Exhibit 10.1

 

This SUBSCRIPTION AGREEMENT is made and entered into as of July 11, 2008 (this
“Agreement”), by and between ACE*COMM CORPORATION, a Maryland corporation (the
“Corporation”), and ARISTON GLOBAL HOLDING LLC, a Delaware limited liability
company (the “Investor”).

 

WHEREAS, the Agreement and Plan of Merger (the “Merger Agreement”) by and among
the Corporation, the Investor and Ariston Global Merger Sub, Inc., dated the
date hereof, contemplates that the Investor will make an equity investment in
the Company;

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933 (the “Securities Act”),
and Regulation D promulgated thereunder, the Corporation desires to issue and
sell to the Investor, and the Investor desires to purchase from the Corporation,
714,286 shares of common stock, par value $0.01 per share, of the Corporation
(the “Common Stock”) pursuant to the terms set forth herein.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Corporation and the Investor
agree as follows:

1.

SUBSCRIPTION

 

1.1.

Purchase of Shares

Subject to the terms and conditions set forth in this Agreement, at the Closing
(as defined below), the Corporation shall sell to the Investor, and the Investor
shall purchase from the Corporation, 714,286 shares of Common Stock (the
“Shares”) at a purchase price per share equal to $0.56, for an aggregate
purchase price of $400,000 (the “Purchase Price”), to be paid by wire transfer
or immediately available funds to the Corporation at the Closing. The Closing
shall take place simultaneously with the signing of this Agreement on the date
hereof at such time and place as the parties may agree (the “Closing”). A
certificate evidencing the Shares shall be delivered by the Corporation to the
Investor reasonably promptly following the Closing.

2.

CORPORATION REPRESENTATIONS AND WARRANTIES

 

The Corporation hereby represents and warrants to the Investor that:

 

 

2.1.

Organization and Standing

The Corporation is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland and has all requisite power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. The

 

 

 

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Corporation is duly qualified to transact business, and is in good standing, in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on its business. The Corporation has all requisite power and
authority to own, lease and operate its assets and properties and to carry on
its business.

 

2.2.

Capitalization

The authorized capital stock of the Corporation consists of 45,000,000 shares of
Common Stock, par value $0.01 per share, of which 19,473,852 shares are issued
and outstanding as of the date hereof without taking into account the issuance
of the Shares hereunder and (ii) 5,000,000 shares of preferred stock, par value
$.01 per share, of which no shares are issued and outstanding as of the date
hereof.

 

2.3.

Authorization

The execution, delivery and performance of this Agreement by the Corporation,
the fulfillment of and compliance with the respective terms and provisions
hereof, and the due consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of the Corporation (none of which actions has been modified or rescinded, and
all of which actions are in full force and effect).

 

2.4.

Binding Obligation

This Agreement constitutes a valid and binding obligation of the Corporation,
enforceable in accordance with its terms.

 

2.5.

Title to Stock

Upon payment by the Investor of the Purchase Price and delivery by the
Corporation to the Investor of a certificate for the Shares, the Shares will be
duly authorized, validly issued and outstanding, fully paid and nonassessable,
and the Investor will acquire good, valid and marketable title thereto, free and
clear of all mortgages, liens, pledges, charges, claims, security interests,
agreements, encumbrances and equities whatsoever (other than any created by the
Investor).

 

2.6.

Consents

The Corporation is not subject to any law, ordinance, regulation, rule, order,
judgment, injunction, decree, charter, bylaw, contract, commitment, lease,
agreement, instrument or other restriction of any kind that would prevent the
Corporation’s consummation of this Agreement or any of the transactions
contemplated hereby without the consent of any third party or that would result
in any penalty, forfeiture or other termination as a result of such consummation
(except, in each case, to the extent that consents or waivers have been
obtained).

 

2.7.

Absence of Violation

Neither the execution or delivery of this Agreement by the Corporation nor the
consummation of the transactions contemplated hereby by the Corporation
constitutes a violation or default under or conflicts with, or will result in
the creation of any encumbrance on any of the

 

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assets owned by the Corporation under, any term or provision of the Articles of
Amendment and Restatement or Bylaws of the Corporation, or any material
contract, commitment, lease, instrument, or agreement to which the Corporation
is a party or by which the Corporation is bound.

