Exhibit 10.4
AGREEMENT
     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the
1st day of December, 2006, by and between ACE*COMM Corporation, a Maryland
corporation (the “Company”), having an address at 704 Quince Orchard Road,
Gaithersburg, Maryland 20878 and Christopher C. Couch (the “Executive”),
currently residing at 13108 Brandon Way Road, Gaithersburg, MD 20878.
     WHEREAS, the Executive desires to enter into an agreement of employment
with the Company in accordance with the terms and conditions set forth herein;
and
     WHEREAS, the Company desires to employ the Executive as its Sr. Vice
President and Chief Marketing Officer in accordance with the terms and
conditions set forth herein;
     NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, the parties hereto, intending legally to be bound, hereby
agree as follows:

1.   Term of Employment. The initial term of employment shall begin on the date
set forth above (the “Effective Date”) and shall continue in effect until the
first anniversary of the Effective Date (such period being the “Initial Term”).
On the first anniversary of the Effective Date and on subsequent anniversaries,
the term of employment shall automatically renew for successive one year
periods, unless at least thirty (30) days prior to the end of such renewal date
either party hereto gives written notice to the other party of its intention not
to renew the term of employment. As provided below, this Agreement shall remain
in effect following a Change in Control. The Executive’s employment may be
terminated at any time during the Initial Term or during any renewal term solely
in accordance with the terms and conditions of Section 5 hereof.   2.   Duties.

  2.1   Position. The Company hereby employs the Executive in an executive
capacity with the title of Sr. Vice President, Chief Marketing Officer, and the
Executive hereby accepts such employment and undertakes and agrees to serve in
such capacity. In such capacity, the Executive shall have such powers, perform
such duties and fulfill such responsibilities typically associated with such
positions in other publicly held companies. The Executive shall devote
substantially all of his working time and efforts to the performance of his
duties hereunder. The Executive shall report directly to the Chief Executive
Officer (“CEO”) of the Company and have the authority to hire and discharge any
employee within his area of responsibility.     2.2   Limitation on Other
Employment. During the term of his employment hereunder, the Executive will not
engage in any other occupation for gain, profit or pecuniary advantage, without
the consent of the CEO of the Company; provided, however, that this limitation
shall not be construed as preventing him from (a) serving on the board of
directors of any corporation not directly competitive with the Company (provided
that the Executive has obtained the approval of the CEO prior to commencing such
service), and (b) investing or trading in securities or other

 

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      forms of investment, in each case so long as such activities do not
materially interfere with the performance of his duties hereunder and such
investments do not represent the ownership of 5% or more of the capital stock of
publicly traded entities.

3.   Compensation.

  3.1   Base Salary. In consideration of the services rendered hereunder, the
Company shall pay the Executive during the Initial Term of this Agreement a base
salary at the rate of One Hundred Sixty-Five Thousand ($165,000) per annum or
such higher rate as the CEO may in his/her discretion determine (“Base Salary”),
which amount will be payable to him in bi-weekly installments (or at such
intervals as other salaried employees of the Company are paid). The amount of
the Executive’s Base Salary shall be reviewed annually by the CEO but shall not
be reduced without written consent of the Executive.     3.2   Incentive
Compensation.

  (a)   The Executive will be eligible to participate in the ACE*COMM Incentive
Compensation Plan (“ICP”) at a level commensurate with his position. Specific
annual entitlements to bonus awards shall be predicated on the Executive’s
performance and subject to the Company achieving its operating targets,
consistent with the rules set forth in the ICP.     (b)   The Executive shall
participate in all other Bonus, Long-Term Capital Accumulation and/or
Stock-Based Programs that the Company may adopt from time to time for senior
executives.

4.   Benefits.

  4.1   Benefit Program. The Executive will be eligible to participate in the
group insurance plans (“Insurance Plans”), retirement plans, and other benefits
plans and arrangements (such retirement and other benefit plans and
arrangements, together with the Insurance Plans, the “Benefit Program”)
available to executives of the Company, as such plans may be or have been
adopted from time to time in the Company’s discretion. Nothing in this Agreement
shall affect the Company’s right to change insurance carriers and to adopt,
amend, or terminate such plans and arrangements at any time. The Company will
provide to the Executive the specific benefits listed on Schedule A hereto.    
4.2   Employee Time Off. Employee Time Off will be provided as customary for
executives when necessary and convenient for both ACE*COMM and the Executive;
and no Employee Time Off will be accrued or paid out at any time.     4.3  
Expense Reimbursement. In accordance with the policies and procedures which may
be adopted from time to time by the Company and upon presentation by the
Executive of sufficient documentation and substantiation of such expenses, the

 

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      Company will reimburse the Executive for his ordinary and customary
business expenses incurred in the performance of his duties hereunder.

