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                                                                   Exhibit 10.17

AGREEMENT made the 20th day of January 1999 BETWEEN the INDUSTRIAL DEVELOPMENT
---------                               -------
AGENCY (IRELAND) having its principal office at Wilton Park House, Wilton
Place, Dublin 2 ("IDA") of the first part MODUS MEDIA INTERNATIONAL
KILDARE having its registered office at..................("the Company")
of the second part and MODUS MEDIA INTERNATIONAL HOLDINGS, INCORPORATED
having its registered office at..................("the Promoters") of
the third part.

WHEREAS:
-------

A.   The Company which is controlled by the Promoters has been carrying on at
     Kildare an industrial undertaking for the production of software/hardware
     assembly, on demand printing and technology services in accordance with
     proposals furnished to IDA by the Promoters has applied to IDA for
     financial assistance towards the cost of expanding its operation which is
     intended to give employment to 200 persons over a revised base level of 494
     jobs ("the Undertaking");

B.   The Company and the Promoters having made the necessary enquiries
     are satisfied and represent to IDA that to the best of their belief there
     will be available to the Undertaking the relevant resources required for
     its proper commercial expansion and efficient operation;

C.   The Promoters have represented to IDA that the Undertaking will
     contribute to the development of the Irish economy.

NOW IT IS HEREBY WITNESSED that in consideration of the Company implementing
------------------------
the said proposals and carrying on the Undertaking in accordance with
this Agreement, IDA agrees to grant to the Company the sum of 1,800,000
Irish Pounds or the aggregate of 9,000 Irish Pounds for each job created
over a base level of 494 in the Undertaking in accordance with Paragraph 7
of the Second Schedule hereto whichever is the lesser ("the grant")
subject to the following terms and conditions including those contained
in the Schedules hereto:




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1.  DEVELOPMENT OF THE UNDERTAKING:
    ------------------------------
The development of the Undertaking and in particular the provision of
employment shall be substantially in accordance with the particulars given
in the said proposals.

2.  CONTROL OF THE COMPANY:
    ----------------------
The controlling interest in the Company shall be held directly or indirectly
by the Promoters unless otherwise agreed to in writing by IDA.

3.  PROVISION OF ELIGIBLE ASSETS:
    ----------------------------
The provision of the fixed assets shall be as set forth in the First Schedule.

4.  PROMOTERS INVESTMENT:
    --------------------
The Company shall procure or provide for the purposes of the Undertaking:-
4.1  Additional Equity Equivalent of IR(pounds) 1,800,000;
     For the purposes of this Agreement "Equity Equivalent" shall mean the
     total monies obtained by the Company as follows:-
     4.1.1  cash received by the Company from the Promoters in consideration
            for the issue at par of fully paid-up Ordinary Shares in the
            Company; and/or
     4.1.2  retained earnings of the Company capitalised at par as fully
            paid-up Ordinary Shares in the Company; and/or
     4.1.3  retained earnings of the Company transferred to a special non-
            distributable reserve account which shall be maintained at the
            appropriate level for the duration of this Agreement; and/or
     4.1.4  loans from the Promoters on the following terms and conditions
            ("Subordinated Loans"):-
            4.1.4.1  that no interest on such loans shall be payable by the
                     Company except out of profits which would otherwise
                     be available for dividend;
            4.1.4.2  that no such loans shall be repaid except out of
                     profits of the Company which would otherwise be
                     available for dividend or out of a new loan obtained
                     on the same terms for this purpose, or out of the proceeds
                     of a new issue at par of fully paid-up Ordinary
                     Shares of the Company made for this purpose;
            4.1.4.3  that where any such loans are repaid out of profits,
                     there shall be transferred out of profits which
                     would otherwise




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              have been available for dividend to a special non-distributable
              reserve account a sum equal to the amount of the loan repaid,
              and that there shall be no reduction in the amount of such
              special non-distributable reserve account during the term of
              this Agreement;
     4.1.4.4  that where any such loans are repaid out of a new loan obtained
              for this purpose, the new loan shall be subject to these
              conditions as if it were the original loan;
     4.1.4.5  that in the event of the winding up of the Company the amount
              of any such loans still outstanding shall be subordinated to
              the claims of the unsecured creditors of the Company;

     PROVIDED ALWAYS that not less than 25% of the Equity Equivalent shall be
     ---------------
     Ordinary Shares in the Company as specified at Clauses 4.1.1 and/or 4.1.2
     above and PROVIDED FURTHER that retained earnings utilised as Equity
              -----------------
     Equivalent as aforesaid shall not include any sum received in respect of
     the grant or derived from a revaluation of the fixed assets of the Company.

