Exhibit 10.2(c)

         
 
       
(RBC CAPITAL MARKETS LOGO) [w76318w7631804.gif]
  RBC Capital Markets Corporation
 
  One Liberty Plaza — 2nd Floor
 
  165 Broadway
 
  New York, NY 10006-1404
 
  Telephone: (212) 858-7000

     
DATE:
  November 10, 2009
 
   
TO:
  TeleCommunication Systems, Inc.
ATTENTION:
  Bruce A. White
TELEPHONE:
  (410) 263-7616
FACSIMILE:
  (410) 263-7617
 
   
FROM:
  RBC Capital Markets Corporation
 
  as agent for
 
  Royal Bank of Canada
TELEPHONE:
  (212) 858-7000
FACSIMILE:
  (212) 428-3053
 
   
SUBJECT:
  Equity Derivatives Note Hedge Confirmation
 
   
REFERENCE NUMBER(S):
  NY-23175 to NY-23214

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the
terms and conditions of the transaction entered into between Royal Bank of
Canada (“RBC”) and TeleCommunication Systems, Inc. (“Counterparty”) on the Trade
Date specified below (the “Transaction”). This Confirmation constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below. This
Confirmation constitutes the entire agreement and understanding of the parties
with respect to the subject matter and terms of the Transaction and supersedes
all prior or contemporaneous written and oral communications with respect
thereto.
Disclosure of Agency Relationship
RBC has appointed as its agent, its indirect wholly-owned subsidiary, RBC
Capital Markets Corporation (“RBCCM”), for purposes of conducting on the Bank’s
behalf, a business in privately negotiated transactions in options and other
derivatives. You hereby are advised that RBC, the principal and stated
counterparty in such transactions, duly has authorized RBCCM to market,
structure, negotiate, document, price, execute and hedge transactions in
over-the-counter derivative products.
The definitions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between the Equity Definitions and the terms of this Confirmation,
the terms of this Confirmation shall govern. For the purposes of the Equity
Definitions, each reference herein to a Note Hedging Unit shall be deemed to be
a reference to a Call or an Option, as context requires.
This Confirmation evidences a complete and binding agreement between RBC and
Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and be subject to
an agreement (the “Agreement”) in the form of the ISDA 2002 Master Agreement as
if RBC and Counterparty had executed an

 

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agreement in such form (without any Schedule but with the elections set forth in
this Confirmation). For the avoidance of doubt, the Transaction shall be the
only transaction under the Agreement.
The Transaction shall be considered a Share Option Transaction for purposes of
the Equity Definitions, and shall have the following terms:

      General:  
 
   
 
Trade Date:  
November 10, 2009
   
 
Effective Date:  
The closing date for the initial issuance of the Convertible Notes.
   
 
Transaction Style:  
American subject to the provisions below under “Procedure for Exercise”.
   
 
Transaction Type:  
Note Hedging Units.
   
 
Seller:  
RBC.
   
 
Buyer:  
Counterparty.
   
 
Shares:  
Class A common stock, par value USD 0.01 per share, of Counterparty.
   
 
Convertible Notes:  
4.5% Senior Convertible Notes of Counterparty due November 1, 2014, offered
pursuant to an Offering Memorandum to be dated as of November 10, 2009 and
issued pursuant to the indenture to be dated on or about November 16, 2009, by
and between Counterparty and The Bank of New York Mellon, as trustee (as may be
amended, modified or supplemented from time to time, but only if such amendment,
modification or supplement is consented to by RBC in writing, the “Indenture”).
Certain defined terms used herein have the meanings assigned to them in the
Indenture. In the event of any inconsistency between the terms defined in the
Indenture and this Confirmation, this Confirmation shall govern.
   
 
Number of Note Hedging Units:  
90,000
   
 
Note Hedging Unit Entitlement:  
USD1,000 divided by the Strike Price. Notwithstanding anything to the contrary
herein or in the Agreement (including without limitation the provisions of
Calculation Agent Adjustment), in no event shall the Note Hedging Unit
Entitlement at any time be greater than the “Conversion Rate” (as such term is
defined in the Indenture) at such time.
   
 
Strike Price:  
USD10.348.
   
 
Applicable Percentage:  
20%
   
 
Premium:  
As provided in Annex A to this Confirmation.
   
 
Premium Payment Date:  
The Effective Date.

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Exchange:
  The NASDAQ Global Market.
 
   
Related Exchanges:
  All Exchanges.
 
   
Calculation Agent:
  RBCCM, which is an affiliate of RBC, shall be the Calculation Agent, or any
successor calculation agent thereto appointed by RBCCM. All determinations and
calculations of the Calculation Agent shall be binding on the parties hereto in
the absence of material manifest error.
 
   
Procedure for Exercise:
   
 
   
Potential Exercise Dates:
  Each Conversion Date.
 
   
Conversion Date:
  Each “Conversion Date” as defined in the Indenture.
 
   
Required Exercise on Conversion Dates:
  On each Conversion Date, a number of Note Hedging Units equal to the number of
Convertible Notes in denominations of USD1,000 principal amount submitted for
conversion in respect of such Conversion Date in accordance with the terms of
the Indenture shall be exercised as described below under “Notice of Exercise”.
 
   
Expiration Date:
  November 1, 2014
 
   
Aggregate Conversion Date:
  August 1, 2014
 
   
Multiple Exercise:
  Applicable, as provided under “Required Exercise on Conversion Dates”.
 
   
Automatic Exercise:
  As provided under “Required Exercise on Conversion Dates”.
 
   
Notice of Exercise:
  Notwithstanding anything to the contrary in the Equity Definitions, in order
to exercise any Note Hedging Units, Counterparty must notify RBC in writing (and
use reasonable efforts to confirm receipt by telephone to RBC’s Origination
Convertible Desk ) prior to 5:00 PM, New York City time, on the day that is two
Scheduled Trading Days prior to the first day of the Settlement Averaging Period
for the Note Hedging Units being exercised (the “Notice Deadline”) of (i) the
number of Note Hedging Units being exercised on such Exercise Date and (ii) the
scheduled settlement date under the Indenture for the Convertible Notes
converted on the Conversion Date corresponding to such Exercise Date; provided
that in respect of Convertible Notes with a Conversion Date occurring on or
after the Aggregate Conversion Date, the Notice Deadline shall be 5:00 PM, New
York City time, on the second “Scheduled Trading Day” (as defined in the
Indenture) immediately preceding the “Maturity Date” (as defined in the
Indenture).
 
