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                                                                   EXHIBIT 10.21
 
CHRISTENSEN, MILLER, FINK, JACOBS,
  GLASER, WEIL & SHAPIRO, LLP
2121 Avenue of the Stars
18th Floor
Los Angeles, California 90067-5010
(310) 553-3000

Attorneys for



                   SUPERIOR COURT OF THE STATE OF CALIFORNIA

                         FOR THE COUNTY OF LOS ANGELES



              Plaintiff,

      v.



              Defendant.
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) Case No.

                   STIPULATION OF SETTLEMENT OF CLASS ACTION
                             AND DERIVATIVE CLAIMS

         This Stipulation of Settlement (the "Stipulation"), dated as

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of April 14, 1995 is made and entered into by and among the following parties
(as defined further in (S)V hereof) to the above-entitled Litigation and the
derivative action defined below: (1) the Plaintiffs, on behalf of themselves and
each of the Settlement Class Members, Styles on Video, Inc. ("SOV" or the
"Company") Stockholders and derivatively on behalf of nominal defendant SOV, by
and through their counsel of record in Litigation; (ii) the Defendants, by and
through their counsel of record in the Litigation; and (iii) SOV as defendant,
by and through its counsel of record. The Stipulation is entered into by the
Settling Parties pursuant to the settlement memorialized in part, in a
transcript of proceedings before the Honorable Manual Real on April 7, 1995, and
pursuant to subsequent settlement conferences before his Honor. The Stipulation
is intended by the Settling Parties to fully, finally and forever resolve,
discharge and settle the Release Class and Derivative Claims (as defined
herein), upon and subject to the terms and conditions hereof.

I.   THE LITIGATION

     On and after December 13, 1994, the following actions (the "Litigation")
were filed in this Court on behalf of a class of purchasers of SOV common stock
during a defined period of time or derivatively on behalf of SOV:

The Class Actions

     Kassindorf v. Styles on Video, Inc., et al., Civil No. 9-8342-R(Ex)

     Robbins v. Styles on Video, Inc., et al., Civil No. 94-8362-R (Ex)

     Donald & Co. Securities, Inc. v. Styles on Video, Inc., et al., Civil No.
     94-8632-R (Ex)

     Ratner, et al. v. Styles on Video, Inc., et al., Civil No. 94-8719-R (Ex)

     On March 17, 1995, a Consolidated First Amended Class Action complaint for
Violations of the Federal Securities Laws (the "Class Complaint") was filed. The
Class Complaint alleges claims for violations of 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

     On April 21, 1995, upon this Stipulation of the parties, the Court ordered
the Robbins, Donald & Co. Securities, Inc., and Ratner complaints dismissed
without prejudice.

The Derivative Action

     On March 28, 1995 a derivative action (the "Derivative Complaint") entitled
Cohen v. De Vreese, Civil No. 95-1980-R (Ex)

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was filed with the Court. The Derivative Complaint alleged claims on behalf of
SOV for breach of fiduciary duty and abuse of control.

II.  PRETRIAL PROCEEDINGS AND DISCOVERY IN THE LITIGATION

           Discovery, Investigation and Research

     Plaintiffs' counsel have conducted formal and informal discovery in this
case.  Plaintiffs' counsel have (i) reviewed and analyzed extensive
documentation obtained informally during the Litigation; (ii) consulted with
experts in economics and accounting; (iii) reviewed and investigated defendants'
public filings, annual reports and other public statements made during the time
period at issue; and (iv) researched the applicable law with respect to the
claims asserted in the Class and Derivative Complaints and any potential
defenses to those claims.

III. DEFENDANTS' STATEMENTS AND DENIALS OF WRONGDOING AND LIABILITY

     The Defendants have denied and continue to deny each and all of the claims
and contentions alleged by the Plaintiffs on behalf of the Settlement Class
and/or SOV or SOV Stockholders in the Litigation. The Defendants expressly have
denied and continue to deny all charges of wrongdoing or liability against them
arising out of any of the conduct, statements, acts or omissions alleged, or
that could have been alleged, in the Litigation. The Defendants also have denied
and continue to deny, inter alia, the allegations that the Plaintiffs, the
Settlement Class or SOV or SOV Stockholders have suffered damage or that the
Plaintiffs, the Settlement Class, or SOV, or SOV Stockholders or any other
person or entity were harmed by the conduct alleged in the Class and Derivative
Complaints.

     Nonetheless, the Defendants have concluded that it is desirable that the
Litigation be fully and finally settled in the manner and upon the terms and
conditions set forth in this Stipulation and order to avoid further expense,
inconvenience and distraction, and to dispose of burdensome and protracted
litigation.  The Defendants also have taken into account the uncertainty and
risks inherent in any litigation, especially in complex cases like this
Litigation.  The Defendants have, therefore, determined that it is desirable and
beneficial to them that the Litigation be settled in the manner and upon the
terms and conditions set forth in this Stipulation.

IV.  CLAIMS OF THE PLAINTIFFS AND BENEFITS OF SETTLEMENT

     The Plaintiffs and their counsel believe that the claims asserted in the
Litigation have merit and that the evidence developed to date supports the
claims asserted.  However, Plaintiffs and counsel for the Plaintiffs recognize
and acknowledge 

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the expense and length of continued proceedings necessary to prosecute the
Litigation against the Defendants through trial and through appeals. Counsel for
the Plaintiffs also have taken into account the uncertain outcome and the risk
of any litigation, especially in complex actions such as this Litigation, the
difficulties and delays inherent in such litigation, as well as the financial
condition of the Defendants, including SOV. Counsel for the Plaintiffs believe
that the settlement set forth in the Stipulation confers substantial benefits
upon the Settlement Class, each of the Settlement Class Members, SOV and SOV
Stockholders. Based on their evaluation, counsel for the Plaintiffs have
determined that the settlement set forth in the Stipulation is in the best
interests of the Plaintiffs, the Settlement Class, each of the Settlement Class
Members, SOV and SOV Stockholders.

