AGREEMENT

                                 by and between
                  NIMBUS CD INTERNATIONAL, INC., NIMBUS MANUFACTURING INC.
                                       and
                       Stream International Holdings Inc.
                            dated as of 28 March 1997

                                TABLE OF CONTENTS

                                                                Page

                                    ARTICLE I
                        MANUFACTURER AND MARKETING OF CDs
1.1   Requirements of NMI                                         5
1.2   Minimum Quantity                                            6
1.3   Compensatory Payments and Rebate Payments                   7
1.4   Prices                                                      8
1.5   Payment                                                     8
1.6   Forecast                                                    9
1.7   Orders                                                      9
1.8   Input Materials                                             9
1.9   Production and Delivery                                     9
1.10  Quality                                                     10
1.11  Defective Copies                                            10
1.12  Technical and Sales Support and Cooperation                 11

                                   ARTICLE II
                                   FACILITIES
2.1   [Intentionally Deleted]                                     11
2.2   Capacity                                                    11
2.3   Security                                                    11
2.4   Output of Designated Facility                               12
2.5   Operating Committee                                         12

                                   ARTICLE III
                      NEW TECHNOLOGY AND NON-U.S. SERVICES
3.1   New Services                                                12
3.2   New Media and Processes                                     12

                                   ARTICLE IV
                         RESTRICTIONS ON CERTAIN CONDUCT
4.1   Nondisclosure                                               13
4.2   No Hiring or Solicitation of Employees                      14

                                    ARTICLE V
                        REPRESENTATIONS OF NIMBUS AND NMI
5.1   Organizational Status                                       15
5.2   Corporate Authority                                         15
5.3   Authorization of the Transaction                            15
5.4   Validity                                                    15
5.5   Noncontravention                                            15

                                   ARTICLE VI
                            REPRESENTATION OF STREAM
6.1   Organizational Status                                       16
6.2   Corporate Authority                                         16
6.3   Authorization of the Transaction                            16
6.4   Validity                                                    16
6.5   Noncontravention                                            16

                                   ARTICLE VII
                                      TERM
7.1   Term and Renewal                                            17
7.2   Termination                                                 17

                                  ARTICLE VIII
                           INDEMNIFICATION AND DAMAGES
8.1   Intellectual Property                                       17
8.2   Sales and Use Tax                                           17
8.3   Other Indemnity by Stream                                   18
8.4   Other Indemnity by Nimbus and NMI                           18
8.5   Limitation of Damages                                       18
8.6   Exclusive Remedy                                            19

                                   ARTICLE IX
                                   ENFORCEMENT
9.1   No Implied Waiver                                           19

                                    ARTICLE X
                                    DISPUTES
10.1  Attorneys' Fees                                             19
10.2  Arbitration                                                 19

                                   ARTICLE XI
                                     NOTICES
11.1  Delivery of Notice                                          20
11.2  Change of Address                                           21

                                   ARTICLE XII
                               GENERAL PROVISIONS
12.1  No Third-Party Beneficiaries                                21
12.2  Relationship of Parties                                     21
12.3  Amendment and Waiver                                        21
12.4  Counterparts                                                21
12.5  Parties in Interest                                         22
12.6  Entire Agreement and Transaction; Release                   22
12.7  Applicable Law                                              22
12.8  Headings                                                    23
12.9  Expenses                                                    23
12.10 Severability                                                23
12.11 Construction                                                23
12.12 Conflicts                                                   23
12.13 Time of Essence                                             23

ANNEXES
A     Glossary
B     Supplemental Services
C     Standard Form of Terms and Conditions
D     Input Material Guidelines


                                    AGREEMENT

THIS AGREEMENT is made and entered into as of the ________ day of March, 1997 by
and between NIMBUS CD INTERNATIONAL,  INC., a Delaware  corporation  ("Nimbus"),
NIMBUS  MANUFACTURING INC., a Virginia corporation and a wholly owned subsidiary
of  Nimbus  ("NMI"),  and  Stream   International   Holdings  Inc.,  a  Delaware
corporation  ("Stream").  Capitalized  terms used herein shall have the meanings
ascribed to them in the Glossary which is Annex A hereto.

WHEREAS,  Nimbus is engaged  through NMI in the United  States and through other
subsidiaries  in certain other areas of the world in the  production and sale of
digitally  encoded  nonphotographic  laser scanned optical  information  storage
media meeting certain  established  industry  specifications,  commonly known as
compact  discs  ("CDs")  and  in the  providing  of  services  related  to  such
production and sale;

WHEREAS,  Stream is engaged in the production and distribution of information in
print and other  media and in the  business  of  acquiring  rights -- whether as
creator,  purchaser,  licensee or otherwise -- to  proprietary  information  and
marketing that information, together with information in the public domain, in a
variety of formats, including CD ROM and other CD formats;

WHEREAS,  Nimbus and NMI,  desiring to have the  benefit of  Stream's  marketing
expertise, and Stream, as successor-in-interest to R.R. Donnelley & Sons Company
("Donnelley"),  desiring to have the benefit of NMI's  manufacturing  expertise,
each as it relates  primarily to CD ROM, entered into a certain  Agreement dated
as of April 6, 1994, which they subsequently  amended by the First Amendment and
Restatement Agreement dated as of April 1, 1995 (the "Original Agreement"), both
of  which  they  each,  respectively,  now  desire  to  cancel  (except  for the
obligations  of the parties  thereto to make payments for products  delivered or
services  rendered  thereunder  which are unpaid at the date hereof) and replace
with this AGREEMENT;

NOW, THEREFORE,  in consideration of the above premises, the cancellation of the
Original Agreement and the representations and agreements herein contained,  the
parties hereto mutually agree as follows:

                                    ARTICLE I
                        MANUFACTURE AND MARKETING OF CDs

1.1   Requirements of NMI.

1.1.1.  During  the  Term,  NMI  will  supply  Stream  with  certain  of  its CD
Requirements on the terms and conditions set forth herein.  NMI's  obligation to
supply CDs shall be suspended  for the duration of any event of Force Majeure or
any failure of Stream to comply with its obligations under Section 1.8 hereof.