   
RBC’s Telephone Number and Telex and/or Facsimile Number and Contact Details for
the Purpose of Giving a Notice of Exercise:
  Steven Milke / Brian Ward
Telephone: (866) 609-6009 / (416) 842-6092
Facsimile Number: (212) 428-2395 / (416) 842-4803

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Settlement Terms:
   
 
   
Net Share Settlement:
  In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity
Definitions, and subject to “Notice of Exercise” above, in respect of any
Exercise Date occurring on a Conversion Date, RBC shall deliver to Counterparty,
on the related Settlement Date, the Settlement Amount. For the avoidance of
doubt, to the extent RBC is obligated to deliver Shares hereunder, the
provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions
shall be applicable to any such delivery of Shares, except that all references
in such provisions to “Physical Settlement” and “Physically-settled” shall be
read as references to “Net Share Settlement” and “Net Share Settled”; and
provided that the Representation and Agreement contained in Section 9.11 of the
Equity Definitions shall be modified by excluding any representations therein
relating to restrictions, obligations, limitations or requirements under
applicable securities laws as a result of the fact that Counterparty is the
issuer of the Shares.
 
   
Settlement Amount:
  The product of the Applicable Percentage and a number of Shares equal to the
Net Shares. In no event will the Net Shares be less than zero.
 
   
Net Shares:
  In respect of any Note Hedging Unit exercised or deemed exercised, a number of
Shares equal to (A) the sum of the quotients, for each Valid Day during the
Settlement Averaging Period for such Note Hedging Unit, of (x) the Note Hedging
Unit Entitlement on such Valid Day multiplied by (y) the Relevant Price on such
Valid Day less the Strike Price, divided by (z) such Relevant Price, divided by
(B) the number of Valid Days in the Settlement Averaging Period; provided that
in no event shall the Net Shares for any Note Hedging Unit exceed a number of
Shares equal to the Applicable Limit for such Note Hedging Unit divided by the
Relevant Price on the last Valid Day of the Settlement Averaging Period (or if
such Note Hedging Unit relates to a Convertible Note with a Conversion Date
occurring on or after the Aggregate Conversion Date, the Relevant Price on the
second Scheduled Valid Day immediately preceding the Expiration Date); provided
further that if the calculation contained in clause (y) above results in a
negative number, such number shall be replaced with the number “zero”. For the
avoidance of doubt, such obligation shall be determined excluding any Shares or
cash that Counterparty is obligated to deliver to holder(s) of the Convertible
Notes as a result of any adjustments to the “Conversion Rate” for issuance of
additional Shares or cash as set forth in Section 4.02 of the Indenture (a
“Fundamental Change Adjustment”) or any voluntary adjustment pursuant to
Sections 5.08 and 5.09 of the Indenture (a “Discretionary Adjustment”).

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  RBC will deliver cash in lieu of any fractional Shares to be delivered with
respect to any Net Shares, valued at the Relevant Price for the last Valid Day
of the Settlement Averaging Period.

     
Applicable Limit:
  For any Note Hedging Unit, an amount of cash equal to the Applicable
Percentage multiplied by the excess of (i) the number of Shares delivered to the
Holder (as such term is defined in the Indenture) of the related Convertible
Note upon conversion of such Convertible Note multiplied by the Relevant Price
on the date provided by Counterparty to Dealer pursuant to clause (ii) of
“Notice of Exercise,” or if such Note Hedging Unit relates to a Convertible Note
with a Conversion Date occurring on or after the Aggregate Conversion Date, the
Relevant Price on the second Scheduled Valid Day immediately preceding the
Expiration Date, over (ii) USD 1,000.
 
   
Valid Day:
  A day on which (i) there is no Market Disruption Event and (ii) trading in the
Shares generally occurs on the Exchange or, if the Shares are not then listed on
the Exchange, on the primary other United States national or regional securities
exchange on which the Shares are listed or admitted for trading or, if the
Shares are not then listed or admitted for trading on a United States national
or regional securities exchange, on the principal other market on which the
Shares are then traded. If the Shares are not so listed or admitted for trading,
“Valid Day” means a Business Day.
 
   
Scheduled Valid Day:
  A day that is scheduled to be a Valid Day on the principal United States
national or regional securities exchange or market on which the Shares are
listed or admitted for trading. If the Shares are not so listed or admitted for
trading, “Scheduled Valid Day” means a Business Day.
 
   
Business Day:
  Any day other than a Saturday, a Sunday or a day on which the Federal Reserve
Bank of New York is authorized or required by law or executive order to close or
be closed.
 
   
Relevant Price:
  On any Valid Day, the per Share volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on Bloomberg page TSYS <equity> AQR (or any
successor thereto) in respect of the period from the scheduled opening time of
the Exchange to the Scheduled Closing Time of the Exchange on such Valid Day (or
if such volume-weighted average price is unavailable, the market value of one
Share on such Valid Day, as determined by the Calculation Agent using a
substantially similar volume-weighted method). Notwithstanding the foregoing, if
any Valid Day is a Disrupted Day and the Calculation Agent determines that such
Disrupted Day shall be a Valid Day in part in respect of a number of Net Shares,
then the Relevant Price for such Valid Day and such number of Net Shares shall
be the volume-weighted average price per Share on such Valid Day on the
Exchange, as determined by the Calculation Agent based on such sources as it
deems appropriate using a volume-weighted methodology, for the portion of such
Valid Day and such number of Net Shares for which the Calculation Agent
determines there is no Market Disruption Event, and the Calculation Agent shall
make corresponding adjustments to the settlement terms hereunder to account for
such partial Valid Day.

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Settlement Averaging Period:
  For any Note Hedging Unit:
 
   
 
       (i) If Counterparty has, on or prior to the Aggregate Conversion Date,
delivered a Notice of Exercise to Dealer with respect to such Note Hedging Unit
with a Conversion Date occurring prior to the Aggregate Conversion Date, the 40
consecutive Valid Days commencing on and including the second Scheduled Valid
Day following such Conversion Date; or
 
   
 
       (ii) if Counterparty has, on or following the Aggregate Conversion Date,
delivered a Notice of Exercise to Dealer with respect to such Note Hedging Unit
with a Conversion Date occurring on or following the Aggregate Conversion Date,
the 40 consecutive Valid Days commencing on, and including, the 42nd Scheduled
Valid Day immediately prior to the Expiration Date.
 
   
Settlement Date:
  For any Note Hedging Unit, the third Business Day immediately following the
final Valid Day of the Settlement Averaging Period for such Note Hedging Unit.
 
   
Settlement Currency:
  USD.
 
   
Restricted Certificated Shares:
  Notwithstanding anything to the contrary in the Equity Definitions, RBC may,
in whole or in part, deliver Shares in certificated form representing the Share
portion of the Settlement Amount to Counterparty in lieu of delivery through the
Clearance System.
 