4.2  Such further sums, including working capital, as may be required for
     the Undertaking.
4.3  The total amount paid from the grant shall at no time exceed the total
     amount of Equity Equivalent of which at all times not less than 25% shall
     comprise an amount for issued Ordinary Shares in the Company as aforesaid.


5.   PLANNING PERMISSION AN PREVENTION OF POLLUTION:
     ----------------------------------------------
The Company shall:-
5.1  obtain all relevant permissions prescribed by Local and/or National
     Authorities and shall comply with all requirements of such permissions and
     with all Building Regulations and Statutory requirements (if any)
     required for the Undertaking;
5.2  comply with all statutory requirements and other requirements which IDA
     reasonably considers to be necessary in relation to environmental
     controls and the prevention of pollution.




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6.  GUARANTEES:
    -----------
The Company shall not give a guarantee in respect of any borrowings other
than borrowings for the purpose of the Undertaking.

7. INSURANCE:
   ----------
The Company shall:-
7.1  keep all the assets insured to their full cost of reinstatement against
     loss or damage by fire and explosion;
7.2  obtain on commencement of production and in accordance with good
     commercial practice Consequential Loss Insurance to adequately indemnify
     the Company against losses and costs resulting from fire and explosion, and
7.3  make arrangements to ensure that IDA will be notified of any failure
     to renew the insurance specified at Clauses 7.1 and 7.2 hereof and also of
     any change in such insurance.


8.  RESTORATION OF FIXED ASSETS:
    -----------------------------
If there should be damage to or loss of fixed assets including buildings
under construction through fire or explosion or any other cause the insurance
or other compensation received by the Company shall be used forthwith to
restore to the reasonable satisfaction of IDA  the property so damaged or
lost and in the event of such compensation being insufficient for that
purpose the Company shall make good the deficiency out of its own funds.


9.  NON-DISTRIBUTION OF THE GRANT:
    ------------------------------
The Company shall not distribute by way of dividend on the share capital
of the Company or otherwise any sum received in respect of the grant.


10. ROYALTIES OR SIMILAR PAYMENTS:
    ------------------------------
The Company may only make royalty or similar payments on the following
terms and conditions:-
10.1  that to the extent that the said royalty and/or similar payments
      exceed 5% of the Company's net annual sales, such excess shall not be
      payable except out of profits of the Company which would otherwise be
      available for dividend; and
10.2  that in the event of winding up of the Company the amount of any
      such excess accrued or accruing for payment but unpaid shall be




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       subordinated to the claims of the unsecured creditors, including
IDA, of the Company;
PROVIDED ALWAYS that the  provisions of this Clause shall not apply to
---------------
bona fide third party arms length transactions.


11.  PAYMENT OF THE GRANT:
     ---------------------
11.1 The grant shall be paid subject to the following terms and conditions
     and the Company shall provide evidence satisfactory to IDA:-
     11.1.1  that the Company has been properly incorporated and that its
             Memorandum and Articles of Association empower the Company to
             implement this Agreement;
     11.1.2  that the Company has obtained suitable premises for the Undertaking
             and has title acceptable to IDA to all land and buildings required
             for the Undertaking;
     11.1.3  that the Company is in compliance with all the terms and
             conditions of its property agreements, if any, with IDA;
     11.1.4  that the necessary arrangements have been made for the provision of
             all capital required for the Undertaking as specified at Clause 4
             hereof;
     11.1.5  that all Planning Permissions as aforesaid have been obtained and
             complied with;
     11.1.6  that all requirements for the control of the environment
             and prevention of pollution as aforesaid have been obtained and
             complied with;
     11.1.7  that insurance arrangements as aforesaid have been made;
     11.1.8  that the Company has obtained a tax number in the relevant tax
             district; that it is up to date in its tax affairs with the Revenue
             Commissioners and prior to payment from the grant it shall submit
             an up-to-date tax clearance certificate from the Revenue
             Commissioners;
     11.1.9  that the Company has complied up-to-date with all the provisions of
             this Agreement;
11.2  Subject to compliance with all the relevant terms of this Agreement
      the grant shall be paid to the Company in accordance with the arrangements
      set forth in the Second Schedule hereto




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12.   ACHIEVEMENT OF PROJECTED PERFORMANCE:
      ------------------------------------
            Schedule of Grant Drawdown for the Undertaking
            ----------------------------------------------

                      Base Year     Year 1      Year 2      Year 3
                      ---------     ------      ------      ------
      Period           Ending       Ending      Ending      Ending
      ------           ------       ------      ------      ------
                     31.12.1998    31.12.1999  31.12.2000  31.12.2001
                     ----------    ----------  ----------  ----------