1.1.2.      Affiliates of Stream shall be entitled to purchase Basic Services 
and Supplemental Services from NMI on the terms and conditions set forth herein.

1.2   Minimum Quantity.

1.2.1.  Stream  agrees to  purchase  and pay for when due and  Nimbus  agrees to
deliver in accordance  with the terms hereof the following  number of CDs during
the period specified (the "Minimum Quantity"):

            Production Period             Quantity-U.S.

1.2.1(a)    From April 1, 1997
            through March 31, 1998        27,500,000 units


1.2.1(b)    From April 1, 1998
            through December 31, 1998     20,625,000 units

"U.S." quantities refers to CDs produced for Stream's United States operations.

1.2.2.  Subject to the  provisions of Section 1.3,  Stream must purchase and pay
for when due in accordance  with the terms hereof a minimum number of CDs during
each calendar month period (the "Minimum Monthly Requirement"),  as follows: for
CDs, the Minimum Monthly  Requirement  with respect to U.S.  quantities shall be
2,291,667  units  commencing  on April 1, 1997.  Only CDs  produced for Stream's
United  States  operations  shall count  against the  Minimum  Quantity  and the
Minimum Monthly Requirement for U.S. quantities.

1.2.3.      The following shall count toward Stream satisfying the Minimum 
Quantity and the Minimum Monthly Requirement:

      (a)   all CDs produced as U.S. quantities during the Production Period for
Stream or any Affiliate of Stream;

      (b)   all CDs purchased by Stream or any Affiliate of Stream in accordance
with the provisions of Subsection 1.9.5 or 1.9.6;

      (c)   DVD/DVD-ROM units purchased by Stream from Nimbus during the Pro-
duction Period;

      (d)   All CDs  produced at the  Designated  Facility  from the  Designated
            Capacity for NMI  customers as permitted  under the last sentence of
            Section 2.4.1 hereof.

1.2.4.  The following shall not count toward Stream satisfying the Minimum 
Quantity or the Minimum Monthly Requirement:

      (a)   to  the  extent  that  Stream's  order  for  delivery  of CDs in any
            calendar month exceeds the Agreed Capacity and NMI does not have the
            capacity in the Designated Facility to satisfy the order.

1.2.5.  For  purposes of  determining  whether  the Minimum  Quantity or Minimum
Monthly Requirement has been purchased pursuant to this Section 1.2, the Minimum
Quantity or Minimum  Monthly  Requirement for the applicable  Production  Period
shall be reduced to the extent (and in proportion to the duration of the period)
that  Stream is unable to  purchase  the  Minimum  Quantity  or Minimum  Monthly
Requirement as the result of:

            (a)   an event of Force Majeure;

            (b)   functional or quality problems discovered with respect to CDs 
                  produced by NMI; or

            (c)   manufacturing  delays  occasioned  by  the  failure  of NMI to
                  comply with its delivery obligations under this Agreement.

1.2.6.      Such Minimum Quantity or Minimum Monthly Requirement will not be 
reduced as a result of:

            (a)   delivery delays or functional or quality problems that arise 
                  from Input Materials supplied by Stream; or

            (b)   delays resulting from Stream's failure to meet its forecasting
                  or other obligations under this Agreement.

1.3   Compensatory Payments and Rebate Payments.

1.3.1.  The number of CDs purchased by Stream from NMI as U.S.  quantities (i.e.
CDs  delivered  during  such  calendar  month  which  are  paid  for when due in
accordance  with the  provisions  hereof) shall be recorded on a calendar  month
basis. At the end of each calendar  quarter,  the monthly  purchases as recorded
shall be  aggregated  and if, with respect to the Monthly  Minimum  Requirement,
there is a

            (a)   net deficit  for the  quarter,  Stream  shall pay to NMI, as a
                  compensatory payment ("Compensatory Payment"), an amount equal
                  to:

                  (i)   the difference  between  6,875,000 units minus the
                        actual  number of Raw Discs  produced  during such
                        quarter multiplied by;

            (ii)  $0.29 for the  Production  Period  from April 1, 1997  through
                  March 31, 1998 and $0.25 for the Production  Period from April
                  1, 1998 through December 31, 1998;

            (b)   net surplus for the quarter,  NMI shall rebate to Stream, as a
                  rebate payment ("Rebate Payment"), an amount equal to:

                  (i)   the  difference  between the actual  number of Raw
                        Discs produced during such quarter minus 6,875,000
                        units, multiplied by

                  (ii)  $0.29 for the Production Period from April 1, 1997
                        through   March   31,   1998  and  $0.25  for  the
                        Production  Period  from  April  1,  1998  through
                        December 31, 1998;

provided,  however,  that the Rebate  Payments to be made by NMI to Stream shall
not exceed the aggregate of all Compensatory  Payments  theretofore  received by
NMI from Stream less the aggregate amount of Rebate Payments theretofore made by
NMI to Stream.

1.3.2.  Notwithstanding  the foregoing,  no  Compensatory  Payment and no Rebate
Payment shall be due with respect to any Production Period for which the Minimum
Quantity is  purchased  and paid for when due.  Any  Compensatory  Payments  and
Rebate  Payments  made  during  such  Production  Period  for which the  Minimum
Quantity is purchased  shall be refunded to the party making such payment at the
end of such Production Period.

1.4   Prices.

1.4.1.  The price for Basic Services in respect of U.S.  quantities  (i.e.,  the
production  of Raw Discs) for the  Production  Period  commencing  April 1, 1997
shall be $.47 per unit for the first 24,000,000  units. For all other units, the
price will be $.46 per unit.

1.4.2.      The price for Basic Services in respect of U.S. quantities (i.e., 
the production of Raw Discs) for the Production Period commencing April 1, 1998 
through December 31, 1998 shall be $.41 per unit.

1.4.3. The prices for Supplemental  Services in respect of U.S. quantities shall
be as set forth in Annex B for the Production  Period  beginning  April 1, 1997.
New prices  shall be  established  at the  beginning  of the  Production  Period
beginning April 1, 1998 as mutually agreed by the parties.

