LAZARD FRERES & Co. LLC
  30 ROCKEFELLER PLAZA
  NEW York. N.Y. 10020
 TELEPHONE (212) 632-6000                                       New York

 FACSIMILE (212) 632-6060
                                                                August 13, 1999

Video Services Corporation
240 Pegasus Avenue
North vale, NJ 07647

Gentlemen:

     This letter confirms the retention of Lazard Freres & Co. LLC ("Lazard") as
sole  and  exclusive  investment  banker  to  Video  Services  Corporation  (the
"Company") in connection  with the possible sale of the Company,  an interest in
the Company or a subsidiary or division of the Company to another corporation or
business entity (a "Buyer"),  which transaction may take the form of a merger or
a sale of assets or equity or other  interests (the  "Transaction").  By signing
this letter,  we hereby accept our appointment as your  investment  banker under
the terms hereof.

     We will act with respect to the foregoing for a period of one (1) year from
the date hereof, subject to the following conditions:

1.   We will assist you as necessary  and  requested to analyze the business and
     financial  condition of the  Company,  formulate  appropriate  strategy and
     structural alternatives, advise you in connection with negotiations and aid
     in the consummation of the Transaction.

2.   If requested  by the Board of  Directors of the Company,  we will render an
     opinion  (the  "Opinion")  as  to  the  fairness  to  the  Company  or  its
     stockholders,  from a financial point of view, of the  consideration  to be
     received  pursuant to the  Transaction,  and will  furnish to the Company a
     letter  expressing  such  Opinion for  inclusion  in  material  that may be
     provided to the  stockholders  of the Company and filed with the Securities
     and Exchange  Commission.  The Opinion shall be in such  customary form and
     with such  qualifications  as determined  appropriate by Lazard,  including
     that Lazard has relied upon the information  furnished to it by the Company
     and  the  Buyer  or  publicly  available,  has  assumed  the  accuracy  and
     completeness of such information and has not assumed any responsibility for
     independent verification of such information.

     Lazard  will  not,  as part of the  Opinion  or any  other  aspect  of this
     engagement.  undertake any independent valuation or appraisal of any of the
     assets or liabilities of the Company or the Buyer,  or opine or give advice
     to the Board of Directors of the Company or management or  shareholders  of
     the  Company  on any issues of  solvency.  Any  solvency  opinion or issues
     addressed  will  be  the   responsibility   of  an   independent   solvency
     professional or  professionals  to be retained by the Board of Directors of
     the Company,  the Company or the Buyer. We will have no responsibility  for
     monitoring the work or opinions of such solvency professionals.

3.   In  connection  with  our  engagement,  you  will  furnish  or  cause to be
     furnished to us such current and historical financial information and other
     information  regarding  the business of the Company as we may request.  You
     represent and warrant to us that all of the foregoing  information  will be
     accurate and complete at the time it is furnished, and you agree to keep us
     advised of all material developments affecting the Company or its financial
     position.  You also agree to use all reasonable  efforts to cause the Buyer
     to  provide  us with  such  information  concerning  the  Buyer  as we deem
     necessary  for our  financial  review and analysis and the rendering of the
     Opinion.  The Company  understands  that in  rendering  services  hereunder
     Lazard will be relying, without independent  varification,  on the accuracy
     and  completeness of all information  that is or will be furnished to us by
     or on behalf of the  Company or any other party or  potential  party to any
     transaction contemplated by this letter, and Lazard will not in any respect
     be responsible for the accuracy or completeness thereof.

4.   In consideration of our services, you agree to pay us the following fees:

          (i)  A fee of $75,000 payable upon execution of this letter agreement.
               Such

          (ii) fee shall be credited  against any fee payable in Section 4 (ii);
               A success fee based on the aggregate consideration  calculated as
               set forth in Schedule I hereto with respect to a Transaction  (it
               being  understood  that in no event will the  success fee be less
               than  $500,000).  In the  event  that  there  is  more  than  one
               Transaction,  the fee schedule and minimum fee referred to in the
               prior sentence shall apply to each Transaction; and

          (iii)A fee of $100,000,  payable upon submission of any Opinion to the
               Board of Directors of the Company.