Cumulative Jobs to be   494           609         694         694
created

Maximum Cumulative       -          517,000    1,417,000   1,800,000
Grant Drawdown IR(pounds)



Unless otherwise agreed to by IDA and notwithstanding any other provision in
this Agreement:

12.1  The aggregate amount payable from the grant in each period set out above
      shall not exceed the maximum amount specified for that period.
12.2  The maximum grant drawdown in the period to the end of Year 1 shall be
      available subject to compliance with the provisions of this Agreement.
12.3  Subject to compliance as aforesaid, payment from the maximum cumulative
      grant drawdowns in the periods to the end of Years 2 and 3 respectively,
      shall be conditional upon the cumulative number of Jobs (as set out above)
      being created by the immediately preceding end of year; in the event of
      such number of Jobs not having been created by the relevant date no part
      of the grant drawdown for the following year will be paid to the Company
      until such number of Relevant Jobs has been created.
12.4  On or after 31 December 2001 the Company and IDA shall review the
      development of the Undertaking to that date with particular reference to
      the creation of Jobs in the Company. Should the total number of jobs
      existing in the Company at the date of review be less than 694, unless
      otherwise agreed to by IDA and notwithstanding any other provision in this
      Agreement, all monies paid from the grant on foot of this Agreement in
      excess of IR(pounds) 9,000 per Job multiplied by the number of Jobs (in
      excess of 494 Jobs) existing in the Company at the date of review shall
      be repayable on demand to IDA by the Company (and in the event of default



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      by the Company in making repayment shall be repayable on demand by the
      Promoters) within one month from date of demand.
      For the purposes of this Clause "Jobs" shall mean full-time permanent
      Jobs existing in the Company at the relevant date.

13.   FURNISHING OF INFORMATION:
      -------------------------
13.1  The Company shall permit the officers and agents of IDA to inspect the
      fixed assets at all reasonable times during the term of this Agreement and
      shall furnish to IDA promptly whenever required to do so by IDA all such
      information and documentary evidence as IDA may from time to time
      reasonably require to vouch compliance by the Company with any of the
      terms and conditions of this Agreement.
13.2  The Company acknowledges the right of IDA to consult with relevant third
      parties to obtain any information it requires relating to the affairs of
      the Company and/or the Promoters prior to any payment from the grant and
      to withhold grant payments in the event of such information being
      unsatisfactory to IDA. The Company and/or the Promoters hereby undertake
      to instruct such third parties to furnish any such information to IDA, on
      request.
13.3  The Company and/or the Promoters shall submit Annual Audited Accounts
      satisfactory to IDA for the duration of this Agreement within six months
      from the end of the relevant financial year.

14.   NOTICES:
      -------
14.1  The Certificate of an Officer of IDA certifying any decision of IDA taken
      or made hereunder shall be conclusive evidence of any such decision.
14.2  Any notice by IDA to the Company or the Promoters or vice-versa under this
      Agreement shall be sent by registered post to the Registered Office of the
      party for whom it is intended.

15.   CONSENTS:
      --------
15.1  Circumstances requiring the consent, approval or permission of any party
      hereto shall be interpreted to mean that such consents, approvals or
      permissions shall not be unreasonably withheld. This provision shall not
      apply to the provisions of Clause 2 hereof.

15.2  Any variation or modification of any of the terms or conditions herein
      made at the request of or with the agreement of the Company and with the
      consent of IDA shall not in any way determine or prejudice the



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      Promoters' liability hereunder PROVIDED that the financial amount of the
      Promoters' said liability shall not be increased without its express
      agreement in writing.

16.  TERMINATION OF AGREEMENT:
     ------------------------
      This Agreement shall terminate five years from the date of the last
      payment from the grant.

17.   CANCELLATION AND REVOCATION OF THE GRANT:
      ----------------------------------------
      IDA may stop payment of the grant and/or revoke and cancel or reduce the
      grant or so much thereof as shall not then have been actually paid to the
      Company if any one or more of the following events occur:-
17.1  if there be any breach of the terms or conditions of Clause 2 hereof
      and/or Paragraph 2 of the Third Schedule hereto;
17.2  if the Company should to a material extent be in breach of any of the
      terms and conditions of this Agreement other than those specified in
      Clause 17.1 and having failed to establish to the reasonable satisfaction
      of IDA that such breach was due to force majeure shall not have rectified
      such breach within 30 days after written notice thereof has been served on
      the Company;
17.3  if an order is made or an effective resolution is passed
      for the winding up of the Company;
17.4  if a Receiver or an Examiner is appointed over any of the property of the
      Company or if a distress or execution is levied or served upon any of the
      property of the Company and is not paid off within 30 days;
17.5  if the Company should cease to carry on the Undertaking.