1.4.4.  NMI  presently  pays $0.094 U.S.  royalties to certain third parties for
intellectual  property  associated  with the  manufacture of CDs. If, during the
term of the  Agreement,  such  royalties  decline by more than  $0.03/unit,  the
prices set forth in Sections 1.4.1 and 1.4.2 shall be reduced by one-half of the
amount of the decline over $0.03/unit.

1.5   Payment.

Payment  for all CDs shall be due 60 days from the later of (a) the  delivery of
such  CDs or (b) the date on any NMI  invoice  for such  CDs.  Compensatory  and
Rebate  Payments are due within 30 days of receipt of invoice.  A late charge at
the rate of one percent  (1%) per month (12%  annually)  will be charged for all
amounts not paid when due.

1.6   Forecast.

Within  thirty  (30) days in  advance of each  calendar  quarter,  Stream  shall
deliver  to NMI a  forecast,  on a monthly  basis,  of its  anticipated  monthly
requirements  for CDs and  Masterings  during the following  twelve (12) months.
Such forecast shall not be binding on either party, but shall represent Stream's
best estimate when provided of its anticipated requirements.

1.7   Orders.

1.7.1.  Stream shall from time to time place orders for CDs, DVDs and Masterings
with NMI pursuant to a purchase order, provided, however, that no order shall be
for less than 200 CDs and DVDs, except at mutually agreed pricing,  and provided
further, however, that all orders shall include packaging in at least one of the
packaging formats (or any mutually agreed additions or substitutions)  listed on
Annex B attached hereto.

1.7.2 The Standard  Terms and  Conditions of Sale  governing each order shall be
those of NMI which are then in effect at the beginning of each Production Period
and shall be in substantially the form of Annex C attached hereto. To the extent
that there is any conflict  between the terms in the body of this  Agreement and
the Standard Terms and Conditions  which is an Annex hereto,  the provisions set
forth in the body of this Agreement shall apply.

1.8   Input Materials.

Stream  shall  provide to NMI,  in a timely  manner to permit NMI to satisfy the
requested  delivery  schedule of CDs in a commercially  reasonable  manner,  all
Input Material conforming to the Standard Terms and Conditions of Sale and NMI's
general Guidelines for Input Materials from time to time established by NMI, the
current form of which is included  herein by  reference as Annex D hereto.  (See
Annexes C and D.)

1.9   Production and Delivery.

1.9.1. All CDs shall be manufactured in respect of the U.S.  quantities  (unless
Stream shall otherwise approve) at the Designated Facility;  provided,  however,
that the number of CDs which Stream may request annually to be produced at NMI's
Other  Facilities and counted toward  satisfying  Stream's  Minimum Quantity for
such  Production  Period  shall be as  mutually  agreed  between  NMI and Stream
annually.  To the extent  capacity is not available at the  requested  facility,
then NMI shall have the  obligation to fill the order from its other  facilities
if capacity is available and shall use commercially  reasonable  efforts to make
such capacity available.

1.9.2.  NMI shall be permitted to ship, and Stream shall be obligated to pay 
for, the following:

            (a)   for orders of 2,000 CDs or less, no less than 100% and no more
                  than 103% of the number ordered (excluding any defective CDs);

            (b)   for orders of 2,001 to up to 10,000 CDs, no less than 100% and
                  no  more  than  102%  of the  number  ordered  (excluding  any
                  defective CDs); and

            (c)   for orders in excess of 10,001  CDs,  no less than 100% and no
                  more than 101% of the number ordered  (excluding any defective
                  CDs).

1.9.3.  NMI  acknowledges  the  importance  to  Stream's  business of the timely
delivery  of  non-defective  CDs and  DVDs to meet  marketing  requirements  and
customer  demand,  and Stream  acknowledges  the importance to NMI's business of
Stream's  timely delivery of Input Materials and the timely giving of notices so
as to permit timely performance of NMI's obligations hereunder.

1.9.4.      NMI shall use commercially reasonable efforts to meet Stream's re-
quirements with respect to timely delivery.

1.9.5.  Without  limiting any other remedy which may be available to Stream,  if
NMI fails or is unable to  fulfill  any  order  submitted  by Stream  hereunder,
Stream may secure the services of any source to fulfill such order.

1.9.6.  On order  entry,  NMI  will  notify  Stream  if the  specified  delivery
requirements cannot be met, in which case the parties will consult to work out a
mutually agreed delivery  schedule.  In the event a delivery  schedule cannot be
agreed on,  Stream shall place the order with another  vendor and the order will
be counted towards Stream's  Minimum Quantity or Minimum Monthly  Requirement up
to,  and to the  extent  that,  the order  would  not  cause  NMI to exceed  the
Designated Capacity computed on a monthly basis.

1.10  Quality.

1.10.1.  All CDs and DVDs  shall  conform to the  quality of the Input  Material
provided by Stream with regard to signal quality and, in addition, shall conform
to NMI's then prevailing quality  standards,  which shall be at least comparable
to Philips Electronics,  N.V.  specifications for CD-ROM ("Yellow Book") or such
then current standards for DVD as specified by Nimbus.

1.10.2.  NMI  agrees to use  commercially  reasonable  efforts to  maintain  the
Designated Facility in conformance with all requirements for ISO 9002.

1.11  Defective Copies.

1.11.1.  NMI warrants that CDs and DVDs shipped to Stream shall be substantially
free of  manufacturing  defects  as defined  by NMI's  then  prevailing  quality
standards.  In the  event  such  CDs and DVDs  should  not  conform  to such NMI
standards, Stream may return defective CDs and DVDs to NMI and NMI shall inspect
such CDs and DVDs and, at Stream's discretion:

            (a)   credit Stream for returned defective CDs and DVDs in accord-
                  ance with its prevailing practices; or

            (b)   replace the defective  CDs and DVDs to satisfy the  customer's
                  order requirements unless otherwise specified by Stream.

