11.

               i.   "California State BOE Claim" shall mean that certain
     priority tax claim filed by the California State Board of Equalization in
     the amount of $617,000.

               j.   "Closing Date" shall mean the first business day after the
     satisfaction of all conditions precedent to the effectiveness of this
     Agreement.

               k.   "Collateral" shall mean all of the property owned by any of
     the Debtors on which the Agent and the Bank Group have a lien or security
     interest to secure the pre-petition indebtedness of the Debtors to the
     Agent and the Bank Group.

               l.   "Committee" shall have the meaning given to such term in the
     Preamble to this Agreement.

               m.   "Compromise Order" shall have the meaning given to such term
     in section 9a hereof.

               n.   "Court" shall have the meaning given to such term in the
     Recital A above.

               o.   "Debtors" shall have the meaning given to such term in the
     Preamble to this Agreement, and consists of the Duke City Debtors and the
     Non-Duke City Debtors.

               p.   "Duke City Debtors" shall have the meaning given to such
     term in Recital F above.

               q.   "Duke City Preference Recovery Claim" shall have the meaning
     given to such term in Recital F above.

               r.   "Duke City Allocated Proceeds" shall mean the first $1.2
     million of proceeds from certain assets of Duke City Video, Inc. as
     described more particularly in

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     paragraph 8 of that certain Order re Use of Cash Collateral and Adequate
     Protection entered by the Court on May 31, 2000.

               s.   "Existing Fee Reserve" shall have the meaning given to such
     term in section 4b(6) hereof.

               t.   "Filing Deadline" shall have the meaning given to such term
     in section 2 hereof.

               u.   "Final Order," shall mean, with respect to any order, such
     order has become final and is not subject to a timely appeal, or if an
     appeal is filed timely with respect to such Order, the earlier of (i) the
     date such appeal is finally resolved and no further appeals are pending and
     (ii) the date the Parties hereto mutually waive the requirement that such
     Order become a Final Order.

               v.   "Four Star" shall have the meaning given to such term in
     Recital C above.

               w.   "Four Star Proceeds" shall have the meaning given to such
     term in Recital E above.

               x.   "Four Star Sale" shall have the meaning given to such term
     in Recital E above.

               y.   "General Unsecured Creditors" shall mean creditors of any of
     the Debtors with respect to their pre-petition unsecured non-Priority
     Claims against any of the Debtors or unsecured deficiency claims of holders
     of secured claims, but excluding any claims of the Bank Group, any of its
     members, successors or assigns, and any claims of ING.

               z.   "HRC" shall have the meaning given to such term in Recital D
     above.

               aa.  "HRC Proceeds" shall have the meaning given to such term in
     Recital D above.

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               bb.  "HRC Sale" shall have the meaning given to such term in
     Recital D above.

               cc.  "Interim Sale Proceed Payments" shall have the meaning given
     to such term in the definition of Net Sale Proceeds in section 1ee hereof.

               dd.  "Management Fees" shall have the meaning given to such term
     in section 4b(2) hereof.

               ee.  "Net Sale Proceeds" shall mean the Sale Proceeds less the
                                                                     ----
     amount of all payments made by the Debtors from Sale Proceeds prior to the
     date hereof, consisting of the direct costs incurred and paid by the
     Debtors in connection with the HRC Sale or the Four Star Sale and the
     payments to the Agent and the Bank Group of one-third of the net proceeds
     of each of the HRC Sale and the Four Star Sale, plus certain interest
     accrued on such funds, (the "Interim Sale Proceed Payments").

               ff.  "Non-Duke City Debtors" shall have the meaning given to such
     term in Recital F above.

               gg.  "Non-Duke City Preference Recovery Claims" shall have the
     meaning given to such term in Recital F above.

               hh.  "Parties" shall have the meaning given to such term in the
     Preamble to this Agreement.

               ii.  "Petition Date" shall have the meaning given to such term in
     Recital A above.

               jj.  "Preference Recovery Claim" shall have the meaning given to
     such term in Recital F above.

               kk.  "Priority Claim Reserve" shall mean the amount of $600,000
     of the Sale Proceeds retained by the Debtors for the purposes set forth in
     section 4 hereof.

               ll.  "Professional Fees" shall have the meaning given to such
     term in section 4b(2) hereof.

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               mm.  "Released Claims" shall have the meaning given to such term
     in section 11 hereof.

               nn.  "Sale Proceeds" shall have the meaning given to such term in
     Recital E above.

               oo.  "Settlement Amount" shall mean five hundred fifty thousand
     dollars ($550,000.00) of the Sale Proceeds.

               pp.  "Unsecured Claim Expense Reserve" shall have the meaning
     given to such term in the definition of "Administrative Reserve".

               qq.  "Vitec" shall mean Vitec DC Holding Corp., and any
     affiliate thereof, which is obligated to pay any funds withheld by Vitec
     from the purchase price paid to the Duke City Debtors for Vitec's purchase
     of certain Duke City assets.

               rr.  "Vitec Tax Reserve" shall mean the $800,000 tax reserve
     withheld by Vitec from the purchase price paid to the Duke City Debtors for
     Vitec's purchase of certain Duke City assets.

               ss.  "Waiver Portion" shall have the meaning given to such term
     in section 2 hereof.

               tt.  Any terms not otherwise defined in the Agreement shall have
     any definition given to such terms in the Bankruptcy Code.

