Exhibit 10.5


AMENDMENT #1
TO THE MASTER SALES AGREEMENT

BETWEEN VONAGE NETWORK INC. AND

TELECOMMUNICATIONS SYSTEMS, INC.


WHEREAS, Vonage
Network Inc. (“Vonage”) and Telecommunications Systems, Inc. (“TCS”) are
parties to the Master Sales Agreement dated June 8, 2005 including all
exhibits, amendments and statements of work thereto (together, the “Agreement”);
and


WHEREAS, the
Parties wish to modify and amend the Agreement effective as of June 1, 2006
solely to the extent set forth under this Amendment #1 to the Agreement (“Amendment
#1”); and


WHEREAS, the
Parties acknowledge and agree that all capitalized terms used but not
specifically defined herein shall have the same meaning as under the Agreement;
and


NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which is
acknowledged, the Parties agree that Exhibit B to the Agreement shall be
amended as follows:


1.             The
section identified as “Monthly Recurring Fee” under the header “Billing” within
Exhibit B to the Agreement is hereby stricken in its entirety and replaced with
the following:


Monthly Recurring Fee:


A.                                   The
Parties have determined that actual call volumes vary month-to-month within a
narrower range than originally anticipated by Vonage and TCS. To accommodate
this, the Monthly Recurring Fee is hereby revised and restated to create
average daily call volume buckets in 25 call increments, in lieu of the 100
daily call increments per the original pricing schedule under Exhibit B.


B.                                     Thus,
as of June 1, 2006, TCS shall calculate the Monthly Recurring Fees under the
Agreement based on Vonage’s actual volumes from the previous month, applying
the “Mid”-column in the following table (also
provided in paragraph C, below, is a narrative example of “Mid”-column pricing,
and an actual recalculation of Vonage’s June 2006 invoice using the “Mid”-column
pricing method):


*






*       Pages
where confidential treatment has been requested are stamped, “Confidential
treatment has been requested.  The
redacted 

 material has been separately filed with the Commission.”  All redacted material has been marked by an
asterisk (*).


 









 



Cells represent previous
pricing under Exhibit B for up to “Hi” number of average daily calls.  Cells represent Vonage’s new pricing schedule
restated with smaller volume buckets.


C.                                     *


2.             As an
administrative concern, this Amendment #1 shall be viewed by TCS as a “Change
Request” and executed as Work Order #011, and hereby adjusts Vonage’s June and
July 2006 invoices retroactively to the new pricing table, as described above.
To the extent this adjustment impacts any invoices that have already been
issued and paid by Vonage, TCS shall true-up any amounts paid in excess of the
adjusted amount and provide any applicable credits in the monthly invoice
immediately following execution of this Amendment #1.


3.             Except
as specifically amended herein, all terms, conditions and provisions contained
in the Agreement shall remain unchanged and in full force and effect.


4.             This
Amendment #1 may be executed in one or more counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same agreement. Facsimile signatures shall be deemed original signatures.


5.             The individuals
named below who are executing this Amendment #1 on behalf of the parties are
duly authorized to make the representations contained herein.


IN WITNESS WHEREOF,
the Parties have executed this Amendment #1 on the day and year last set forth
below to be effective as of the June 1, 2006 invoice.


	
  VONAGE NETWORK INC.:

  	
  TELECOMMUNICATIONS SYSTEMS, INC.:

  
	
  By:

  	
  /s/ Timothy
  Smith

  	
   

  	
  By:

  	
  /s/ Richard A. Young

  	
   

  
	
  Printed Name:
  Timothy Smith

  	
  Printed Name: Richard A. Young

  
	
  Title: President

  	
  Title: Executive Vice President & COO

  
	
  Date: 8–4–06

  	
  Date of Signature: 8–8–06

  
						







*       Confidential
treatment has been requested.  The
redacted material has been separately filed with the Commission.


 



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[VONAGE LETTERHEAD]


November 2, 2006


VIA FAX AND OVERNIGHT MAIL


TeleCommunication Systems, Inc.

275 West Street

Annapolis, MD 21401

Attn: Celeste Ciecierski


Dear Ms. Ciecierski


An administrative
error has come to our attention regarding the naming of recent amendments to
the Master Sales Agreement between TeleCommunication Systems, Inc. (“TCS”) and
Vonage Network Inc. (“Vonage”) dated June 8, 2005 (the “Agreement”).  Specifically, our files contain the following
amendments to the Agreement:


·                                          “Amendment
to the Master Services Agreement Between Vonage Network Inc. and
TeleCommunications Systems, Inc.”; and


·                                          “Amendment #1 to the Master Sales Agreement Between Vonage Network Inc.
and TeleCommunications Systems, Inc.”.


This confirms that the respective documents should
correctly be identified and referred to as:


·                                          “Amendment
#1 to the Master Sales Agreement Between Vonage Network Inc. and
TeleCommunication Systems, Inc.”; and


·                                          “Amendment #2 to the Master Sales Agreement Between Vonage Network Inc.
and TeleCommunication Systems, Inc.”.


In addition, any
and all references to “Master Services Agreement” under new
Amendment #1 shall hereafter be read to mean “Master Sales Agreement,” and any
references to “Amendment” shall be read to mean “Amendment #1.”  Similarly, any and all references to
“Amendment #1” under new Amendment
#2 shall hereafter be read to mean “Amendment #2.”  References to “TeleCommunications Systems,
Inc.” shall hereafter be read to mean “TeleCommunication Systems, Inc.”
throughout both documents.


If you have any
questions, please do not hesitate to contact me directly at 732.231.6237.  Thank you for your attention to this matter.


	
  

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  VONAGE NETWORKS
  INC.

  
	
   

  	
   

  
	
   

  	
  /s/ ED MULLIGAN by Marilyn Picot

  
	
   

  	
  Ed Mulligan

  
	
   

  	
  Vice President -
  Carrier Operations

  



 


 


 


	
  ACCEPTED AND AGREED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ A. CELESTE CIECIERSKI

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  A. Celeste
  Ciecierski

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Director of
  Contracts

  	
   

  



 


cc:                                 Dave
Rao

Joe Brucchieri

Zenas Choi