V.   TERMS AND STIPULATION AND AGREEMENT OF SETTLEMENT

     NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and amount the
Plaintiffs (for themselves and the Settlement Class Members, SOV and SOV
Stockholders) and the Defendants by and through their respective counsel or
attorneys of record, that subject to the approval of the Court, the Litigation
and the Released Class Claims and Released Derivative Claims shall be finally
and fully compromised, settled and released, and the Litigation shall be
dismissed on the merits and with prejudice, as to all Settling Parties, upon and
subject to the terms and conditions of the Stipulation, as follows:

     1.   Definitions

     As used in the Stipulation, the following terms have the meanings specified
below:

     1.1  "SOV" means Styles on Video, Inc.

     1.2  "SOV Stockholders" means the current holders of the common stock of
SOV.

     1.3  "SOV Stock" means each and all of the shares of common stock of SOV,
issued at any time.

     1.4  "Authorized Claimant" means any Settlement Class Member
whose claim for recovery has been allowed pursuant to the terms of the
Stipulation.

     1.5  "Claimant" means any Settlement Class Member who files a Proof of
Claim in such form and manner, and within such time, as the Court shall
prescribe.

     1.6  "Defendants" means Styles on Video, Inc., Guy De Vreese, Jerry Krant,
Katherine L. Duncan, Harold J. Meyers, H.J. Meyers & Co., Inc., Fredericus L.
Kolsteeg, Thomas N. Lenagh, Franck Verhaeghe and Ann Graham Ehringer.

     1.7  "Effective Date" means the first date by which all of the events and
conditions specified in (P) 8.1 of the Stipulation have 

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been met and have occurred.
     
     1.8  "Final" means: (i) The date of final affirmance on any appeal of the
Judgment, or the expiration of the time for a petition for a write of certiorari
to review the Judgment and, if certiorari be granted, the date of final
affirmance of the Judgment following review pursuant to that grant; or (ii) the
date of final dismissal of any appeal of the Judgment or the final dismissal of
any proceeding on certiorari to review the Judgment; or (iii) if no appeal is
filed, the expiration date of the time for the filing or noticing of any appeal
from the Court's Judgment, i.e., thirty (30) days after entry of the Judgment.
An appeal or petition for a writ of certiorari pertaining solely to any plan of
allocation and/or application for attorney's fees, cots or expenses, shall not
in any way delay or preclude the Judgment from becoming final.

     1.9  "Judgment" means the judgment to be rendered by the Court,
substantially in the form attached hereto as Exhibit "B."

     1.10 "Person" means an individual, corporation, partnership,
limited partnership, association, joint stock company, estate, legal
representative, trust, unincorporated association, government or any political
subdivision or agency thereof, and any business or legal entity and their
spouses, heirs, predecessors, successors, representatives, or assignees.

     1.11 "Plaintiffs" means Jack Kassindorf, Lynn Robbins, Dennis Ratner, Peter
Grela, Donald & Co. Securities, Inc,, Jerry Hatfield, Ronald Phillips and Neil
Cohen.

     1.12 "Plaintiffs' Settlement Counsel" means the law firm of Milberg Weiss
Bershad Hynes & Lerach LLP, William S. Lerach, Keith F. Park, Blake M. Harper,
600 W. Broadway, Suite 1800, San Diego, California, 92101-5050, Telephone (619)
231-1058; Weiss & Youngman, Kevin Yourman, 10940 Wilshire Blvd., Suite 2300, Los
Angeles, California, 90024, Telephone (310) 208-2800; and Abbey & Ellis, Mark C.
Gardy, 212 East 39th Street, New York, New York, 10016, Telephone (212)889-3700.
"Plaintiffs' Derivative Counsel" means the law firm of Stull, Stull & Brody,
Edward Dietrich, 10940 Wilshire Blvd., Suite 2300, Los Angeles, California,
90024, Telephone (310) 209-2468.

     1.13 "Plan of Allocation" means a plan or formula of allocation of the
Settlement Fund which shall separately be submitted by Plaintiffs' Settlement
Counsel to the Court, whereby the Settlement Fund shall be distributed to
Authorized Claimants.  Any Plan of Allocation is not part of the Stipulation.

     1.14 "Related Parties" means each of a Person's past or present directors,
officers, employees, partners, principals, agents (except does not include
securities brokers and dealers), insurer, co-insurers, reinsurers, controlling
shareholders, attorneys and accountants, auditors, advisors, personal or legal

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representatives, predecessors, successors, parents, subsidiaries, divisions,
joint ventures, assignees, spouses, heirs, associates, related or affiliated
entities, any members of their immediate families, or any trust of which any
Person is the settlor or which is for the benefit of any Person and/or member(s)
of his or her family, except that neither Thomas D. Leaper nor Kellogg &
Andelson (and its officers, shareholders and employees in their capacity with
Kellogg & Andelson) are Related Parties for purposes of the "Released Derivative
Claims" as defined in 1.16. In no event shall any language in this agreement be
interpreted to have waived any rights belonging to SOV against Kellogg &
Andelson (and its officers, shareholders and employees in their capacity with
Kellogg & Andelson) or Thomas D. Leaper.

     1.15 "Released Class Claims" means and includes any and all claims or
causes of action, including "Unknown Claims" as defined in 1.22 hereof, that
have been or could have been asserted by the Plaintiffs or the Settlement Class
Members, or any of them, against the Released Persons in the Litigation, which
are based upon or related to both the purchase and/or sale of SOV common stock
by the Plaintiffs or a Settlement Class Member during the Settlement Class
Period and the facts, transactions, events, occurrences, acts, disclosures,
statements, omissions or failures to act which were alleged or could have been
alleged in the Litigation or any other forum or based upon or related to the
conduct or resolution of the Litigation.

