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                               SERVICE AGREEMENT
                               -----------------

          Dated this 29th Day of January, 1997 (the "Effective Date").

PARTIES
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1.   'The Company': MSU (UK) Limited of Elder House, 525 to 528 Elder Gate,
     Central Milton Keynes, England.

2.   'The Executive': G.J. Capaci of 2715 Amstel Way, Raleigh, North Carolina,
     27613, U.S.A.

OPERATIVE PROVISIONS:
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1.   INTERPRETATION

     1.1  The headings and marginal headings to the clauses are for convenience
          only and have no legal effect.

     1.2  Any reference in this Agreement to any Act or delegated legislation
          includes any statutory modification or re-enactment of it or the
          provision referred to.

     1.3  In this Agreement:
          'THE BOARD' means the Board of Directors of the Company and includes
          any committee of the Board duly appointed by it. 'GROUP COMPANY' means
          any company which for the time being is a company having an ordinary
          share capital (as defined in 'SS'832 of the Income and Corporation
          Taxes Act of 1988) of which not less than 25 per cent is owned
          directly or indirectly by the Company or its holding company applying
          the provisions of 'SS'828 of the Income and Corporation



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          Taxes Act 1988 in the determination of ownership. 'MANAGING DIRECTOR'
          means any person or persons jointly holding such office of the Company
          from time to time and includes any person(s) exercising substantially
          the functions of a Managing Director or Executive Officer of the
          Company.

2.   APPOINTMENT AND DURATION

     2.1  The Company appoints the Executive and the Executive agrees to act as
          Vice President of Business Development and Marketing. The Executive's
          job description and objectives are as set out in Schedule 1 or,
          subject to the agreement of the Executive, as shall from time to time
          be directed by the Board. The Executive accepts that the Company may
          in emergencies require him to perform other duties or tasks not within
          the scope of his normal duties and the Executive agrees to perform
          those duties or undertake those tasks as if they were specifically
          required under this Agreement, provided that such duties will be
          consistent with those of a senior executive and will not change the
          person(s) to whom the Executive reports.

     2.2  The appointment and this Agreement shall be deemed to have commenced
          on the day immediately after the date upon which the Executive's
          employment with IBM Corporation terminates, as indicated in a written
          notice from the Executive to the Company, and shall continue (subject
          to earlier termination as provided in this Agreement), unless either
          party shall give 6 months written notice to the other


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          party whereupon the appointment and this Agreement will instead
          terminate at the end of the 6 month notice period.

     2.3  The Executive warrants that by virtue of entering into this Agreement
          or the other agreements or arrangements made or to be made between the
          Company or any Group Company and him he will not be in breach of any
          express or implied terms of any contract with or of any other
          obligation to any third party binding upon him.


3.   DUTIES OF THE EXECUTIVE

     3.1  The Executive shall at all times during the period of this Agreement:

          3.1.1 devote the whole of his time, attention and ability as the Board
                consider necessary to the duties of his appointment;

          3.1.2 faithfully and diligently perform those duties and exercise such
                powers consistent with them which are from time to time assigned
                to or vested in him;

          3.1.3 obey all lawful and reasonable directions of the Board;

          3.1.4 use his best endeavors to promote the interests of the Company
                and its Group Companies;

          3.1.5 keep this Board promptly and fully informed (in writing if so
                requested) of his conduct of the business or affairs of the
                Company and its Group Companies and provide such explanations as
                the Board reasonably may require;


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          3.1.6 not at any time make to the Board any untrue or misleading
                statement relating to the Company or any Group Company.
 
     3.2  The Executive shall (without further remuneration) if and for so long
          as the Company require during the term of the Agreement;
 
          3.2.1 carry out the duties of his appointment on behalf of any Group
                Company;
 
          3.2.2 act as an officer of any Group Company or hold any other
                appointment or office on behalf of, or as nominee or
                representative of the Company or any Group Company, unless the
                Executive determines that such service would present an
                unreasonable risk of liability to or damage to the reputation of
                the Executive or that an unreasonable risk of bankruptcy of the
                Group Company exists;
 
          3.2.3 carry out such duties and the duties attendant upon any such
                appointment as if they were duties to be performed by him on
                behalf of the Company.
 