 

2.8.

SEC Reports

Since July 1, 2007, the Corporation has filed all reports required to be filed
by it under the Securities Act and the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d)
thereof (the foregoing materials being collectively referred to herein as the
“SEC Reports”). All such reports were filed on a timely basis (including where
applicable prior to expiration of a valid extension of such time of filing). As
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules
and regulations of the Securities and Exchange Commission (the “Commission”)
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.

 

2.9.

Securities Act

Subject to the accuracy of the representations and warranties of the Investor
contained herein, it is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement to
register the Shares under the Securities Act.

 

2.10.

General Solicitation

Within the preceding six months, other than pursuant to an effective
registration statement on Form S-8, neither the Corporation, any affiliate of
the Corporation nor any person acting on its or their behalf has sold any shares
of Common Stock by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or offered or sold
any shares of Common Stock outside the United States to non-U.S. persons (as
defined in Rule 902 under the Securities Act).

 

2.11.

Integration

Within the preceding six months, neither the Corporation nor any other person
acting on behalf of the Corporation has sold to any person any shares of Common
Stock other than the Shares offered or sold to the Investor hereunder other than
pursuant to an effective registration statement on Form S-8. The Corporation
will take reasonable precautions designed to ensure that any offer or sale,
direct or indirect, of any shares of Common Stock or any substantially similar
security issued by the Corporation, within six months subsequent to the Closing,
is made under restrictions and other circumstances reasonably designed not to
affect the status of the offer and sale of the Shares contemplated by this
Agreement as transactions exempt from the registration provisions of the
Securities Act.

 

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2.12.

No Brokers

No broker, finder, commission agent or other person is entitled to be paid by
the Corporation any broker's fee or commission in connection with the sale of
the Shares and the transactions contemplated by this Agreement.

 

3.

INVESTOR REPRESENTATIONS AND WARRANTIES 

 

The Investor hereby represents and warrants to the Corporation that:

 

3.1.

Organization and Standing; Legal Capacity

The Investor is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation and has all requisite power and
authority to own, lease and operate its assets, properties and business; to
carry on its business as now conducted; to execute and deliver this Agreement;
and to perform fully its obligations hereunder.

 

3.2.

Authorization

The execution, delivery and performance of this Agreement by the Investor, the
fulfillment of and the compliance with the respective terms and provisions
hereof, and the due consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary limited liability company
action on the part of the Investor (none of which actions have been modified or
rescinded, and all of which actions are in full force and effect).

 

3.3.

Binding Obligation

This Agreement constitutes a valid and binding obligation of the Investor,
enforceable in accordance with its terms.

 

3.4.

Consents

The Investor is not subject to any law, ordinance, regulation, rule, order,
judgment, injunction, decree, charter, bylaw, contract, commitment, lease,
agreement, instrument or other restriction of any kind that would prevent the
Investor’s consummation of this Agreement or any of the transactions
contemplated hereby without the consent of any third party, that would require
the consent of any third party to the consummation of this Agreement or any of
the transactions contemplated hereby, or that would result in any penalty,
forfeiture or other termination as a result of such consummation (except, in
each case, to the extent that consents and/or waivers have been obtained).

 

3.5.

Absence of Violation

Neither the execution, delivery or performance of this Agreement by the Investor
nor the consummation by the Investor of the transactions contemplated hereby
constitutes or will constitute a violation or default under or conflicts with or
will conflict with, or will result in the creation of any encumbrance on any of
the assets owned by the Investor under, any term or provision of the
organizational documents of the Investor, if the Investor is an Entity, or any

 

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material contract, commitment, lease, instrument, or agreement to which the
Investor is a party or by which the Investor is bound.

 

3.6.

Purchase Entirely for Own Account

 

The Shares will be acquired for the Investor’s own account for investment
purposes and not with a view to distributing or reselling such Shares or any
part thereof in violation of applicable securities laws, without prejudice,
however, to the Investor’s right at all times to sell or otherwise dispose of
all or any part of the Shares in compliance with applicable federal and state
securities laws. Nothing contained herein shall be deemed a representation or
warranty by such Investor to hold the Shares for any period of time. The
Investor understands that the Shares have not been registered under the
Securities Act, and therefore the Shares may not be sold, assigned or
transferred unless pursuant to (i) a registration statement under the Securities
Act is in effect with respect thereto or (ii) an available exemption from the
registration requirements of the Securities Act.

