**Exhibit 4.11****SUBORDINATION AGREEMENT**     This Subordination Agreement (the “Agreement”) is made as of this 13th day of March, 2006, byand among SILICON VALLEY BANK, a California-chartered bank with its principal place of business at3003 Tasman Drive, Santa Clara, CA 95054, (the “Bank”) and Bonanza Master Fund, LTD., for itselfand as agent for each Purchaser (the “Agent”), HHMI Investments, L.P., SRB Greenway Capital LP, SRBGreenway Capital (QP) LP, SRB Greenway Offshore Operating Fund, LP, Walker Smith Capital (QP), LP,Walker Smith Capital, LP, and Walker Smith International Fund, Ltd. (collectively, the “Purchasers”and each a “Purchaser”) the purchasers jointly but not severally, on a pro rata basis, of SecuredNotes due 2009 (together with any Additional Notes (as defined in that certain Purchase Agreementdated March 13, 2006 by and between the Borrower and the Purchasers) (the “Purchase Agreement”),the “Notes”) of TELECOMMUNICATION SYSTEMS, INC. (the “Borrower”).**Recitals**     A. Bank and the Borrower have entered into the Second Amended and Restated Loan and SecurityAgreement (Revolver) between them, dated as of October 14, 2005, as such agreement is amended orotherwise modified from time to time (referred to herein as the “Loan Agreement”), pursuant towhich Bank has extended credit accommodations to Borrower secured by a first priority interest incertain collateral described in the Loan Agreement (the “Collateral”).     B. The Purchasers have entered into the Purchase Agreement with the Borrower, pursuant towhich the Purchasers have purchased an initial aggregate principal amount of $10,000,000 (which maybe increased by the issuance of Additional Notes) of the Borrower’s Notes, which shall be securedby that certain Intellectual Property Security Agreement dated March 13, 2006 (the “SecurityAgreement”).     C. In order to induce Bank to continue to extend the credit accommodations to Borrower as theLoan Agreement contemplates, Purchasers are willing to subordinate (i) all of Borrower’sindebtedness, liabilities, guarantees and all other obligations owing to Purchasers arising fromtime to time, including, without limitation, with respect to the Notes (collectively the“Subordinated Debt”) to and in favor of all of Borrower’s indebtedness, liabilities, guarantees andall other obligations owing to Bank, now existing or hereafter arising, including withoutlimitation, under the Loan Agreement (the “Senior Debt”) and (ii) all security interests, liens,encumbrances, ownership interests and all other interests of similar import of Purchasers now inexistence and arising hereafter with respect to any and all property of the Borrower now inexistence or hereafter arising, including, without limitation, the Collateral, except thosesecurity interests, liens and encumbrances arising pursuant to the Security Agreement (the“Subordinate Interest”) to and in favor of the rights and interests of Bank in and to any and allof such property, in each of the foregoing cases to the extent and as otherwise set forth herein.**Agreement****NOW, THEREFORE, THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:**     1. Purchasers hereby subordinate their Subordinate Interest regarding any and all assets andproperty of the Borrower to and in favor of Bank. Further, notwithstanding the respective dates ofattachment or perfection of the Subordinate Interest and the security interest and lien of Bank,the security interest and lien of Bank in the assets and property of Borrower granted pursuant tothe Loan Agreement and otherwise arising from time to time in connection with the Senior Debt,including, without limitation, the Collateral, shall at all times be prior and superior to theSubordinate Interest. Bank and Purchasers each hereby acknowledge and agree that (i) theCollateral, includes Accounts or General Intangibles (as such terms are defined in the UniformCommercial Code in the State of Maryland) now or hereafter arising out of Borrower’s
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intellectual property; (ii) any security interest now or hereafter arising in favor of Bankwith respect to any intellectual property of Borrower is junior and subordinate in all respects toany security interest now or hereafter arising in favor of Purchasers with respect to suchintellectual property; and (ii) any proceeds from the sale by the Purchasers of Borrower’sintellectual property are not Accounts or General Intangibles.     