**Exhibit 4.10****INTELLECTUAL PROPERTY SECURITY AGREEMENT**     INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of March 13, 2006 (this“Agreement”), among Telecommunication Systems, Inc., a Maryland corporation (the“Company” or the “Debtor”) and Bonanza Master Fund, Ltd. as agent (the “Agent”) forthe holders of the Company’s Secured Notes due March 13, 2009 in the original aggregate principalamount of $10,000,000 (together with any additional such Notes issued as interest on the existingNotes, the “Notes”), signatory hereto, their endorsees, transferees and assigns(collectively referred to as, the “Secured Parties”).**W I T N E S S E T H:**     WHEREAS, pursuant to the Notes, the Secured Parties have severally agreed to extend the loansto the Company evidenced by the Notes; and     WHEREAS, in order to induce the Secured Parties to extend the loans evidenced by the Notes,Debtor has agreed to execute and deliver to the Agent this Agreement and to grant the Agent for thebenefit of the Secured Parties, a first priority perfected security interest in the Collateral (asdefined herein) to secure the prompt payment, performance and discharge in full of all of theCompany’s obligations under the Notes.     NOW, THEREFORE, in consideration of the agreements herein contained and for other good andvaluable consideration, the receipt and sufficiency of which is hereby acknowledged, the partieshereto hereby agree as follows:     1. **Certain Definitions**. As used in this Agreement, the following terms shall have the meaningsset forth in this Section 1. Capitalized terms used but not otherwise defined in this Agreementthat are defined in Article 9 of the UCC shall have the respective meanings given such terms inArticle 9 of the UCC.     (a) “Collateral” means Debtor’s Intellectual Property existing on the date ofthis Agreement, wherever situated, and all Proceeds of any sale or other dispositionthereof outside of the ordinary course of business, including, without limitation, allproceeds from insurance covering the same and of any tort claims in connection therewith.     (b) “Intellectual Property” means the collective reference to all rights,priorities and privileges relating to intellectual property, whether arising under UnitedStates, multinational or foreign laws or otherwise, including, without limitation, (i) allcopyrights arising under the laws of the United States, any other country or any politicalsubdivision thereof, whether registered or unregistered and whether published orunpublished, all registrations and recordings thereof, and all applications in connectiontherewith, including, without limitation, all registrations, recordings and applications inthe United States Copyright Office, (ii) all letters patent of the United States, any othercountry or any political subdivision thereof, all reissues and extensions thereof, and allapplications for
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letters patent of the United States or any other country and all divisions,continuations and continuations-in-part thereof, (iii) all trademarks, trade names,corporate names, company names, business names, fictitious business names, trade dress,service marks, logos, domain names and other source or business identifiers, and allgoodwill associated therewith, now existing or hereafter adopted or acquired, allregistrations and recordings thereof, and all applications in connection therewith, whetherin the United States Patent and Trademark Office or in any similar office or agency of theUnited States, any State thereof or any other country or any political subdivision thereof,or otherwise, and all common law rights related thereto, (iv) all trade secrets arisingunder the laws of the United States, any other country or any political subdivisionthereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing,(vi) all licenses for any of the foregoing, but only to the extent that the inclusionthereof in this Agreement does not and will not cause a default under the terms of anyagreements in respect of the such license (except that all rights to payment in respect ofsuch licenses shall be included in the definition of Intellectual Property), and (vii) allcauses of action for infringement of the foregoing.     (c) “Majority in Interest” means (i) the Secured Parties who, together withtheir respective Affiliates, hold a majority of the Notes outstanding at the time ofdetermination, (ii) SRB Management, L.P. as long as (A) it and its Affiliates, (B) WSCapital Management, L.P. and its Affiliates and (C) WS Ventures Management, L.P. and itsAffiliates collectively hold at least $2,000,000 in aggregate principal amount of the Notesoutstanding at the time of determination, and (iii) Bonanza Master Fund Ltd. as long as it,together with its Affiliates, holds at least $3,000,000 in aggregate principal amount ofthe Notes outstanding at the time of determination.     (d) “Note Purchase Agreement” means the Note Purchase Agreement dated as ofthe date hereof by and among Debtor and the Secured Parties signatory thereto.     (e) “Obligations” means (i) principal of, and interest on the Notes and theloans extended pursuant thereto; (ii) any and all other fees, indemnities, costs,obligations and liabilities of the Debtor from time to time under or in connection withthis Agreement, the Notes and the Note Purchase Agreement; and (iii) all amounts (includingbut not limited to post-petition interest) in respect of the foregoing that would bepayable but for the fact that the obligations to pay such amounts are unenforceable or notallowable due to the existence of a bankruptcy, reorganization or similar proceedinginvolving any Debtor.     (f) “Organizational Documents” means with respect to Debtor, the documents bywhich such Debtor was organized (such as a certificate of incorporation, certificate oflimited partnership or articles of organization, and including, without limitation, anycertificates of designation for preferred stock or other forms of preferred equity) andwhich relate to the internal governance of