5.   Termination.

  5.1   Termination by the Company for Cause.

  (a)   Definition. The Company may terminate the Executive’s employment
hereunder for “Cause” which shall be limited to:

  (i)   Neglect or dereliction in the performance of the Executive’s duties or
other similar misconduct by him and the failure to cure such situation within
ten (10) days after receipt of a notice thereof from the Board of Directors,    
(ii)   The Executive’s engaging in conduct which has caused material injury to
the Company, monetary or otherwise, as determined by the Board of Directors,    
(iii)   The Executive’s engaging in conduct constituting a breach of fiduciary
duty to the Company, or the Executive’s commission of an act of dishonesty,
disloyalty, or fraud with respect to the Company,     (iv)   The Executive’s
breach of this Agreement,     (v)   The Executive’s material violation of the
code of conduct adopted by the Board of Directors or any other written Company
policy of similar significance, or     (vi)   The Executive’s conviction of, or
plea of guilty or nolo contendere to, any felony or any crime which involves the
property of the Company or dishonesty, disloyalty, or fraud with respect to the
Company.

  (b)   Compensation upon Termination for Cause. Upon the termination of the
Executive’s employment for Cause, the Company shall pay the Executive his Base
Salary and prorated target incentive compensation, if any, and shall permit his
continued participation in the Benefit Program through the effective date of
such termination.

  5.2   Termination for Disability or Death.

  (a)   Disability. The Company may terminate the Executive’s employment
hereunder in the event of the Executive’s permanent disability. For the purposes
of this Agreement, permanent disability shall mean the Executive’s inability,
whether mental or physical, to perform the regular duties of his employment on a
full-time continuous basis for six (6)

 

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      consecutive months (the “Disability Period”). If a policy of disability
insurance maintained by the Company is in effect insuring the Executive, then in
no event shall Executive be deemed to be disabled until he is determined to be
entitled to receive disability income payments pursuant to such disability
policy. During the Disability Period the Company shall (i) pay the Executive his
full Base Salary then in effect, as well as any ICP benefit to which he would
otherwise be entitled, reduced by any amounts which he actually received under
any disability plan maintained by the Company during the Disability Period, and
(ii) shall continue his participation in the Benefit Program subject to the
terms and conditions of the plans and arrangements. The Company shall notify the
Executive in writing of its determination that he has a permanent disability. If
the Executive disputes the Company’s determination that he has a permanent
disability, then the question shall be decided by a panel of three physicians,
one to be designated by the Company, one by the Executive and one by the first
two so designated. The determination of the panel shall be final and binding
upon the parties with costs of the panel to be paid by the Company.

  (b)   Death. The Executive’s employment hereunder will terminate upon the
Executive’s death without any further notice or action required by the Company.
    (c)   Compensation Upon Termination For Disability or Death.

  (i)   If the Company terminates the Executive’s employment due to permanent
disability, pursuant to Subsection 5.2(a) herein, the Company shall pay the
Executive his monthly Base Salary then in effect for one (1) year after his
termination, reduced by any amounts which he actually receives under any
disability plan maintained by the Company and shall pay the Executive when due,
a pro-rata portion of the bonus determined pursuant to (iii) below corresponding
to the period of his active employment during the termination year.     (ii)  
If the Executive’s employment is terminated due to his death, pursuant to
Subsection 5.2(b) herein, the Company shall pay the Executive’s estate or
designated beneficiary (A) the Executive’s Base Salary and any other amounts due
or earned through the date of death, (B) until the end of the fiscal year in
which the date of death occurred, or, if greater, for three months following the
date of death, the Executive’s Base Salary as in effect (offset by any proceeds
paid to the Executive from any Company-maintained life insurance policy), and
(C) a pro-rata portion of the bonus determined pursuant to (iii) below
corresponding to the period of his employment during the termination year.