 

3.7.

Investment Experience

 

The Investor, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Shares, and has so evaluated the merits and risks of such investment. The
Investor is able to bear the economic risk of an investment in the Shares and,
at the present time, is able to afford a complete loss of such investment.

 

3.8.

Restricted Shares

 

The Investor understands that the Shares are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being
acquired from the Corporation in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may not be
resold without registration under the Act, except in certain limited
circumstances. The Investor is familiar with Rule 144 promulgated under the Act,
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.

 

3.9.

Legends

 

The Investor understands that the certificates evidencing the Shares will bear
the following, or a substantially similar, legend:

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“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY OTHER FEDERAL OR STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

 

3.10.

Accredited Investor

 

At the time the Investor was offered the Shares, it was, and at the date hereof
it is, an “accredited investor” as defined in Rule 501(a) under the Securities
Act. The Investor is not a registered broker-dealer under Section 15 of the
Exchange Act.

 

3.11.

General Solicitation

 

The Investor is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.

 

3.12.

Availability of Funds

The Investor has adequate committed funds to satisfy at Closing all of its
obligations hereunder.

4.

REGISTRATION RIGHTS

 

 

4.1.

Shelf Registration.

 

4.1.1.   In the event the Merger Agreement is terminated in accordance with its
terms (such date of termination, the “Termination Date”), no later than 45 days
following the Termination Date (such 45th day referred to herein as the “Filing
Date”), the Corporation shall prepare and file with the Commission a
Registration Statement on an appropriate form of registration statement covering
the resale of all Shares for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall contain (except if
otherwise directed by the Investor) the “Plan of Distribution,” substantially as
attached hereto as Exhibit A. In the event Form S-3 is not available for the
registration of the resale of Shares hereunder, the Corporation shall
(i) register the resale of the Shares on another appropriate form in accordance
herewith and (ii) attempt to register the Shares on Form S-3 as soon as such
form is available, provided that the Corporation shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Shares has been declared
effective by the Commission.

 

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4.1.2.   The Corporation shall use reasonable best efforts to cause the
Registration Statement to be declared effective by the Commission as promptly as
possible after the filing thereof (the date of such effectiveness, the
“Effective Date”) but in any event within 120 days following the Termination
Date (such 120th day referred to herein as the “Required Effectiveness Date”),
and shall use reasonable best efforts to keep the Registration Statement
continuously effective under the Securities Act until the earlier of (i) the
fifth anniversary of the Effective Date, (ii) such time as all Shares covered by
the Registration Statement have been sold publicly or (iii) such time as all of
the Shares covered by the Registration Statement may be sold pursuant to Rule
144 as determined by counsel to the Corporation pursuant to a written opinion
letter to such effect (the “Effectiveness Period”).

 

4.1.3.   The Corporation shall notify the Investor in writing promptly after
receiving notification from the Commission that the Registration Statement has
been declared effective.

 

 

4.2.

Registration Procedures.

 

In connection with the Corporation’s registration obligations hereunder, the
Corporation shall:

 

4.2.1.   Not less than six business days prior to the filing of the Registration
Statement or any related prospectus (a “Prospectus”) or any amendment or
supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), furnish to the Investor copies of all
such documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject to the
review of the Investor. The Corporation shall not file the Registration
Statement or any Prospectus or any amendments or supplements thereto to which
the Investor shall reasonably object.

 

4.2.2.   (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep the Registration Statement
continuously effective as to the applicable Shares for the Effectiveness Period;
(ii) cause any related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to the Registration Statement or any
amendment thereto and as promptly as reasonably possible provide the Investor
true and complete copies of all correspondence from and to the Commission
relating to the Registration Statement; provided, however, the Corporation will
not be required to provide copies of any correspondence that would result in the
disclosure to the Investor of material and non-public information concerning the
Corporation unless the Investor has executed a confidentiality agreement with
the Corporation; and (iv) comply in all material respects with the provisions of
the Securities Act and the Exchange Act, with respect to the disposition of all
Shares covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Investor set forth in
the Registration Statement as so amended or in such Prospectus as so
supplemented.