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such Debtor (such as bylaws, a partnership agreement or an operating, limitedliability or members agreement).     (g) “Release Collateral” shall mean all of the following:          (i) all letters patent of the United States or any other country or politicalsubdivision thereof, and all applications for letters patent of the United States or anyother country, that are listed on Schedule E-1 attached hereto;          (ii) all re-issues, continuations, divisions, continuations-in-part, renewals orextensions of the patents and applications referred to in preceding clause (i);          (iii) the inventions disclosed or claimed in preceding clauses (i) and (ii), includingthe right to make, use, practice and/or sell (or license or otherwise transfer or disposeof) the inventions disclosed or claimed in preceding clauses (i) and (ii);          (iv) the right to make and prosecute applications for the patents and applicationsreferred to in preceding clauses (i), (ii) and (iii); and          (v) Proceeds of any property described in the preceding clauses of this definition ofRelease Collateral.     (h) “Silicon Valley Bank” means Silicon Valley Bank, andits successors and assigns.     (i) “Subordination Agreement” means the Subordination Agreement, dated of evendate herewith, among Silicon Valley Bank and the Secured Parties.     (j) “UCC” means the Uniform Commercial Code of the State of Maryland and orany other applicable law of any state or states which has jurisdiction with respect to all,or any portion of, the Collateral or this Agreement, from time to time. It is the intentof the parties that defined terms in the UCC should be construed in their broadest sense sothat the term “Collateral” will be construed in its broadest sense. Accordingly if thereare, from time to time, changes to defined terms in the UCC that broaden the definitions,they are incorporated herein and if existing definitions in the UCC are broader than theamended definitions, the existing ones shall be controlling.     2. **Grant of Perfected First Priority Security Interest**. As an inducement for the SecuredParties to extend the loans as evidenced by the Notes and to secure the complete and timelypayment, performance and discharge in full, as the case may be, of all of the Obligations, Debtorhereby unconditionally and irrevocably pledges, grants and hypothecates to the Agent for thebenefit of the Secured Parties a continuing and
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perfected security interest in and to, a lien upon all of their respective right, title andinterest of whatsoever kind and nature in and to, the Collateral (the “Security Interest”).Secured Parties acknowledge that the Collateral may be subject to certain rights of SiliconValley Bank pursuant to certain loan documents from the Debtor in favor of Silicon Valley Bank.     3. Intentionally Omitted.     4. **Representations, Warranties, Covenants and Agreements of the Debtor**. Debtor represents andwarrants to, and covenants and agrees with, the Secured Parties as follows:     (a) Debtor has the requisite corporate power and authority to enter into thisAgreement and otherwise to carry out its obligations hereunder. The execution, delivery andperformance by Debtor of this Agreement and the filings contemplated therein have been dulyauthorized by all necessary action on the part of Debtor and no further action is requiredby Debtor. This Agreement has been duly executed by Debtor. This Agreement constitutesthe legal, valid and binding obligation of Debtor, enforceable against Debtor in accordancewith its terms except as such enforceability may be limited by applicable bankruptcy,insolvency, reorganization and similar laws of general application relating to or affectingthe rights and remedies of creditors and by general principles of equity.     (b) The Debtor has no place of business or offices where its books of account andrecords are kept (other than temporarily at the offices of its attorneys or accountants) orplaces where Collateral is stored or located, except as set forth on Schedule Aattached hereto.     (c) Except as set forth on Schedule B attached hereto, the Debtor is the soleowner of the Collateral (except for non-exclusive licenses granted by Debtor in theordinary course of business), free and clear of any liens, security interests,encumbrances, rights or claims, and is fully authorized to grant the Security Interest.There is not on file in any governmental or regulatory authority, agency or recordingoffice an effective financing statement, security agreement, license or transfer or anynotice of any of the foregoing (other than those that will be filed in favor of the SecuredParties pursuant to this Agreement) covering or affecting any of the Collateral. So longas this Agreement shall be in effect, the Debtor shall not execute and shall not knowinglypermit to be on file in any such office or agency any such financing statement or otherdocument or instrument (except to the extent filed or recorded in favor of the SecuredParties pursuant to the terms of this Agreement). In the event that there is on file onthe date hereof in any governmental or regulatory authority, agency or recording office aneffective financing statement, security agreement, license or other notice of any of theforegoing (other than those that will be filed in favor of the Secured Parties pursuant tothis Agreement) covering or affecting the Collateral, Debtor shall be permitted a period ofthirty (30) days after becoming aware thereof in which to