   
Share Adjustments:
   
 
   
Potential Adjustment Events:
  Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential
Adjustment Event” means any occurrence of any event or condition, as set forth
in Section 5.06 of the Indenture that would result in an adjustment to the
Conversion Rate of the Convertible Notes; provided that in no event shall there
be any adjustment hereunder as a result of the Fundamental Change Adjustment or
Discretionary Adjustment provisions of the Indenture.
 
   
Method of Adjustment:
  Calculation Agent Adjustment, which means that, notwithstanding
Section 11.2(c) of the Equity Definitions, upon any adjustment to the Conversion
Rate of the Convertible Notes pursuant to the Indenture (other than a
Fundamental Change Adjustment or a Discretionary Adjustment), the Calculation
Agent shall make a corresponding adjustment to any one or more of the Strike
Price, Number of Note Hedging Units, the Note Hedging Unit Entitlement and any
other variable relevant to the exercise, settlement, payment or other terms of
the Transaction.

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Extraordinary Events:
   
 
   
Merger Events:
  Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event”
means only the occurrence of any event or condition set forth in Section 5.11 of
the Indenture.
 
   
Notice of Merger Consideration:
  Upon the occurrence of a Merger Event that causes the Shares to be converted
into or exchanged for more than a single type of consideration (determined based
in part upon the form of election of the holders of Shares), Counterparty shall
promptly (but in any event prior to the effective date of the Merger Event)
notify the Calculation Agent of the weighted average of the kind and amounts of
consideration to be received by the holders of Shares in any Merger Event who
affirmatively make such an election.
 
   
Consequences of Merger Events:
  Notwithstanding Section 12.2 of the Equity Definitions, upon the occurrence of
a Merger Event, the Calculation Agent shall make the corresponding adjustment in
respect of any adjustment under the Indenture to any one or more of the nature
of the Shares, the Strike Price, the Number of Note Hedging Units, the Note
Hedging Unit Entitlement and any other variable relevant to the exercise,
settlement, payment or other terms of the Transaction, to the extent an
analogous adjustment is made under the Indenture; provided that such adjustment
shall be made without regard to any adjustment to the Conversion Rate for the
issuance of additional shares or cash pursuant to a Fundamental Change
Adjustment or a Discretionary Adjustment; and provided further that the
Calculation Agent may limit or alter any such adjustment referenced in this
paragraph so that the fair value of the Transaction to RBC is not reduced as a
result of such adjustment.
 
   
Nationalization, Insolvency and Delisting:
  Cancellation and Payment (Calculation Agent Determination); provided that in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
shall also constitute a Delisting if the Exchange is located in the United
States and the Shares are not immediately re-listed, re-traded or re-quoted on
any of the New York Stock Exchange, The NASDAQ Global Select Market or The
NASDAQ Global Market (or their respective successors); if the Shares are
immediately re-listed, re-traded or re-quoted on any such exchange or quotation
system, such exchange or quotation system shall be deemed to be the Exchange.
For the avoidance of doubt, the occurrence of any event that is a Merger Event
and would otherwise have been a Delisting will have the consequence specified
for the relevant Merger Event.
 
   
Additional Disruption Events:
   
 
   
Change in Law:
  Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended (i) by the replacement of the word “Shares” with “Hedge
Positions” in clause (X) thereof; (ii) by adding the phrase “or announcement”
immediately after the phrase “due to the promulgation” in the third line thereof
and adding the phrase “formal or informal” before the word “interpretation” in
the same line; and (iii) immediately following the word “Transaction” in clause
(X) thereof, adding the phrase “in the manner contemplated by the Hedging Party
on the Trade Date, unless the illegality is due to an act or omission of the
party seeking to elect termination of the Transaction”.

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Failure to Deliver:
  Applicable
 
   
Insolvency Filing:
  Applicable
 
   
Increased Cost of Hedging:
  Applicable
 
   
Hedging Party:
  RBC for all applicable Additional Disruption Events
 
   
Determining Party:
  RBC for all applicable Additional Disruption Events
 
   
Acknowledgements:
   
 
   
Non-Reliance:
  Applicable
 
   
Agreements and Acknowledgements
   
Regarding Hedging Activities:
  Applicable
 
   
Additional Acknowledgements:
  Applicable

Mutual Representations: Each of RBC and Counterparty represents and warrants to,
and agrees with, the other party that:

  (i)   Tax Disclosure. Notwithstanding anything to the contrary herein, in the
Equity Definitions or in the Agreement, and notwithstanding any express or
implied claims of exclusivity or proprietary rights, the parties (and each of
their employees, representatives or other agents) are authorized to disclose to
any and all persons, beginning immediately upon commencement of their
discussions and without limitation of any kind, the tax treatment and tax
structure of the Transaction, and all materials of any kind (including opinions
or other tax analyses) that are provided by either party to the other relating
to such tax treatment and tax structure.     (ii)   Commodity Exchange Act. It
is an “eligible contract participant” within the meaning of Section 1a(12) of
the U.S. Commodity Exchange Act, as amended (the “CEA”). The Transaction has
been subject to individual negotiation by the parties. The Transaction has not
been executed or traded on a “trading facility” as defined in Section 1a(33) of
the CEA. It has entered into the Transaction with the expectation and intent
that the Transaction shall be performed to its termination date.     (iii)  
Securities Act. It is a “qualified institutional buyer” as defined in Rule 144A
under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or an
“accredited investor” as defined under the Securities Act.     (iv)   Investment
Company Act. It is a “qualified purchaser” as defined under the U.S. Investment
Company Act of 1940, as amended (the “Investment Company Act”).     (v)   ERISA.
The assets used in the Transaction (1) are not assets of any “plan” (as such
term is defined in Section 4975 of the U.S. Internal Revenue Code (the “Code”))
subject to Section 4975 of the Code or any “employee benefit plan” (as such term
is defined in Section 3(3) of the U.S. Employee Retirement Income Security Act
of 1974, as amended (“ERISA”)) subject to Title I of ERISA, and (2) do not
constitute “plan assets” within the meaning of Department of Labor
Regulation 2510.3-101, 29 CFR Section 2510-3-101.

