##### 



Exhibit 10.46
 Silicon Valley Bank
 Second Amended and Restated
Loan and Security Agreement
 Borrower:
    
    TELECOMMUNICATION SYSTEMS, INC.(the Company or the Borrower)Address:
    
    275 West Street, Suite 400Annapolis, Maryland 21401Date:
    
    October 14, 2005
 THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT Closing Date Borrower Borrowers Address Schedule
 RECITALS
   -1-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  1. LOANS.
 1.1 Loans. Revolving Loan Loans Credit Limit
 1.2 Interest.
 1.3 Overadvances.
 1.4 Fees.
 1.5 Loan Requests.
 1.6 Letters of Credit Exposure.
 Letters of Credit Letter of
Credit Sublimit
 -2-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  1.7 Foreign Exchange FX
Forward Contract Foreign
Exchange Sublimit FX
Reserve
 1.8 Cash Management/ACH Services.
 Cash Management Services
 1.9 EximBank Loans.
 -3-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 Exim Loans Exim Loan Exim Loan Sublimit Exim Loan Documents
 1.10 Equipment Loan.
 1.11 Supplemental Equipment Loans Sublimit. Supplemental Equipment Loans
 2. SECURITY INTEREST. Collateral
 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.
  -4-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 3.1 Corporate Existence and Authority.
 3.2 Name; Trade Names and Styles.
 3.3 Place of Business; Location of Collateral.
 3.4 Title to Collateral; Perfection; Permitted Liens.
    -5-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
   3.5 Maintenance of Collateral.
 3.6 Books and Records.
 3.7 Financial Condition, Statements and Reports.
 3.8 Tax Returns and Payments; Pension Contributions.
 3.9 Compliance with Law.
 -6-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 3.10 Litigation.
 3.11 Use of Proceeds.
 3.12 Operating Subsidiaries
 4. Accounts.
 4.1 Representations Relating to Accounts.
 4.2 Representations Relating to Documents and Legal Compliance.
 4.3 Schedules and Documents Relating to Accounts.
 -7-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  4.4 Collection of Accounts.
 4.5. Remittance of Proceeds.
 4.6 Disputes.
 4.7 Returns.
 4.8 Verification.
 4.9 No Liability.
 -8-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  4.10 Exim Insurance .
 4.11 Subsidiaries .
 5. ADDITIONAL DUTIES OF BORROWER.
 5.1 Financial and Other Covenants.
 5.2 Insurance.
 5.3 Reports.
 5.4 Access to Collateral, Books and Records.
 -9-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  5.5 Negative Covenants.
 -10-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  5.6 Litigation Cooperation.
 5.7 Further Assurances.
 6. TERM.
 6.1 Maturity Date. Maturity Date
 6.2 Early Termination.
 6.3 Payment of Obligations.
 -11-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  7. EVENTS OF DEFAULT AND REMEDIES.
 7.1 Events of Default.
 -12-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  7.2 Remedies.
 -13-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  7.3 Standards for Determining Commercial Reasonableness.
 7.4 Power of Attorney.
 -14-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  7.5 Application of Proceeds.
 7.6 Remedies Cumulative.
 8. Definitions.
 Account Debtor
 Accounts
 Affiliate
 -15-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 Borrower Agreement
 Business Day
 Buyer
 Code
 Collateral
 Contingent Obligation
 continuing during the continuance of
 Default
 Default Rate
 Deposit Accounts
 EBITDA
 Eligible Accounts Minimum Eligibility Requirements Eligibility Period
 -16-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  Equipment
 Exim Bank
 Exim Borrowing Base
 Exim Eligible Foreign Accounts
 Exim Eligible Foreign Inventory
 Exim Guarantee
 Export Order
 Event of Default
 GAAP
 -17-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 General Intangibles
 good faith business judgment
 including
 Indebtedness
 Intellectual Property
 Inventory
 Investment Property
 Loan Authorization Notice
 -18-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 Loan Documents
 Material Adverse Change
 Maximum Credit Limit
 Obligations
 Other Property
 Perfection Certificate
 Permitted Liens
 -19-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  Person
 Reserves
 Streamline Period
 Subordinated Debt
 Subordination Agreement
 Other Terms
 9. GENERAL PROVISIONS.
 9.1 Interest Computation.
 -20-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  9.2 Application of Payments.
 9.3 Charges to Accounts.
 9.4 Monthly Accountings.
 9.5 Notices.
 9.6 Severability.
 9.7 Integration. There are no oral understandings, representations or agreements between the parties which are
not set forth in this Agreement or in other written agreements signed by the parties in connection
herewith.
 9.8 Waivers; Indemnity.
 -21-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  9.9 No Liability for Ordinary Negligence.
 9.10 Amendment.
 9.11 Time of Essence.
 9.12 Attorneys Fees and Costs.
 -22-