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have such financing statement, security agreement, license or transfer or noticeterminated and released of record.     (d) No written claim has been received that any Collateral or Debtor’s use of anyCollateral violates the rights of any third party. There has been no adverse decision toDebtor’s claim of ownership rights in or exclusive rights to use the Collateral in anyjurisdiction or to Debtor’s right to keep and maintain such Collateral in full force andeffect, and there is no proceeding involving said rights pending or, to the best knowledgeof Debtor, threatened before any court, judicial body, administrative or regulatory agency,arbitrator or other governmental authority.     (e) This Agreement creates in favor of the Agent for the benefit of the SecuredParties a valid security interest in the Collateral, securing the payment and performanceof the Obligations. Upon making the filings described in the immediately followingparagraph, all security interests created hereunder in any Collateral which may beperfected by filing Uniform Commercial Code financing statements shall have been dulyperfected. Except for the filing of the Uniform Commercial Code financing statementsreferred to in the immediately following paragraph, no action is necessary to create orperfect the security interests created hereunder. Without limiting the generality of theforegoing, except for the filing of said financing statements, no consent of any thirdparties and no authorization, approval or other action by, and no notice to or filing with,any governmental authority or regulatory body is required for (i) the execution, deliveryand performance of this Agreement, (ii) the creation or perfection of the SecurityInterests created hereunder in the Collateral or (iii) the enforcement of the rights of theSecured Parties hereunder, other than as set forth in the Subordination Agreement.     (f) Debtor hereby authorizes the Agent on behalf of the Secured Parties to file one ormore financing statements under the UCC, with respect to the Security Interest with theproper filing and recording agencies in any jurisdiction deemed proper by them.     (g) The execution, delivery and performance of this Agreement by the Debtor does not(i) violate any of the provisions of any Organizational Documents of the Debtor or anyjudgment, decree, order or award of any court, governmental body or arbitrator or anyapplicable law, rule or regulation applicable to Debtor or (ii) conflict with, orconstitute a default (or an event that with notice or lapse of time or both would become adefault) under, or give to others any rights of termination, amendment, acceleration orcancellation (with or without notice, lapse of time or both) of, any agreement, creditfacility, debt or other instrument (evidencing Debtor’s debt or otherwise) or otherunderstanding to which Debtor is a party or by which any property or asset of Debtor isbound or affected. No consent (including, without limitation, from stockholders orcreditors of Debtor)
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which has not been obtained is required for Debtor to enter into and perform itsobligations hereunder.     (h) Debtor shall at all times maintain the liens and Security Interest provided forhereunder as valid and perfected first priority liens and security interests in theCollateral in favor of the Agent until this Agreement and the Security Interest hereundershall be terminated pursuant to Section 11 hereof. Debtor hereby agrees to defend the sameagainst the claims of any and all persons and entities. At the request of the Agent,Debtor will pay the cost of filing UCC financing statements in appropriate form in allpublic offices wherever filing is, or is deemed by the Agent to be, necessary or desirableto effect the rights and obligations provided for herein. Without limiting the generalityof the foregoing, Debtor shall pay all fees, taxes and other amounts necessary to maintainthe Collateral and the Security Interest hereunder, and Debtor shall obtain and furnish tothe Agent from time to time, upon demand, such releases and/or subordinations of claims andliens which may be required to maintain the priority of the Security Interest hereunder;provided, however, that nothing in this clause (h) shall obligate the Debtor to take anyaction with respect to the Subordination Agreement.     (i) Debtor will not transfer, pledge, hypothecate, encumber, license, sell orotherwise dispose of any of the Collateral (other than Release Collateral and licensesgranted by a Debtor in its ordinary course of business) without the prior written consentof the Agent, which consent shall not be unreasonably withheld, conditioned or delayed, itbeing acknowledged that the legitimate interests of the Agent and the Debtor may differwith respect to the desirability of any given proposed disposition.     (j) Debtor shall, within thirty (30) days of obtaining knowledge thereof, advise theSecured Parties promptly, in sufficient detail, of any substantial change in theCollateral, and of the occurrence of any event which would have a material adverse effecton the value of the Collateral (other than the Release Collateral) or on the SecuredParties’ security interest therein.     (k) Upon the Agent’s written request, Debtor shall execute and deliver to Agent suchinstruments and documents, in form and substance reasonably satisfactory to Debtor (and forso long as Debtor is indebted to Silicon Valley Bank, Silicon Valley Bank), as may benecessary for Agent to confirm the creation or perfection of, or to give public notice of,the Security Interest granted under this Agreement; provided that unless an Event ofDefault has occurred and is continuing (i) Debtor shall not be required to execute ordeliver to Agent any instrument or other document to be recorded with any public officeother than the appropriate public office for filing financing statements under the UCC and(ii) the Agent shall not make any filing in any office other than the appropriate publicoffice for filing financing statements under the UCC.