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Counterparty Representations: In addition to the representations and warranties
in the Agreement and those contained elsewhere herein, Counterparty represents,
warrants, acknowledges and covenants that:

  (i)   Counterparty is not as of the Trade Date, and shall not be after giving
effect to the transactions contemplated hereby, “insolvent” (as such term is
defined in Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United
States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase
a number of Shares equal to the Number of Shares in compliance with the laws of
the jurisdiction of Counterparty’s incorporation or organization.     (ii)  
Counterparty shall immediately provide written notice to RBC upon obtaining
knowledge of the occurrence of any event that would constitute an Event of
Default, a Potential Event of Default, a Potential Adjustment Event, a Merger
Event or any other Extraordinary Event; provided, however, that should
Counterparty be in possession of material non-public information regarding
Counterparty, Counterparty shall not communicate such information to RBC in
connection with this Transaction.     (iii)   Counterparty has (and shall at all
times during the Transaction have) the capacity and authority to invest directly
in the Shares underlying the Transaction and has not entered into the
Transaction with the intent to avoid any regulatory filings.     (iv)  
Counterparty’s financial condition is such that it has no need for liquidity
with respect to its investment in the Transaction and no need to dispose of any
portion thereof to satisfy any existing or contemplated undertaking or
indebtedness.     (v)   Counterparty’s investments in and liabilities in respect
of the Transaction, which it understands are not readily marketable, are not
disproportionate to its net worth, and Counterparty is able to bear any loss in
connection with the Transaction, including the loss of its entire investment in
the Transaction.     (vi)   The representations and warranties of Counterparty
set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement
dated as of the Trade Date between Counterparty and Oppenheimer & Co. Inc.and
Raymond James & Associates (the “Purchase Agreement”) are true and correct and
are hereby deemed to be repeated to RBC as if set forth herein.     (vii)  
Counterparty understands, agrees and acknowledges that RBC has no obligation or
intention to register the Transaction under the Securities Act, any state
securities law or other applicable federal securities law.     (viii)  
Counterparty is not, and after giving effect to the transactions contemplated
hereby will not be, an “investment company” as such term is defined in the
Investment Company Act.     (ix)   Counterparty understands, agrees and
acknowledges that no obligations of RBC to it hereunder shall be entitled to the
benefit of deposit insurance and that such obligations shall not be guaranteed
by any affiliate of RBC or any governmental agency.     (x)   (A) Counterparty
is acting for its own account, and it has made its own independent decisions to
enter into the Transaction and as to whether the Transaction is appropriate or
proper for it based upon its own judgment and upon advice from such advisers as
it has deemed necessary, (B) Counterparty is not relying on any communication
(written or oral) of RBC or any of its affiliates as investment advice or as a
recommendation to enter into the Transaction (it being understood that
information and explanations related to the terms and conditions of the
Transaction shall not be considered investment advice or a

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      recommendation to enter into the Transaction) and (C) no communication
(written or oral) received from RBC or any of its affiliates shall be deemed to
be an assurance or guarantee as to the expected results of the Transaction.    
(xi)   Without limiting the generality of Section 13.1 of the Equity
Definitions, Counterparty acknowledges that RBC is not making any
representations or warranties with respect to the treatment of the Transaction
under FASB Statements 128, 133, 149 or 150 (or under any successor statement),
EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements),
under FASB’s Liabilities & Equity Project, or under any other accounting
guidance.     (xii)   Counterparty is not entering into the Transaction for the
purpose of (i) creating actual or apparent trading activity in the Shares (or
any security convertible into or exchangeable for the Shares) or (ii) raising or
depressing or otherwise manipulating the price of the Shares (or any security
convertible into or exchangeable for the Shares), in either case in violation of
the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).    
(xiii)   Counterparty’s filings under the Securities Act, the Exchange Act, and
other applicable securities laws that are required to be filed have been filed
and, as of the respective dates thereof and as of the date of this
representation, there is no misstatement of material fact contained therein or
omission of a material fact required to be stated therein or necessary to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.     (xiv)   Counterparty has not violated, and shall
not directly or indirectly violate, any applicable law (including, without
limitation, the Securities Act and the Exchange Act) in connection with the
Transaction.     (xv)   The Transaction, and any repurchase of the Shares by
Counterparty in connection with the Transaction, is pursuant to a publicly
announced Share repurchase program that has been approved by Counterparty’s
board of directors (including engaging in derivative transactions) and any such
repurchase has been, or shall when so required be, publicly disclosed in its
periodic filings under the Exchange Act and its financial statements and notes
thereto.     (xvi)   Counterparty shall deliver to RBC an opinion of counsel,
dated as of the Trade Date and reasonably acceptable to RBC in form and
substance, with respect to the matters set forth in Section 3(a) of the
Agreement and such other matters as RBC may reasonably request.

Miscellaneous:
Netting and Set-Off. The parties hereto agree that the Transaction shall not be
subject to netting or set off with any other transaction.
Qualified Financial Contracts. It is the intention of the parties that, in
respect of Counterparty, (a) the Transaction shall constitute a “qualified
financial contract” within the meaning of 12 U.S.C. Section 1821(e)(8)(D)(i) and
(b) a Non-defaulting Party’s rights under Sections 5 and 6 of the Agreement
constitute rights of the kind referred to in 12 U.S.C. Section 1821(e)(8)(A).
Method of Delivery. Whenever delivery of funds or other assets is required
hereunder by or to Counterparty, such delivery shall be effected through Agent.
In addition, all notices, demands and communications of any kind relating to the
Transaction between RBC and Counterparty shall be transmitted exclusively
through Agent.
Staggered Settlement. RBC may, by notice to Counterparty prior to any Settlement
Date (a “Nominal Settlement Date”), elect to deliver the Shares deliverable on
such Nominal Settlement Date on two or more dates