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  9.13 Benefit of Agreement.
 9.14 Joint and Several Liability.
 9.15 Limitation of Actions.
 9.16 Paragraph Headings; Construction.
 9.17 Governing Law; Jurisdiction; Venue.
 -23-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
  9.18 Mutual Waiver of Jury Trial .
 9.19 Exim Notification
 [SIGNATURES APPEAR ON THE FOLLOWING PAGE]
 -24-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 Borrower:
    
    Silicon:TELECOMMUNICATION SYSTEMS, INC.
    
    SILICON VALLEY BANKBy
    
    /s/ Thomas B. Brandt, Jr.
    
    By
    
    /s/ Peter BendorisTitle: Senior Vice President and CFO
    
    
    
    Title: Relationship ManagerName: Thomas B. Brandt, Jr.
    
    
    
    Name: Peter Bendoris
 -25-




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Silicon Valley Bank
 Schedule to
 Second Amended and Restated Loan and Security Agreement
 Borrower:
    
    TELECOMMUNICATION SYSTEMS, INC.Address:
    
    275 West Street, Suite 400Annapolis, Maryland 21401Date:
    
    October 14, 2005
 
 1. CREDIT LIMIT(Section 1.1):
    
    Revolving Loans: An amount not to exceed the lesser of: (i) the Maximum Credit
Limit, less the amount of any outstanding Letters of Credit, FX Forward Contracts, FX
Reserves, Exim Loans, Supplemental Equipment Loans and the Cash Management Sublimit (the
Sublimit Outstandings); or (ii) the sum of (a) eighty percent (80%) (the Advance Rate)
of the amount of Borrowers Eligible Receivables, plus (b) thirty percent (30%) of
raw materials and finished goods inventory from Mobile Office and Mobile Finance, each a
division of Enterprise Mobile Systems, (the Eligible Inventory), provided, however, that
the maximum amount of Loans made against Eligible Inventory cannot at any time exceed the
lesser of (yy) forty percent (40%) of Loans outstanding (including the face amount of
issued Letters of Credit) or (zz) Five Hundred Thousand Dollars ($500,000), less the
amount of Sublimit Outstandings.Notwithstanding anything set forth herein to the contrary,
during any Default or after the occurrence and during the
continuance of any Event of Default, the outstanding amount of
all Equipment Loans shall be incorporated in the calculation of
the Borrowing Base in the immediately preceding paragraph.Silicon may, from time to time, modify the Advance Rate, in its
good faith business judgment, upon notice to the Borrower, based
on changes in collection experience with respect to
 -1-




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Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 Accounts or other issues or factors relating to the Accounts or
other Collateral.Letters of Credit Sublimit(Section 1.6):
    
    Four Million Dollars ($4,000,000).Foreign ExchangeSublimit(Section 1.7)
    
    Seven Hundred Fifty Thousand Dollars ($750,000)Cash ManagementSublimit(Section 1.8)
    
    Two Million Five Hundred Thousand Dollars ($2,500,000)Exim Loan Sublimit(Section 1.9):
    
    Three Million Dollars ($3,000,000).Equipment LoanAmount(Section 1.10):
    
    Two Million Five Hundred Thousand Dollars ($2,500,000).Supplemental EquipmentLoan Sublimit(Section 1.11):
    
