8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 10, 2009

TeleCommunication Systems, Inc.

(Exact name of registrant as specified in its charter)

MARYLAND
(State or other jurisdiction
of incorporation) 000-30821
(Commission File Number) 52-1526369
(IRS Employer
Identification No.)

275 West Street
Annapolis, Maryland 21401
(Address of principal executive offices, including zip code)

(410) 263-7616
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On November 10, 2009, TeleCommunication Systems, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) under which it agreed to sell $103.5 million aggregate principal amount of its 4.5% Convertible Senior Notes due 2014 (the “Notes”) to the initial purchasers named therein (the “Initial Purchasers”). The aggregate principal amount of the notes issued reflects the full exercise of the $13.5 million over-allotment option granted to the Initial Purchasers with respect to the Notes. The Purchase Agreement contains customary representations, warranties and covenants. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities. A copy of the Purchase Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

The closing of the sale of the Notes occurred on November 16, 2009. The Notes were issued pursuant to an indenture, dated as of November 16, 2009 (the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Notes bear interest at a rate of 4.5% per year, payable semiannually in arrears in cash on November 1st and May 1st of each year, beginning on May 1, 2010.

Holders may convert the Notes at their option on any day prior to the close of business on the second “scheduled trading day” (as defined in the Indenture) immediately preceding November 1, 2014. The conversion rate will initially be 96.637 shares of Class A common stock per $1,000 principal amount of Notes, equivalent to an initial conversion price of approximately $10.348 per share of Class A common stock. While this represents an approximately 30% conversion premium over the closing price of the Company’s Class A common stock on November 10, 2009 of $7.96 per share, the effect of the convertible note hedge and warrant transactions described below increased the effective conversion premium of the Notes to 60% above the November 10th closing price, to $12.74 per share.

Subject to certain exceptions, holders may require the Company to repurchase, for cash, all or part of their Notes upon a “fundamental change” (as defined in the Indenture) at a price equal to 100% of the principal amount of the Notes being purchased, plus accrued and unpaid interest to, but excluding, the fundamental change purchase date. In addition, upon a “make-whole adjustment event” (as defined in the Indenture) prior to the maturity date of the Notes, we will increase the conversion rate for a holder that elects to convert its Notes in connection with such make-whole adjustment event.

The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the entire principal amount of all the Notes plus accrued interest, if any, to be immediately due and payable. A copy of the Indenture is attached hereto as Exhibit 4.1 and is incorporated herein by reference.

Certain affiliates of the Initial Purchasers have performed, and may continue to perform in the future, investment banking and advisory services for the Company from time to time for which they have received customary fees and expenses.

The Notes and the shares of the Company’s Class A common stock, par value $0.01 per share issuable upon conversion of the Notes, as described below and as more fully set forth in the Indenture (as defined below), have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). The Company offered and sold the Notes to the Initial Purchasers in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. The Company relied on this exemption from registration based in part on representations made by the Initial Purchasers in the Purchase Agreement.

In connection with the sale of the Notes, the Company entered into convertible note hedge transactions with respect to the Class A common stock with certain counterparties (collectively, the “Hedge Dealers”). The convertible note hedge transactions cover, subject to adjustments, 10,001,303 shares of Class A common stock. Copies of the confirmations of the convertible note hedge transactions with each Hedge Dealer, which confirmations were entered into (i) on November 10, 2009 and (ii) on November 11, 2009, as a result of the exercise of the over-allotment option, are attached hereto as Exhibits 10.2(a), (b) and (c) and 10.4(a) and (b), respectively, and are incorporated herein by reference.

In connection with the sale of the Notes, the Company also entered into separate warrant transactions with certain counterparties (collectively, the “Warrant Dealers”). The Company sold to the Warrant Dealers, warrants to purchase in the aggregate 10,001,303 shares of Class A common stock, subject to adjustments, at an exercise price of $12.736 per share of Class A common stock. The Company offered and sold the warrants to the counterparties in reliance on the exemption from registration provided by Section 4(2) of the Securities Act. Copies of the confirmations of the warrant transactions with each Warrant Dealer, which confirmations were entered into (i) on November 10, 2009 and (ii) on November 11, 2009, as a result of the exercise of the over-allotment option, are attached hereto as Exhibits 10.3(a), (b) and (c) and 10.5(a) and (b), respectively, and are incorporated herein by reference.

The Company used a portion of the gross proceeds of the offering to pay the Company’s cost of the convertible note hedge transactions. The convertible note hedge and the warrant transactions are separate transactions, each entered into by the Company with the counterparties, are not part of the terms of the Notes and will not affect the holders’ rights under the Notes. The convertible note hedges are expected generally to reduce the potential dilution to the Company’s Class A common stock upon any conversion of the Notes in the event that the volume weighted average price per share of the Company’s Class A common stock, as measured under the convertible note hedges, at the time of exercise is greater than the strike price of the convertible note hedges, which corresponds to the initial conversion price of the Notes and is similarly subject to certain customary adjustments. If, however, the volume weighted average price per share of the Company’s Class A common stock exceeds the strike price of the warrant transactions when the warrant transactions are exercisable, the Company will be required to issue shares of the Company’s Class A common stock to the counterparties, and those issuances will have a dilutive effect on our earnings per share.

The foregoing summaries of the Purchase Agreement, the Indenture, the Call Options and the Warrants set forth above are qualified in their entirety by reference to the full text of the Purchase Agreement, the Indenture, the confirmations of the convertible note transactions and the warrants, copies of which are attached hereto.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this Form 8-K is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 of this Form 8-K is incorporated herein by reference.

Item 8.01. Other Events.

On November 16, 2009, the Company issued a press release announcing the closing of the private placement of the Notes. The full text of the press release is attached to this Form 8-K as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

4.1	Indenture dated as of November 16, 2009, by and between the Company and The Bank of New York Mellon Trust Company, as Trustee.
10.1	Purchase Agreement dated as of November 10, 2009, by and among the Company and Oppenheimer & Co. Inc. and Raymond James & Associates, Inc.
10.2(a)	Convertible Bond Hedging Transaction Confirmation dated November 10, 2009, by and between the Company and Deutsche Bank AG, London Branch.
10.2(b)	Convertible Bond Hedging Transaction Confirmation dated November 10, 2009, by and between the Company and Société Générale.
10.2(c)	Convertible Bond Hedging Transaction Confirmation dated November 10, 2009, by and between the Company and Royal Bank of Canada.
10.3(a)	Confirmation of Warrants dated November 10, 2009, by and between the Company and Deutsche Bank AG, London Branch.
10.3(b)	Confirmation of Warrants dated November 10, 2009, by and between the Company and Société Générale.
10.3(c)	Confirmation of Warrants dated November 10, 2009, by and between the Company and Royal Bank of Canada.
10.4(a)	Convertible Bond Hedging Transaction Confirmation dated November 11, 2009, by and between the Company and Deutsche Bank AG, London Branch.
10.4(b)	Convertible Bond Hedging Transaction Confirmation dated November 11, 2009, by and between the Company and Société Générale.
10.5(a)	Confirmation of Warrants dated November 11, 2009, by and between the Company and Deutsche Bank AG, London Branch.
10.5(b)	Confirmation of Warrants dated November 11, 2009, by and between the Company and Société Générale.
99.1	Press Release dated November 16, 2009.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TeleCommunication Systems, Inc.
By:	/s/ Bruce A. White
	Name:	Bruce A. White
	Title:	Sr. Vice President, General Counsel and Secretary

Dated: November 16, 2009

EX-4.1

Exhibit 4.1

EXECUTION VERSION

TELECOMMUNICATION SYSTEMS, INC.

4.5% CONVERTIBLE SENIOR NOTES DUE NOVEMBER 1, 2014

INDENTURE
DATED AS OF NOVEMBER 16, 2009

THE BANK OF NEW YORK MELLON,
AS TRUSTEE

TABLE OF CONTENTS

		Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01.	Definitions		1
Section 1.02.	Other Definitions		6
Section 1.03.	Trust Indenture Act Provisions		7
Section 1.04.	Rules of Construction		7
ARTICLE 2
THE SECURITIES
Section 2.01.	Form and Dating		8
Section 2.02.	Execution and Authentication		9
Section 2.03.	Registrar, Paying Agent and Conversion Agent		10
Section 2.04.	Paying Agent to Hold Money in Trust		11
Section 2.05.	Securityholder Lists		11
Section 2.06.	Transfer and Exchange		11
Section 2.07.	Replacement Securities		12
Section 2.08.	Outstanding Securities		13
Section 2.09.	Treasury Securities		13
Section 2.10.	Temporary Securities		14
Section 2.11.	Cancellation		14
Section 2.12.	Legends; Additional Transfer Requirements		14
Section 2.13.	CUSIP Numbers		20
Section 2.14.	Ranking		20
Section 2.15.	Issuance, Transfer and Exchange of Common Stock Issuable Upon Conversion of the Securities		20
Section 2.16.	Additional Securities		20
Section 2.17.	Additional Interest		21
Section 2.18.	Calculations in Respect of Securities		21
ARTICLE 3
PURCHASES OF SECURITIES UPON FUNDAMENTAL CHANGE
Section 3.01.	Purchase of Securities at Option of the Holder Upon Fundamental Change		22
Section 3.02.	Effect of Fundamental Change Purchase Notice		25
Section 3.03.	Deposit of Fundamental Change Purchase Price		26
Section 3.04.	Securities Purchased in Part		27
Section 3.05.	Compliance with Securities Laws Upon Purchase of Securities		27

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TABLE OF CONTENTS

		Page
Section 3.06.	No Fundamental Change Repurchase Following Acceleration		27
Section 3.07.	Trustee’s Fundamental Change Purchase Disclaimer		27
ARTICLE 4
PAYMENT OF INTEREST AND ADDITIONAL SHARES
Section 4.01.	Interest Payments		27
Section 4.02.	Additional Shares		28
ARTICLE 5
CONVERSION
Section 5.01.	Conversion Privilege		30
Section 5.02.	Conversion Procedure		30
Section 5.03.	Fractional Shares		31
Section 5.04.	Taxes on Conversion		32
Section 5.05.	Issuance of Common Stock Upon Conversion		32
Section 5.06.	Adjustment of Conversion Price		33
Section 5.07.	No Adjustment		39
Section 5.08.	Adjustment for Tax Purposes		40
Section 5.09.	Temporary Reduction of Conversion Price		40
Section 5.10.	Notice of Certain Transactions		40
Section 5.11.	Effect of Reclassification, Consolidation, Merger, Binding Share Exchange or Sale on Conversion Privilege		41
Section 5.12.	Disclaimer		42
Section 5.13.	Limitation on Adjustments		43
ARTICLE 6
[RESERVED]
ARTICLE 7
COVENANTS
Section 7.01.	Payment of Securities		43
Section 7.02.	SEC Reports		44
Section 7.03.	No Resale of Restricted Securities		44
Section 7.04.	Compliance Certificates		44
Section 7.05.	Additional Interest Notice		45
Section 7.06.	Rule 144A Information Requirements		45
Section 7.07.	Further Instruments and Acts		45

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TABLE OF CONTENTS

		Page
Section 7.08.	Maintenance of Corporate Existence		46
Section 7.09.	Stay, Extension and Usury Laws		46
Section 7.10.	Additional Interest Payable Upon Failure to Report or to Delegend		46
ARTICLE 8
CONSOLIDATION, MERGER, BINDING SHARE EXCHANGE, CONVEYANCE, TRANSFER OR LEASE
Section 8.01.	Company May Consolidate, etc., only on Certain Terms		47
Section 8.02.	Successor Substituted		48
ARTICLE 9
DEFAULT AND REMEDIES
Section 9.01.	Events of Default		48
Section 9.02.	Acceleration		50
Section 9.03.	Other Remedies		51
Section 9.04.	Waiver of Defaults and Events of Default		51
Section 9.05.	Control by Majority		51
Section 9.06.	Limitations on Suits		51
Section 9.07.	Rights of Holders to Receive Payment and to Convert		52
Section 9.08.	Collection Suit by Trustee		52
Section 9.09.	Trustee May File Proofs of Claim		52
Section 9.10.	Priorities		53
Section 9.11.	Undertaking for Costs		53
ARTICLE 10
TRUSTEE
Section 10.01.	Duties of Trustee		54
Section 10.02.	Rights of Trustee		55
Section 10.03.	Monies Held in Trust		56
Section 10.04.	Trustee’s Disclaimer		56
Section 10.05.	Notice of Default or Events of Default		56
Section 10.06.	Reports by Trustee to Holders		57
Section 10.07.	Compensation and Indemnity		57
Section 10.08.	Replacement of Trustee		58
Section 10.09.	Successor Trustee by Merger, etc.		59
Section 10.10.	Eligibility; Disqualification		59
Section 10.11.	Preferential Collection of Claims Against Company		59
Section 10.12.	Trustee or Agents May Hold Securities		59

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TABLE OF CONTENTS

		Page
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01.	Satisfaction and Discharge		59
Section 11.02.	Application of Trust Money		60
Section 11.03.	Repayment to Company		60
Section 11.04.	Reinstatement		61
ARTICLE 12
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 12.01.	Without Consent of Holders		61
Section 12.02.	With Consent of Holders		62
Section 12.03.	Compliance with Trust Indenture Act		63
Section 12.04.	Revocation and Effect of Consents		63
Section 12.05.	Notation on or Exchange of Securities		63
Section 12.06.	Trustee to Sign Amendments, etc.		63
Section 12.07.	Effect of Supplemental Indentures		64
ARTICLE 13
MISCELLANEOUS
Section 13.01.	Trust Indenture Act Controls		64
Section 13.02.	Notices		64
Section 13.03.	Communications by Holders with Other Holders		65
Section 13.04.	Certificate and Opinion as to Conditions Precedent		65
Section 13.05.	Record Date for Vote or Consent of Securityholders		66
Section 13.06.	Rules by Trustee, Paying Agent, Registrar and Conversion Agent		66
Section 13.07.	Legal Holidays		66
Section 13.08.	Governing Law		66
Section 13.09.	No Adverse Interpretation of Other Agreements		66
Section 13.10.	No Recourse against Others		66
Section 13.11.	Successors		67
Section 13.12.	Multiple Counterparts		67
Section 13.13.	Severability		67
Section 13.14.	Table of Contents, Headings, etc.		67
Section 13.15.	Force Majeure		67
Section 13.16.	Waiver of Jury Trial		67
Section 13.17.	Not Security Interest Created		68
Section 13.18.	Benefits of Indenture		68
SCHEDULE 4.02			S-1

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		Page
Exhibit A	Form of Security		A-R-1
Exhibit B	Form of Transfer Certificate for Transfer of Restricted Common Stock		B-1

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     THIS INDENTURE, dated as of November 16, 2009, is between TeleCommunication Systems, Inc., a corporation duly organized under the laws of Maryland (the “Company”), and The Bank of New York Mellon, a New York banking corporation having its principal office at 101 Barclay Street, Floor 8W, New York, New York 10286, as Trustee (the “Trustee”).

     In consideration of the premises and the acquisition of the Securities by the Holders thereof, both parties agree as follows for the benefit of the other and for the equal and ratable benefit of the registered Holders of the Securities.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

     Section 1.01. Definitions.

     “Additional Interest” means any additional interest payable pursuant to Section 7.10 or Section 9.02(b) hereof.

     “Affiliate” means, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, “control” when used with respect to any person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Agent” means any Registrar, Paying Agent or Conversion Agent.

     “Applicable Procedures” means, with respect to any transfer or exchange of beneficial ownership interests in a Global Security, the delegending of Global Securities or shares of Common Stock, or the increase or decrease in the aggregate principal amount of the Global Security from time to time, the rules and procedures of the Depositary, in each case to the extent applicable to such transfer, exchange, delegending, or increase or decrease in aggregate principal amount of the Global Security.

     “Board of Directors” means either the board of directors of the Company or any committee of the Board of Directors specifically authorized to act for it with respect to this Indenture.

     “Business Day” means each day that is not a Legal Holiday.

     “Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, but excluding any debt securities convertible into such equity.

     “Cash” or “cash” means such coin or currency of the United States as at any time of payment is legal tender for the payment of public and private debts.

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     “Certificated Security” means a Security that is in substantially the form attached hereto as Exhibit A and that does not include the information or the schedule called for by footnotes 1, 3 and 7 thereof.

     “Closing Sale Price” of the Common Stock means, as of any date of determination, the closing sale price per share (or, if no such closing sale price is reported on such day, the average of the bid and asked prices or, if more than one in either case, the average of the average bid and the average asked prices) at 4:00 p.m. (New York City time) on such date as reported in composite transactions for the principal U.S. securities exchange on which the Common Stock is traded or, if the Common Stock is not listed on a U.S. national or regional securities exchange, as reported by Pink OTC Markets Inc. If the Common Stock is not so reported, the “Closing Sale Price” of the Common Stock means the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three U.S. nationally recognized independent investment banking firms selected by the Company for this purpose. The Closing Sale Price shall be determined without reference to extended or after hours trading.

     “Common Stock” means Class A common stock of the Company, $0.01 par value, as it exists on the date of this Indenture and any shares of any class or classes of Capital Stock of the Company resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, however, that, if at any time there shall be more than one such resulting class, the shares of each such class then so issuable on conversion of the Securities shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

     “Company” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor.

     “Continuing Directors” means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors as of the date hereof or (b) was nominated for election or elected to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Board of Directors at the time of such nomination or election.

     “Conversion Rate” means, as of any date of determination, an amount equal to $1,000 divided by the then applicable Conversion Price on such date, rounded to the nearest 1/10,000th of a share, for each $1,000 principal amount of the Securities. As of the date hereof and subject to adjustment pursuant to Section 5.06, the Conversion Rate with respect to the Securities is approximately 96.637 shares of Common Stock.

     “Corporate Trust Office” means the office of the Trustee at which at any time the trust created by this Indenture shall be administered, which office at the date of the execution of this Indenture is located at 101 Barclay Street, Floor 8W, New York, New York 10286, Attention: Corporate Trust Administration, or at any other time at such other address as the

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Trustee may designate from time to time by notice to the Holders and the Company or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Company).

     “Default” or “default” means any event which is or, after notice or passage of time or both, would be an Event of Default.

     “Ex-Dividend Date” means with respect to any issuance, dividend or distribution on the Common Stock, the first date on which the shares of Common Stock trade, regular way, on the relevant exchange or in the relevant market without the right to receive such issuance, dividend or distribution.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.

     “Fair Market Value” means with respect to any asset or property, the price which could be negotiated in an arm’s length, free market transaction, for Cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. For all purposes of this Indenture, Fair Market Value shall be determined in good faith by the Board of Directors, whose determination will be conclusive and evidenced by a resolution of the Board of Directors.

     “Global Security” means a permanent Global Security that is in substantially the form attached hereto as Exhibit A and that includes the information and schedule called for by footnotes 1, 3 and 4 thereof and which is deposited with the Depositary or its custodian and registered in the name of the Depositary or its nominee.

     “Holder” or “Securityholder” means the person in whose name a Security is registered on the Primary Registrar’s books.

     “Indenture” means this Indenture as amended or supplemented from time to time pursuant to the terms of this Indenture.

     “Initial Issue Date” means November 16, 2009.

     “interest”, in respect of the Securities, unless the context otherwise requires, refers to interest payable on the Securities, including Additional Interest, if any.

     “Make Whole Adjustment Event” means the occurrence of any of the following: (a) any Change in Control included in clause (i), (ii) or (iv) of the definition of Change in Control or (b) any Termination of Trading, provided that an acquisition, consolidation, merger or binding share exchange or a sale, assignment, conveyance, transfer, lease or other disposition otherwise constituting a Change in Control will not constitute a Make Whole Adjustment Event if at least 90% of the consideration paid for the Common Stock in such transaction or transactions, excluding Cash payments for fractional shares and Cash payments made pursuant to dissenters’ appraisal rights, consists of shares that are traded on the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective

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successors) or will be so traded immediately following such transaction or transactions, the Securities become convertible into such shares of such common stock.

     “Market Disruption Event” means the occurrence or existence for more than one half hour period in the aggregate on any Scheduled Trading Day for the Common Stock of any suspension or limitation imposed on trading, by reason of movements in price exceeding limits permitted by NASDAQ or otherwise, in the Common Stock or in any options, contracts or future contracts relating to the Common Stock, and such suspension or limitation occurs or exists at any time before 1:00 p.m. (New York City time) on such day.

     “Maturity Date” means November 1, 2014.

     “NASDAQ” means the NASDAQ Stock Market.

     “Officer” means the Chairman or any Co-Chairman of the Board of Directors, any Vice Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary of the Company.

     “Officers’ Certificate” means a certificate signed on behalf of the Company by two or more Officers of the Company, one of whom must be either the principal executive officer, the principal financial officer or the principal accounting officer of the Company, delivered to the Trustee, that meets the requirements of Section 13.04.

     “Opinion of Counsel” means a written opinion that meets the requirements of Section 13.04 from legal counsel. The counsel may be an employee of or counsel to the Company.

     “Person” or “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

     “Principal” or “principal” of a debt security, including the Securities, means the principal of the security plus, when appropriate, the premium, if any, on the security.

     “QIB” means any “qualified institutional buyer” (as defined in Rule 144A).

     “Restricted Common Stock” means Common Stock issued upon conversion of a Security that is Transfer Restricted Common Stock.

     “Restricted Global Security” means a Global Security that is a Transfer Restricted Security.

     “Restricted Security Legend” means the legend set forth in Section 2.12(a).

     “Restricted Stock Legend” means the legend required by Section 2.12(b).

     “Rule 144A” means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time.

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     “Scheduled Trading Day” means any day that is scheduled to be a Trading Day.

     “SEC” means the United States Securities and Exchange Commission.

     “Securities” means the 4.5% Convertible Senior Notes due 2014, or any of them (each, a “Security”).

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.

     “Securities Custodian” means the Trustee, as custodian with respect to the Securities in global form, or any successor thereto.

     “Significant Subsidiary” means, in respect of any Person, a Subsidiary of such Person that would constitute a “significant subsidiary” as such term is defined under Rule 1-02(w) of Regulation S-X under the Exchange Act.

     “Stated Maturity” means, with respect to any Security, the date specified in such security as the fixed date on which the final payment of principal of such Security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the Holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

     “Subsidiary” means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other equity interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.

     “TIA” means the Trust Indenture Act of 1939, as amended, and the rules and regulations thereunder as in effect on the date of this Indenture, except to the extent any amendment to the Trust Indenture Act expressly provides for application of the Trust Indenture Act as in effect on another date.

     “Trading Day” means a day on which (i) trading in the Common Stock generally occurs, (ii) there is no Market Disruption Event and (iii) a Closing Sale Price for the Common Stock (other than a Closing Sale Price referred to in the second sentence of the definition thereof) is available for such day; provided that if the Common Stock is not admitted for trading or quotation on or by any exchange, bureau or other organization referred to in the definition of Closing Sale Price (excluding the second sentence of that definition), “Trading Day” will mean any Business Day. A “Trading Day” only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then standard closing time for regular trading on the relevant exchange or trading system.

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     “Trustee” means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of this Indenture and, thereafter, means the successor.

     “Trust Officer” shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

     “Vice President”, when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

     “Voting Stock” of a Person means any class or classes of Capital Stock or other interests of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

     “Wholly Owned Subsidiary” means a Significant Subsidiary of the Company all the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or another Wholly Owned Subsidiary.

     Section 1.02. Other Definitions.

Term	Defined in Section
“Additional Interest Notice”	7.05
“Additional Securities”	2.16(a)
“Additional Shares”	4.02(a)
“Agent Members”	2.01(b)
“Bankruptcy Law”	9.01
“Change in Control”	3.01(a)
“Company Order”	2.02
“Conversion Agent”	2.03
“Conversion Date”	5.02(b)
“Conversion Obligation”	5.05(a)
“Conversion Price”	5.06
“Custodian”	9.01
“Depositary”	2.01(a)
“DTC”	2.01(a)
“Effective Date”	4.02(b)
“Event of Default”	9.01
“Expiration Date”	5.06(d)
“Expiration Time”	5.06(d)
“Fundamental Change”	3.01(a)

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Term	Defined in Section
“Fundamental Change Purchase Date”	3.01(a)
“Fundamental Change Purchase Notice”	3.01(c)
“Fundamental Change Purchase Price”	3.01(a)
“Interest Payment Date”	4.01(a)
“Legal Holiday”	13.07
“Make-Whole Adjustment Event Period”	4.02(a)
“Maximum Conversion Rate”	4.02(g)
“Notice of Conversion”	5.02(a)
“Notice of Default”	9.01(k)
“Paying Agent”	2.03
“Primary Registrar”	2.03
“Record Date”	4.01(a)
“Reference Property”	5.11
“Registrar”	2.03
“Resale Restriction Termination Date”	2.12(a)
“Spin-Off”	5.06(d)(iii)
“Stock Price”	4.02(a)
“Termination of Trading”	3.01(a)
“Transfer Restricted Common Stock”	2.12(b)
“Transfer Restricted Securities”	2.12(a)
“Unissued Shares”	3.01(a)
“Valuation Period”	5.06(c)

     Section 1.03. Trust Indenture Act Provisions.

