Document:

exv4w1

 

Exhibit 4.1

Buyer Series A Loan Note

ACE*COMM CORPORATION

LOAN NOTE

DUE September 23, 2005

			
	£258,108.93
	 	March 24, 2005

     FOR VALUE RECEIVED, the undersigned, ACE*COMM Corporation, a Maryland corporation
(“Borrower”), hereby promises to pay to Noga Confino or her registered assigns (the “Holder”), the
principal sum of £258,108.93 (Two hundred and fifty eight thousand one hundred and eight pounds
sterling and ninety three pence) on September 23, 2005 (the “Maturity Date”), except as otherwise
set forth herein, and with interest thereon as provided herein.

1. Interest and Principal Amortization.

          (a) Basic Interest. This Loan Note (this “Note”) shall not bear any interest
(“Interest”) for the first twenty (20) business days following the date hereof, and thereafter
shall bear Interest on the outstanding unpaid principal amount of this Note at the rate of fifteen
percent (15%) per annum. Interest on this Note shall accrue from and including such
20th business day through and until repayment of the entire principal amount of this
Note and payment of all Interest in full, and shall be computed on the basis of a 365-day year
applied to actual days on the unpaid principal balance. The Interest shall accrue and be paid in
full upon the Maturity Date, and if any, all or any part of this Note is prepaid, the Interest
accrued on such prepaid portion shall be paid concurrently with such prepayment.

          (b) Security. This Note shall not be secured by any assets of the Borrower.

          (c) Default Rate of Interest. Notwithstanding the foregoing provisions of this
Section 1, but subject to applicable law, any overdue principal of and overdue Interest on this
Note shall bear interest for each day from the date payment thereof was due to the date of actual
payment, at a rate equal to fifteen percent (15%) per annum payable as provided in Section 1(a)
above.

          (d) No Usurious Interest. In the event that any interest rate(s) provided for in this
Section 1, shall be determined to be unlawful, such interest rate(s) shall be computed at the
highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in
excess of that permitted by law shall be returned to the Borrower.

     2. Payment.

          (a) Cash or Shares. The Borrower, at its option, may pay its obligations under this
Note in cash or (subject to the limitation in Section 2(e) below) shares of common stock of
Borrower (“ACE*COMM Stock”), or in a combination of cash and ACE*COMM Stock. If the Borrower
elects to pay any portion of this Note in ACE*COMM Stock, the pounds sterling principal amount and
accrued Interest shall be converted into US Dollars at the

 

 

Exchange Rate, and the Borrower shall
issue ACE*COMM Stock to Holder equal in value (as specified below) to the sum of (i) such portion
of the principal amount of the Note being paid in ACE*COMM Stock and (ii) the accrued Interest on
such portion. For purposes of this Note, the value of the ACE*COMM Stock shall be $3.1648 per
share. For the purposes of this Section 2(a), the “Exchange Rate” means the mid market spot rate
for the conversion of funds sterling into US Dollars as published in the London edition of the
Financial Times on the business day preceding the date of issuance of the ACE*COMM Stock.

          (b) Registration of ACE*COMM Stock. The Borrower agrees to register the ACE*COMM
Stock issued pursuant to this Note with the Securities and Exchange Commission pursuant to the
terms and conditions set forth in Clause 15 of the Purchase Agreement by and among Borrower, Holder
and Springreel Limited dated as of March 24, 2005, as amended (the “Purchase Agreement”).

          (c) Prepayment. The Borrower may prepay all or any part of the principal amount of or
Interest accrued on this Note at any time without advance notice to the Holder. The Borrower shall
prepay the principal amount of this Note in cash, in whole but not in part, to the extent the
Borrower has available to it sufficient additional cash beyond what is available to the Borrower as
of the date of this Note to effect such prepayment.

          (d) Conversion. The Holder shall have the right (subject to the limitation in Section
2(e) below) to convert all or any part of the principal amount of or Interest accrued on this Note
at any time into ACE*COMM Stock. If the Holder elects, by written notice to the Borrower, to
convert any portion of this Note into ACE*COMM Stock, the Borrower shall issue ACE*COMM Stock to
Holder equal in value (as specified in Section 2(a) above) to the sum of (i) such portion of the
principal amount of the Note being converted into ACE*COMM Stock and (ii) the accrued Interest on
such portion.

          (e) Maximum Number of Shares Issuable. Notwithstanding the foregoing, the aggregate
amount of ACE*COMM Stock that may be issued under this Note, together with the ACE*COMM Stock
issued under the Purchase Agreement on or about the date hereof and that is issued under the three
other notes entered into by the Borrower or its affiliates on or about the date hereof under the
Purchase Agreement, may not exceed 19.999% of the ACE*COMM Stock outstanding immediately prior to
the completion under the Purchase Agreement, unless the Borrower obtains shareholder approval under
the rules of the Nasdaq trading market on which the ACE*COMM Stock is then listed to exceed such
limit. To the extent the Borrower is prevented by such limitation from issuing ACE*COMM Stock in
payment of any portions of this Note, whether principal or Interest, all such portions shall be
paid in cash.

     3. Events of Default. The following shall constitute an “Event of Default” hereunder:

          (a) Borrower’s insolvency, general assignment for the benefit of creditors, or the final
judgment by or against Borrower of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition of Borrower’s debts under any law
relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or

- 2 -

 

seeking appointment
of a receiver, trustee, custodian, or other similar official for Borrower or for all or any
substantial part of Buyer’s assets.

          (b) Borrower’s common stock being delisted from trading on the Nasdaq Small Caps Market unless
it commences trading on the Nasdaq National Market or American Stock Exchange.

     4. Remedies. Upon the occurrence of an Event of Default, Holder shall have the right to
cause the entire unpaid principal balance, together with all accrued Interest thereon, reasonable
attorneys’ fees and all fees, charges, costs and expenses, if any, owed by Borrower to Holder, to
become immediately due and payable in full by giving written notice to Borrower. In addition, upon
the occurrence of an Event of Default, Holder may avail itself of any legal or equitable rights
which Holder may have at law or in equity or under this Note. The remedies of Holder as provided
herein shall be distinct and cumulative, and may be pursued singly, successively or together, at
the sole discretion of Holder, and may be exercised as often as occasion therefor shall arise.
Failure to exercise any of the foregoing options upon the occurrence of an Event of Default shall
not constitute a waiver of the right to exercise the same or any other option at any subsequent
time in respect to the same or any other Event of Default, and no single or partial exercise of any
right or remedy shall preclude other or further exercise of the same or any other right or remedy.