     1.16 "Released Derivative Claims" means and includes any and all claims or
causes of action, including unknown Claims as defined in 1.22 hereof, that have
been or could have been asserted by SOV against the Released Persons in the
Litigation, except Thomas D. Leaper and Kellogg & Andelson (and its officers,
shareholders and employees in their capacity with Kellogg & Andelson), who are
expressly not released by SOV, which are based upon or related to the facts,
transactions, events, occurrences, acts, disclosures, statements, omissions or
failures to act which were alleged or could have been alleged in the Litigation
or any other forum or based upon or related to the conduct or resolution of the
Litigation. "Released Derivative Claims" further means and includes any and all
claims or causes of action, including unknown Claims" as defined in 1.22 hereof,
that have been or could have been asserted by SOV Stockholders on behalf of SOV
against the Released Persons, except Thomas D. Leaper and Kellogg & Andelson
(and its officers, shareholders and employees in their capacity with Kellogg &
Andelson), who are expressly not released by SOV in this paragraph, which are
based upon or related to the facts, transactions, events, occurrences, acts,
disclosures, statements, omissions or failures to act which were alleged or
could have been
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alleged in the Litigation or based upon or related to the conduct or resolution
of the Litigation.

     1.17 "Released Persons" means each and all of the Defendants and their
Related Parties, except that Thomas D. Leaper and Kellogg & Andelson (and its
officers, shareholders and employees in their capacity with Kellogg & Andelson),
are expressly not released from the Released Derivative Claims as defined in
1.16 above).

     1.18 "Settlement Class" means all persons who purchased SOV common stock
during the period April 15, 1994 through and including December 28, 1994 (the
"Settlement Class Period"). Excluded from the class are the Released Persons,
members of the immediate family of any Released Person who is an individual, any
entity in which any Defendant has or had a controlling interest, current and
former directors and officers of SOV, and the legal representatives, heirs,
successors, or assigns of any such excluded person or entity. Also excluded from
the Settlement Class are those persons who timely and validly request exclusion
from the Settlement Class pursuant to the "Notice of Pendency and Settlement of
Class and Derivative Action" (substantially in the form of Exhibit A-1 hereto)
to be sent to the Settlement Class. The Parties hereto agree to the
certification of the Settlement Class for settlement purposes only.

     1.19 "Settlement Class Member" or "Member of the Settlement Class" means a
Person who falls within the definition of the Settlement Class as set forth in
1.18 of the stipulation.

     1.20 "Settlement Fund" means:

          (a) Two million two hundred twenty five thousand dollars ($2,225,000)
in cash contributed by SOV's insurers reimbursing SOV for its indemnity
obligations. Said sum shall be deposited with the Escrow Agent on or before ten
(10) business days after the Defendants and their insurers receive notice of
preliminary court approval of the Settlement.

          (b) A note for the principal amount of two hundred fifty thousand
dollars ($250,000) which, beginning on its execution date, shall bear simple
interest at 9% per annum from SOV payable to the Escrow Agent in three equal
installments on July 1, 1996, January 1, 1997, and July 1, 1997.

          (c) Seven hundred fifty thousand (750,000) warrants (the "Settlement
Warrants") to purchase SOV stock (as further defined and described in 2.1-2.4 
hereof);

          (d) Two hundred-fifty thousand (250,000) shares of SOV common stock
(the "Settlement Stock") which shall be contributed by Guy De Vreese to SOV and
by SOV to the Settlement Fund; and

          (e) The cancellation of De Vreese's option to purchase 150,000 shares
of SOV common stock.

     1.21 "Settling Parties" means, collectively, each of the 

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Defendants, and the Plaintiffs on behalf of themselves, the Members of the
Settlement Class, SOV and SOV Stockholders.

     1.22 "Unknown Claims" means any Released Class Claims or Released
Derivative Claims which the Plaintiffs, any Settlement Class Member, SOV or SOV
Stockholder does not know or suspect to exist in his, her or its favor at the
time of the release of the Released Persons pursuant to 1.15 and 1.16 above
which, if known by him, her or it, might have affected his, her or its
settlement with and release of the Released Persons, or might have affected his,
her or its decision not to object to this settlement. Solely with respect to any
and all Released Class Claims and Released Derivative Claims, the Settling
Parties stipulate and agree that, upon the Effective Date, the Plaintiffs, each
of the Settlement Class Members, SOV and SOV Stockholders shall be deemed to
have, and by operation of the Judgment shall have, waived and relinquished, to
the fullest extent permitted by law, the provisions, rights, and benefits of
1542 of the California Civil Code, which provides:

     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.

The Plaintiffs, each of the Settlement Class Members, SOV and SOV Stockholders,
upon the Effective Date, shall be deemed to have, and by operation of the
Judgment shall have waived any and all provisions, rights and benefits conferred
by any law of any state or territory of the United States, or principle of
common law, which is similar, comparable or equivalent to 1542 of the California
Civil Code. The Plaintiffs, each of the Settlement Class Members, SOV and SOV
Stockholders may hereafter discover facts in addition to or different from those
which he, she or it now knows or believes to be true with respect to the subject
matter of the Released Class Claims and Released Derivative Claims, but the
Plaintiffs, each of the Settlement Class Members, SOV and SOV Stockholders, upon
the Effective Date, shall be deemed to have, and by operation of the Judgment
shall have, fully, finally, and forever settled and released any and all
Released Class Claims and Released Derivative Claims, known or unknown,
suspected or unsuspected, contingent or non-contingent, whether or not concealed
or hidden, which now exist, or heretofore have existed upon any theory of law or
equity now existing or coming into existence in the future, including, but not
limited to, conduct which is negligent, intentional, with or without malice, or
a breach of any duty, law or rule, without regard to the subsequent discovery or
existence of such different or additional facts. Releasers acknowledge that the
foregoing waiver was separately bargained for

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and is an integral element of the settlement of which this release is a part.