          2.   Motion for Approval of Agreement. Within five (5) days following
               --------------------------------
     the execution of this Agreement (the "Filing Deadline"), (a) the Debtors
     shall file a motion with the Court seeking (i) approval of this Agreement
     and of the compromises of the rights and obligations of the Parties set
     forth herein, and (ii) entry of the Compromise Order; and (b) the Committee
     shall file with the Court a declaration establishing the appropriateness of
     that portion of the compromise provided herein under which the Non-Duke
     City Preference Recovery Claims are released and waived ("Waiver Portion").
     The Debtors' Motion shall indicate that the Committee has been allocated
     this

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     responsibility.  The Debtors neither endorse nor oppose the Waiver Portion,
     but have agreed to be bound by the provision of the Compromise Order
     approving the Waiver Portion.  The form and content of the motion, the
     notice of hearing, and all other matters relating thereto, shall be
     reasonably satisfactory to each of the Parties.

          3.   Validity of Bank Group Claims and Liens. Effective upon the
               ---------------------------------------
     Closing Date, the Parties acknowledge and agree (and the Compromise Order
     shall provide) that in accordance with this Agreement, as of the Closing
     Date (i) the Debtors will be indebted to the Bank Group on account of pre-
     petition indebtedness in an unpaid amount of not less than approximately
     $60,000,000 less all payments made by the Debtors to the Bank Group after
                 ----
     the date hereof, after crediting all post-petition payments made by the
                      -----
     Debtors to the Bank Group including payments made under a reservation of
     rights, (ii) the amount of such pre-petition indebtedness is, but for the
     pendency of the Bankruptcy Cases, immediately due and payable to the Bank
     Group, (iii) the Debtors do not have or assert any claim, counterclaim,
     setoff, or defense of any kind or nature which would in any way reduce or
     affect their obligation to pay such pre-petition indebtedness to the Bank
     Group; and (iv) the liens and security interests of the Bank Group are
     valid and perfected security interests in all of the assets of the Debtors,
     and are not subject to reduction or avoidance.

          4.   Disposition of the Funds of the Estates. Subject to the terms of
               ---------------------------------------
     this Agreement, effective as of the Closing Date, the Bank Group and each
     member thereof, hereby irrevocably consent to the Debtors use of the cash
     Collateral of the Bank Group for the purposes set forth in this Agreement
     and no others, and only so long as (1) the Compromise Order is not revoked,
     or modified or amended in any manner not acceptable to the Bank Group in
     its sole discretion, (2) none of the Debtors' chapter 11 cases is converted
     to a case under chapter 7 of the Bankruptcy Code, and (3) no trustee is
     appointed in any of the Bankruptcy Cases. As to each sub-reserve in the

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     Administrative Reserve and the Settlement Amount, the preceding consent to
     use is solely for the purposes and up to the amounts specified in this
     Agreement for each such sub-reserve and the Settlement Amount,
     respectively, and funds in any sub-reserve or the Settlement Amount may not
     be used for any purpose except as expressly provided in this Agreement,
     provided, however, that the Debtors may use up to $25,000 of the funds in
     --------
     the Accrued Liability Reserve to make payments to be made from the Priority
     Claim Reserve, or up to $25,000 of the funds in the Priority Claim Reserve
     to make payments to be made from the Accrued Liability Reserve, but in no
     event may more than $25,000 of funds in either of such sub-reserves be used
     for a purpose other than payments covered by such sub-reserve, and any
     portion of such $25,000 may only be used to satisfy an obligation expressly
     covered by the other sub-reserve under the terms of this Agreement.

               b.   Effective as of the Closing Date, the Administrative
     Reserve, the Priority Claim Reserve and the Settlement Amount shall be held
     by the Debtors subject to the terms of this Agreement.

                    (1)  The Administrative Reserve and the sub-reserves
     thereunder shall be used only to pay any expenses of administration allowed
     by Final Order of the Court if the incurring and payment of such expenses
     are permitted by this Agreement ("Allowed Administrative Expenses") against
     any of the estates.

                    (2)  The funds in the Administrative Operating Reserve shall
     be used to pay the following items to the extent such items are incurred or
     accrue on or after August 1, 2001: (i) expenses incurred by the Debtors in
     the ordinary course of the operation of their estates, including (a) wages
     and salaries owed to non-professional persons employed by the estates at
     the request of the estate representative, and (b) the costs of rent,
     storage of the Debtors' books and records and occupancy charges; (ii) fees
     and expenses of professional persons employed at the expense of the Debtors
     ---

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     ("Professional Fees") to the extent not satisfied out of the Existing Fee
     Reserve; (iii) fees and expenses of Crossroads LLC as estate
     representative, or any successor estate representative, ("Management Fees")
     to the extent not satisfied out of the Existing Fee Reserve, (iv) fees owed
     to the Office of the United States Trustee; and (v) Court costs; provided,
                                                                      --------
     however, that (a) none of the funds in the Administrative Reserve other
     -------
     than the $75,000 in the Unsecured Claim Expense Reserve shall be used to
     pay for Professional Fees incurred directly or indirectly in connection
     with objecting to disputed unsecured pre-petition non-Priority Claims of
     the General Unsecured Creditors or administering the distribution of the
     Settlement Amount to such creditors, whether Professional Fees in excess of
     such amount are allowed by the Court or not.

                    (3)  The funds in the Accrued Liability Reserve shall be
     used to pay Allowed Administrative Expenses that accrued or were incurred
     by reason of actions or occurrences prior to August 1, 2001.