1.11.2.  Stream  shall  pay NMI  $.01  for  each CD and DVD  returned  to NMI as
defective  which,  after  inspection,   NMI  determines,   subject  to  Stream's
verification upon Stream's reasonable request:

            (a)   not to be a CD or DVD produced pursuant to this Agreement;

            (b)   not to be defective; or

            (c)   to be defective for a reason other than a manufacturing 
                  defect.

1.11.3.  To the extent that  Stream is  required by its  Customer to warrant the
quality of a CD or DVD, then NMI will issue to Stream for transfer to the Stream
Customer  a mutually  agreed  warranty  substantially  in  conformance  with the
warranty given by NMI to Stream for a period not to exceed 30 years.

1.12  Technical and Sales Support and Cooperation.

During the Term,  NMI shall provide  technical and sales support in the field to
Stream  on the same  basis  as  provided  by NMI to its own  sales  force.  Such
technical  and sales  support is to be  administered  on a schedule from time to
time  agreed to between  NMI and  Stream.  Stream  shall  reimburse  NMI for all
reasonable  out of pocket travel and service costs  incurred by NMI in providing
the technical  training but not the mutually agreed upon travel  associated with
normal business.

                                   ARTICLE II
                                   FACILITIES

2.1   [Intentionally Deleted]

2.2   Capacity.

2.2.1.  The  Designated  Capacity of the  Designated  Facility is 32,000,000 Raw
Discs on an annualized  basis (assuming  relatively level monthly demand for Raw
Discs).

2.3   Security.

NMI shall employ  security  systems and procedures  which are equal to standards
prevailing  at  other  First  Class  Facilities,  to  prevent  theft,  pirating,
unauthorized exhibition, copying or duplication of any Stream material delivered
to NMI or manufactured by NMI hereunder.  Stream agrees that it will not prevent
NMI  from  complying  with  NMI's  requirement  under  this  Section  2.3 in the
Designated  Facility,  and NMI agrees that authorized Stream personnel will have
access to the Designated Facility to conduct normal business.

2.4   Output of Designated Facility.

2.4.1.  Stream will have first call on the output with respect to the Designated
Capacity  subject to the  restrictions of this  Agreement.  NMI shall be free to
utilize in its sole  discretion  and without  any  restriction  as to  customers
served or other limitation of any kind, all capacity in excess of the Designated
Capacity. Additionally, upon approval by Stream, NMI may utilize such portion of
the  Designated  Capacity  as from time to time is not  required  to satisfy the
requirements of Stream.

2.4.2. To the extent that Stream requests  product to be produced at NMI's Other
Facilities, NMI and its subsidiaries may take similar quantities of product from
the Designated Capacity.

2.5   Operating Committee.

During the Term, NMI agrees to operate the Designated  Facility  consistent with
its normal operating procedure under the supervision of an Operating  Committee,
consisting of three  representatives of NMI and three  representatives of Stream
(in each case such  representatives  must be reasonably  acceptable to the other
party). The Operating Committee shall meet in person or by conference  telephone
call at  least  monthly  and as  necessary  for the  purpose  of  reviewing  the
operations  with respect to the Designated  Facility and the current  production
schedule.

                                   ARTICLE III
                      NEW TECHNOLOGY AND NON-U.S. SERVICES

3.1    New Services.

NMI shall offer to provide to Stream any mastering or replication services using
new  technologies  or new  media  (including,  but  not  limited  to,  DVD)  and
holographic technologies that NMI may from time to time hereinafter offer to its
other customers on the same terms and conditions by NMI to its other  customers.
Subject to the  foregoing,  should  Stream  elect to have NMI provide to it such
services  using such new  technologies  or media,  pricing  shall be as mutually
agreed.

3.2   New Media and Processes.

Each of Stream and NMI shall  regularly  consult with and advise the other as to
the  emergence in the  marketplace  of any demand for  information  media in the
Territory  in  addition  to CD ROM.  If Stream  shall in the future  require the
production  of any  non-proprietary,  digitally  encoded  information  media  in
addition to CDs,  Stream  shall  notify NMI of such need and shall offer NMI the
opportunity  to submit a proposal to Stream to  incorporate  that  manufacturing
capability  into its then current  facilities  which would enable NMI to produce
such new media for Stream. If NMI shall in the future offer production  services
of any  non-proprietary  digitally encoded information media in addition to CDs,
NMI shall notify Stream of such services and shall offer Stream the  opportunity
to  utilize  such  services  at the  Designated  Facility  at the same terms and
conditions offered by NMI to its other customers.

3.3 DVD.  Should  Stream  wish to order DVD or DVD ROM units in volume from NMI,
Stream DVD units will be made available  subject to mutual  agreement on prices,
terms and capacity  provided  that the prices and terms  offered by NMI shall be
market prices and terms as mutually agreed by NMI and Stream.

3.4 Basic Services  Outside U.S. Stream and Nimbus  acknowledge  that Stream may
purchase  2,500,000 Raw Discs from Nimbus for its operations  outside the United
States during the  Production  Period.  In that regard,  Stream and Nimbus shall
endeavor  to  determine a mutually  agreeable  market  price for Basic  Services
outside the United  States.  Stream and Nimbus  agree that  quotations  based on
similar terms and conditions from MPO, Sonopress and CD Plant will be acceptable
quotations as a basis for determining market price.

                                   ARTICLE IV
                         RESTRICTIONS ON CERTAIN CONDUCT

4.1   Nondisclosure.

The  parties  hereto  shall  regard  all the  terms  of this  Agreement  and all
information relating to their respective operations as confidential  information
received in trust and shall not use the other party's  customer  information  to
gain a  competitive  advantage  over the other.  Neither  party shall  disclose,
reveal,  publish,  report or transfer any such  confidential  information to any
person or entity  including any  non-operating  owner,  shareholder,  partner or
director except:

            (a)   to such  employees  of each party in their  capacity  as such,
                  such  information  as may be required for the  performance  of
                  their responsibilities hereunder;

            (b)   to the extent  necessary to comply with law or the valid order
                  of a court of competent jurisdiction, in which event the party
                  making  such  disclosure  shall so notify  the other and shall
                  seek confidential treatment of such information;

            (c)   as part of each party's normal  reporting or review  procedure
                  to  its  parent  company,   its  auditors  and  its  attorneys
                  (provided  that such auditors and attorneys  agree to be bound
                  by the provisions of this Article IV);

            (d)   in order to enforce the rights of each party pursuant to this 
                  Agreement; and

            (e)   to  third  parties  as  part  of a due  diligence  process  in
                  connection  with any  assignment  permitted  by  Section  12.5
                  hereof.

