Document:

Exhibit 4.2

 EXHIBIT 4.2 
  

MARKEL CORPORATION 
  
 BYLAWS 
 (as amended May 14,
2003)1 
  
 ARTICLE I 
  
 MEETINGS OF SHAREHOLDERS 
  
 Section 1. Place and Time of Meetings. Meetings of shareholders shall be held at such place, either within or without the Commonwealth of Virginia, and at such time, as may be provided in the notice of the
meeting and approved by the President or the Board of Directors. 
  
 Section 2. Annual Meeting. The annual meeting of shareholders shall be held in May of each year on the date designated by the Board of Directors and specified in the notice of the meeting. 
  
 Section 3. Substitute Annual Meeting. If an annual meeting of
shareholders is not held within the time period designated in these Bylaws, a substitute annual meeting shall be called as promptly as is practicable in accordance with the provisions of Section 4 of this Article. Any meeting so called shall be
designated and treated for all purposes as the annual meeting. 
  
 Section 4. Special Meetings. Special meetings of the shareholders may be called by the Chairman of the Board of Directors, the Board of Directors, the President or, if required by law, by shareholders. Only business within the
purpose or purposes described in the notice for a special meeting of shareholders may be conducted at the meeting. 
  
 Section 5. Fixing Record Date. Except as is provided in Section 10 of this Article, the Board of Directors may fix in advance a date to make a
determination of shareholders entitled to notice, or to vote at any meeting of shareholders, to receive any dividend, or for any purpose, such date to be not more than 70 days before the meeting or action requiring a determination of shareholders.
If no such date is set, the date on which the notice of the meeting is mailed shall be the record date for such determination of shareholders. When a determination of shareholders entitled to notice of or to vote at any meeting of shareholders
(regardless of who may have called the meeting) has been made, such determination shall be effective for any adjournment of the meeting unless the Board of Directors fixes a new record date, which it shall do if the meeting is adjourned to a date
more than 120 days after the date fixed for the original meeting. 
  
 Section 6. Notice of Meetings. Written notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than
60 days before the date of the meeting (except as a different time is specified by law) either personally or by mail, by or at the direction of the person(s) calling the meeting, to each shareholder of record entitled to vote at such meeting and to
such nonvoting shareholders as may be 
  

 1 Effective May 14, 2003, the Bylaws were amended to change the permitted number of
directors from a range of between three and eleven to a range of between three and fifteen, so that Article II, Section 2 now reads in its entirety as follows: Section 2. Number. The number of directors of the Corporation shall be not less than
three nor more than fifteen, the exact number of directors to be fixed, from time to time, by a resolution of the Board of Directors. 

 required by law. If mailed, such notice shall be deemed to be given when deposited in the United States mail with postage
thereon prepaid, addressed to the shareholder at his address as it appears on the share transfer books of the Corporation. If an annual or special meeting is adjourned to a different date, time or place, notice need not be given if the new date,
time or place is announced at the meeting before adjournment. However, if a new record date for an adjournment is fixed, notice of the adjourned meeting shall be given to persons who are shareholders as of the new record date unless a court provides
otherwise. Notwithstanding the foregoing, no notice of a shareholders’ meeting need be given to a shareholder if (i) an annual report and proxy statements for two consecutive annual meetings of shareholders or (ii) all, and at least two, checks
in payment of dividends or interest on securities during a 12-month period, have been sent by first-class United States mail, with postage thereon prepaid, addressed to the shareholder at his address as it appears on the share transfer books of the
Corporation, and returned undeliverable. The obligation of the Corporation to give notice of shareholders’ meetings to any such shareholder shall be reinstated once the Corporation has received a new address for such shareholder for entry on
its share transfer books. 
  
 Section 7. Waiver of Notice;
Attendance at Meeting. A shareholder may waive any notice required by law, the Articles of Incorporation or these Bylaws before or after the date and time of the meeting that is the subject of such notice. The waiver shall be in writing, be
signed by the shareholder entitled to the notice, and be delivered to the Secretary of the Corporation for inclusion in the minutes or filing with the corporate records. A shareholder’s attendance at a meeting (i) waives objection to lack of
notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting, and (ii) waives objection to consideration of a particular matter at the meeting
that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented. 
  