     5. Amendment. Amendments and modifications of this Note may be made only in a writing
executed by the Borrower and the Holder.

     6. Assignment. The Holder may not transfer this Note without the prior written consent of
the Borrower, which approval shall not be unreasonably withheld.

     7. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized
representative of the Holder stating the circumstances of the loss, theft, destruction or
mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of
such Note), the Borrower, at its expense, will promptly execute and deliver, in lieu thereof, a new
Note of like tenor. If required by the Borrower, the Holder must provide indemnity sufficient in
the reasonable judgment of the Borrower to protect the Borrower from any loss which the Borrower
may suffer if a lost, stolen or destroyed Note is replaced.

     8. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Borrower shall bind its successors and
assigns, whether so expressed or not.

     9. Notices. All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified first-class mail, return
receipt requested, telecopier (with receipt confirmed), courier service or personal delivery, to
the applicable party at its principal corporate headquarters, attention: chief executive
officer. All such notices and communications shall be deemed to have been duly given when:
delivered by hand, if personally delivered; when delivered by courier, if delivered by courier
service; if mailed, five (5) business days after being deposited in the mail, postage prepaid; or
if telecopied, when receipt is acknowledged.

- 3 -

 

     10. Governing Law. This Agreement shall be governed by, construed in accordance with, and
enforced under, the laws of the State of Maryland, without regard to the conflicts of law
principles thereof.

     11. Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

     12. Headings. The headings in this Note are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

- 4 -

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Note as of the day and year first
hereinabove set forth.

    	 	 	 	 	 	 	 	 
	 	 	ACE*COMM CORPORATION
	 
	 	 	 	 	 	 	 
	 
	 	By: 	 	/s/ Steven R. Delmar	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Name: 	Steven R. Delmar	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Title: 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 

- 5 -

 

Buyer Series B Loan Note

ACE*COMM CORPORATION

LOAN NOTE

DUE September 23, 2005

			
	£200,000
	 	March 24, 2005

     FOR VALUE RECEIVED, the undersigned, ACE*COMM Corporation, a Maryland corporation
(“Borrower”), hereby promises to pay to Noga Confino or her registered assigns (the “Holder”), the
principal sum of £200,000 (Two hundred thousand pounds sterling) on September 23, 2005 (the
“Maturity Date”), except as otherwise set forth herein, and with interest thereon as provided
herein.

1. Interest and Principal Amortization.

          (a) Basic Interest. The Borrower promises to pay interest (“Interest”) on the
outstanding unpaid principal amount of this Note at the rate of seven and one half percent (7.5%)
per annum. Interest on this Loan Note (this “Note”) shall accrue from and including the date of
issuance through and until repayment of the entire principal amount of this Note and payment of all
Interest in full, and shall be computed on the basis of a 365-day year applied to actual days on
the unpaid principal balance. The Interest shall accrue and be paid in full upon the Maturity Date.

          (b) Security. This Note shall not be secured by any assets of the Borrower.

          (c) Default Rate of Interest. Notwithstanding the foregoing provisions of this
Section 1, but subject to applicable law, any overdue principal of and overdue Interest on this
Note shall bear interest for each day from the date payment thereof was due to the date of actual
payment, at a rate equal to fifteen percent (15%) per annum payable as provided in Section 1(a)
above.

          (d) No Usurious Interest. In the event that any interest rate(s) provided for in this
Section 1, shall be determined to be unlawful, such interest rate(s) shall be computed at the
highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in
excess of that permitted by law shall be returned to the Borrower.

2. Payment.

          (a) Cash or Shares. The Borrower, at its option, may pay its obligations under this
Note in cash or (subject to the limitation in Section 2(d) below) shares of common
stock of Borrower (“ACE*COMM Stock”), or in a combination of cash and ACE*COMM Stock. If the
Borrower elects to pay any portion of this Note in ACE*COMM Stock, the pounds sterling principal
amount and accrued Interest shall be converted into US Dollars at the Exchange Rate, and the
Borrower shall issue ACE*COMM Stock to Holder equal in value (as specified below) to the sum of (i)
such portion of the principal amount of the Note being paid in ACE*COMM Stock, (ii) the accrued
Interest on such portion and (iii) 50% of the value of the

 

 

sum of (i) and (ii). For purposes of
this Note, the value of the ACE*COMM Stock shall be $3.1648 per share. For the purposes of this
Section 2(a), the “Exchange Rate” means the mid market spot rate for the conversion of funds
sterling into US Dollars as published in the London edition of the Financial Times on the business
day preceding the date of issuance of the ACE*COMM Stock.

          (b) Registration of ACE*COMM Stock. The Borrower agrees to register the ACE*COMM
Stock issued pursuant to this Note with the Securities and Exchange Commission pursuant to the
terms and conditions set forth in Clause 15 of the Purchase Agreement by and among Borrower, Holder
and Springreel Limited dated as of March 24, 2005, as amended (the “Purchase Agreement”).

          (c) No Prepayment. The Borrower shall not prepay any part of the principal amount of
or Interest accrued on this Note.

          (d) Maximum Number of Shares Issuable. Notwithstanding the foregoing, the aggregate
amount of ACE*COMM Stock that may be issued under this Note, together with the ACE*COMM Stock
issued under the Purchase Agreement on or about the date hereof and that is issued under the three
other notes entered into by the Borrower or its affiliates on or about the date hereof under the
Purchase Agreement, may not exceed 19.999% of the ACE*COMM Stock outstanding immediately prior to
the completion under the Purchase Agreement, unless the Borrower obtains shareholder approval under
the rules of the Nasdaq trading market on which the ACE*COMM Stock is then listed to exceed such
limit. To the extent the Borrower is prevented by such limitation from issuing ACE*COMM Stock in
payment of any portions of this Note, whether principal or Interest, all such portions shall be
paid in cash.

     3. Events of Default. The following shall constitute an “Event of Default” hereunder:

          (a) Borrower’s insolvency, general assignment for the benefit of creditors, or the final
judgment by or against Borrower of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition of Borrower’s debts under any law
relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or seeking appointment
of a receiver, trustee, custodian, or other similar official for Borrower or for all or any
substantial part of Buyer’s assets.

          (b) Borrower’s common stock being delisted from trading on the Nasdaq Small Caps Market unless
it commences trading on the Nasdaq National Market or American Stock Exchange.