The  provisions  of this  Article IV shall not apply after all or any portion of
such  confidential  information has been voluntarily  disclosed to the public by
the party originally  possessing such information or independently  disclosed by
other or has  otherwise  entered into the public  domain  through  lawful means;
provided,  however,  that such exception shall only apply to the portion of such
confidential information so disclosed.  Failure by either party to comply in all
material  respects with the  provisions  of this Section 4.1 shall  constitute a
material breach of this Agreement.

4.2   No Hiring or Solicitation of Employees.

Except as the parties may mutually agree,  during the Term of this Agreement and
for a period of eighteen (18) months thereafter,  neither party shall, nor shall
it permit its affiliates to,  directly or indirectly,  whether as an individual,
partner,  principal,  agent, employee officer,  director,  shareholder or in any
other capacity:

            (a) employ any person who is then, or within the prior eighteen (18)
months was,  employed as a manager or sales  representative  by the other or any
affiliate of the other.

            (b)   solicit for  employment  any person who is then, or within the
                  prior eighteen (18) months was, employed by the other party or
                  any  affiliate  of the other party,  or request,  influence or
                  advise  any  person  who is now or shall be at the time of the
                  solicitation  employed by or in the service of the other party
                  or any  affiliate of the other party to leave such  employment
                  or service of the other  party or any  affiliate  of the other
                  party; or

            (c)   influence or advise any  competitor of or anyone  intending to
                  compete  with the other  party or any  affiliate  of the other
                  party to employ or otherwise engage the services of any person
                  who  is now  or  shall  be at  the  time  of the  solicitation
                  employed  by or in the  service  of  the  other  party  or any
                  affiliate of the other party.

                                    ARTICLE V
                        REPRESENTATIONS OF NIMBUS AND NMI

As an inducement to Stream to enter into this  Agreement,  Nimbus and NMI hereby
represent  to Stream,  as of the date of the  Agreement,  as to the  matters set
forth in Sections 5.1 through 5.5.

5.1   Organizational Status.

5.1.1.  Nimbus is a validly existing  corporation and in good standing under the
laws of the State of  Delaware.  Nimbus has the  corporate  power and  authority
required to carry on its  activities  as they are now  conducted  and to own the
stock of NMI.

5.1.2.      NMI is a validly existing corporation and in good standing under the
laws of the State of Virginia.  NMI has the corporate power and authority 
required to carry on its activities as they are now conducted.

5.2   Corporate Authority.

Nimbus and NMI have full legal right and corporate power, without the Consent of
any other Person,  to execute,  deliver and to perform their  obligations  under
this Agreement.

5.3   Authorization of the Transaction.

All  corporate  and other  actions  required  to be taken by  Nimbus  and NMI to
authorize the  execution,  delivery and  performance  of this  Agreement and all
transactions  contemplated hereby have been duly and properly taken. No Consent,
approval or authorization of, or filing of any certificate, notice, application,
report or other document with, any  governmental  authority,  is required on the
part of Nimbus or NMI in  connection  with the valid  execution  and delivery of
this Agreement or the performance by Nimbus of any of its obligations  hereunder
or by NMI of any of its obligations hereunder.

5.4   Validity.

This  Agreement  has been duly executed and delivered by Nimbus and NMI and is a
lawful,  valid and legally  binding  obligation  of Nimbus and NMI,  enforceable
against  each of Nimbus  and NMI in  accordance  with its terms and  conditions,
except  to  the  extent  limited  by  bankruptcy,  insolvency,   reorganization,
moratorium or similar laws affecting  creditors'  rights generally or by general
equitable principles.

5.5   Noncontravention.

The execution, delivery and performance of this Agreement are not prohibited by,
do not violate or conflict with any provision of, or result in a default (or, to
the  knowledge of Nimbus and NMI, an event which with notice or lapse of time or
both, would become a default) under or a breach of:

            (a)   the Certificate or Articles of Incorporation or By-laws of 
                  Nimbus and NMI;

            (b)   any regulation, order, decree or judgment of any court or 
                  governmental agency; or

            (c)   any law applicable to Nimbus or NMI.

                                   ARTICLE VI
                            REPRESENTATION OF STREAM

As an inducement to Nimbus and NMI to enter into this  Agreement,  Stream hereby
represents to Nimbus and NMI, as of the date of this  Agreement,  to the matters
set forth in this Article VI.

6.1   Organizational Status.

Stream is a validly existing  corporation and in good standing under the laws of
the State of Delaware.  Stream has the corporate power and authority required to
carry on its activities as they are now conducted.

6.2   Corporate Authority.

Stream has full legal  right and  authority,  without  the  Consent of any other
Person, to execute, deliver and to perform its obligations under this Agreement.

6.3   Authorization of the Transaction.

All corporate and other actions  required to be taken by Stream to authorize the
execution,  delivery and  performance  of this  Agreement  and all  transactions
contemplated  hereby have been duly and properly taken. No Consent,  approval or
authorization of, or filing of any certificate,  notice, application,  report or
other  document  with, any  governmental  authority,  is required on the part of
Stream in connection with the valid execution and delivery of this Agreement, or
the performance by Stream of any of its obligations hereunder.

6.4   Validity.

This  Agreement  has been duly executed and delivered by Stream and is a lawful,
valid and legally binding  obligation of Stream,  enforceable  against Stream in
accordance  with its  terms and  conditions,  except to the  extent  limited  by
bankruptcy,  insolvency,  reorganization,  moratorium or similar laws  affecting
creditors' rights generally or by general equitable principles.

