PATENT SECURITY AGREEMENT

Exhibit 10.39

PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this 30^th day of July, 2007, among Grantors listed on the signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”), and XXXXX FARGO FOOTHILL, INC., as Agent for the Lender Group and the Bank Product Providers (together with its successors and assigns in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, Imaging Holdings Corp., a Delaware corporation (f/k/a Monotype Imaging Holdings Corp. (“Imaging Holdings”), Monotype Imaging Inc., a Delaware corporation (f/k/a Monotype Imaging, Inc.) (“Administrative Borrower”), International Typeface Corporation, a New York corporation (“Typeface” and together with Administrative Borrower, the “Original Borrowers”), the lenders party thereto (the “Original Lenders”) and Agent, entered into that certain Credit Agreement dated of November 5, 2004 (as amended, restated, supplemented or otherwise modified from time to time, the “Original Credit Agreement”);

WHEREAS, Imaging Holdings, the Original Borrowers, Agent and certain lenders have decided to amend and restate the Original Credit Agreement;

WHEREAS, pursuant to that certain Amended and Restated Credit Agreement dated as of July 30, 2007 (as amended, restated, supplemented or otherwise modified from time to time, including all exhibits and schedules thereto, the “Credit Agreement”) among Monotype Imaging Holdings Inc., a Delaware corporation (“Parent”), Imaging Holdings, Administrative Borrower, Typeface (Typeface, together with Administrative Borrower and Imaging Holdings, individually a “Borrower” and collectively, the “Borrowers”), the lenders party thereto (the “Lenders”) and Agent, the Lender Group agreed to make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof;

WHEREAS, the members of Lender Group are willing to make financial accommodations to Borrowers as provided in the Credit Agreement, but only upon the condition, among others, that the Grantors shall have executed and delivered to Agent, for the benefit of the Lender Group, that certain Security Agreement dated as of November 5, 2004 (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Security Agreement”); and

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to Agent, for the benefit of Lender Group and the Bank Product Providers, this Patent Security Agreement.

NOW, THEREFORE, for and in consideration of the premises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby agrees as follows:

1. DEFINED TERMS. All capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement and/or the Credit Agreement.

2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby grants to Agent, for the benefit of the Lender Group and the Bank Product Providers, a continuing

first priority security interest in all of such Grantors right, title and interest in, to and under the following, whether presently existing or hereafter created or acquired (collectively, the “Patent Collateral”):

(a) all of its Patents and rights in and to Patent Intellectual Property Licenses to which it is a party including those referred to on Schedule I hereto;

(b) all reissues, continuations, continuations-in-part, substitutes, extensions or renewals of, and improvements on, the foregoing; and

(c) all products and proceeds of the foregoing, including, without limitation, any claim by such Grantor against third parties for past, present or future infringement of any Patent.

3. SECURITY AGREEMENT. The security interests granted pursuant to this Patent Security Agreement are granted in conjunction with the security interests granted to Agent, for the benefit of the Lender Group and the Bank Product Providers, pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and remedies of Agent with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.

4. AUTHORIZATION TO SUPPLEMENT. Grantors hereby authorize Agent unilaterally to modify this Agreement by amending Schedule I to include any patentable inventions or applications therefor which become part of the Patent Collateral under the Security Agreement. Notwithstanding the foregoing, no failure to so modify this Patent Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent’s continuing security interest in all Collateral, whether or not listed on Schedule I.

5. COUNTERPARTS. This Patent Security Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. Any signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed an original signature hereto.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

GRANTOR:						MONOTYPE IMAGING INC., a
						Delaware corporation, as a Grantor
						By:		/s/ Xxxxxxxxxx Xxxxxx
						Name:		Xxxxxxxxxx Xxxxxx
						Title:		Chief Financial Officer

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

IN WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

GRANTOR:						INTERNATIONAL TYPEFACE CORPORATION, a New York corporation, as a Grantor
						By:		/s/ Xxxxxxxxxx Xxxxxx
						Name:		Xxxxxxxxxx Xxxxxx
						Title:		Assistant Treasurer

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

IN WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

GRANTOR:						LINOTYPE CORP., a Delaware corporation, as a Grantor
						By:		/s/ Xxxxxxxxxx Xxxxxx
						Name:		Xxxxxxxxxx Xxxxxx
						Title:		Assistant Treasurer

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

AGENT:						XXXXX FARGO FOOTHILL, INC., a California corporation, as Agent
						By:		/s/ Xxxxx Xxxxxxx
						Name:		Xxxxx Xxxxxxx
						Title:		Vice President

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]