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     (l) Intentionally Omitted.     (m) Debtor shall promptly notify the Agent in sufficient detail upon becoming aware ofany attachment, garnishment, execution or other legal process levied against any Collateraland of any other information received by Debtor that may materially affect the value of theCollateral, the Security Interest or the rights and remedies of the Agent hereunder.     (n) Intentionally Omitted.     (o) Debtor will not change its name, type of organization, jurisdiction oforganization, organizational identification number (if it has one), legal or corporatestructure, or identity, or add any new fictitious name unless it provides at least 10 daysprior written notice to the Agent of such change and, at the time of such writtennotification, Debtor provides any financing statements necessary to perfect and continueperfected the perfected security interest granted and evidenced by this Agreement.     (p) Debtor was organized and remains organized solely under the laws of the state setforth next to Debtor’s name in the first paragraph of this Agreement. Schedule Cattached hereto sets forth Debtor’s organizational identification number or, if Debtor doesnot have one, states that one does not exist.     (q) (i) The actual name of Debtor is the name set forth in the preamble above; (ii)Debtor does not have any trade names except as set forth on Schedule D attachedhereto; (iii) Debtor has not used any name other than that stated in the preamble hereto oras set forth on Schedule D for the preceding five years; and (iv) no entity hasmerged into Debtor or been acquired by Debtor within the past five years except as setforth on Schedule D.     (r) If Debtor shall at any time hold or acquire a commercial tort claim in respect ofany Collateral, Debtor shall promptly notify the Secured Parties in a writing signed byDebtor of the particulars thereof and grant to the Secured Parties in such writing asecurity interest therein and in the proceeds thereof, all upon the terms of thisAgreement, with such writing to be in form and substance satisfactory to the SecuredParties.     (s) Without limiting the generality of the other obligations of the Debtor hereunder,Debtor shall, upon the written request of the Agent upon the occurrence and during thecontinuance of any Event of Default, promptly (i) cause to be registered at the UnitedStates Copyright Office all of its material copyrights and (ii) cause the Security Interestwith respect to all Intellectual Property registered at the United States Copyright Officeor United States Patent and Trademark Office to be duly recorded at the applicable office,(provided, that
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no such recordation shall be required prior to the occurrence of an Event of Default).     (t) Schedule E attached hereto lists all of the patents, patent applications,trademarks, trademark applications, registered copyrights, and domain names owned by theDebtor as of the date hereof. Schedule E lists all material licenses in favor ofDebtor for the use of any patents, trademarks, copyrights and domain names as of the datehereof. All material patents and trademarks of the Debtor have been duly recorded at theUnited States Patent and Trademark Office.     5. RELEASE COLLATERAL.     (a) Notwithstanding anything to the contrary set forth in this Agreement or in any otherTransaction Document, the Agent, and, if requested by the Debtor, each Secured Party shall releaseand terminate any and all liens and security interests that the Agent or any Secured Party has ormay have in the Release Collateral within ten (10) days after Debtor’s written request for suchrelease and termination in preparation for Debtor’s sale, license or other disposition of all orany portion of the Release Collateral to any Person from time to time, and in connection therewith,and within ten (10) days after Debtor’s written request for any such release and termination, theAgent, and if so requested by the Debtor, each Secured Party shall:     (i) execute and deliver to Debtor a written instrument prepared by Debtor in form andsubstance satisfactory to Debtor to confirm that Secured Party’s liens and securityinterests in the Release Collateral will be fully released and terminated upon suchdisposition and that all of Agent’s and each Secured Party’s right, title and interest insuch Release Collateral has been so assigned back to Debtor;     (ii) execute such Uniform Commercial Code financing statement amendments prepared byDebtor as may be necessary in the appropriate public filing office(s) to release theRelease Collateral from any filed financing statement on which Agent or any Secured Partyis a secured party and which describes collateral that includes, or in Debtor’s judgmentmay include, the Release Collateral; and     (iii) execute for filing with the United States Patent and Trademark Office suchwritten instruments and documents prepared by Debtor as may be necessary or appropriate inDebtor’s judgment to fully release and terminate of record Agent’s or each Secured Party’slien and security interest in the Release Collateral and to assign all of Agent’s or eachSecured Party’s right, title and interest in such Release Collateral back to Debtor.