     4. Remedies. Upon the occurrence of an Event of Default, Holder shall have the right to
cause the entire unpaid principal balance, together with all accrued Interest thereon, reasonable
attorneys’ fees and all fees, charges, costs and expenses, if any, owed by Borrower to Holder, to
become immediately due and payable in full by giving written notice to Borrower. In addition, upon
the occurrence of an Event of Default, Holder may avail itself of any legal or equitable rights
which Holder may have at law or in equity or under this Note. The remedies of

- 2 -

 

Holder as provided
herein shall be distinct and cumulative, and may be pursued singly, successively or together, at
the sole discretion of Holder, and may be exercised as often as occasion therefor shall arise.
Failure to exercise any of the foregoing options upon the occurrence of an Event of Default shall
not constitute a waiver of the right to exercise the same or any other option at any subsequent
time in respect to the same or any other Event of Default, and no single or partial exercise of any
right or remedy shall preclude other or further exercise of the same or any other right or remedy.

     5. Amendment. Amendments and modifications of this Note may be made only in a writing
executed by the Borrower and the Holder.

     6. Assignment. The Holder may not transfer this Note without the prior written consent of
the Borrower, which approval shall not be unreasonably withheld.

     7. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized
representative of the Holder stating the circumstances of the loss, theft, destruction or
mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of
such Note), the Borrower, at its expense, will promptly execute and deliver, in lieu thereof, a new
Note of like tenor. If required by the Borrower, the Holder must provide indemnity sufficient in
the reasonable judgment of the Borrower to protect the Borrower from any loss which the Borrower
may suffer if a lost, stolen or destroyed Note is replaced.

     8. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Borrower shall bind its successors and
assigns, whether so expressed or not.

     9. Notices. All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified first-class mail, return
receipt requested, telecopier (with receipt confirmed), courier service or personal delivery, to
the applicable party at its principal corporate headquarters, attention: chief executive officer.
All such notices and communications shall be deemed to have been duly given when: delivered by
hand, if personally delivered; when delivered by courier, if delivered by courier service; if
mailed, five (5) business days after being deposited in the mail, postage prepaid; or if
telecopied, when receipt is acknowledged.

     10. Governing Law. This Agreement shall be governed by, construed in accordance with, and
enforced under, the laws of the State of Maryland, without regard to the conflicts of law
principles thereof.

     11. Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

     12. Headings. The headings in this Note are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

- 3 -

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Note as of the day and year first
hereinabove set forth.

    	 	 	 	 	 	 	 	 
	 	 	ACE*COMM CORPORATION
	 
	 	 	 	 	 	 	 
	 
	 	By: 	 	/s/ Steven R. Delmar	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Name: 	 Steven R. Delmar	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Title: 	 Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 

- 4 -

 

Buyer Series C Loan Note

ACE*COMM CORPORATION

LOAN NOTE

DUE September 23, 2005

			
	£291,891.07
	 	March 24, 2005

     FOR VALUE RECEIVED, the undersigned, ACE*COMM Corporation, a Maryland corporation
(“Borrower”), hereby promises to pay to Noga Confino or her registered assigns (the “Holder”), the
principal sum of £291,891.07 (Two hundred and ninety one thousand eight hundred and ninety one
pounds sterling and seven pence) on September 23, 2005 (the “Maturity Date”), except as otherwise
set forth herein, and with interest thereon as provided herein.

     1. Interest and Principal Amortization.

          (a) Basic Interest. This Loan Note (this “Note”) shall not bear any interest
(“Interest”) for the first twenty (20) business days following the date hereof, and thereafter
shall bear Interest on the outstanding unpaid principal amount of this Note at the rate of fifteen
percent (15%) per annum. Interest on this Note shall accrue from and including such
20th business day through and until repayment of the entire principal amount of this
Note and payment of all Interest in full, and shall be computed on the basis of a 365-day year
applied to actual days on the unpaid principal balance. The Interest shall accrue and be paid in
full upon the Maturity Date, and if any, all or any part of this Note is prepaid, the Interest
accrued on such prepaid portion shall be paid concurrently with such prepayment.

          (b) Security. This Note shall not be secured by any assets of the Borrower.

          (c) Default Rate of Interest. Notwithstanding the foregoing provisions of this
Section 1, but subject to applicable law, any overdue principal of and overdue Interest on this
Note shall bear interest for each day from the date payment thereof was due to the date of actual
payment, at a rate equal to fifteen percent (15%) per annum payable as provided in Section 1(a)
above.

          (d) No Usurious Interest. In the event that any interest rate(s) provided for in this
Section 1, shall be determined to be unlawful, such interest rate(s) shall be computed at the
highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in
excess of that permitted by law shall be returned to the Borrower.

     2. Payment.

          (a) Cash or Shares. The Borrower, at its option, may pay its obligations under this
Note in cash or (subject to the limitation in Section 2(e) below) shares of common
stock of Borrower (“ACE*COMM Stock”), or in a combination of cash and ACE*COMM Stock. If the
Borrower elects to pay any portion of this Note in ACE*COMM Stock, the pounds sterling principal
amount and accrued Interest shall be converted into US Dollars at the

 

 

Exchange Rate, and the
Borrower shall issue ACE*COMM Stock to Holder equal in value (as specified below) to the sum of (i)
such portion of the principal amount of the Note being paid in ACE*COMM Stock and (ii) the accrued
Interest on such portion. For purposes of this Note, the value of the ACE*COMM Stock shall be
$3.16480 per share. For the purposes of this Section 2(a), the “Exchange Rate” means the
mid market spot rate for the conversion of funds sterling into US Dollars as published in the
London edition of the Financial Times on the business day preceding the date of issuance of the
ACE*COMM Stock.

          (b) Registration of ACE*COMM Stock. The Borrower agrees to register the ACE*COMM
Stock issued pursuant to this Note with the Securities and Exchange Commission pursuant to the
terms and conditions set forth in Clause 15 of the Purchase Agreement by and among Borrower, Holder
and Springreel Limited dated as of March 24, 2005, as amended (the “Purchase Agreement”).

          (c) Prepayment. The Borrower may prepay all or any part of the principal amount of or
Interest accrued on this Note at any time without advance notice to the Holder. The Borrower shall
prepay the principal amount of this Note in cash, in whole but not in part, to the extent the
Borrower has available to it sufficient additional cash beyond what is available to the Borrower as
of the date of this Note to effect such prepayment.