2. On the terms and conditions set forth herein, Purchasers hereby subordinate allSubordinated Debt in right of payment to and in favor of all Senior Debt. Nothing herein shall bedeemed to subordinate, waive or restrict the performance of the obligations of Borrower to issuecapital stock of Borrower under any warrants that the Borrower may have issued to Purchasers fromtime to time.     3. Subject to and except as set forth in Section 4 below, Purchasers will not: (a) demand orreceive from Borrower (and Borrower will not pay to Purchasers) all or any part of the SubordinatedDebt, by way of payment, prepayment, setoff, lawsuit or otherwise; (b) exercise any right orremedy, or take any enforcement action regarding any property or assets of Borrower; or (c)commence, or cause to be commenced, prosecute or participate in any administrative, legal orequitable action against Borrower or the Collateral as defined in the Loan Agreement, for thelonger of such time as any Senior Debt remains outstanding or the Loan Agreement remains effectiveand not terminated; provided, however, Agent may on behalf of Purchasers, duringthe existence and continuance of any default in respect of the Subordinated Debt, and in accordancewith the terms thereof, take an enforcement or other remedial action with respect to the Borroweror any of the property described in the Security Agreement on and after the date that is onehundred eighty (180) days after Agent on behalf of Purchasers has given Bank written notice of itsintention to do any of the foregoing in a letter that specifically references this section andindicates what actions are contemplated (and with the understanding that any such written noticemay be given during a Blockage Period if Agent on behalf of Purchasers so desires).     4. (a) Notwithstanding anything to the contrary contained in Sections 2 and 3 above, butexpressly subject to (b) below, Borrower shall be permitted to make, and Purchasers shall bepermitted to accept or receive the following permitted payments (“Permitted Payments”) on theSubordinated Debt: (i) scheduled repayments of principal when due (as contemplated by theagreements in effect as of the date hereof) under the Notes (as long as the maximum principalamount of the Subordinated Debt in the aggregate does not exceed $10,000,000), (ii) scheduledquarterly payments of accrued interest when due under the Notes (as contemplated by the agreementsin effect as of the date hereof), (iii) payments of reimbursable expenses, costs and professionalfees and expenses as and when due under the Subordinated Debt facility (as contemplated by theagreements in effect as of the date hereof), (iv) payments of liquidated damages as and when dueunder the Subordinated Debt (as contemplated by the agreements in effect as of the date hereof),provided that at the time of such payment and after giving effect thereto, no default shall haveoccurred and be continuing under the Loan Agreement, and (v) other payments consented to in writingby the Bank. Borrower further covenants and agrees that it will not make any of the paymentspermitted to be made to Purchasers pursuant to this Section 4(a), if at the time of any suchpayment or after giving effect to any such payments a Payment Default or Non-Payment Default (eachas hereinafter defined) would exist. In the event Borrower makes such a determination, it shallimmediately notify Bank of such determination.          (b) Notwithstanding anything to the contrary contained in this Section 4 or elsewhere in thisAgreement, if the Bank delivers to Agent written notice (a “Blockage Notice”) which states thateither:     (i) a specific default by Borrower involving the payment of the Senior Debt (a“Payment Default”) has occurred under the Loan Agreement and continues to exist after thegiving of any notice, if any is so required, and the expiration of any applicable grace orcure period, or
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     (ii) a specific default by Borrower not involving the payment of Senior Debt(a “Non-Payment Default”) has occurred under the Loan Agreement and continues to existafter the giving of any notice, if any is so required, and the expiration of any applicablegrace or cure period, such notice to include all such defaults in existence at the time,     *then*, from and after the date of delivery of any such Blockage Notice, Purchasers shall notaccept or receive any payment of any kind of or on account of the Subordinated Debt (including anyPermitted Payment), unless and until the earlier of (A) the time such Payment Default orNon-Payment Default shall have been cured by Borrower or waived in writing by Bank, or (B) theexpiration of the Blockage Period (as defined below) for such Blockage Notice.     As used herein, “Blockage Period” means a period of time beginning on the date a BlockageNotice is delivered to Agent and termination on the earlier to occur of:     (1) 180 days following such date; provided that if, prior to the expiration ofsuch 180-day period, Bank has commenced a judicial proceeding or non-judicial actions tocollect or enforce the Senior Debt or the collateral for the Senior Debt, or a case orproceeding by or against Borrower is commenced under the federal Bankruptcy Code or anyother insolvency law, then such period shall be extended during the continuation of suchproceedings and actions under the payment in cash or other property or securities in thefull amount of the allowed claim of the Senior Debt; or     (2) Bank’s written consent to such termination.     