Promissory Note of MS Acquisition

THE SECURITY REPRESENTED BY THIS NOTE WAS ORIGINALLY ISSUED ON APRIL 14, 1998, AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAW. THIS NOTE MAY NOT BE RESOLD OR TRANSFERRED, IN WHOLE OR IN PART, UNLESS REGISTERED OR EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ALL APPLICABLE STATE SECURITIES LAWS.


MS ACQUISITION CORP.
Promissory Note


April 14, 1998 $[______] New York, New York


FOR VALUE RECEIVED, MS ACQUISITION CORP., a Delaware corporation (the "Company"), promises to pay to [_______________] or his, her or its registered successor or assigns (each a "Holder") , the principal sum of [____________] ($[________]), as such sum may be decreased by prepayments made pursuant to Section 3 below, on October 14, 1999 (the "Maturity Date"), all in accordance with the provisions of this Note.


This note is one of the promissory notes required to be issued pursuant to Section 2.02 of the Stock Purchase Agreement dated as of April 3, 1998 among the Company, Societe Financiere de Developpement Industriel et Technologique and the other parties set forth on the signature pages thereto (as the same may be amended, supplemented or modified from time to time, the "Purchase Agreement"). This note and any notes issued upon registration of transfer or exchange of this Note or any of the aforementioned notes are collectively referred to herein as the "Notes".


1. Interest. In the event that he Company has not consummated a Qualifying Offering (as defined below) on or prior to April 14, 1999 (the "Accrual Date"), interest will accrue on the principal amount of this Note from and after the Accrual Date at the LIBOR Rate (as defined below) plus two percent (2%) per annum. If applicable, the Company will pay interest in arrears on the 14th day of April and October of each year, beginning October 14, 1999, and on the Maturity Date ( each, an "Interest Period").


"LIBOR Rate" as used herein shall mean, with respect of any applicable Interest Period, the rate per annum (rounded upwards if necessary to the nearest 1/16 of 1%) quoted at approximately 11:00 a.m., London Time, by the principal London branch of Citibank. N.A. two (2) banking days prior to the first day of such Interest Period for the offering to leading banks in the London interbank market of Dollar deposits in immediately available funds, for an Interest Period, and in an amount equal to the aggregate principal amount of the Notes outstanding during such Interest Period.


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"Qualifying Offering" as used herein shall mean the consummation of an underwritten primary or secondary public offering of Common Stock pursuant to an effective registration statement under the Securities Act of 193, as amended, as a result of which (i) (together with all similar previous public offerings) at least $50 million of aggregate net proceeds are raised for the Company, and (ii) the Common Stock is listed on the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market or any successor thereto.


2. Method of Payment. Subject to the next sentence, the Company will pay the principal of, and interest on, this Note in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company shall make all payments of principal of and interest on this Note, subject to any applicable withholding tax or similar withholding, by wire transfer of immediately available funds to the account specified by Holder in a written notice to the Company delivered at least two business days prior to such payment date; provided that the Company may pay interest amounts if less than $10,000 by check payable in such money and may mail an interest check to the Holder's registered address.


If a payment date is a legal holiday in the State of New York or Paris, France, payment shall be made on the next succeeding business day.


3. Mandatory and Optional Prepayments.


(a) The Company, at its option, may prepay all or portion of the outstanding principal amount of the Notes at any time and from time to time pro rata among all Notes at 100% of the portion of the principal amount of the Notes being prepaid plus accrued but un unpaid interest thereon on the prepayment date.


(b) Immediately upon (i) the consummation of a Qualifying Offering, (ii) the consummation of a Sale of the Company (as defined below) pursuant to the clause (i) of the definition of "Sale of the Company" or (iii) the distribution of any proceeds from a Sale of the Company to the stockholders of the Company pursuant to clause (ii) of the definition of "Sale of the Company", the Company shall prepay all of the principal amount of the Notes plus accrued but unpaid interest thereon on the prepayment date. "Sale of the Company" as used herein shall mean the sale of the Company (wether by merger, consolidation, recapitalization, reorganization, sale of securities, sale of assets or otherwise) in one transaction or a series of related transactions to a Person or Persons pursuant to which such Persons acquires (i) securities representing at least a majority of the voting power of all securities of the Company, assuming the conversio ...