AETHER BUSINESS SYSTEMS SEPARATION: COST SHARING AGREEMENT

Exhibit 10.7

AETHER BUSINESS SYSTEMS SEPARATION: COST SHARING AGREEMENT

     This AETHER BUSINESS SYSTEMS SEPARATION: COST SHARING AGREEMENT (this “Agreement”) is made as of January 13, 2004, by and among Aether Systems, Inc., a Delaware corporation (“Aether”), TSYS Acquisition Corp, a Maryland corporation (“TSYS”), TeleCommunication Systems Limited, a corporation formed under the laws of the United Kingdom and a wholly owned subsidiary of Parent (“TCS Ltd.” and together with TSYS, the “Buyer”), and TeleCommunication Systems, Inc., a Maryland corporation (“TCS”). Terms used but not otherwise defined herein, shall have the meaning ascribed such term in the Purchase Agreement, as defined below.

WITNESSETH:

     WHEREAS, pursuant to that certain Purchase Agreement, dated as of December 18, 2003, by and among Aether, Buyer, and TCS relating to the purchase and sale of all issued and outstanding shares of Aether European Holdings, B.V. and certain assets of Aether comprising the company’s Enterprise Mobility Solutions division (as amended, the “Purchase Agreement”), Aether has agreed to sell, convey, transfer, assign and deliver to Buyer, and Buyer has agreed to acquire certain assets and to assume the Assumed Liabilities from Aether, in each case relating exclusively to the Business, which the parties agree will be achieved pursuant to (i) the purchase and sale of the Purchased Assets, (ii) the assumption of the Assumed Liabilities, and (iii) the purchase and sale of the Purchased Shares, all on the terms and subject to the conditions set forth in the Purchase Agreement; and

     WHEREAS, in connection therewith, each of Aether, Buyer and TCS desire, that Aether provide Buyer with certain transition services upon the terms and provisions and subject to the conditions of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the covenants and agreements set forth herein, each of Aether, Buyer and TCS agrees as follows:

     1.   Services. During the Service Period (as defined in Section 5), upon the request of Buyer, Aether agrees to provide, or cause its Affiliates to provide, to Buyer from the date of this Agreement for the period of time described on Annex A attached hereto with respect to each of the services, the services set forth on Annex A. Such services shall be provided under the terms set forth on Annex A. Aether’s obligation to deliver any service is conditioned upon Aether’s obtaining the consent, where necessary, of any relevant third party provider. Aether shall use its commercially reasonable efforts, and Buyer and TCS shall cooperate fully with Aether in all respects, to obtain any consents that may be required from such licensors in order to provide any of the services hereunder. Buyer and TCS shall be responsible for purchasing any and all required hardware and software in support of any transitioned software systems unless specifically stated otherwise in this agreement. Aether may, in Aether’s sole discretion, provide Buyer with hardware to support Buyer’s implementation of transitioned software systems.

     2.   Billing and Payment. In accordance with the provisions of this Agreement, Buyer and TCS shall pay to Aether the following fees for the transition services to be provided by Aether under this Agreement (regardless of the nature or extent of the actual services rendered):

     Such amount shall be paid by check in accordance with the instructions provided by Aether in writing to Buyer, at the end of the calendar month specified. Buyer and TCS shall be jointly and severally liable for all payments required under this Section 2 and all the obligations under this Agreement.