     Whenever this Indenture refers to a provision of the TIA, that provision is incorporated by reference in and made a part of this Indenture. This Indenture shall also include those provisions of the TIA that would be required to be included herein by the provisions of the Trust Indenture Reform Act of 1990 if this Indenture had been qualified pursuant to the TIA. The following TIA terms used in this Indenture have the following meanings:

     “obligor” on the Securities means the Company or any other obligor on the Securities.

     All other terms used in this Indenture that are defined in the TIA, defined by TIA reference to another statute or defined by any SEC rule and not otherwise defined herein have the meanings assigned to them therein.

     Section 1.04. Rules of Construction.

     Unless the context otherwise requires:

     (A) a term has the meaning assigned to it herein;

     (B) words in the singular include the plural, and words in the plural include the singular;

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     (C) provisions apply to successive events and transactions;

     (D) the term “merger” includes a statutory share exchange, and the term “merged” has a correlative meaning;

     (E) the masculine gender includes the feminine and the neuter;

     (F) references to agreements and other instruments include subsequent amendments thereto;

     (G) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and

     (H) references to the payments on the Securities shall include Additional Interest payable hereunder, if any.

ARTICLE 2

THE SECURITIES

     Section 2.01. Form and Dating.

     The Securities and the corresponding Trustee’s certificate of authentication shall be substantially in the respective forms set forth in Exhibit A, which Exhibit is incorporated in and made part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. The Company shall provide any such notations, legends or endorsements to the Trustee in writing. The Securities shall be dated the date of their authentication.

     (a) Restricted Global Securities. Securities offered and sold to QIBs in reliance on Rule 144A shall be issued in the form of one or more Restricted Global Securities, substantially in the form of Exhibit A, which shall be deposited on behalf of the acquirers of the Securities represented thereby with the Trustee, at its Corporate Trust Office, as custodian for the depositary, The Depository Trust Company (“DTC”) (such depositary, or any successor thereto, being hereinafter referred to as the “Depositary”), and registered in the name of its nominee, Cede & Co., duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Securities Custodian as hereinafter provided, subject in each case to compliance with the Applicable Procedures.

     (b) Global Securities in General. Each Global Security shall represent such of the outstanding Securities as shall be specified therein, and each shall provide that it shall represent the aggregate principal amount of outstanding Securities from time to time endorsed thereon and that the aggregate principal amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, transfers, redemptions, purchases or conversions of such Securities. Any adjustment of the aggregate principal amount of a Global Security to reflect the amount of any increase or decrease in the amount of outstanding Securities represented thereby shall be made by the Trustee in accordance with

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instructions given by the Holder thereof as required by Section 2.12 hereof and shall be made on the records of the Trustee and the Depositary. Payment of principal of and Interest and premium, if any, on any Global Security shall be made to the Holder of such Security.

     Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or under the Global Security, and the Depositary (including, for this purpose, its nominee) may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall (A) prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or (B) impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security.

     (c) Book Entry Provisions. The Company shall execute and the Trustee shall, in accordance with this Section 2.01(c) and Section 2.02, authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of Cede & Co. or as otherwise instructed by the Depositary, (ii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instructions and (iii) shall bear legends substantially to the following effect:

     “UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO TELECOMMUNICATION SYSTEMS, INC. (THE “COMPANY”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

     Section 2.02. Execution and Authentication.

     An Officer shall sign the Securities for the Company by manual or facsimile signature. Typographic and other minor errors or defects in any such facsimile signature shall not affect the validity or enforceability of any Security which has been authenticated and delivered by the Trustee.

     If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

     A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

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     The Trustee shall authenticate and make available for delivery Securities for original issue in the aggregate principal amount of up to $103,500,000 (subject to Section 2.16) upon receipt of (i) a written order or orders of the Company signed by two Officers of the Company (a “Company Order”) and delivered to the Trustee, and (ii) an Officers’ Certificate and Opinion of Counsel pursuant to Section 13.04 hereof. Additional Securities may thereafter be issued pursuant to Section 2.16 hereof. Each Company Order shall specify the amount of Securities to be authenticated, shall provide that all Securities will be represented by a Global Security and the date on which each original issue of Securities is to be authenticated. The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to existing Holders.

     The Trustee shall act as the initial authenticating agent. Thereafter, the Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent shall have the same rights as an Agent to deal with the Company or an Affiliate of the Company.

     The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 principal amount and any integral multiple thereof.

     Section 2.03. Registrar, Paying Agent and Conversion Agent.

     The Company shall maintain one or more offices or agencies in The City of New York where Securities may be presented for registration of transfer or for exchange (each, a “Registrar”) or for conversion (each, a “Conversion Agent”), one or more offices or agencies where Securities may be presented for payment (each, a “Paying Agent”) and one or more offices or agencies where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. One of the Registrars (the “Primary Registrar”) shall keep a register of the Securities and of their transfer and exchange.

     The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar, Paying Agent, or Conversion Agent, or fails to give the foregoing notice, the Trustee shall act as such. The Company or any Affiliate of the Company may act as Paying Agent (except for the purposes of Article 11).

     The Company hereby initially designates the Trustee as Paying Agent, Registrar, Securities Custodian and Conversion Agent, and the Corporate Trust Office of the Trustee to be such office or agency of the Company for each of the aforesaid purposes.

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     Section 2.04. Paying Agent to Hold Money in Trust.

     Prior to 11:00 a.m. (New York City time) on each due date of the principal of or interest on any Securities, the Company shall deposit with a Paying Agent a sum sufficient to pay such principal and interest so becoming due. The Company shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee in writing of any default by the Company (or any other obligor on the Securities) in making any such payment. If the Company or an Affiliate of the Company acts as Paying Agent, it shall, before 11:00 a.m. (New York City time) on each due date of the principal of or interest on any Securities, segregate the money and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee, and the Trustee may at any time during the continuance of any default, upon written request to a Paying Agent, require such Paying Agent to pay forthwith to the Trustee all sums so held in trust by such Paying Agent. Upon doing so, the Paying Agent (other than the Company) shall have no further liability for the money.

     Section 2.05. Securityholder Lists.

     The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Primary Registrar, the Company shall furnish to the Trustee at least five Business Days before each semiannual interest payment date, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

     Section 2.06. Transfer and Exchange.

     (a) Subject to compliance with any applicable additional requirements contained in Section 2.12, when a Security is presented to a Registrar with a request to register a transfer thereof or to exchange such Security for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested; provided, however, that every Security presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by, if applicable, any legal opinions, certifications or other evidence required by the Company pursuant to Section 2.12 and, if it is a Certificated Security, an assignment form in the form included in Exhibit A, all in form satisfactory to the Registrar duly executed by the Holder thereof or its attorney duly authorized in writing. To permit registration of transfers and exchanges, upon surrender of any Security for transfer or exchange at an office or agency maintained pursuant to Section 2.03, the Company shall execute and the Trustee shall authenticate Securities of a like aggregate principal amount at the Registrar’s request. Any exchange or transfer shall be without charge, except that the Company or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto; provided that this sentence shall not apply to any exchange pursuant to Section 2.10, 3.04, 5.02(d) or 12.05.

     None of the Company, any Registrar or the Trustee shall be required to exchange or register a transfer of any Securities or portions thereof (i) in respect of which a Fundamental

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Change Purchase Notice has been delivered and not withdrawn by the Holder thereof (except, in the case of the purchase of a Security in part, the portion thereof not to be purchased) or (ii) surrendered for conversion pursuant to Article 5.

     All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.

     (b) Any Registrar appointed pursuant to Section 2.03 hereof shall provide to the Trustee such information as the Trustee may reasonably require in connection with the delivery by such Registrar of Securities upon transfer or exchange of Securities.

     (c) Each Holder of a Security agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder’s Security in violation of any provision of this Indenture and/or applicable U.S. federal or state securities law. Prior to the due presentment of a registration of a transfer of any Security, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Security is registered as the absolute owner of such Security for the purpose of all payments with respect to such Securities, and neither the Trustee, any Agent nor the Company shall be affected by notice to the contrary. Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary.

     The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Agent Members or other beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture and to examine the same to determine substantial compliance as to form with the express requirements hereof.

     Section 2.07. Replacement Securities.

     If any mutilated Security is surrendered to the Company, a Registrar or the Trustee, or the Company, a Registrar and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the Company, the applicable Registrar and the Trustee such security or indemnity as will be required by them to save each of them from any loss they may suffer if a Security is replaced, then, in the absence of written notice to the Company, such Registrar or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute, and upon its written request the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding. The Trustee and the Company each may charge such Holder for their expenses in replacing such Security.

     In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, or is about to be purchased by the Company pursuant to Article 3, or

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converted pursuant to Article 5, the Company in its discretion may, instead of issuing a new Security, pay, purchase or convert such Security, as the case may be.

     Upon the issuance of any new Securities under this Section 2.07, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the reasonable fees and expenses of the Trustee or the Registrar) in connection therewith.

     Every new Security issued pursuant to this Section 2.07 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

     The provisions of this Section 2.07 are (to the extent lawful) exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

     Section 2.08. Outstanding Securities.

     Securities outstanding at any time are all Securities authenticated by the Trustee, except for those canceled by it, those purchased pursuant to Article 3, those converted pursuant to Article 5, those delivered to it for cancellation or surrendered for transfer or exchange and those described in this Section 2.08 as not outstanding.

     If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Company receives, subsequent to the new Security’s authentication, proof satisfactory to the Company that the replaced Security is held by a bona fide purchaser unaware that such Security has been replaced.

     If a Paying Agent (other than the Company or an Affiliate of the Company) holds in respect of Securities on a Fundamental Change Purchase Date or the Maturity Date money sufficient to pay the principal of (including premium, if any), and any accrued interest on Securities (or portions thereof) payable on that date, then on and after such Fundamental Change Purchase Date or the Maturity Date, as the case may be, such Securities (or portions thereof, as the case may be) shall cease to be outstanding and any interest on them shall cease to accrue.

     Subject to the restrictions contained in Section 2.09, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.

     Section 2.09. Treasury Securities.

     In determining whether the Holders of the required principal amount of Securities have concurred in any notice, direction, waiver or consent, Securities owned by the Company or any other obligor on the Securities or by any Affiliate of the Company or of such other obligor shall be disregarded, except that, for purposes of determining whether the Trustee shall be protected in relying on any such notice, direction, waiver or consent, only Securities which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Securities so owned which

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have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to the Securities and that the pledgee is not the Company or any other obligor on the Securities or any Affiliate of the Company or of such other obligor.

     Section 2.10. Temporary Securities.

     Until definitive Securities are ready for delivery, the Company may prepare and execute, and, upon receipt of a Company Order, the Trustee shall authenticate and deliver, temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities and as shall be reasonably acceptable to the Trustee. Every temporary Security shall be executed and registered by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate and deliver definitive Securities in exchange for temporary Securities.

     Section 2.11. Cancellation.

     The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee or its agent any Securities surrendered to them for transfer, exchange, redemption, payment or conversion. The Trustee and no one else shall cancel, in accordance with its standard procedures, all Securities surrendered for transfer, exchange, payment, conversion or cancellation and shall deliver the canceled Securities to the Company. The Company may, to the extent permitted by law, purchase Securities in the open market or by tender offer at any price or by private agreement. Any Securities purchased or otherwise acquired by the Company or any of its Subsidiaries prior to the Maturity Date may, to the extent permitted by law, be reissued or resold or may, at the option of the Company, be surrendered to the Trustee for cancellation. Any Securities surrendered for cancellation may not be reissued or resold and shall be promptly cancelled by the Trustee, and the Company may not hold or resell such Securities or issue any new Securities to replace any such Securities or any Securities that any Holder has converted pursuant to Article 5.

     Section 2.12. Legends; Additional Transfer Requirements.

     (a) Every Security that bears or is required under this Section 2.12(a) to bear the Restricted Security Legend set forth in this Section 2.12(a) (the “Transfer Restricted Securities”) shall be subject to the restrictions on transfer set forth in Section 2.06 and this Section 2.12(a) (including those set forth in the Restricted Security Legend set forth below), and the Holder of each such Transfer Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in Sections 2.12(a) and 2.12(b), the term “transfer” includes any sale, pledge, transfer or other disposition whatsoever of any Transfer Restricted Security. The Registrar shall not register any transfer of a Transfer Restricted Security not made in accordance with the restrictions on transfer set forth in this Section 2.12.

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     Subject to the last two paragraphs of this Section 2.12(a), prior to the date upon which the Trustee removes the Restricted Security Legend from any Security (the “Resale Restriction Termination Date,” which shall have a correlative meaning in respect of any Restricted Common Stock) any certificate evidencing such Security (and all securities issued in exchange therefor or substitution thereof, including Common Stock, if any, issued upon conversion thereof, which shall bear the legend set forth in Section 2.12(b), if applicable) shall bear a legend in substantially the following form:

“THIS SECURITY AND THE CLASS A COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

     1. REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

     2. AGREES FOR THE BENEFIT OF TELECOMMUNICATION SYSTEMS, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

          (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR

          (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

          (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

          (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO

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DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT;”

     So long as the Securities are represented by Global Securities that are held by or on behalf of the Depositary only, the Company may accomplish any delegending of such Securities by:

     (i) instructing the Trustee to remove the Restricted Security Legend from the Securities and instructing the transfer agent for the Common Stock to remove the Restricted Stock Legend from the Common Stock issued upon conversion of the Securities;

     (ii) notifying Holders of the Securities and Common Stock issued upon conversion of the Securities that the Restricted Security Legend and Restricted Stock Legend have been removed or deemed removed;

     (iii) notifying the Trustee, the transfer agent for the Common Stock and DTC to change the CUSIP number for the Securities and the Common Stock issued upon conversion of the Securities to the applicable unrestricted CUSIP number; and

     (iv) complying with any Applicable Procedures for delegending;

whereupon the Restricted Security Legend shall be deemed removed from any Global Securities without further action on the part of Holders.

     Any Security (or security issued in exchange or substitution therefor) as to which the restrictions on transfer shall have expired in accordance with their terms or that has been transferred, replaced or exchanged on or after the Resale Restriction Termination Date or that has been transferred pursuant to a registration statement that has been declared effective under the Securities Act may, upon surrender of such Security to the Registrar for exchange in accordance with the provisions of this Section 2.12, be exchanged for a new Security or Securities, of like tenor and aggregate principal amount, which shall not bear the Restricted Security Legend required by this Section 2.12(a).

     (b) Every stock certificate representing Common Stock issued upon conversion of a Transfer Restricted Security that bears or is required under this Section 2.12(b) to bear the Restricted Stock Legend set forth in this Section 2.12(b) (the “Transfer Restricted Common Stock”) shall be subject to the restrictions on transfer set forth in Section 2.06 and this Section 2.12(b) (including those set forth in the Restricted Stock Legend set forth below), and the Holder of such Common Stock issued upon conversion of a Transfer Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer and the further restrictions set forth in Section 2.15. The Company shall not register any transfer of Common Stock issued upon conversion of such a Transfer Restricted Security not made in accordance with the restrictions on transfer set forth in this Section 2.12.

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     Subject to the last paragraph of this Section 2.12(b) and Section 2.15 with respect to Common Stock, prior to the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of a Transfer Restricted Security shall bear a legend in substantially the following form, unless such Common Stock has been sold pursuant to a registration statement that has been declared effective under the Securities Act (and which continues to be effective at the time of such issuance) or such Common Stock has been issued upon conversion of Securities that have been transferred pursuant to a registration statement that has been declared effective under the Securities Act:

“THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

     1. REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

     2. AGREES FOR THE BENEFIT OF TELECOMMUNICATION SYSTEMS, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE OF THE SECURITY IN RESPECT OF THE CONVERSION OF WHICH THIS SECURITY WAS ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

     (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR

     (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

     (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

     (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH

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LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”

     Any stock certificate (or security issued in exchange or substitution therefor) as to which such restrictions on transfer shall have expired in accordance with their terms or that has been transferred, replaced or exchanged on or after the Resale Restriction Termination Date or that has been transferred pursuant to a registration statement that has been declared effective under the Securities Act may, upon surrender of such stock certificate to the transfer agent for the Common Stock for exchange in accordance with the provisions of this Section 2.12 and Section 2.15, be exchanged for a new stock certificate, of like tenor and aggregate number of shares, which shall not bear the Restricted Stock Legend required by this Section 2.12(b).

     (c) Any Security or Common Stock issued upon the conversion or exchange of a Security that, prior to the date upon which the Company instructs the Trustee to remove the Restricted Security Legend, is purchased or owned by the Company or any Affiliate thereof may not be resold by the Company or such Affiliate unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction that results in such Security or Common Stock, as the case may be, no longer being “restricted securities” (as defined under Rule 144).

     (d) Notwithstanding any provision of Section 2.06 and Section 2.12 to the contrary, in the event Rule 144(d) as promulgated under the Securities Act (or any successor rule) is amended to change the one-year period under Rule 144(d) (or the corresponding period under any successor rule), from and after receipt by the Trustee of the Officers’ Certificate and Opinion of Counsel provided for in this Section 2.12(d), (i) each reference in Section 2.12(a) to “one year” and in the Restricted Security Legend set forth in such paragraph to “ONE YEAR” shall be deemed for all purposes hereof to be references to such changed period, (ii) each reference in Section 2.12(b) to “one year” and in the Restricted Stock Legend set forth in such paragraph to “ONE YEAR” shall be deemed for all purposes hereof to be references to such changed period and (iii) all corresponding references in the Security (including the definition of Resale Restriction Termination Date) and the Restricted Security Legend thereon shall be deemed for all purposes hereof to be references to such changed period, provided that such changes shall not become effective if they are otherwise prohibited by, or would otherwise cause a violation of, the then-applicable federal securities laws. The provisions of this Section 2.12(d) shall not be effective until such time as the Opinion of Counsel and Officers’ Certificate have been received by the Trustee hereunder. This Section 2.12(d) shall apply to successive amendments to Rule 144(d) (or any successor rule) changing the holding period thereunder.

     (e) A Global Security may not be transferred, in whole or in part, to any Person other than the Depositary or a nominee or any successor thereof, and no such transfer to any such other Person may be registered; provided that the foregoing shall not prohibit any transfer of a Security that is issued in exchange for a Global Security but is not itself a Global Security. No transfer of

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a Security to any Person shall be effective under this Indenture or the Securities unless and until such Security has been registered in the name of such Person. Notwithstanding any other provisions of this Indenture or the Securities, transfers of a Global Security, in whole or in part, shall be made only in accordance with this Section 2.12.

     (f) The provisions of clauses (i), (ii), (iii) and (iv) below shall apply only to Global Securities:

     (i) Notwithstanding any other provisions of this Indenture or the Securities, a Global Security shall not be exchanged in whole or in part for a Security registered in the name of any Person other than the Depositary or one or more nominees thereof; provided that a Global Security may be exchanged for Securities registered in the names of any person designated by the Depositary in the event that (A) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or such Depositary has ceased to be a “clearing agency” registered under the Exchange Act, and a successor Depositary is not appointed by the Company within 90 days or (B) an Event of Default has occurred and is continuing with respect to the Securities. Any Global Security exchanged pursuant to clause (A) shall be so exchanged in whole and not in part, and any Global Security exchanged pursuant to clause (B) above may be exchanged in whole or from time to time in part as directed by the Depositary. Any Security issued in exchange for a Global Security or any portion thereof shall be a Global Security; provided that any such Security so issued that is registered in the name of a Person other than the Depositary or a nominee thereof shall not be a Global Security.

     (ii) Securities issued in exchange for a Global Security or any portion thereof shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depositary shall designate and shall bear the applicable legends provided for herein. Any Global Security to be exchanged in whole shall be surrendered by the Depositary to the Trustee, as Registrar. With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with respect to such Global Security, the principal amount thereof shall be reduced by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and deliver the Security issuable on such exchange to or upon the order of the Depositary or an authorized representative thereof.

     (iii) The registered Holder may grant proxies and otherwise authorize any Person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

     (iv) In the event of the occurrence of any of the events specified in clause (i) above, the Company shall promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form, without interest coupons.

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     Section 2.13. CUSIP Numbers.

     The Company in issuing the Securities may use one or more “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of purchase as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a purchase and that reliance may be placed only on the other identification numbers printed on the Securities, and any such purchase shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any change in the “CUSIP” number.

     Section 2.14. Ranking.

     The obligations of the Company arising under or in connection with this Indenture and every outstanding Security issued under this Indenture from time to time constitute and shall constitute an unsecured general obligation of the Company, ranking equal in right of payment to all other existing and future senior unsecured and unsubordinated indebtedness of the Company and ranking senior in right of payment to any future indebtedness of the Company that is expressly made subordinate to the Securities by the terms of such indebtedness.

     Section 2.15. Issuance, Transfer and Exchange of Common Stock Issuable Upon Conversion of the Securities.

     If (i) shares of Common Stock to be issued upon conversion of Securities bearing the Restricted Security Legend are to be registered in a name other than that of the Holder of such Securities or (ii) shares of Common Stock represented by a certificate bearing the Restricted Stock Legend are transferred subsequently by such Holder, then the Holder must deliver to the transfer agent for the Common Stock and to the Company a certificate in substantially the form of Exhibit B as to compliance with the restrictions on transfer applicable to such shares of Common Stock and neither the transfer agent nor the registrar for the Common Stock shall be required to register any transfer of such Common Stock not so accompanied by a properly completed certificate.

     Section 2.16. Additional Securities.

     (a) The Company may, from time to time without the consent of the Holders of outstanding Securities, increase the aggregate principal amount of the Securities by issuing additional Securities in the future pursuant to this Indenture (“Additional Securities”) having terms and conditions identical to those of the other outstanding Securities, except that Additional Securities may have a different initial date from which interest begins to accrue thereon so that the Additional Securities are fungible with outstanding Securities; provided that no differences pursuant to this Section 2.16(a) shall cause such Additional Securities to constitute a different class of securities than the Securities issued on the Initial Issue Date for U.S. federal income tax purposes; and provided, further, that the Additional Securities shall have the same CUSIP number as the Securities issued on the Initial Issue Date. The Securities issued on the Initial Issue Date and any Additional Securities shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, offers to purchase and U.S.

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federal income tax purposes. No Additional Securities may be issued if on the issue date therefor any Event of Default has occurred and is continuing.

     (b) With respect to any Additional Securities, the Company shall set forth in an Officers’ Certificate pursuant to a resolution of the Board of Directors of the Company, copies of which shall be delivered to the Trustee, the following information:

     (i) the aggregate principal amount of such Additional Securities to be authenticated and delivered pursuant to this Indenture;

     (ii) the issue date and the issue price of such Additional Securities;

     (iii) whether such Additional Securities will be subject to transfer restrictions under the Securities Act (or other applicable securities laws).

In addition, the Company shall deliver to the Trustee an Opinion of Counsel in accordance with Section 13.04 hereof certifying as to the satisfaction of all conditions precedent to the authentication by the Trustee of such Additional Securities.

     Section 2.17. Additional Interest.

     The Company may be obligated to pay Additional Interest to Holders, as and to the extent set forth in accordance with Section 7.10 and Section 9.02(b) hereof. Any Additional Interest is deemed to be interest for purposes of this Indenture. The Trustee has no duty to determine when Additional Interest under Section 7.10 or Section 9.02(b) hereof should be paid.

     Section 2.18. Calculations in Respect of Securities.

     Except to the extent provided herein and therein, the Company will be responsible for making all calculations called for under the Indenture and the Securities. These calculations include, but are not limited to, determinations of the Closing Sale Price of the Common Stock, adjustments to the Conversion Price, any accrued interest payable on the Securities, the Conversion Price and the Conversion Rate. The Company will make these calculations in good faith and, absent manifest error, the calculations will be final and binding on Holders of the Securities. The Company will provide to each of the Trustee and the Conversion Agent a schedule of its calculations, and the Trustee and the Conversion Agent are entitled to rely conclusively upon the accuracy of such calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder of the Securities upon the request of such Holder.

ARTICLE 3

PURCHASES OF SECURITIES UPON FUNDAMENTAL CHANGE

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     Section 3.01. Purchase of Securities at Option of the Holder Upon Fundamental Change.

     (a) If at any time that Securities remain outstanding there shall occur a Fundamental Change, Securities shall be purchased by the Company at the option of the Holders, as of a date, determined by the Company in its sole discretion, that is not less than 20 Business Days and not more than 35 Business Days after the occurrence of the Fundamental Change (the “Fundamental Change Purchase Date”) at a purchase price equal to 100% of the principal amount of the Securities to be purchased, together with any accrued and unpaid interest to, but excluding, the Fundamental Change Purchase Date (the “Fundamental Change Purchase Price”), unless the Fundamental Change Purchase Date is after a Record Date and on or prior to the related Interest Payment Date, in which case interest accrued to the Interest Payment Date will be paid to Holders of the Securities as of the preceding Record Date and the Fundamental Change Purchase Price payable to any Holder surrendering such Holder’s Security for purchase pursuant to this Article 3 shall be equal to the principal amount of Securities subject to purchase and will not include any accrued and unpaid interest. The Fundamental Change Purchase Price shall be payable in Cash, subject to satisfaction by or on behalf of any Holder of the requirements set forth in subsection (c) of this Section 3.01. Notwithstanding the foregoing, the Company may not repurchase the Securities upon the occurrence of a Fundamental Change if the principal amount of the Securities has been accelerated and such acceleration has not been rescinded on or prior to the Fundamental Change Purchase Date.

     A “Fundamental Change” shall mean the occurrence of a Change in Control or a Termination of Trading.