 Section 8. Quorum and Voting Requirements. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a
quorum of those shares exists with respect to that matter. Unless otherwise required by law or by the Articles of Incorporation, a majority of the votes entitled to be cast on a matter by a voting group constitutes a quorum of that voting group for
action on that matter. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or shall be set for that
adjourned meeting. If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless a greater
number of affirmative votes is required by law. Less than a quorum may adjourn a meeting. 
  
 Section 9. Proxies. A shareholder may vote his shares in person or by proxy. A shareholder may appoint a proxy to vote or otherwise act for him by signing an appointment form, either personally or by his
attorney-in-fact. An appointment of a proxy is effective when received by the Secretary or other officer or agent authorized to tabulate votes and is valid for 11 months unless a longer period is expressly provided in the appointment form. An
appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest. 
  
 The death or incapacity of the shareholder appointing a proxy does not affect the right of the Corporation to accept the
proxy’s authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment. An appointment made irrevocable under
this section is revoked when the interest with which it is coupled is extinguished. A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if he did not know of its existence when he acquired the shares and
the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares. Subject to any legal limitations on the right of a corporation to accept the vote or other action of a proxy and to any express
limitation on the proxy’s authority appearing on the face of the appointment form, the Corporation is entitled to accept the proxy’s vote or other action as that of the shareholder making the appointment. Any fiduciary who is entitled to
vote any shares may vote such shares by proxy. 
  
 Section 10.
Action Without Meeting. Action required or permitted to be taken at a shareholders’ 

 meeting may be taken without a meeting and without action by the Board of Directors if the action is taken by all the
shareholders entitled to vote on the action. The action shall be evidenced by one or more written consents describing the action taken, signed by all the shareholders entitled to vote on the action, and delivered to the Secretary of the Corporation
for inclusion in the minutes or filing with the corporate records. Action taken under this section shall be effective when all consents are in the possession of the Corporation, unless the consent specifies a different effective date and states the
date of execution by each shareholder, in which event it shall be effective according to the terms of the consent. A shareholder may withdraw consent only by delivering a written notice of withdrawal to the Corporation prior to the time that all
consents are in the possession of the Corporation. The record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs the consent described in the preceding paragraph. If notice of proposed
action is required by law to be given to nonvoting shareholders and the action is to be taken by unanimous consent of the voting shareholders, the Corporation shall give such nonvoting shareholders written notice of the proposed action at least ten
days before the action is taken. The notice shall contain or be accompanied by the same material that would have been required to be sent to nonvoting shareholders in a notice of meeting at which the proposed action would have been submitted to the
shareholders for action. 
  
 ARTICLE II 
  
 DIRECTORS 
  
 Section 1. General Powers. The Corporation shall have a Board of
Directors. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation managed under the direction of, its Board of Directors, subject to any limitation set forth in the Articles of
Incorporation. 
  
 Section 2. Number. The number of
directors of the Corporation shall be not less than three nor more than fifteen, the exact number of directors to be fixed, from time to time, by a resolution of the Board of Directors. 
  
 Section 3. Election and Term. Directors shall be elected at each annual meeting of shareholders. Despite the
expiration of a director’s term, such director shall continue to serve until his successor is elected and qualifies or until there is a decrease in the number of directors. No individual shall be named or elected as a director without his prior
consent. 
  
 Section 4. Removal; Vacancies. The
shareholders may remove any director with or without cause at a meeting called for that purpose. Removal of a director shall be effective only if approved by a majority of the votes entitled to be cast at an election of directors of the voting group
or groups by which such director was elected. A vacancy on the Board of Directors, including a vacancy resulting from the removal of a director, or an increase in the number of directors, may be filled only by (i) the shareholders, (ii) the Board of
Directors, or (iii) the majority vote of the remaining directors though less than a quorum of the Board of Directors. In the case of the resignation of a director that will become effective at a specified later date, the vacancy may be filled before
it occurs but the new director may not take office until the vacancy occurs. 
  
 Section 5. Annual and Regular Meetings. Annual meetings of the Board of Directors shall be held immediately following each annual meeting of shareholders, for the purpose of electing officers and carrying on
such other business as may properly come before such meeting. Such meeting shall be held at the place where the shareholders’ meeting was held. The Board of Directors may also adopt a schedule of additional meetings which shall be considered
regular meetings. Regular meetings shall be held at such times and at such places, within or without the Commonwealth of Virginia, as the President or the Board of Directors shall designate from time to time. If no place is designated, regular
meetings shall be held at the principal office of the Corporation. 
  