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     (b) Debtor shall not be required to pay Agent or any Secured Party any fee or other amount foror in connection with any release or termination requested by Debtor under this Section 5 (or forperformance of Agent’s or any Secured Party’s obligations under this Section 5) and Debtor shallnot be required to make any payment or prepayment of any obligations (under the Notes or otherwise)upon, or with any Proceeds of, any sale, license or other disposition of any Release Collateral.     (c) If the Agent or any Secured Party shall fail to comply with the requirements of thisSection 5, Debtor is hereby authorized to prepare, execute (as necessary) and file in theappropriate Uniform Commercial Code financing statement records and with the United States Patentand Trademark Office such financing statement amendments and other instruments and documents as maybe necessary to release and terminate all of Agent’s and each Secured Party’s right, title andinterest in the Release Collateral of record and in fact and to re-assign the Release Collateralback to Debtor. Agent and each Secured Party hereby grants Debtor Agent’s and such Secured Party’spower of attorney and authorization to execute, deliver and file such instruments and documents inAgent’s or such Secured Party’s name for the purposes described in this Section 5, which power iscoupled with an interest and is irrevocable.     (d) Each Secured Party hereby irrevocably agrees that the Agent’s release and termination ofany lien or security interest in the Release Collateral as provided in this Section 5 shallconstitute a full and complete release and termination of any and all right, title and interest(including any lien or security interest) that such Secured Party may have or claim in the ReleaseCollateral and that any actions taken by Agent under this Section 5 shall be binding on eachSecured Party.     (e) The Secured Parties hereby irrevocably authorize and direct the Agent to perform theAgent’s obligations under this Section 5 without any requirement of notice to, or consent orauthorization from, any Secured Party.     6. **Defaults**. The following events shall be “Events of Default”:     (a) The occurrence of an Event of Default (as defined in the Notes) under the Notes;     (b) Any material representation or warranty of any Debtor in this Agreement or theNote Purchase Agreement shall prove to have been incorrect in any material respect whenmade;     (c) The failure by Debtor to observe or perform any of its obligations hereunder forthirty (30) days after delivery to Debtor of notice of such failure by or on behalf of aSecured Party unless such default is capable of cure but cannot be cured within such timeframe and Debtor is using best efforts to cure same in a timely fashion; or
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     (d) If any provision of this Agreement shall at any time for any reason be declaredto be null and void, or the validity or enforceability thereof shall be contested byDebtor, or a proceeding shall be commenced by Debtor, or by any governmental authorityhaving jurisdiction over Debtor, seeking to establish the invalidity or unenforceabilitythereof, or Debtor shall deny that Debtor has any liability or obligation purported to becreated under this Agreement.     7. **Duty To Hold In Trust**. Upon and during the occurrence of any Event of Default, Debtorshall, upon receipt of any Proceeds of any sale or other disposition of Collateral other than theRelease Collateral, Debtor shall hold the same in trust for the Secured Parties and shall forthwithendorse and transfer any such sums or instruments evidencing such sums, or both, to the Agent forthe benefit of the Secured Parties, pro-rata in proportion to their initial purchases of Notes forapplication to the satisfaction of the Obligations (and if any Notes are not outstanding, pro-ratain proportion to the initial purchases of the remaining Notes).     8. **Rights and Remedies Upon Default**.     (a) Upon the occurrence and during the continuance of any Event of Default, the Agentshall have the right to exercise all of the remedies conferred hereunder, and the Agentshall have all the rights and remedies of a secured party under the UCC. Withoutlimitation, the Agent shall have the following rights and powers:     (i) The Agent shall have the right to take possession of the Collateral and,for that purpose, enter, with the aid and assistance of any person, any premiseswhere the Collateral, or any part thereof, is or may be placed and remove the same,and Debtor shall assemble the Collateral and make it available to the Agent atplaces which the Agent shall reasonably select, whether at Debtor’s premises orelsewhere, and make available to the Agent, without rent, all of Debtor’s premisesand facilities for the purpose of the Agent taking possession of, removing orputting the Collateral in saleable or disposable form.     (ii) Upon notice to the Debtor by Agent, all rights of Debtor to receivepayments or other sums from the sale of Collateral (but not any revenue, income orother sums which arise in the ordinary course of business from the use ofCollateral) shall, at the option of Agent, be delivered to Agent. Without limitingthe generality of the foregoing, Agent shall have the right (but not theobligation) to exercise all rights with respect to the Collateral as if it were thesole and absolute owner thereof.     (iii) The Agent shall have the right to assign, sell, lease or otherwisedispose of and deliver all or any part of the Collateral, at public or private saleor otherwise, either with or without special conditions or