    Five Million Dollars ($5,000,000).2. INTEREST.Interest Rate
(Section 1.2):Except as set forth below, all Revolving Loans shall bear
interest at a rate equal to the Prime Rate in effect from time
to time per annum plus one and one quarter of one percent
(1.25%) per annum.If in any two (2) consecutive quarterly periods Borrower
meets its EBITDA forecast, then so long as Borrower continues to
meet such forecast, Revolving Loans shall immediately, as of the
first (1st) day of the following quarter, bear
interest at a rate equal to the Prime Rate in effect from time
to time per annum plus one percent (1.0%); furthermore,
if in any four (4) consecutive quarterly periods Borrower meets
its EBITDA forecast, then so long as Borrower continues to meet
such forecast, Revolving Loans shall immediately, as of the
first (1st) day of the following quarter, bear
interest at a rate equal to the Prime Rate in effect from time
to time per annum plus three quarters of one percent
(0.75%); provided, however, if
 2




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 either Borrower fails to (i) deliver to Silicon a quarterly
financial statement on a timely basis, or (ii) fails to meet its
EBITDA forecast as of any quarter end, all Revolving Loans shall
immediately, bear interest at a rate equal to the Prime Rate in
effect from time to time per annum plus one and one
quarter of one percent (1.25%) per annum.Interest on all Equipment Loans shall bear interest at a
fixed rate equal to the Prime Rate in effect on the date of such
Equipment Loan (the Equipment Loan Funding Date), plus one and
one quarter of one percent (1.25%) per annum.Prime Rate means the rate announced from time to time by
Silicon as its prime rate; it is a base rate upon which other
rates charged by Silicon are based, and it is not necessarily
the best rate available at Silicon, but for purposes of this
Agreement the Prime Rate shall at all times be not less than
four and one quarter of one percent (4.25%) per annum. The
interest rate applicable to the Obligations shall change on each
date there is a change in the Prime Rate.Interest shall be calculated on the basis of a 360-day year for
the actual number of days elapsed.3. FEES(Section 1.4):Loan Fee:
    
    Three Hundred Thousand Dollars ($300,000), payable as follows:(a) One Hundred Seventy Five Thousand Dollars ($175,000)
concurrently herewith; and(b) One Hundred Twenty Five Thousand Dollars ($125,000)
shall be due and payable within five (5) Business Days of
outstanding Obligations (including the face amount of all issued
and outstanding Letters of Credit) exceeding Fifteen Million
Dollars ($15,000,000).Collateral Monitoring
     Fee:
    
    One Thousand Dollars ($1,000), per month, payable in
arrears (prorated for any partial month at the
beginning and at termination of this Agreement).Unused Portion Fee:
    
    The Borrower shall pay to Silicon a fee
(collectively, the Unused Line Fees and
individually, a Unused Line Fee) in an amount
equal to one quarter of one percent (0.25%) per
 3




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 annum of the average daily unused and undisbursed portion of the Maximum Credit
Limit accruing during each month. The accrued and unpaid portion of the Unused
Line Fee shall be paid by the Borrower to Silicon on the first day of each
month, commencing on the first such date following the date hereof, and on the Maturity Date.Exim Bank Loan Fee
    
    One and one half percent (1.50%) of the Exim Bank
Loan Sublimit is due and payable in accordance with
Section 1.8 of the Agreement, and annually
thereafter.4. REPAYMENT OF EQUIPMENT LOANS(Section 1.10):Borrower will continue to repay the outstanding balance of the
Equipment Loan in equal monthly principal payments of principal
and interest in accordance with Schedule2 attached
hereto. The provisions of this Agreement and the Loan Documents
shall supersede all prior agreements with respect to the
Equipment Loan.5. REPAYMENT OF EQUIPMENT LOANS SUBLIMIT(Section 1.11):Borrower may request Supplemental Equipment Loans from the
Closing Date through June 30, 2006 (the Supplemental Equipment
Availability End Date), and Silicon will make Supplemental
Equipment Loans not exceeding the Equipment Sublimit. To obtain
an Supplemental Equipment Loan, Borrower will deliver to Silicon
copies of invoices for the Equipment being financed, together
with a UCC Financing Statement, if requested by Silicon,
covering the Equipment described thereon, and such additional
information as Bank may request at least five (5) Business Days
before the proposed funding date. The Supplemental Equipment
Loans may only be used to finance or refinance Equipment
purchased three hundred sixty five (365) days before the date of
each Supplemental Equipment Loan (the Funding Date) and may
not exceed one hundred percent (100%) of the equipment invoice,
including taxes, shipping, warranty charges, freight discounts
and installation expense. Each Supplemental Equipment Loan must
be for a minimum of Two Hundred Thousand Dollars ($200,000).Interest accrues from the Funding Date of each Supplemental
Equipment Loan at the rate in Section 1.2 and is payable
monthly. Supplemental Equipment Loans are payable in thirty
 4




