exv10w2wc






Exhibit 10.2(c)




	 	 	 	 	 
	 
	 	 	 	 
	
	 	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





 









 








RBCCM Refs: NY-23175 to NY-23214

Tags: TSYS_A1-C1 to TSYS_A1-C40



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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RBCCM Refs: NY-23175 to NY-23214

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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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RBCCM Refs: NY-23175 to NY-23214

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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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RBCCM Refs: NY-23175 to NY-23214

Tags: TSYS_A1-C1 to TSYS_A1-C40




	 	 	 
	 

	 	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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RBCCM Refs: NY-23175 to NY-23214

Tags: TSYS_A1-C1 to TSYS_A1-C40




	 	 	 
	 
	 	 
	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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RBCCM Refs: NY-23175 to NY-23214

Tags: TSYS_A1-C1 to TSYS_A1-C40




	 	 	 
	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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RBCCM Refs: NY-23175 to NY-23214

Tags: TSYS_A1-C1 to TSYS_A1-C40




	 	 	 
	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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RBCCM Refs: NY-23175 to NY-23214

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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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RBCCM Refs: NY-23175 to NY-23214

Tags: TSYS_A1-C1 to TSYS_A1-C40





	 	 	 	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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RBCCM Refs: NY-23175 to NY-23214

Tags: TSYS_A1-C1 to TSYS_A1-C40





(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.



16









 





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









 





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	 













 





ANNEX A



The Premium for the Transaction is set forth below.




	 	 	 
	Premium:

	 	USD4,134,780







A-1