 Section 6. Special Meetings. Special meetings of the Board of Directors may be called by the President or the Board of Directors, and shall be held at such times and at such places, within or without the 

 Commonwealth of Virginia, as the person or persons calling the meetings shall designate. If no such place is designated
in the notice of a meeting, it shall be held at the principal office of the Corporation. 
  
 Section 7. Notice of Meetings. No notice need be given of regular meetings of the Board of Directors. Notice of special meetings of the Board of Directors shall be given to each director by delivering such
notice to his residence or business address (or such other place as he may have directed in writing) by mail, messenger, telecopier, telegraph, or other means of written communication or by telephoning such notice to him not less than 24 hours
before the meeting. Any such notice shall set forth the time and place of the meeting and state the purpose for which it is called. 
  
 Section 8. Waiver of Notice. A director may waive any notice required by law, the Articles of Incorporation, or these Bylaws before or after the
date and time stated in the notice and such waiver shall be equivalent to the giving of such notice. Except as provided in the next paragraph of this section, the waiver shall be in writing, signed by the director entitled to the notice, and filed
with the minutes or corporate records. A director’s attendance at or participation in a meeting waives any required notice to him of the meeting unless the director at the beginning of the meeting or promptly upon his arrival objects to holding
the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting. 
  
 Section 9. Quorum; Voting. A majority of the number of directors prescribed in accordance with these Bylaws, or if no number has been prescribed,
the number of directors in office immediately before the meeting begins, shall constitute a quorum for the transaction of business at a meeting of the Board of Directors. The act of a majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors. A director who is present at a meeting of the Board of Directors or a committee of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless (i)
he objects at the beginning of the meeting, or promptly upon his arrival, to holding it or transacting specified business at the meeting; or (ii) he votes against, or abstains from, the action taken. 
  
 Section 10. Telephonic Meetings. The Board of Directors may permit any
or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director
participating in a meeting by this means is deemed to be present in person at the meeting. 
  
 Section 11. Action Without Meeting. Action required or permitted to be taken at a Board of Directors’ meeting may be taken without a meeting if the action is taken by all members of the Board. The action
shall be evidenced by one or more written consents stating the action taken, signed by each director either before or after the action taken, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken
under this section shall be effective when the last director signs the consent unless the consent specifies a different effective date and states the date of execution by each director, in which event it shall be effective according to the terms of
the consent. 
  
 Section 12. Compensation. Unless the
Articles of Incorporation provide otherwise, the Board of Directors may fix the compensation of directors for their services as directors and may provide for the payment of all expenses incurred by directors in attending meetings of the Board of
Directors. 
  
 ARTICLE III 
  
 COMMITTEES OF DIRECTORS 
  
 Section 1. Committees. The Board of Directors may create one or more
committees and appoint members of the Board of Directors to serve on them. Each committee shall have two or more members who serve at the pleasure of the Board of Directors. The creation of a committee and appointment of members to it shall be
approved by the number of directors required to take action under Section 9 of Article II of these Bylaws. 
  
 Section 2. Authority of Committees. To the extent specified by the Board of Directors, each 

 committee may exercise the authority of the Board of Directors under Section 1 of Article II of these Bylaws, except that
a committee may not (i) approve or recommend to shareholders action that is required by law to be approved by shareholders; (ii) fill vacancies on the Board of Directors or on any of its committees; (iii) amend the Articles of Incorporation; (iv)
adopt, amend, or repeal these Bylaws; (v) approve a plan of merger not requiring shareholder approval; (vi) authorize or approve a distribution, except according to a general formula or method prescribed by the Board of Directors; or (vii) authorize
or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except that the Board of Directors may authorize a committee, or a senior
executive officer of the Corporation, to do so within limits specifically prescribed by the Board of Directors. The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the
standards of conduct required of a director. 
  
 Section 3.
Committee Meetings; Miscellaneous. The provisions of Article II of these Bylaws relating to meetings, notice and waiver of notice, quorum and voting, and consents shall apply to committees of directors and their members. 
  
 ARTICLE IV 
  
 OFFICERS 
  
 Section 1. Officers. The officers of the Corporation shall be a Chairman of the Board of Directors, a President, a
Secretary, a Treasurer and a Controller, and in the discretion of the Board of Directors, a Vice-Chairman of the Board of Directors, one or more Vice-Presidents and other officers and assistant officers as may be deemed necessary or advisable to
carry on the business of the Corporation. Any two or more offices may be held by the same person. 
  