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(each, a “Staggered Settlement Date”) or at two or more times on the Nominal
Settlement Date as follows: (i) in such notice, RBC will specify to Counterparty
the related Staggered Settlement Dates (each of which will be on or prior to
such Nominal Settlement Date or delivery times and how it will allocate the
Shares it is required to deliver under “Net Share Settlement” above among the
Staggered Settlement Dates or delivery times; and (ii) the aggregate number of
Shares that RBC will deliver to Counterparty hereunder on all such Staggered
Settlement Dates and delivery times will equal the number of Shares that RBC
would otherwise be required to deliver on such Nominal Settlement Date.
Additional Termination Events. The occurrence of (i) an “Event of Default” with
respect to Counterparty under the terms of the Convertible Notes as set forth in
Section 9.01 of the Indenture, (ii) an Amendment Event or (iii) a Repayment
Event shall be an Additional Termination Event, in each case with the
Transaction as the sole Affected Transaction and Counterparty as the sole
Affected Party and RBC as the party entitled to designate an Early Termination
Date pursuant to Section 6(a) of the Agreement; provided that in the case of a
Repayment Event the Transaction shall be subject to termination only in respect
of the portion of the Transaction corresponding to the number of Convertible
Notes subject to such Repayment Event.
“Amendment Event” means that Counterparty amends, modifies, supplements or
obtains a waiver with respect to any term of the Indenture or the Convertible
Notes if such amendment, modification, supplement or waiver has an adverse
effect on this Transaction or RBC’s ability to hedge all or a portion of this
Transaction, with such determination to be made in the sole discretion of the
Calculation Agent. For the avoidance of doubt, Counterparty electing to increase
the Conversion Rate pursuant to a Discretionary Adjustment shall not constitute
an Amendment Event.
“Repayment Event” means that (A) any Convertible Notes are repurchased (whether
in connection with or as a result of a change of control, howsoever defined, or
for any other reason) by Counterparty or any of its subsidiaries, (B) any
Convertible Notes are delivered to Counterparty or any of its subsidiaries in
exchange for delivery of any property or assets of Counterparty or any of its
subsidiaries (howsoever described), (C) any principal of any of the Convertible
Notes is repaid prior to the final maturity date of the Convertible Notes
(whether following acceleration of the Convertible Notes or otherwise), or
(D) any Convertible Notes are exchanged by or for the benefit of the holders
thereof for any other securities of Counterparty or any of its affiliates (or
any other property, or any combination thereof) pursuant to any exchange offer
or similar transaction; provided that, in the case of clause (B) and clause (D),
conversions of the Convertible Notes pursuant to the terms of the Indenture as
in effect on the date hereof shall not be Repayment Events.
Disposition of Hedge Shares. Counterparty hereby agrees that if, in the good
faith reasonable judgment of RBC, the Shares (the “Hedge Shares”) acquired by
RBC for the purpose of hedging its obligations pursuant to the Transaction
cannot be sold in the public market by RBC without registration under the
Securities Act, Counterparty shall, at its election: (i) in order to allow RBC
to sell the Hedge Shares in a registered offering, make available to RBC an
effective registration statement under the Securities Act to cover the resale of
such Hedge Shares and (A) enter into an agreement, in form and substance
satisfactory to RBC, substantially in the form of an underwriting agreement for
a registered offering, (B) provide accountant’s “comfort” letters in customary
form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably
acceptable to RBC, (D) provide other customary opinions, certificates and
closing documents customary in form for registered offerings of equity
securities and (E) afford RBC a reasonable opportunity to conduct a “due
diligence” investigation with respect to Counterparty customary in scope for
underwritten offerings of equity securities; provided, however, that if RBC, in
its sole reasonable discretion, is not satisfied with access to due diligence
materials, the results of its due diligence investigation, or the procedures and
documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this paragraph shall apply at the election of Counterparty;
(ii) in order to allow RBC to sell the Hedge Shares in a private placement,
enter into a private placement agreement substantially similar to private
placement purchase agreements customary for private placements of equity
securities of its size, in form and substance satisfactory to RBC, including
customary representations, covenants, blue sky and other governmental filings
and/or registrations, indemnities to RBC, due diligence rights (for RBC or any
designated buyer of the Hedge Shares from RBC), opinions and certificates and
such other documentation as is customary for private placements agreements of
similar size, all reasonably acceptable to RBC (in which case, the Calculation
Agent shall make

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RBCCM Refs: NY-23175 to NY-23214
Tags: TSYS_A1-C1 to TSYS_A1-C40
any adjustments to the terms of the Transaction that are necessary, in its
reasonable judgment, to compensate RBC for any discount from the public market
price of the Shares incurred on the sale of Hedge Shares in a private
placement); or (iii) purchase the Hedge Shares from RBC at the VWAP Price on
such Exchange Business Days, and in the amounts, requested by RBC. “VWAP Price”
means, on any Exchange Business Day, the per Share volume-weighted average price
as displayed under the heading “Bloomberg VWAP” on Bloomberg page TSYS <equity>
AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00
p.m. (New York City time) on such Exchange Business Day (or if such
volume-weighted average price is unavailable, the market value of one Share on
such Exchange Business Day, as determined by the Calculation Agent using a
volume-weighted method). This paragraph shall survive the termination,
expiration or early unwind of the Transaction.
Limitation On Delivery of Shares. Notwithstanding anything herein or in the
Agreement to the contrary, in no event shall Counterparty be required to deliver
Shares in connection with the Transaction in excess of 3,478,933 Shares (the
“Maximum Delivery Amount”). Counterparty represents and warrants (which shall be
deemed to be repeated on each day that the Transaction is outstanding) that the
Maximum Delivery Amount is equal to or less than the number of authorized but
unissued Shares of Counterparty that are not reserved for future issuance in
connection with transactions in the Shares (other than the Transaction) on the
date of the determination of the Maximum Delivery Amount (such Shares, the
“Available Shares”). In the event Counterparty shall not have delivered the full
number of Shares otherwise deliverable as a result of this paragraph (the
resulting deficit, the “Deficit Shares”), Counterparty shall be continually
obligated to deliver, from time to time until the full number of Deficit Shares
have been delivered pursuant to this paragraph, Shares when, and to the extent,
that (i) Shares are repurchased, acquired or otherwise received by Counterparty
or any of its subsidiaries after the Trade Date (whether or not in exchange for
cash, fair value or any other consideration), (ii) authorized and unissued
Shares reserved for issuance in respect of other transactions prior to such date
which prior to the relevant date become no longer so reserved and (iii)
Counterparty additionally authorizes any unissued Shares that are not reserved
for other transactions. Counterparty shall immediately notify RBC of the
occurrence of any of the foregoing events (including the number of Shares
subject to clause (i), (ii) or (iii) and the corresponding number of Shares to
be delivered) and promptly deliver such Shares thereafter. Notwithstanding the
provisions of Section 5(a)(ii) of the Agreement, in the event of a failure by
Counterparty to comply with the agreement set forth in this provision, there
shall be no grace period for remedy of such failure.
Status of Claims in Bankruptcy. RBC acknowledges and agrees that this
Confirmation is not intended to convey to RBC rights with respect to the
Transaction that are senior to the claims of common stockholders in any U.S.
bankruptcy proceedings of Counterparty; provided that nothing herein shall limit
or shall be deemed to limit RBC’s right to pursue remedies in the event of a
breach by Counterparty of its obligations and agreements with respect to the
Transaction; provided, further, that nothing herein shall limit or shall be
deemed to limit RBC’s rights in respect of any transactions other than the
Transaction.
No Collateral. Notwithstanding any provision of this Confirmation, the
Agreement, Equity Definitions, or any other agreement between the parties to the
contrary, the obligations of Counterparty under the Transaction are not secured
by any collateral.
Securities Contract; Swap Agreement. The parties hereto agree and acknowledge
that RBC is a “financial institution,” “swap participant” and “financial
participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of
the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that
this Confirmation is (i) a “securities contract,” as such term is defined in
Section 741(7) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the
Bankruptcy Code and a “settlement payment” or a “transfer” within the meaning of
Section 546 of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is
defined in Section 101(53B) of the Bankruptcy Code, with respect to which each
payment and delivery hereunder or in connection herewith is a “termination
value,” a “payment amount” or “other transfer obligation” within the meaning of
Section 362 of the Bankruptcy Code and a “transfer” within the meaning of
Section 546 of the Bankruptcy Code, and (B) that RBC is entitled to the
protections afforded by, among other sections, Section 362(b)(6), 362(b)(17),
362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the
Bankruptcy Code.