                    (4)  The funds in the Unsecured Claim Expense Reserve shall
     be used to pay for Professional Fees incurred directly or indirectly in
     connection with objecting to disputed unsecured pre-petition non-Priority
     Claims of the General Unsecured Creditors or administering the distribution
     of the Settlement Amount to such creditors. Any Professional Fees allowed
     by the Court, or that are incurred after the dismissal of the Bankruptcy
     Cases of the Non-Duke City Debtors and are approved by the Committee, for
     such purposes in excess of the amount in the Unsecured Claim Expense
     Reserve may only be charged against and paid from the funds in the
     Settlement Amount.

                    (5)  Expenses which are incurred or accrue from and after
     August 1, 2001 but are incurred or accrued outside of the ordinary course
     of the administration of the Bankruptcy Cases shall not be paid from the
     Administrative Operating Reserve even if such expenses become Allowed
     Administrative Expenses

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     unless (i) prior written consent to such payment is given by the Bank
     Group, (ii) an order of the Court is entered approving such payment
     following notice to the Agent, the Bank Group and the Committee and an
     opportunity for a hearing, or (iii) such payment is in accordance with the
     existing monthly fee procedure (subject to the Court approval pursuant to
     interim and final fee applications as provided in such procedures).

                    (6)  The amounts of Professional Fees and Management Fees
     included in budgets accompanying cash collateral stipulations approved by
     the Court and funded in the professional fee reserve established thereunder
     solely for such purpose (the "Existing Fee Reserve") prior to the execution
     of this Agreement, shall be payable out of and from such reserve. The
     approximate amount of funds in the Existing Fee Reserve as of July 31, 2001
     was $495,663. The Agent and the Bank Group acknowledge that amounts paid
     from the Professional Fee Reserve prior to the date hereof in accordance
     with budgets accompanying cash collateral stipulations and orders of the
     Court, or paid hereafter in accordance with the terms of this Agreement,
     constituted and shall constitute an authorized use of cash Collateral
     solely for the benefit of the parties entitled to receive such payments.

                    (7)  The Debtors' proposed expenditure of cash in the
     Administrative Reserve shall be made pursuant to stipulations covering 30-
     day or longer periods reasonably approved by the Bank Group and presented
     to and approved by the Court.

                    (8)  No more than the funds in the Unsecured Claim Expense
     Reserve shall be payable from the Administrative Reserve for Professional
     Fees owed to professional persons employed by the Committee for services
     rendered or costs incurred after the Closing Date.

                    (9)  No cost or expense directly or indirectly related to
     any Debtor commencing litigation or judicial proceedings to assert any
     claim or cause of

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     against any third party, including, without limitation, the Agent or any
     member of the Bank Group, or the assertion of any counterclaim or cross-
     complaint, shall constitute an Allowed Administrative Expense, provided
                                                                    --------
     that this provision shall not apply to the filing and prosecution of any
     objection to any proof of claim filed against any of the Debtors.

               (10) The funds in the Priority Claim Reserve shall be used only
     to pay Allowed Priority Claims.

               (11) The funds constituting the Settlement Amount shall only be
     used in accordance with sections 4b, 4c, 4d, and 6 hereof.

           c.  Effective as of the Closing Date, the Bank Group and each
     member thereof shall be deemed to have irrevocably directed that a portion
     of the Collateral equal to the Settlement Amount (i) shall be held by the
     Debtors in trust solely for the benefit of General Unsecured Creditors in a
     segregated interest-bearing account, and such funds shall no longer be
     property of any of the Debtors' estates, (ii) shall be free and clear of
     all liens and security interests asserted by the Bank Group, ING, or any of
     their successors or assigns, (iii) shall not be distributed to the Bank
     Group, any of its members or ING, nor used to pay any Allowed
     Administrative Expenses or Allowed Priority Claims, or for any other
     purpose other than as provided in this Agreement; and (iv) shall, upon the
     written request of the Committee, be disbursed by one or more of the
     Debtors or, if a nominee for the benefit of the General Unsecured Creditors
     is designated by the Committee, turned over to the nominee for distribution
     to General Unsecured Creditors on a pro rata basis calculated on the
     allowed amounts of said creditors' claims without duplication thereof in
     the event that more than one Debtor is or may be liable to such creditor
     with respect to such claim, and excluding any distribution with respect to
     indebtedness which any Debtor owes to any other Debtor.  Such funds shall
     be treated in accordance with section 6 of this Agreement.

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           d.  On the Closing Date, after setting aside funds for the
     Administrative Reserve, the Priority Claim Reserve and the Settlement
     Amount as required by this Agreement, the balance of the Net Sale Proceeds
     and all other funds held by any of the Debtors' estates, other than funds
     in the Existing Fee Reserve, shall be paid to the Agent for the Bank Group
     free and clear of any lien, claim or interest of any Debtor or of any third
     party asserting any right to such funds on account of any conduct or
     inaction by any Debtor.

           e.  The Agent for the Bank Group shall be entitled to receive from
     time to time following the Closing Date, promptly upon receipt by the
     Debtors, (i) any additional HRC Proceeds or Four Star Proceeds received by
     the Debtors after the Closing Date, (ii) all funds received by the Debtors
     after the Closing Date from (x) the sale of the Debtors' assets other than
     the assets sold in the HRC Sale and the Four Star Sale, or (y) the
     collection of any of the Debtors' promissory notes, receivables, deposits,
     offset rights, claims or causes of action (except as expressly set forth in
     this Agreement to the contrary with respect to Non-Duke City Preference
     Recovery Claims), and (iii) one hundred percent (100%) of the Duke City
     Allocated Proceeds, provided that, to the extent the Agent has received the
                         --------
     proceeds of the Vitec Tax Reserve and the California State BOE Claim
     thereafter becomes an Allowed Priority Claim, the Agent shall refund to the
     Debtors the amount necessary to satisfy the California State BOE Claim, up
     to the amount received with respect to the Vitec Tax Reserve.