 

4.2.3.   Notify the Investor as promptly as reasonably possible of any of the
following events: (i) the Commission issues any stop order suspending the
effectiveness of the Registration Statement or initiates any proceedings for
that purpose; (ii) the Corporation receives notice of

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any suspension of the qualification or exemption from qualification of any
Shares for sale in any jurisdiction, or the initiation or threat of any
proceeding for such purpose; or (iii) the financial statements included or
incorporated by reference in the Registration Statement become ineligible for
inclusion or incorporation therein or any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference is untrue in any material respect or any
revision to the Registration Statement, Prospectus or other document is required
so that it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

 

4.2.4.   Use reasonable best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Shares for sale in any jurisdiction,
as soon as practicable.

 

4.2.5.   Furnish to the Investor, without charge, at least one conformed copy of
the Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
the Investor (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.

 

4.2.6.   Promptly deliver to the Investor, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as the Investor may reasonably request. The
Corporation hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Investor in connection with the
offering and sale of the Shares covered by such Prospectus and any amendment or
supplement thereto.

 

4.2.7.   (i) If required, prepare and timely file with any national securities
exchange, market or trading or quotation facility on which the Common Stock is
then listed or quoted (a “Trading Market”) an additional shares listing
application covering all of the Shares; (ii) use reasonable best efforts to
cause such Shares to be approved for listing on such Trading Market as soon as
practicable thereafter; (iii) provide to the Investor evidence of such listing;
and (iv) use reasonable best efforts to maintain the listing of such Shares on
such Trading Market.

 

4.2.8.   Prior to any public offering of Shares, use reasonable best efforts to
register or qualify or cooperate with the Investor in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Shares for offer and sale under the securities or blue
sky laws of such jurisdictions within the United States as the Investor requests
in writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Shares covered by the Registration Statement.

 

4.2.9.   Cooperate with the Investor to facilitate the timely preparation and
delivery of certificates representing Shares to be delivered to a transferee
pursuant to the Registration Statement, which certificates shall be free, to the
extent permitted by this Agreement, of all

 

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restrictive legends, and to enable such Shares to be in such denominations and
registered in such names as any such Investor may request.

 

4.2.10. Upon the occurrence of any event described in Section 4.2.3(iii), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

 

4.3.

Obligations of the Investor

 

(a) The Investor will promptly furnish in writing to the Corporation such
information regarding itself and the intended method of disposition of the
Shares held by it, as shall be reasonably required to effect the registration of
such Shares and shall execute such documents in connection with such
registration as the Corporation may reasonably request. At least seven (7)
business days prior to the first anticipated filing date of the Registration
Statement, the Corporation shall notify the Investor of the information the
Corporation requires from the Investor. The Investor shall provide such
information to the Corporation at least three (3) business days prior to the
first anticipated filing date of the Registration Statement.

 

(b) The Investor, by its acceptance of the Shares, agrees to cooperate with the
Corporation as reasonably requested by the Corporation in connection with the
preparation and filing of the Registration Statement hereunder.

 

 

4.4.

Registration Expenses.

 

The Corporation shall pay (or reimburse the Investor for) all fees and expenses
incident to the performance of or compliance with this Agreement by the
Corporation, including without limitation (a) all registration and filing fees
and expenses, including without limitation those related to filings with the
Commission and any Trading Market, and those fees and expenses incurred in
connection with applicable state securities or blue sky laws, (b) printing
expenses (including without limitation expenses of printing certificates for
Shares and of printing prospectuses requested by the Investor), (c) messenger,
telephone and delivery expenses, (d) fees and disbursements of counsel for the
Corporation, (e) fees and expenses of all other persons retained by the
Corporation in connection with the consummation of the transactions contemplated
by this Agreement, and (f) all listing fees to be paid by the Corporation to the
Trading Market. Discounts, concessions, commissions and similar selling
expenses, if any, payable to an underwriter and specifically attributable to the
sale of Shares by the Investor will be borne by the Investor.

 

 

4.5.

Indemnification.