          (d) Conversion. The Holder shall have the right (subject to the limitation in Section
2(e) below) to convert all or any part of the principal amount of or Interest accrued on this Note
at any time into ACE*COMM Stock. If the Holder elects, by written notice to the Borrower, to
convert any portion of this Note into ACE*COMM Stock, the Borrower shall issue ACE*COMM Stock to
Holder equal in value (as specified in Section 2(a) above) to the sum of (i) such portion of the
principal amount of the Note being converted into ACE*COMM Stock and (ii) the accrued Interest on
such portion.

          (e) Maximum Number of Shares Issuable. Notwithstanding the foregoing, the aggregate
amount of ACE*COMM Stock that may be issued under this Note, together with the ACE*COMM Stock
issued under the Purchase Agreement on or about the date hereof and that is issued under the three
other notes entered into by the Borrower or its affiliates on or about the date hereof under the
Purchase Agreement, may not exceed 19.999% of the ACE*COMM Stock outstanding immediately prior to
the completion under the Purchase Agreement, unless the Borrower obtains shareholder approval under
the rules of the Nasdaq trading market on which the ACE*COMM Stock is then listed to exceed such
limit. To the extent the Borrower is prevented by such limitation from issuing ACE*COMM Stock in
payment of any portions of this Note, whether principal or Interest, all such portions shall be
paid in cash.

     3. Events of Default. The following shall constitute an “Event of Default” hereunder:

          (a) Borrower’s insolvency, general assignment for the benefit of creditors, or the final
judgment by or against Borrower of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition of Borrower’s debts under any law
relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or

- 2 -

 

seeking appointment
of a receiver, trustee, custodian, or other similar official for Borrower or for all or any
substantial part of Buyer’s assets.

          (b) Borrower’s common stock being delisted from trading on the Nasdaq Small Caps Market unless
it commences trading on the Nasdaq National Market or American Stock Exchange.

     4. Remedies. Upon the occurrence of an Event of Default, Holder shall have the right to
cause the entire unpaid principal balance, together with all accrued Interest thereon, reasonable
attorneys’ fees and all fees, charges, costs and expenses, if any, owed by Borrower to Holder, to
become immediately due and payable in full by giving written notice to Borrower. In addition, upon
the occurrence of an Event of Default, Holder may avail itself of any legal or equitable rights
which Holder may have at law or in equity or under this Note. The remedies of Holder as provided
herein shall be distinct and cumulative, and may be pursued singly, successively or together, at
the sole discretion of Holder, and may be exercised as often as occasion therefor shall arise.
Failure to exercise any of the foregoing options upon the occurrence of an Event of Default shall
not constitute a waiver of the right to exercise the same or any other option at any subsequent
time in respect to the same or any other Event of Default, and no single or partial exercise of any
right or remedy shall preclude other or further exercise of the same or any other right or remedy.

     5. Amendment. Amendments and modifications of this Note may be made only in a writing
executed by the Borrower and the Holder.

     6. Assignment. The Holder may not transfer this Note without the prior written consent of
the Borrower, which approval shall not be unreasonably withheld.

     7. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized
representative of the Holder stating the circumstances of the loss, theft, destruction or
mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of
such Note), the Borrower, at its expense, will promptly execute and deliver, in lieu thereof, a new
Note of like tenor. If required by the Borrower, the Holder must provide indemnity sufficient in
the reasonable judgment of the Borrower to protect the Borrower from any loss which the Borrower
may suffer if a lost, stolen or destroyed Note is replaced.

     8. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Borrower shall bind its successors and
assigns, whether so expressed or not.

     9. Notices. All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified first-class mail, return
receipt requested, telecopier (with receipt confirmed), courier service or personal delivery, to
the applicable party at its principal corporate headquarters, attention: chief executive
officer. All such notices and communications shall be deemed to have been duly given when:
delivered by hand, if personally delivered; when delivered by courier, if delivered by courier
service; if mailed, five (5) business days after being deposited in the mail, postage prepaid; or
if telecopied, when receipt is acknowledged.

- 3 -

 

     10. Governing Law. This Agreement shall be governed by, construed in accordance with, and
enforced under, the laws of the State of Maryland, without regard to the conflicts of law
principles thereof.

     11. Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

     12. Headings. The headings in this Note are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

- 4 -

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Note as of the day and year first
hereinabove set forth.

    	 	 	 	 	 	 	 	 
	 	 	ACE*COMM CORPORATION
	 
	 	 	 	 	 	 	 
	 
	 	By: 	 	/s/ Steven R. Delmar	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Name:	  Steven R. Delmar	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Title: 	 Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 

- 5 -

 

Buyer Series A Loan Note

ACE*COMM CORPORATION

LOAN NOTE

DUE September 23, 2005

			
	£258,108.93
	 	March 24, 2005

     FOR VALUE RECEIVED, the undersigned, ACE*COMM Corporation, a Maryland corporation
(“Borrower”), hereby promises to pay to Springreel Limited or its registered assigns (the
“Holder”), the principal sum of £258,108.93 (Two hundred and fifty eight thousand one hundred and
eight pounds sterling and ninety three pence) on September 23, 2005 (the “Maturity Date”), except
as otherwise set forth herein, and with interest thereon as provided herein.

1. Interest and Principal Amortization.

          (a) Basic Interest. This Loan Note (this “Note”) shall not bear any interest
(“Interest”) for the first twenty (20) business days following the date hereof, and thereafter
shall bear Interest on the outstanding unpaid principal amount of this Note at the rate of fifteen
percent (15%) per annum. Interest on this Note shall accrue from and including such
20th business day through and until repayment of the entire principal amount of this
Note and payment of all Interest in full, and shall be computed on the basis of a 365-day year
applied to actual days on the unpaid principal balance. The Interest shall accrue and be paid in
full upon the Maturity Date, and if any, all or any part of this Note is prepaid, the Interest
accrued on such prepaid portion shall be paid concurrently with such prepayment.

          (b) Security. This Note shall not be secured by any assets of the Borrower.

          (c) Default Rate of Interest. Notwithstanding the foregoing provisions of this
Section 1, but subject to applicable law, any overdue principal of and overdue Interest on this
Note shall bear interest for each day from the date payment thereof was due to the date of actual
payment, at a rate equal to fifteen percent (15%) per annum payable as provided in Section 1(a)
above.

          (d) No Usurious Interest. In the event that any interest rate(s) provided for in this
Section 1, shall be determined to be unlawful, such interest rate(s) shall be computed at the
highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in
excess of that permitted by law shall be returned to the Borrower.