     A “Change in Control” shall be deemed to have occurred if any of the following occurs after the date hereof:

     (i) any “person” or “group” (as such terms are defined below) is or becomes the “beneficial owner” (as defined below), directly or indirectly, of shares of Voting Stock of the Company representing 50% or more of the total voting power of all outstanding classes of Voting Stock of the Company or has the power, directly or indirectly, to elect a majority of the members of the Board of Directors; or

     (ii) the Company consolidates with, enters into a binding share exchange with, or merges with or into, another Person or the Company sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of the Company, or any Person consolidates with, or merges with or into, the Company, in any such event other than pursuant to a transaction (A) in which the Persons that “beneficially owned”, directly or indirectly, shares of Voting Stock of the Company immediately prior to such transaction “beneficially own”, directly or indirectly, shares of Voting Stock of the Company representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving or transferee Person, with such Holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction being in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction, or (B) which is effected solely to change the jurisdiction of

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incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving Person; or; or

     (iii) a majority of the members of the Board of Directors are not Continuing Directors; or

     (iv) the holders of the Capital Stock of the Company approve any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the terms hereof).

     For the purpose of the definition of “Change in Control”, (i) “person” and “group” have the meanings given such terms under Section 13(d) and 14(d) of the Exchange Act or any successor provision to either of the foregoing, and the term “group” includes any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor provision thereto), (ii) a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the Exchange Act, as in effect on the date of this Indenture, except that the number of shares of Voting Stock of the Company shall be deemed to include, in addition to all outstanding shares of Voting Stock of the Company and Unissued Shares deemed to be held by the “person” or “group” (as such terms are defined above) or other Person with respect to which the Change in Control determination is being made, all Unissued Shares deemed to be held by all other Persons, and (iii) the terms “beneficially owned” and “beneficially own” shall have meanings correlative to that of “beneficial owner”. The term “Unissued Shares” means shares of Voting Stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination of a Change in Control.

     Notwithstanding anything to the contrary set forth in this Section 3.01, Holders shall not have the right to require the Company to purchase any Securities in the event of a Change of Control resulting from the occurrence of an event described in clauses (i) and (ii) of the definition of such term, and the Company shall not be required to deliver a written notice of a Fundamental Change incidental thereto as a result of any acquisition, consolidation, merger or binding share exchange or a sale, assignment, conveyance, transfer, lease or other disposition if at least 90% of the consideration paid for the Common Stock (excluding cash payments for fractional shares and cash payments pursuant to dissenters’ appraisal rights) in such transaction or transactions consists of shares of common stock that are traded on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or which will be so traded immediately following such transaction or transactions and as a result of such transaction or transactions the Securities become convertible into such shares of such common stock.

     A “Termination of Trading” means that the Common Stock or other securities into which the Securities are convertible are not approved for listing on the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors).

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     If any transaction in which the Common Stock is replaced by the securities of another entity occurs, following completion of any related Make Whole Adjustment Event Period and any related Fundamental Change Purchase Date, references to the Company in the definitions of “Fundamental Change,” “Change of Control” and “Termination of Trading” above shall apply to such other entity instead.

     (b) Within 10 Business Days after the occurrence of a Fundamental Change, the Company shall mail a written notice of the Fundamental Change to the Trustee and to each Holder. The Company shall also issue a press release announcing the occurrence of such Fundamental Change (and make such press release available on the Company’s website). The notice shall include the form of a Fundamental Change Purchase Notice to be completed by the Holder and shall state:

     (i) briefly, the events causing such Fundamental Change;

     (ii) the Effective Date of the Fundamental Change, and whether the Fundamental Change is a Make Whole Adjustment Event, in which case the Effective Date of the Make Whole Adjustment Event;

     (iii) information about the Holders’ right to convert the Securities;

     (iv) information about the Holders’ right to require the Company to purchase the Securities;

     (v) the last date on which a Holder may exercise the purchase right;

     (vi) the Fundamental Change Purchase Date;

     (vii) the Fundamental Change Purchase Price;

     (viii) the date by which the Fundamental Change Purchase Notice pursuant to this Section 3.01 must be given;

     (ix) the Conversion Price (giving effect to any applicable Additional Shares) and any adjustments thereto;

     (x) the procedures that the Holder must follow to exercise rights under this Section 3.01;

     (xi) the procedures for withdrawing a Fundamental Change Purchase Notice, including a form of notice of withdrawal; and

     (xii) the name and address of each Paying Agent and Conversion Agent;

     (xiii) that the Holder must satisfy the requirements set forth in the Indenture and the Securities in order to convert the Securities.

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     If any of the Securities is in the form of a Global Security, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depositary applicable to the repurchase of Global Securities.

     (c) A Holder may exercise its rights specified in subsection (a) of this Section 3.01 upon delivery of a written notice (which shall be in substantially the form included in Exhibit A hereto and which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any other manner reasonably acceptable to the Paying Agent and, in the case of Global Securities, may be delivered electronically or by other means in accordance with the Depositary’s customary procedures) of the exercise of such rights (a “Fundamental Change Purchase Notice”) to any Paying Agent during the period between the mailing of the Fundamental Change Purchase Notice and the close of business on the second Scheduled Trading Day next preceding the Fundamental Change Purchase Date.

     The delivery of such Security to any Paying Agent (together with all necessary endorsements) at the office of such Paying Agent shall be a condition to the receipt by the Holder of the Fundamental Change Purchase Price therefor.

     The Company shall purchase from the Holder thereof, pursuant to this Section 3.01, a portion of a Security if the principal amount of such portion is $1,000 or an integral multiple of $1,000. Provisions of the Indenture that apply to the purchase of all of a Security pursuant to Section 3.01 through Section 3.04 also apply to the purchase of such portion of such Security.

     Notwithstanding anything herein to the contrary, any Holder delivering to a Paying Agent the Fundamental Change Purchase Notice contemplated by this subsection (c) shall have the right to withdraw such Fundamental Change Purchase Notice in whole or in a portion thereof that is a principal amount of $1,000 or in an integral multiple thereof at any time prior to 5:00 p.m. (New York City time) on the second scheduled Trading Day next preceding the Fundamental Change Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.02.

     A Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Purchase Notice or written withdrawal thereof.

     Anything herein to the contrary notwithstanding, in the case of Global Securities, any Fundamental Change Purchase Notice may be delivered or withdrawn and such Securities may be surrendered or delivered for purchase in accordance with the Applicable Procedures as in effect from time to time.

     Section 3.02. Effect of Fundamental Change Purchase Notice.

     Upon receipt by any Paying Agent of the Fundamental Change Purchase Notice specified in Section 3.01(c), the Holder of the Security in respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn as specified below) thereafter be entitled to receive the Fundamental Change Purchase Price with respect to such Security. Such Fundamental Change Purchase Price shall be paid to such Holder promptly following the later of (a) the Fundamental Change Purchase Date

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with respect to such Security (provided the conditions in Section 3.01(c) have been satisfied) and (b) the time of delivery of such Security to a Paying Agent by the Holder thereof in the manner required by Section 3.01(c). Securities in respect of which a Fundamental Change Purchase Notice has been given by the Holder thereof may not be converted into shares of Common Stock pursuant to Article 5 on or after the date of the delivery of such Fundamental Change Purchase Notice unless such Fundamental Change Purchase Notice has first been validly withdrawn.

     A Fundamental Change Purchase Notice may be withdrawn by means of a written notice (which may be delivered by mail, overnight courier, hand delivery, facsimile transmission or in any other manner reasonably acceptable to the Paying Agent and, in the case of Global Securities, may be delivered electronically or by other means in accordance with the Depositary’s customary procedures) of withdrawal delivered by the Holder to a Paying Agent at any time prior to 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately preceding the Fundamental Change Purchase Date, specifying the principal amount of the Security or portion thereof (which must be a principal amount of $1,000 or an integral multiple of $1,000 in excess thereof) with respect to which such notice of withdrawal is being submitted.

     Section 3.03. Deposit of Fundamental Change Purchase Price.

     On or before 11:00 a.m. (New York City time) on the Fundamental Change Purchase Date, the Company shall deposit with the Trustee or with a Paying Agent (other than the Company or an Affiliate of the Company) an amount of money (in immediately available funds if deposited on such Fundamental Change Purchase Date) sufficient to pay the aggregate Fundamental Change Purchase Price of all the Securities or portions thereof that are to be purchased as of such Fundamental Change Purchase Date. The manner in which the deposit required by this Section 3.03 is made by the Company shall be at the option of the Company; provided that such deposit shall be made in a manner reasonably acceptable to the Trustee and the Paying Agent such that the Trustee or a Paying Agent shall have immediately available funds on the Fundamental Change Purchase Date.

     If a Paying Agent holds, in accordance with the terms hereof, money sufficient to pay the Fundamental Change Purchase Price of any Security for which a Fundamental Change Purchase Notice has been tendered and not withdrawn in accordance with this Indenture, then, on the Fundamental Change Purchase Date, such Security shall cease to be outstanding, interest shall cease to accrue thereon and the rights of the Holder in respect thereof shall terminate (other than the right to receive the Fundamental Change Purchase Price as aforesaid). The Company shall publicly announce the principal amount of Securities purchased as a result of such Fundamental Change on or as soon as practicable after the Fundamental Change Purchase Date.

     To the extent that the aggregate amount of Cash deposited by the Company pursuant to this Section 3.03 exceeds the aggregate Fundamental Change Purchase Price of the Securities or portions thereof that the Company is obligated to purchase, then promptly after the Fundamental Change Purchase Date the Trustee or a Paying Agent, as the case may be, shall return any such excess Cash to the Company.

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     Section 3.04. Securities Purchased in Part.

     Any Security that is to be purchased only in part shall be surrendered at the office of a Paying Agent and, promptly after the Fundamental Change Purchase Date, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of such authorized denomination or denominations as may be requested by such Holder, in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered that is not purchased.

     Section 3.05. Compliance with Securities Laws Upon Purchase of Securities.

     In connection with any offer to purchase Securities under Section 3.01, the Company shall (a) comply with the applicable provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act, (b) file the related Schedule TO (or any successor or similar schedule, form or report), if required, under the Exchange Act and (c) otherwise comply with all federal and state securities laws in connection with such offer to purchase or repurchase Securities, all so as to permit the rights of the Holders and obligations of the Company under Section 3.01 through Section 3.04 to be exercised in the time and in the manner specified therein.

     Section 3.06. No Fundamental Change Repurchase Following Acceleration.

     No Securities shall be purchased by the Company under Section 3.01 if the principal amount of the Securities has been accelerated under Section 9.02, and such acceleration has not been rescinded, on or prior to the Fundamental Change Purchase Date.

     Section 3.07. Trustee’s Fundamental Change Purchase Disclaimer.

     The Trustee has no duty to determine when a Fundamental Change has occurred, or when purchases of Securities upon a Fundamental Change under Article 3 should be made. The Trustee shall not be accountable for and makes no representation as to the Fundamental Change Purchase Price payable in respect of any Fundamental Change. The Trustee shall not be responsible for the Company’s failure to comply with this Article 3.

ARTICLE 4

PAYMENT OF INTEREST AND ADDITIONAL SHARES

     Section 4.01. Interest Payments.

     (a) The Company shall pay interest on the Securities at a rate of 4.5% per annum, payable semi-annually in arrears on May 1 and November 1 of each year (each, an “Interest Payment Date”), or if any such day is not a Business Day, the immediately following Business Day, commencing May 1, 2010. Interest on a Security shall be paid to the Holder of such Security at the close of business on April 15 or October 15 (each, a “Record Date”), as the case may be, next preceding the related Interest Payment Date, and shall be computed on the basis of a 360-day year comprised of twelve 30-day months. In the event of the maturity, conversion, or purchase of a Security by the Company at the option of the Holder, interest shall cease to accrue on such Security. Notwithstanding any other provision of this Indenture, however, the Company

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shall pay interest on the Maturity Date to Holders on the Record Date immediately preceding the Maturity Date in respect of the period ending with the Maturity Date regardless of whether such Holders convert their Securities.

     (b) Upon conversion of a Security, (i) a Holder shall not receive any Cash payment of interest (unless such Holder is the Holder on a Record Date and such conversion occurs between such Record Date and the Interest Payment Date to which it relates, in which case a Holder on the Record Date shall receive on the Interest Payment Date accrued and unpaid interest) and the Conversion Rate shall not be adjusted to account for accrued and unpaid interest and (ii) except as set forth in clause (c) below, the Company’s delivery to a Holder of Common Stock and (in the case of fractional shares) Cash in settlement of the Conversion Obligation as set forth in Section 5.05 shall be deemed to satisfy its obligation with respect to such Security, and any accrued but unpaid interest shall be deemed to be paid in full upon conversion, rather than cancelled, extinguished or forfeited.

     (c) Securities surrendered for conversion by a Holder after the close of business on any Record Date but prior to the next Interest Payment Date must be accompanied by payment of an amount equal to the interest that shall be payable on the Securities; provided, however, that no such payment need be made (1) if the Company has specified a Fundamental Change Purchase Date that is after a Record Date and on or prior to the next Interest Payment Date, (2) with respect to any Securities surrendered for conversion following the Record Date for the payment of interest immediately preceding the Maturity Date or (3) only to the extent of overdue interest, if any overdue interest exists at the time of conversion with respect to such Securities.

     Section 4.02. Additional Shares.

     (a) Notwithstanding anything herein to the contrary, in the event a Holder elects to surrender its Securities for conversion in accordance with Article 5, at any time from, and including, the Effective Date of a Make Whole Adjustment Event to, and including, the close of business on the second Scheduled Trading Day immediately preceding the related Fundamental Change Purchase Date, or (in the case of a Make Whole Adjustment Event that does not also constitute a Fundamental Change) the 40th Scheduled Trading Day immediately following the Effective Date of such Make Whole Adjustment Event (such period, the “Make Whole Adjustment Event Period”), the Company will increase the Conversion Rate for the Securities surrendered for conversion by the applicable number of additional shares of Common Stock set forth in Schedule 4.02 (the “Additional Shares”), as described in this Section 4.02.

     (b) For purposes of determining the applicable number of Additional Shares pursuant to Schedule 4.02:

     (i) “Effective Date” shall mean the date the Make Whole Adjustment Event occurs or becomes effective; and

     (ii) “Stock Price” shall mean:

     (x) in the case of a Make Whole Adjustment Event described in clause (ii) of the definition of Change in Control in which the holders of

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Common Stock receive only Cash in such Make Whole Adjustment Event, the Cash amount paid or deemed paid per share of Common Stock in such Change of Control converted, if necessary, into U.S. dollars at the exchange rate in effect on such date; or

     (y) in the case of any other Make Whole Adjustment Event, the average of the last reported Closing Sale Price over the five consecutive Trading Day period ending on the Trading Day immediately preceding the Effective Date of such other Make Whole Adjustment Event.

     (c) If the Stock Price is between two Stock Price amounts in the table attached as Schedule 4.02 hereto, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Price amounts, based on a 365-day year.

     (d) If the Effective Date falls between two Effective Dates in the table attached as Schedule 4.02 hereto, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the two dates, based on a 365-day year.

     (e) No increase in the Conversion Rate shall be made pursuant to this Section 4.02 if the Stock Price (i) exceeds $36.00 per share (subject to adjustment) or (ii) is less than $7.96 per share (subject to adjustment).

     (f) The Stock Price amounts set forth in the first row of the table (i.e., column headers) in Schedule 4.02 hereto shall be adjusted as of any date on which the Conversion Price of the Securities is adjusted pursuant to Section 5.06. The Stock Price amounts set forth in the table shall be adjusted by the same adjustment factor applied to the Conversion Price pursuant to Section 5.06. The number of Additional Shares indicated in the table shall be adjusted by the inverse of the adjustment factor applied to the Conversion Price pursuant to Section 5.06.

     (g) In no event shall the Conversion Rate be increased to more than 125.616 shares per $1,000 principal amount of Securities (the “Maximum Conversion Rate”) pursuant to the events described in this Section 4.02. The Maximum Conversion Rate shall be adjusted as of any date on which the Conversion Price of the Securities is adjusted pursuant to Section 5.06, by the inverse of the adjustment factor applied to the Conversion Price pursuant to such section.

     (h) The Company shall use commercially reasonable efforts to notify Holders of the anticipated Effective Date of a Make Whole Adjustment Event not less than 10 Scheduled Trading Days prior to the anticipated Effective Date of such Make Whole Adjustment Event.

ARTICLE 5

CONVERSION

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     Section 5.01. Conversion Privilege.

     (a) Subject to the further provisions of this Article 5 and paragraph 6 of the Securities, a Holder may surrender a Security for conversion at any time prior to the close of business on the second Scheduled Trading Date immediately preceding the Maturity Date.

     (b) A Security in respect of which a Holder has delivered a Fundamental Change Purchase Notice pursuant to Section 3.01(c) exercising the option of such Holder to require the Company to purchase such Security may be converted only if such Fundamental Change Purchase Notice is withdrawn by a written notice of withdrawal delivered to a Paying Agent prior to 5:00 p.m. (New York City time) on the second Scheduled Trading Day immediately preceding the Fundamental Change Purchase Date in accordance with Section 3.02.

     (c) Securities may be surrendered for conversion only in principal amounts that are integral multiples of $1,000.

     Section 5.02. Conversion Procedure.

     (a) The right to convert any Security may be exercised only if such Holder shall (i) in the case of a Global Security, comply with the Applicable Procedures of the Depositary in effect at that time and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 4.01(c) and, if required, all transfer or similar taxes, if any, and (ii) in the case of a Certificated Security, (1) complete and manually sign and deliver an irrevocable notice to the Conversion Agent in the form on the reverse of such Certificated Security (or a facsimile thereof) (included in Exhibit A hereto) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Securities to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock, if any, to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Securities, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 4.01(c), (4) if required, furnish appropriate endorsements and transfer documents, and (5) if required, pay all transfer or similar taxes, if any, as set forth in Section 5.04. The Trustee (and if different, the relevant Conversion Agent) shall notify the Company of any conversion pursuant to this Article 5 on the date of such conversion. No Notice of Conversion with respect to any Securities may be surrendered by a Holder thereof if such Holder has also delivered a Fundamental Change Repurchase Notice to the Company in respect of such Securities and has not validly withdrawn such Fundamental Change Repurchase Notice in accordance with Article 3.

     If more than one Security shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Securities, if any, that shall be payable upon conversion shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof to the extent permitted thereby) so surrendered.

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     (b) A Security shall be deemed to have been converted (the “Conversion Date”) immediately prior to the close of business on the date that the Holder has complied with the requirements set forth in Section 5.02(a), if such requirements are satisfied by 11:00 a.m. (New York City time) on that date, or immediately prior to the close of business on the next succeeding Business Day if such requirements are satisfied after 11:00 a.m. (New York City time) on that date.

     (c) The Company shall cause the Holder of such Securities on the Conversion Date to become the holder of record of the deliverable number of shares of Common Stock constituting the Conversion Obligation on the Conversion Date. The Company shall issue or cause to be issued, and deliver to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary for the number of full shares of Common Stock to which such Holder shall be entitled in satisfaction of such Conversion Obligation.

     (d) In case any Security shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Security so surrendered, without charge to such Holder, a new Security or Securities in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Security.

     (e) Except as provided in Section 5.06, no adjustment shall be made for dividends on any shares issued upon the conversion of any Security as provided in this Article.

     (f) Upon the conversion of an interest in a Global Security, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Security as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of Securities effected through any Conversion Agent other than the Trustee.

     (g) The Person in whose name the certificate for any shares of Common Stock delivered upon conversion is registered shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date.

     (h) The Company shall not be required to deliver any Additional Shares pursuant to Section 4.02 hereof until the Effective Date of the Make Whole Adjustment Event causing such increase has occurred. The Company shall deliver the Additional Shares as soon as practicable, but in no event after the third Business Day after the later of:

     (i) the Conversion Date; and

     (ii) the Effective Date of the Make Whole Adjustment Event.

     Section 5.03. Fractional Shares.

     The Company shall not issue fractional shares of Common Stock upon conversion of Securities. In lieu thereof, the Company shall deliver Cash equal to the remainder multiplied by the Closing Sale Price of Common Stock on the relevant Conversion Date.

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     Section 5.04. Taxes on Conversion.

     If a Holder converts a Security, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon such conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name. The Conversion Agent may refuse to deliver the certificate representing the Common Stock being issued in a name other than the Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which shall be due because the shares are to be issued in a name other than the Holder’s name. Nothing herein shall preclude any tax withholding required by law or regulation.

     Section 5.05. Issuance of Common Stock Upon Conversion.

     (a) Subject to Section 5.02, upon any conversion of any Security, the Company shall deliver to converting Holders on the third Business Day immediately following the relevant Conversion Date (unless such Conversion Date occurs on or following August 1, 2014, in which case the Company shall make such delivery on the Maturity Date), in respect of each $1,000 principal amount of Securities being converted, the number of shares of Common Stock (the “Conversion Obligation”) equal to the then applicable Conversion Rate. The Company shall also deliver to each converting Holder of the Securities Cash in lieu of fractional shares of Common Stock as set forth pursuant to Section 5.03.

     (b) The Company shall, prior to the issuance of any Securities hereunder, and from time to time as may be necessary, reserve at all times and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, a sufficient number of shares of Common Stock deliverable upon conversion of all of the Securities.

     (c) All shares of Common Stock that may be issued upon conversion of the Securities shall be duly authorized, validly issued, fully paid and nonassessable and shall be free of any preemptive rights and free of any lien or adverse claim.

     (d) The Company shall endeavor to comply with all applicable securities laws regulating the offer and delivery of any Common Stock upon conversion of Securities and shall list or cause to have quoted such shares of Common Stock on each national or regional securities exchange or other over-the-counter market or such other market on which the Common Stock is then listed or quoted; provided, however, that, if the rules of such automated quotation system or exchange permit the Company to defer the listing of such Common Stock until the first conversion of the Securities into Common Stock in accordance with the provisions of this Indenture, the Company covenants to list such Common Stock issuable upon conversion of the Securities in accordance with the requirements of such automated quotation system or exchange at such time. Any Common Stock issued upon conversion of a Security hereunder which at the time of conversion was a Transfer Restricted Security shall also be a Transfer Restricted Security.

     (e) Notwithstanding anything herein to the contrary, nothing herein shall give to any Holder any rights as a creditor in respect of its right to conversion.

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     Section 5.06. Adjustment of Conversion Price.

     The conversion price as stated in paragraph 6 of the Securities (the “Conversion Price”) shall be adjusted from time to time by the Company as follows:

     (a) If the Company issues solely shares of Common Stock as a dividend or distribution on all or substantially all of the shares Common Stock, or if the Company subdivides or combine outstanding shares of Common Stock, the Conversion Price will be adjusted based on the following formula:

CP = CP0 ×	OS0
	OS

     where,

     CP₀ = the conversion price in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such subdivision or combination of Common Stock, as the case may be;

     CP = the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately after the open of business on the effective date of such subdivision or combination of Common Stock, as the case may be;

     OS₀ = the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such subdivision or combination of Common Stock, as the case may be; and

     OS = the number of shares of Common Stock outstanding immediately after such dividend or distribution, or immediately after the effective date of such subdivision or combination of Common Stock, as the case may be.

     Such adjustment shall become effective immediately after the opening of business on the Ex-Dividend Date for such dividend or distribution or the effective date for such subdivision or combination of Common Stock. If any dividend or distribution of the type described in this Section 5.06(a) is declared but not so paid or made, or the outstanding shares of Common Stock are not split or combined, as the case may be, the Conversion Price shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, or subdivide or combine the outstanding shares of Common Stock, as the case may be, to the Conversion Price that would then be in effect if such dividend, distribution, subdivision or combination of Common Stock had not been declared or announced.

     (b) If the Company distributes to all or substantially all holders of Common Stock any rights, options or warrants entitling them for a period of not more than 60 calendar days from the record date for such distribution to subscribe for or purchase shares of the Common Stock (or securities convertible into Common Stock), at a price per share (or a conversion price per share)

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less than the average of the Closing Sale Prices for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution, the Conversion Price will be decreased based on the following formula:

CP = CP0 ×	OS0 + Y
	OS0 + X

     where,

     CP₀ = the Conversion Price in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

     CP = the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such distribution;

     OS₀ = the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Dividend Date for such distribution;

     X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

     Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the average of the Closing Sale Prices over the 10 consecutive Trading Day period ending on, and including, the trading day immediately preceding the Ex-Dividend Date for such distribution.

     Such adjustment shall be successively made whenever any such rights, options or warrants are distributed and shall become effective immediately after the opening of business on the Ex-Dividend Date for each such distribution. To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Price shall be readjusted to the Conversion Price that would then be in effect had the adjustments made upon the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price that would then be in effect if such Ex-Dividend Date for such distribution had not been fixed.

     For purposes of this Section 5.06(b), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the Common Stock at less than the average of the Closing Sale Prices for each Trading Day in the applicable 10-consecutive Trading Day period, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors. In no event shall the Conversion Price be increased pursuant to this Section 5.06(b).