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stipulations, for cash or on credit or for future delivery, in such parcel orparcels and at such time or times and at such place or places, and upon such termsand conditions as shall be commercially reasonable, all without (except as shall berequired by applicable statute) advertisement or demand upon or notice to Debtor orright of redemption of Debtor. Upon each such sale, lease, assignment or othertransfer of Collateral, the Agent may, unless prohibited by applicable law,purchase all or any part of the Collateral being sold, free from and discharged ofall trusts, claims, right of redemption and equities of Debtor, which are herebywaived and released.     (iv) Intentionally Omitted.     (v) The Agent may (but is not obligated to) transfer any or all IntellectualProperty registered in the name of Debtor at the United States Patent and TrademarkOffice and/or Copyright Office into the name of the Agent or any designee or anypurchaser of any Collateral.     (b) The Agent may comply with any applicable law in connection with a disposition ofCollateral and such compliance will not be considered adversely to affect the commercialreasonableness of any sale of the Collateral. The Agent may sell the Collateral withoutgiving any warranties and may specifically disclaim such warranties. If the Agent sellsany of the Collateral on credit, the Debtor will only be credited with payments actuallymade by the purchaser. In addition, Debtor waives any and all rights that it may have to ajudicial hearing in advance of the enforcement of any of the Agent’s rights and remedieshereunder, including, without limitation, its right following an Event of Default to takeimmediate possession of the Collateral and to exercise its rights and remedies with respectthereto.     (c) For the purpose of enabling the Agent to further exercise rights and remediesunder this Section 8 or elsewhere provided by agreement or applicable law, upon theoccurrence and during the continuance of any Event of Default, Debtor hereby grants to theAgent, for the benefit of the Agent and the Secured Parties, an irrevocable, nonexclusivelicense (exercisable without payment of royalty or other compensation to Debtor) to use,license or sublicense any Intellectual Property, and wherever the same may be located, andincluding in such license access to all media in which any of the licensed items may berecorded or stored and to all computer software and programs used for the compilation orprintout thereof.     9. **Applications of Proceeds**. The proceeds of any such sale, lease or other disposition of theCollateral hereunder shall be applied first, to the expenses of retaking, holding, storing,processing and preparing for sale, selling, and the like (including, without limitation, any taxes,fees and other costs incurred in connection therewith) of the Collateral, to the reasonableattorneys’ fees and expenses incurred by the Agent or the Secured Parties in enforcing their rightshereunder and in connection with collecting,
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storing and disposing of the Collateral, and then to satisfaction of the Obligations pro rata amongthe Secured Parties (based on then-outstanding principal amounts of Notes at the time of any suchdetermination), and to the payment of any other amounts required by applicable law, after which theAgent on behalf of the Secured Parties shall pay to the Debtor any surplus proceeds. If, upon thesale, license or other disposition of the Collateral, the proceeds thereof are insufficient to payall amounts to which the Secured Parties are legally entitled, the Debtor will be liable for thedeficiency, together with interest thereon, at the rate of 14% per annum or the lesser amountpermitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employedby the Secured Parties to collect such deficiency. To the extent permitted by applicable law,Debtor waives all claims, damages and demands against the Agent and the Secured Parties arising outof the repossession, removal, retention or sale of the Collateral, unless due solely to the grossnegligence or willful misconduct of the Secured Parties as determined by a final judgment (notsubject to further appeal) of a court of competent jurisdiction.     10. Intentionally Omitted.     11. **Costs and Expenses**. Debtor agrees to pay all reasonable out-of-pocket fees, costs andexpenses incurred in connection with any filing required hereunder, including without limitation,any financing statements pursuant to the UCC, continuation statements, partial releases and/ortermination statements related thereto, or upon and during the continuance of an Event of Default,any expenses of any searches reasonably required by the Secured Parties. The Debtor will also,upon demand, pay to the Secured Parties the amount of any and all reasonable expenses, includingthe reasonable fees and expenses of its counsel and of any experts and agents, which the SecuredParties may incur upon the occurrence and during the continuance of an Event of Default inconnection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or thesale of, collection from, or other realization upon, any of the Collateral, or (iii) the exerciseor enforcement of any of the rights of the Secured Parties under the Notes. Until so paid, any feespayable hereunder shall be added to the principal amount of the Notes and shall bear interest atthe Default Rate.     12. **Responsibility for Collateral**. The Debtor assumes all liabilities and responsibility inconnection with all Collateral, and the Obligations