     2. Payment.

          (a) Cash or Shares. The Borrower, at its option, may pay its obligations under this
Note in cash or (subject to the limitation in Section 2(e) below) shares of common stock of
Borrower (“ACE*COMM Stock”), or in a combination of cash and ACE*COMM Stock. If the Borrower
elects to pay any portion of this Note in ACE*COMM Stock, the pounds sterling principal amount and
accrued Interest shall be converted into US Dollars at the

 

 

Exchange Rate, and the Borrower shall
issue ACE*COMM Stock to Holder equal in value (as specified below) to the sum of (i) such portion
of the principal amount of the Note being paid in ACE*COMM Stock and (ii) the accrued Interest on
such portion. For purposes of this Note, the value of the ACE*COMM Stock shall be $3.1648 per
share. For the purposes of this Section 2(a), the “Exchange Rate” means the mid market spot rate
for the conversion of funds sterling into US Dollars as published in the London edition of the
Financial Times on the business day preceding the date of issuance of the ACE*COMM Stock.

          (b) Registration of ACE*COMM Stock. The Borrower agrees to register the ACE*COMM
Stock issued pursuant to this Note with the Securities and Exchange Commission pursuant to the
terms and conditions set forth in Clause 15 of the Purchase Agreement by and among Borrower, Holder
and Noga Confino dated as of March 24, 2005, as amended (the “Purchase Agreement”).

          (c) Prepayment. The Borrower may prepay all or any part of the principal amount of or
Interest accrued on this Note at any time without advance notice to the Holder. The Borrower shall
prepay the principal amount of this Note in cash, in whole but not in part, to the extent the
Borrower has available to it sufficient additional cash beyond what is available to the Borrower as
of the date of this Note to effect such prepayment.

          (d) Conversion. The Holder shall have the right (subject to the limitation in Section
2(e) below) to convert all or any part of the principal amount of or Interest accrued on this Note
at any time into ACE*COMM Stock. If the Holder elects, by written notice to the Borrower, to
convert any portion of this Note into ACE*COMM Stock, the Borrower shall issue ACE*COMM Stock to
Holder equal in value (as specified in Section 2(a) above) to the sum of (i) such portion of the
principal amount of the Note being converted into ACE*COMM Stock and (ii) the accrued Interest on
such portion.

          (e) Maximum Number of Shares Issuable. Notwithstanding the foregoing, the aggregate
amount of ACE*COMM Stock that may be issued under this Note, together with the ACE*COMM Stock
issued under the Purchase Agreement on or about the date hereof and that is issued under the three
other notes entered into by the Borrower or its affiliates on or about the date hereof under the
Purchase Agreement, may not exceed 19.999% of the ACE*COMM Stock outstanding immediately prior to
the completion under the Purchase Agreement, unless the Borrower obtains shareholder approval under
the rules of the Nasdaq trading market on which the ACE*COMM Stock is then listed to exceed such
limit. To the extent the Borrower is prevented by such limitation from issuing ACE*COMM Stock in
payment of any portions of this Note, whether principal or Interest, all such portions shall be
paid in cash.

     3. Events of Default. The following shall constitute an “Event of Default” hereunder:

          (a) Borrower’s insolvency, general assignment for the benefit of creditors, or the final
judgment by or against Borrower of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition of Borrower’s debts under any law
relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or

- 2 -

 

seeking appointment
of a receiver, trustee, custodian, or other similar official for Borrower or for all or any
substantial part of Buyer’s assets.

          (b) Borrower’s common stock being delisted from trading on the Nasdaq Small Caps Market unless
it commences trading on the Nasdaq National Market or American Stock Exchange.

     4. Remedies. Upon the occurrence of an Event of Default, Holder shall have the right to
cause the entire unpaid principal balance, together with all accrued Interest thereon, reasonable
attorneys’ fees and all fees, charges, costs and expenses, if any, owed by Borrower to Holder, to
become immediately due and payable in full by giving written notice to Borrower. In addition, upon
the occurrence of an Event of Default, Holder may avail itself of any legal or equitable rights
which Holder may have at law or in equity or under this Note. The remedies of Holder as provided
herein shall be distinct and cumulative, and may be pursued singly, successively or together, at
the sole discretion of Holder, and may be exercised as often as occasion therefor shall arise.
Failure to exercise any of the foregoing options upon the occurrence of an Event of Default shall
not constitute a waiver of the right to exercise the same or any other option at any subsequent
time in respect to the same or any other Event of Default, and no single or partial exercise of any
right or remedy shall preclude other or further exercise of the same or any other right or remedy.

     5. Amendment. Amendments and modifications of this Note may be made only in a writing
executed by the Borrower and the Holder.

     6. Assignment. The Holder may not transfer this Note without the prior written consent of
the Borrower, which approval shall not be unreasonably withheld.

     7. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized
representative of the Holder stating the circumstances of the loss, theft, destruction or
mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of
such Note), the Borrower, at its expense, will promptly execute and deliver, in lieu thereof, a new
Note of like tenor. If required by the Borrower, the Holder must provide indemnity sufficient in
the reasonable judgment of the Borrower to protect the Borrower from any loss which the Borrower
may suffer if a lost, stolen or destroyed Note is replaced.

     8. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Borrower shall bind its successors and
assigns, whether so expressed or not.

     9. Notices. All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified first-class mail, return
receipt requested, telecopier (with receipt confirmed), courier service or personal delivery, to
the applicable party at its principal corporate headquarters, attention: chief executive
officer. All such notices and communications shall be deemed to have been duly given when:
delivered by hand, if personally delivered; when delivered by courier, if delivered by courier
service; if mailed, five (5) business days after being deposited in the mail, postage prepaid; or
if telecopied, when receipt is acknowledged.

- 3 -

 

     10. Governing Law. This Agreement shall be governed by, construed in accordance with, and
enforced under, the laws of the State of Maryland, without regard to the conflicts of law
principles thereof.

     11. Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

     12. Headings. The headings in this Note are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

- 4 -

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Note as of the day and year first
hereinabove set forth.

    	 	 	 	 	 	 	 	 
	 	 	ACE*COMM CORPORATION
	 
	 	 	 	 	 	 	 
	 
	 	By: 	 	/s/ Steven R. Delmar	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Name:	 Steven R. Delmar	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Title: 	 Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 

- 5 -

 

Buyer Series B Loan Note

ACE*COMM CORPORATION

LOAN NOTE

DUE September 23, 2005

			
	£200,000
	 	March 24, 2005

     FOR VALUE RECEIVED, the undersigned, ACE*COMM Corporation, a Maryland corporation
(“Borrower”), hereby promises to pay to Springreel Limited or its registered assigns (the
“Holder”), the principal sum of £200,000 (Two hundred thousand pounds sterling) on September 23,
2005 (the “Maturity Date”), except as otherwise set forth herein, and with interest thereon as
provided herein.