     3.3  The Company hereby agrees to indemnify the Executive to the fullest
          extent permissible under applicable law against any liability
          (including reasonable legal fees and other expenses) for any act or
          omission related to his service for the Company or any Group Company.
 
4.   PLACE OF WORK
 
     4.1  The Executive shall generally perform his duties from the place of
          business of the Company in the United States of America. The Company
          may reasonably require
 
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          the Executive to travel in the normal course of his duties, including
          international travel, to other places of business of the Company or
          of any Group Company.
 
     4.2  If the Company and the Executive agree to change the Executive's place
          of work such that the Executive has to relocate his residence, the
          Company shall provide the Executive with a reasonable relocation
          package as shall be negotiated by the Company and the Executive at the
          time such change is contemplated.
 
5.   PAY
 
     5.1  During his appointment, the Company shall pay to the Executive:
 
          5.1.1 a salary at the rate of $125,000 U.S. Dollars per year which
                shall accrue day to day and be payable by equal monthly
                installments in arrears. The salary shall be deemed to include
                any fees receivable by the Executive as a Director of the
                Company or any Group Company, or of any other company or
                unincorporated body in which he holds office as nominee or
                representative of the Company or any Group Company; and
 
          5.1.2 an annual performance bonus based on criteria established by
                agreement of the Company and the Executive within 60 days of the
                Effective Date, which criteria may be modified by agreement of
                the Company and the Executive; and
 
     5.2  The Executive's salary shall be reviewed by the Board annually and the
          rate of salary shall be increased by the Company in line with the
          company salary review policy.
 
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     5.3  The Company will grant to the Executive nonqualified stock options as
          described in Schedule 2 hereto.
 
6.   PENSION
 
     6.1  The Company will establish and maintain a retirement plan which is
          qualified under section 401(a) of the U.S. Internal Revenue Code of
          1986, as amended (the 'Code'), and under which the Company shall make
          annual nondiscretionary contributions on the Executive's behalf in an
          amount equal to 7.5% of the Executive's salary in effect for such year
          and under which the Executive shall be entitled to elect salary
          deferral contributions to the maximum extent permitted under the
          applicable Code provisions. The Company shall make the annual
          nondiscretionary contributions specified above in monthly installments
          each equal to one-twelfth of the total amount of such nondiscretionary
          contributions for the applicable year.
 
7.   INSURANCE BENEFITS
 
     7.1  The Company shall establish and maintain a private medical scheme that
          provides benefits equivalent to those provided by IBM Corporation to
          the Executive and his family at the time the Executive terminates
          employment with IBM Corporation. The Executive shall be entitled to
          participate in such scheme at the Company's expense for himself, his
          spouse and dependent children, subject always to the rules of such
          scheme.
 
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     7.2  For any period prior to the implementation of such a scheme the
          Company shall reimburse the Executive for the total premium paid by
          the Executive for continued coverage under the medical plan of his
          prior employer for himself, his spouse and his dependent children. In
          order to compensate the Executive for the taxes payable on such
          reimbursement, the total amount of such reimbursement shall be
          increased as follows: total reimbursement = total premium divided
          by .6.
 
8.   EXPENSE
 
     8.1  The Company shall reimburse to the Executive on a monthly basis all
          travelling, hotel, entertainment and other expenses reasonably
          incurred by him in the proper performance of his duties subject to the
          production to the Company of such vouchers or other evidence of actual
          payment of the expenses as the Company may reasonably require.
 
     8.2  Where the Company issues a company sponsored credit or charge card to
          the Executive he shall use such card only for expenses reimbursable
          under clause 8.1 above, and shall return it to the Company forthwith
          on the termination of his employment.
 
     8.3  All expenses in excess of $5,000 for any one event must be approved in
          advance in writing by the Board.
 
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9.   HOLIDAY
 
     9.1  In addition to public holidays, the Executive is entitled to 25
          working days paid holiday in each calendar year. The Executive shall
          not without the consent of the Board carry forward any unused part of
          his holiday entitlement to a subsequent holiday year.
 