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RBCCM Refs: NY-23175 to NY-23214
Tags: TSYS_A1-C1 to TSYS_A1-C40
Repurchase Notices. Counterparty shall, on any day on which Counterparty effects
any repurchase of Shares, provide RBC with a written notice of such repurchase
(a “Repurchase Notice”) on such day if, following such repurchase, the Unit
Equity Percentage as determined on such day is (a) equal to or greater than 4.5%
and (b) greater by 0.5% or more than the Unit Equity Percentage included in the
immediately preceding Repurchase Notice (or, in the case of the first such
Repurchase Notice, greater by 0.5% or more than the Unit Equity Percentage as of
the date hereof). The “Unit Equity Percentage” as of any day is the fraction,
expressed as a percentage, (i) the numerator of which is the product of the
Applicable Percentage, the number of Note Hedging Units and the Note Hedging
Unit Entitlement, and (ii) the denominator of which is the number of Shares
outstanding on such day. Counterparty agrees to indemnify and hold harmless RBC
and its affiliates and their respective officers, directors, employees,
advisors, agents and controlling persons (each, a “Section 16 Indemnified
Person”) from and against any and all losses (including losses relating to RBC’s
hedging activities as a consequence of becoming, or of the risk of becoming, a
Section 16 “insider”, including without limitation, any forbearance from hedging
activities or cessation of hedging activities and any losses in connection
therewith with respect to the Transaction), claims, damages, judgments,
liabilities and expenses (including reasonable attorney’s fees), joint or
several, to which a Section 16 Indemnified Person may become subject, as a
result of Counterparty’s failure to provide RBC with a Repurchase Notice on the
day and in the manner specified in this paragraph, and to reimburse, upon
written request, each of such Section 16 Indemnified Persons for any reasonable
legal or other expenses incurred in connection with investigating, preparing
for, providing testimony or other evidence in connection with or defending any
of the foregoing. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
the Section 16 Indemnified Person, such Section 16 Indemnified Person shall
promptly notify Counterparty in writing, and Counterparty, upon request of the
Section 16 Indemnified Person, shall retain counsel reasonably satisfactory to
the Section 16 Indemnified Person to represent the Section 16 Indemnified Person
and any others Counterparty may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding. Counterparty shall
be relieved from liability to the extent that the Section 16 Indemnified Person
fails promptly to notify Counterparty of any action commenced against it in
respect of which indemnity may be sought hereunder; provided that failure to
notify Counterparty (x) shall not relieve Counterparty from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
(y) shall not, in any event, relieve Counterparty from any liability that it may
have otherwise than on account of this indemnity agreement. Counterparty shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, Counterparty agrees to indemnify any Section 16 Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Counterparty shall not, without the prior written consent of the
Section 16 Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Section 16 Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Section 16 Indemnified Person, unless such settlement includes an
unconditional release of such Section 16 Indemnified Person from all liability
on claims that are the subject matter of such proceeding on terms reasonably
satisfactory to such Section 16 Indemnified Person. If the indemnification
provided for in this paragraph is unavailable to a Section 16 Indemnified Person
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then Counterparty, in lieu of indemnifying such Section 16
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Section 16 Indemnified Person as a result of such losses, claims, damages
or liabilities. The remedies provided for in this paragraph are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any Section 16 Indemnified Person at law or in equity. The indemnity and
contribution agreements contained in this paragraph shall remain operative and
in full force and effect regardless of the termination of the Transaction.
Alternative Calculations and RBC Payment on Early Termination and on Certain
Extraordinary Events. If RBC owes Counterparty any amount in connection with the
Transaction pursuant to Sections 12.2, 12.3 (and “Consequences of Merger Events”
above), 12.6, 12.7 or 12.9 of the Equity Definitions (except in the case of an
Extraordinary Event in which the consideration or proceeds to be paid to holders
of Shares as a result of such event consists solely of cash) or pursuant to
Section 6(d)(ii) of the Agreement (except in the case of an Event of Default in
which Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party, other than (x) an Event of Default of the
type described in Section 5(a)(iii), (v), (vi) or (vii) of the Agreement or
(y) a Termination Event of the type described in Section 5(b)(i), (ii), (iii),
(iv), (v) or (vi) of the Agreement that in the case of either (x) or
(y) resulted from an event or events outside Counterparty’s control) (a “RBC
Payment Obligation”), Counterparty shall have the right, in its sole discretion,
to require RBC to satisfy