 

4.5.1.   Indemnification by the Corporation. The Corporation shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
the Investor, its officers, directors, partners, members, agents, brokers
(including brokers who offer and sell Shares as principal as

 

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a result of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees, each person who controls any such
Investor (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, partners, members, agents and
employees of each such controlling person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, judgments, fines,
penalties, charges, amounts paid in settlement, damages and expenses (including
but not limited to any and all expenses incurred in investigating, preparing or
defending any litigation or proceeding, whether commenced or threatened, and the
reasonable fees, disbursements and other charges of counsel (collectively,
“Losses”), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that (i) such untrue statements, alleged untrue statements, omissions or
alleged omissions are based solely upon information regarding the Investor
furnished in writing to the Corporation by the Investor expressly for use
therein, or to the extent that such information relates to the Investor or the
Investor’s proposed method of distribution of Shares and was reviewed and
expressly approved in writing by the Investor expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (ii) in the case of an occurrence of an event
of the type specified in Section 4.2.3(i)-(iii), the use by the Investor of an
outdated or defective Prospectus after the Corporation has notified the Investor
in writing that the Prospectus is outdated or defective and prior to the receipt
by the Investor of the Advice contemplated in Section 4.6.

 

4.5.2.   Indemnification by Investor. The Investor shall, severally and not
jointly, indemnify and hold harmless the Corporation, its directors, officers,
agents and employees, each person who controls the Corporation (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling persons, to
the fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising solely out of any untrue statement of a material
fact contained in the Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto, or arising solely out of
any omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus or form of prospectus
or supplement thereto, in light of the circumstances under which they were made)
not misleading to the extent, but only to the extent, that (i) such untrue
statement or omission is based solely upon information regarding the Investor
furnished in writing to the Corporation by the Investor expressly for use in the
Registration Statement or Prospectus, or to the extent that such information
relates to the Investor or its proposed method of distribution of Shares and was
reviewed and expressly approved in writing by the Investor expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto or (ii) in the case of an occurrence of an event
of the type specified in Section 4.2.3(i)-(iii), the use by the Investor of an
outdated or defective Prospectus after the Corporation has notified the Investor
in writing that the Prospectus is outdated or defective and prior to the receipt
by the Investor of the Advice contemplated in Section 4.6. In no event shall the
liability

 

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of the Investor be greater in amount than the dollar amount of the net proceeds
received by the Investor upon the sale of the Shares giving rise to such
indemnification obligation.

 

4.5.3.   Conduct of Indemnification Proceedings. If any proceeding shall be
brought or asserted against any person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

 

An Indemnified Party shall have the right to employ separate counsel in any such
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
the defense of such proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such proceeding; or (iii) the named parties to any
such proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding.

 

All fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to
defend such proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten business days of written
notice thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).

 

4.5.4.   Contribution. If a claim for indemnification under Section 4.5.1 or
4.5.2 is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion

 

11

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as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.

 

The amount paid or payable by a party as a result of any Losses shall be deemed
to include, subject to the limitations set forth in Section 4.5.3, any
reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.5.4 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 4.5.4, the Investor shall not be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by the Investor from the sale of the Shares
subject to the proceeding exceeds the amount of any damages that the Investor
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

 

 

4.6.

Dispositions.

 

The Investor agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Shares pursuant to the Registration Statement. The Investor further agrees
that, upon receipt of a notice from the Corporation of the occurrence of any
event of the kind described in Sections 4.2.3(i)-(iii), the Investor will
discontinue disposition of such Shares under the Registration Statement until
the Investor’s receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement contemplated by Section 4.2.10, or until it is
advised in writing (the “Advice”) by the Corporation that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Corporation may provide appropriate stop orders to enforce the provisions of
this paragraph.

 

 

4.7.

Piggy-Back Registrations.

 

If at any time during the Effectiveness Period there is not an effective
Registration Statement covering all of the Shares and the Corporation shall
determine to prepare and file with the Commission the registration statement
relating to an offering for its own

 

12

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account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Corporation shall send to the Investor written notice of
such determination and if, within fifteen days after receipt of such notice, the
Investor shall so request in writing, the Corporation shall include in the
registration statement all or any part of such Shares the Investor requests to
be registered, subject to customary underwriter cutbacks applied on a pro rata
basis to all holders of registration rights.