     (c) If the Company distributes shares of its Capital Stock, evidences of its indebtedness or other assets or property of the Company to all or substantially all holders of Common Stock other than (i) dividends or distributions (including subdivision of Common

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Stock) covered by Section 5.06(a) or Section 5.06(b), (ii) dividends or distributions paid exclusively in cash referred to in Section 5.06(d), (iii) Spin-Offs to which the provisions set forth below in this Section 5.06(c) shall apply, and (iv) distributions of rights to all or substantially all holders of Common Stock pursuant to the adoption of a shareholder rights plan, then, in each such case the Conversion Price shall be decreased based on the following formula:

CP = CP0 ×	SP0 - FMV
	SP0

     where,

     CP₀ = the Conversion Price in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

     CP = the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such distribution;

     SP₀ = the average of the Closing Sale Prices over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

     FMV = the Fair Market Value of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Stock as of the open of business on the Ex-Dividend Date for such distribution.

     If the then- Fair Market Value of the portion of the shares of Capital Stock, evidences of indebtedness or other assets or property so distributed applicable to one share of Common Stock is equal to or greater than the average of the Closing Sale Prices over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution, in lieu of the foregoing adjustment, adequate provisions shall be made so that each Holder of a Security shall have the right to receive on conversion in respect of each Security held by such Holder, in addition to the number of shares of Common Stock that such Holder is entitled to receive, the amount and kind of securities and assets such Holder would have received had such Holder already owned a number of shares of Common Stock equal to the Conversion Rate immediately prior to the record date for the distribution of the securities or assets.

     With respect to an adjustment pursuant to this Section 5.06(c) where there has been a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion Price will be decreased based on the following formula:

CP = CP0 ×	MP0
	FMV + MP0

     where,

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     CP₀ = the Conversion Price in effect immediately prior to the open of business on the Ex-Dividend Date for the Spin-Off;

     CP = the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for the Spin-Off;

     FMV = the average of the closing sale prices of the Capital Stock or similar equity interests distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Day period immediately following, and including, the Ex-Dividend Date for the Spin-Off (such period, the “Valuation Period”); and

     MP₀ = the average of the Closing Sale Price of the Common Stock over the Valuation Period.

     The adjustment to the Conversion Price under the preceding paragraph of this Section 5.06(c) shall be made immediately after the open of business on the day after the last day of the Valuation Period, but shall become effective as of the open of business on the Ex-Dividend Date for the Spin-Off. For purposes of determining the Conversion Price, in respect of any conversion during the 10 Trading Days commencing on the Ex-Dividend Date of any Spin-Off, references in the portion of this Section 5.06(c) related to Spin-Offs to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for such Spin-Off to, but excluding, the Conversion Date for such conversion.

     For purposes of this Section 5.06(c), Section 5.06(a) and Section 5.06(b), any dividend or distribution to which this Section 5.06(c) is applicable that also includes shares of Common Stock, or rights, options or warrants to subscribe for or purchase shares of Common Stock to which Section 5.06(a) or Section 5.06(b) applies (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of Capital Stock other than such shares of Common Stock or rights, options or warrants to which this Section 5.06(c) applies (and any Conversion Price adjustment required by this Section 5.06(c) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights, options or warrants (and any further Conversion Price adjustment required by Section 5.06(a) and Section 5.06(b) with respect to such dividend or distribution shall then be made), except (A) the Ex-Dividend Date of such dividend or distribution shall be substituted as “the Ex-Dividend Date,” “the Ex-Dividend Date relating to such distribution of such rights, options or warrants” and “the Ex-Dividend Date for such distribution” within the meaning of Section 5.06(a) and Section 5.06(b) and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such subdivision or share combination, as the case may be” within the meaning of Section 5.06(a) or “outstanding immediately prior to the Ex-Dividend Date for such distribution” within the meaning of Section 5.06(b).

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     In no event shall the Conversion Price be increased pursuant to this Section 5.06(c).

     (d) If the Company makes or pays any cash dividend or distribution to all or substantially all holders of outstanding Common Stock (other than distributions pursuant to Section 5.06(e) and any dividend or distribution in connection with the liquidation, dissolution or winding up on the Company), the applicable Conversion Price shall be decreased based on the following formula:

CP = CP0 ×	SP0 - C
	SP0

     where,

     CP₀ = the Conversion Price in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;

     CP = the Conversion Price in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;

     SP₀ = the average of the Closing Sale Prices for the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

     C = the amount in cash per share the Company pays or distributes to holders of Common Stock.

     If any dividend or distribution described in this Section 5.06(d) is declared but not so paid or made, the new Conversion Price shall again be readjusted to be the Conversion Price that would then be in effect if such dividend or distribution had not been declared.

     For the avoidance of doubt, for purposes of this Section 5.06(d), in the event of any reclassification of the Common Stock, as a result of which the Securities become convertible into more than one class of common stock, if an adjustment to the Conversion Price is required pursuant to this Section 5.06(d), references in this Section to one share of Common Stock or Closing Sale Prices of one share of Common Stock shall be deemed to refer to a unit or to the price of a unit consisting of the number of shares of each class of common stock into which the Securities are then convertible equal to the number of shares of such class issued in respect of one share of Common Stock in such reclassification. The above provisions of this paragraph shall similarly apply to successive reclassifications.

     In no event shall the Conversion Price be increased pursuant to this Section 5.06(d).

     (e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock and if the Cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Closing Sale Prices of the Common Stock over the 10 consecutive Trading-Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders

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or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Price shall be decreased based on the following formula:

CP = CP0 ×	OS0 × SP
	AC + (OS × SP)

     where,

     CP₀ = the Conversion Price in effect immediately prior to the open of business on the Trading Day next succeeding the Expiration Date;

     CP = the Conversion Price in effect immediately after the open of business on the Trading Day next succeeding the Expiration Date;

     AC = the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares purchased in such tender or exchange offer;

     OS₀ = the number of shares of Common Stock (including Class B common stock on an as converted basis) outstanding immediately prior to the time (the “Expiration Time”) such tender or exchange offer expires (prior to giving effect to such tender offer or exchange offer);

     OS = the number of shares of Common Stock (including Class B common stock on an as converted basis) outstanding immediately after the Expiration Time (after giving effect to such tender offer or exchange offer); and

     SP = the average of the Closing Sale Prices of Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date.

     Such adjustment under this Section 5.06(e) shall become effective at the opening of business on the Trading Day next succeeding the Expiration Date. For purposes of determining the Conversion Price, in respect of any conversion during the 10 Trading Days commencing on the Trading Day next succeeding the Expiration Date, references within this Section 5.06(e) to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the Expiration Date to, but excluding, the Conversion Date for such conversion. If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting any or all or any portion of such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made or had been made only in respect of the purchases that had been effected. In no event shall the Conversion Price be increased pursuant to this Section 5.06(e).

     (f) Notwithstanding this Section 5.06 or any other provision of this Indenture or the Securities, if any Conversion Price adjustment becomes effective, or any Ex-Dividend Date for

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any issuance, dividend or distribution (relating to a required Conversion Price adjustment) occurs on a Conversion Date, the Board of Directors shall make adjustments to the Conversion Price and the amount of cash or number of shares of Common Stock issuable upon conversion of the Securities, as the case may be, as are necessary or appropriate to effect the intent of this Section 5.06 and the other provisions of this Article 5 and to avoid unjust or inequitable results, as determined in good faith by the Board of Directors. Any adjustment made pursuant to this Section 5.06(f) shall apply in lieu of the adjustment or other term that would otherwise be applicable.

     (g) If the Company adjusts the Conversion Price pursuant to the above provisions, the Company will deliver to the Conversion Agent a certificate setting forth the Conversion Price, detailing the calculation of the Conversion Price and describing the facts upon which the adjustment is based. In addition, the Company will issue a press release containing the relevant information and make the press release available on its website.

     Section 5.07. No Adjustment.

     (a) All calculations and other determinations under this Article 5 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000) of a share. Notwithstanding the provisions of Section 5.06, no adjustment in the Conversion Rate shall be required unless the adjustment would result in a change of at least 1% in the Conversion Price as last adjusted; provided, however, that any adjustments which by reason of this Section 5.07 are not required to be made shall be carried forward and taken into account in any subsequent adjustment, regardless of whether the aggregate adjustment is less than 1%, (i) upon any conversion of Securities, (ii) upon any required purchases of the Securities in connection with a fundamental change, and (iii) with respect to any conversions occurring after August 15, 2014, as the case may be.

     (b) No adjustment to the Conversion Rate shall be required in respect of any transaction in which Holders participate (as a result of holding the Securities, at the same time as holders of the Common Stock participate) as if such Holders held the number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount of Securities held by such Holder, divided by 1,000, without conversion of the Securities.

     (c) No adjustment to the Conversion Rate shall be required upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on Company’s securities and the investment of additional optional amounts in shares of Common Stock under any plan;

     (d) No adjustment to the Conversion Rate shall be required upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of, or assumed by, us or any of our subsidiaries;

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     (e) No adjustment to the Conversion Rate shall be required upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in Section 5.07(d) and outstanding as of the date the Securities were first issued.

     (f) No adjustment to the Conversion Rate shall be required for a change in the par value of the Common Stock.

     (g) No adjustment to the Conversion Rate shall be required for accrued and unpaid interest, if any.

     Section 5.08. Adjustment for Tax Purposes.

     The Company shall be entitled to make such reductions in the Conversion Price, for the remaining term of the Securities or any shorter term, in addition to those required by Section 5.06, as the Board of Directors shall determine to be advisable in order to avoid or diminish any tax to any holders of shares of Common Stock or rights to purchase Common Stock resulting from any stock dividends, subdivisions of shares, distributions of rights or warrants to purchase or subscribe for stock or securities, distributions of securities convertible into or exchangeable for stock hereafter made by the Company to its stockholders or from any event treated as such for income tax purposes.

     Section 5.09. Temporary Reduction of Conversion Price.

     To the extent permitted by applicable law, the Company from time to time may reduce the Conversion Price by any amount for any period of time if the period is at least 20 Business Days, the reduction is irrevocable during such period, and the Board of Directors shall have made a determination that such reduction would be in the best interest of the Company. Whenever the Conversion Price is reduced pursuant to the preceding sentence, the Company shall provide notice of any reduction in the Conversion Price to the Holders in the manner provided in Section 13.02, with a copy to the Trustee and Conversion Agent, at least 15 days prior to the date such reduced Conversion Price takes effect, and such notice shall state the reduced Conversion Price and the period during which it will be in effect.

     Section 5.10. Notice of Certain Transactions.

     In the event that:

          (1) the Company takes any action which would require an adjustment in the Conversion Price;

          (2) the Company consolidates or enters into a binding share exchange with, merges with or into, or transfers all or substantially all of its property and assets to, another corporation and shareholders of the Company must approve the transaction; or

          (3) there is a dissolution or liquidation of the Company,

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the Company shall mail to Holders and file with the Trustee a notice stating the proposed record or effective date, as the case may be, and mail the notice at least 10 days before such date; provided, further, that upon occurrence of an event referred to in clause (1) of this Section 5.10, the Company shall file with the Trustee (and deliver a copy to the Conversion Agent) an Officers’ Certificate briefly stating the facts requiring the adjustment and the manner of computing it and promptly mail to Holders a notice of the adjustment. Failure to mail such notice or any defect therein shall not affect the validity of any transaction referred to in clause (1), (2) or (3) of this Section 5.10; provided, however, that unless and until the Trustee and the Conversion Agent shall have received an Officers’ Certificate setting forth an adjustment of the Conversion Price in connection with the event referred to in clause (1), the Trustee may assume without inquiry that the Conversion Price has not been adjusted and that the last Conversion Price of which it has knowledge remains in effect.

     Section 5.11. Effect of Reclassification, Consolidation, Merger, Binding Share Exchange or Sale on Conversion Privilege.

     If any of the following shall occur, namely: (a) any reclassification or change of shares of Common Stock issuable upon conversion of the Securities (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination, or any other change for which an adjustment is provided in Section 5.06); (b) any consolidation, merger, binding share exchange or combination to which the Company is a party other than a merger or binding share exchange in which the Company is the continuing corporation and which does not result in any reclassification of, or change (other than in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination) in, outstanding shares of Common Stock; or (c) any sale, assignment, conveyance, transfer, lease or other disposition as an entirety or substantially as an entirety of the property and assets of the Company, directly or indirectly, to any person, then the Company, or such successor, purchasing or transferee corporation, as the case may be, shall, as a condition precedent to such reclassification, change, combination, consolidation, merger, binding share exchange, sale, assignment, conveyance, transfer, lease or other disposition, execute and deliver to the Trustee a supplemental indenture providing that the Holder of each Security then outstanding shall have the right to convert such Security into the kind and amount of shares of stock and other securities and property (including Cash) receivable upon such reclassification, change, combination, consolidation, merger, binding share exchange, sale, assignment, conveyance, transfer, lease or other disposition by a holder of the number of shares of Common Stock deliverable upon conversion of such Security immediately prior to such reclassification, change, combination, consolidation, merger, binding share exchange, sale, assignment, conveyance, transfer, lease or other disposition (the “Reference Property”). For purposes of the foregoing, if holders of the Common Stock receive or have the right to receive more than one form of consideration in connection with such reclassification, change, combination, consolidation, merger, binding share exchange, sale, assignment, conveyance, transfer, lease or other disposition, then the Reference Property shall be based on weighted average of elections as to consideration made by holders of the Common Stock (such as pro rata reductions made to any portion of consideration payable). If the Common Stock is replaced by Reference Property, thereafter all references to Common Stock in this Indenture shall be references to such Reference Property, except as the context otherwise requires. The determination of the Reference Property shall apply to all of the Securities and the Company shall notify the Trustee of the composition

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of the Reference Property promptly after it is determined. Such supplemental indenture shall provide for adjustments of the Conversion Price which shall be as nearly equivalent as may be practicable to the adjustments of the Conversion Price provided for in this Article 5. If, in the case of any such consolidation, merger, binding share exchange, combination, sale, assignment, conveyance, transfer, lease or other disposition, the stock or other securities and property (including Cash) receivable thereupon by a holder of Common Stock include shares of stock or other securities and property of a person other than the successor, purchasing or transferee corporation, as the case may be, in such consolidation, merger, binding share exchange, combination, sale, assignment, conveyance, transfer, lease or other disposition, then such supplemental indenture shall also be executed by such other person and shall contain such additional provisions to protect the interests of the Holders of the Securities as the Board of Directors shall reasonably consider necessary by reason of the foregoing. The provisions of this Section 5.11 shall similarly apply to successive reclassifications, changes, combinations, consolidations, mergers, binding share exchanges, sales, assignments, conveyances, transfers, leases and other dispositions. The Trustee has no duty to determine whether a supplemental indenture under this Section 5.11 need be entered into.

     In the event the Company shall execute a supplemental indenture pursuant to this Section 5.11, the Company shall promptly file with the Trustee (x) an Officers’ Certificate briefly stating the reasons therefor, the kind or amount of Reference Property receivable by Holders of the Securities upon the conversion of their Securities after any such reclassification, change, combination, consolidation, merger, binding share exchange, sale, assignment, conveyance, transfer, lease or other disposition, any adjustment to be made with respect thereto and that all conditions precedent have been complied with and (y) an Opinion of Counsel that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Holders.

     Section 5.12. Disclaimer.

     Nether the Trustee nor any Conversion Agent (other than the Company or an Affiliate of the Company) shall have any duty to determine when an adjustment under this Article 5 should be made, how it should be made or what such adjustment should be, but may accept as conclusive evidence of that fact or the correctness of any such adjustment, and shall be protected in relying upon, an Officers’ Certificate, including the Officers’ Certificate with respect thereto, which the Company is obligated to file with the Trustee (and to deliver a copy thereof to the Conversion Agent) pursuant to Section 5.10. Neither the Trustee nor any Conversion Agent (other than the Company or an Affiliate of the Company) makes any representation as to the validity or value of any securities or assets issued upon conversion of Securities, and neither shall be responsible for the Company’s failure to comply with any provisions of this Article 5.

     The Trustee shall not be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture executed pursuant to Section 5.11, but may accept as conclusive evidence of the correctness thereof, and shall be fully protected in relying upon, the Officers’ Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to Section 5.11.

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     Section 5.13. Limitation on Adjustments.

     (a) The Company shall not take any action that would result in an adjustment pursuant to the foregoing provisions in this Article 5 without complying with the shareholder approval rules of the NASDAQ Stock Market (including NASDAQ Market Rule 5635), or any similar rules of any other stock exchange on which the Common Stock may be listed, if applicable.

     (b) The Company shall not take any action that would result in an adjustment pursuant to the foregoing provisions in this Article 5 if that adjustment would reduce the Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Securities.

ARTICLE 6

[Reserved]

ARTICLE 7

COVENANTS

     Section 7.01. Payment of Securities.

     The Company shall promptly make all payments in respect of the Securities on the dates and in the manner provided in the Securities and this Indenture. An installment of principal or interest shall be considered paid on the date it is due if the Paying Agent (other than the Company) holds by 11:00 a.m. (New York City time) on that date money, deposited by the Company or an Affiliate thereof, sufficient to pay such installment. The Company shall (in immediately available funds), to the fullest extent permitted by law, pay interest on overdue principal and overdue installments of interest at the rate borne by the Securities per annum.

     Payment of the principal of and interest on the Securities shall be made at the office or agency of the Company maintained for that purpose in New York, New York (which shall initially be The Bank of New York Mellon), or at the Corporate Trust Office of the Trustee in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address appears in the Register; provided, further, that a Holder holding an aggregate principal amount of the Securities in excess of $1,000,000 shall be paid by wire transfer in immediately available funds at the election of such Holder if such Holder has provided wire transfer instructions to the Trustee and the Paying Agent at least 10 Business Days prior to the payment date; provided, further, that all payments made to the Depositary or its nominee shall be made by wire transfer in immediately available funds.

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     Section 7.02. SEC Reports.

     So long as any Securities are outstanding, the Company shall (i) file with the SEC within the time periods prescribed by its rules and regulations and (ii) furnish to the Trustee and the Holders of the Securities within 15 days after the date on which the Company would be required to file the same with the SEC pursuant to its rules and regulations (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), all quarterly and annual financial information required to be contained in Forms 10-Q and 10-K and, with respect to the annual consolidated financial statements only, a report thereon by the Company’s independent auditors.

     Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates). The Company shall not be required to file any report or other information with the SEC if the SEC does not permit such filing, although such reports shall be furnished to the Trustee. Documents filed by the Company with the SEC via the SEC’s EDGAR system (or any successor thereto) will be deemed furnished to the Trustee and the Holders of the Securities as of the time such documents are filed via EDGAR (or such successor). The Trustee is hereby directed, which direction may be changed by the Company at any time, upon a three Business Day prior written notice, to access the EDGAR system for purposes of retrieving the reports so filed. The Trustee shall have no duty to search for or obtain any electronic or other filings that the Company makes with the SEC, regardless of whether such filings are periodic, supplemental or otherwise.

     Section 7.03. No Resale of Restricted Securities.

     During the period of one year after the last original issuance of the Securities, the Company shall not, and shall not permit any of its Affiliates to, resell any of the Securities that constitute Transfer Restricted Securities that have been reacquired by any of them. The Securities will be issued with a restricted CUSIP number. Until such time as the Company notifies the Trustee to remove the Restricted Security Legend from the Securities, the restricted CUSIP will be the CUSIP number for the Securities. At such time as the Company notifies the Trustee to remove the Restricted Security Legend from the Securities, such Restricted Security Legend will be deemed removed from any Global Securities and an unrestricted CUSIP number for the Securities will be deemed to be the CUSIP number for the Securities.

     Section 7.04. Compliance Certificates.

     The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company (beginning with the fiscal year ending December 31, 2009), an Officers’ Certificate as to the signer’s knowledge of the Company’s compliance with all conditions and covenants on its part contained in this Indenture and stating whether or not the signer knows of any default or Event of Default. If such signer knows of such a default or Event of Default, the Officers’ Certificate shall describe the default or Event of Default and the efforts to remedy the same. For the purposes of this Section 7.04, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture.

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     The Company shall deliver to the Trustee, as soon as possible and in any event within thirty days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate setting forth the details of such Event of Default or default and the action which the Company proposes to take with respect thereto.

     Section 7.05. Additional Interest Notice.

     In the event that the Company is required to pay Additional Interest to Holders of Securities pursuant to Sections 7.10 or 9.02(b) hereof, the Company shall provide a direction or order in the form of a written notice (“Additional Interest Notice”) to the Trustee (and if the Trustee is not the Paying Agent, the Paying Agent) of the Company’s obligation to pay Additional Interest no later than ten Business Days prior to the proposed payment date set for the payment of Additional Interest, and the Additional Interest Notice shall set forth the amount of Additional Interest to be paid by the Company on such payment date and direct the Trustee (or, if the Trustee is not the Paying Agent, the Paying Agent) to make payment to the extent it receives funds from the Company to do so. The Trustee shall not at any time be under any duty or responsibility to any holder of Securities to determine whether Additional Interest is payable, or with respect to the nature, extent, or calculation of the amount of Additional Interest owed, or with respect to the method employed in such calculation of Additional Interest.

     Section 7.06. Rule 144A Information Requirements.

     For so long as any of the Securities or the Common Stock issuable upon the conversion thereof are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act (or any successor provision), the Company covenants and agrees that it shall, during any period in which it is not subject to and in compliance with Section 13 or 15(d) under the Exchange Act, upon the request of any Holder or beneficial holder of the Securities or any Common Stock issued upon conversion thereof bearing a Restricted Security Legend or Restricted Stock Legend, as the case may be, make available to such Holder or beneficial holder of such Securities or any Common Stock issued upon conversion thereof in connection with any sale thereof and any prospective purchaser of Securities or such Common Stock designated by such Holder or beneficial holder, the information required pursuant to Rule 144A(c)(2) under the Securities Act and it shall take such further action as any Holder or beneficial holder of such Securities or such Common Stock may reasonably request, all to the extent required from time to time to enable such Holder or beneficial holder to sell its Securities or Common Stock without registration under the Securities Act within the limitation of the exemption provided by Rule 144A, as such Rule may be amended from time to time. Upon the request of any Holder or any beneficial holder of the Securities or such Common Stock, the Company shall deliver to such Holder a written statement as to whether such Holder and prospective purchaser have complied with such requirements.

     Section 7.07. Further Instruments and Acts.

     Upon request of the Trustee, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

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     Section 7.08. Maintenance of Corporate Existence.

     Subject to Article 8, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

     Section 7.09. Stay, Extension and Usury Laws.

     The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of, or premium, if any, or interest on, the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

     Section 7.10. Additional Interest Payable Upon Failure to Report or to Delegend.

     (a) If at any time during the six months to one-year period following the last original issuance date of the Securities, the Company fails to timely file any document or report that it is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act (other than any Current Report on Form 8-K), as applicable, or the Securities are not otherwise freely tradable by the Holders, other than Holders who are Affiliates of the Company (as a result of restrictions imposed pursuant to U.S. securities law or the terms of this Indenture or the Securities), the Company shall make a one time payment in respect of the Securities in the amount of 0.50% of their principal amount, provided that the Company will have 14 days, in the aggregate, to cure all such missed filings.

     (b) Unless:

     (i) the Restricted Security Legend on the Securities has been removed, and

     (ii) the Securities are freely tradable pursuant to Rule 144 under the Securities Act without volume restrictions by Holders other than Affiliates of the Company (without restrictions pursuant to U.S. securities law or the terms of this Indenture or the Securities)

as of the 375th day after the last date of original issuance of the Securities, the Company shall either (i) pay Additional Interest on the Securities at an annual rate equal to 0.50% of the aggregate principal amount of the outstanding Securities until the Securities are freely tradable as described above or pursuant to the next clause or (y) designate an effective shelf registration statement useable for the resale of such Securities and any Common Stock issuable upon conversion of the Securities. So long as a condition described in either (i) or (ii) of this Section 7.10(b) continues, the Company shall pay such Additional Interest in Cash on May 1 and November 1 of each year to the Person who is the Holder of record of the Securities on the immediately preceding April 15 and October 15. When such registration default ceases to continue, accrued and unpaid Additional Interest through the date of cessation shall be paid in

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Cash on the subsequent Interest Payment Date to the record Holder. In no event shall Additional Interest accrue at an annual rate in excess of 0.50%, in the aggregate, pursuant to this Section 7.10 and Section 9.02(b).

ARTICLE 8

CONSOLIDATION, MERGER, BINDING SHARE EXCHANGE, CONVEYANCE,
TRANSFER OR LEASE

     Section 8.01. Company May Consolidate, etc., only on Certain Terms.

     The Company shall not consolidate with, enter into a binding share exchange or merge with or into another Person or sell, assign, convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, unless:

     (1) in case the Company shall consolidate or enter into a binding share exchange with, or merge with or into, another Person or sell, assign, convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or binding share exchange or with or into which the Company is merged or the Person which acquires by sale, assignment, conveyance, transfer, lease, or which otherwise acquires, the properties and assets of the Company substantially as an entirety shall be a corporation organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed, and the conversion rights shall be provided for in accordance with Article 5, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the Person (if other than the Company) formed by such consolidation, binding share exchange or into which or with whom the Company shall have been merged or by the Person which shall have acquired the Company’s assets;

     (2) immediately after giving effect to such transaction, no Event of Default, and no default which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

     (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each in a form reasonably satisfactory to the Trustee and stating that such consolidation, merger with or into another person, binding share exchange, sale, assignment, conveyance, transfer, lease or other disposal and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture complies with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

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     Section 8.02. Successor Substituted.