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RBCCM Refs: NY-23175 to NY-23214
Tags: TSYS_A1-C1 to TSYS_A1-C40
any such RBC Payment Obligation by delivery of Termination Delivery Units (as
defined below) by giving irrevocable telephonic notice to RBC, confirmed in
writing within one Scheduled Trading Day, between the hours of 9:00 a.m. and
4:00 p.m. New York time on the Early Termination Date or other date the
transaction is terminated, as applicable (“Notice of RBC Termination Delivery”).
Within a commercially reasonable period of time following receipt of a Notice of
RBC Termination Delivery, RBC shall deliver to Counterparty a number of
Termination Delivery Units having a cash value equal to the amount of such RBC
Payment Obligation (such number of Termination Delivery Units to be delivered to
be determined by the Calculation Agent as the number of whole Termination
Delivery Units that could be purchased over a commercially reasonable period of
time with the cash equivalent of such payment obligation). If the provisions set
forth in this paragraph are applicable, the provisions of Sections 9.8, 9.9,
9.10, 9.11 (modified as described above) and 9.12 of the Equity Definitions
shall be applicable, except that all references to “Shares” shall be read as
references to “Termination Delivery Units”.
“Termination Delivery Unit” means (a) in the case of a Termination Event, an
Event of Default or an Extraordinary Event (other than an Insolvency,
Nationalization or Merger Event), one Share or (b) in the case of an Insolvency,
Nationalization or Merger Event, a unit consisting of the number or amount of
each type of property received by a holder of one Share (without consideration
of any requirement to pay cash or other consideration in lieu of fractional
amounts of any securities) in such Insolvency, Nationalization or Merger Event.
If a Termination Delivery Unit consists of property other than cash or New
Shares and Counterparty provides irrevocable written notice to the Calculation
Agent on or prior to the Closing Date that it elects to receive cash, New Shares
or a combination thereof (in such proportion as Counterparty designates) in lieu
of such other property, the Calculation Agent shall replace such property with
cash, New Shares or a combination thereof as components of a Termination
Delivery Unit in such amounts, as determined by the Calculation Agent in its
discretion by commercially reasonable means, as shall have a value equal to the
value of the property so replaced. If such Insolvency, Nationalization or Merger
Event involves a choice of consideration to be received by holders, such holder
shall be deemed to have elected to receive the maximum possible amount of cash.
Rule 10b-18. Except as disclosed to RBC in writing prior to the date on which
the offering of the Convertible Notes was first announced, Counterparty
represents and warrants to RBC that it has not made any purchases of blocks by
or for itself or any of its Affiliated Purchasers pursuant to the one block
purchase per week exception in Rule 10b-18(b)(4) under the Exchange Act during
each of the four calendar weeks preceding, and during the week of, such date
(“Rule 10b-18 purchase,” “blocks” and “Affiliated Purchaser” each as defined in
Rule 10b-18 under the Exchange Act). Counterparty agrees and acknowledges that
it shall not, and shall cause its affiliates and Affiliated Purchasers not to,
directly or indirectly (including by means of a derivative instrument) enter
into any transaction to purchase any Shares during the period beginning on such
date and ending on the day on which RBC has informed Counterparty in writing
that it has completed all purchases of Shares or other transactions to hedge
initially its exposure to the Transaction.
Regulation M. Counterparty was not on the date on which the offering of the
Convertible Notes was first announced, has not since such date, and is not on
the date hereof, engaged in a distribution, as such term is used in Regulation M
under the Exchange Act, of any securities of Counterparty, other than a
distribution meeting the requirements of the exception set forth in
Sections 101(b)(10) and 102(b)(7) of Regulation M under the Exchange Act.
Counterparty shall not, until the day on which RBC has informed Counterparty in
writing that it has completed all purchases of Shares or other transactions to
hedge initially its exposure to the Transaction, engage in any such
distribution.
No Material Non-Public Information. On each day during the period beginning on
the date on which the offering of the Convertible Notes was first announced and
ending on the day on which RBC has informed Counterparty in writing that RBC has
completed all purchases of Shares or other transactions to hedge initially its
exposure with respect to the Transaction, Counterparty represents and warrants
to RBC that it is not aware of any material nonpublic information concerning
itself or the Shares.
Right to Extend. RBC may postpone any potential Exercise Date or postpone or
extend any other date of valuation or delivery with respect to some or all of
the relevant Note Hedging Units (in which event the Calculation Agent shall make
appropriate adjustments to the Settlement Amount for such Note Hedging Units),
if RBC determines, in its reasonable discretion, that (a) a Regulatory
Disruption has occurred or (b) such extension

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RBCCM Refs: NY-23175 to NY-23214
Tags: TSYS_A1-C1 to TSYS_A1-C40
is reasonably necessary or appropriate to (i) preserve RBC’s hedging or hedge
unwind activity hereunder in light of existing liquidity conditions or
(ii) enable RBC to effect purchases of Shares in connection with its hedging,
hedge unwind or settlement activity hereunder in a manner that would, if RBC
were the Issuer or an affiliated purchaser of the Issuer, be in compliance with
applicable legal, regulatory or self-regulatory requirements, or with related
policies and procedures applicable to RBC. “Regulatory Disruption” shall mean
any event that RBC, in its commercially reasonable discretion upon the advice of
outside counsel, determines makes it appropriate with regard to any legal,
regulatory or self-regulatory requirements or related policies and procedures
(whether or not such requirements, policies or procedures are imposed by law or
have been voluntarily adopted by RBC, and including without limitation
Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the Exchange
Act and Regulation M and/or analyzing RBC as if it were the Issuer or an
affiliated purchaser of the Issuer), for RBC to refrain from or decrease any
market activity in connection with the Transaction.
Transfer or Assignment. Counterparty may not transfer any of its rights or
obligations under the Transaction without the prior written consent of RBC. RBC
may transfer or assign all or a portion of its Note Hedging Units hereunder at
any time to any third party with a rating (or whose guarantor has a rating) for
its long term, unsecured and unsubordinated indebtedness of A+ or better by
Standard & Poor’s Ratings Services or its successor (“S&P”), or A1 or better by
Moody’s Investors Service, Inc. or its successor (“Moody’s”) or, if either S&P
or Moody’s ceases to rate such debt, at least an equivalent rating or better by
a substitute agency rating mutually agreed by Counterparty and RBC, without the
consent of Counterparty.
If, as determined in RBC’s sole discretion, (a) at any time (1) the Equity
Percentage exceeds 8.0%, (2) RBC, RBC Group (as defined below) or any person
whose ownership position would be aggregated with that of RBC or RBC Group (RBC,
RBC Group or any such person, a “RBC Person”) under Sections 3-701 to 3-709 of
the Maryland Control Share Acquisition Act or other federal, state or local
laws, regulations or regulatory orders applicable to ownership of Shares
(“Applicable Laws”), owns, beneficially owns, constructively owns, controls,
holds the power to vote or otherwise meets a relevant definition of ownership,
or could be reasonably viewed as meeting any of the foregoing, in excess of a
number of Shares equal to (x) the number of Shares that would give rise to
reporting, registration, filing or notification obligations or other
requirements (including obtaining prior approval by a state or federal
regulator) of a RBC Person under Applicable Laws and with respect to which such
requirements have not been met or the relevant approval has not been received
minus (y) 1% of the number of Shares outstanding on the date of determination or
(3) the number of “control shares” (as such term is used in Section 3-701(d) of
the Maryland Control Share Acquisition Act) owned by a RBC Person divided by the
number of Counterparty’s outstanding Shares (the “Control Share Percentage”)
exceeds 8.0% (each of such conditions described in clause (1), (2) or (3), an
“Excess Ownership Position”), and (b) RBC is unable, after commercially
reasonable efforts, to effect a transfer or assignment on pricing and terms and
within a time period reasonably acceptable to it of all or a portion of this
Transaction pursuant to the preceding paragraph such that an Excess Ownership
Position no longer exists, RBC may designate any Scheduled Trading Day as an
Early Termination Date with respect to a portion (the “Terminated Portion”) of
this Transaction, such that an Excess Ownership Position no longer exists
following such partial termination. In the event that RBC so designates an Early
Termination Date with respect to a portion of this Transaction, a payment shall
be made pursuant to Section 6 of the Agreement as if (i) an Early Termination
Date had been designated in respect of a Transaction having terms identical to
this Transaction and a Number of Note Hedging Units equal to the Terminated
Portion, (ii) Counterparty shall be the sole Affected Party with respect to such
partial termination and (iii) such Transaction shall be the only Terminated
Transaction (and, for the avoidance of doubt, the provisions set forth under the
caption “Alternative Calculations and RBC Payment on Early Termination and on
Certain Extraordinary Events” shall apply to any amount that is payable by RBC
to Counterparty pursuant to this sentence). The “Equity Percentage” as of any
day is the fraction, expressed as a percentage, (A) the numerator of which is
the number of Shares that RBC and any of its affiliates subject to aggregation
with RBC for purposes of the “beneficial ownership” test under Section 13 of the
Exchange Act and all persons who may form a “group” (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act) with RBC (collectively, “RBC Group”)
“beneficially own” (within the meaning of Section 13 of the Exchange Act)
without duplication on such day and (B) the denominator of which is the number
of Shares outstanding on such day.
Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing RBC to purchase, sell, receive or deliver any shares or
other securities to or from Counterparty, RBC may designate any of its