6.5   Noncontravention.

The execution, delivery and performance of this Agreement are not prohibited by,
do not violate or conflict  with any  provision of, or result in a default under
or a breach of:

            (a)   Stream's Certificate of Incorporation or By-laws;

            (b)   any regulation, order, decree or judgment of any court or
                  governmental agency; or

            (c)   any law applicable to Stream.

                                   ARTICLE VII
                                      TERM

7.1       Term and Renewal.

The Term of this  Agreement  shall  commence on April 1, 1997 and shall continue
until December 31, 1998 unless terminated in accordance with 7.2 below.

7.2   Termination.

The Term of this Agreement may be terminated at any time:

            (a)  by mutual consent of the parties; or

            (b)  by either  party  upon 90 days'  written  notice of a  material
                 breach  of a  material  provision  hereof  which  has not  been
                 reasonably cured within such 90 days period.

                                  ARTICLE VIII
                           INDEMNIFICATION AND DAMAGES

8.1      Intellectual Property.

8.1.1.  Stream shall  indemnify and hold harmless Nimbus and NMI against any and
all losses,  damages,  costs,  expenses,  attorneys' fees or other  liabilities,
including,  without  limitation,  costs incurred in  successfully  asserting the
right to  indemnification  hereunder  which  arise out of or are  founded on any
claim that NMI's  replication  or  packaging  of any CD for Stream or any of its
Affiliates  violates the property,  personal,  copyright or other rights, of any
Person.

8.1.2.  Nimbus and NMI shall  indemnify and hold harmless Stream against any and
all losses,  damages,  costs,  expenses,  attorneys' fees or other  liabilities,
including,  without  limitation,  costs incurred in  successfully  asserting the
right to  indemnification  hereunder  which  arise out of or are  founded on any
claim that the production  process used by NMI or the  electronic  format of the
CDs produced thereby violates the property,  personal, copyright or other rights
of any Person.

8.2   Sales and Use Tax.

8.2.1.  Stream shall indemnify and hold Nimbus and NMI harmless  against any and
all losses,  damages,  costs,  expenses,  attorneys'  fees or other  liabilities
including,  without  limitation,  costs incurred in  successfully  asserting the
right to  indemnification  hereunder,  which  arise out of or are founded on any
claim  against  Nimbus or NMI for any  sales or use tax  liability  incurred  by
Nimbus  or NMI as a  result  of,  or at the  order of  sales  to  Stream  or its
Affiliates.

8.2.2.  Stream shall, upon request of NMI, defend Nimbus and NMI in any audit or
other  proceeding  brought  by the taxing  authority  in any  jurisdiction  with
respect to sales and use tax.

8.3   Other Indemnity by Stream.

8.3.1.  Stream represents and warrants that, to the best of Stream's  knowledge,
by  entering  into this  Agreement  it will not be in  violation  of any term or
provision of any other agreement to which Stream is a party  (collectively,  the
"Stream Agreements").

8.3.2.  Stream shall indemnify and hold each of Nimbus and NMI harmless  against
any and all  Damages  which  arise out of or relate to any Claim by any party to
the Stream  Agreements  which is based or founded  on the Stream  Agreements  or
which are the result of the non-truthfulness of any of Stream's  representations
and warranties herein.

8.4   Other Indemnity by Nimbus and NMI.

8.4.1.  Nimbus  and NMI  represent  and  warrant  that,  to the  best  of  their
knowledge,  by entering into this Agreement they will not be in violation of any
term  or  provision   of  any  other   agreement  to  which  they  are  a  party
(collectively, the "Nimbus Agreements").

8.4.2.  Nimbus and NMI shall indemnify and hold Stream harmless  against any and
all Damages which arise out of or relate to any Claim by any party to the Nimbus
Agreements which is based or founded on the Nimbus  Agreements or which are as a
result of the  non-truthfulness of any of Nimbus' and NMI's  representations and
warranties herein.

8.4.3.      THE WARRANTIES, SET FORTH IN THIS AGREEMENT ARE IN LIEU OF, TO THE 
EXTENT PERMITTED BY LAW, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS 
FOR A PARTICULAR PURPOSE.

8.5   Limitation of Damages.

Notwithstanding any other provision herein, neither party shall be liable to the
other for any lost profits or other consequential  damages,  whether foreseeable
or unforeseeable,  arising out of such party's inability,  as determined by law,
to perform their respective obligations under this Agreement.


8.6   Exclusive Remedy.

NMI's and Nimbus'  sole and  exclusive  remedy,  whether in contract or in tort,
arising out of or  relating  to any  failure by Stream to  purchase  the Minimum
Quantity or the Monthly Minimum  Requirement are the  Compensatory  Payments set
forth in Section 1.3.

                                   ARTICLE IX
                                   ENFORCEMENT

9.1   No Implied Waiver.

No course of dealing  between the parties and no delay in exercising  any right,
power or remedy conferred hereby or now or hereafter existing at law, in equity,
by statute or otherwise,  shall operate as a waiver of, or otherwise  prejudice,
any such right, power or remedy.

                                    ARTICLE X
                                    DISPUTES

10.1  Attorneys' Fees.

In the event of any suit or other  proceeding  between the  parties  hereto with
respect to any of the  transactions  contemplated  herein or the subject  matter
hereof,  the  prevailing  party  shall,  in addition to such other relief as the
court may award, be entitled to recover  attorneys' fees,  expenses and costs of
investigation,   all  as  actually  incurred,   including,  without  limitation,
attorneys'  fees,  expenses  and costs of  investigation  incurred in  appellate
proceedings  or in any action or  participation  in, or in connection  with, any
case  or  proceeding   under  any  bankruptcy,   insolvency  or   reorganization
proceeding.

10.2  Arbitration.

10.2.1. Any controversy or Claim arising out of or relating to this Agreement or
the breach thereof,  including any claim or controversy as to the  arbitrability
of any claim or controversy  and any claim for  rescission,  shall be settled by
arbitration in New York, New York in accordance with the commercial  arbitration
rules of the  American  Arbitration  Association  and  judgment  upon the  award
rendered  by the  arbitrators  may be entered in any court  having  jurisdiction
thereof.