     3.   General Intent. Aether shall use its commercially reasonable efforts to provide the transition services which are set forth on Annex A and such other transition assistance as the parties may otherwise agree during the Service Period. Each of Buyer, TCS and their respective Affiliates agrees to use their respective commercially reasonable efforts to terminate their need to use such assistance as soon as reasonably possible and (unless the parties otherwise agree) in all events to terminate such need with respect to each service specified in Annex A not later than the end of the period specified in Annex A for the provision of each such service. Buyer and TCS, on the one hand, and Aether, on the other hand, acknowledge that during the Service Period, each party may be utilizing and/or have access to software/systems of the other party. The parties shall cooperate to establish policies, procedures and protocols over joint usage of each parties software/systems to ensure the confidentiality and integrity of each party’s data. Buyer and Aether acknowledge that in the event either party is unable to migrate off of one or more of the software applications as described in this Agreement, within the time frames specified then both Buyer and Aether shall continue to cooperate and work in good faith with the other to complete the migration of the software application(s) including allowing the party which is migrating continued usage of the functioning software application, until such time as the migrating party is able to successfully migrate and implement its own software application(s).

     4.   Validity of Documents. The parties hereto shall be entitled to rely upon the genuineness, validity or truthfulness of any document, instrument or other writing presented in connection with this Agreement unless such document, instrument or other writing appears on its face to be fraudulent, false or forged.

     5.   Term of Agreement. The term of this Agreement shall commence on the date hereof and shall continue (unless sooner terminated pursuant to the terms hereof) until the services contemplated by this Agreement have been provided and the obligations of the parties hereunder have been fulfilled (such period the “Service Period,” or such shorter period as may be specified in Annex A with respect to particular services described in Annex A.) Upon termination of this Agreement, all rights and obligation of each party, other than those set forth in Sections 8 and 11 of this Agreement and other than any payments by Buyer and TCS for services provided through the date of termination shall cease as of the effective date of such

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termination, and any such unpaid amounts owed by Buyer and TCS shall be paid in accordance with the payment provisions of Section 2.

     6.   Partial Termination. Any and all of the services provided by Aether and its Affiliates hereunder are only terminable earlier than the period specified in Annex A by Buyer or TCS on thirty (30) days prior written notice to Aether. Any such termination shall be final.

     7.   Assignment. This Agreement shall not be assignable in whole or in part by Buyer or TCS without the prior written consent of Aether. Aether may assign, sell, delegate or otherwise transfer this Agreement or any of its rights and obligations hereunder as part of a merger, consolidation, corporate reorganization, joint venture, lease, sale of all or a portion of its assets, sale of stock or similar event; provided that in connection with any such transaction (a) the resulting, surviving or transferee Person (any such Person, a “Successor Company”) by operation of law, becomes, without more, bound by the terms and provisions of this Agreement or, if not so bound, the Successor Company expressly assumes the rights and obligations of Aether under this Agreement which are being transferred to such Successor Company, and (b) Aether shall notify Buyer and TCS in writing promptly (and in no event more than ten (10) days) after any such assignment, sale, delegation or transfer.

     8.   Confidentiality. Each party hereto agrees to hold, and use its best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of law, all confidential documents and information concerning this Agreement and any services provided hereunder, provided, however, that to the extent that any of them may become so legally compelled, they may only disclose such information if they shall first have used best efforts to, and, if practicable, shall have afforded the other party the opportunity to, obtain an appropriate protective order or other satisfactory assurance of confidential treatment for the information required to be disclosed. If this Agreement is terminated, TCS and Buyer will, and will use their best efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to, destroy or deliver to Aether, upon request, all documents and other materials, and all copies thereof, obtained by TCS and Buyer and their respective Affiliates or on their behalf from Aether or any of its Affiliates in connection with this Agreement that are subject to such confidence. Notwithstanding anything herein to the contrary, the parties agree (and each affiliate and person acting on behalf of such party) agree that each party (and each employee, representative, and other agent of such party) may disclose to any and all persons without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions and other tax analyses) that are provided to such party or such persons relating solely to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws.

     9.   Governing Law; Submission To Jurisdiction. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the State of Maryland without regard to the conflict of law principles thereof.