 Section 2. Election; Term. Officers shall be elected at the annual meeting of the Board of Directors and may be elected at such other time or times
as the Board of Directors shall determine. They shall hold office, unless removed, until the next annual meeting of the Board of Directors or until their successors are elected. Any officer may resign at any time upon written notice to the Board of
Directors, and such resignation is effective when notice is delivered unless the notice specifies a later effective date. 
  
 Section 3. Removal of Officers. The Board of Directors may remove any officer or assistant officer at any time, with or without cause. 

 
 Section 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors shall be the chief executive officer of the Corporation and shall have general supervision over, responsibility for, and control of the other officers, agents and employees of the Corporation. The Chairman of the Board of
Directors shall preside as Chairman at all meetings of the shareholders and directors and shall perform such duties, and shall have such authority, as may be lawfully required of, or conferred upon, him by the Board of Directors. 
  
 Section 5. Vice Chairman of the Board of Directors. The Vice Chairman
of the Board of Directors shall, in the absence of the Chairman of the Board of Directors, preside as Chairman at all meetings of the shareholders and directors and shall perform such duties, and shall have such authority, as may be lawfully
required of, or conferred upon, him by the Board of Directors. 
  
 Section 6. President. The President shall be the principal administrative officer of the Corporation and, subject to the direction of the Chairman of the Board of Directors, shall have general supervision over, responsibility for,
and control of the other officers (except the Chairman and Vice Chairman of the Board of Directors), agents and employees of the Corporation. The President shall, during the absence, disqualification or inability to act of the Chairman or Vice
Chairman of the Board of Directors, perform all the duties of the Chairman of the Board or the Vice Chairman of the Board of Directors, or both of them, as the case may be. 
  
 Section 7. Vice Presidents. Each Vice President (including any Executive Vice President or Senior 

 Vice President) shall perform such duties, and shall have such authority, as may lawfully be required of, or conferred
upon, him by the Chairman of the Board of Directors, the President or the Board of Directors. The Vice Presidents (in the order of Executive Vice Presidents, Senior Vice Presidents and thereafter as designated by the Board of Directors from time to
time or, if no such designation is made, in the order of election as a Vice President) shall, during the absence, disqualification or inability to act, of the President, severally exercise all the functions and perform all the duties of the
President. 
  
 Section 8. Secretary. The Secretary shall,
as secretary of the meetings, record all proceedings at shareholders’ meetings and directors meetings in a book or books kept for that purpose; he shall maintain the record of shareholders of the Corporation, giving the names and addresses of
all shareholders and the numbers, classes and series of the shares held by each; and, unless otherwise prescribed by the Board of Directors, he shall maintain the stock transfer books. 
  
 Section 9. Treasurer. The Treasurer shall have the custody of all moneys and securities of the Corporation; he shall
deposit the same in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors, disburse the funds of the Corporation as may be required, and cause the books and records of account to be kept in
accordance with generally accepted accounting practices and principles. 
  
 Section 10. Controller. The Controller shall be the accounting officer of the Corporation. The Controller shall cause to be kept full and accurate books and accounts of all assets, liabilities and transactions of the Corporation,
establish and administer an adequate plan for the control of operations (including systems and procedures required to properly maintain internal controls on all financial transactions of the Corporation), prepare, or cause to be prepared, statements
of the financial condition of the Corporation and proper profit and loss statements covering the operations of the Corporation and such other and additional financial statements, if any, as required by the Chairman of the Board, the President or the
Board of Directors, and to perform such other duties as may be assigned, from time to time, to him by the Chairman of the Board, the President or the Board of Directors. 
  
 Section 11. Delegation of Power. During the absence, disqualification or inability to act of any of the officers of
the Corporation, other than the Chairman or Vice Chairman of the Board of Directors or the President, the Chairman of the Board of Directors or the President by written order of the Board of Directors by resolution may delegate the powers of such
officer to any other officer or employee of the Corporation. 
  
 ARTICLE V 
  
 SHARE CERTIFICATES

  
 Section 1. Form. Shares of the Corporation shall,
when fully paid, be evidenced by certificates in such form as may be required by law and approved by the Board of Directors. Subject to the provisions of Section 2 below, certificates shall be signed by any two of the Chairman, Vice Chairman,
Executive Vice President or Secretary of the Corporation. Certificates may (but need not) be sealed with the seal of the Corporation or a facsimile thereof. 
  