In no event shall the Blockage Period during any period of 365 consecutive days exceed 180days in the aggregate, whether pursuant to one (1) Blockage Notice or multiple Blockage Notices;provided, however, the foregoing limitation shall not apply in the event that prior to theexpiration of such 180 day period Bank has commenced a judicial proceeding or non-judicial actionsto collect or enforce the Senior Debt or a case of proceeding by or against Borrower is commencedunder the federal Bankruptcy Code or any other insolvency law, then such period shall be extendedduring the continuation of such proceedings and actions until the payment in cash or other propertyor securities in the full amount of the allowed claim of the Senior Debt. After termination of anyBlockage Period pursuant to the conditions specified in (1) or (2) above and until Agent’s receiptof a subsequent Blockage Notice from Bank, Purchasers shall be entitled to receive all PermittedPayments.     5. If Agent or any Purchaser sends the Borrower a notice of default under the PurchasersFacility, Purchasers shall use best efforts to promptly deliver a copy of the notice of default toBank, but failure to do so shall not, in and of itself, be a breach of this Agreement nor affectany of Purchasers’ rights in respect of the Subordinated Debt.     6. Purchasers shall promptly deliver to Bank in the form received (except for endorsement orassignment by Purchasers where required by Bank) for application to the Senior Debt any payment,distribution, security or proceeds received by Purchasers with respect to the Subordinated Debtother than in accordance with this Agreement.     7. In the event of Borrower’s insolvency, reorganization or any case or proceeding under anybankruptcy or insolvency law or laws relating to the relief of debtors, these provisions shallremain in full force and effect, and Bank’s claims against Borrower and the estate of Borrowershall be paid in full before any payment is made to Purchasers.     8. For so long as any of the Senior Debt remains unpaid, Purchasers irrevocably appoint Bankas Purchasers’ attorney-in-fact, and grants to Bank a power of attorney with full power ofsubstitution, in the name of Purchasers or in the name of Bank, for the use and benefit
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of Bank,without notice to Purchasers, in any bankruptcy, insolvency or similar proceedinginvolving Borrower to (i) file the appropriate claim or claims in respect of the SubordinatedDebt on behalf of Purchasers if Purchasers do not do so prior to 30 days before the expiration ofthe time to file claims in such proceeding and (ii) accept or reject any plan of reorganization orarrangement on behalf of Purchasers and otherwise to vote Purchasers’ claims in respect of anySubordinated Debt in any manner that Bank chooses.     9. Purchasers shall immediately affix a legend to the instruments evidencing the SubordinatedDebt stating that the instruments are subject to the terms of this Agreement. No amendment of thedocuments evidencing or relating to the Subordinated Debt shall directly or indirectly modify theprovisions of this Agreement in any manner which might terminate or impair the subordination of theSubordinated Debt or the subordination of the security interest or lien that Purchasers may have inany property of Borrower. Additionally, no amendment of the documents evidencing the SubordinatedDebt may change the timing or amount of the regularly scheduled payments of principal and interestwithout Bank’s consent.     10. The Purchasers shall not be subrogated to, or be entitled to any assignment of any SeniorDebt or evidence of any evidence of Senior Debt or any Collateral until all Senior Debt isindefeasibly paid and satisfied in full.     11. All necessary action on the part of the Purchasers, their respective officers, directors,partners, members and shareholders, as applicable, necessary for the authorization of thisAgreement and the performance of all obligations of the Purchasers hereunder has been taken.Additionally, the execution, delivery and performance of and compliance with this Agreement willnot result in any material violation or default of any term of any of the Purchasers’ charter,formation or other organizational documents (such as Articles or Certificate of Incorporation,bylaws, partnership agreement, operating agreement, etc.).     