     For purposes  hereof,  the term "aggregate  consideration"  means the total
     amount of cash and the fair  market  value (on the date of  payment) of all
     other property paid or payable  (including amounts paid into escrow) to the
     Company or its  securityholders  in connection with the Transaction (or any
     related  transaction).  including  amounts  paid or  payable  in respect of
     convertible  securities,  warrants,  stock appreciation rights,  options or
     similar  rights,  whether or not vested,  plus the principal  amount of all
     indebtedness   for  borrowed   money  as  set  forth  in  the  most  recent
     consolidated  balance  sheet of the Company  prior to  consummation  of the
     Transaction  or, in the case of a sale of . assets,  all  indebtedness  for
     borrowed  money assumed by the Buyer.  Aggregate  consideration  shall also
     include  the  aggregate  amount  of any  dividends  or other  distributions
     declared by the Company after the date hereof,  other than normal quarterly
     cash  dividends,  and,  in case of a sale of  assets,  the net value of any
     current assets not sold by the Company.  If the aggregate  consideration is
     subject to increase by contingent  payments  related to future events,  the
     portion of our fee relating thereto shall be calculated by us in good faith
     and paid to us upon the consummation of a Transaction.

5.   Regardless of whether any Transaction is completed,  you agree to reimburse
     us for all our  expenses  incurred  in  connection  with  this  engagement.
     Generally  these  expenses  include travel costs,  document  production and
     other  expenses  of this type,  and will also  include  the fees of outside
     counsel and other  professional  advisors.  All  payments to be made by you
     pursuant  to this  agreement  shall be made  promptly  after such  payments
     accrue hereunder.

6.   No fee  payable  to any  other  person,  by you  or any  other  company  in
     connection  with the subject  matter of this  engagement,  shall  reduce or
     otherwise affect any fee payable hereunder.

7.   Simultaneously   herewith,   the  parties   hereto  are  entering  into  an
     indemnification letter (the "Indemnification  Letter") in the form attached
     hereto.  The  Indemnification  Letter  shall  survive  any  termination  or
     expiration of this agreement.

8.   Our engagement hereunder may be terminated by you or us at any time without
     liability or continuing  obligation  to you or us,  except that,  following
     such  termination  and any  expiration of this  agreement,  we shall remain
     entitled to any fees accrued pursuant to paragraph 4 but not yet paid prior
     to such termination or expiration, as the case may be, and to reimbursement
     of expenses  incurred prior to such termination or expiration,  as the case
     may be, as contemplated by paragraph 5 hereof. In addition,  in the case of
     termination by the Company and any expiration of this  agreement,  we shall
     remain  entitled to full  payment of all fees  contemplated  by paragraph 4
     hereof  in  respect  of  any   Transaction   announced  or  resulting  from
     negotiations  commenced  during the period  from the date  hereof  until 18
     months following such termination or expiration, as the case may be.

9.   Except as provided in paragraph 2, any financial  advice,  written or oral,
     rendered  by us  pursuant  to this  agreement  is  intended  solely for the
     benefit and use of management  and the Board of Directors of the Company in
     considering  the matters to which this agreement  relates,  and the Company
     agrees that such advice may not be disclosed  publicly or made available to
     third parties  without the prior written  consent of Lazard,  which consent
     shall not be unreasonably withheld.

10.  The provisions hereof shall inure to the benefit of and be binding upon the
     successors and assigns of the Company, Lazard and any other person entitled
     to indemnity under the Indemnification Letter.

11.  Lazard has been retained under this agreement as an independent contractor,
     and it is  understood  and  agreed  that this  agreement  does not create a
     fiduciary  relationship  between  Lazard  and the  Company  or the Board of
     Directors.