shall in no way be affected or diminished byreason of the loss, destruction, damage or theft of any of the Collateral or its unavailability forany reason. Without limiting the generality of the foregoing, (a) neither the Agent nor anySecured Party (i) has any duty (either before or after an Event of Default) to collect any amountsin respect of the Collateral or to preserve any rights relating to the Collateral, or (ii) has anyobligation to clean-up or otherwise prepare the Collateral for sale, and (b) Debtor shall remainobligated and liable under each contract or agreement included in the Collateral to be observed orperformed by Debtor thereunder. Neither the Agent nor any Secured Party shall have any obligationor liability under any such contract or agreement by reason of or arising out of this Agreement orthe receipt by the Agent or any Secured Party of any payment relating to any of the Collateral, norshall the Agent or any Secured Party be obligated in any manner to perform any of the obligationsof Debtor under or pursuant to any such
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contract or agreement, to make inquiry as to the nature or sufficiency of any payment received bythe Agent or any Secured Party in respect of the Collateral or as to the sufficiency of anyperformance by any party under any such contract or agreement, to present or file any claim, totake any action to enforce any performance or to collect the payment of any amounts which may havebeen assigned to the Agent or to which the Agent or any Secured Party may be entitled at any timeor times.     13. **Security Interest Absolute**. All rights of the Agent and the Secured Parties and allobligations of the Debtor hereunder, shall be absolute and unconditional, irrespective of: (a) anylack of validity or enforceability of this Agreement, the Notes, the Obligations or any agreemententered into in connection with the foregoing, or any portion hereof or thereof; (b) any change inthe time, manner or place of payment or performance of, or in any other term of, all or any of theObligations, or any other amendment or waiver of or any consent to any departure from the Notes orany other agreement entered into in connection with the foregoing; (c) any exchange, release ornonperfection of any of the Collateral, or any release or amendment or waiver of or consent todeparture from any other collateral for, or any guaranty, or any other security, for all or any ofthe Obligations; (d) any action by the Agent or the Secured Parties to obtain, adjust, settle andcancel in its sole discretion any insurance claims or matters made or arising in connection withthe Collateral; or (e) any other circumstance which might otherwise constitute any legal orequitable defense available to Debtor, or a discharge of all or any part of the Security Interestgranted hereby. Until the Obligations shall have been paid and performed in full, the rights ofthe Agent and the Secured Parties shall continue even if the Obligations are barred for any reason,including, without limitation, the running of the statute of limitations or bankruptcy. Debtorexpressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demandfor performance. In the event that at any time any transfer of any Collateral or any paymentreceived by the Agent or the Secured Parties hereunder shall be deemed by final order of a court ofcompetent jurisdiction to have been a voidable preference or fraudulent conveyance under thebankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to anyparty other than the Agent or the Secured Parties, then, in any such event, Debtor’s obligationshereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied byany prior payment thereof and/or cancellation of this Agreement, but shall remain a valid andbinding obligation enforceable in accordance with the terms and provisions hereof. Debtor waivesall right to require the Agent or the Secured Parties to proceed against any other person or entityor to apply any Collateral which the Agent or the Secured Parties may hold at any time, or tomarshal assets, or to pursue any other remedy. Debtor waives any defense arising by reason of theapplication of the statute of limitations to any obligation secured hereby.     14. **Term of Agreement**. This Agreement and the Security Interest shall terminate on the dateon which all payments of principal, accrued and unpaid interest and any other amounts due under theNotes have been indefeasibly paid in full; provided, however, that all indemnities of the Debtorcontained in this Agreement (including, without limitation, Annex A hereto) shall survive andremain operative and in full force and effect regardless of the termination of this Agreement.Upon payment in full of all of
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the outstanding principal amount of the Notes, together with all accrued and unpaid interest, andany other amounts due under the Notes, the Agent shall prepare and file such Uniform CommercialCode financing statement amendments, and shall prepare, execute and file such other documents orinstruments, as may be necessary to terminate of record and in fact any security interest in orlien on the Collateral under this Agreement. Each Secured Party irrevocably agrees that theAgent’s termination and release of any lien or security interest in the Collateral as provided inthis Section 14 shall constitute a full and complete termination and release or any and all right,title and interest (including any lien or security interest) that such Secured Party may have orclaim in the Collateral and that any actions taken by Agent under this Section 14 shall be bindingon each Secured Party. The Secured Parties hereby irrevocably authorize and direct the Agent toperform the Agent’s obligations under this Section 14 without any requirement or notice to, orconsent or authorization from, any Secured Party.     