          2.   The Settlement

     2.1 Pursuant to the Plan of Allocation to be approved by the Court, SOV
shall issue and distribute to Authorized Claimants, the Settlement Stock and the
Settlement Warrants to purchase a like number of shares of SOV Stock. Each
Settlement Warrant shall be exercisable for one share of SOV Stock at an
exercise price per share equal to the average market price of SOV Stock for the
twenty trading days preceding the date nine months after the recommencement of
trading of SOV common stock. The Settlement Warrants will expire five years from
the date of distribution of the Settlement Warrants to the Authorized Claimants
and shall each be redeemable by SOV at any time prior to exercise at five
dollars per warrant.

     2.2  The Settlement Warrants and Settlement Stock issued shall be either
registered or exempt from registration under the Securities Act of 1933
("Securities Act"), as amended, and shall be freely tradeable such that the
Settlement Warrants and Settlement Stock shall not constitute "restricted
securities" for purposes of the Securities Act of 1933.  The Settlement Warrants
and Settlement Stock shall be listed and tradeable on the same stock exchange as
SOV Stock.

     2.3 Ten (10) days before the scheduled date of the hearing for final
approval of this Stipulation, SOV shall provide Plaintiffs' Settlement Counsel
with the written opinion of outside counsel substantially to the effect that
subject to a fairness hearing on the terms and conditions of the issuance of all
securities, related approval by the Court, notice of the hearing and the right
of persons to be heard, and advisement to the Court that if the terms of
settlement are approved that the registration of securities will not be required
under the Securities Act by virtue of the Court's approval: (1) that the
Settlement Warrants and Settlement Stock will be exempt from registration under
5 of the Securities Act pursuant to 3(a)(10) of the Securities Act; and (2) that
the shares to be issued upon exercise of the Settlement Warrants will be validly
issued, fully paid and non-assessable. In addition, SOV shall at the same time
as the opinions are delivered, provide a memorandum prepared by outside counsel
setting forth the applicable legal requirements for registration or exemption of
the Settlement Stock and Settlement Warrants in each state where such
registration or exemption is so required. Plaintiffs' Settlement Counsel shall
provide SOV or its transfer agent with a payment list identifying each
Authorized Claimant who is to receive Settlement Warrants or Settlement Stock,
providing an address for such Person and the number of warrants to be issued to
such Person. SOV

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shall thereafter direct its transfer agent to distribute the Settlement Warrants
and Settlement Stock to Authorized Claimants at the address provided.  All costs
associated with the distribution of the Settlement Warrants and Settlement
Stock, including any fees charged by the transfer agent shall be borne by SOV.
The Settlement Warrants and Settlement Stock to be distributed to each
Authorized Claimant will be equitably adjusted such that no Authorized Claimant
will be issued a fraction of a Settlement Warrant and Settlement Stock, and any
Authorized Claimants who are allocated a fraction of fifty percent (50%) or less
will not be allocated a share or warrant for the same, and Authorized Claimants
who are allocated more than fifty percent (50%) will be allocated one share or
warrant for the same.  SOV shall direct its transfer agent to issue and
distribute the Settlement Warrants and Settlement Stock within 30 days of
receipt of the payment list to the Authorized Claimants in the amounts shown on
said list.

     2.4  Pursuant to the Plan of Allocation to be approved by this Court, the
Escrow Agent shall also distribute the cash portion of the Settlement Fund to
Authorized Claimants.

     2.5  Upon the Effective Date, each Defendant hereby releases, waives and
relinquishes any and all right, title and interest to or in the cash portion of
the Settlement Fund.

     2.6  Corporate Governance
          Regardless of whether SOV previously had policies or practices such as
those described below, it agrees for the purpose of this settlement, without
admitting any prior negligence, fault or culpable conduct, to the following:

          (a) With respect to SOV's recognition of revenues in its quarterly
statements, any revenue based upon non-recurring items shall be clearly and
prominently disclosed in the quarterly statements.

          (b)  At each regularly scheduled Board of Directors meeting following
each quarter end, SOV's chief financial officer or his designee shall provide a
report as to SOV's financial condition and prospects, including but not limited
to, a discussion of all reasons for material increases in expenses and
liabilities, if any, and material decreases in revenues and earnings, if any,
management plans for ameliorating or reversing such negative trends and the
success or failure of any such plans presented in the past.

          (c)  To the extent they do not already exist, within 30 days
after the entry of the Judgment, SOV's Board of Directors will adopt resolutions
or amendments to SOV's By-Laws or Articles of Incorporation to implement the
following, which shall remain in effect for a period of no less than five years
after such adoption;

               i)  Internal Audit Function

               SOV shall implement an internal audit function. 