 

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  (iii)   For purposes of determining the bonus payable in the year of
termination, the Company shall pay a bonus equal to the amount of the current
year’s target bonus which could have been paid to Executive for the year of
termination, pro-rated for the period of his employment during the termination
year.

  (d)   Insurance Plans upon Termination for Death or Disability.

  (i)   If the Company terminates the Executive’s employment due to his
permanent disability, pursuant to Subsection 5.2(a) herein, the Company shall
continue to provide him and his dependents coverage under the Insurance Plans,
at his option, for the longer of one year or the period required by applicable
law. The Company shall provide such coverage at its expense (except with respect
to those costs for which the Executive was responsible prior to the termination
of employment).     (ii)   If the Executive’s employment is terminated due to
his death, pursuant to Subsection 5.2(b) herein, the Company shall continue to
provide the Executive’s dependents medical insurance coverage, at their option,
for the longer of one (1) year after his death or the period required by
applicable law. The Company shall provide such coverage at its expense (except
for those costs for which the Executive was responsible prior to his death).    
(iii)   In the event the continued coverage contemplated by Subsections
5.2(d)(i) and (ii) is not permitted by the Insurance Plans, then the Company for
the period specified above will instead pay the Executive or the Executive’s
dependents (in the event of the Executive’s death) the monetary value of the
premium(s) that it would have paid on the Executive’s behalf if such continued
coverage were permitted.

  5.3   Termination By The Executive.

  (a)   Good Reason. The Executive may terminate his employment hereunder for
“Good Reason,” which shall be limited to: (i) the failure by the Company (or its
stockholders as the case may be) to elect or reelect or to appoint or reappoint
the Executive to the offices of Sr. Vice President, Chief Marketing Officer
(ii) the occurrence, without the written consent of the Executive, of an event
constituting a material breach of this Agreement by the Company, or (iii) a
Change in Control (as defined in Section 5.3(c) herein) and any one of the
following events occurring within one (1) year after such Change in Control:

  (A)   the assignment to the Executive of any material duties inconsistent with
the Executive’s then status as an executive officer of the Company or a
substantial adverse alteration in the nature of the

 

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      Executive’s responsibilities from those in effect immediately prior to the
Change in Control;

  (B)   a reduction by the Company in the Executive’s Base Salary as in effect
immediately prior to the Change in Control;     (C)   a reduction in the
aggregate percentage upon which the Executive’s Incentive Compensation is
determined unless equivalent reductions are made generally for other executives
of the Company;     (D)   the relocation of Executive’s principal place of
employment, without his consent, to a location more than twenty (20) miles from
the place of such employment immediately prior to the Change in Control;     (E)
  The failure by the Company to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under the Benefit
Program immediately prior to the Change in Control, any action by the Company
which materially reduces the Benefit Program (other than general reductions that
are applicable to other executives too), or the failure by the Company to
provide the Executive with paid Employee Time Off as provided to Executive
immediately prior to Change in Control;     (F)   The failure of a successor to
the Company to expressly assume and agree to perform this Agreement pursuant to
Section 5.5 herein.

The Executive understands and agrees that none of the foregoing events shall
constitute Good Reason unless and until the Executive provides written notice to
the Company identifying the asserted grounds for Good Reason and such notice is
provided to the Company within ninety (90) days of such event. The Executive
further understands and agrees that the events described above shall not
constitute Good Reason unless and until the Company fails to cure such asserted
grounds for Good Reason within twenty (20) days of its receipt of such notice
from the Executive.

  (b)   Compensation and Benefits upon Termination By The Executive.

  (i)   In the event of a termination of this Agreement by the Executive without
Good Reason, the Company shall pay him his Base Salary and the prorated portion
of the target bonus, if any, determined pursuant to Section 5.2(c)(iii) and
shall permit his continued participation in the Benefit Program through the
effective date of such termination.     (ii)   If the Executive terminates his
employment hereunder for Good Reason, (A) if there has not occurred a Change in
Control, the

 