     Upon any consolidation of the Company or binding share exchange with, or merger of the Company into or with, any other Person or any sale, assignment, conveyance, transfer, lease or other disposal of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor Person formed by such consolidation or binding share exchange or into which or with whom the Company is merged or to which such assignment, sale, conveyance, transfer, lease or other disposal is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE 9

DEFAULT AND REMEDIES

     Section 9.01. Events of Default.

     An “Event of Default” with respect to Securities shall occur if:

     (a) the Company defaults in the payment of any principal of any Security when the same becomes due and payable (whether at maturity, on a Fundamental Change Purchase Date or otherwise);

     (b) the Company defaults in the payment of Cash and the delivery of shares of Common Stock owing upon conversion of any Security (including any Additional Shares), within the time period required under Article 5;

     (c) the Company defaults in the payment of interest (including any Additional Interest) when the same becomes due and payable and the default continues for a period of 30 days;

     (d) The Company fails to perform or comply with any of its other covenants or agreements contained in the Securities or in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is specifically dealt with in clauses (a), (b) or (c) of this Section 9.01) and the default continues for 60 days after notice is given as specified below;

     (e) the Company defaults in the payment of the purchase price of any Security when the same becomes due and payable;

     (f) the Company fails to provide on a timely basis written notice of a Fundamental Change as required by Section 3.01(b);

     (g) any indebtedness for money borrowed by the Company, or any of the Significant Subsidiary of the Company (or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary), in an outstanding principal amount, individually or in the aggregate, in

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excess of $5.0 million is not paid at final maturity (or when otherwise due) or is accelerated, and such indebtedness is not discharged (or such default in payment or acceleration is not cured or rescinded) within 30 days after written notice as provided in this Indenture;

     (h) the Company or any Significant Subsidiary of the Company (or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary) fails to pay one or more final and non-appealable judgments entered by a court or courts of competent jurisdiction, the aggregate uninsured or unbonded portion of which is in excess of $5.0 million, if the judgments are not paid, discharged or stayed within 30 days;

     (i) the Company or any Significant Subsidiary of the Company, pursuant to or within the meaning of any Bankruptcy Law:

     (i) commences a voluntary case or proceeding;

     (ii) consents to the entry of an order for relief against it in an involuntary case or proceeding;

     (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property; or

     (iv) makes a general assignment for the benefit of its creditors; or

     (j) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

     (i) is for relief against the Company or any Significant Subsidiary of the Company in an involuntary case or proceeding;

     (ii) appoints a Custodian of the Company or any Significant Subsidiary of the Company for all or substantially all of the property of the Company or any such Significant Subsidiary; or

     (iii) orders the liquidation of the Company or any Significant Subsidiary of the Company;

and in each case the order or decree remains unstayed and in effect for 60 consecutive days.

     The term “Bankruptcy Law” means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

     (k) A default under clause (d) above is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding notify the Company and the Trustee, in writing of the default, and the Company does not cure the default within 60 days after receipt of such notice. The notice given

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pursuant to this Section 9.01 must specify the default, demand that it be remedied and state that the notice is a “Notice of Default.” When any default under this Section 9.01 is cured, it ceases.

     (l) The Trustee shall not be charged with knowledge of any Event of Default unless written notice thereof shall have been given to a Trust Officer at the Corporate Trust Office of the Trustee by the Company, a Paying Agent, any Holder or any agent of any Holder.

     Section 9.02. Acceleration.

     (a) If an Event of Default (other than an Event of Default specified in clause (i) or (j) of Section 9.01) occurs and is continuing with respect to any Securities, the Trustee may, by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may, by notice to the Company and the Trustee, declare all unpaid principal to the date of acceleration on the Securities then outstanding (if not then due and payable) to be due and payable upon any such declaration, and the same shall become and be immediately due and payable. If an Event of Default specified in clause (i) or (j) of Section 9.01 occurs, all unpaid principal of the Securities then outstanding shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may rescind an acceleration of Securities and its consequences if (a) all existing Events of Default, other than the nonpayment of the principal of the Securities which has become due solely by such declaration of acceleration, have been cured or waived; (b) interest which has become due otherwise than by such declaration of acceleration, has been paid; (c) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (d) all payments due to the Trustee and any predecessor Trustee under Section 10.07 have been made. No such rescission shall affect any subsequent default or impair any right consequent thereto.

     (b) Notwithstanding anything in the Indenture to the contrary, if the Company so elects, the sole remedy for any failure comply with Section 7.02 hereof shall, for 180 days following the occurrence of such an Event of Default, be limited to the payment of Additional Interest as provided in the following sentence. If the Company fails to comply with Section 7.02 hereof to file periodic or other reports, the Company shall pay Additional Interest to all Holders at a rate per annum equal to 0.50% of the principal amount of the Securities to, but not including, the 181st day thereafter (or, if applicable, the earlier date on which such Event of Default is waived). In no event shall Additional Interest accrue at an annual rate in excess of 0.50%, in the aggregate, pursuant to Section 7.10 hereof and this Section 9.02(b). If the Event of Default is continuing on the 181st day after an Event of Default relating to a failure to comply with Section 7.02 first occurs, the Securities shall be subject to acceleration as provided in Section 9.02(a) hereof. All accrued and unpaid Additional Interest arising under this paragraph, if any, shall be paid in arrears in Cash to Holders of the Securities by the Company on the Interest Payment Date on which interest in respect of the Securities for the same accrual period is paid, to the Holders receiving such interest. The provisions of this Indenture described in this paragraph shall not affect the rights of the Holders in the event of the occurrence of any other Events of Default.

     In order to elect to pay additional interest as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the failure to comply with Section 7.02 in

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accordance with the immediately preceding paragraph, the Company shall notify all Holders and the Trustee and Paying Agent of such election on or before the close of business on the fifth Business Day after the date on which such Event of Default otherwise would occur. Upon a failure by the Company to timely give such notice or pay additional interest, the Securities will be immediately subject to acceleration as otherwise provided in this Section 9.02.

     Section 9.03. Other Remedies.

     If an Event of Default with respect to Securities occurs and is continuing, the Trustee may, but shall not be obligated to, pursue any available remedy by proceeding at law or in equity to collect the payment of the principal of or any interest on, the Securities or to enforce the performance of any provision of the Securities or this Indenture.

     The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

     Section 9.04. Waiver of Defaults and Events of Default.

     Subject to Section 9.02, 9.07 and 12.02, the Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may waive an existing default or Event of Default and its consequence, except a default or Event of Default in the payment of the principal of or interest on, any Security, a failure by the Company to pay the Cash and deliver the shares of Common Stock owing upon conversion of any Security (including Additional Shares, if any) within the time period required by this Indenture or any default or Event of Default in respect of any provision of this Indenture or the Securities which, under Section 12.02, cannot be modified or amended without the consent of the Holder of each Security affected. When a default or Event of Default is waived, it is cured and ceases.

     Section 9.05. Control by Majority.

     The Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of another Holder or the Trustee or that may involve the Trustee in personal liability unless the Trustee is offered indemnity satisfactory to it; provided, however, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

     Section 9.06. Limitations on Suits.

     A Holder of a Security may not pursue any remedy with respect to this Indenture or the Securities (except actions for payment of overdue principal, premium, if any, or interest or for the conversion of the Securities pursuant to Article 5) unless:

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     (a) the Holder personally gives to the Trustee written notice of a continuing Event of Default;

     (b) the Holders of at least 25% in aggregate principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy;

     (c) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;

     (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

     (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Securities then outstanding.

     A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder, it being understood that the Trustee does not have an affirmative duty to ascertain whether or not a Holder’s actions or forbearances constitute such prejudicial use.

     Section 9.07. Rights of Holders to Receive Payment and to Convert.

     Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of the principal of and interest on the Security, on or after the respective due dates expressed in the Security and this Indenture, to convert such Security in accordance with Article 5 and to bring suit for the enforcement of any such payment on or after such respective dates or the right to convert, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.

     Section 9.08. Collection Suit by Trustee.

     If an Event of Default in the payment of principal, premium, if any, or interest specified in clause (a) or (b) of Section 9.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or another obligor on the Securities for the whole amount of principal and accrued interest remaining unpaid, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

     Section 9.09. Trustee May File Proofs of Claim.

     The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor on the Securities), its creditors or its property and shall be entitled and empowered to collect and receive any money or other property payable or deliverable on any such claims and

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to distribute the same, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 10.07, and to the extent that such payment of the reasonable compensation, expenses, disbursements and advances in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other property which the Holders may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to, or, on behalf of any Holder, to authorize, accept or adopt, any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

     Section 9.10. Priorities.

     If the Trustee collects any money pursuant to this Article 9, it shall pay out the money in the following order:

     First, to the Trustee for amounts due under Section 10.07;

     Second, to Holders for amounts due and unpaid on the Securities for principal and interest ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

     Third, the balance, if any, to the Company.

     The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 9.10.

     Section 9.11. Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses (whether incurred before trial, at trial or on appeal or in any bankruptcy, arbitration or other administrative proceeding), against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 9.11 does not apply to a suit made by the Trustee, a suit by a Holder pursuant to Section 9.07 or a suit by Holders of more than 10% in aggregate principal amount of the Securities then outstanding.

ARTICLE 10

TRUSTEE

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     Section 10.01. Duties of Trustee.

     (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

     (b) Except during the continuance of an Event of Default:

     (i) the Trustee need perform only those duties as are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture or the TIA against the Trustee; and

     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, without investigation as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture but need not verify the content thereof. The Trustee, however, shall examine any certificates and opinions which by any provision hereof are specifically required to be delivered to the Trustee to determine whether or not they conform to the requirements of this Indenture, but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein.

     (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

     (i) this paragraph does not limit the effect of subsection (b) of this Section 10.01;

     (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

     (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 9.02, 9.04 or 9.05.

     (d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers unless the Trustee shall have received adequate indemnity in its opinion against potential costs and liabilities incurred by it relating thereto.

     (e) Every provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b), (c) and (d) of this Section 10.01.

     (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

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     Section 10.02. Rights of Trustee.

     Subject to Section 10.01:

     (a) The Trustee may rely conclusively on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both, which shall conform to Section 13.04(b). The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel.

     (c) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, or independent contractors and shall not be responsible for any misconduct or negligence on the part of any agent, attorney or independent contractor appointed with due care.

     (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers.

     (e) The Trustee may consult with counsel of its selection, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection in respect of any such action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

     (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

     (g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company, and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

     (h) The Trustee shall not be deemed to have knowledge of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office, and such notice references the Securities and this Indenture. The Trustee shall not be charged with the knowledge of the Company’s obligation to pay Additional Interest, or the cessation of such obligation, unless the Trustee receives written notice thereof from the Company or any Holder.

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     (i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder (including, but not limited to, the Paying Agent or Conversion Agent).

     (j) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficiently evidenced by a written order signed by one Officer of the Company.

     (k) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

     (l) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

     Section 10.03. Monies Held in Trust.

     Subject to the provisions of Section 11.03, all monies and properties received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed in writing from time to time by the Company and the Trustee.

     Section 10.04. Trustee’s Disclaimer.

     The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement herein or in the Securities or any other document in connection with the sale of the Securities or pursuant to this Indenture other than its certificate of authentication.

     Section 10.05. Notice of Default or Events of Default.

     If a default or an Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Holder notice of the default or Event of Default within 90 days after it becomes known to the Trustee. However, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of Holders, except in the case of a default or an Event of Default in payment of the principal of or interest on any Security, including the failure to make Cash payments due upon conversion.

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     Section 10.06. Reports by Trustee to Holders.

     If such report is required by TIA Section 313, within 60 days after each May 1, beginning with the May 1 following the date of this Indenture, the Trustee shall mail to each Holder a brief report dated as of such May 1 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2) and (c).

     A copy of each report at the time of its mailing to Holders shall be mailed to the Company and filed with the SEC and each stock exchange, if any, on which the Securities are listed. The Company shall notify the Trustee whenever the Securities become listed on any stock exchange or listed or admitted to trading on any quotation system and any changes in the stock exchanges or quotation systems on which the Securities are listed or admitted to trading and of any delisting thereof.

     Section 10.07. Compensation and Indemnity.

     The Company shall pay to the Trustee from time to time such compensation (as agreed to from time to time by the Company and the Trustee in writing) for its services (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust). The Company shall reimburse the Trustee upon request for all reasonable disbursements, expenses and advances incurred or made by it. Such expenses may include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

     The Company shall indemnify the Trustee or any predecessor Trustee (which for purposes of this Section 10.07 shall include its officers, directors, employees and agents) for, and hold it harmless against, any and all loss, claim, damage, liability or expense, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), including reasonable legal fees and expenses, incurred by it in connection with the acceptance or administration of its duties under this Indenture or any action or failure to act as authorized or within the discretion or rights or powers conferred upon the Trustee hereunder, including the reasonable costs and expenses of the Trustee and its counsel in defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Trustee shall notify the Company promptly of any claim asserted against the Trustee for which it may seek indemnity. The Company need not pay for any settlement without its written consent, which shall not be unreasonably withheld.

     The Company need not reimburse the Trustee for any expense or indemnify it against any loss or liability incurred by it resulting from its gross negligence or bad faith.

     To secure the Company’s payment obligations in this Section 10.07, the Trustee shall have a lien prior to the Securities as to all money or property held or collected by the Trustee for any amount owing it or any predecessor Trustee pursuant to this Section 10.07, except such money or property held in trust for the benefit of holders of particular Securities. The obligations of the Company under this Section 10.07 shall survive the satisfaction and discharge of this Indenture or the resignation or removal of the Trustee.

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     When the Trustee incurs expenses or renders services after an Event of Default specified in clause (i) or (j) of Section 9.01 occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section shall survive the termination of this Indenture.

     Section 10.08. Replacement of Trustee.

     The Trustee may resign by so notifying the Company. The Holders of a majority in aggregate principal amount of the Securities then outstanding may remove the Trustee by so notifying the Trustee and may, with the Company’s written consent, appoint a successor Trustee. The Company may remove the Trustee if:

     (a) the Trustee fails to comply with Section 10.10;

     (b) the Trustee is adjudged a bankrupt or an insolvent;

     (c) a receiver or other public officer takes charge of the Trustee or its property; or

     (d) the Trustee becomes incapable of acting.

     If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. The resignation or removal of a Trustee shall not be effective until a successor Trustee shall have delivered the written acceptance of its appointment as described below.

     If a successor Trustee does not take office within 45 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of 10% in principal amount of the Securities then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee at the expense of the Company.

     If the Trustee fails to comply with Section 10.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall, upon payment of any fees and expenses due and owing to it hereunder, transfer all property held by it as Trustee to the successor Trustee and be released from its obligations (exclusive of any liabilities that the retiring Trustee may have incurred while acting as Trustee) hereunder, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder.

     A retiring Trustee shall not be liable for the acts or omissions of any successor Trustee after its succession.

     Notwithstanding replacement of the Trustee pursuant to this Section 10.08, the Company’s obligations under Section 10.07 shall continue for the benefit of the retiring Trustee.

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     Section 10.09. Successor Trustee by Merger, etc.

     If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets (including the administration of this Indenture) to, another corporation, the resulting, surviving or transferee corporation, without any further act, shall be the successor Trustee, provided such transferee corporation shall qualify and be eligible under Section 10.10. Such successor Trustee shall promptly mail notice of its succession to the Company and each Holder.

     Section 10.10. Eligibility; Disqualification.

     The Trustee shall always satisfy the requirements of paragraphs (1), (2) and (5) of TIA Section 310(a). The Trustee (or its parent holding company) shall have a combined capital and surplus of at least $50,000,000. If at any time the Trustee shall cease to satisfy any such requirements, it shall resign immediately in the manner and with the effect specified in this Article 10. The Trustee shall be subject to the provisions of TIA Section 310(b). Nothing herein shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA Section 310(b).

     Section 10.11. Preferential Collection of Claims Against Company.

     The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

     Section 10.12. Trustee or Agents May Hold Securities

     The Trustee, any Paying Agent, any Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 10.10 and 10.11, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Registrar or such other agent.

ARTICLE 11

SATISFACTION AND DISCHARGE

     Section 11.01. Satisfaction and Discharge.

     (a) This Indenture shall cease to be of further effect, and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

     (i) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07 and (ii) Securities for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company as provided in Section 11.03) have been delivered to the Trustee for cancellation;

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     (ii) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

     (iii) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 10.07 shall survive.

     (b) The Company may discharge its obligations to pay principal of and interest on the Securities when all Securities not theretofore delivered to the Trustee for cancellation have become due and payable and the Company has irrevocably, subject to the limitations set forth in the following sentence, deposited or caused to be irrevocably, subject to the limitations set forth in the following sentence, deposited with the Trustee or a Paying Agent (other than the Company or any of its Affiliates) as trust funds in trust for such purpose Cash or Cash and shares of Common Stock, if any (solely to satisfy outstanding conversions, if applicable), in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation for principal and interest, to the date of such deposit; provided, however, that the foregoing shall not affect the obligations of the Company to the Trustee under Section 10.07 hereof.

     Section 11.02. Application of Trust Money.

     Subject to the provisions of Section 11.03, the Trustee or a Paying Agent shall hold in trust, for the benefit of the Holders of Securities, all money deposited with it pursuant to Section 11.01(b) with respect to Securities and shall apply the deposited money in accordance with this Indenture and the Securities to the payment of the principal of and any interest on the Securities.

     Section 11.03. Repayment to Company.

     The Trustee and each Paying Agent shall promptly pay to the Company upon request any excess money (i) deposited with them pursuant to Section 11.01(b) and (ii) held by them at any time.

     The Trustee and each Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years after a right to such money has matured; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment, may at the expense of the Company cause to be mailed to each Holder entitled to such money notice that such money remains unclaimed and that after a date specified therein, which shall be at least 30 days from the date of such mailing, any unclaimed balance of such money then remaining shall be repaid to the Company. After payment to the Company, Holders entitled to money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person.

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     Section 11.04. Reinstatement.

     If the Trustee or any Paying Agent is unable to apply any money in accordance with Section 11.02 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01(b) until such time as the Trustee or such Paying Agent is permitted to apply all such money in accordance with Section 11.02; provided, however, that, if the Company has made any payment of the principal of or interest on any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive any such payment from the money held by the Trustee or such Paying Agent.

ARTICLE 12

AMENDMENTS, SUPPLEMENTS AND WAIVERS

     Section 12.01. Without Consent of Holders.

     The Company, when authorized by a resolution of the Board of Directors, and the Trustee may amend or supplement the Indenture or the Securities without notice to or consent of any Holder:

     (a) to comply with Section 5.11 and 8.01;

     (b) to cure any ambiguity, or correct any defect or inconsistency; provided that any amendment or supplement to cure any ambiguity or correct any defect or inconsistency in the Indenture or the Securities that is made solely to conform the provisions of the Indenture and the Securities to the descriptions thereof contained in the offering memorandum relating to the Securities dated November 10, 2009, shall be deemed not to adversely affect the rights of any Holder;

     (c) to make any other change that does not adversely affect the rights of any Holder;

     (d) to comply with the provisions of the TIA;

     (e) to add to the covenants of the Company for the equal and ratable benefit of the Holders or to surrender any right, power or option conferred upon the Company;

     (f) to appoint a successor Trustee; or

     (g) to provide for the issuance of Additional Securities as permitted by Section 2.16, which will have terms substantially identical to the other outstanding Securities except as specified in Section 2.16, and which will be treated, together with any other outstanding Securities, as a single issue of securities.

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     Section 12.02. With Consent of Holders.

     The Company and the Trustee may amend or supplement the Securities or this Indenture with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding. The Holders of at least a majority in aggregate principal amount of the Securities then outstanding may waive compliance in a particular instance by the Company with any provision of the Securities or this Indenture without notice to any Holder. However, notwithstanding the foregoing but subject to Section 12.04, without the written consent of each Holder affected, an amendment, supplement or waiver, including a waiver pursuant to Section 9.04, may not:

     (a) change the Stated Maturity of, or the date any installment of interest (including any Additional Interest) is due on, any Security;

     (b) reduce the principal amount of or interest (including any Additional Interest) on, any Security;

     (c) reduce the amount of principal payable upon acceleration of the maturity of any Security;

     (d) change the place or currency of payment of principal of or interest (including any Additional Interest) on, any Security;

     (e) impair the right of any Holder to receive payment of principal and of interest on such Holder’s Securities on or after the due date therefore or to institute suit for the enforcement of any payment on, or with respect to, any Security;

     (f) modify the provisions with respect to the purchase right of Holders pursuant to Article 3 upon a Fundamental Change in a manner adverse to the Holders of Securities;

     (g) change the ranking of the Securities;

     (h) modify the provisions of this Indenture with respect to conversion of the Securities in a manner adverse to the Holders of Securities; and

     (i) modify any of the provisions of this Section or Section 9.04, except to increase any such percentage or to provide that certain provisions of this Indenture cannot be modified, amended or waived without the consent of the Holder of each outstanding Security affected thereby.

     It shall not be necessary for the consent of the Holders under this Section 12.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

     After an amendment, supplement or waiver under this Section 12.02 becomes effective, the Company shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any

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defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.

     Section 12.03. Compliance with Trust Indenture Act.

     Every amendment to or supplement of this Indenture or the Securities shall comply with the TIA as applicable to indentures qualified thereunder at the date of such amendment or supplement.

     Section 12.04. Revocation and Effect of Consents.

     Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to its Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective.

     After an amendment, supplement or waiver becomes effective, it shall bind every applicable Holder, unless it makes a change described in any of clauses (a) through (j) of Section 12.02. In that case the amendment, supplement or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security.

     Section 12.05. Notation on or Exchange of Securities.

     If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.

     Section 12.06. Trustee to Sign Amendments, etc.

     The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 12 if the amendment or supplemental indenture does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, in its sole discretion, but need not sign it. In signing or refusing to sign such amendment or supplemental indenture, the Trustee shall be provided with, and, subject to Section 10.01, shall be fully protected in relying upon, an Officers’ Certificate (accompanied by a resolution of the Board of Directors of the Company) and an Opinion of Counsel in accordance with Section 13.04 hereof, each stating that such amendment or supplemental indenture is authorized or permitted by this Indenture. The Company may not sign an amendment or supplement indenture until the Board of Directors approves it.

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     Section 12.07. Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

ARTICLE 13

MISCELLANEOUS

     Section 13.01. Trust Indenture Act Controls.

     If any provision of this Indenture limits, qualifies or conflicts with any duties imposed by any of Sections 310 to 317, inclusive, of the TIA through operation of Section 318(c) thereof, such imposed duties shall control.

     Section 13.02. Notices.

     Any demand, authorization, notice, request, consent or communication shall be given in writing and delivered in person or mailed by first-class mail, postage prepaid, addressed as follows or transmitted by facsimile transmission (confirmed by delivery in person or mail by first-class mail, postage prepaid, or by guaranteed overnight courier) to the following facsimile numbers:

If to the Company, to:

TeleCommunication Systems, Inc.
275 West Street,
Annapolis, Maryland
21401
Attention: Chief Legal Officer
Facsimile No.: (410) 263-7617

if to the Trustee, to:

The Bank of New York Mellon
101 Barclay Street, 8 West
New York, New York 10286
Attention: Corporate Trust Administration
Facsimile No.: (212) 815-5704

     Such notices or communications shall be effective when received.

     The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

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     Any notice or communication mailed to a Holder shall be mailed by first-class mail or delivered by an overnight delivery service to it at its address shown on the register kept by the Primary Registrar.

     Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication to a Holder is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

     Section 13.03. Communications by Holders with Other Holders.

     Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and any other person shall have the protection of TIA Section 312(c).

     Section 13.04. Certificate and Opinion as to Conditions Precedent.

     (a) Upon any request or application by the Company to the Trustee to take any action under this Indenture, if required, the Company shall furnish to the Trustee:

     (i) an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent (including any covenants, compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with; and

     (ii) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent (including any covenants, compliance with which constitutes a condition precedent) have been complied with.

     (b) Each Officers’ Certificate and Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture shall include:

     (i) a statement that the person making such certificate or opinion has read such covenant or condition;

     (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

     (iii) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

     (iv) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with;

provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials.

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     Section 13.05. Record Date for Vote or Consent of Securityholders.

     The Company (or, in the event deposits have been made pursuant to Section 11.01, the Trustee) may set a record date for purposes of determining the identity of Holders entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date shall not be more than 30 days prior to the date of the commencement of solicitation of such action. Notwithstanding the provisions of Section 12.04, if a record date is fixed, those persons who were Holders of Securities at the close of business on such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date.

     Section 13.06. Rules by Trustee, Paying Agent, Registrar and Conversion Agent.

     The Trustee may make reasonable rules (not inconsistent with the terms of this Indenture) for action by or at a meeting of Holders. Any Registrar, Paying Agent or Conversion Agent may make reasonable rules for its functions.

     Section 13.07. Legal Holidays.

     A “Legal Holiday” is a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

     Section 13.08. Governing Law.

     This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed in such state.

     Section 13.09. No Adverse Interpretation of Other Agreements.

     This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary of the Company. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

     Section 13.10. No Recourse Against Others.

     No recourse for the payment of the principal of or premium, if any, or interest on any Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or

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penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Securities.

     Section 13.11. Successors.

     All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.

     Section 13.12. Multiple Counterparts.

     The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall be deemed an original, but all of them together represent the same agreement.

     Section 13.13. Severability.