     10.   Limitation of Liability. Aether shall not be liable to Buyer, TCS or any of their respective its Affiliates or any third party for any special, consequential or exemplary damages (including lost or anticipated revenues or profits relating to the same) arising from any claim

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relating to this Agreement or any of the services provided hereunder, whether such claim is based on warranty, contract, tort (including negligence or strict liability) or otherwise, even if an authorized representative of Aether is advised of the possibility or likelihood of the same. In addition, Aether shall not be liable to Buyer or TCS, any of their respective Affiliates or any third party for any direct damages arising from any claim relating to this Agreement or any of the services provided hereunder or required to be provided hereunder, except to the extent that such direct damages are caused by the gross negligence or willful misconduct of Aether or its Affiliates.

     11.   Default. In the event that (a) TCS or Buyer fails to pay any amount when due under this Agreement within sixty (60) days after written notice that such payment is due; or (b) TCS or Buyer fails to perform, or breaches or defaults under any other material term, condition or obligation of this Agreement, and such failure, breach or default is not cured within 90 days after written notice thereof, Aether shall have the right to terminate this Agreement without penalty to Aether and without prejudice to any other rights and remedies of Aether and its Affiliates.

     12.   Counterparts. This Agreement may be executed in one or more counterparts (including by means of telecopied signature pages), all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

     13.   Notices. All notices or other communications required or permitted to be delivered hereunder shall be in writing and shall be delivered by hand or sent by prepaid telex or telecopy, or sent, postage prepaid, by registered, certified or express mail, or reputable overnight courier service and shall be deemed delivered when so delivered by hand, telexed or telecopied with acknowledged receipt, or if mailed, five (5) calendar days after mailing (one (1) Business Day in the case of express mail or overnight courier service), as follows:

     If to Buyer or TCS:

     with a copy to:

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     If to Aether:

     and:

or such other address or facsimile number as such party may hereafter specify in writing for the purpose by notice to the other parties hereto.

     14.   Amendment And Waiver. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or, in the case of a waiver, by or on behalf of the party waiving compliance. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any party of any condition, or of any breach of any term, covenant, representation or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of any breach of any other term, covenant, representation or warranty.

     15.   Interpretation. The headings and captions contained in this Agreement and in Annex A attached hereto are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The use of the word “including” and all variants thereof herein shall mean “including without limitation.”

     16.   No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any person.

     17.   Entire Agreement. This Agreement, the Purchase Agreement and the other agreements contemplated therein contain the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to such subject matter.

     18.   Relationship of Parties. Except as specifically provided herein, none of the parties shall act or represent or hold itself out as having authority to act as an agent or partner of

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the other parties, or in any way bind or commit the other party to any obligations. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture, agency, trust or other association of any kind, each party being individually responsible only for its obligations as set forth in this Agreement.

     19.   Force Majeure. If Aether or any of its Affiliates is prevented from complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, hurricane, storm, strike, lockout or other labor trouble, any law, order, proclamation, regulation, ordinance, demand or requirement of any governmental authority, riot, war, rebellion or other causes beyond the reasonable control of Aether or its Affiliates or other acts of God, then upon written notice to TCS and Buyer, the affected provisions and/or other requirements of this Agreement shall be suspended during the period of such disability and Aether and its Affiliates shall have no liability to TCS, Buyer, any of their respective Affiliates or any other party in connection herewith. Aether shall use all commercially reasonable efforts to remove such disability within thirty (30) days of giving notice of such disability.

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date and year first set forth above.

ANNEX A
TO
AETHER BUSINESS SYSTEMS SEPARATION: COST SHARING AGREEMENT

     This Annex A sets forth the transition services to be provided by Aether to Buyer and TCS relating to the operation of the Business. To the extent that transition services set forth on this Annex A may be provided to Buyer and TCS, such services will be provided in a commercially reasonable manner. In the event Aether reasonably determines that the performance of any of the transition services is commercially unreasonable and Aether informs Buyer and TCS it intends to cease the performance of such services, Buyer and TCS, on one hand, and Aether, on the other hand, shall enter into prompt and good faith negotiations to resolve Aether’s inability to provide the services in question.

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