     9.2  On termination of his appointment for whatever reason, the Executive
          shall be entitled to pay in lieu of outstanding holiday entitlement
          and shall not be required to repay to the Company any salary received
          for holiday taken in excess of his actual entitlement. The basis for
          payment and repayment shall be 1/253 of the Executive's annual salary
          for each day.
 
10.  INCAPACITY
 
     10.1 If the Executive shall be prevented by illness (including mental
          disorder), injury or other incapacity from properly performing his
          duties hereunder he or his representative shall report this fact
          forthwith to the Company Secretary's office and if the Executive is so
          prevented for 30 or more consecutive business days he shall provide a
          medical practitioner's statement on the 31st day and weekly thereafter
          so that the whole period of incapacity is certified by such
          statements.
 
     10.2 If the Executive shall be absent from his duties hereunder due to
          illness (including mental disorder), accident or other incapacity duly
          certified in accordance with the provisions of sub-clause 10.1 hereof,
          he shall be paid his full remuneration hereunder (including bonus and
          commission) for up to 6 months' absence in any


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          period of 12 consecutive months and thereafter such remuneration, if
          any, as the Board shall determine from time to time.
 
     10.3 If the Executive shall be absent from his duties hereunder due to
          illness (including mental disorder), injury or other incapacity for 30
          or more consecutive business days, the Executive shall at the request
          and expense of the Company permit himself to be examined by a
          registered medical practitioner to be selected by the Company and
          shall authorize such medical practitioner to disclose to and discuss
          with the Company's medical advisor the results of such examination and
          any matters which arise from it in order that the Company's medical
          adviser can notify the Company of any matters which, in his opinion,
          might hinder or prevent the Executive (if during a period of
          incapacity) from returning to work for any period or (in other
          circumstances) from properly performing any duties of his appointment
          at any time.
 
11.  TERMINATION OF AGREEMENT
 
     11.1 Automatic Termination
 
          This Agreement shall automatically terminate:
 
          11.1.1 on the Executive reaching his 65th birthday; or

          11.1.2 6 months after the Executive is provided with written notice
                 that he has become prohibited by law from being a Director; or

          11.1.3 if he resigns his office

 
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     11.2 Suspension
 
          In order to investigate a complaint against the Executive of
          misconduct the Company is entitled to suspend the Executive on full
          pay for so long as may be necessary to carry out a proper
          investigation and hold a disciplinary hearing.
 
     11.3 Immediate Dismissal
 
          The Company may by notice terminate this Agreement with immediate
          effect if the Executive:
 
          11.3.1 commits any act of fraud, gross negligence, or willful
                 misconduct or repeats or continues (after written warning) any
                 other material or serious breach of his obligations under this
                 Agreement; or
 
          11.3.2 is guilty of any conduct which in the reasonable opinion of the
                 Board brings him, the Company or any Group Company into serious
                 disrepute; or
 
          11.3.3 is convicted of any criminal offense punishable with 6 months
                 or more imprisonment (excluding an offence under the road
                 traffic legislation for which he is not sentenced to any term
                 of imprisonment whether immediate or suspended); or
 
         11.3.4  embezzles, or otherwise dishonestly takes for his own benefit,
                 any assets of the Company, any Group Company, or any of its or
                 their employees.


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     11.4 Immediate Termination by the Executive
 
          The Executive may by notice terminate this Agreement with immediate
          effect if the Company:
 
          11.4.1 commits any material breach of the Company's obligations under
                 this Agreement; or

          11.4.2 causes any material reduction in the level of responsibility,
                 status, office, title, reporting relationships, working
                 conditions, authority or duties of the Executive; or

          11.4.3 files a petition relating to bankruptcy, insolvency,
                 reorganization, winding-up, liquidation or dissolution or is
                 the subject of any similar filing.

 
     11.5 Dismissal on Short Notice
 
          The Company may terminate this Agreement, notwithstanding clause
          10.2, by not less than 6 months' prior notice given at any time while
          the Executive is incapacitated by ill-health or accident from
          performing his duties under this Agreement and has been so
          incapacitated for a period or periods aggregating 6 calendar months in
          the preceding 12 months. Provided that the Company shall withdraw any
          such notice, with the consent of the Executive, if during the currency
          of the notice the Executive returns to full time duties and provides a
          medical practitioner's certificate satisfactory to the Board to the
          effect that he has fully recovered his health and that no recurrence
          of his illness or incapacity can reasonably be anticipated.