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The Internal Auditor, who shall be appointed by the Board and who will report to
the Audit Committee at least twice a year, shall monitor SOV's internal control
environment, revenue recognition practices and its accounting practices with
respect to acquisitions. The Internal Auditor shall be responsible for devising
an Internal Audit Plan for each fiscal year which will be presented to the Audit
Committee of the board of directors. The Internal Audit Plan shall include
assessment of the internal controls environment in order to ensure that
appropriate financial reporting procedures are in place and being followed by
SOV employees. SOV shall be subject to an internal audit review each year. A
written report shall be prepared for each internal audit performed describing
the internal audit's findings, opinions and recommendations, if any. These
written reports shall be directed to the Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer and the Audit Committee of the Board
of Directors for their review, and, if necessary, remedial action.

               ii)  Revenue Recognition Policy

               The Chief Financial Officer shall be responsible for
ensuring that SOV's revenue recognition policy, which conforms to the
requirements of GAAP as currently in effect or as amended, is implemented and
utilized throughout the Company. The CFO shall report to the Board of Directors
on a semi-annual basis regarding the implementation and operation of this
policy. The CFO shall ensure that the SOV revenue recognition policy is
distributed to each SOV employee who records or reviews the recording of
revenue. Any questions regarding that policy, or its application, shall be
directed to SOV's CFO. The policy shall be adopted by SOV's Board of Directors
and provided to Plaintiffs' Settlement Counsel prior to the entry of the
Judgment.

               iii) Annual Audit of Financial Statements By Independent Auditor

               So long as the Company remains a publicly traded company,
the Company shall engage an independent auditing firm to perform an annual audit
of its financial statements. The annual audit will encompass a review of the
financial results reported by each SOV office to SOV headquarters. A written
report of the results of each annual audit, including any findings, opinions or
recommendations by the independent auditor shall be provided to the Chief
Executive Officer, the Chief Operating Officer, the Chief Financial Officer and
the Audit Committee of the Board of Directors for review and remedial action, if
necessary.

          In addition, each year the Company shall request that the independent
auditor perform specific tests of annual revenue including but not limited to,
testing to ensure that all contracts in excess of $500,000 are in compliance
with GAAP as then 

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in effect as part of its audit.

               (iv) Insider Trading Controls

               The Board of Directors will appoint a senior officer of the
Company who will be responsible for effecting compliance with Stock trading and
market communications policy. That individual will be designated the "Trading
Compliance Officer," and will be responsible for developing (with Board
involvement), presenting to the Board for approval, monitoring and updating
(with Board involvement and approval) a comprehensive program (the "Trading
Compliance Program") designed to ensure compliance with SOV's trading policies.
The Board will be responsible for direct oversight of the Trading Compliance
Program and the Trading Compliance Officer, and the outside director
(nonmanagement) members of the Board will have direct access to the Trading
Compliance Officer, including the opportunity to meet with the Trading
Compliance Officer outside the presence of any other member of management. At
least once yearly, the outside director members of the Board will receive a
report from the Trading Compliance Officer outside the presence of any other
members of management.

          Any director, officer or executive employee of SOV who possesses
material inside information, as defined by applicable SEC regulations and court
decisions, concerning SOV's financial results shall be prohibited by SOV from
trading in SOV securities from the fifteenth day of the last month of each
quarter through the close of trading on the day of SOV's public disclosure of
its financial results for that quarter; provided, however, that such restriction
shall not apply if SOV publicly discloses such material inside information
through a press release disseminated by means of a nationally recognized wire
service, including but not limited to Business Wire, Inc. or PR Newswire
Association, Inc. or through any non-confidential filing with the SEC, in which
event trading will be allowed on the day following SOV's public disclosure of
the material inside information.

               The Trading Compliance Program shall contain provisions with
respect to transactions in SOV's securities by directors and officers of SOV
which are no less restrictive than those set forth in the New York Stock
Exchange Listed Company Manual and shall take into account applicable federal
security laws and regulations.

          Failure to comply with the Company's trading policy will result in
appropriate sanctions, as determined by the Board, including disgorgement by the
individual to SOV of all profits from the transaction, termination, or other
appropriate disciplinary action.

          The Company shall use reasonable efforts to ensure that all directors
and officers file all trading forms required by 

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them to be filed by the SEC concerning trading by directors, officers, and
executive employees of SOV.

     2.7  The Escrow Agent shall invest the cash portion of the Settlement Fund
deposited pursuant to (P) 1.20 above in instruments backed by the full faith and
credit of the United States Government or fully insured by the United States
Government or an agency thereof and shall reinvest the proceeds of these
instruments as they mature in similar instruments at their then current market
rates.

     2.8  The Escrow Agent shall not disburse the Settlement Fund except as
provided in the Stipulation, or with the written agreement of counsel for
Defendants and Plaintiffs' Settlement Counsel or an order of the Court.

     2.9  Subject to further order and/or directions as may be made by the
Court, the escrow Agent is authorized to execute such transactions on behalf of
the Settlement Class Members as are consistent with the terms of the
Stipulation.

     2.10 All funds held by the Escrow Agent shall be deemed and considered to
be in custodia leqis of the Court, and shall remain subject to the jurisdiction
of the Court, until such time as such funds shall be distributed pursuant to the
Stipulation and/or further order(s) of the Court.

     2.11 (a) The Defendants and the Escrow Agent agree to treat the Settlement
Fund as being at all times a "qualified settlement fund" within the meaning of
Treas. Reg. Section 1.468B-1. In addition, the Escrow Agent and, as required,
the Defendants shall jointly and timely make such elections as necessary or
advisable to carry out the provisions of this 2.11, including the relationback
election" (as defined in Treas. Reg. Section 1.468B-1) back to the earliest
permitted date. Such elections shall be made in compliance with the procedures
and requirements contained in such regulations. It shall be the responsibility
of the Escrow Agent to timely and properly prepare, and deliver the necessary
documentation for signature by all necessary parties, and thereafter to cause
the appropriate filing to occur.

          (b) For the purpose of Section 468B of the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder, the
"administrator" shall be the Escrow Agent. The Escrow Agent shall timely and
properly file all informational and other tax returns necessary or advisable
with respect to the Settlement Fund (including without limitation the returns
described in Treas. Reg. Section 1.468B-2(k)). Such returns (as well as the
election described in 2.11 (a)) shall be consistent with this 2.11 and in all
events shall reflect that all taxes (including any interest or penalties) on the
income earned by the Settlement

                                    Page 13
<PAGE>
 
Fund shall be paid out of the Settlement Fund as provided in 2.11(c) hereof.