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 six (36) equal monthly installments of principal and accrued
interest, beginning on the first day of each month (each date
being called a Payment Date), after the Funding Payment Date.
On the Funding Date (unless such Funding Date is the first
Business Day of the month) Borrower shall pay to Silicon an
amount (the Interim Payment) equal the number of days from the
Funding Date until the first Payment Date with respect to such
Supplemental Equipment Advance.6. MATURITY DATE(Section 6.1):Loans
    
    September 30, 2008Exim Bank LoansEquipment Loans
    
    Unless sooner paid, all accrued and unpaid interest
plus unpaid principal on the Equipment Loans shall
be due and payable in full on December 31, 2006.Supplemental Equipment
     Loans
    
    Thirty six (36) months from the date of each
Supplemental Equipment Loan, provided, however, if
the Maturity Date for the Loans is not extended,
the then unpaid principal balance, together with
all accrued and unpaid interest thereon, shall be
due and payable in full on the Maturity Date for
the Loans.7. FINANCIAL COVENANTS(Section 5.1):
    
    Borrower shall comply with each of the following covenants. Compliance shall be
determined as of the end of each month, except as otherwise specifically provided below:Minimum Cash and
Excess Availability:
    
    Through October 15, 2005, Borrower shall at all
times maintain a sum of (i) unencumbered cash on
deposit with Silicon and (ii) availability under the
Loans of not less than Ten Million Dollars
($10,000,000).Minimum Monthly Cash:
    
    Borrower shall maintain unencumbered cash on deposit
with Silicon of not less than Five Million Dollars
($5,000,000).Minimum Tangible
     Net Worth:
    
    Borrower shall maintain a Tangible Net Worth of not
less than Twenty-Nine Million Five Hundred Thousand
Dollars ($29,500,000) at all times, plus (a)
seventy-five percent (75%)
 5




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 of Borrowers net income (without regard to any loss) adjusted
quarterly beginning with the most recent quarter ended and plus
(b) eighty-five percent (85%) of all subordinated debt and equity
raised.Definitions.
    
    
    
    
    
    For purposes of the foregoing financial covenants, the
following term shall have the following meaning:Tangible Net Worth shall mean the excess of total assets
over total liabilities, determined in accordance with GAAP,
with the following adjustments:(A) there shall be excluded from assets: (i) notes,
accounts receivable and other obligations owing to Borrower
from its officers or other Affiliates, and (ii) all assets
which would be classified as intangible assets under GAAP,
including without limitation goodwill, licenses, patents,
trademarks, trade names, copyrights and organizational costs,
licenses and franchises (provided, however, that capitalized
software costs shall be included as assets).(B) there shall be excluded from liabilities: all indebtedness
which is subordinated to the Obligations under a Subordination
Agreement.Adjusted Quick Ratio shall mean unrestricted cash
(and equivalents) plus billed accounts receivable divided
by Current Liabilities less the current portion of
deferred revenue.Current Liabilities are the aggregate amount of
Borrowers Total Liabilities which mature within one (1)
year.Total Liabilities is on any day, obligations that
should, under GAAP, be classified as liabilities on
Borrowers consolidated balance sheet, and current portion
Subordinated Debt allowed to be paid, but excluding all
other Subordinated Debt.8. REPORTING.(Section 5.3):Borrower shall provide Silicon with the following:1. Weekly transaction
reports and schedules of collections, on Silicons standard
form shall be provided weekly (and
 6




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 upon each Loan request), provided, however,
that the transaction reports and schedules of collections
shall be provided monthly during any Streamline Period.2.
    
    
    Monthly accounts
receivable agings, aged by invoice date, within fifteen
days after the end of each month.3.
    
    
    Monthly accounts payable
agings, aged by invoice date, and outstanding or held check
registers, if any, within fifteen (15) days after the end
of each month.4.
    
    
    During the Streamline
Period, monthly reconciliations of accounts receivable
agings (aged by invoice date), transaction reports, and
general ledger, within fifteen (15) days after the end of
each month.5.
    