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     11.6 Pay In Lieu
          On either party's serving 6 months' prior notice to terminate this
          Agreement (as provided in sub-clause 2.2) or at any time thereafter
          during the currency of such notice the Company shall pay to the
          Executive his basic salary (at the rate then payable under clause 5
          hereof) and all other compensation and benefits provided hereunder for
          the unexpired portion of the duration of his appointment or
          entitlement to notice as may be the case.

     11.7 Miscellaneous
          On the termination of this Agreement for whatever reason, the
          Executive shall at the request of the Company resign (without
          prejudice to any claims which the Executive may have against any
          company arising out of this Agreement or the termination thereof) from
          all and any offices which he may hold as a Director of the Company or
          offices which he holds as nominee or representative of the Company or
          any Group Company and if he would fail to do so within seven days the
          Company is hereby irrevocably authorized to appoint some person in his
          name and on his behalf to sign any documents or do any things
          necessary or requisite to effect such resignations.

12.  GENERAL

     12.1 Other Terms
          The provisions of the Company's standard terms and conditions of
          employment (as amended from time to time) shall be terms of the
          Executive's employment


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          except to the extent that they are unreasonable and/or inconsistent
          with this Agreement.

     12.2 Statutory Particulars
          The further particulars of terms of employment not contained in the
          body of this Agreement which must be given to the Executive in
          compliance with Part 1 of the Employment Protection (Consolidation)
          Act 1978 shall be set forth in a schedule attached hereto and agreed
          to in writing by the Executive.

     12.3 Prior Agreements
          This Agreement sets out the entire agreement and understanding of the
          parties and is in substitution for any previous contracts of
          employment or for services between the Company or any of its Group
          Companies and the Executive (which shall be deemed to have been
          terminated by mutual consent).

     12.4 Accrued Rights
          The expiration or termination of this Agreement however arising shall
          not operate to affect such of the provisions of this Agreement as are
          expressed to operate or have effect after then and shall be without
          prejudice to any accrued rights or remedies of the parties.

     12.5 Proper Law
          The validity construction and performance of this Agreement shall be
          governed by the laws of the State of North Carolina without regard to
          its principles of the choice of law or the conflict of laws.


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     12.6 Notices
          Any notice to be given by a party under this Agreement must be in
          writing and must be given by delivery at or sending first class post
          or other faster postal service, or telex, facsimile transmission or
          other means of telecommunication in permanent written form (provided
          the addressee has his or its own facilities for receiving such
          transmissions) to the last known postal address or relevant
          telecommunications number of the other party. Where notice is given
          sending in a prescribed manner it shall be deemed to have been
          received when in the ordinary course of the means of transmission it
          would be received by the dispatched. A notice shall have effect from
          the sooner of its actual or deemed receipt by the addressee.



/s/ WILLIAM D. SNOWDEN (Secretary)
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FOR AND ON BEHALF OF
MSU CORPORATION


/s/ Gerald J. Capaci
------------------------------
MR. G. CAPACI


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                                   SCHEDULE 1
                        JOB DESCRIPTIONS AND OBJECTIVES
                                     YEAR 1
 
1.   To organize an appropriate serviced office at reasonable local rates.
 
2.   In line with a plan to be submitted to the Board for approval, to:
 
     2.1  Maximize MSU product and technology sales in North America by closing
          business with retail groups, OEM's and licensees as appropriate in
          line with regional business plan;
 
     2.2  to support/promote existing MSU customers in the region;
 
     2.3  handle negotiations/customers in other territories by agreement with
          the Board;
 
3.   To maximize profitability of the North American region in line with the
     approved regional business plan.
 
4.   To propose, agree and implement such marketing and promotions plans as are
     necessary to maximize MSU's regional sales revenues.
 
5.   To prepare, and upon request present to the Board, comprehensive monthly
     status reports.
 
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                                   SCHEDULE 2
                       EXECUTIVE'S ENTITLEMENT TO SHARES
 
"Shares" are defined as shares of Common Stock of MSU Corporation of $0.01 each.
"Market Value" shall mean the last trading value, in U.S. Dollars, of the Shares
reported by NASDAQ, a successor to NASDAQ or any similar market system or
exchange or, if the Shares are not traded on any such system or exchange, fair
market value of the Shares within the meaning of Code section 422 and the rules
and regulations thereunder.
 