          (c) All (a) taxes (including any interest or penalties) arising with
respect to the income earned by the Settlement Fund, including any taxes or tax
detriments that may be imposed upon the Defendants with respect to any income
earned by the Settlement Fund for any period during which the Settlement Fund
does not qualify as a "qualified settlement fund" for federal or state income
tax purposes ("Taxes") and (b) expenses and costs incurred in connection with
the operation and implementation of this 2.11) (including, without limitation,
expenses of tax attorneys and/or accountants and mailing and distribution costs
and expenses relating to filing (or failing to file) the returns described in
this 2.11) ("Tax Expenses"), shall be paid out of the Settlement Fund; in all
events the Defendants and their insurers shall have no liability or
responsibility for the Taxes or the Tax Expenses. The Escrow Agent shall
indemnify and hold Defendants and their insurers harmless for Taxes and Tax
Expenses (including, without limitation, taxes payable by reason of any such
indemnification). Further, Taxes and Tax Expenses shall be treated as, and
considered to be, a cost of administration of the Settlement and shall be timely
paid by the Escrow Agent out of the Settlement Fund without prior order from the
Court and the Escrow Agent shall be obligated (notwithstanding anything herein
to the contrary) to withhold from distribution to class members any funds
necessary to pay such amounts including the establishment of adequate reserves
for any Taxes and Tax Expenses (as well as any amounts that may be required to
be withheld under Treas. Reg Section 1.468B-2(1) (2)); the Defendants and their
insurers are not responsible and shall have no liability therefor. The parties
hereto agree to Cooperate with the Escrow Agent, each other, and their tax
attorneys and accountants to the extent reasonably necessary to carry out the
provisions of this 2.11.

          (d) For the purpose of this 2.11, references to the Settlement Fund
shall include both the Settlement Fund and the Class Notice and Administration
Fund and shall also include any earnings thereon.

     2.12 In the event that the Stipulation is not approved, or is terminated,
canceled, or fails to become effective for any reason, the Settlement Fund
(including accrued interest) less expenses actually incurred or due and owing in
connection with the settlement provided for herein (not including attorneys'
fees), shall be refunded to counsel for Defendants as described in 8.4
below.

          3.   Notice And Administration Fund

     3.1  The Escrow Agent shall establish a "Notice and 

                                    Page 14
<PAGE>
 
Administration Fund," and shall deposit up to $100,000 out of the Settlement
Fund into it. The Notice and Administration Fund may be used by Plaintiffs'
Settlement Counsel to pay costs and expenses reasonably and actually incurred in
connection with providing notice to the Class, locating Class members,
soliciting Class claims, assisting with the filing of class, administering and
distributing the Settlement Fund to Authorized Claimants, processing Proofs of
Claim and Release and paying escrow fees and costs, if any. The Class Notice and
Administration Fund may also be invested and earn interest as provided for in
2.7 of this Stipulation. Any unused portion of the Class Notice and
Administration Fund shall be returned to the Settlement Fund.

          4.   Notice Order And Settlement Hearing

      4.1  Promptly after execution of the Stipulation, the Settling Parties
shall submit the Stipulation together with its Exhibits to the Court and shall
jointly apply for entry of an order (the "Notice Order"), substantially in the
form of Exhibit "A" hereto, requesting, inter alia, the preliminary approval of
the settlement set forth in the Stipulation, and approval for the mailing and
publication of the Notice, which shall include the general terms of the
settlement set forth in the Stipulation, the proposed Plan of Allocation, and
the date of the Settlement Hearing.

     4.2  The Settling Parties shall request that, after notice is given, the
Court hold the Settlement Hearing and finally approve the settlement of the
Litigation as set forth herein.  At or after the Settlement Hearing, Plaintiffs'
Settlement Counsel also will request that the Court approve the proposed Plan of
Allocation.

          5.   Releases

     5.1 Upon the Effective Date, as defined in 1.7, each of the Settlement
Class Members shall be deemed to have, and by operation of the Judgment shall
have, fully, finally, and forever released, relinquished and discharged all
Released Class Claims against the Released Persons, whether or not such
Settlement Class Member executes and delivers the Proof of Claim and Release.

     5.2 Upon the Effective Date, as defined in 1.7, SOV and SOV Stockholders in
their capacities as stockholders only, shall be deemed to have, and by operation
of the Judgment shall have, fully, finally and forever released, relinquished
and discharged all Released Derivative Claims against the Released Persons,
except Thomas D. Leaper and Kellogg & Andelson and its officers, shareholders
and employees.

     5.3 Upon the Effective Date, as defined in 1.7, each of the Released
Persons shall be deemed to have, and by operation of the Judgment shall have,
fully, finally, and forever released, relinquished and discharged each and all
of the Settlement Class Members, SOV, SOV Stockholders and counsel to the
Plaintiffs from
                                    Page 15
<PAGE>
 
all claims (including "Unknown Claims"), arising out of, relating to, or in
connection with the institution, prosecution, assertion or resolution of the
Litigation or the Released Class or Derivative Claims.

          6.   Administration And Calculation Of Claims, Final Awards And
               Supervision And Distribution Of Settlement Fund

     6.1  Plaintiffs' Settlement Counsel, or their authorized agents, acting on
behalf of the Settlement Class, and subject to such supervision and direction of
the Court as may be necessary or as circumstances may require, shall calculate
the claims submitted by Settlement Class Members and shall oversee distribution
of the Settlement Fund to Authorized Claimants.