If the grant be revoked the Company and/or the Promoters shall repay to IDA on
demand all sums received in respect of the grant, and if the grant be reduced
the Company and/or the Promoters shall repay to IDA on demand all sums received
in excess of the amount of the reduced grant and in either case in default of
such repayment such sums shall be recoverable by IDA from the Company and/or the
Promoters as a joint and several simple contract debt.

18.   GOVERNING LAW:
      -------------
This Agreement shall be governed by and be construed in accordance with the Laws
of Ireland and the parties hereto expressly and irrevocably submit to the
jurisdiction of the Irish Courts and the Promoters hereby irrevocably appoint
the



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Company to be its attorney for the purpose of accepting service on its behalf of
any notice, document or legal process with respect to the Promoters' obligations
pursuant to the provisions of Clause 17 (and/or Clause 12) hereof and service of
any such document on such attorney shall be deemed for all purposes to be good
service.



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                                FIRST SCHEDULE
                                --------------

                PROVISIONS OF FIXED ASSETS FOR THE UNDERTAKING
                ----------------------------------------------

1.            FIXED ASSETS                    ESTIMATED COSTS
                                                    IR(pounds)
1.1           Buildings and Modifications         3,360,000
1.3           New Machinery and                   9,337,000
              Equipment
              Total                              12,697,000

2.   The Company shall:-

2.1  have the construction of the said proposed factory buildings and building
     modifications for the Undertaking commenced to the satisfaction of IDA not
     later than 1 April 1999 and completed in a proper and satisfactory manner
     not later than 31 December 2000;

2.2  Purchase and have installed in a proper and workmanlike manner ready for
     operation in the said factory buildings all machinery and equipment
     suitable in all respects required for the Undertaking by 31 December 2000;

2.3  have commenced production in the Undertaking by 31 December 1998.



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                                SECOND SCHEDULE
                                ---------------
                ADDITIONAL TERMS AND CONDITIONS RELATING TO THE
                -----------------------------------------------
                               EMPLOYMENT GRANT
                               ----------------


1.  The grant shall be payable in respect of the total number of such jobs
    as are created in the Company (in accordance with paragraph 7 of this
    Schedule) provided such jobs are occupied by EU citizens who are subject to
    Irish taxation.


2.  A job for the purposes of grant shall be a permanent full time position
    in the Undertaking and shall be deemed to be created when a contract of
    employment has been signed and payment has been made to an employee in
    respect of work done in the job.


3.  The grant in respect of each job created  shall be paid in two moieties.
    The first moiety shall be payable when the job has been created and the
    second moiety shall be payable when permanent full-time employment in the
    job for a twelve month period has been completed.


4.  Claims for payment of an instalment from the grant may be submitted
    monthly and shall be certified by the Company's Auditors in an agreed
    format.


5.  The Company shall also submit details of the Company's employment history
    to date; this shall give such particulars as IDA may require in a format
    satisfactory to IDA.


6.  IDA may at any time within five years from the date of payment of the
    first moiety of the grant in respect of any job revoke the grant paid in
    respect of that job if the job should become vacant and remain vacant for
    a period in excess of six calendar months.



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7.
Job Description     Base Year   Year 1   Year 2
                      1998       1999     2000

Administration and    156        189      218
Support               338        420      476
Operations            494        609      694
Total                 ---        ---      ---




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IN WITNESS WHEREOF the parties hereto have affixed their respective seals the
day and year first herein written.



PRESENT when the Seal of the
INDUSTRIAL DEVELOPMENT AGENCY (IRELAND)
was affixed hereto:-


                              /s/ illegible signature
                              ------------------------
                              AUTHORISED OFFICER


                              /s/ illegible signature
                              ------------------------
                              AUTHORISED OFFICER



PRESENT when the Seal of
MODUS MEDIA INTERNATIONAL KILDARE
was affixed hereto:-



                              /s/ illegible signature
                              ------------------------
                              Director


                              /s/ illegible signature
                              ------------------------
                              Director



PRESENT when the Seal of
MODUS MEDIA INTERNATIONAL HOLDINGS, INCORPORATED
was affixed hereto:-


                              /s/ Terence M. Leahy
                              ------------------------
                              Director



                              /s/ illegible signature
                              ------------------------
                              Sr Vice President and
                              Chief Financial Officer



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