           f.  Except to the extent of up to $25,000 as set forth in section 4a
     hereof, the Administrative Operating Reserve, the Accrued Liability
     Reserve, the Unsecured Claim Expense Reserve and the Priority Claim
     Reserve, respectively, shall be used only to pay obligations up to the
     amounts and for the purposes specified in this Agreement. To the extent any
     portion of the Administrative Operating Reserve, the Accrued Liability
     Reserve, the Unsecured Claim Expense Reserve or the Priority Claim

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     Reserve is not used to satisfy the obligations specified in this Agreement
     applicable to such reserve, respectively, at such time as the Debtors and
     the Bank Group reasonably determine that no further obligations covered by
     the applicable reserve will be allowed, then the unused funds in the
     applicable reserve shall be paid to the Agent for the benefit of the Bank
     Group. Further, any surplus funds in the Existing Fee Reserve will be paid
     to the Agent for the benefit of the Bank Group as soon as the Debtors and
     the Bank Group reasonably determine that there are surplus funds in the
     Existing Fee Reserve.

           g.  Effective as of the Closing Date, to the extent the Interim
     Sale Proceed Payments and other payments have been made by any of the
     Debtors to the Agent and the Bank Group during the Bankruptcy Cases subject
     to any reservation of rights on behalf of the estates or parties in
     interest, all such reservations of rights shall be terminated and the Agent
     and the Bank Group shall be entitled to retain all such payments free and
     clear of any lien, claim, interest or reservation of rights on behalf of
     these estates or any party in interest.

           h.  All payments made to the Agent or the Bank Group pursuant to
     the terms of this Agreement shall be final when made and not subject to
     recovery or avoidance, except as expressly set forth herein with respect to
     the proceeds of the Vitec Tax Reserve.

       5. Cash Collateral.  Effective as of the Closing Date, except as set
          ---------------
     forth in section 5b hereof with respect to the proceeds of the Vitec Tax
     Reserve and section 6 with respect to the Settlement Amount, the Debtors,
     their estates, and their successors and assigns, including, without
     limitation, any estate representative and any trustee who may be appointed
     in any of the Bankruptcy Cases, shall not be entitled to (i) use any cash
     Collateral of the Bank Group in excess of the amounts then remaining in the
     Administrative Reserve, the Existing Fee Reserve or the Priority Claim
     Reserve, (ii) pay any obligations other than Allowed Administrative
     Expenses or Allowed Priority Claims,

                                       16
<PAGE>

     or (iii) seek to increase the amount of cash Collateral of the Bank Group
     which may be used to pay Allowed Administrative Expenses or Allowed
     Priority Claims over the objection of the Bank Group. The Debtors and their
     estates, on behalf of themselves and their successors and assigns,
     including, without limitation, any estate representative and any trustee
     who may be appointed in any of the Bankruptcy Cases, agree that no cost or
     expense which is incurred by the Debtors or any trustee during the pendency
     of the Bankruptcy Cases, including any trustee appointed following
     conversion of any of the pending cases to cases under chapter 7, whether or
     not any such cost or expense is incurred in connection with or on account
     of the preservation or disposition of any of the Collateral of the Bank
     Group or which otherwise could be chargeable to the Agent or the Collateral
     pursuant to Bankruptcy Code section 506(c) or otherwise, shall be
     chargeable to the Agent or such Collateral, except for the amounts
     remaining in the Administrative Reserve, the Priority Claim Reserve or the
     Settlement Amount, or the Vitec Tax Reserve for payments necessary to
     satisfy the California State BOE Claim. Nothing in this Agreement or in the
     Compromise Order shall be deemed or construed to obligate the estate
     representative or any professional employed by the Debtors or the Committee
     to continue to render services unless they have assurance satisfactory to
     them that they will be paid for their services at rates satisfactory to
     them.

           b.  The Debtors may use the proceeds of the Vitec Tax Reserve to
     satisfy the California State BOE Claim to the extent that claim becomes an
     Allowed Priority Claim.

           c.  It is the intention of the Parties, and the Compromise Order
     shall provide, that the sum of: the Administrative Reserve, the Priority
     Claim Reserve, the Existing Fee Reserve, the Settlement Amount and any
     proceeds of the Vitec Tax Reserve used to pay the California State BOE
     Claim, constitutes the absolute limit on the proceeds of the Collateral
     which may be used hereafter for any purpose in

                                       17
<PAGE>

     connection with these Bankruptcy Cases other than for payment to and
     satisfaction of the Agent and the Bank Group's claims against the Debtors
     and their estates. Nothing in this Agreement or the Compromise Order shall
     be deemed or construed to authorize the Debtors, any trustee in any of the
     Bankruptcy Cases or any other third party to use cash Collateral of the
     Bank Group, except as expressly set forth herein with respect to the
     Administrative Reserve, the Priority Claim Reserve, the Existing Fee
     Reserve, the proceeds of the Vitec Tax Reserve and the Settlement Amount,
     without the prior written consent or the Bank Group, which the Bank Group
     may withhold in their absolute discretion.