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      Company shall also pay him a severance payment equal to twelve (12) months
of his Base Salary then in effect (paid as salary continuation for the twelve
months following the notice of termination), plus the pro-rata portion of the
target bonus determined pursuant to Section 5.2(c)(iii); (B) if there has
occurred a Change in Control, the Company shall pay him a severance payment in a
lump sum equal to the sum of the target bonus plus 200% of his annual Base
Salary then in effect, and (C) in either case, the Executive’s employment shall
be deemed to continue for the balance of the term identified in Section 1 above
for purposes of determining his participation in the Company’s medical and
dental insurance plans; provided, however, that if such participation by him
after termination of employment is not permitted under such plans, the Company
will instead pay the Executive the monetary value of the premium(s) that it
would have paid on the Executive’s behalf if such continued coverage were
permitted. The Company will pay the total costs of the Executive’s participation
in such plans or the equivalent thereof. The Executive also will be provided
out-placement assistance utilizing a consultation service designated and paid
for by the Company. Furthermore, all stock options granted to Executive shall
immediately vest and be exercisable for a period of 12 months following
termination.

  (c)   Definition of Change in Control. A “Change in Control” shall mean the
occurrence of an event set forth in any one of the following paragraphs:

  (i)   any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company or its
affiliates) representing 20% or more of the combined voting power of the
Company’s then outstanding securities, excluding any Person who becomes such
Beneficial Owner in connection with a transaction described in clause (A) of
paragraph (iii) below and excluding a transaction whereby a person becomes the
Beneficial Owner of 20% or more of the combined voting power of the Company’s
then outstanding securities, but such transaction does not transfer the power to
control the management or the policies of the Company; or     (ii)   the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective Date,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the Board
or nomination for election by the Company’s stockholders

 

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      was approved or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on the Effective Date
or whose appointment, election or nomination for election was previously so
approved or recommended; or

  (iii)   there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the company with any other corporation, other
than (A) a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities Beneficially Owned by such Person any
securities acquired directly from the Company or its Affiliates other than in
connection with the acquisition by the Company or its Affiliates of a business)
representing 20% ore more of the combined voting power of the Company’s then
outstanding securities; or     (iv)   the stockholders of the Company approve a
plan of complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by
the Company of all or substantially all of the Company’s assets to an entity, at
least 60% of the combined voting power of the voting securities of which are
owned by the stockholders of the Company in substantially the same proportions
as their ownership of the Company immediately prior to such sale.

For purposes of this Section 5.3(c), the following definitions shall apply:
“Person” shall have the meaning given in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the “Act”), as modified and used in Section
13(d) thereof, except that such term shall not include (i) the Company or any of
its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company. “Beneficial Owner” shall have the meaning set
forth in Rule 13d-3 under the Act. “Affiliate” shall have the meaning set forth
in Rule 12b-2 promulgated under Section 12 of the Act.

 

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  5.4   Termination by the Company other than for Cause.

  (a)   Compensation Upon Termination by the Company other than for Cause. If
the Company terminates the Executive’s employment hereunder without “Cause,” the
Company shall pay the Executive a severance payment equal to twelve (12) months
of his Base Salary then in effect (paid as salary continuation for the twelve
months following the notice of termination), plus the pro-rata portion of the
target bonus determined pursuant to Section 5.2(c)(iii).     (b)   Benefits Upon
Termination by the Company other than for Cause. If the Company terminates the
Executive’s employment hereunder without “Cause,” the Executive’s employment
shall be deemed to continue for the balance of the term identified in Section 1
above for purposes of determining his participation in the Company’s medical and
dental insurance plans; provided, however, that if such participation by him
after termination of employment is not permitted under such plans, the Company
will pay for equivalent coverage. The Company will pay the total costs of the
Executive’s participation in such plans or the equivalent thereof. The Executive
also will be provided with out-placement assistance utilizing a consultation
service designated and paid for by the Company. Furthermore, all stock options
granted to Executive shall immediately vest and be exercisable for a period of
12 months following termination.

  5.5   Successor. The Company, or any entity which controls the Company, shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business assets
of the Company by written agreement expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had occurred. As used in this
Agreement, “Company” shall mean the Company as defined above and any successor
to all or substantially all of its business or assets which becomes bound by all
of the terms and conditions of this Agreement.     5.6   Requirement of a
General Release. The Executive agrees that, as a condition to receiving the
compensation and benefits described in Sections 5.3(b), 5.4(a), or 5.4(b), the
Executive will first execute a general release of claims in a form acceptable to
the Employer. The compensation and benefits shall begin within ten (10) business
days following the later of the Company’s receipt of the general release of
claims or the expiration of the revocation period (to the extent that there is a
revocation period) without the general release of claims being revoked by the
Executive.