     In case any provisions in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

     Section 13.14. Table of Contents, Headings, etc.

     The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.

     Section 13.15. Force Majeure.

     In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

     Section 13.16. Waiver of Jury Trial.

     EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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     Section 13.17. No Security Interest Created.

     Nothing in this Indenture or in the Securities, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction in which property of the Company or its Subsidiaries is located.

     Section 13.18. Benefits of Indenture.

     Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any authenticating agent, any Security Registrar and their successors hereunder and the holders of Securities any benefit or any legal or equitable right, remedy or claim under this Indenture.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the date and year first above written.

TELECOMMUNICATION SYSTEMS, INC.
By:	/s/ Thomas M. Brandt, Jr.
	Name:	Thomas M. Brandt, Jr.
	Title:	Senior Vice President and Chief Financial Officer
THE BANK OF NEW YORK MELLON, as Trustee
By:	/s/ Cheryl L. Clarke
	Name:	Cheryl L. Clarke
	Title:	Vice President

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SCHEDULE 4.02

The following table sets forth the increase in the Conversion Rate, expressed as a number of Additional Shares to be received per $1,000 principal amount of Securities:

	Stock price
Effective date	7.960		8.500		10.000		11.500		13.000		14.500		16.000		20.000		24.000		28.000		32.000		36.000
November 16, 2009		28.979		25.435		18.374		13.874		10.839		8.692		7.107		4.420		2.879		1.899		1.240		0.785
November 1, 2010		28.979		23.698		16.585		12.214		9.369		7.418		6.016		3.706		2.406		1.581		1.025		0.640
November 1, 2011		28.979		21.669		14.424		10.198		7.595		5.898		4.729		2.884		1.871		1.225		0.785		0.478
November 1, 2012		28.979		20.306		12.384		8.104		5.702		4.277		3.370		2.050		1.348		0.890		0.570		0.342
November 1, 2013		28.979		19.252		9.724		5.238		3.194		2.232		1.728		1.088		0.740		0.499		0.322		0.190
November 1, 2014		28.979		21.010		3.363		0.000		0.000		0.000		0.000		0.000		0.000		0.000		0.000		0.000

EXHIBIT A

[FORM OF FACE OF SECURITY]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO TELECOMMUNICATION SYSTEMS, INC. (THE “COMPANY”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]¹

[THIS SECURITY AND THE CLASS A COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

     1. REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

     2. AGREES FOR THE BENEFIT OF TELECOMMUNICATION SYSTEMS, INC. THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

     (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR

     (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

     (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

¹ This paragraph should be included only if the Security is a Global Security.

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     (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.] ²

² These paragraphs should be included only if the Security is a Transfer Restricted Security.

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TELECOMMUNICATION SYSTEMS, INC.

CUSIP: No.     

4.5% CONVERTIBLE SENIOR NOTES DUE 2014

TeleCommunication Systems, Inc., a Maryland corporation (the “Company”, which term shall include any successor corporation under the Indenture referred to on the reverse hereof), promises to pay to Cede & Co., or registered assigns, the principal sum of ($ ) on November 1, 2014 [or such greater or lesser amount as is indicated on the Schedule of Exchanges of Securities on the reverse of this Security].³

The Company shall pay interest at a rate of 4.5% per annum, on the principal amount of this Security payable as provided in the Indenture. The Company further agrees to pay Additional Interest as provided for, and under the circumstances specified in, Sections 7.10 and 9.02(b) of the Indenture.

This Security is convertible as specified on the reverse of this Security. Additional provisions of this Security are set forth on the reverse of this Security.

[SIGNATURE PAGE FOLLOWS]

³ This phrase should be included only if the Security is a Global Security.

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

TELECOMMUNICATION SYSTEMS, INC.
By:
	Name:
	Title:

Trustee’s Certificate of Authentication: This is one of the Securities referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK MELLON, as Trustee
By:
	Name:
	Title:

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[FORM OF REVERSE OF SECURITY]

TELECOMMUNICATION SYSTEMS, INC.

4.5% CONVERTIBLE SENIOR NOTES DUE 2014

1. INTEREST AMOUNTS

     TeleCommunication Systems, Inc., a Maryland corporation (the “Company”, which term shall include any successor corporation under the Indenture hereinafter referred to), shall pay interest, at a rate of 4.5% per annum, on the principal amount of this Security payable as provided in the Indenture. The Company further agrees to pay Additional Interest as provided for, and under the circumstances specified in, Sections 7.10 and 9.02(b) of the Indenture.

2. METHOD OF PAYMENT

     The Company shall pay any interest on this Security to the person who is the Holder of this Security at the close of business on April 15 or October 15, as the case may be, next preceding the related interest payment date. The Holder must surrender this Security to a Paying Agent to collect payment of principal. Interest on the Security will be paid at a rate of 4.5% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, or if any such day is not a Business Day, the immediately following Business Day, commencing May 1, 2010. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months. In the event of the maturity, conversion or purchase of the Security by the Company at the option of the Holder, interest shall cease to accrue on the Security. Notwithstanding any other provision hereof, however, the Company shall pay interest on the Maturity Date to the Holder of this Security on the Record Date immediately preceding the Maturity Date in respect of the period ending with the Maturity Date regardless of whether such Holder converts this Security.

3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT

     Initially, The Bank of New York Mellon (the “Trustee”, which term shall include any successor trustee under the Indenture hereinafter referred to) will act as Paying Agent, Registrar and Conversion Agent. The Company may change any Paying Agent, Registrar or Conversion Agent without notice to the Holder.

4. INDENTURE, LIMITATIONS

     This Security is one of a duly authorized issue of Securities of the Company designated as its 4.5% Convertible Senior Notes due 2014 (the “Securities”), issued under an Indenture, dated as of November 16, 2009 (together with any supplemental indentures thereto, the “Indenture”), between the Company and the Trustee. The terms of this Security include those stated in the Indenture and those required by or made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, as in effect on the date of the Indenture. This Security is subject to all such terms, and the Holder of this Security is referred to the Indenture and said Act for a statement of them.

A-R-1

5. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE

     At the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase all or any part specified by the Holder (so long as the principal amount of such part is $1,000 or an integral multiple of $1,000 in excess thereof) of the Securities held by such Holder on the date of the Company’s choosing that is not less than 20 or more than 35 Business Days after the date on which the Company notifies the Holders of the Securities of the occurrence of the effective time of a Fundamental Change, at a purchase price equal to 100% of the principal amount thereof, together with any accrued and unpaid interest up to, but excluding, the Fundamental Change Purchase Date, payable in Cash. The Holder shall have the right to withdraw any Fundamental Change Purchase Notice (in whole or in a portion thereof that is $1,000 or an integral multiple of $1,000 in excess thereof) at any time prior to 5:00 p.m. (New York City time) on the second Scheduled Trading Day next preceding the Fundamental Change Purchase Date by delivering a written notice of withdrawal to the Paying Agent in accordance with the terms of the Indenture.

6. CONVERSION

     A Holder of a Security may convert the principal amount of such Security (or any portion thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof) into Common Stock at any time prior to the close of business on the second scheduled Trading Date immediately preceding the maturity date pursuant to Section 5.01 of the Indenture.

     The initial Conversion Price is $10.348 per share, and the initial Conversion Rate is approximately 96.637 shares of Common Stock, in each case subject to adjustment under certain circumstances as provided in the Indenture. Upon conversion, the Company shall deliver to holders in respect of each $1,000 principal amount of Securities being converted a number of shares of Common Stock equal to the applicable Conversion Rate, together with a Cash payment in lieu of any fractional share of Common Stock issuable upon conversion based on the Closing Sale Price of Common Stock on the relevant Conversion Date.

     A Security in respect of which a Holder had delivered a Fundamental Change Purchase Notice exercising the option of such Holder to require the Company to purchase such Security may be converted only if the Fundamental Change Purchase Notice is withdrawn in accordance with the terms of the Indenture.

7. DENOMINATIONS, TRANSFER, EXCHANGE

     The Securities are in registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes or other governmental charges that may be imposed in relation thereto by law or permitted by the Indenture.

8. PERSONS DEEMED OWNERS

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     The Holder of a Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY

     If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent will pay the money back to the Company at its written request, subject to applicable unclaimed property law. After any such payment, Holders entitled to money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person.

10. AMENDMENT, SUPPLEMENT AND WAIVER

     Subject to the exceptions set forth in the Indenture, the Securities and the Indenture may be amended or supplemented with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding, and an existing default or Event of Default with respect to the Securities and its consequence or compliance with any provision of the Securities or the Indenture may be waived in a particular instance with the consent of the Holders of a majority in aggregate principal amount of the Securities then outstanding. Without notice to or the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities to, among other things, cure any ambiguity, correct any defect or inconsistency or make any other change that does not adversely affect the rights of any Holder.

11. SUCCESSOR ENTITY

     When a successor corporation assumes all the obligations of its predecessor under the Securities and the Indenture in accordance with the terms and conditions of the Indenture, the predecessor corporation (except in the circumstances specified in the Indenture) shall be released from those obligations.

12. CALCULATIONS IN RESPECT OF SECURITIES

     Except to the extent provided therein, the Company will be responsible for making all calculations called for under the Indenture and the Securities. These calculations include, but are not limited to, determinations of the Closing Sale Price of the Common Stock, adjustments to the Conversion Price, any accrued interest payable on the Securities, the Conversion Price and the Conversion Rate. The Company will make these calculations in good faith and, absent manifest error, the calculations will be final and binding on Holders of the Securities. The Company will provide to each of the Trustee and the Conversion Agent a schedule of its calculations, and the Trustee and the Conversion Agent are entitled to rely conclusively upon the accuracy of such calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder of the Securities upon the request of such Holder.

13. DEFAULTS AND REMEDIES

     Under the Indenture, an Event of Default with respect to the Securities includes: (i) default in the payment of any principal of any Security when the same becomes due and payable; (ii) defaults in the payment of Cash and delivery of shares of Common Stock owing

A-R-3

upon conversion of any Security (including any Additional Shares), when the same becomes due and payable; (iii) default for 30 days in the payment of interest (including any Additional Interest) when the same becomes due and payable; (iv) failure by the Company for 60 days after notice to it to comply with any of its other agreements contained in the Securities or in the Indenture with respect to the Securities (other than a default set forth in clauses (1) through (3) above); (v) default in payment of the purchase price of any Security when the same becomes due and payable; (vi) failure to provide a Fundamental Change Purchase Notice when required; (vii) any indebtedness for money borrowed of the Company or a Significant Subsidiary in an outstanding principal amount, individually or in the aggregate, in excess of $5.0 million is not paid at stated maturity (or when otherwise due) or is accelerated and such indebtedness is not discharged (or such default in payment or acceleration is not cured or rescinded) within 30 days after written notice as provided in the Indenture; (viii) the Company or a Significant Subsidiary fails to pay one or more final and non-appealable judgments entered by a court or courts of competent jurisdiction, the aggregate uninsured or unbonded portion of which is in excess of $5.0 million, if the judgments are not paid, discharged or stayed within 30 days; and (xi) certain events of bankruptcy, insolvency or reorganization of the Company or any Significant Subsidiary. If an Event of Default with respect to the Securities (other than as a result of certain events of bankruptcy, insolvency or reorganization specified in the Indenture) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may declare all unpaid principal to the date of acceleration on the Securities then outstanding to be due and payable immediately, all as and to the extent, and subject to the exceptions, provided in the Indenture. If an Event of Default occurs as a result of certain events of bankruptcy, insolvency or reorganization specified in the Indenture, all unpaid principal of the Securities then outstanding shall become due and payable immediately without any declaration or other act on the part of the Trustee or any Holder, all as and to the extent provided in the Indenture. Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal or interest, including the failure to make Cash payments and deliver shares of Common Stock due upon conversion) if it determines that withholding notice is in their interests.

14. TRUSTEE DEALINGS WITH THE COMPANY

     The Bank of New York Mellon, the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or an Affiliate of the Company and may otherwise deal with the Company or an Affiliate of the Company, as if it were not the Trustee.

15. NO RECOURSE AGAINST OTHERS

     A director, officer, employee or shareholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. The Holder of this

A-R-4

Security by accepting this Security waives and releases all such liability. The waiver and release are part of the consideration for the issuance of this Security.

16. AUTHENTICATION

     This Security shall not be valid until the Trustee or an authenticating agent manually or by facsimile signs the certificate of authentication on the face of this Security.

17. ABBREVIATIONS AND DEFINITIONS

     Customary abbreviations may be used in the name of the Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act).

     All terms defined in the Indenture and used in this Security but not specifically defined herein are used herein as so defined.

18. INDENTURE TO CONTROL; GOVERNING LAW

     In the case of any conflict between the provisions of this Security and the Indenture, the provisions of the Indenture shall control. This Security shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed in such state.

     The Company will furnish to any Holder, upon written request and without charge, a copy of the Indenture. Requests may be made to: TeleCommunication Systems, Inc., 275 West Street, Annapolis, Maryland 21401, Attention: Chief Legal Officer.

A-R-5

ASSIGNMENT FORM⁴

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

agent to transfer this Security on the books of the Company. The agent may substitute another to act for him or her.

	Your Signature:
Date:
	(Sign exactly as your name appears on the other side of this Security)

	*Signature guaranteed by:
By:

*	The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.
4	This form should be included only if the Security is a Certificated Security.

A-R-6

CONVERSION NOTICE⁵

To convert this Security into Common Stock of the Company, check the box: o

To convert only part of this Security, state the principal amount to be converted (must be $1,000 or a integral multiple of $1,000): $     .

If you want the stock certificate made out in another person’s name, fill in the form below:

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

	Your Signature:
Date:
	(Sign exactly as your name appears on the other side of this Security)

	*Signature guaranteed by:
By:

*	The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.
5	This form should be included only if the Security is a Certificated Security.

A-R-7

OPTION TO ELECT REPURCHASE
UPON A FUNDAMENTAL CHANGE⁶

To: TeleCommunication Systems, Inc.

     The undersigned registered owner of this Security hereby irrevocably acknowledges receipt of a notice from TeleCommunication Systems, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to repurchase the entire principal amount of this Security, or the portion thereof (which is $1,000 or an integral multiple thereof) below designated, in accordance with the terms of the Indenture referred to in this Security at a purchase price equal to the Fundamental Change Purchase Price, payable in Cash.

Dated:
	Signature(s) must be guaranteed by a qualified guarantor institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934. Signature Guaranty

Principal amount to be repurchased (in an
integral multiple of $1,000, if less than
all):

NOTICE: The signature to the foregoing Election must correspond to the Name as written upon the face of this Security in every particular, without alteration or any change whatsoever.

⁶ This form should be included only if the Security is a Certificated Security.

A-R-8

SCHEDULE OF EXCHANGES OF SECURITIES⁷

     The following exchanges, increases/decreases in principal amount, repurchases or conversions of a part of this Global Security have been made:

Principal Amount
of this Global Security	Authorized	Amount of	Amount of
Following Such Decrease	Signatory of	Decrease in	Increase in
Date of Exchange	Securities	Principal Amount	Principal Amount
(or Increase)	Custodian	of this Global Security	of this Global Security

⁷ This schedule should be included only if the Security is a Global Security.

A-R-9

EXHIBIT B

FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OF RESTRICTED COMMON STOCK

[NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT]

     Re: TeleCommunication Systems, Inc. 4.5% Convertible Senior Notes Due 2014 (the “Securities”)

Reference is hereby made to the Indenture dated as of November 16, 2009 between the Company and the Trustee (the “Indenture”). Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.

This letter relates to                      shares of Common Stock [that are to be] [represented by the accompanying certificate(s) that were] issued upon conversion of Securities and which are held in the name of [name of transferor] (the “Transferor”) to effect the transfer of such Common Stock.

In connection with the transfer of such shares of Common Stock, the undersigned confirms that such shares of Common Stock are being transferred:

CHECK ONE BOX BELOW:

o   To the Company or any Subsidiary thereof.

o   To a person the undersigned reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)), in accordance with Rule 144A under the Securities Act.

o   Pursuant to another available exemption from the registration requirements of the Securities Act.

B-1

Unless one of the boxes is checked, the transfer agent will refuse to register any of the Common Stock evidenced by this certificate in the name of any person other than the registered holder thereof; provided , however , that if the third box is checked, the transfer agent may require, prior to registering any such transfer of the Common Stock such certifications and other information, including opinions of counsel, as the Company has reasonably requested in writing, by delivery to the transfer agent of a standing letter of instruction, to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

[Name of Transferor],
By:
	Name:
	Title:
Dated:

A-R-2

EX-10.1

Exhibit 10.1

EXECUTION VERSION

TeleCommunication Systems, Inc.

$90,000,000

4.5% CONVERTIBLE SENIOR NOTES DUE 2014

PURCHASE AGREEMENT

November 10, 2009

OPPENHEIMER & CO. INC.
RAYMOND JAMES & ASSOCIATES INC.,
     as Representatives of the several
     Initial Purchasers named in Schedule I hereto
c/o Oppenheimer & Co. Inc.
300 Madison Avenue
New York, New York 10017

Ladies & Gentlemen:

     TeleCommunication Systems, Inc., a Maryland corporation (the “Company”), proposes to issue and sell to Oppenheimer & Co. Inc. and the other initial purchasers named on Schedule I to this Agreement, for whom Oppenheimer & Co. Inc. and Raymond James & Associates Inc. are acting as Representatives (the “Representatives”) (the “Initial Purchasers”), $90,000,000 in aggregate principal amount of 4.5% Convertible Senior Notes due 2014 (the “Firm Notes”), subject to the terms and conditions set forth herein.

     1. The Transaction. Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the Initial Purchasers, severally and not jointly, the Firm Notes which are convertible into the Class A common stock $0.01 par value per share (the “Common Stock”) of the Company. In addition, the Company proposes to grant to the Initial Purchasers an option to purchase up to an additional $13,500,000 principal amount of Notes from the Company (the “Option Notes”) pursuant to the terms hereof. The Firm Notes and the Option Notes are collectively referred to herein as the “Securities”. The Securities are to be issued under an Indenture between the Company and The Bank of New York Mellon, as trustee (the “Trustee”) (the “Indenture”).

     The amounts of the Securities to be purchased by each of the several Initial Purchasers are set forth opposite their names on Schedule I hereto.

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     In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum, dated November 9, 2009 (the “Preliminary Offering Memorandum”), and has prepared a final offering memorandum, dated the date hereof (the “Offering Memorandum”), each setting forth information regarding the Company, the Securities, the terms of the Offering and the transactions contemplated by the Transaction Documents (as defined below), and any material developments relating to the Company occurring after the date of the most recent financial statements included therein. Any references herein to the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed to include, in each case, all amendments and supplements thereto and any information and/or documents incorporated by reference therein. The Company hereby confirms that it has authorized the use of the Disclosure Package (as defined below) and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers.

     The Company understands that the Initial Purchasers propose to make an offering of the Securities (the “Exempt Resales”) only on the terms and in the manner set forth in the Disclosure Package and the Offering Memorandum, as amended or supplemented, and the terms hereof as soon as the Initial Purchasers deem advisable after this Agreement has been executed and delivered, solely to persons in the United States whom the Initial Purchasers reasonably believe to be “qualified institutional buyers” (each, a “QIB”) as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), as such rule may be amended from time to time (“Rule 144A”) in transactions under Rule 144A or pursuant to another exemption from registration requirements of the Securities Act. The QIBs are referred to herein from time to time as the “Eligible Purchasers.” The Initial Purchasers will offer the Securities to such Eligible Purchasers initially at a price equal to 100% of the principal amount thereof. Such price may be changed by the Initial Purchasers at any time without notice.

     The Securities are convertible in accordance with their terms and the terms of the Indenture into shares of Common Stock (except for any cash in lieu of fractional shares) at an initial conversion rate of 96.637 shares of Common Stock per $1,000 principal amount of Securities.

     This Agreement, the Securities, and the Indenture are hereinafter referred to collectively as the “Transaction Documents.”

     Any references herein to “Exchange Act Reports” herein include all documents filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless stated to the contrary, any references herein to the terms “amend”, “amendment” or “supplement” with respect to the Disclosure Package or the Offering Memorandum shall be deemed to refer to all Exchange Act Reports filed subsequent to the date of this Agreement that are incorporated by reference therein.

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     Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Disclosure Package, and if not defined therein, in the Indenture.

     2. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the Initial Purchasers that:

          (a) (i) The Preliminary Offering Memorandum as of its date did not, (ii) the Preliminary Offering Memorandum, as supplemented by the information listed in Schedule II hereto (the “Pricing Term Sheet”) (the Preliminary Offering Memorandum and the Pricing Term Sheet taken together, the “Disclosure Package”), as of the Applicable Time (as defined below) does not, (iii) the Offering Memorandum as of its date does not, and as of the Closing Date will not, (iv) each electronic road show when taken together as a whole with the Disclosure Package and (v) any supplement or amendment to any of the documents referenced in clauses (i) through (iv) above does not and will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the representations and warranties contained in this paragraph shall not apply to statements in or omissions from the Preliminary Offering Memorandum or the Offering Memorandum (or any supplement or amendment thereto, including the Pricing Term Sheet) made in reliance upon and in conformity with Initial Purchaser Information (as such term is defined in Section 11 hereof). For purposes of this Agreement, the “Applicable Time” means 8:50 p.m. New York City time on the date of this Agreement.

          (b) The Disclosure Package and the Offering Memorandum have been or will be prepared by the Company for use by the Initial Purchasers in connection with the offering of the Securities.

          (c) Each of the Disclosure Package and the Offering Memorandum contains, if any, all pro forma, as adjusted financial information and statements and consolidated financial statements including the notes thereto, which are required to be included or incorporated by reference in accordance with Regulation S-X promulgated under the Securities Act in the Disclosure Package and the Offering Memorandum if the Disclosure Package and the Offering Memorandum were prospectuses included in registration statements on Form S-1 filed with the Commission. The pro forma, as adjusted financial information and statements, and consolidated financial statements including the notes thereto, and the supporting schedules included in the Disclosure Package and the Offering Memorandum present fairly the financial position as of the dates indicated and the cash flows and results of operations for the periods specified of the Company and its consolidated subsidiaries in the Disclosure Package and the Offering Memorandum; except as otherwise stated in the Disclosure Package and the Offering Memorandum, said financial statements have been prepared in conformity with U.S. GAAP applied on a consistent basis throughout the periods involved; and the supporting schedules included in the Disclosure Package and the Offering Memorandum present fairly the information required to be stated therein. No other financial statements or supporting schedules are required to be included in the Disclosure Package or the Offering Memorandum if the Disclosure Package or the Offering Memorandum, respectively, were included in a registration statement filed pursuant to the Securities Act.

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          (d) Ernst & Young LLP (the “Auditor”) who have certified the financial statements and supporting schedules of the Company and its consolidate subsidiaries included or to be included as part of the Disclosure Package and the Offering Memorandum, are and, during the periods covered by their report, were an independent registered public accounting firm as required by the Securities Act and the Exchange Act.

          (e) The Company is duly organized, validly existing and in good standing under the laws of Maryland, its jurisdiction of incorporation, has all requisite power and authority to carry on its business as it is currently being conducted and as described in the Disclosure Package and the Offering Memorandum, and to own, lease and operate its properties. The Company is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by it or location of the assets or properties owned, leased or licensed by it requires such qualification, except for those failures to be so qualified or in good standing which (individually or in the aggregate) could not reasonably be expected to have a material adverse effect on (A) the business, general affairs, management, condition (financial or otherwise), results of operations, stockholders’ equity, properties or business prospects of the Company and the subsidiaries, individually or taken as a whole, (B) the long-term debt or capital stock of the Company, (C) the issuance or marketability of the Securities or (D) the validity of this Agreement or any other Transaction Documents or the transactions described in the Disclosure Package and the Offering Memorandum under the caption “Use of Proceeds” (any such effect being a “Material Adverse Effect”).

          (f) The Company has no significant subsidiaries within the meaning of Rule 405 under the Securities Act.

          (g) The Company has all requisite corporate power and authority, and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits of and from all governmental or regulatory bodies or any other person or entity (collectively, the “Permits”), to own, lease and license its assets and properties and conduct its business, all of which are valid and in full force and effect, except where the lack of such Permits, individually or in the aggregate, would not have a Material Adverse Effect. The Company has fulfilled and performed in all material respects all of its obligations with respect to such Permits and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the Company thereunder. No Permits are required to enter into, deliver and perform this Agreement or any other Transaction Document and to issue and sell the Securities.

          (h) Except as described in the Disclosure Package and the Offering Memorandum and except as would not have a Material Adverse Effect; (i) the Company owns or possesses legally enforceable rights to use all patents, patent rights, inventions, trademarks, trademark applications, trade names, service marks, copyrights, copyright applications, licenses, know-how and other similar rights and proprietary knowledge (collectively, “Intangibles”) necessary for the conduct of its business; and (ii) the Company has not received any notice of, or is not aware of, any infringement of or conflict with asserted rights of others with respect to any Intangibles.