1.   As soon as possible following the execution of this Agreement, the Company
     shall grant to the Executive a nonqualified stock option to purchase
     100,000 Shares at a price per Share equal to the Market Value on the date
     of the grant; such option shall be fully vested upon grant and shall be
     exercisable on or before the 5th anniversary of the Effective Date of this
     Agreement.
 
2.   As soon as administratively possible following the earlier of (i) the first
     date following the first anniversary of the Effective Date of this
     Agreement on which the Market Value is at least $15.00 per Share, or (ii)
     the first date during the first year of this Agreement on which the Market
     Value has been at least $15.00 per Share for a period of 30 consecutive
     days, the Company shall grant to the Executive a nonqualified stock option
     to purchase 100,000 Shares at a price per Share equal to 50% of the Market
     Value on the applicable date specified in (i) or (ii) above; such option
     shall be fully vested upon
 
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     grant and shall be exercisable on or before the 5th anniversary of the
     applicable date specified in (i) or (ii) above.
 
3.   As soon as administratively possible following the earlier of (i) the first
     date following the second anniversary of the Effective Date of this
     Agreement on which the Market Value is at least $20.00 per Share, or (ii)
     the first date during the first year of this Agreement on which the Market
     Value has been at least $20.00 per Share for a period of 30 consecutive
     days, the Company shall grant to the Executive a nonqualified stock option
     to purchase 100,000 Shares at a price per Share equal to 50% of the Market
     Value on the applicable date specified in (i) or (ii) above; such option
     shall be fully vested upon grant and shall be exercisable on or before the
     5th anniversary of the applicable date specified in (i) or (ii) above.
 
4.   Unless such Shares are registered under applicable state and federal
     securities laws, acquisition of Shares will be for investment purposes
     only.
 
5.   In the event that:
 
     5.1  this Agreement is terminated by the Company for any reason or by the
          Executive as provided in Section 11.4 herein; and
 
     5.2  the options described in clause 2 and/or 3 above have not yet been
          granted; and
 
     5.3  either a timing and/or Share pricing milestone described in clause 2
          and/or 3 above is achieved within 6 months of the date of termination;
 
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     the Company shall grant to the Executive such option(s) as the Executive
     would have been entitled to pursuant to clause 2 and/or 3 above if such
     timing and/or Share pricing milestone had been achieved prior to the date
     of such termination. Such option(s) shall be granted as soon as
     administratively possible after the date on which the timing and/or Share
     pricing milestone is achieved, such option(s) shall be fully vested at
     grant, and the Executive shall be entitled to exercise such option at any
     time and from time to time for a period of 5 years from the date of grant.
 
6.   Notwithstanding any other provision of this Schedule 2, in the event of a
     merger or consolidation to which the Company or MSU Corporation is a party
     (other than as the surviving entity), or of any other acquisition of a
     majority of the outstanding shares of the common stock of the Company or
     MSU Corporation or of any transfer of all or substantially all of the
     assets of the Company or MSU Corporation, or of the liquidation or
     dissolution of the Company or MSU Corporation (any such event shall be
     referred to herein as a "Transaction"), (i) if the option described in
     clause 2 above has not yet been granted, the Company shall grant to the
     Executive an option to purchase 100,000 Shares, and (ii) if the option
     described in clause 3 above also has not yet been granted, the Company
     shall grant to the Executive an option to purchase an additional 100,000
     Shares. The option(s) described in (i) and/or (ii) above shall be granted
     as of the effective date of the Transaction or such earlier date as may be
     determined by the Company (the "Grant Date"), shall be fully vested and
     exercisable at grant, shall contain
 
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     a purchase price equal to 50% of the Market Value on the Grant Date, and
     shall automatically terminate upon consummation of the Transaction.
 
7.   The price and the number of Shares purchasable pursuant to any option
     granted or to be granted pursuant to this Agreement shall be adjusted as
     necessary to reflect any reclassification, change, conversion, subdivision,
     combination, or stock dividend of or relating to the Shares.
 
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