 Section 2. Signatures. The signatures of the officers upon a stock certificate issued by the Corporation may be facsimiles if such stock
certificate is countersigned by a transfer agent, or registered by a registrar, other than the Corporation itself or an employee of the Corporation. If any officer who has signed, or whose facsimile signature has been placed upon a stock
certificate, shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of its issue. 
  
 Section 3. Transfer. The Board of Directors shall have power and
authority to make rules and regulations concerning the issue, registration and transfer of certificates representing the shares of the Corporation. Transfers of shares and of the certificates representing such shares shall be made upon the books of
the Corporation by surrender of the certificates for the shares transferred accompanied by 

 assignments in writing by the owners or their attorneys-in-fact. 
  
 Section 4. Restrictions on Transfer. A restriction on the transfer or
registration of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is lawful and its existence is noted conspicuously on the front or back of the certificate representing the shares. 
  
 Section 5. Lost or Destroyed Share Certificates. The Corporation may
issue a new share certificate in the place of any certificate theretofore issued by it which is alleged to have been lost or destroyed and may require the owner of such certificate, or his legal representative, to give the Corporation a bond, with
or without surety, or such other agreement, undertaking or security as the Board of Directors shall determine is appropriate, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction or
the issuance of any such new certificate. 
  
 ARTICLE VI

  
 MISCELLANEOUS PROVISIONS 
  
 Section 1. Corporate Seal. The corporate seal of the Corporation shall
be circular and shall have inscribed thereon, within and around the circumference, “MARKEL CORPORATION”. In the center shall be the word “SEAL”. 
  
 Section 2. Fiscal Year. The fiscal year of the Corporation shall be determined in the discretion of the Board of
Directors, but in the absence of any such determination it shall be the calendar year. 
  
 Section 3. Amendments. These Bylaws may be amended or repealed, and new Bylaws may be made at any regular or special meeting of the Board of Directors. Bylaws made by the Board of Directors may be repealed or
changed and new Bylaws may be made by the shareholders, and the shareholders may prescribe that any Bylaw made by them shall not be altered, amended or repealed by the Board of Directors.<PAGE>

                                                                    Exhibit 10.1

      August 4, 2003

ACE*COMM Corporation
704 Quince Orchard Road
Gaithersburg, MD  20878

Ladies and Gentlemen:

Pursuant to our recent discussions, this letter of intent sets forth our mutual
understanding with respect to the terms upon which ACE*COMM Corporation (or a
subsidiary thereof) ("Buyer") would acquire (the "Transaction") 100% of the
outstanding capital stock of i3 Mobile, Inc., a Delaware corporation (the
"Company"), from the stockholders of the Company.

Certain significant terms and conditions of the proposed Transaction are set
forth below:

1. Structure. The Buyer or a wholly owned subsidiary of Buyer would acquire the
Company through a merger.

2. Purchase Price. The aggregate merger consideration for 100% of the stock of
the Company to be acquired by Buyer pursuant to the Transaction shall be a
number of freely tradable shares of Buyer's common stock, par value $.01 per
share (the "Common Stock"), equal to (x) the Balance Sheet Cash divided by (y)
the Purchase Price Per Share (as defined below), subject to equitable adjustment
for any stock split, stock dividend, recapitalization or similar event involving
the capital stock of Buyer or the Company occurring after the date hereof, and
will be paid by Buyer to the Company's stockholders at the closing of the
Transaction (the "Closing").

                   "Balance Sheet Cash" shall be defined to mean cash on the
                   balance sheet of the Company as of the closing of the
                   Transaction, minus (y) the sum of (A) the Lease Amount, (B)
                   the value of certain stipulated discounted liabilities based
                   upon a mutually agreeable discount percentage and (C) the
                   value of liabilities not discounted pursuant to (B) (valued
                   according to generally accepted accounting principles) which
                   have not been paid prior to the Closing, in each case as
                   estimated in good faith by the parties prior to the date of
                   the mailing of the Company's definitive proxy statement.

                   "Lease Amount" shall be defined to mean an amount equal to
                   $1.5 million with respect to the lease obligations in
                   Stamford, Connecticut (or such other lesser amount as the
                   parties may agree), minus the Lease Adjustment Amount.