     1. Interest and Principal Amortization.

          (a) Basic Interest. The Borrower promises to pay interest (“Interest”) on the
outstanding unpaid principal amount of this Note at the rate of seven and one half percent (7.5%)
per annum. Interest on this Loan Note (this “Note”) shall accrue from and including the date of
issuance through and until repayment of the entire principal amount of this Note and payment of all
Interest in full, and shall be computed on the basis of a 365-day year applied to actual days on
the unpaid principal balance. The Interest shall accrue and be paid in full upon the Maturity Date.

          (b) Security. This Note shall not be secured by any assets of the Borrower.

          (c) Default Rate of Interest. Notwithstanding the foregoing provisions of this
Section 1, but subject to applicable law, any overdue principal of and overdue Interest on this
Note shall bear interest for each day from the date payment thereof was due to the date of actual
payment, at a rate equal to fifteen percent (15%) per annum payable as provided in Section 1(a)
above.

          (d) No Usurious Interest. In the event that any interest rate(s) provided for in this
Section 1, shall be determined to be unlawful, such interest rate(s) shall be computed at the
highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in
excess of that permitted by law shall be returned to the Borrower.

     2. Payment.

          (a) Cash or Shares. The Borrower, at its option, may pay its obligations under this
Note in cash or (subject to the limitation in Section 2(d) below) shares of common stock of
Borrower (“ACE*COMM Stock”), or in a combination of cash and ACE*COMM Stock. If the Borrower
elects to pay any portion of this Note in ACE*COMM Stock, the pounds sterling principal amount and
accrued Interest shall be converted into US Dollars at the
Exchange Rate, and the Borrower shall issue ACE*COMM Stock to Holder equal in value (as specified
below) to the sum of (i) such portion of the principal amount of the Note being paid in ACE*COMM
Stock, (ii) the accrued Interest on such portion and (iii) 50% of the value of the

 

 

sum of (i) and
(ii). For purposes of this Note, the value of the ACE*COMM Stock shall be $3.1648 per share. For
the purposes of this Section 2(a), the “Exchange Rate” means the mid market spot rate for the
conversion of funds sterling into US Dollars as published in the London edition of the Financial
Times on the business day preceding the date of issuance of the ACE*COMM Stock.

          (b) Registration of ACE*COMM Stock. The Borrower agrees to register the ACE*COMM
Stock issued pursuant to this Note with the Securities and Exchange Commission pursuant to the
terms and conditions set forth in Clause 15 of the Purchase Agreement by and among Borrower, Holder
and Noga Confino dated as of March 24, 2005, as amended (the “Purchase Agreement”).

          (c) No Prepayment. The Borrower shall not prepay any part of the principal amount of
or Interest accrued on this Note.

          (d) Maximum Number of Shares Issuable. Notwithstanding the foregoing, the aggregate
amount of ACE*COMM Stock that may be issued under this Note, together with the ACE*COMM Stock
issued under the Purchase Agreement on or about the date hereof and that is issued under the three
other notes entered into by the Borrower or its affiliates on or about the date hereof under the
Purchase Agreement, may not exceed 19.999% of the ACE*COMM Stock outstanding immediately prior to
the completion under the Purchase Agreement, unless the Borrower obtains shareholder approval under
the rules of the Nasdaq trading market on which the ACE*COMM Stock is then listed to exceed such
limit. To the extent the Borrower is prevented by such limitation from issuing ACE*COMM Stock in
payment of any portions of this Note, whether principal or Interest, all such portions shall be
paid in cash.

     3. Events of Default. The following shall constitute an “Event of Default” hereunder:

          (a) Borrower’s insolvency, general assignment for the benefit of creditors, or the final
judgment by or against Borrower of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition of Borrower’s debts under any law
relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or seeking appointment
of a receiver, trustee, custodian, or other similar official for Borrower or for all or any
substantial part of Buyer’s assets.

          (b) Borrower’s common stock being delisted from trading on the Nasdaq Small Caps Market unless
it commences trading on the Nasdaq National Market or American Stock Exchange.

     4. Remedies. Upon the occurrence of an Event of Default, Holder shall have the right to
cause the entire unpaid principal balance, together with all accrued Interest thereon, reasonable
attorneys’ fees and all fees, charges, costs and expenses, if any, owed by Borrower to
Holder, to become immediately due and payable in full by giving written notice to Borrower. In
addition, upon the occurrence of an Event of Default, Holder may avail itself of any legal or
equitable rights which Holder may have at law or in equity or under this Note. The remedies of

- 2 -

 

Holder as provided herein shall be distinct and cumulative, and may be pursued singly, successively
or together, at the sole discretion of Holder, and may be exercised as often as occasion therefor
shall arise. Failure to exercise any of the foregoing options upon the occurrence of an Event of
Default shall not constitute a waiver of the right to exercise the same or any other option at any
subsequent time in respect to the same or any other Event of Default, and no single or partial
exercise of any right or remedy shall preclude other or further exercise of the same or any other
right or remedy.

     5. Amendment. Amendments and modifications of this Note may be made only in a writing
executed by the Borrower and the Holder.

     6. Assignment. The Holder may not transfer this Note without the prior written consent of
the Borrower, which approval shall not be unreasonably withheld.

     7. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized
representative of the Holder stating the circumstances of the loss, theft, destruction or
mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of
such Note), the Borrower, at its expense, will promptly execute and deliver, in lieu thereof, a new
Note of like tenor. If required by the Borrower, the Holder must provide indemnity sufficient in
the reasonable judgment of the Borrower to protect the Borrower from any loss which the Borrower
may suffer if a lost, stolen or destroyed Note is replaced.

     8. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Borrower shall bind its successors and
assigns, whether so expressed or not.

     9. Notices. All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified first-class mail, return
receipt requested, telecopier (with receipt confirmed), courier service or personal delivery, to
the applicable party at its principal corporate headquarters, attention: chief executive officer.
All such notices and communications shall be deemed to have been duly given when: delivered by
hand, if personally delivered; when delivered by courier, if delivered by courier service; if
mailed, five (5) business days after being deposited in the mail, postage prepaid; or if
telecopied, when receipt is acknowledged.

     10. Governing Law. This Agreement shall be governed by, construed in accordance with, and
enforced under, the laws of the State of Maryland, without regard to the conflicts of law
principles thereof.