12.  This  agreement  and any  claim  related  directly  or  indirectly  to this
     agreement  (including any claim concerning advice provided pursuant to this
     agreement)  shall be governed and construed in accordance  with the laws of
     the  State of New York  (without  giving  regard  to the  conflicts  of law
     provisions  thereof).  No such  claim  shall be  commenced,  prosecuted  or
     continued  in any  forum  other  than the  courts  of the State of New York
     located in the City and County of New York or in the United States District
     Court for the Southern District of New York, and each of the parties hereby
     submits to the  jurisdiction  of such courts.  The Company hereby waives on
     behalf of itself and its  successors and assigns any and all right to argue
     that the choice of forum  provision  is or has become  unreasonable  in any
     legal proceeding.  Each of Lazard and the Company waives all right to trial
     by jury in any  action,  proceeding  or  counterclaim  (whether  based upon
     contract, tort or otherwise) related to or arising out of the engagement of
     Lazard   pursuant  to,  or  the  performance  by  Lazard  of  the  services
     contemplated by, this agreement.

     This agreement is the only agreement  between us and  superscedes any other
     arrangement  whether written or oral. If the foregoing correctly sets forth
     the  understanding  between us,  please so indicate on the enclosed  signed
     copy of this agreement in the space provided  therefor and return it to us,
     whereupon this agreement shall constitute a binding agreement between us.

                                                     Very truly yours,

                                                     LAZARD FRERES & CO. LLC


                                                     By/s/Barry W Ridings
                                                           Barry W. Ridings
                                                           Managing Director


     AGREED TO AND ACCEPTED
     as of the date first
     above written:

     Video Services Corporation


     By:/s/Louis H Siracusano
        Louis H. Siracusano
        Chief Executive Officer

<PAGE>

                                   SCHEDULE 1


     The following  table outlines  Lazard's M&A fee schedule.  The total fee is
calculated   by   multiplying   the  Total  Fee   percentage  by  the  Aggregate
Consideration. For Aggregate Consideration in an amount between values specified
in the table below, the fee will be determined by a straight-line  interpolation
calculation  (e.g.  $75mm would yield a 1.375% Total Fee %: 1.50% - [($75- $50)!
($100 -$50)] * [1.50% - 1.25% 1 = 1.375%)

         Aggregate Consideration            Total Fee %
         -----------------------            ------------
               ($ in millions)
               $25                              2.00%
               $50                              1.50%
               $100 or greater                  1.25%

<PAGE>


                                                              August 13, 1999


     Video Services Corporation
     240 Pegasus Avenue
     Northvale, NJ 07647


     Dear Sirs:

              In connection with our engagement to advise and assist you with

     the matters set forth in the engagement letter of even date herewith,

you and we are entering into this letter agreement.  It is understood and agreed
that in the event that Lazard Freres & Co. LLC or any of our members, employees,
agents,  affiliates  or  controlling  persons,  if any  (each of the  foregoing,
including  Lazard  Freres & Co.  LLC,  being  an  "Indemnified  Person")  become
involved in any  capacity  in any action,  claim,  proceeding  or  investigation
brought or threatened  by or against any person,  including  your  stockholders,
related  to,  arising  out of or in  connection  with our  engagement,  you will
reimburse  each  such  Indemnified  Person  for its  reasonable  legal and other
expenses  (including the cost of any  investigation and preparation) as and when
they are incurred in connection therewith.  You will indemnify and hold harmless
each  Indemnified  Person  from  and  against  any  losses,   claims,   damages,
liabilities or expense to which any Indemnified  Person may become subject under
any applicable federal or state law, or otherwise, related to, arising out of or
in  connection  with our  engagement,  whether or not any pending or  threatened
action, claim,  proceeding or investigation giving rise to such losses,  claims,
damages, liabilities or expense is initiated or brought by or on your behalf and
whether or not in connection  with any action,  proceeding or  investigation  in
which you or such Indemnified Persons are a party, except to the extent that any
such loss, claim, damage,  liability or expense is found by a court of competent
jurisdiction  in a  judgment  which  has  become  final in that it is no  longer
subject to appeal or review to have  resulted  primarily  from such  Indemnified
Person's  bad faith or gross  negligence.  You also  agree  that no  Indemnified
Person shall have any liability (whether direct or indirect, in contract or tort
or otherwise) to you or your security  holders or creditors  related to, arising
out of or in connection with our engagement  except to the extent that any loss,
claim,  damage or liability is found by a court of competent  jurisdiction  in a
judgment  which has  become  final in that it is no longer  subject to appeal or
review to have resulted  primarily from such  Indemnified  Person's bad faith or
gross  negligence.  If multiple  claims are brought against us in an arbitration
related to, arising out of or in connection with our engagement, with respect to
at least one of which such claims  indemnification is permitted under applicable
law, you agree that any  arbitration  award shall be  conclusively  deemed to be
based on  claims as to which  indemnification  is  permitted  and  provided  for
hereunder,  except to the extent the arbitration award expressly states that the
award,  or  any  portion  thereof,  is  based  solely  on a  claim  as to  which
indemnification is not available.