          6.  Settlement Amount.  Effective as of the Closing Date:
              -----------------

               a.  The Settlement Amount shall be held by the Debtors or the
     nominee designated by the Committee solely to make payments on account of
     the allowed prepetition claims of the holders of General Unsecured Claims
     against any of the Debtors and to pay (i) Professional Fees related to
     objecting to any of such claims which are disputed, to the extent such
     Professional Fees are in excess of the Unsecured Claim Expense Reserve, and
     (ii) expenses of distribution of the Settlement Amount.  The amount of
     Professional Fees or expenses of distribution which may be paid from the
     Settlement Amount shall be reasonably agreed upon between the Committee and
     the party seeking such payment, without the need for an order of the Court
     approving such payment.

               b.  The Bank Group and its members shall be deemed to have
     directed that the Settlement Amount shall be held in trust for the benefit
     of the General Unsecured Creditors separate and apart from any other assets
     of Debtors' estates, and shall no longer constitute property of said
     estates.  The General Unsecured Creditors shall be entitled to share pro
     rata in the Settlement Amount free and clear of any liens of the Bank Group
     or ING, and the Settlement Amount shall not be reduced by: (i) any

                                       18
<PAGE>

     costs of administration of the Bankruptcy Cases, whether under section
     506(c) of the Bankruptcy Code or otherwise; (ii) claims of the Bank Group
     or ING; (iii) unsecured claims entitled to priority pursuant to section 507
     of the Bankruptcy Code, or otherwise; (iv) payments made to creditors to
     cure defaults in leases or executory contracts to be assumed; and (v)
     payments made to secured creditors on account of their secured claims,
     whether to reinstate secured claims or otherwise. General Unsecured
     Creditors shall be entitled to a single satisfaction of their claims
     regardless of the number of Debtors liable on such claims.

               c.  The Bank Group, and each of its members, expressly waive any
     and all right to share in the Settlement Amount with General Unsecured
     Creditors, whether as a deficiency claim pursuant to 11 U.S.C. (S) 506, or
     otherwise.  In addition, the Bank Group shall exercise its subordination
     rights with respect to any right of ING to share in any portion of the
     Settlement Amount otherwise payable to ING on account of any General
     Unsecured Claim of ING.  As a result, neither the Bank Group nor ING shall
     share in any portion of the Settlement Amount.

               d.  Distributions of the Settlement Amount shall be made by one
     or more of the Debtors or the nominee designated by the Committee pursuant
     to section 4c   hereof upon the satisfaction of the conditions to the
     effectiveness of this Agreement in section 10 hereof and the earlier of (i)
     entry of a Final Order dismissing the Bankruptcy Cases of the Non-Duke City
     Debtors; and (ii) entry of a Final Order resolving the last dispute with
     respect to any claims of General Unsecured Creditors with respect to the
     Bankruptcy Cases of the Non-Duke City Debtors.

               e.  In the event all disputed claims of General Unsecured
     Creditors have not been resolved by the earliest of the dates in section 6d
     hereof, then the Debtors or the nominee designated by the Committee shall
     reserve a portion of the Settlement Amount for all such disputed claims
     equal to their pro rata share of the

                                       19
<PAGE>

     Settlement Amount calculating each such disputed claim at the higher of the
     amount filed or scheduled, or if the amount of the claim has been estimated
     under section 502(c) of the Bankruptcy Code, at said estimated amount, and
     a first distribution shall be paid to all holders of non-disputed claims.
     If all disputes have not been resolved by the date of the first
     distribution of the Settlement Amount, a second and final distribution
     shall be made upon resolution of the last disputed claim of the General
     Unsecured Creditors.

          7.  Modification of Stay.  The Compromise Order shall provide that
              --------------------
     the automatic stay in effect in the Bankruptcy Cases pursuant to Bankruptcy
     Code section 362 shall be deemed modified to enable the parties to
     implement the terms of this Agreement. For example, where this Agreement
     provides for the transfer of funds, such as the transfer of the Settlement
     Amount, the automatic stay shall be deemed modified to authorize such
     transfer in accordance with the terms of this Agreement.

          8.  Preference Recovery Claims.  None of the Debtors, any estate
              --------------------------
     representative, any of their respective designees, nor any trustee
     appointed in any of the Bankruptcy Cases, shall initiate, prosecute, or aid
     in the prosecution of any action to recover any Non-Duke City Preference
     Recovery Claim made by any of the Non-Duke City Debtors prior to the
     commencement by such Debtor of its Bankruptcy Case. Nothing in this section
     7a shall apply to or impair the right of the appropriate third party to
     initiate or prosecute any Duke City Preference Recovery Claim or any claim,
     cause of action or right of the Non-Duke City Debtors based upon any theory
     other than the recovery of potential preferences pursuant to section 547 of
     the Bankruptcy Code.

              b.  The proceeds of any recovery of any Duke City Preference
     Recovery Claim or any avoidance actions held by either of the Duke City
     Debtors shall be allocated in accordance with the provisions of the
     Bankruptcy Code, such that only General Unsecured Creditors with direct
     claims against the Duke City Debtors (not including any indebtedness of
     either Duke City Debtor to the other) and the Bank

                                       20
<PAGE>

     Group's unsecured claims against such Debtors shall share in such proceeds
     pro rata. The Bank Group may exercise its subordination rights with respect
     to any right of ING to share in any portion of the recovery claims
     otherwise payable to ING on account of any General Unsecured Claim of ING.