     6.2 Upon the Effective Date and thereafter, and in accordance with the
terms of the Stipulation, the Plan of Allocation, or such further approval and
further order(s) of the Court as may be necessary or as circumstances may
require, the Settlement Fund shall be distributed to Authorized Claimants
subject to and in accordance with the following:

          (a) Within one hundred and twenty (120) days after the mailing of the
Notice or such other time as may be set by the Court, each Person claiming to be
an Authorized Claimant shall be required to submit to the claims administrator a
completed Proof of Claim and Release (substantially in the form of Exhibit A-2
hereto) and supported by such documents as specified in the Proof of Claim and
Release and as are reasonably available to the Authorized Claimant.

          (b) Except as otherwise ordered by the Court, all Settlement Class
Members who fail to timely submit a Proof of Claim and Release within such
period, or such other period as may be ordered by the Court, or otherwise
allowed, shall be forever barred from receiving any payments pursuant to the
Stipulation and the settlement set forth herein, but will in all other respects
be subject to and bound by the provisions of the Stipulation, the settlement and
releases contained herein, and the Judgment.

          (c)  The Settlement Fund shall be distributed to the Authorized
Claimants substantially in accordance with a Plan of Allocation to be described
in the Notice and approved by the Court.   

     6.3 The Defendants and their insurers shall have no responsibility for,
interest in, or liability whatsoever with respect to the Plan of Allocation, the
determination or calculation of claims.

     6.4 No Person shall have any claim against Plaintiffs' Settlement Counsel
or any claims administrator or other agent designated by Plaintiffs Settlement
Counsel or Defendants or their counsel or insurers and their counsel based on
the distributions

                                    Page 16
<PAGE>
 
made substantially in accordance with the stipulation and the settlement
contained herein, the Plan or Allocation, or further orders of the Court.

     6.5  It is understood and agreed by the Settling Parties that any proposed
Plan of Allocation of the Settlement Fund including, but not limited to, any
adjustments to an Authorized Claimant's Claim set forth therein, is not a part
of the Stipulation and is to be considered by the Court separately from the
Court's consideration of the fairness, reasonableness and adequacy of the
settlement set forth in the Stipulation, and any order or proceedings relating
to the Plan of Allocation shall not operate to terminate or cancel the
Stipulation or affect the finality of the Court's Judgment approving the
stipulation and the settlement set forth herein, or any other orders entered
pursuant to the Stipulation.

          7.   Representative Plaintiffs' Counsel's Attorneys' Fees And
               Reimbursement Of Expenses

     7.1  The Representative Plaintiffs or their counsel, including Derivative
Counsel, may submit an application or applications (the "Fee and Expense
Application") for distributions to them from the Settlement Fund for: (i) an
award of attorneys' fees of up to 33-1/3 percent of the Settlement Fund; plus
(ii) reimbursement of actual expenses and costs, including the fees of any
experts or consultants incurred in connection with prosecuting the Litigation,
plus any interest on such attorneys' fees, costs and expenses at the same rate
and for the same periods as earned by the Settlement Fund as may be awarded by
the Court.

     7.2 The attorneys' fees, expenses and costs, including the fees of experts
and consultants, as awarded by the Court, shall be paid to Plaintiffs'
Settlement counsel and Derivative Counsel from the Settlement Fund, as ordered,
within three (3) business days after the Court executes an order awarding such
fees and expenses and Plaintiffs' Settlement counsel and Derivative Counsel
shall thereafter allocate the attorneys' fees amongst Representative Plaintiffs'
Counsel in a manner in which they in good faith believe reflects the
contributions of such counsel to the prosecution and settlement of the
Litigation. In the event that the Effective Date does not occur, or the Judgment
or the Order making the fee and expense award is reversed or modified on appeal,
and in the event that the fee and expense award has been paid to any extent,
then Plaintiffs' Representative Counsel shall within five (5) business days from
receiving notice from Defendants' counsel or from a court of appropriate
jurisdiction, refund to the settlement Fund the fees, expenses and costs
previously paid to them from the Settlement Fund plus interest thereon at the
same rate as earned on 

                                    Page 17
<PAGE>
 
the Settlement Fund in an amount consistent with such reversal or modification.

     7.3 The procedure for the allowance or disallowance by the Court of any
applications by any of the counsel to the Representative Plaintiffs for
attorneys' fees, costs and expenses, including the fees of experts and
consultants, to be paid out of the Settlement Fund, are not part of the
settlement set forth in the Stipulation, and are to be considered by the Court
separately from the Court's consideration of the fairness, reasonableness and
adequacy of the settlement set forth in the Stipulation, and any order or
proceedings relating to the Fee and Expense Application, or any appeal from any
order relating thereto or reversal or modification thereof, shall not operate to
terminate or cancel the Stipulation, or affect or delay the finality of the
Judgment approving the Stipulation and the settlement of the Litigation set
forth herein.

          8.   Condition Of Settlement, Effect Of Disapproval, Cancellation Or
               Termination

     8.1  The Effective Date of the Stipulation shall be conditioned on the
occurrence of all of the following events:

          (a) Defendants have timely made their contributions to the Settlement
Fund as required by 1.20 above;

          (b) The Court has entered the Notice Order, as required by (P) 4,
above;

          (c) Plaintiffs' Settlement Counsel and Derivative Counsel and
Defendants counsel shall not have exercised their right to terminate the
Stipulation under the circumstances set forth in Exhibit C which shall either
not be filed with the Court or, if filed, shall be filed and maintained under
seal;

          (d) The Court has entered the Judgment, or a judgment substantially in
the form of Exhibit "B" ; and

          (e) The Judgment has become Final, as defined in 8.1, above.

     8.2  If all of the conditions specified in 8.1 are not met, then the
Stipulation shall be canceled and terminated unless Plaintiffs' Settlement
Counsel and Derivative counsel and counsel for Defendants mutually agree in
writing to proceed with or amend the Stipulation.