     11. Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

     12. Headings. The headings in this Note are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

- 3 -

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Note as of the day and year first
hereinabove set forth.

    	 	 	 	 	 	 	 	 
	 	 	ACE*COMM CORPORATION
	 
	 	 	 	 	 	 	 
	 
	 	By: 	 	/s/ Steven R. Delmar	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Name:	 Steven R. Delmar	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Title:	 Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 

- 4 -

 

Buyer Series C Loan Note

ACE*COMM CORPORATION

LOAN NOTE

DUE September 23, 2005

			
	£291,891.07
	 	March 24, 2005

     FOR VALUE RECEIVED, the undersigned, ACE*COMM Corporation, a Maryland corporation
(“Borrower”), hereby promises to pay to Springreel Limited or its registered assigns (the
“Holder”), the principal sum of £291,891.07 (Two hundred and ninety one thousand eight hundred and
ninety one pounds sterling and seven pence) on September 23, 2005 (the “Maturity Date”), except as
otherwise set forth herein, and with interest thereon as provided herein.

     1. Interest and Principal Amortization.

          (a) Basic Interest. This Loan Note (this “Note”) shall not bear any interest
(“Interest”) for the first twenty (20) business days following the date hereof, and thereafter
shall bear Interest on the outstanding unpaid principal amount of this Note at the rate of fifteen
percent (15%) per annum. Interest on this Note shall accrue from and including such
20th business day through and until repayment of the entire principal amount of this
Note and payment of all Interest in full, and shall be computed on the basis of a 365-day year
applied to actual days on the unpaid principal balance. The Interest shall accrue and be paid in
full upon the Maturity Date, and if any, all or any part of this Note is prepaid, the Interest
accrued on such prepaid portion shall be paid concurrently with such prepayment.

          (b) Security. This Note shall not be secured by any assets of the Borrower.

          (c) Default Rate of Interest. Notwithstanding the foregoing provisions of this
Section 1, but subject to applicable law, any overdue principal of and overdue Interest on this
Note shall bear interest for each day from the date payment thereof was due to the date of actual
payment, at a rate equal to fifteen percent (15%) per annum payable as provided in Section 1(a)
above.

          (d) No Usurious Interest. In the event that any interest rate(s) provided for in this
Section 1, shall be determined to be unlawful, such interest rate(s) shall be computed at the
highest rate permitted by applicable law. Any payment by the Borrower of any interest amount in
excess of that permitted by law shall be returned to the Borrower.

     2. Payment.

          (a) Cash or Shares. The Borrower, at its option, may pay its obligations under this
Note in cash or (subject to the limitation in Section 2(e) below) shares of common
stock of Borrower (“ACE*COMM Stock”), or in a combination of cash and ACE*COMM Stock. If the
Borrower elects to pay any portion of this Note in ACE*COMM Stock, the pounds sterling principal
amount and accrued Interest shall be converted into US Dollars at the

 

 

Exchange Rate, and the
Borrower shall issue ACE*COMM Stock to Holder equal in value (as specified below) to the sum of (i)
such portion of the principal amount of the Note being paid in ACE*COMM Stock and (ii) the accrued
Interest on such portion. For purposes of this Note, the value of the ACE*COMM Stock shall be
$3.1648 per share. For the purposes of this Section 2(a), the “Exchange Rate” means the
mid market spot rate for the conversion of funds sterling into US Dollars as published in the
London edition of the Financial Times on the business day preceding the date of issuance of the
ACE*COMM Stock.

          (b) Registration of ACE*COMM Stock. The Borrower agrees to register the ACE*COMM
Stock issued pursuant to this Note with the Securities and Exchange Commission pursuant to the
terms and conditions set forth in Clause 15 of the Purchase Agreement by and among Borrower, Holder
and Noga Confino dated as of March 24, 2005, as amended (the “Purchase Agreement”).

          (c) Prepayment. The Borrower may prepay all or any part of the principal amount of or
Interest accrued on this Note at any time without advance notice to the Holder. The Borrower shall
prepay the principal amount of this Note in cash, in whole but not in part, to the extent the
Borrower has available to it sufficient additional cash beyond what is available to the Borrower as
of the date of this Note to effect such prepayment.

          (d) Conversion. The Holder shall have the right (subject to the limitation in Section
2(e) below) to convert all or any part of the principal amount of or Interest accrued on this Note
at any time into ACE*COMM Stock. If the Holder elects, by written notice to the Borrower, to
convert any portion of this Note into ACE*COMM Stock, the Borrower shall issue ACE*COMM Stock to
Holder equal in value (as specified in Section 2(a) above) to the sum of (i) such portion of the
principal amount of the Note being converted into ACE*COMM Stock and (ii) the accrued Interest on
such portion.

          (e) Maximum Number of Shares Issuable. Notwithstanding the foregoing, the aggregate
amount of ACE*COMM Stock that may be issued under this Note, together with the ACE*COMM Stock
issued under the Purchase Agreement on or about the date hereof and that is issued under the three
other notes entered into by the Borrower or its affiliates on or about the date hereof under the
Purchase Agreement, may not exceed 19.999% of the ACE*COMM Stock outstanding immediately prior to
the completion under the Purchase Agreement, unless the Borrower obtains shareholder approval under
the rules of the Nasdaq trading market on which the ACE*COMM Stock is then listed to exceed such
limit. To the extent the Borrower is prevented by such limitation from issuing ACE*COMM Stock in
payment of any portions of this Note, whether principal or Interest, all such portions shall be
paid in cash.

     3. Events of Default. The following shall constitute an “Event of Default” hereunder:

          (a) Borrower’s insolvency, general assignment for the benefit of creditors, or the final
judgment by or against Borrower of any case, proceeding, or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution, or composition of Borrower’s debts under any law
relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or

- 2 -

 

seeking appointment
of a receiver, trustee, custodian, or other similar official for Borrower or for all or any
substantial part of Buyer’s assets.

          (b) Borrower’s common stock being delisted from trading on the Nasdaq Small Caps Market unless
it commences trading on the Nasdaq National Market or American Stock Exchange.