          9.  Control of Liquidation of Assets Following the Closing Date.  At
              -----------------------------------------------------------
     the request of the Bank Group, the Debtors shall assign and transfer to the
     Bank Group at any time after the Closing Date all remaining assets in any
     or all of the Debtors' estates, including, without limitation, (i) any
     tangible assets, promissory notes, receivables, deposits, offset rights,
     claims or causes of action, and (ii) the right to receive the Duke City
     Allocated Proceeds, but not including (iii) Non-Duke City Preference
     Recovery Claims, which, pursuant to this Agreement, shall not be
     prosecuted, or (iv) Duke City Preference Recovery Claims or other avoidance
     actions which cannot be assigned, and which shall be prosecuted by the Duke
     City Debtors on behalf of creditors as provided in section 8b hereof. While
     the Debtors retain ownership and control of any assets, prior to any such
     assignment to the Bank Group, the Bank Group shall be entitled to review
     and approve all administrative expenses with respect to such assets and all
     Allowed Priority Claims which the Debtors propose to pay out of the
     Administrative Reserve or the Priority Claim Reserve.

              b.  The Debtors will from and after the Closing Date provide the
     Agent for the Bank Group (i) no less frequently than monthly, a budget of
     revenues to be received and administrative expenses and Allowed Priority
     Expenses to be paid, balance sheets, income statements, statements of cash
     flow and schedules of all assets remaining in any of the Debtors' estates
     in reasonable detail; (ii) weekly, a deposit report, while the level of
     deposits makes it reasonable for the Agent to receive weekly deposit
     reports, and monthly thereafter; (iii) weekly, on a consolidated basis, in
     arrears, a reconciliation of actual revenues and expenditures to budget, an
     a/r balance-previous

                                       21
<PAGE>

     report plus sales and debt adjustments less collections, a reconciliation
     showing any out of the ordinary course of business dispositions of assets,
     and a cumulative expenses accrued but not paid; and (iv) from time to time,
     such other financial and other information as the Agent shall reasonably
     request.

          10. Conditions to the Closing Date.  The effectiveness of this
              ------------------------------
     Agreement and the obligations of the Parties hereunder are expressly
     conditioned upon the following:

              a.  The Court shall have entered an order (the "Compromise
     Order") approving this Agreement, which order shall be in form and content
     satisfactory to each of the Parties, and shall, without limitation,
     authorize the Debtors and the Parties to implement the provisions of this
     Agreement; compromise the alleged avoidance actions and any other claims
     the Debtors' estates may have against the Bank Group; waive and release the
     Non-Duke City Preference Recovery Claims (i.e. the Waiver Portion); and
     impose the terms of this Agreement upon the Debtors, their estates, their
     successors and assigns, any estate representative, any of their respective
     designees, ING, and any trustee who might be appointed in any of the
     Bankruptcy Cases.

              b.  The Compromise Order shall have been entered on or before
     September 21, 2001, and shall have become a Final Order on or before
     October 3, 2001, unless the Parties hereto agree to extend either or both
     of such deadlines or waive the requirement for a Final Order in accordance
     with the definition of Final Order.

              c.  If any of these conditions is not satisfied and the date for
     satisfaction of such condition is not extended by the Parties, this
     Agreement shall be deemed void ab initio.
                                    -- ------
          11. Duke City Allocated Proceeds.  Notwithstanding anything in this
              ----------------------------
     Agreement, including whether or not the conditions to the effectiveness of
     this Agreement are ever satisfied and this Agreement becomes effective, the
     Duke City Allocated Proceeds shall be paid by the Debtors to the Agent for
     the Bank Group as they

                                       22
<PAGE>

     are received by the Debtors, in accordance with the Order re Use of Cash
     Collateral and Adequate Protection entered by the Bankruptcy Court on May
     31, 2000,.

          12. Release of the Agent and the Bank Group.  Effective as of the
              ---------------------------------------
     Closing Date, except for the obligations imposed under this Agreement, the
     Debtors, and each of them, hereby forever release and discharge the Agent
     and each member of the Bank Group and all of their officers, directors,
     agents, employees, attorneys, shareholders, predecessors and successors,
     jointly and severally, from any and all claims, demands, actions, causes of
     action, liabilities, costs, expenses and damages of any kind whatsoever, in
     law or in equity, past, present or future, ("Released Claims") and whether
     such Released Claims are know or unknown, suspected or unsuspected, from
     the beginning of time to the date hereof.

                    TO THE EXTENT THAT THE FOREGOING RELEASE IS A RELEASE TO
          WHICH SECTION 1542 OF THE CALIFORNIA CIVIL CODE OR SIMILAR PROVISIONS
          OF OTHER APPLICABLE LAW APPLIES, IT IS THE INTENTION OF THE DEBTORS
          THAT THE FOREGOING RELEASE SHALL BE EFFECTIVE AS A BAR TO ANY AND ALL
          ACTIONS, DAMAGES, LOSSES, CLAIMS, LIABILITIES AND DEMANDS OF
          WHATSOEVER CHARACTER, NATURE AND KIND, KNOWN OR UNKNOWN, SUSPECTED OR
          UNSUSPECTED, HEREINABOVE SPECIFIED TO BE BARRED.  IN FURTHERANCE OF
          THIS INTENTION, THE DEBTORS EXPRESSLY WAIVE ANY AND ALL RIGHTS AND
          BENEFITS CONFERRED ON THEM BY THE PROVISIONS OF SECTION 1542 OF THE
          CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:

                    "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
          CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
          EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
          AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

               b.  The Debtors represent to the Agent and the Bank Group that
     they have thoroughly discussed all aspects of this Release with their
     attorneys to the full extent that they deem it necessary to do so, have
     been fully advised by their attorneys as to their rights, understands that
     they may be waiving significant legal rights or

                                       23
<PAGE>

     Released Claims, and enter into the Release under this Agreement with a
     full and complete understanding of its terms.

