AGREEMENT
This Agreement, dated as of September 28, 1998, is
between Xxxxxx X. Xxxxxxx, individually, and ACE*COMM
Corporation, a Maryland corporation. In consideration of
the mutual benefits derived herefrom and certain other good
and valid consideration, receipt of which hereby is
acknowledged, the parties, intending to be legally bound,
covenant and agree as follows:
1. If at any time during the next twelve months the
following occur: (a) ACE*COMM's working capital becomes
inadequate to support the business at its then current level
and (b) financing for working capital adequate to support
the business at such level can not be obtained in a timely
manner, then Xx. Xxxxxxx will make available through a loan
or loan guarantee, for working capital, up to $3,500,000 in
principal amount (less any amounts raised by ACE*COMM after
September 28, 1998, from financing activities or through the
sale or pledge of assets). Such loan, if any, would bear
interest at the prime rate of interest at Crestar Bank plus
2% per annum, would be repayable upon demand and, an any
event out of the first alternate funding available to
ACE*COMM or upon a change of control of ACE*COMM, if any,
and would be fully collateralized by the assets of the
Company.
2. Xx. Xxxxxxx has provided an unconditional
guarantee, fully secured by his cash or marketable
securities, of ACE*COMM's reimbursement obligation for any
amount paid by Crestar Bank in connection with a $450,000
letter of credit issued on behalf of ACE*COMM in connection
with ACE*COMM's lease of its headquarters building.
ACE*COMM hereby agrees to repay Xx. Xxxxxxx upon demand for
any amounts paid by him under such guarantee. ACE*COMM's
repayment obligation may be secured from time to time by
assets of the Company at the request of Xx. Xxxxxxx.
Any amount required to be paid by ACE*COMM pursuant to
this section which is not made on the date that the same
becomes due and payable, shall continue as an obligation of
ACE*COMM until it is fully paid, and ACE*COMM agrees in
addition to pay, to the extent permitted by law, late
interest thereon at the prime rate of interest at Crestar
Bank plus 2% per annum, adjusted daily, such late interest
to accrue from the date such overdue payment became due and
payable until paid. ACE*COMM shall also pay, promptly upon
demand, all costs of collection, including reasonable
attorneys' fees if this Agreement is referred to an attorney
for collection after default with respect thereto, whether
or not an action is instituted to enforce or collect on this
Agreement. Time is of the essence hereof for all purposes.
ACE*COMM waives presentment and demand for payment,
protest or notice of protest for non-payment, bringing of
suit and diligence in taking any action to collect any sums
owing thereunder or in proceeding against any of the rights
and properties securing payment hereof. From time to time,
without affecting the obligations of ACE*COMM contained
herein, Xx. Xxxxxxx may modify the terms of repayment of
obligations under this Agreement, without causing such
actions to constitute a notation of the repayment
obligations under this Agreement or any waiver of rights.
The acceptance by Xx. Xxxxxxx of any repayment of
obligations by ACE*COMM that is less than payment in full of
all amounts due and payable at the time of such payment
shall not constitute a waiver of the right to exercise any
rights for full repayment.
Any attorney at law may appear in any court of record
in the State of Maryland or in the United States, after
demand for payment of the obligations under this Agreement
and waive the issuing of service of process and confess a
judgment against ACE*COMM in favor of Xx. Xxxxxxx for the
amount then appearing due under this Agreement, together
with interest, costs of suit and reasonable attorneys' fees.
3. This Agreement shall be effective as of the date
hereof and shall be binding upon and inure to the benefit
of, the parties and their respective heirs, successors,
assigns, and personal representatives, as the case may be.
As used herein, the successors of the Company shall include,
but not be limited to, any successor by way of merger,
consolidation, sale of all or substantially all of the
assets, or similar reorganization or change in control.
4. Any term, provision or condition of this Agreement
(other than as prohibited by applicable law) may be waived
in writing at any time by the party which is entitled to the
benefits thereof. This Agreement has been duly authorized,
executed and delivered and constitutes the valid and binding
obligations of the parties hereto, enforceable in accordance
with its terms. The validity and construction of this
Agreement or any of its provisions shall be determined under
the laws of the State of Maryland, without giving effect to
its conflicts of laws provisions, and without regard to its
place of execution or its place of performance. If any one
or more of the terms or provisions of this Agreement shall
for any reason be held to be invalid, illegal or
unenforceable, in whole or in part, or in any respect or in
the event that any one or more of the provisions of this
Agreement operated or would prospectively operate to
invalidate this Agreement, then and in either of those
events, such provision or provisions only shall be deemed
null and void to the extent such term or provision is held
to be invalid, illegal or unenforceable and shall not affect
any other provision of this Agreement and the remaining
provisions of this Agreement shall remain operative and in
full force and effect and shall in no way be affected,
prejudiced or disturbed thereby.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the 28th day of September, 1998.
XXXXXX X. XXXXXXX
/S/ XXXXXX X. XXXXXXX
ACE*COMM CORPORATION
By: /S/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
Chairman of the Board
(authorized by the Board of Directors)