5.

CONDITIONS

 

5.1.

Conditions Precedent to the Obligations of the Investor.

 

The obligation of the Investor to acquire the Shares at the Closing is subject
to the satisfaction or waiver by the Investor, at or before the Closing, of each
of the following conditions:

 

5.1.1.   Representations and Warranties. The representations and warranties of
the Corporation contained herein shall be true and correct in all material
respects (without giving effect to any qualifications as to materiality herein)
as of the date when made and as of the Closing as though made on and as of such
date;

 

5.1.2.   Performance. The Corporation and the Investor shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Agreement to be performed, satisfied or complied
with by it at or prior to the Closing;

 

5.1.3.   No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Agreement;

 

5.1.4.   Secretary of State Certificate. The Investor shall have received a
certificate, as of a recent date, of the Secretary of State of the State of
Maryland showing the Corporation to be validly existing and in good standing;

 

5.1.5.   Officer’s Certificate of Corporation. The Investor shall have received
a certificate dated the date of the Closing signed by an authorized officer of
the Corporation certifying that (i)  attached thereto are true and complete
copies of resolutions adopted by the Corporation’s Board of Directors
authorizing the execution, delivery and performance by the Corporation of the
Agreement; and

 

5.1.6.   Closing Certification of the Corporation. The Investor shall have
received a certificate signed by an authorized officer of the Corporation
certifying that, as of the Closing Date, (i) each of the conditions set forth in
this Section 6.1 has been satisfied (except to the extent waived in writing by
the Investor).

 

13

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5.2.

Conditions Precedent to the Obligations of the Corporation.

 

The obligation of the Corporation to sell the Shares at the Closing is subject
to the satisfaction or waiver by the Corporation, at or before the Closing, of
each of the following conditions:

 

5.2.1.   Representations and Warranties. The representations and warranties of
the Investor contained herein shall be true and correct in all material respects
as of the date when made and as of the Closing as though made on and as of such
date;

 

5.2.2.   Performance. The Investor shall have performed, satisfied and complied
in all material respects with all covenants, agreements and conditions required
by the Agreement to be performed, satisfied or complied with by the Investor at
or prior to the Closing; and

 

5.2.3.   No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Agreement.

6.

MISCELLANEOUS

 

6.1.

Notices

Notices required or permitted to be given hereunder shall be in writing and
shall be deemed to be given when personally delivered (including delivery by an
express or overnight delivery service), when received by facsimile transmission
(upon confirmation of receipt thereof) or when sent by registered mail, return
receipt requested, addressed, if to the Investor, at the address appearing on
the signature page hereof, and if to the Corporation, at:

 

If to the Corporation:

ACE*COMM CORPORATION

 

704 Quince Orchard Road

Gaithersburg, MD 20878

Attn: Steven R. Delmar, Chief Financial Officer

Tel. (301) 721-3000

Fax (301) 721-3001

 

 

If to the Investor:

Ariston Global Holding LLC
15 Fisher’s Road, Suite 201
Pittsford, NY 14534
Attention: Steve M. Dubnik
Facsimile: 585-249-2679

and

c/o Spire Capital Partners, LLC

 

 

 

 

14

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30 Rockefeller Plaza, Suite 4200
New York, NY 10112
Attention: Richard Patterson
Fax: (212) 218-5455

 

 

 

 

6.2.

Waiver

The failure of the Corporation to exercise any right or remedy under this
Agreement, or delay by the Corporation in exercising same, will not operate as a
waiver thereof. No waiver by the Corporation will be effective unless and until
it is in writing and signed by the Corporation.

 

 

6.3.

Governing Law

ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (EXCEPT FOR
MATTERS GOVERNED BY CORPORATE LAW IN THE STATE OF MARYLAND), WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY AGREES THAT ALL LEGAL
PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE
TRANSACTIONS CONTEMPLATED BY ANY OF THE TRANSACTION DOCUMENTS (WHETHER BROUGHT
AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS,
SHAREHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE
AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN. EACH
PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH
ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT
TO THE ENFORCEMENT OF ANY OF THIS AGREEMENT), AND HEREBY IRREVOCABLY WAIVES, AND
AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION
OR PROCEEDING IS IMPROPER. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL
SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION
OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN
EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL
CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY

 

15

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WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTION DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. IF EITHER PARTY SHALL COMMENCE AN
ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS OF THIS AGREEMENT OR ANY
TRANSACTION DOCUMENT, THEN THE PREVAILING PARTY IN SUCH ACTION OR PROCEEDING
SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE ATTORNEYS FEES AND
OTHER REASONABLE COSTS AND EXPENSES INCURRED WITH THE INVESTIGATION, PREPARATION
AND PROSECUTION OF SUCH ACTION OR PROCEEDING.