          13. Motion for Dismissal of Non-Duke City Bankruptcy Cases. As soon as
              -------------------------------------------------------
     practicable after (i) the Closing Date, (ii) the resolution of any disputed
     administrative claims and any priority claims in the Non-Duke City
     Bankruptcy Cases, and (iii) either the resolution of any disputed pre-
     petition unsecured non-priority claims against any of the Non-Duke City
     Debtors or the expenditure in full of the Unsecured Claim Expense Reserve,
     the Non-Duke City Debtors shall file a motion with the Court seeking
     approval for the dismissal of the Non-Duke City Bankruptcy Cases on notice
     and hearing to the parties in interest, which order of dismissal shall
     provide, however, that, in accordance with Bankruptcy Code section 349(b),
     such dismissal shall not vacate any order, judgment or transfer ordered by
     the Court during the Bankruptcy Cases. In the event the Settlement Amount
     has not been distributed to the General Unsecured Creditors entitled to
     receive such funds prior to the dismissal of the Non-Duke City Bankruptcy
     Cases, such funds shall be distributed to such creditors outside of the
     Bankruptcy Cases, with the cost of such distribution to be paid from the
     Settlement Amount. In the event the Non-Duke City Bankruptcy Cases are not
     dismissed, the parties shall reasonably cooperate regarding an alternative
     mechanism to resolve those cases, provided that such non-dismissal shall
     not invalidate any provision of this Agreement or any provision of the
     Compromise Order.

          14. MiscellaneousNotices. All notices, requests, demands, and other
              ---------------------
     communications made in connection with this Agreement shall be in writing
     and shall be deemed to have been duly given on the date of receipt if
     personally delivered or delivered by overnight courier or received by
     facsimile transmission (which facsimile shall be followed by a mailed
     original), or five (5) business days after mailing if mailed by

                                       24
<PAGE>

     certified or registered mail, postage prepaid, return receipt requested,
     addressed to each Party as follows:

               If to the Debtors
               -----------------

               Ellen K. Gordon
               Crossroads, LLC
               9 Executive Circle
               Suite 190
               Irvine, CA  92614

               With a copy to:
               ---------------

               Klee Tuchin, Bogdanoff & Stern LLP
               1880 Century Park East
               Suite 200
               Los Angeles,  CA 90067-1698
               Facsimile: (310) 407-9090
               Attention: Lee R. Bogdanoff

               If to the Committee:
               -------------------

               Wybron Incorporated
               4830 List Drive
               Colorado Springs, CO  80919
               Facsimile: (719) 548-0432
               Attention: Keny Whitright, President

               With a copy to:
               --------------

               Stutman, Treister & Glatt
               3699 Wilshire Boulevard, Suite 900
               Los Angeles, California 90010
               Facsimile:  (213) 251-5288
               Attention:  Richard M. Neiter

                                       25
<PAGE>

               If to the Bank Group:
               --------------------

               The Chase Manhattan Bank
               380 Madison Avenue, 10th Floor
               New York, NY  10017
               Facsimile: (212) 622-4834
               Attention:  William T. Strout, V.P.

               With a copy to:
               --------------

               Latham & Watkins
               633 West Fifth Street, Suite 4000
               Los Angeles, CA  90071
               Facsimile: (213) 891-8763
               Attention: Michael Lurey

               Any Party may change its address by giving written notice to the
     other Parties in the manner set forth above.

               b.  Cooperation. The Parties agree to cooperate with one another
                   ------------
     and to take all commercially reasonable actions necessary or desirable to
     satisfy the conditions to the effectiveness of this Agreement and to
     implement the terms hereof.

               c.  Entire Agreement; Modification; Waiver. This Agreement
                   ---------------------------------------
     constitutes the entire agreement between the Parties and supersedes all
     prior and contemporaneous agreements, representations, warranties, and
     understandings of the Parties, whether oral, written, or implied, as to the
     subject matter hereof. No supplement, modification, or amendment of this
     Agreement shall be binding unless executed in writing by all Parties
     affected thereby. No waiver of any of the provisions of this Agreement
     shall be deemed or constitute a waiver of any other provision, whether or
     not similar, nor shall any waiver constitute a continuing waiver. No waiver
     shall be binding unless executed in writing, and specifying such waiver, by
     the Party making the waiver .

               d.  Limitation on Third-Party Beneficiaries. Nothing contained in
                   ----------------------------------------
     this Agreement is intended to relieve or discharge the obligation or
     liability of any third

                                       26
<PAGE>

     party to any Party, nor shall any provision give any third party any right
     of subrogation or action over or against any Party.

               e.  Successors and Assigns. This Agreement shall be binding upon,
                   -----------------------
     and shall inure to the benefit of, the Parties and their respective legal
     representatives, successors, and assigns, including, without limitation,
     any trustee appointed in the Bankruptcy Cases, including any trustee
     appointed following conversion of the pending cases to cases under chapter
     7.

               f.  Further Assurances. Each Party hereto agrees to execute any
                   -------------------
     and all documents and to do and perform any and all acts and things
     necessary or proper to effectuate or further evidence the terms and
     provisions of this Agreement.