<PAGE>

                   "Lease Adjustment Amount" shall be defined to mean the amount
                   equal to (x) the number of shares of Common Stock outstanding
                   20 trading days after the date of issuance of the Company's
                   press release announcing the execution of this letter of
                   intent (the "Press Release Date"), multiplied by (y) the
                   product of (1) the difference obtained by subtracting (A) the
                   average closing price per share of Common Stock for the five
                   (5) trading prior to the Press Release Date from (B) the
                   average closing price per share of Common Stock for the 20
                   trading days after the Press Release Date, if a positive
                   number, and (2) 0.75; provided that, with respect to (y), if
                   the product of (1) and (2) exceeds 7.5% of the Market Price
                   Per Share, then such product shall equal the Market Price Per
                   Share multiplied by 7.5%.

                   "Market Price Per Share" shall be defined to mean the average
                   closing stock price per share of Common Stock for the 20
                   trading days prior to the date that is five days prior to the
                   date of the mailing of the Company's definitive proxy
                   statement.

                   "Purchase Price Per Share" shall be defined to mean the price
                   per share of Common Stock equal to (x) the Market Price Per
                   Share multiplied by (y) the Share Discount.

                   "Share Discount" shall be defined to mean .825.

3. Termination of Merger Agreement. The Merger Agreement (as hereinafter
defined) shall provide that in the event that the Common Stock establishes a
Trading Value (as hereinafter defined) during the period from the date hereof
until the mailing of the Company's definitive proxy statement greater to or less
than, as the case may be, the amounts set forth below, then either the Company
or Buyer, as applicable, may terminate the Merger Agreement:

--------------------------------------------------------------------------------
         Trading Value
--------------------------------------------------------------------------------
Greater than $2.25                   The Company shall have the right to
                                     terminate the Merger Agreement
--------------------------------------------------------------------------------
Less than $0.88                      Buyer shall have the right to terminate the
                                     Merger Agreement
--------------------------------------------------------------------------------

"Trading Value" shall mean for each day the closing price per share of Common
Stock for a period of 20 consecutive trading days.

4. Due Diligence. Consummation of the Transaction contemplated hereby is
contingent upon each of Buyer and the Company conducting, and being satisfied in
all respects with the results of, a due diligence investigation of the other
party. The purpose of such review

                                       2

<PAGE>

is to confirm each party's current understandings with regard to the ownership,
assets, operations and prospects of the other, as applicable. Each party will
commence its due diligence investigation promptly following the date hereof. To
assist each party in conducting this review, each party will promptly provide,
or cause to be promptly provided, all information with respect to it as a party
may reasonably request, including all interim operating reports and financial
statements when available. In addition, each party will make available their
respective auditors, counsel, officers and directors and other representatives
to discuss with any aspect of the business of a party or the Transaction which
such party may deem relevant. As part of this review, each party and their
respective independent auditors may review the financial statements of the other
party, including any audit papers relating thereto. Each party acknowledges that
additional or modified terms may be proposed following such due diligence
review.

5. Additional Closing Conditions. Consummation of the Transaction is also
conditional upon satisfaction of each of the following:

                   (a) The preparation and execution of a merger agreement (the
                   "Merger Agreement") by and between the Company and Buyer and
                   other mutually acceptable definitive agreements with regard
                   to the Transaction, all of which will be drafted by Buyer's
                   counsel. The Merger Agreement will include representations,
                   warranties, covenants, terms and conditions typical for
                   merger transactions of this nature between publicly traded
                   corporations and as set forth herein.

                   (b) The receipt of all necessary governmental, corporate and
                   third-party consents and approvals to the Transaction upon
                   terms and in a form satisfactory to each party.

                   (c) The absence of any material adverse change with respect
                   to the Company or the Buyer.

6. D&O Insurance. The Company shall purchase "tail coverage" directors' and
officers' insurance prior to the Closing. Buyer shall agree to maintain from and
after the Closing (i) appropriate customary indemnification provisions in its
charter and bylaws and (ii) directors' and officers' insurance.

7. Board of Directors. At Closing, Buyer shall appoint two additional designees
of the Company to the existing four-member Board of directors of Buyer on terms
to be mutually agreed upon.

8. Expenses. Buyer and the Company will each separately bear their own expenses
incurred in connection with this letter of intent and the Transaction
contemplated hereby, whether or not the Transaction is consummated.