                                   ARTICLE XI
                                     NOTICES

11.1  Delivery of Notice.

All notices,  requests,  demands and other communications  hereunder shall be in
writing and shall be,  personally  delivered or sent by  facsimile  transmission
with  confirming copy sent by overnight  courier (such as Express Mail,  Federal
Express,  etc.) and a delivery  receipt  obtained and  addressed to the intended
recipient as follows:

(a)   If to Nimbus or NMI:

      Nimbus CD International, Inc.
      623 Welsh Run Road, Ruckersville, Virginia 22968
      Attention:    Lyndon Faulkner and L. Steven Minkel
      Telphone:  (804) 985-1100
      Facsimile:  (804) 985-4794

      With copies to:

      NMI
      85 East Bay Boulevard, Provo, Utah 84605
      Attention:    General Manager
      Telephone:  (801) 375-6797
      Facsimile:  (801) 374-8757

      White & Case
      1155 Avenue of the Americas, New York, New York  10036
      Attention:  Frank L. Schiff, Esq.
      Telephone:  (212) 819-8200
      Facsimile:  (212) 354-8113

(b)   If to Stream International Holdings Inc.:

      Terence M. Leahy, Chief Executive Officer
      Stream International Holdings Inc.
      105 Rosemont Road, Westwood, Mass.  02090
      Telephone: (617) 751-1008
      Facsimile: (617) 751-7090

      With copies to:

      Alicia T. Brophey, Vice-President & General Counsel
      Stream International Holdings, Inc.
      105 Rosemont Road
      Westwood, Mass.   02090
      Telephone:  (617) 751-1359
      Facsimile:  (617) 751-7670

11.2  Change of Address.

Any party may change its address for receiving  notice by giving  written notice
to the others named above. All such notices shall be effective  immediately upon
confirmation of facsimile or completion of personal delivery.

                                   ARTICLE XII
                               GENERAL PROVISIONS

12.1     No Third-Party Beneficiaries.

This Agreement  constitutes an agreement  solely among the parties hereto and is
not  intended  to and will not  confer  any  rights,  remedies,  obligations  or
liabilities, legal or equitable, on any person other than the parties hereto and
their  respective  successors or assigns,  or otherwise  constitute any person a
third party beneficiary under or by reason of this Agreement.

12.2  Relationship of Parties.

Nothing  in this  Agreement,  expressed  or  implied,  is  intended  to or shall
constitute the parties hereto as partners or participants in a joint venture.

12.3  Amendment and Waiver.

No amendment or waiver of any provision of this Agreement  shall in any event be
effective, unless the same shall be in writing and signed by the parties hereto,
and then  such  amendment,  waiver or  consent  shall be  effective  only in the
specific instance and for the specific purpose for which given.

12.4  Counterparts.

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

12.5  Parties in Interest.

This Agreement  shall bind and inure to the benefit of the parties named herein,
in each case with respect to the obligations and rights  applicable to them, and
their respective,  successors and assigns;  provided,  however, that the parties
hereto  shall  only  be  permitted  to  assign  this  Agreement  as  part of the
assignment of substantially all of the assets and liabilities of, in the case of
Stream, its software  manufacturing  business and in the case of Nimbus and NMI,
the NMI business.  In the event of any such assignment,  the assignor shall have
no further  liability or  obligation  to the parties to this  Agreement  and the
assignee shall assume all liabilities and obligations of its assignor.

12.6  Entire Agreement and Transaction; Release.

This  Agreement,  including  the Annexes  listed in the Table of Contents in the
forepart hereof and the documents  delivered pursuant hereto,  together with any
other  confidentiality  agreements  previously entered into between the parties,
constitute  the  entire   agreement  among  the  parties  with  respect  to  the
transactions   contemplated  hereby  and  supersede  all  other  agreements  and
understandings  among the parties  including the First Amendment and Restatement
dated April 1, 1995 and the Agreement dated April 6, 1994.

Each Party, on behalf of itself,  its affiliates,  its predecessors in interest,
and its  successors  and assigns  hereby  releases  the other  parties and their
affiliates,  predecessors  in interest,  successors and assigns from any and all
claims, obligations and liabilities, known or unknown, arising out of or related
to the prior agreements between the parties including,  without limitation,  any
claims,  obligations  and  liabilities  arising  under  the  April,  1995  First
Amendment and Restatement or the Original Agreement provided,  however,  that no
party is released from any obligation to make payments for products delivered or
services  rendered under the Original  Agreement which are unpaid as of the date
of this Agreement.

Upon the execution of the  Agreement by Donnelley as to this Section 12.6,  this
release is  intended  to and will extend on a mutual  basis to  Donnelley  which
signed the Original Agreement;  provided, however, that the effectiveness of all
other provisions of this Agreement are not dependent on Donnelley's execution of
the Agreement.

12.7  Applicable Law.

This  Agreement  shall be  governed  by and  construed  in  accordance  with the
internal substantive laws of the State of New York. Should any provision of this
Agreement  be  determined  to be invalid,  void or  unenforceable  by a court of
competent  jurisdiction for any reason, the remaining provisions shall remain in
full force and effect.

12.8  Headings.

The section and other headings  contained in this Agreement are for  convenience
of  reference  purposes  only and shall not  affect  in any way the  meaning  or
interpretation of this Agreement.

12.9  Expenses.

Each party to this Agreement  shall pay its own costs and expenses in connection
with the transactions contemplated hereby.

12.10 Severability.

Any term or provision of this Agreement  which is held invalid or  unenforceable
by a court of competent jurisdiction, shall be ineffective to the extent of such
invalidity or  unenforceability  without  rendering invalid or unenforceable the
remaining  rights of the Person  intended to be benefited by such  provision and
provisions of this Agreement.

12.11 Construction.

This Agreement has been negotiated by the parties hereto, and legal or equitable
principles  that  might  require  the  construction  of  this  Agreement  or any
provision  hereof against the party  drafting this Agreement  shall not apply in
any construction or interpretation of this Agreement.

12.12 Conflicts.

If there is any conflict or inconsistency  between a provision in this Agreement
and that of an Annex, the provision of this Agreement shall prevail.