6.   Restrictions.

  6.1   Confidential Information. The Executive agrees that during and after the
period of his employment he will not, without authorization from the Company,
divulge,

 

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      disclose or otherwise communicate to any person or company any
confidential or proprietary information pertaining to the Company’s business,
functions or operations, products, services, plans strategies, financial
performance, customers, employees, or contracts (collectively, “Confidential
Information”), except in connection with the discharge of his duties hereunder,
or pursuant to the order of a court of competent jurisdiction. The Executive and
the Company agree that the term “Confidential Information” shall have the
broadest possible meaning permitted by law and shall include any and all
information described in the Company’s standard confidentiality agreement with
employees. The Executive further agrees that, upon termination of his employment
with the Company for any reason, he will promptly return to the Company all
books and records of or pertaining to the Company’s business, and all other
property belonging to the Company which is in his custody or possession.

  6.2   Non-Compete. During his employment by the Company and for twelve (12)
months thereafter regardless of how his employment ends, subject to Section 2.2
above, the Executive shall not anywhere in the United States or in any other
country in which the Company markets or sells its products or services:
(i) solicit or encourage any client or customer of the Company to terminate,
reduce or alter in a manner adverse to the Company any existing business
arrangements with it; (ii) provide services to any entity as an employee,
consultant, contractor, partner, director, officer, agent, or contractor if the
entity competes with the Company by engaging in the Business and the services to
be provided by the Executive are substantially similar to or otherwise
competitive with those previously provided by the Executive to the Company; or
(iii) own an interest in any entity that competes with the Company by engaging
in the Business, provided, however, that the Executive may own, as a passive
investor, securities of any such entity that has outstanding publicly traded
securities so long as the Executive’s direct holdings in any such entity shall
not in the aggregate constitute more than 5% of the voting power of such entity.
For the purposes of Section 6.2, the “Business” shall mean the matters described
in the Company’s Annual Report on Form 10-K filed immediately prior to the end
of the Executive’s employment, and the entities that “compete with the Company”
shall include without limitation those companies listed as competing with the
Company in the Company’s Annual Report on Form 10-K filed immediately prior to
the end of the Executive’s employment. Without the prior written approval of the
CEO, the Executive further agrees that during the twelve (12) month period
following the termination of his employment for any reason, he will not solicit
for employment any employee of the Company or any person who was employed by the
Company within three (3) months of such solicitation. It is further agreed and
understood that the Executive shall not engage in any conduct or communication
which shall disparage the Company or interfere with its current or prospective
business relationships.     6.3   Cause of Action. The parties hereby declare
that the rights of the Company are of a unique nature, the loss of which may
cause irreparable harm, and it may be impossible to measure in money the damages
which will accrue to the Company by reason of the loss of such rights or a
failure by the Executive to perform or

 

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      adhere to any of the obligations under Sections 6.1 or 6.2 hereof. The
Executive expressly acknowledges that remedies at law alone will be inadequate
to compensate the Company for any breach or violation of any of the provisions
of Sections 6.1 or 6.2 hereof, and that the Company, in addition to all other
remedies hereunder or thereunder, shall be entitled, as a matter of right, to
seek injunctive relief, including specific performance, with respect to any such
breach of violation, in any court of competent jurisdiction.

  6.4   Modification/Severability. If any of the restrictions contained in
Section 6 are determined by any court of competent jurisdiction or other
adjudicator to be unenforceable by reason of their extending for too great a
period of time or over too great a geographical area or by reason of their being
too extensive in any other respect, then the Executive and the Company agree
that the court or adjudicator shall interpret and modify such restriction(s) to
be effective for the maximum period of time for which it/they may be enforceable
and over the maximum geographical area as to which it/they may be enforceable
and to the maximum extent in all other respects as to which it/they may be
enforceable. The Executive and the Company further agree that such modified
restriction(s) shall be enforced by the court or adjudicator. In the event that
modification is not possible, then the Executive and the Company agree that,
because each of the Executive’s obligations in Section 6 is a separate and
independent covenant, any unenforceable obligation shall be severed and all
remaining obligations shall be enforced.