                                       3

<PAGE>

9. Registration Rights. Buyer shall file a registration statement for resale on
Form S-3 (or such other registration form that Buyer is eligible to use if the
Buyer is not eligible to use Form S-3) the shares of Common Stock received by
affiliates (and their respective transferees, successors and assigns) of the
Company within 30 days of the Closing and use its reasonable best efforts to
cause such registration statement to become effective as soon as practicable
thereafter. Such registration shall remain continuously effective until the
earlier of the (x) date on which the selling stockholders may sell the shares of
Common Stock received in the Transaction pursuant to Rule 144(k) or (y) date on
which all such shares of Common Stock have been sold by the selling
stockholders.

10. Public Announcements. Except as required by applicable law or listing
requirements, Buyer and the Company each agree that they will make no public
announcements relating to this letter of intent or the Transaction contemplated
hereby without the prior consent of the other as to both the timing and the text
of any such announcement (such consent not to be unreasonably withheld or
delayed). Notwithstanding the foregoing, each party agrees that upon execution
of this letter of intent a party hereto may issue a press release publicly
announcing the execution of this letter of intent (an "Execution Announcement").
Prior to issuing an Execution Announcement, the issuing party shall provide the
other party a draft of the Execution Announcement a reasonable time prior to the
release of such Execution Announcement for the other party's review and comment.

11. Confidentiality. The parties hereto acknowledge that the Confidentiality
Agreement, dated May 30, 2003, is still in effect as it relates to this letter
of intent and the Transaction contemplated hereby.

12. Exclusivity. Immediately following the execution of this letter of intent,
the Company will (and will cause its representatives to) terminate any existing
discussions with third parties relating to any merger, sale of assets or shares
of capital stock, joint venture or other business combination involving the
Company. For a period of 21 days following the date hereof, the Company will not
and will not permit any stockholder, director, officer, employee, investment
banker or other representative of the Company to, directly or indirectly,
solicit or engage in discussions or negotiations with, or provide any
information to, or otherwise cooperate with, encourage or assist, any third
party regarding any such transaction. The Company will immediately advise Buyer
of any inquiries or proposals received from third parties regarding any such
transaction.

13. Non-Binding Nature of Letter of Intent; Governing Law. This letter of intent
merely constitutes a statement of our mutual intention with respect to the
Transaction described herein. It does not contain all matters upon which
agreement must be reached in order for such Transaction to be consummated and,
therefore, does not constitute a binding commitment on the part of any party
hereto, and will not be construed to bind the Company or Buyer. Notwithstanding
the foregoing, the agreements and obligations of the parties set forth in
Sections 8, 10, 11, 12, 13 and 14 hereof represent legally binding commitments
of the parties in accordance with the terms of said Sections. Buyer and the
Company agree that this letter of intent, the Merger Agreement and all other
definitive

                                       4

<PAGE>

agreements to be entered into in connection with the Transaction will be
governed by the laws of the State of Delaware.

14. Termination. Further discussions with respect to the Transaction may be
terminated (a) by any party if the Merger Agreement is not executed within 21
days following the date hereof or (b) by agreement between the Company and
Buyer. No party will incur any liability for such termination; provided, that
any obligations under Sections 8, 10, 11, 12, 13 and 14 hereof will survive such
termination. To the extent any party hereto intends to abandon negotiations,
such party will immediately notify the other parties hereto in writing.

                                       5

<PAGE>

This letter of intent will remain open for acceptance by the method set forth in
the next sentence until August 5, 2003, after which, if not accepted, it will
automatically and without any further action by the Company, be deemed
withdrawn. If the foregoing correctly sets forth our intentions, kindly so
indicate by signing in the space indicated below and returning a copy to the
undersigned on or before August 5, 2003, whereupon we will promptly continue our
due diligence investigation and the negotiation of a definitive Merger
Agreement.

                                 Very truly yours,

                                 i3 MOBILE, INC.

                                 By: /s/ Edward J. Fletcher
                                    -------------------------------
                                    Name: Edward J. Fletcher
                                    Title: Chief Financial Officer

Confirmed and Agreed:

ACE*COMM CORPORATION

By: /s/ Steven R. Delmar
    ---------------------------------
    Name: Steven R. Delmar
    Title: Senior Vice President and
           Chief Financial Officer

                                       6

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