     8.3 In the event that the Stipulation is not approved by the Court or the
settlement set forth in the Stipulation is terminated or fails to become
effective in accordance with its terms, the Settling Parties shall be restored
to their respective positions in the Litigation as of November 15, 1994. In such
event, the terms and provisions of the Stipulation, with the exception of 
8.2-8.3, 9.2-9.3, and 9.9-9.12 herein, shall have no further

                                    Page 18
<PAGE>
 
force and effect with respect to the Settling Parties and shall not be used in
this Litigation or in any other proceeding far any purpose and any Judgment or
Order entered by the Court in accordance with the terms of the Stipulation shall
be treated as vacated, nunc pro tunc.

     8.4 In the event the Stipulation shall terminate, or be canceled, or shall
not become effective for any reason, within five (5) business days after written
notification of such event is sent by counsel for Defendants or Plaintiffs
Settlement Counsel to the Escrow Agent, the Settlement Fund (including accrued
interest), plus any amount then remaining in the Notice and Administration Fund
(including accrued interest), legs expenses and any costs which have either been
disbursed pursuant to 3.1 hereto, or are determined to be chargeable to the
Notice and Administration Fund, shall be refunded by the Escrow Agent to counsel
for the Defendants and their insurers pursuant to written instructions from
counsel for the Defendants and their insurers. In such event the Defendants and
their insurers shall be entitled to any tax refund owing to the Settlement Fund.
At the request of the Defendants, the Escrow Agent or its designee shall apply
for any such refund and pay the proceeds, after deduction of any fees or
expenses incurred in connection with such application(s) for refund, to the
Defendants and their insurers in proportion to their respective contributions.
Defendants and their insurers shall each receive the amount that each
contributed to the settlement fund plus accrued interest and less the pro rata
share of costs disbursed pursuant to 3.1 hereto.

          9.   Miscellaneous Provisions

     9.1  The Settling Parties (a) acknowledge that it is their intent to
consummate this agreement; and (b) agree to reasonably cooperate to the extent
necessary to effectuate and implement all terms and conditions of the
Stipulation and to exercise their best efforts to accomplish the foregoing terms
and conditions of the Stipulation.

     9.2  The parties intend this settlement to be a final and complete
resolution of all disputes between them with respect to the Litigation.
Further, Defendants agree that the amounts paid to the Settlement Fund and the
other terms of the settlement reflect a good faith settlement of the claims
asserted by the Plaintiffs, reached voluntarily after consultation with
experienced legal counsel.

     9.3  Neither the Stipulation nor the settlement, nor any act performed or
document executed pursuant to or in furtherance of the Stipulation or the
settlement: (i) is or may be deemed to be or may be used as an admission of, or
evidence of, the validity of any Released Class or Derivative Claim, or of any
wrongdoing or 

                                    Page 19
<PAGE>
 
liability of the Released Persons; or (ii) is or may be deemed to be or may be
used as an admission of, or evidence of, any fault or omission of any of the
Released Persons in any civil, criminal or administrative proceeding in any
court, administrative agency or other tribunal, other than in such proceedings
as may be necessary to consummate or enforce the stipulation. The settlement or
the Judgment. Notwithstanding any other provision hereof, the Released Persons
may file the Stipulation and/or the Judgment in any action that may be brought
against them in order to support a defense or counterclaim based on principles
of res judicata, collateral estoppel, release, good faith settlement, judgment
bar or reduction or any other theory of claim preclusion or issue preclusion or
similar defense or counterclaim.

     9.4  All of the Exhibits to the Stipulation are material and integral parts
hereof and are fully incorporated herein by this reference.

     9.5  The Stipulation may be amended or modified only by a written
instrument signed by or on behalf of all Settling Parties or their respective
successors-in-interest.

     9.6  The Stipulation and the Exhibits attached hereto constitute the entire
agreement among the parties hereto and no representations, warranties or
inducements have been made to any party concerning the Stipulation or its
Exhibits other than the representations, warranties and covenants contained and
memorialized in such documents.

     9.7 Plaintiffs' Settlement Counsel and Derivative Counsel, on behalf of the
Settlement Class, SOV and SOV Stockholders, are expressly authorized by the
Plaintiffs to take all appropriate action required or permitted to be taken by
the Settlement Class, SOV or SOV Stockholders pursuant to the Stipulation to
effectuate its terms and also are expressly authorized to enter into any
modifications or amendments to the Stipulation on behalf of the Settlement
Class, SOV or SOV Stockholders which they deem appropriate.

     9.8  Each counsel or other Person executing the Stipulation or any of its
Exhibits on behalf of any party hereto hereby warrants that such person has the
full authority to do so.

     9.9  The Stipulation may be executed in one or more counterparts.  All
executed counterparts and each of them shall be deemed to be one and the game
instrument.  Counsel for the parties to the Stipulation shall exchange among
themselves original signed counterparts and a complete set of original executed
counterparts shall be filed with the Court.

     9.10 The Stipulation shall be binding upon, and inure to the benefit of,
the successors and assigns of the parties hereto.

     9.11 The Court shall retain jurisdiction with respect to 

                                    Page 20
<PAGE>
 
implementation and enforcement of the terms of the Stipulation, and all parties
hereto submit to the jurisdiction of the Court for purposes of implementing and
enforcing the settlement embodied in the Stipulation.

     9.12 The Stipulation and the Exhibits hereto shall be considered to have
been negotiated, executed and delivered, and to be wholly performed, in the
State of California, and the rights and obligations of the parties to the
stipulation shall be construed and enforced in accordance with, and governed by,
the internal, substantive laws of the State of California without giving effect
to that State's choice of law principles.

          IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to
be executed, by their duly authorized attorneys.

                                    Page 21