 

 

6.4.

Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Corporation may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Investor. The Investor may assign its rights under this Agreement
to any person to whom the Investor assigns or transfers any Shares, provided
such transferee agrees in writing to be bound, with respect to the transferred
Shares, by the provisions hereof that apply to the Investor. Notwithstanding
anything to the contrary herein, the Shares may be pledged to any person in
connection with a bona fide margin account secured by such Shares.

 

 

6.5.

Entire Agreement; Amendments; Counterparts

This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and may be amended only by a writing executed by
both parties hereto. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. This Agreement may also be executed by
facsimile.

 

6.6.

Survival of Representations and Warranties

The representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Shares.

 

6.7.

Severability

 

If any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt in good faith to agree upon a valid and enforceable
provision that is a reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.

 

16

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6.8.

Remedies

 

In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, the Investor and the Corporation will be
entitled to specific performance under the Agreement. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.

 

[Signature Page Follows]

 

17

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IN WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

 

 

 

ACE*COMM CORPORATION

 

 

 

 

 

By: /s/ James W. Greenwell

 

Name: James W. Greenwell

 

Title: Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

 

ARISTON GLOBAL HOLDING LLC

 

 

 

 

 

By: /s/ Steve M. Dubnik

 

Name: Steve M. Dubnik

 

Title: Co-Chief Executive Officer

 

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Exhibit A

 

Plan of Distribution

 

The “selling stockholders,” which term as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from the selling stockholder as a gift, pledge, partnership distribution or
other transfer, may, from time to time, sell any or all of their shares of
common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:

 

 

•

 

ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

 

 

 

 

•

 

block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

 

 

 

 

 

•

 

purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

 

 

 

 

•

 

an exchange distribution in accordance with the rules of the applicable
exchange;

 

 

 

 

 

•

 

privately negotiated transactions;

 

 

 

 

 

•

 

to cover short sales made after the date that this Registration Statement is
declared effective by the Securities and Exchange Commission;

 

 

 

 

 

•

 

broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 

 

 

 

 

•

 

a combination of any such methods of sale; and

 

 

 

 

 

•

 

any other method permitted pursuant to applicable law.

 

The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

 

The selling stockholders may also engage in short sales against the box, puts
and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades.

 

Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

 

--------------------------------------------------------------------------------

 

Any profits on the resale of shares of common stock by a broker-dealer acting as
principal might be deemed to be underwriting discounts or commissions under the
Securities Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by the
selling stockholder. The selling stockholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
shares if liabilities are imposed on that person under the Securities Act.

 

The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act amending the
list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.

 

The selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus
and may sell the shares of common stock from time to time under this prospectus
after we have filed an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.

 

The selling stockholders and any broker-dealers or agents that are involved in
selling the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.

 

We are required to pay all fees and expenses incident to the registration of the
shares of common stock, but we will not receive any proceeds from the sale of
the common stock by the selling stockholders. We have agreed to indemnify the
selling stockholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.

 

The selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale or purchase of shares of common stock, if required,
we will file a supplement to this prospectus. If the selling stockholders use
this prospectus for any sale of the shares of common stock, they will be subject
to the prospectus delivery requirements of the Securities Act.

 

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We have advised each selling stockholder that it may not use shares registered
under this registration statement to cover short sales of common stock made
prior to the date on which this registration statement shall have been declared
effective by the Securities and Exchange Commission. The selling stockholders
will be responsible for their respective compliance with the applicable
provisions of the Securities Act and Exchange Act, and the rules and regulations
thereunder promulgated, including, without limitation, Regulation M, as
applicable to such selling stockholders in connection with resales of their
respective shares under this registration statement.

 

 

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