12. This Agreement shall remain effective until the later to occur of the repayment in full incash of the Senior Debt or the termination of the Loan Agreement. If, at any time after payment infull of the Senior Debt any payments of the Senior Debt must be disgorged by Bank for any reason(including, without limitation, the bankruptcy of Borrower), this Agreement and the relative rightsand priorities set forth herein shall be reinstated as to all such disgorged payments as thoughsuch payments had not been made and Purchasers shall immediately pay over to Bank all paymentsreceived with respect to the Subordinated Debt to the extent that such payments would have beenprohibited hereunder. At any time and from time to time, without notice to Purchasers, Bank maytake such actions with respect to the Senior Debt as Bank, in its sole discretion, may deemappropriate, including, without limitation, terminating advances to Borrower, extending the time ofpayment, increasing applicable interest rates, renewing, compromising or otherwise amending theterms of any documents affecting the Senior Debt and any collateral securing the Senior Debt, andenforcing or failing to enforce any rights against Borrower or any other person. Purchasers waivesthe benefits, if any, of any statutory or common law rule that may permit a subordinating Purchaserto assert any defenses of a surety or guarantor, or that may give the subordinating Purchaser theright to require a senior Purchaser to marshal assets, and Purchasers agree that it shall notassert any such defenses or rights.     13. This Agreement shall bind any successors or assignees of Purchasers and shall benefit anysuccessors or assigns of Bank. This Agreement is solely for the benefit of Purchasers and Bank andnot for the benefit of Borrower or any other party.     14. This Agreement may be executed in two or more counterparts, each of which shall be deemedan original and all of which together shall constitute one instrument. This Agreement shall becomeeffective only when it shall have been executed by Purchasers and Bank.
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     15. This Agreement shall be governed by and construed in accordance with the laws of the Stateof California without giving effect to conflicts of law principles. Purchasers and Banksubmit to the exclusive jurisdiction of the state and federal courts located in Santa ClaraCounty, California. PURCHASERS AND BANK WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIMOR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONSCONTEMPLATED HEREIN.     16. This Agreement represents the entire agreement with respect to the subject matter hereof,and supersedes all prior negotiations, agreements and commitments. Purchasers is not relying onany representations by Bank or Borrower in entering into this Agreement, and Purchasers has keptand will continue to keep itself fully apprised of the financial and other condition of Borrower.This Agreement may be amended only by written instrument signed by Purchasers and Bank.     17. In the event of any legal action to enforce the rights of a party under this Agreement,the party prevailing in such action shall be entitled, in addition to such other relief as may begranted, all reasonable costs and expenses, including reasonable attorneys’ fees, incurred in suchaction.     18. Except as otherwise provided herein, all notices required, contemplated, or permittedunder this Agreement or with respect to the subject matter hereof shall be in writing, and shall bedeemed to have been validly served, given, delivered, and received upon the earlier of: (i) thefirst business day after transmission by facsimile or hand delivery or deposit with an overnightexpress service or overnight mail delivery service; or (ii) the third calendar day after deposit inthe United States mails, with proper first class postage prepaid, and shall be sent to the addressset forth below or to such other address as each party may designate for itself by like notice.Bank shall satisfy any notice requirement with respect to the Purchasers under this Agreement byproviding notice to the Agent.*[SIGNATURES APPEAR ON THE FOLLOWING PAGE]*
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     **IN WITNESS WHEREOF**, the undersigned have executed this Agreement as of the date firstabove written.       BANK       **SILICON VALLEY BANK**       By:    /s/ Tony Wolfe            Name: Tony Wolfe       Title:   Relationship Manager       Address for Notice:       3003 Tasman Drive  Mail Sort HA 250  Santa Clara, California 95054  Attention: General Counsel       PURCHASERS:       **Bonanza Master Fund, Ltd.**       By: /s/ Brian Ladin            Name: Brian Ladin       Title:   Partner       Address for Notice:       Bonanza Capital  300 Crescent Court  Suite 250  Dallas, TX 75201       **HHMI Investments, L.P**.       By: WS Capital Management, L.P, Investment Manager  By: WS Capital, L.L.C., General Partner       By:    /s/ Reid S. Walker             Name: Reid S. Walker       Title:   Member       Address for Notice:       300 Crescent Court  Suite 1111  Dallas, TX 75201
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       **SRB Greenway Capital, L.P.**       By: SRB Management, L.P., General Partner