Exhibit 10.1

Security Agreement

          This Security Agreement is made this August 15, 2006, by and between
Timeline, Inc., a Washington corporation, having its principal office at 1700
7th Avenue, Suite 2100, Seattle, Washington 98101 (“Grantor”), and Rohde & Van
Kampen PLLC (“RV”), a Washington professional limited liability company, having
its principal office at 1001 4th Avenue, Suite 4050, Seattle, Washington 98154
and Susman Godfrey L.L.P. (“SG”)1, a limited liability partnership registered in
Washington, having its principal office at 1000 Louisiana, Suite 5100, Houston,
Texas 77002 ( RV and SG are collectively “Grantees”).

          WHEREAS, Grantor is the owner of the U.S. and foreign patents listed
on the attached Schedule A (collectively the “Patents”).  Further, Grantor is
the sole owner of certain claims of patent infringement and claims for breach of
contract as disclosed in a fee agreement dated August 15, 2006 (“Fee Agreement”)
between Grantor and Grantees.  (All claims disclosed in the Fee Agreement are
collectively referred to as “cause of action”);

          WHEREAS, Grantor intends to grant to Grantees a security interest in
certain assets including the Patents to secure performance of the obligations of
Grantor under the Fee Agreement; and

          WHEREAS, Grantors and Grantees by this instrument seeks to confirm and
make a record of the grant of a security interest in the Patents and other
assets.

          NOW, THEREFORE, for good and valuable consideration, the adequacy of
which are hereby acknowledged, Grantor does hereby acknowledge that as security
for Grantor’s obligations under the Fee Agreement, Grantor grants to Grantees
right to and interest in, to and under, the patents set forth in Exhibit A and
the right to record Grantee’s security interest.  As further security for
Grantor’s obligations, as set forth in the Fee Agreement, Grantor hereby
collaterally transfers and assigns to Grantees an undivided security interest in
the cause of action, such interest being equivalent to the amount or percentage
that Grantor, by the concurrently executed Fee Agreement, promises to pay for
the services of Grantees.  Grantor agrees to execute any additional documents
necessary to record and perfect Grantees security interest.

          Grantor agrees that it shall not assign or otherwise create any lien
against that part of the cause of action collaterally assigned to Grantees
pursuant to the preceding paragraph.

TIMELINE, INC.

 

 

 

 

 

 

 

By:

/s/ Charles R. Osenbaugh

 

 

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Charles R. Osenbaugh, President

 

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1 RV and SG includes any firms which may become successors to the PLLC or the
LLP.

AGREED TO AND ACCEPTED:

 

 

 

 

 

 

 

ROHDE & VAN KAMPEN, PLLC

 

SUSMAN GODFREY L.L.P.

 

 

 

 

 

 

 

 

 

/s/ Robert E. Rohde

 

/s/ Parker C. Folse, III

 

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Robert E. Rohde, Member

 

Parker C. Folse, III, Partner

 

Exhibit A – U.S. and foreign patents pledged as security

EXHIBIT A

Patents

Timeline:

U.S.

5,802,511

9/1/98

U.S.

6,023,694

2/8/00

U.S.

6,026,392

2/15/00

U.S.

6,625,617

9/23/03

U.S.

6,631,382

10/7/03

 

 

 

Australia

729,275

5/17/01

Australia

772,658

8/20/04

 

 

 

Canada

2,240,663

6/8/04

 

 

 

China

CN 1163821C

8/25/04

China

CN 198853

3/16/05

 

 

 

Hong Kong

HK1018328

1/7/05

 

 

 

Israel

125,129

10/1/02

Israel

139,665

12/1/05

 

 

 

Korea

0538,547

12/16/05

 

 

 

Mexico

212,383

1/7/03

Mexico

218,620

1/12/04

 

 

 

Singapore

80171

1/8/03

Singapore

53983

11/30/04