7.   Legal Matters.

  7.1   Resolutions of Conflict. Other than for any claims or causes of action
which, in whole or in part, assert any violation by the Executive of Section 6,
any and all disputes, claims and controversies between the parties hereto
concerning the validity, interpretation, performance, termination or breach of
this Agreement, which cannot be resolved by the parties within ninety (90) days
after such dispute, claim or controversy arises shall, at the option of either
party, be referred to and finally settled by arbitration. Such arbitration shall
be initiated by the initiating party giving notice (the “Arbitration Notice”) to
the other party (the “Respondent”) that it intends to submit such dispute, claim
or controversy to arbitration. Each party shall, within thirty (30) days of the
date of the Arbitration Notice is received by the Respondent, designate a person
who is approved as an American Arbitration Association arbitrator to act as an
arbitrator, if either party fails to designate a person to Act as an arbitrator
within the time specified herein the arbitration shall be conducted by the sole
designated arbitrator. The two arbitrators appointed by the parties shall,
within thirty (30) days after their designation appoint a third arbitrator who
shall act as presiding arbitrator (the “Presiding Arbitrator”). If the two
arbitrators designated by the parties are unable to appoint a Presiding
Arbitrator, the Presiding Arbitrator shall be appointed according to the rules
of the American Arbitration Association as in effect on the date the notice of
submission to arbitration is given (the “Rules”).

 

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Such arbitration shall be held in the Gaithersburg, Maryland area in accordance
with the Rules except as otherwise expressly provided herein. The arbitrators
shall, by majority vote, render a written decision stating reasons therefore in
reasonable detail within three (3) months after the appointment of all the
arbitrators. Each party shall bear its own costs and attorneys fees. All other
costs and expenses of arbitration shall be apportioned between the parties by
the arbitrators. The award of the arbitrators shall be final and binding, and
judgment thereon may be rendered by any court having jurisdiction thereof, or
application may be made to such court for the judicial acceptance of the award
and an order of enforcement as the case may be.

  7.2   Notices. All notices, requests, consents and other communications,
required or permitted to be given hereunder, shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed first class,
postage prepaid, by registered or certified mail, addressed to either party at
the address first written above (or to such other address as either party shall
designate by notice in writing to the other party in accordance herewith).

8.   Miscellaneous.

  8.1   Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland applicable to
agreements made and to be performed within Maryland, without regard to the
principles of conflict of laws.     8.2   Headings. The section headings
contained herein are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.     8.3   Entire Agreement.
This Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and from and after the date hereof
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof provided, however, that the benefits
conferred under this Agreement are in addition to, and not in lieu of, any and
all benefits conferred under plans and arrangements currently in effect for the
Executive.     8.4   Assignment. This Agreement is binding upon and shall inure
to the benefits of the Executive and his estate, but the Executive’s rights and
obligations hereunder may not be assigned or pledged by him.     8.5  
Modification. This Agreement may be amended, modified, superseded, canceled,
renewed or extended, and the terms or covenants hereof may be waived, only by
written instrument executed by both of the parties hereto or in the case of a
waiver, by the party waiving compliance.     8.6   Section 162(m). In the event
compensation payable to the Executive hereunder in any single tax year would
result in the non-deductibility of a portion of such compensation by the Company
solely by reason of Section 162(m) of the Internal

 

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Revenue Code of 1986, as amended, then, and in such event, the Company shall be
permitted to defer payment of such non-deductible amount to the Executive to be
paid to him on the first day of the succeeding tax year of the Company.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with legal and binding effect as of the day and year first above
written.

            ACE*COMM CORPORATION
      /s/ George T. Jimenez   By:   George T. Jimenez, Chairman and CEO      
THE EXECUTIVE
      /s/ Christopher C. Couch     Christopher C. Couch         

 

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SCHEDULE A

      Group Plans   Benefit
 
   
ACE*COMM Group Medical Plan
  Varies
 
   
ACE*COMM Group Life Insurance Plan
  Two times annual salary
 
   
ACE*COMM Group Short-Term Disability Plan
  70% of weekly earnings after 14 Days, continuing up to 11 weeks. Maximum
weekly benefit is $1,000, with reduction in benefit depending on age at time of
disability.
 
   
ACE*COMM Group Long-Term Disability Plan
  60% of monthly earnings after 90 days. Maximum monthly benefit is $10,000,
with reduction in benefit depending on age at time of disability. Benefit is
reduced at retirement age.
 
   
Executive Plans/Benefits
   
 
   
Incentive Compensation Plan
Amended and Restated Omnibus Stock Plan