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          (i) The Company has good and marketable title in fee simple to all real property, and good and marketable title to all other property owned by it, in each case free and clear of all Liens, except such as do not materially affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company and its subsidiaries. All property held under lease by the Company and its subsidiaries is held by them under valid, existing and enforceable leases, free and clear of any lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever, other than a Permitted Lien (any “Lien”), or such as are not material and do not materially interfere with the use made or proposed to be made of such property by the Company and its subsidiaries. A Permitted Lien is any security interest, claim, lien, limitation on voting rights or encumbrance pursuant to the Third Amended and Restated Loan and Security Agreement among the Company, Longhorn Acquisition, LLC and Silicon Valley Bank dated June 26, 2009 or any statutory Liens for taxes not yet due or securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons imposed without action of such parties. Subsequent to the respective dates as of which information is given in the Disclosure Package and the Offering Memorandum, (i) there has not been any event which would have a Material Adverse Effect; (ii) the Company has not sustained any loss or interference with its assets, businesses or properties (whether owned or leased) from fire, explosion, earthquake, flood or other calamity, whether or not covered by insurance, or from any labor dispute or any court or legislative or other governmental action, order or decree which would have a Material Adverse Effect; and (iii) since the date of the latest balance sheet included in the Disclosure Package and the Offering Memorandum except as disclosed in the Offering Memorandum or in the Exchange Act Reports, the Company has not (A) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except such liabilities or obligations incurred in the ordinary course of business, (B) entered into any transaction not in the ordinary course of business or (C) except for regular dividends on the Common Stock in amounts per share that are consistent with past practice, declared or paid any dividend or made any distribution on any shares of its stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares of its capital stock.

          (j) Each description of a contract, document or other agreement in the Disclosure Package and the Offering Memorandum accurately reflects in all material respects the terms of the underlying contract, document or other agreement. Each contract, document or other agreement described in the Disclosure Package and the Offering Memorandum is in full force and effect and is valid and enforceable against the Company, in accordance with its terms. The Company, nor to the Company’s knowledge any other party, is in default in the observance or performance of any term or obligation to be performed by it under any such agreement, and no event has occurred which with notice or lapse of time or both would constitute such a default, in any such case which default or event, individually or in the aggregate, would have a Material Adverse Effect. No default exists, and no event has occurred which with notice or lapse of time or both would constitute a default, in the due performance and observance of any term, covenant or condition, by the Company of any other agreement or instrument to which the Company is a party or by which Company or its properties or business may be bound or affected which default or event, individually or in the aggregate, would have a Material Adverse Effect.

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          (k) The statistical and market related data included in the Disclosure Package and the Offering Memorandum are based on or derived from sources that the Company believes to be reliable and accurate.

          (l) The Company (i) is not in violation of its articles of incorporation or other organizational documents, (ii) is not in default under, and no event has occurred which, with notice or lapse of time, or both, would constitute a default under, or result in the creation or imposition of any Lien upon, any property or assets of the Company pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (iii) is not in violation of any statute, law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, foreign or domestic applicable to it, except (in the case of clauses (ii) and (iii) above) for violations or defaults that could not (individually or in the aggregate) have a Material Adverse Effect and except (in the case of clause (ii) alone) for any Lien disclosed in the Disclosure Package and the Offering Memorandum.

          (m) The Company has the required corporate or other power and authority to execute, deliver and perform its obligations under this Agreement and each of the other Transaction Documents to which it is a party and to consummate the transactions contemplated hereby and thereby, including, without limitation, the corporate or other power and authority to issue, sell and deliver the Securities.

          (n) The Securities have been duly and validly authorized by the Company for issuance and sale to the Initial Purchasers pursuant to this Agreement and, when executed by the Company and authenticated by the Trustee in accordance with the provisions of the Indenture and when delivered to and paid for by the Initial Purchasers in accordance with the terms hereof and thereof, will be duly and validly executed, issued and delivered and will constitute valid and legally binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally and (ii) general principles of equity. The Securities will conform in all material respects to the descriptions thereof in the Disclosure Package and the Offering Memorandum. At the Closing Date, the Securities will be in the form contemplated by the Indenture.

          (o) The Indenture has been duly and validly authorized by the Company and, when duly executed and delivered by the Company (assuming the due authorization, execution and delivery by the Trustee), will constitute a valid and legally binding agreement of the Company, enforceable against each of them in accordance with its terms, except that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally and (ii) general principles of equity. The Indenture conforms in all material respects to the description thereof in the Disclosure Package and the Offering Memorandum.

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          (p) This Agreement has been duly and validly authorized, executed and delivered by the Company.

          (q) None of (i) the execution, delivery and performance by the Company of this Agreement and consummation of the transactions contemplated by the Transaction Documents to which each of them, respectively, is a party, (ii) the issuance and sale of the Securities or (iii) the application of the proceeds as described in the Disclosure Package and the Offering Memorandum under the caption “Use of Proceeds,” will give rise to a right to terminate or accelerate the due date of any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, or require any consent or waiver under, or result in the execution or imposition of any Lien, upon any properties or assets of the Company pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is a party or by which either the Company or any its properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or violate any provision of the charter or by-laws of the Company, except for such consents or waivers which have already been obtained and are in full force and effect.

          (r) The Company has authorized and outstanding capital stock as set forth under the caption “Capitalization” in the Disclosure Package and the Offering Memorandum. All of the issued and outstanding shares of common stock of the Company have been duly and validly issued and are fully paid and nonassessable. There are no statutory preemptive or other similar rights to subscribe for or to purchase or acquire any shares of common stock of the Company or any such rights pursuant to its charter or by-laws or any agreement or instrument to or by which the Company is a party or bound. Except as disclosed in the Disclosure Package and the Offering Memorandum, there is no outstanding option, warrant or other right calling for the issuance of, and there is no commitment, plan or arrangement to issue, any share of stock of the Company or any security convertible into, or exercisable or exchangeable for, such stock.

          (s) When the Securities are issued and delivered pursuant to this Agreement, no securities of the Company will be (i) of the same class (within the meaning of Rule 144A) as the Securities and (ii) listed on a national securities exchange registered under Section 6 of the Exchange Act, or quoted in a United States automated interdealer quotation system.

          (t) Except as described in the Disclosure Package and the Offering Memorandum, no person has any rights to require registration of any security of the Company by reason of the execution by the Company of this Agreement or any other Transaction Document to which it is a party or the consummation by the Company of the transactions contemplated hereby and thereby, or as part or on account of, or otherwise in connection with the offering of the Securities and any of the other transactions contemplated by the Transaction Documents, and any such rights so disclosed have been effectively waived by the holders thereof, and any such waivers remain in full force and effect.

          (u) None of the Company, any of its respective affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act) or representatives directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of any

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“security” (as defined in the Securities Act) which is or could be integrated with the sale of the Securities in a manner that would require the registration under the Securities Act of the Securities or (ii) engaged in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offer and sale of the Securities or in connection with Exempt Resales of the Securities, or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. Assuming the accuracy of the Initial Purchasers’ representations and warranties set forth in Section 3 hereof, neither (i) the offer and sale of the Securities to the Initial Purchasers in the manner contemplated by this Agreement, the Disclosure Package and the Offering Memorandum nor (ii) the Exempt Resales requires registration under the Securities Act and prior to the effectiveness of any Registration Statement. The Indenture does not require qualification under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”) No securities of the same class as the Securities have been issued and sold by the Company within the six-month period immediately prior to the date hereof.

          (v) Each of (i) the Preliminary Offering Memorandum as of its date, (ii) the Disclosure Package as of the Applicable Time, (iii) the Offering Memorandum as of its date and as of the Closing Date and (iv) each amendment or supplement to any of the documents referenced in (i), (ii) or (iii), in each case, as of its date, contains the information specified in, and meets the requirements of, Rule 144A(d)(4) under the Securities Act.

          (w) Except pursuant to this Agreement, there are no contracts, agreements or understandings between or among the Company, and any other person that would give rise to a valid claim against the Company or the Initial Purchasers for a brokerage commission, finder’s fee or like payment in connection with the issuance, purchase and sale of the Securities.

          (x) Except as described in the Disclosure Package and the Offering Memorandum and except as would not have a Material Adverse Effect: (i) there are no legal or governmental proceedings pending to which the Company is a party or of which any property of the Company is the subject which, if determined adversely to the Company could individually or in the aggregate have a Material Adverse Effect; and (ii) to the knowledge of the Company, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.

          (y) The Company is not involved in any labor dispute nor, to the knowledge of the Company, is any such dispute threatened, which dispute would have a Material Adverse Effect. The Company is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers or contractors which would have a Material Adverse Effect. The Company is not aware of any threatened or pending litigation between the Company and any of its executive officers which, if adversely determined, could have a Material Adverse Effect and has no reason to believe that such officers will not remain in the employment of the Company.

          (z) Except as disclosed in the Disclosure Package and the Offering Memorandum, no relationship, direct or indirect, exists between or among the Company, or any affiliate of the Company, on the one hand, and any director, officer, stockholder, customer or supplier of the Company, or any affiliate of the Company, on the other hand, which is required

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by the Exchange Act to be described in the Company’s annual and/or quarterly reports on Form 10-K and 10-Q, as applicable, which is not so described and described as required in such reports, or which would be required by the Securities Act to be described in the Disclosure Package and the Offering Memorandum if the Disclosure Package and the Offering Memorandum were prospectuses included in registration statements on Form S-1 filed with the Commission. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members. The Company has not, in violation of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), directly or indirectly, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

          (aa) Neither the Company nor any of its “affiliates” (as defined in Rule 144 under the Securities Act) has taken, nor will it take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Securities or any other security of the Company to facilitate the sale or resale of any of the Securities or the Common Stock issuable upon conversion thereof.

          (bb) The Company has filed all Federal, state, local and foreign tax returns which are required to be filed through the date hereof, which returns are true and correct in all material respects or has received timely extensions thereof, and has paid all taxes shown on such returns and all assessments received by it to the extent that the same are material and have become due. There are no tax audits or investigations pending, which if adversely determined would have a Material Adverse Effect; nor are there any material proposed additional tax assessments against the Company.

          (cc) The books, records and accounts of the Company accurately and fairly reflect, in all material respects, the transactions in, and dispositions of, the assets of, and the results of operations of, the Company. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

          (dd) The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in the businesses in which they are engaged or propose to engage after giving effect to the transactions described in the Disclosure Package and the Offering Memorandum; all policies of insurance and fidelity or surety bonds insuring the Company or the Company’s respective businesses, assets, employees, officers and directors are in full force and effect; the Company is in compliance with the terms of such policies and instruments in all material respects; and neither the Company nor any

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subsidiary has reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that is not materially greater than the current cost.

          (ee) Each approval, consent, order, authorization, designation, declaration or filing of, by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the other Transaction Documents and the consummation of the transactions herein contemplated required to be obtained or performed by the Company has been obtained or made and is in full force and effect.

          (ff) The Company is not now and, after sale of the Securities as contemplated hereunder and application of the net proceeds of such sale as described in the Disclosure Package and the Offering Memorandum under the caption “Use of Proceeds,” will not be, required to register as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and is not and will not be an entity “controlled” by an “investment company” within the meaning of the Investment Company Act.

          (gg) To the knowledge of the Company, the Company or any other person associated with or acting on behalf of the Company including, without limitation, any director, officer, agent or employee of the Company or its subsidiaries, has not, directly or indirectly, while acting on behalf of the Company or its subsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful payment.

          (hh) To the knowledge of the Company, the operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending, or to the best knowledge of the Company, threatened.

          (ii) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

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          (jj) The Company has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the U.S. Employee Retirement Income Security Act of 1974 (“ERISA”) and the regulations and published interpretations thereunder with respect to each “plan” as defined in Section 3(3) of ERISA and such regulations and published interpretations in which its employees are eligible to participate and each such plan is in compliance in all material respects with the presently applicable provisions of ERISA and such regulations and published interpretations. No “Reportable Event” (as defined in 12 ERISA) has occurred with respect to any “Pension Plan” (as defined in ERISA) for which the Company could have any liability.

          (kk) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act), which: (i) are designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; (ii) provide for the periodic evaluation of the effectiveness of such disclosure controls and procedures at the end of the periods in which the periodic reports are required to be prepared; and (iii) are effective in all material respects to perform the functions for which they were established.

          (ll) Based on the evaluation of its disclosure controls and procedures, the Company is not aware of (i) any significant deficiency in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or any material weaknesses in internal controls; or (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls.

          (mm) Except as described in the Disclosure Package and the Offering Memorandum, there are no material off-balance sheet arrangements (as defined in Item 303 of Regulation S-K) that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, revenues or expenses, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

          (nn) The Company’s Board of Directors has validly appointed an audit committee whose composition satisfies the requirements of Rule 5605(c)(2) of the Rules of the NASDAQ Stock Market (the “NASD Rules”) and the Board of Directors and/or the audit committee has adopted a charter that satisfies the requirements of Rule 5605(c)(1) of the NASD Rules. The audit committee has reviewed the adequacy of its charter within the past twelve months.

          (oo) There is and has been no failure on the part of the Company or any of its directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act, including, without limitation, Section 402 related to loans and Sections 302 and 906 related to certifications.

          (pp) The Company is in compliance with all rules, laws and regulation relating to the use, treatment, storage and disposal of toxic substances and protection of health or the environment (“Environmental Law”) which are applicable to its business except as would not reasonable be expected to have a Material Adverse Effect. Except as described in the Disclosure

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Package and the Offering Memorandum, the Company has not received any written notice from any governmental authority or third party of an asserted claim under Environmental Laws which are applicable to its business. Except as described in the Disclosure Package and the Offering Memorandum, the Company has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and is in compliance in all material respects with all terms and conditions of any such permit, license or approval. To the Company’s knowledge, except as disclosed in the Disclosure Package and Offering Memorandum, no facts currently exist that will require the Company to make future material capital or other expenditures to comply with Environmental Laws which are applicable to its business.

          (qq) The statements in the Preliminary Offering Memorandum and the Offering Memorandum under the headings “Description of Capital Stock”, “Description of Convertible Note Hedge and Warrant Transactions,” and “Certain Material United States Federal Income Tax Considerations”, insofar as such statements summarize legal matters, agreements or documents discussed therein, are accurate and fair summaries of such legal matters, agreements or documents.

          (rr) Each director and executive officer of the Company listed on Schedule IV hereto has delivered to the Representatives his or her enforceable written lock-up agreement in the form attached to this Agreement as Exhibit A hereto (“Lock-Up Agreement”).

          (ss) Upon the Issuance and delivery of the Securities in accordance with this Agreement and the Indenture, the Securities will be convertible at the option of the holder thereof into shares of the Common Stock in accordance with the terms of the Securities and the Indenture; the Common Stock issuable upon conversion of the Securities have been duly authorized and reserved and, when issued upon conversion of the Securities, will be validly issued, fully paid and non-assessable; and the issuance of the Common Stock will not be subject to any preemptive or similar rights.

          (tt) The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or the quotation of the Common Stock on the Nasdaq Global Market, nor has the Company received any notification that the Commission or the Nasdaq Global Market is contemplating terminating such registration or quotation.

          (uu) Except as described in the Disclosure Package and the Offering Memorandum, the Company is not in default under any of the Transaction Documents or any of the contracts described in the Disclosure Package and the Offering Memorandum, has received a notice or claim of any such default or has knowledge of any breach of such contracts by the other party or parties thereto, except such defaults or breaches as would not, individually or in the aggregate, have a Material Adverse Effect.

          (vv) The Company has not distributed or, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Securities, will distribute any material in connection with the offering and sale of the Securities other than the Preliminary Offering Memorandum or the Offering Memorandum.

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     Any certificate contemplated in this Agreement signed by or on behalf of the Company and delivered to the Initial Purchasers shall be deemed to be a representation and warranty by the Company to the Initial Purchasers as to the matters covered thereby.

     The Company acknowledges that the Initial Purchasers and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Section 9 hereof, counsel for the Company and counsel for the Initial Purchasers, will rely upon the accuracy and truth of the foregoing representations and hereby consent to such reliance.

     3. Representations and Warranties of the Initial Purchasers. Each Initial Purchaser severally and not jointly, represents, warrants and covenants to the Company and agrees that:

          (a) Such Initial Purchaser is a QIB and an accredited investor within the meanings of Rule 501(a) of the Securities Act, with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Securities.

          (b) Such Initial Purchaser (i) has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act (“Regulation D”) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act and (ii) it has solicited and will solicit offers for the Securities only from, and has offered or sold and will offer, sell or deliver the Securities, as part of their initial offering, only within the United States to persons whom it reasonably believes to be QIBs, or if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to it that each such account is a QIB to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A and in each case, in transactions in accordance with Rule 144A in transactions pursuant to another exemption from the registration requirements of the Securities Act.

          (c) The Initial Purchasers will not amend or supplement the Preliminary Offering Memorandum or the Offering Memorandum or any other document used in connection with the offer and sale of the Securities or any amendment or supplement thereto unless the Company shall previously have been advised thereof and furnished a copy for a reasonable period of time prior to the proposed amendment or supplement and as to which the Company shall not have given their consent, which shall not be unreasonably withheld.

     4. Purchase, Sale and Delivery. On the basis of the representations, warranties, covenants and agreements contained in this Agreement, and subject to its terms and conditions:

          (a) The Company agrees to issue and sell to the several Initial Purchasers, and each of the Initial Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 100% of the principal amount thereof, plus accrued interest, if any, from November 10, 2009 to the Closing Date, as defined below (the “Initial Price”), the aggregate amount of Firm Notes. The Company hereby grants to each of the Initial Purchasers an option to purchase all or any part of the Option Notes at the Initial Price. The aggregate amount of Option

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Notes to be purchased by each of the Initial Purchasers shall be the same percentage of the Option Notes to be purchased by each of the Initial Purchasers as such Initial Purchaser is purchasing of the Firm Notes. Such option may be exercised in whole or in part at any time on or before 12:00 noon, New York City time, on the business day before the Firm Notes Closing Date (as defined below), and from time to time thereafter within 30 days after the date of this Agreement, in each case upon written, facsimile or telegraphic notice, or verbal or telephonic notice confirmed by written, facsimile or telegraphic notice, by each of the Initial Purchasers to the Company no later than 12:00 noon, New York City time, on the business day before the Firm Notes Closing Date or at least two business days before the Option Notes Closing Date (as defined below), as the case may be, setting forth the aggregate amount of Option Notes to be purchased and the time and date (if other than the Firm Notes Closing Date) of such purchase.

          (b) Payment of the purchase price for, and delivery of, the Firm Notes shall be made at the offices of Oppenheimer & Co. Inc., 300 Madison Avenue, New York, New York 10017, at 10:00 a.m., New York City time, on November 16, 2009 or at such time on such other date, not later than ten (10) business days after the date of this Agreement, as shall be agreed upon by the Company and the Representatives (such time and date of delivery and payment are called the “Firm Notes Closing Date”. In addition, in the event that any or all of the Option Notes are purchased by the Initial Purchasers, payment of the purchase price, and delivery of the certificates, for such Option Notes shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Initial Purchasers and the Company, on each date of delivery as specified in the notice from the Initial Purchasers to the Company (such time and date of delivery and payment are called the “Option Notes Closing Date”). The Firm Notes Closing Date and any Option Notes Closing Dates are called, individually, a “Closing Date” and, together, the “Closing Dates”.

          (c) Payment for the Securities shall be made to the Company by wire transfer of immediately available funds or by certified or official bank check or checks payable in New York Clearing House (same day) funds drawn to the order of the Company, against delivery of the Securities to the Representatives for the respective accounts of the Initial Purchasers.

          (d) On each Closing Date the Company will deliver to the Initial Purchasers, in such denomination or denominations and registered in such name or names as the Representatives request upon notice to the Company at least 48 hours prior to the Closing Date, one or more Securities in definitive form, registered in such name and in such denominations as the Initial Purchasers shall request, having an aggregate amount corresponding to the aggregate principal amount of the Securities sold pursuant to Exempt Resales to QIBs and Individual Accredited Investors (the “Definitive Note”), against payment of the purchase price therefor by wire transfer of same-day funds to the account of the Company, previously designated by it in writing. The Definitive Note shall be made available to the Initial Purchasers for inspection not later than 5:00 p.m., New York City time, on the business day immediately preceding each Closing Date.

     5. Offering by Initial Purchasers. The Initial Purchasers propose to make an offering of the Securities at the price and upon the terms set forth in the Offering Memorandum as soon as practicable after this Agreement is entered into and as, in the judgment of the Initial Purchasers, is advisable.

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     6. Agreements of the Company. The Company covenants and agrees with the Initial Purchasers that:

          (a) The Company shall advise the Initial Purchasers promptly and, if requested by the Representative, confirm such advice in writing, (i) of the issuance by any state securities commission or other regulatory authority of any stop order or order suspending the qualification or exemption from qualification of any Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority and (ii) of the happening of any event that makes any statement of a material fact made in the Disclosure Package or the Offering Memorandum untrue or that requires the making of any additions to or changes in the Disclosure Package or the Offering Memorandum in order to make the Disclosure Package or the Offering Memorandum not misleading in the light of the circumstances existing at the time it is delivered to an Eligible Purchaser. The Company shall use their commercially reasonable efforts to prevent the issuance of any stop order or order suspending the qualification or exemption from qualification of any Securities under any state securities or blue sky laws and, if at any time any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of any Securities under any state securities or blue sky laws, the Company shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time.

          (b) The Company shall, without charge, provide to the Initial Purchasers and to counsel to the Initial Purchasers, and to those persons identified by the Initial Purchasers to the Company as many copies of the Preliminary Offering Memorandum and the Offering Memorandum, and any amendments or supplements thereto, as the Initial Purchasers may reasonably request. The Company consents to the use of the Preliminary Offering Memorandum and the Offering Memorandum, and any amendments and supplements thereto required pursuant hereto, by the Initial Purchasers in connection with Exempt Resales.

          (c) The Company will not amend or supplement the Preliminary Offering Memorandum or the Offering Memorandum or any other document used in connection with the offer and sale of the Securities or any amendment or supplement thereto during such period as, in the opinion of counsel for the Initial Purchasers, the Preliminary Offering Memorandum or the Offering Memorandum is required by law to be delivered in connection with Exempt Resales and in connection with market-making activities of the Initial Purchasers for so long as any Notes are outstanding unless the Initial Purchasers shall previously have been advised thereof and furnished a copy for a reasonable period of time prior to the proposed amendment or supplement and as to which the Initial Purchasers shall not have given their consent, which shall not be unreasonably withheld.

          (d) If, during the period referred to in 6(c) above, any event shall occur as a result of which, it is necessary or advisable, in the opinion of counsel for the Initial Purchasers, to amend or supplement the Preliminary Offering Memorandum or the Offering Memorandum or any other document used in connection with the offer and sale of the Securities in order to make such Preliminary Offering Memorandum or Offering Memorandum or such other document not misleading in the light of the circumstances existing at the time it is delivered to an Eligible Purchaser, or if for any other reason it shall be reasonably necessary or advisable to amend or

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supplement the Preliminary Offering Memorandum or the Offering Memorandum or such other document to comply with applicable laws, rules or regulations, the Company shall (subject to Section 6(c) hereof) forthwith amend or supplement such Preliminary Offering Memorandum or Offering Memorandum or such other document at its own expense so that, as so amended or supplemented, such Preliminary Offering Memorandum or Offering Memorandum or such other document will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading or so that such Preliminary Offering Memorandum or Offering Memorandum or such other document will comply with all applicable laws, rules or regulations; if, during the period referred to in 6(c) above, the Company proposes to file with the SEC an Exchange Act Report that is incorporated by reference into the Offering Memorandum, a reasonable time prior to the proposed filing, the Company shall furnishes a copy of such Exchange Act Report to the Initial Purchasers for review and comment, and shall not file such document with the Commission until the Initial Purchasers have been afforded the opportunity to review and comment and the Initial Purchasers have not reasonably objected to the filing of such Exchange Act Report.

          (e) The Company shall cooperate with the Initial Purchasers and counsel for the Initial Purchasers in connection with the qualification or registration of the Securities for offering and sale under the securities or blue sky laws of such jurisdictions as the Representative may designate and shall continue such qualifications in effect for as long as may be necessary to complete the Exempt Resales; provided, however, that in connection therewith neither the Company shall be required to qualify as a foreign corporation where it is not now so qualified or to execute a general consent to service of process in any jurisdiction or to take any other action that would subject it to general service of process or to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject, in each case, other than as to matters and transactions relating to the Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales.

          (f) If this Agreement shall terminate or shall be terminated after execution because of any failure or refusal on the part of the Company to comply with the terms or fulfill any of the conditions of this Agreement, the Company agrees to reimburse the Initial Purchasers for all reasonable out-of-pocket expenses (including reasonable fees and expenses of counsel for the Initial Purchasers) incurred by the Initial Purchasers in connection herewith.

          (g) The Company shall apply the net proceeds from the sale of the Securities in the manner set forth under “Use of Proceeds” in the Disclosure Package and the Offering Memorandum.

          (h) The Company shall not voluntarily claim, and shall actively resist any attempts to claim, the benefit of any usury laws against the holders of any Securities.

          (i) The Company shall do and perform all things required or necessary to be done and performed under this Agreement prior to or after each Closing Date and to satisfy all conditions precedent to the delivery of the Securities.

          (j) None of the Company or any of its “affiliates” (as defined in Rule 144 under the Securities Act) will sell, offer for sale, solicit offers to buy or otherwise negotiate in

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respect of any “security” (as defined in the Securities Act) that could be integrated with the sale of the Securities in a manner that would require the registration under the Securities Act of the sale to the Initial Purchasers or the Eligible Purchasers of the Securities or to take any other action that would result in the Exempt Resales not being exempt from registration under the Securities Act.