               g.  No Representations or Warranties. Except as expressly set
                   ---------------------------------
     forth in this Agreement, none of the Parties makes, or has made, any
     representation or warranty, written or oral, express or implied to any
     other Party.

               h.  Severability. If any nonmaterial portion of this Agreement
                   -------------
     shall be held to be invalid or unenforceable, then that portion shall be
     deemed to have been severed from this Agreement and the Parties acknowledge
     that the balance of this Agreement shall be valid and enforceable.

               i.  Headings. The descriptive headings of the sections of this
                   ---------
     Agreement are inserted for convenience of reference only and do not
     constitute a part of this Agreement.

               j.  Applicable Law. This Agreement shall be governed in all
                   ---------------
     respects, including the validity, interpretation and effect, by the laws of
     the State of California, without giving effect to the principles of
     conflicts of law thereof.

               k.  Counterparts. This Agreement may be executed in two or more
                   -------------
     counterparts, each of which shall be deemed an original, but all of which
     together shall constitute one and the same instrument.

                                       27
<PAGE>

               l.  No Admissions. Neither this Agreement, nor any of the terms
                   --------------
     hereof, nor any negotiations or proceedings in connection herewith, shall
     constitute or be construed as or be deemed to be evidence of an admission
     on the part of any Party of any liability or wrongdoing whatsoever, or the
     truth or untruth, or merit or lack of merit, of any claim or defense of any
     Party; nor shall this Agreement, or any of the terms hereof, or any
     negotiations or proceedings in connection herewith, or any performance or
     forbearance hereunder, be offered or received in evidence or used in any
     proceeding against any Party, or used in any proceeding, or otherwise, for
     any purpose whatsoever, except with respect to the effectuation and
     enforcement of this Agreement.

               m.  Termination of this Agreement. Upon the failure of any
                   ------------------------------
     condition to this Agreement as the date for satisfaction may be extended in
     accordance with section 9 hereof, this Agreement shall terminate and the
     Parties shall be returned to their positions as of the date of execution of
     this Agreement.

               n.  Consent to Entry of Orders and Judgments by the Court. Each
                   ------------------------------------------------------
     Party hereto hereby consents to the determination by the Court, as a "core
     proceeding" within the meaning of 28 U.S.C. (S) 157 or any successor
     provision thereof, and to have the Court hear and determine and enter
     appropriate orders and judgment subject to review under 28 U.S.C. (S) 158,
     as provided in 28 U.S.C. (S) 157(c)(2) or any successor provision, in any
     action brought to enforce, interpret, reform or rescind this Agreement or
     any of the provisions hereof and over any action to determine or declare
     the rights of any of the Parties under or with respect to this Agreement.

                                       28
<PAGE>

          IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed on its behalf, all as of the day and year first above
written.

DATED: August __, 2001        The Chase Manhattan Bank, as Agent


                              /s/ William T. Strout
                              By   William T. Strout
                              Its  Vice President


DATED: August __, 2001        The Official Committee of Creditors Holding
                              Unsecured Claims in the jointly administered cases
                              of Matthews Studio Equipment Group, Inc.


                              /s/ Keny Whitright
                              By   Keny Whitright
                              Its  Chairman


DATED: August __, 2001        Matthews Studio Equipment Group, a California
                              corporation, f/k/a Matthews Studio Equipment, Inc.


                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative

                                       29
<PAGE>

DATED: August __, 2001        Matthews Studio Electronics, Inc., a California
                              corporation


                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative


DATED: August __, 2001        Hollywood Rental Company, LLC, a Delaware limited
                              liability company

                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative


DATED: August __, 2001        Showbizmart.com, Inc., a Delaware corporation


                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative


DATED: August __, 2001        Matthews Studio Group Centers, Inc., a California
                              corporation


                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative


DATED: August __, 2001        HDI Holdings, Inc., a Kentucky corporation


                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative

                                       30
<PAGE>

DATED: August __, 2001        Four Star Holding, Inc., a Delaware corporation


                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative


DATED: August __, 2001        Matthews Acceptance Corporation, a California
                              corporation

                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative


DATED: August __, 2001        Four Star Lighting, Inc., a New York corporation

                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative


DATED:  August __, 2001       Matthews Studio Sales, Inc., a California
                              corporation, f/k/a ESS, Expendable Supply Stores,
                              Olesen, Four Star Los Angeles


                              /s/ Ellen K. Gordon
                              By   Ellen K. Gordon
                              Its  Estate Representative

                                       31
<PAGE>

                                  Schedule A
                                  ----------

MATTHEWS STUDIO EQUIPMENT GROUP, a California corporation, f/k/a Matthews Studio
Equipment, Inc.

MATTHEWS STUDIO ELECTRONICS, INC., a California corporation

HOLLYWOOD RENTAL COMPANY, LLC, a Delaware limited liability company

SHOWBIZMART.COM, INC., a Delaware corporation

MATTHEWS STUDIO GROUP CENTERS, INC., a California corporation

HDI HOLDINGS, INC., a Kentucky corporation

FOUR STAR HOLDING, INC., a Delaware corporation

MATTHEWS ACCEPTANCE CORPORATION, a California corporation

FOUR STAR LIGHTING, INC., a New York corporation

MATTHEWS STUDIO SALES, INC., a California corporation, f/k/a ESS, Expendable
Supply Stores, Olesen, Four Star Los Angeles

</TEXT>
</DOCUMENT>