    
    Monthly perpetual
inventory reports for the Inventory valued on a first-in,
first-out basis at the lower of cost or market (in
accordance with GAAP) or such other inventory reports as
are requested by Silicon in its good faith business
judgment, all within fifteen (15) days after the end of
each month.6.
    
    
    Monthly unaudited
financial statements, as soon as available, and in any
event within thirty (30) days after the end of each month.7.
    
    
    Monthly Compliance
Certificates, within thirty (30) days after the end of each
month, in such form as Silicon shall reasonably specify,
signed by the Chief Financial Officer, Vice President,
Finance, Treasurer or Corporate Controller of Borrower,
certifying that as of the end of such month Borrower was in
full compliance with all of the terms and conditions of
this Agreement, and setting forth calculations showing
compliance with the financial covenants set forth in this
Agreement and such other information as Silicon shall
reasonably request, including, without limitation, a
statement that at the end of such month there were no held
checks.8.
    
    
    Quarterly unaudited
financial statements, as soon as available, and in any
event within forty-five (45) days after the end of each
fiscal quarter of Borrower.9.
    
    
    Annual forecasts prior
to each fiscal year end of Borrower and operating budgets
(including income statements, balance sheets and cash flow
statements, by month) for the
 7




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 current fiscal year of Borrower within sixty (60) days after
the end of each fiscal year of Borrower.10.
    
    
    Annual financial
statements, as soon as available, and in any event within
one hundred twenty (120) days following the end of
Borrowers fiscal year, certified by, and with an
unqualified opinion of, independent certified public
accountants acceptable to Silicon.9. BORROWER INFORMATION:Borrower represents and warrants that the information set
forth in the Perfection Certificate of the Company dated
October 14, 2005, previously submitted to Silicon (the
Perfection Certificate) is true and correct as of the date
hereof.10. STREAMLINE PERIOD:Notwithstanding anything to the contrary set forth in this
Agreement (including in Section 6 of this Schedule), during any
Streamline Period:1. Reporting Requirements. Borrower shall provide Silicon
with interim monthly financial statements, monthly agings of
accounts receivables and accounts payables, transaction reports
on Silicons standard form, including, sales, credit memos and
collections journals within thirty (30) days after the end of
each month.2. Notice Prior to Future Loans. Upon the earliest to
occur of (a) the request by Borrower for a Loan after the date
hereof, (b) the occurrence of a Default or Event of Default, (c)
a breach of Borrowers obligations under this Agreement, or (d)
Borrowers Quick Ratio is equal to or less than 1.75:1.00, the
Streamline Period will automatically and without notice terminate
and the standard terms and conditions as provided for in this
Agreement will immediately take effect without any further action
on the part of Silicon or Borrower.
 8




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##### 



Silicon Valley Bank
    
    Second Amended and Restated Loan and Security Agreement
 11. ADDITIONAL PROVISIONS1.
    
    
    Depository and Operating
Accounts.Borrower shall maintain its primary depository
and operating accounts with Silicon. As to any Deposit
Accounts and investment accounts maintained with another
institution, Borrower shall cause such institution, within
30 days after the date of this Agreement, to enter into a
control agreement in form acceptable to Silicon in its good
faith business judgment in order to perfect Silicons
first-priority security interest in said Deposit Accounts
and investment accounts.2.
    
    
    Subordination of Inside
Debt. All present and future indebtedness of Borrower to
its officers, directors and shareholders (Inside Debt)
shall, at all times, be subordinated to the Obligations
pursuant to a subordination agreement on Silicons standard
form. Borrower represents and warrants that there is no
Inside Debt presently outstanding. Prior to incurring any
Inside Debt in the future, Borrower shall cause the person
to whom such Inside Debt will be owed to execute and
deliver to Silicon a subordination agreement on Silicons
standard form.3.
    
    
    Intellectual Property
Negative Pledge Agreement. As a condition precedent to the
effectiveness of this Agreement, the Borrower shall have
executed and delivered any addendums to the Intellectual
Property Negative Pledge Agreement (the IP Negative Pledge
Agreement) previously executed and delivered to Silicon.4.
    
    
    Minimum Cash and Excess
Availability. Silicon forbears Borrowers compliances with
the Minimum Cash and Excess Availability covenant set forth
in Section 7 of the Schedule to the Original Loan Agreement
through October 15, 2005.
 9