     4. Remedies. Upon the occurrence of an Event of Default, Holder shall have the right to
cause the entire unpaid principal balance, together with all accrued Interest thereon, reasonable
attorneys’ fees and all fees, charges, costs and expenses, if any, owed by Borrower to Holder, to
become immediately due and payable in full by giving written notice to Borrower. In addition, upon
the occurrence of an Event of Default, Holder may avail itself of any legal or equitable rights
which Holder may have at law or in equity or under this Note. The remedies of Holder as provided
herein shall be distinct and cumulative, and may be pursued singly, successively or together, at
the sole discretion of Holder, and may be exercised as often as occasion therefor shall arise.
Failure to exercise any of the foregoing options upon the occurrence of an Event of Default shall
not constitute a waiver of the right to exercise the same or any other option at any subsequent
time in respect to the same or any other Event of Default, and no single or partial exercise of any
right or remedy shall preclude other or further exercise of the same or any other right or remedy.

     5. Amendment. Amendments and modifications of this Note may be made only in a writing
executed by the Borrower and the Holder.

     6. Assignment. The Holder may not transfer this Note without the prior written consent of
the Borrower, which approval shall not be unreasonably withheld.

     7. Replacement of Note. On receipt by the Borrower of an affidavit of an authorized
representative of the Holder stating the circumstances of the loss, theft, destruction or
mutilation of this Note (and in the case of any such mutilation, on surrender and cancellation of
such Note), the Borrower, at its expense, will promptly execute and deliver, in lieu thereof, a new
Note of like tenor. If required by the Borrower, the Holder must provide indemnity sufficient in
the reasonable judgment of the Borrower to protect the Borrower from any loss which the Borrower
may suffer if a lost, stolen or destroyed Note is replaced.

     8. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises and
agreements in this Note contained by or on behalf of the Borrower shall bind its successors and
assigns, whether so expressed or not.

     9. Notices. All notices, demands and other communications provided for or permitted
hereunder shall be made in writing and shall be by registered or certified first-class mail, return
receipt requested, telecopier (with receipt confirmed), courier service or personal delivery, to
the applicable party at its principal corporate headquarters, attention: chief executive
officer. All such notices and communications shall be deemed to have been duly given when:
delivered by hand, if personally delivered; when delivered by courier, if delivered by courier
service; if mailed, five (5) business days after being deposited in the mail, postage prepaid; or
if telecopied, when receipt is acknowledged.

- 3 -

 

     10. Governing Law. This Agreement shall be governed by, construed in accordance with, and
enforced under, the laws of the State of Maryland, without regard to the conflicts of law
principles thereof.

     11. Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

     12. Headings. The headings in this Note are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

- 4 -

 

     IN WITNESS WHEREOF, the undersigned has duly executed this Note as of the day and year first
hereinabove set forth.

    	 	 	 	 	 	 	 	 
	 	 	ACE*COMM CORPORATION
	 
	 	 	 	 	 	 	 
	 
	 	By: 	 	/s/ Steven R. Delmar	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Name:	 Steven R. Delmar	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Title:	 Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 

- 5 -exv10w19

 

Exhibit 10.19

AMENDMENT NUMBER 1

to the

EMPLOYMENT AGREEMENT

Between

FIRST KEYSTONE FINANCIAL, INC.

And

THOMAS M. KELLY

     WHEREAS, as of December 1, 2004, First Keystone Financial, Inc. (the “Corporation”) entered
into an employment agreement (the “Agreement”) pursuant to which the Corporation agreed to employ
Thomas M. Kelly (the “Executive) as President and Chief Operating Officer;

     WHEREAS, effective May 1, 2005, the Board of Directors has appointed the Executive as the
President and Chief Executive Officer of the Corporation; and

     WHEREAS, the Board of Directors of the Corporation and Executive desire to amend the Agreement
to reflect certain mutually agreed upon revisions.

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the Savings Bank
and Executive do hereby agree to amend the Agreement as follows:

1. Section 2(a) of the Agreement is deleted in its entirety and replaced with the following:

     The Corporation hereby employs the Executive as President and Chief Executive Officer of the
Corporation and Executive hereby accepts said employment and agrees to render such services to the
Corporation on the terms and conditions set forth in this Agreement. The term of employment under
this Agreement shall be for three years, commencing on the date of this Agreement and, subject to
the requirements of the succeeding sentence, shall be deemed automatically, without further action,
to extend for an additional year on each annual anniversary of the date of this Agreement. Prior
to the anniversary of the date of this Agreement and each annual anniversary thereafter, the Board
of Directors of the Corporation shall consider and review (with appropriate corporate documentation
thereof, and after taking into account all relevant factors, including the Executive’s performance
hereunder) extension of the term under this Agreement, and the term shall continue to extend in the
manner set forth above unless either the Board of Directors does not approve such extension and
provides written notice to the Executive of such event or the Executive gives written notice to the
Corporation of the Executive’s election not to extend the term, in each case with such written
notice to be given not less than thirty (30) days prior to any such anniversary date. References
herein to the term of this Agreement shall refer both to the initial term and successive terms.

2. Section 3(a) of the Agreement is deleted in its entirety and replaced with the following:

     The Employers shall compensate and pay Executive for his services during the term of this
Agreement at a minimum base salary of $220,000 per year (“Base Salary”), which may be increased
from time to time in such amounts as may be determined by the Boards of Directors of

 

 

the Employers and may not be decreased without the Executive’s express written consent. In
addition to his Base Salary, the Executive shall be entitled to receive during the term of this
Agreement such bonus payments as may be determined by the Boards of Directors of the Employers.

3. Section 5(e) of the Agreement is deleted in its entirety and replaced with the following:

     In the event of the failure by the Employers to elect or to re-elect or to appoint or to
re-appoint the Executive to the offices of President and Chief Executive Officer of the Corporation
and the Savings Bank or a material adverse change made by the Employers in the Executive’s
functions, duties or responsibilities as President and Chief Executive Officer of the Corporation
and the Savings Bank without the Executive’s express written consent, the Executive shall be
entitled to terminate his employment hereunder and shall be entitled to the payments and benefits
provided for in Section 5(c)(A) and (B); however, such termination shall not otherwise constitute a
material breach of this Agreement by the Corporation.

4. All other sections and provisions in the Agreement shall continue in full force and effect and
are incorporated by reference into this Amendment No. 1.

     This Amendment No. 1 to the Agreement shall be deemed effective as of May 1, 2005.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment No. 1 to the
Agreement as of this 28th day of March 2005.

	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	FIRST KEYSTONE FINANCIAL, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/Carol Walsh

	 	 	 	By:
	 	/s/Donald S. Guthrie	 	 
	Witness	 	 	 	Title: Chairman	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 	 	 
	/s/Carol Walsh	 	 	 	/s/ Thomas M. Kelly	 	 
	 	 	 	 	 	 	 
	Witness	 	 	 	Thomas M. Kelly

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]