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RBCCM Refs: NY-23175 to NY-23214
Tags: TSYS_A1-C1 to TSYS_A1-C40
affiliates to purchase, sell, receive or deliver such shares or other securities
and otherwise to perform RBC’s obligations in respect of the Transaction and any
such designee may assume such obligations. RBC shall be discharged of its
obligations to Counterparty to the extent of any such performance.
Severability; Illegality. If compliance by either party with any provision of
the Transaction would be unenforceable or illegal, (a) the parties shall
negotiate in good faith to resolve such unenforceability or illegality in a
manner that preserves the economic benefits of the transactions contemplated
hereby and (b) the other provisions of the Transaction shall not be invalidated,
but shall remain in full force and effect.
Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING RELATING TO THE TRANSACTION. EACH PARTY (I) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A
SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO
THE TRANSACTION, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS PROVIDED HEREIN.
Early Unwind. In the event the sale of Convertible Notes is not consummated with
the initial purchasers thereof for any reason by the close of business in New
York on November 16, 2009 (or such later date as agreed upon by the parties)
(November 16, 2009 or such later date as agreed upon being the “Early Unwind
Date”), the Transaction shall automatically terminate (the “Early Unwind”) on
the Early Unwind Date and (a) the Transaction and all of the respective rights
and obligations of RBC and Counterparty under the Transaction shall be cancelled
and terminated and (b) each party shall be released and discharged by the other
party from and agrees not to make any claim against the other party with respect
to any obligations or liabilities of the other party arising out of and to be
performed in connection with the Transaction either prior to or after the Early
Unwind Date; provided that Counterparty shall purchase from RBC on the Early
Unwind Date all Shares purchased by RBC or one or more of its affiliates, and
assume, or reimburse the cost of, derivatives and other hedging activities
entered into by RBC or one or more of its affiliates, in each case, in
connection with hedging of the Transaction and the unwind of such hedging
activities. The amount payable by Counterparty in cash or, as described in the
following sentence, in Shares, shall be RBC’s (or its affiliates) actual cost of
such Shares and unwind cost of such derivatives and other hedging activities as
RBC informs Counterparty and shall be paid in immediately available funds on the
Early Unwind Date. Counterparty may satisfy its reimbursement obligation in cash
or Shares, with the number of registered or unregistered Shares to be delivered
to be determined by the Calculation Agent as the number of whole Shares that
could be sold by Counterparty over a commercially reasonable period of time with
the cash equivalent of such payment obligation; and provided that, to the extent
that such Shares cannot be sold in the public market without registration under
the Securities Act, such Shares shall be subject to the provisions under
“Disposition of Hedge Shares” above, to be applied to such Shares. RBC and
Counterparty represent and acknowledge to the other that, subject to the proviso
included in the preceding sentence, upon an Early Unwind, all obligations with
respect to the Transaction shall be deemed fully and finally discharged.
Payment by Counterparty. In the event that (i) an Early Termination Date occurs
or is designated with respect to the Transaction as a result of a Termination
Event or an Event of Default (other than an Event of Default arising under
Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty
owes to Dealer pursuant to Section 6(d)(ii) of the Agreement an amount
calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to
Dealer, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions
(including, for the avoidance of doubt, any amount payable in connection with an
Extraordinary Event), an amount calculated under Section 12.8 of the Equity
Definitions, such amount shall be deemed to be zero.
Governing law: The law of the State of New York.

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RBCCM Refs: NY-23175 to NY-23214
Tags: TSYS_A1-C1 to TSYS_A1-C40
Contact information. For purposes of the Agreement (unless otherwise specified
in the Agreement), the addresses for notice to the parties shall be:
(a) Counterparty
TeleCommunication Systems, Inc.
275 West Street,
Annapolis, Maryland 21401
Attention:         Bruce A. White
Facsimile:         (410) 263-7617
(b) RBC
Whenever notices or other communications are required to be in writing as
provided herein, such notices shall be deemed duly given if given by facsimile
with telephone confirmation of receipt or by first class mail, postage prepaid.:

     
RBC’s Address, Facsimile Number and e-Mail
  Trade Affirmations and Settlements:
Address for the Purpose of Giving Notices:
  RBC Capital Markets Corporation
Attn: Back Office
One Liberty Plaza
165 Broadway
New York, NY 10006-1404 USA
Facsimile Number: +1-212-858-7033
e-Mail Address: geda@rbccm.com
 
   
 
  Trade Confirmations:
 
  RBC Capital Markets Corporation
Attn: Structured Derivatives Documentation
Three World Financial Center
200 Vesey Street
New York, NY 10281-1021 USA
Facsimile Number: +1-212-428-3053
e-Mail Address: SDD@rbccm.com

Any notice or other communication required or permitted to be given to RBC (for
matters other than operational matters) with respect to this Confirmation shall
be delivered in person or given by facsimile transmission to RBC and its agent,
RBC Capital Markets Corporation.

17

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RBCCM Refs: NY-23175 to NY-23214
Tags: TSYS_A1-C1 to TSYS_A1-C40
This Confirmation may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to RBC a facsimile of the fully-executed
Confirmation to RBC at (212) 428-3053. Originals shall be provided for your
execution upon your request.
We are very pleased to have executed the Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,

          ROYAL BANK OF CANADA
by its agent
RBC Capital Markets Corporation
      By:   /s/ Steve Milke     Authorized Signatory      Name:   Steven Milke  
    Title:   Managing Director     

Counterparty hereby agrees to, accepts and confirms the terms of the foregoing
as of the Trade Date.

          TELECOMMUNICATION SYSTEMS, INC.
      By:   /s/ Thomas M. Brandt, Jr.     Authorized Signatory      Name: 
Thomas M. Brandt, Jr.     Title:  Senior Vice President and Chief Financial
Officer  

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ANNEX A
The Premium for the Transaction is set forth below.

     
Premium:
  USD4,134,780

A-1