     If for any reason the foregoing indemnification is held unenforceable, then
you shall contribute to the loss, claim, damage,  liability or expense for which
such  indemnification is held unenforceable in such proportion as is appropriate
to reflect the relative benefits received,  or sought to be received, by you and
your  stockholders on the one hand and the party entitled to contribution on the
other hand in the matters contemplated by our engagement as well as the relative
fault of  yourselves  and such party with respect to such loss,  claim,  damage,
liability or expense and any other relevant equitable considerations.  You agree
that for the purposes  hereof the relative  benefits  received,  or sought to be
received,  by you and your  stockholders  and ourselves shall be deemed to be in
the same  proportion  as (i) the  total  value  paid or  proposed  to be paid or
received  by you or your  stockholders,  as the  case  may be,  pursuant  to the
transaction  (whether  or not  consummated)  for which we have been  engaged  to
perform  investment  banking services bears to (ii) the fees paid or proposed to
be paid to us in connection with such engagement;  provided,  however,  that, to
the  extent  permitted  by  applicable  law,  in no event  shall we or any other
Indemnified  Person be required to contribute  an aggregate  amount in excess of
the aggregate  fees actually paid to us for such  investment  banking  services.
Your  reimbursement,  indemnity and contribution  obligations  under this letter
shall be in addition to any liability which you may otherwise have, shall not be
limited by any rights we or any other Indemnified  Person may otherwise have and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of yourselves, ourselves, and any other Indemnified
Persons.

     You agree  that,  without  our prior  written  consent  (which  will not be
unreasonably withheld), you will not settle,  compromise or consent to the entry
of any judgment in any pending or  threatened  claim,  action,  or proceeding or
investigation  in  respect of which  indemnification  or  contribution  could be
sought  hereunder  (whether  or not we or any other  Indemnified  Persons are an
actual or potential party to such claim, action or proceeding or investigation),
unless such settlement,  compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim,  action
or proceeding or investigation.  No waiver,  amendment or other  modification of
this agreement shall be effective  unless in writing and signed by each party to
be bound thereby. This agreement and any claim related directly or indirectly to
this agreement  (including any claim concerning advice provided pursuant to this
agreement)  shall be governed and construed in  accordance  with the laws of the
State of New York  (without  giving  regard to the  conflicts of law  provisions
thereof). No such claim shall be commenced, prosecuted or continued in any forum
other than the courts of the State of New York located in the City and County of
New York or in the United States District Court for the Southern District of New
York,  and each of us hereby  submits to the  jurisdiction  of such courts.  You
hereby waive on behalf of yourself and your  successors  and assigns any and all
right to argue that the choice of forum provision is or has become  unreasonable
in any legal  proceeding.  We and you (on your own  behalf  and,  to the  extent
permitted by applicable law, on behalf of your stockholders and creditors) waive
all right to trial by jury in any action,  proceeding or  counterclaim  (whether
based upon  contract,  tort or  otherwise)  related  to or arising  out of or in
connection  with  our   engagement.   This  agreement  shall  remain  in  effect
indefinitely, notwithstanding any termination or expiration of our engagement.

                                                        Very truly yours,

                                                        LAZARD FRERES & CO. LLC


                                                        By/s/Barry W Ridings
                                                            Barry W. Ridings
                                                            Managing Director



 AGREED TO AND ACCEPTED
 as of the date first
 above written:

 Video Services Corporation

  By/s/Louis H Siracusano
      Louis H. Siracusano
      Chief Executive Officer