12.13 Time of Essence.

Time is of the essence in this Agreement.

IN WITNESS  WHEREOF,  each of the parties have caused this  Agreement to be duly
executed, all as of the date first written above.


NIMBUS CD INTERNATIONAL, INC.       STREAM INTERNATIONAL HOLDINGS
                                    INCORPORATED

By:______________________________   By:_________________________________
Name: ___________________________   Name: ______________________________
Title: ____________________________ Title: _______________________________

                                    As to Section 12.6 only:

NIMBUS MANUFACTURING INC.           R. R. DONNELLEY & SONS COMPANY

By:  _____________________________  By:________________________________
Name: ___________________________   Name:______________________________
Title: ____________________________ Title:_______________________________

<PAGE>
                                     ANNEX A
                                    GLOSSARY

As used in the Agreement and the Annexes thereto, the following terms shall have
the meanings as set forth herein:

Affiliate:  Affiliate of any Person shall mean any other Person which,  directly
or indirectly,  controls,  is controlled by or is under common control with such
Person (excluding any trustee under, or any commitment with  responsibility  for
administering, any Pension Plan). A Person shall be deemed to be "controlled by"
any other Person if such other Person possesses,  directly or indirectly, power:
(i) to vote 90% or more of the  securities  (on a fully  diluted  basis)  having
ordinary  voting  power  for the  election  of  directors  or  managing  general
partners;  or (ii) to  direct  or cause  the  direction  of the  management  and
policies of such Person whether by contract or otherwise.

Agreed Capacity:  2,666,667 CDs per month.

Agreement:  The Agreement effective March 1, 1997.

Basic Services:  The production of Raw Discs.

CD  Requirements:  Stream's  requirements  during  the Term  for CDs for  Stream
customers.

CD ROM:  A  nonprogrammable,  read  only  memory,  CD  capable  of  storing  and
outputting  data,  image, and audio signals  conforming to established  industry
specifications.

Claim: A claim, demand, action, cause of action, suit, charge or Proceeding for
Damages or equitable relief.

Commencement Date: Opening of business on the date of the Agreement.

Compact Disc (CD): Digitally encoded nonphotographic laser scanned optical 
information storage media meeting established industry specifications.

Consent:  Any approvals, consents and acknowledgments required by any third 
party or governmental authority or instrumentality whether written or oral.

Damages:  All losses,  liabilities,  obligations and damages together with costs
and expenses  (including court costs and reasonable  attorneys'  fees,  expenses
related to investigation and expert assistance and amounts paid in settlement).

Designated Capacity: 32,000,000 raw discs on an annualized basis.

Designated Facility: Leased facilities located in Provo, Utah.

DVD:  Digital Versatile Disc.  A high density, digitally encoded, nonprogram-
mable, read only memory, CD capable of storing and outputting data, image, and 
audio signals conforming to established industry specifications for DVD.

First Class Facilities: Means facilities performing the same or similar level of
services of comparable quality as those performed by NMI for Stream.

Force Majeure:  Force Majeure as used herein shall mean the following:
(i) acts of God; (ii) strikes, lockouts, industrial or labor disturbances;
(iii) act of the public  enemy,  wars,  blockades,  insurrections,  riots;  (iv)
epidemics;  (v)  landslides,  lightning,  earthquakes,  fires,  storms,  floods,
wash-outs,  tornadoes,  hurricanes,  windstorms; (vi) civil disturbances;  (vii)
boycotts;  (viii)  explosions and breakage or accident to machinery or equipment
that is not  principally  caused by or  attributable  to the  negligence  of the
Person experiencing the Force Majeure;  (ix) the unavailability of raw materials
used in the  manufacture  of CDs; and any other  causes  similar to those above,
which are not within the reasonable control of the Person claiming Force Majeure
and which by the exercise of due diligence such Person is unable to overcome.

Glossary: Glossary attached as Annex A to the Agreement.

Input Materials:  The information to be republished in any CD format and the 
media containing such information, together with all label film and print 
material.

Mastering: The supply of glass mastering services as it relates to the produc-
tion of Compact Discs.

Minimum Monthly:  The number of CDs specified in Subsection 1.2.2 of Requirement
this Agreement.

Minimum Quantity:  The number of CDs specified in Subsection 1.2.1 of the 
Agreement.

Nimbus:  Nimbus CD International, Inc., a Delaware corporation.

NMI:  Nimbus Manufacturing Inc., a Virginia corporation and wholly-owned sub-
sidiary of Nimbus.

Original  Agreement:  The  Original  Agreement  by and  among  Nimbus,  NMI  and
Donnelley  dated  as of April 6,  1994 as  amended  and  restated  by the  First
Amendment and Restatement dated as of April 1, 1995.

Other  Facilities:   NMI's  facilities,  other  than  the  Designated  Facility,
including  the  facilities   located  in   Ruckersville,   Virginia,   Sunnyvale
California, Cwmbran, Wales and Foetz, Luxembourg.

Person:  Any individual or corporation, partnership, trust or other entity.

Proceedings:  Any suit or any other action, proceeding,  investigation or legal,
administrative,   arbitration   or  other   method  of   settling   disputes  or
disagreements or governmental  investigation by or before any federal,  state or
local governmental or non-governmental  court,  department,  commission,  board,
bureau, agency or instrumentality.

Production Period: The period specified in Subsection 1.2.1 of this Agreement.

Raw Discs:  CDs with two color printing.

Stream Customers:  Any Person for which Stream provides services which include 
production or distribution of information in CD ROM format.

Subsidiary:   A  corporation   of  which  a  Person   and/or  their   respective
Subsidiaries,  as the case may be, own  directly or  indirectly,  such number of
shares as have more than 50% of the  ordinary  voting  power for the election of
directors.

Supplemental Services:  Other services in addition to Basic Services (including,
without limitation, the services described in Article III hereof).

Term:  The period specified in Section 7.1 of this Agreement.

<PAGE>

                                     ANNEX B
                  CURRENT FORM OF STANDARD TERMS AND CONDITIONS