15. **Power of Attorney; Further Assurances**.     (a) Debtor authorizes the Agent, and does hereby make, constitute and appoint theAgent and its officers, agents, successors or assigns with full power of substitution, assuch Debtor’s true and lawful attorney-in-fact, with power, in the name of the Agent, thevarious Secured Parties or Debtor, to, after the occurrence and during the continuance ofan Event of Default, (i) endorse any note, checks, drafts, money orders or otherinstruments of payment (including payments payable under or in respect of any policy ofinsurance) in respect of the Collateral that may come into possession of the Agent or anyof the Secured Parties; (ii) to sign and endorse any financing statement pursuant to theUCC or any invoice, drafts against debtors, assignments, verifications and notices inconnection with accounts, and other documents relating to the Collateral; (iii) to pay ordischarge taxes, liens, security interests or other encumbrances at any time levied orplaced on or threatened against the Collateral; (iv) to demand, collect, receipt for,compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer anyIntellectual Property or provide licenses respecting any Intellectual Property; and (vi)generally, at the option of the Agent, and at the expense of the Debtor, at any time, orfrom time to time, to execute and deliver any and all documents and instruments and to doall acts and things which the Agent deems reasonably necessary to protect, preserve andrealize upon the Collateral and the Security Interest granted therein in order to effectthe intent of this Agreement and the Notes all as fully and effectually as the Debtor mightor could do; and Debtor hereby ratifies all that said attorney shall lawfully do or causeto be done by virtue hereof. This power of attorney is coupled with an interest and shallbe irrevocable for the term of this Agreement and thereafter as long as any of theObligations shall be outstanding. The designation set forth herein shall be deemed toamend and supersede any inconsistent provision in the Organizational Documents or otherdocuments or agreements to which Debtor is subject or to which Debtor is a party other thanthose in favor of Silicon Valley Bank. Without limiting the generality of the foregoing,upon and during the continuance of an Event of Default, the Agent is specificallyauthorized to execute and file any applications
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for or instruments of transfer and assignment of any patents, trademarks, copyrightsor other Intellectual Property with the United States Patent and Trademark Office and theUnited States Copyright Office.     (b) On a continuing basis, Debtor will file with the proper filing office in anyjurisdiction, including, without limitation, the jurisdictions indicated on ScheduleC attached hereto, all such instruments, and take all such action as may reasonably bedeemed necessary or advisable, or as reasonably requested by the Agent, to perfect theSecurity Interest granted hereunder. Notwithstanding anything to the contrary set forth inthis Agreement or otherwise, (1) Debtor shall not be required to maintain or make anyfilings to maintain any Collateral that Debtor deems to be not material to Debtor’sbusiness, and (2) Debtor shall not be required to make any filing other than the filing ofone or more financing statements under the UCC to perfect the Security Interest unless anEvent of Default has occurred and is continuing.     (c) Upon the occurrence and during the continuance of any Event of Default, Debtorhereby irrevocably appoints the Secured Parties as Debtor’s attorney-in-fact, with fullauthority in the place and instead of Debtor and in the name of Debtor, in the Agent’sdiscretion, to take any action and to execute any instrument which the Secured Parties maydeem necessary or advisable to accomplish the purposes of this Agreement, including thefiling, in its sole discretion, of one or more financing or continuation statements andamendments thereto, relative to any of the Collateral without the signature of Debtor wherepermitted by law, and ratifies all such actions taken by the Agent. This power of attorneyis coupled with an interest and shall be irrevocable for the term of this Agreement andthereafter as long as any of the Obligations shall be outstanding.     16. **Notices**. Any notice required or permitted by or in connection with this Agreement shall bein writing and shall be made by facsimile, or by hand delivery, or by overnight delivery service,or by certified mail, return receipt requested, postage prepaid, addressed to Agent or Debtor atthe appropriate address set forth below or to such other address as may be hereafter specified bywritten notice given by Agent or Debtor. Notice shall be considered given as of the earlier of thedate of actual receipt, or the date of the facsimile transmission without error, or the date ofhand delivery, or one (1) business day after delivery to a nationally recognized overnight deliveryservice, or three (3) business days after the date of mailing, independent of the date of actualdelivery or whether delivery is ever in fact made, as the case may be, provided the giver of noticecan establish that notice was given as provided herein.       If to Agent: Bonanza Master Fund, Ltd.    300 Crescent Court, Suite 250    Dallas, Texas 75201