          (k) For so long as any of the Securities remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and are not able to be sold in their entirety under Rule 144 under the Securities Act (or any successor provision), for the benefit of holders from time to time of Securities, the Company will furnish at its expense, upon request, to any holder or beneficial owner of Notes and prospective purchasers of the Notes, information specified in Rule 144A(d)(4) under the Securities Act, unless the Company are then subject to and in compliance with Section 13 or 15(d) of the Exchange Act.

          (l) The Company shall comply with the representation letters to DTC relating to the approval of the Securities by DTC for “book-entry” transfer.

          (m) During the period of three years from the Closing Date, the Company shall deliver without charge to the Initial Purchasers (i) as soon as available, copies of each report and other communication (financial or otherwise) of the Company mailed to the Trustee of the holders of the Securities, stockholders or any national securities exchange on which any class of securities of the Company may be listed (including without limitation, press releases) other than materials filed with or furnished to the Commission and (ii) from time to time such other information concerning the Company as the Initial Purchasers may reasonably request.

          (n) The Company shall not take, directly or indirectly, any action which constitutes or is designed to cause or result in, or which could reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or the Common Stock issuable upon conversion thereof, or take any action prohibited by Regulation M under the Exchange Act, in connection with the distribution of the Securities contemplated hereby. The Company will not distribute any (i) preliminary offering memorandum, including, without limitation, the Preliminary Offering Memorandum, (ii) offering memorandum, including, without limitation, the Offering Memorandum or (iii) other offering material in connection with the offering and sale of the Securities.

          (o) For so long as the Securities constitute “restricted” securities within the meaning of Rule 144(a)(3) under the Securities Act, the Company shall not, and shall not permit any subsidiary to, solicit any offer to buy or offer to sell the Securities by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act.

          (p) During the period from the Closing Date until one year after the Closing Date, without the prior written consent of the Initial Purchasers, the Company shall not, and shall not permit any of its “affiliates” (as defined in Rule 144 under the Securities Act) to, resell any of

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the Securities that constitute “restricted securities” under Rule 144 that have been reacquired by any of them.

          (q) Prior to the Closing Date, except as required by law, not to issue any press release or other communications, directly or indirectly, or hold any press conference with respect to the issuance of the Securities, the Company, the properties, business, results of operations, condition (financial or otherwise), affairs or business prospects of the Company, without the prior consent of the Initial Purchasers, which shall not be unreasonably withheld. In such instance, the Company shall furnish a copy of any such release or communication to the Initial Purchasers for review and comment a reasonable time prior to its contemplated release.

          (r) Without the prior consent of the Initial Purchasers, not to make any offer relating to the Securities that would constitute a “free writing prospectus” (if the offering of the Securities was made pursuant to a registered offering under the Securities Act) as defined in Rule 405 under the Securities Act (a “Free Writing Offering Document”); any such Free Writing Offering Document the use of which has been consented to by the Initial Purchasers is listed on Schedule III hereto; if at any time following issuance of a Free Writing Offering Document any event occurred or occurs as a result of which such Free Writing Offering Document would conflict with the information in the Preliminary Offering Memorandum or the Offering Memorandum or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Initial Purchasers and, if requested by the Initial Purchasers, will prepare and furnish without charge to the Initial Purchasers a Free Writing Offering Document or other document which will correct such conflict, statement or omission.

          (s) Without the prior written consent of the Representatives, for a period of 90 days after the date of this Agreement, the Company shall not issue, sell or register with the Commission (other than (1) securities issued in connection with an acquisition transaction and (2) on Form S-8 or on any successor form), or otherwise dispose of, directly or indirectly, any (i) debt securities issued or guaranteed by the Company and having a maturity of more than one year from the date of issue, or (ii) equity securities of the Company (or any securities convertible into, exercisable for or exchangeable for equity securities of the Company.

          (t) To reserve and keep available at all times, free of preemptive rights, shares of Common Stock for the purpose of enabling the Company to satisfy any obligations to issue shares of its Common Stock upon conversion of the Securities.

          (u) To use its commercially reasonable efforts to list, subject to notice of issuance, the shares of Common Stock issuable upon conversion of the Securities on the Nasdaq Global Market.

     7. Expenses. Whether or not the transactions contemplated by this Agreement are consummated or this Agreement becomes effective or is terminated (pursuant to Section 13 hereof or otherwise), the Company hereby agrees to pay all costs and expenses incident to the performance of their obligations hereunder, including the following: (i) the negotiation, preparation, printing, typing, filing, reproduction, execution and delivery of this Agreement and

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of the other Transaction Documents, any amendment or supplement to or modification of any of the foregoing and any and all other documents furnished pursuant hereto or thereto or in connection herewith or therewith and with the Exempt Resales; (ii) the preparation, printing or reproduction of each Preliminary Offering Memorandum, the Offering Memorandum (including, without limitation, financial statements), and any other document prepared in connection with the offer and sale of the Securities, and all amendments and supplements to any of them; (iii) the issuance, transfer and delivery of the Securities endorsed thereon to the Initial Purchasers; (iv) the registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states (including, without limitation, filing fees, the cost of printing and mailing a preliminary and final blue sky memorandum, and the reasonable fees and disbursements of counsel to the Initial Purchasers relating to such registration or qualification, including the preparation of a preliminary and final blue sky memorandum); (v) the delivery (including postage, air freight charges and charges for counting and packaging) of such copies of each Preliminary Offering Memorandum, the Offering Memorandum and any other document used in connection with the offer and sale of the Securities and all amendments or supplements to any of them as may be requested for use in connection with the offering and sale of the Securities and the Exempt Resales; (vi) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp taxes in connection with the original issuance and sale of the Securities and Trustee’s fees; (vii) the fees, disbursements and expenses of the Company’s counsel (including local and special counsel, if any) and accountants; (viii) the preparation, reproduction and delivery of the preliminary and supplemental blue sky memoranda and all other agreements of documents reproduced and delivered in connection with the offering of the Securities (including the reasonable fees and disbursements of counsel to the Initial Purchasers in connection with such preparation); (ix) all fees and expenses (including fees and expenses of counsel) of the Company in connection with the approval of the Securities by DTC for “book-entry” transfer; (x) any fees charged by investment rating agencies for the rating of the Securities; (xi) the fees and expenses of the Trustee and its counsel; (xii) all expenses incurred in connection with the performance by the Company of their other obligations under this Agreement and the other Transaction Documents; (xiii) the transportation and other road show expenses incurred by or on behalf of the Company representatives in connection with presentations to and related communications with prospective purchasers of the Securities; and (xiv) all expenses and listing fees incurred in connection with the application for quotation of the Common Stock on the Nasdaq Global Market.

     8. Indemnification.

          (a) The Company agrees to indemnify and hold harmless the Initial Purchasers and each person, if any, who controls the Initial Purchasers within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages and liabilities, joint or several (including any reasonable investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted), to which they, or any of them, may become subject under the Securities Act, the Exchange Act or other Federal or state law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Disclosure Package, any Free Writing Offering Document or the Offering Memorandum, or in any supplement thereto or amendment thereof, or in any electronic road show, or in any Blue

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Sky application or other information or other documents executed by the Company filed in any state or other jurisdiction to qualify any or all of the Securities under the securities laws thereof (any such application, document or information being hereinafter referred to as a “Blue Sky Application”) or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that such indemnity shall not inure to the benefit of any Initial Purchaser (or any person controlling such Initial Purchaser) on account of any losses, claims, damages or liabilities arising from the sale of the Securities to any person by such Initial Purchaser if such untrue statement or omission or alleged untrue statement or omission was made in the Disclosure Package, any Free Writing Offering Document or the Offering Memorandum, or in any supplement thereto or amendment thereof, or in any electronic road show, or in any Blue Sky Application in reliance upon and in conformity with the Initial Purchaser Information (as defined in Section 11 hereto). This indemnity agreement will be in addition to any liability which the Company may otherwise have.

          (b) Each Initial Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the officers and directors of the Company, against any losses, claims, damages or liabilities to which such party may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Disclosure Package, any Free Writing Offering Document or the Offering Memorandum, or in any supplement thereto or amendment thereof, or arise out of or are based upon the omission or alleged omission to state therein, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Disclosure Package, any Free Writing Offering Document or the Offering Memorandum, or in any supplement thereto or amendment thereof, in reliance upon and in conformity with the Initial Purchaser Information; provided, however, that the obligation of any Initial Purchaser to severally and not jointly indemnify the Company (including any controlling person, director or officer thereof) shall be limited to the net proceeds received by the Company from such Initial Purchaser.

          (c) Any party that proposes to assert the right to be indemnified under this Section will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section, notify each such indemnifying party of the commencement of such action, suit or proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 8(a) or 8(b) shall be available to any party who shall fail to give notice as provided in this Section 8(c) if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was prejudiced by the failure to give such notice but the omission so to notify such indemnifying party of any such action, suit or proceeding shall not relieve it from any liability that it may have to any indemnified party for contribution or otherwise than under this Section. In case any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall

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wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and the approval by the indemnified party of such counsel, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses, except as provided below and except for the reasonable costs of investigation subsequently incurred by such indemnified party in connection with the defense thereof. The indemnified party shall have the right to employ its counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or in addition to those available to the indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the defense of such action within a reasonable time after notice of the commencement thereof, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying parties. An indemnifying party shall not be liable for any settlement of any action, suit, and proceeding or claim effected without its written consent, which consent shall not be unreasonably withheld or delayed. No indemnifying party shall, without the prior written consent, which consent shall not be unreasonably withheld or delayed, of the indemnified party, effect any settlement of any proceeding or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless (i) such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not contain any factual or legal admission by or with respect to any indemnified party or any adverse statement with respect to the character, professionalism, expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.

     9. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 8(a) or 8(b) is due in accordance with its terms but for any reason is unavailable to or insufficient to hold harmless an indemnified party in respect to any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate losses, liabilities, claims, damages and expenses (including any investigation, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting any contribution received by any person entitled hereunder to contribution from any person who may be liable for contribution) incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities pursuant to this Agreement or, if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Company, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above. The

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aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities resold by it to Eligible Purchasers were offered to the public exceeds the amount of damages which such Initial Purchaser has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9, each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each director of the Company, each officer of the Company, and each person, if any, who controls the Company within the meaning of the Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Company. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties under this Section 9, notify such party or parties from whom contribution may be sought, but the omission so to notify such party or parties from whom contribution may be sought shall not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have hereunder or otherwise than under this Section 9. No party shall be liable for contribution with respect to any action, suit, proceeding or claim settled without its written consent.

     The remedies provided for in Section 8 and this Section 9 are not exclusive and shall not limit any rights or remedies which otherwise may be available to any indemnified party in law or in equity.

     10. Conditions of Initial Purchasers Obligations. The obligations of the Initial Purchasers under this Agreement are several and not joint. The obligations of the Initial Purchasers to purchase and pay for the Securities, as provided herein, are subject to the absence from any certificates, opinions, written statements or letters furnished to the Initial Purchasers pursuant to this Section 10 of any misstatement or omissions and to the satisfaction of the following additional conditions unless waived in writing by the Representative:

          (a) All of the representations and warranties of the Company contained in this Agreement shall be true and correct on the date hereof and on each Closing Date with the same force and effect as if made on and as of the date hereof and the Closing Date, respectively. The Company shall have performed or complied with all of the agreements and satisfied all conditions on their respective parts to be performed, complied with or satisfied hereunder at or prior to each Closing Date.

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          (b) The Offering Memorandum shall have been printed and copies distributed to the Initial Purchasers not later than 10:00 a.m., New York City time, on the day following the date of this Agreement or at such later date and time as to which the Representatives may agree.

          (c) No stop order suspending the qualification or exemption from qualification of the Securities thereof in any jurisdiction referred to in Section 6(e) hereof shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened.

          (d) None of the issuance and sale of the Securities pursuant to this Agreement or any of the transactions contemplated by any of the other Transaction Documents shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order shall have been issued; and there shall not have been any legal action, statute, order, rule, regulation, decree or other administrative proceeding enacted, instituted, adopted, issued or threatened against the Company or against any Initial Purchasers relating to the issuance of the Securities or the Initial Purchasers activities in connection therewith or any other transactions contemplated by this Agreement or the Offering Memorandum, or the other Transaction Documents. No action, suit or proceeding shall have been commenced and be pending against or affecting or, to the best of the Company’s knowledge, threatened against, the Company before any court or arbitrator or any governmental body, agency or official that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; and no stop order shall have been issued preventing the use of the Preliminary Offering Memorandum, any Free Writing Offering Document, the Offering Memorandum, or any amendment or supplement thereto.

          (e) Since the respective dates as of which information is given in the Disclosure Package, (i) there shall not have occurred any change, or any development involving a prospective change, in or affecting the general affairs, management, business, condition (financial or other), properties, business prospects, results of operations, capital stock, or long-term debt, or a material increase in the short-term debt, of the Company, not contemplated by the Disclosure Package and the Offering Memorandum that is, in the judgment of the Representative, so material and adverse as to make it impracticable or inadvisable to proceed with the offering of the Securities on the terms and in the manner contemplated by the Transaction Documents, (ii) no dividend or distribution of any kind shall have been declared, paid or made by the Company on any class of its capital stock, other than as disclosed in the Disclosure Package and the Offering Memorandum, (iii) the Company shall not have incurred any liability or obligation, direct or contingent, that is material, individually or in the aggregate, to the Company, and that is required to be disclosed on a balance sheet or notes thereto in accordance with U.S. GAAP and is not disclosed on the latest balance sheet or notes thereto included in the Disclosure Package and the Offering Memorandum and (iv) there shall not have occurred any event or development relating to or involving the Company, or any of its respective officers or directors that makes any statement made in the Disclosure Package or the Offering Memorandum untrue or that, in the opinion of the Company, and their counsel or the Initial Purchasers and their counsel, require the making of any addition to or change in the Disclosure Package or the Offering Memorandum in order to state a material fact required by any applicable law, rule or regulation to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

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          (f) At each Closing Date and after giving effect to the consummation of the transactions contemplated by the Transaction Documents, there exists no Default or Event of Default (as defined in the Indenture).

          (g) The Initial Purchasers shall have received certificates, dated each Closing Date, signed by the chief financial officer and the general counsel of the Company, in form and substance satisfactory to the Representatives, confirming, as of the Closing Date, the matters set forth in paragraphs (a), (b), (c), (d) and (e) of this Section 10 and that, as of such Closing Date, the obligations of the Company to be performed hereunder on or prior thereto have been duly performed.

          (h) The Initial Purchasers shall have received on the Closing Date:

          (i) an opinion, dated the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers, of DLA Piper LLP (US), counsel for the Company, to the effect set forth in Exhibit B hereto.

          (ii) an opinion, dated the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial Purchasers, relating to this Agreement and such other related matters as the Initial Purchasers may require.

          (i) Ernst & Young, LLP (the “Auditor”), the independent registered public accounting firm for the Company, shall deliver to the Initial Purchasers: (i) simultaneously with the execution of this Agreement a signed letter from the Auditor addressed to the Initial Purchasers and dated the date of this Agreement, in form and substance reasonably satisfactory to the Representatives and Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial Purchasers, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to initial purchasers with respect to the financial statements and certain financial information contained in the Preliminary Offering Memorandum, and (ii) on each Closing Date, a signed letter from the Auditor addressed to the Initial Purchasers and dated the date of such Closing Date(s), in form and substance reasonably satisfactory to the Representatives and Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial Purchasers, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to initial purchasers with respect to the financial statements and certain financial information contained in the Offering Memorandum.

          (j) The Initial Purchasers and Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Initial Purchaser, shall have been furnished with such information, certificates and documents, in addition to those set forth above, as they may reasonably require for the purpose of enabling them to review or pass upon the matters referred to in this Section 10 and in order to evidence the accuracy, completeness or satisfaction in all material respects of any of the representations, warranties or conditions herein contained.

          (k) The Company and the Trustee shall have entered into the Indenture and the Initial Purchasers shall have received counterparts, conformed as executed, thereof and the

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Securities shall have been duly executed and delivered by the Company, and the Securities shall have been duly authenticated by the Trustee.

          (l) On or after the date hereof (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall there have been any announcement of any potential or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible downgrading, or with negative implications, or direction not determined of, any rating of the Company or any securities of the Company (including, without limitation, the placing of any of the foregoing ratings on credit watch with negative or developing implications or under review with an uncertain direction) by any “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act, (ii) there shall not have occurred any change, nor shall any notice have been given of any potential or intended change, in the outlook for any rating of the Company or any securities of the Company by any such rating organization and (iii) no such rating organization shall have given notice that it has assigned (or is considering assigning) a lower rating to the Securities than that on which the Securities were marketed.

          (m) Each of the Transaction Documents and each other agreement or instrument executed in connection with the transactions contemplated thereby shall be reasonably satisfactory in form and substance to the Initial Purchasers and shall have been executed and delivered by all the respective parties thereto and shall be in full force and effect, and there shall have been no material amendments, alterations, modifications or waivers of any provision thereof since the date of this Agreement.

          (n) All proceedings taken in connection with the issuance of the Securities and the transactions contemplated by this Agreement, the other Transaction Documents and all documents and papers relating thereto shall be reasonably satisfactory to the Initial Purchasers and counsel to the Initial Purchasers. The Initial Purchasers and counsel to the Initial Purchasers shall have received copies of such papers and documents as they may reasonably request in connection therewith, all in form and substance reasonably satisfactory to them.

          (o) All opinions, certificates, letters, schedules, documents or instruments required by this Section 10 to be delivered by the Company will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to the Representatives and counsel to the Initial Purchasers. The Company shall furnish the Initial Purchasers such conformed copies of such opinions, certificates, letters, schedules, documents and instruments in such quantities as the Initial Purchasers shall reasonably request.

          (p) On or prior to the Closing Date, the Initial Purchasers shall have received a lock up agreement substantially in the form attached hereto as Exhibit A signed by the Company’s Executive Officers and Directors on Schedule IV hereto.

     11. Initial Purchaser Information. The Company acknowledges that the statements with respect to the offering of the Securities set forth in the 10th paragraph regarding the delivery of the Securities and the 11^th paragraph related to stabilization, syndicate covering transactions and penalty under the heading “Plan of Distribution” in the Preliminary Offering Memorandum and the Offering Memorandum constitute the only written information relating to the Initial

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Purchasers furnished to the Company by or on behalf of the Initial Purchasers expressly for use in the Preliminary Offering Memorandum, the Disclosure Package and the Offering Memorandum, for purposes of Sections 2(a), 8(a) and 8(b) hereof (the “Initial Purchaser Information”).

     12. Survival of Representations and Agreements. The respective representations, warranties, covenants, agreements, indemnities and other statements of the Company, their respective officers and the Initial Purchasers set forth in this Agreement or made by or on behalf of them, respectively pursuant to this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of the Company, any of its officers of directors, the Initial Purchasers or any controlling person referred to in Sections 8 and 9 hereof and (ii) delivery of and payment for the Securities to and by the Initial Purchasers, and shall be binding upon and shall inure to the benefit of, any successors, assigns, heirs, personal representatives of the Company, the Initial Purchasers and the indemnified parties referred to in Section 8 hereof. The respective representations, agreements, covenants, indemnities and other statements set forth in Sections 7, 8, 9, 12 and 13 shall survive the termination of this Agreement, regardless of any termination or cancellation of this Agreement.

     13. Effective Date of Agreement; Termination.

          (a) This Agreement shall become effective upon execution and delivery of a counterpart hereof by each of the parties hereto.

          (b) This Agreement may be terminated in the sole discretion of the Initial Purchasers by notice to the Company from the Representatives, without liability (other than with respect to Sections 8 and 9 hereof) on the Initial Purchasers’ part to the Company in the event the Company has failed, refused or been unable to perform or satisfy all conditions on their respective parts to be performed or satisfied hereunder on or prior to the Closing Date, or if:

          (i) there has occurred any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted, or in the opinion of the Initial Purchasers, will in the future materially disrupt, the securities markets or there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in the judgment of the Initial Purchasers, inadvisable or impracticable to market the Securities or enforce contracts for the sale of the Securities;

          (ii) there has occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in the judgment of the Initial Purchasers, inadvisable or impracticable to market the Securities or enforce contracts for the sale of the Securities;

          (iii) trading in any securities of the Company has been suspended or materially limited or trading generally on the Nasdaq Global Market shall have been suspended or materially limited, or minimum or maximum prices

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for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by any of said exchanges or by order of the Commission, the Financial Industry Regulatory Authority or other regulatory body or governmental authority having jurisdiction;

          (iv) a banking moratorium has been declared by any state or Federal a banking moratorium has been declared by any state or Federal authority;

          (v) in the judgment of the Initial Purchasers, there has been since the time of the execution of the Purchase Agreement or since the respective dates as of which information is given in the Disclosure Package, any material adverse change in the assets, properties, condition (financial or otherwise), or in the results or operations, business affairs or business prospects or cash flows of the Company, whether or not arising in the ordinary course of business; or

          (vi) any debt securities of the Company shall have been downgraded or placed on any “watch list” for possible downgrading by any “nationally recognized statistical rating organization” as defined for purposes of Rule 436(g) under the Securities Act.

          (c) If this Agreement shall be terminated pursuant to any of the provisions hereof, or if the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Initial Purchasers set forth herein is not satisfied or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof, the Company will, subject to demand by the Initial Purchasers, reimburse the Initial Purchasers for all out of pocket expenses (including the reasonable fees and expenses of the Initial Purchasers’ counsel), incurred by the Initial Purchasers in connection herewith. If this Agreement is terminated pursuant to Section 14 by reason of the default of one or more of the Initial Purchasers, the Company shall not be obligated to reimburse any Initial Purchaser on account of such expenses.

     14. Substitution of Initial Purchasers. If any Initial Purchaser shall default in its obligation to purchase on the Closing Date the Securities agreed to be purchased hereunder, the Representative shall have the right, within 36 hours thereafter, to make arrangements for one or more of the non-defaulting Initial Purchasers, or any other Initial Purchasers, to purchase such Securities on the terms contained herein. If, however, the Representative shall not have completed such arrangements within such 36-hour period, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Initial Purchasers to purchase such Securities on such terms. If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the Representative and the Company as provided above, the aggregate amount of Securities which remains unpurchased on the Closing Date does not exceed one-tenth of the aggregate amount of all the Securities that all the Initial Purchasers are obligated to purchase on such date, then the Company shall have the right to require each non-defaulting Initial Purchaser to purchase the aggregate amount of Securities which such Initial Purchaser agreed to purchase hereunder at such date and, in addition, to require each non-defaulting Initial Purchaser to purchase its pro rata share (based on the aggregate amount of Securities which such

27

Purchaser agreed to purchase hereunder) of the Securities of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Initial Purchaser from liability for its default. In any such case, either the Representative or the Company shall have the right to postpone the Closing Date for a period of not more than seven days in order to effect any necessary changes and arrangements (including any necessary amendments or supplements to the Offering Memorandum or any other documents).

     If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the Representative and the Company as provided above, the aggregate amount of such Securities which remains unpurchased exceeds 10% of the aggregate amount of all the Securities to be purchased at such date, then this Agreement shall terminate, without liability on the part of any non-defaulting Initial Purchasers to the Company and without liability on the part of the Company except as provided in Sections 7, 8, 9 and 13(b). The provisions of this Section 14 shall not in any way affect the liability of any defaulting Initial Purchaser to the Company or the nondefaulting Initial Purchasers arising out of such default. The term “Initial Purchaser” as used in this Agreement shall include any person substituted under this Section 14 with like effect as if such person had originally been a party to this Agreement with respect to such Securities.

     15. Notices. All communications hereunder shall be in writing and, if sent to the Initial Purchasers, shall be hand-delivered, mailed by first-class mail, couriered by next-day air courier or faxed and confirmed in writing to Oppenheimer & Co. Inc., 300 Madison Avenue, New York, New York 10017, Attention: Andrew MacInnes, Head of Equity Capital Markets, with copy to Wade Dougherty, Executive Director, and with a copy to Skadden, Arps, Slate, Meagher and Flom LLP, Four Times Square, New York, New York, 10036, Attention: David J. Goldschmidt, as Representatives on behalf of the Initial Purchasers If sent to the Company, shall be mailed, delivered, couriered or faxed and confirmed in writing to TeleCommunication Systems, Inc., 275 West Street, Annapolis, Maryland 21401, Attention: Bruce A. White, and with a copy to DLA Piper LLP (US), 6225 Smith Avenue Baltimore, Maryland 21209, Attention: Wm. David Chalk.

     16. Successors. This Agreement shall inure to the benefit of, and shall be binding upon, the Initial Purchasers, the Company, and their respective successors, legal representatives and assigns, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of, or by virtue of, this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnities of the Company contained in Section 8 hereof shall also be for the benefit of the controlling persons and agents referred to in Sections 8 and 9 hereof and (ii) the indemnities of the Initial Purchasers contained in Section 8 hereof shall also be for the benefit of the directors of the Company, and its officers, employees and agents and any controlling person or persons referred to in Sections 8 and 9 hereof. No purchaser of Securities from the Initial Purchasers will be deemed a successor, legal representative or assign because of such purchase.

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     17. No Waiver; Modifications in Writing. No failure or delay on the part of the Company or the Initial Purchasers in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Company or the Initial Purchasers at law or in equity or otherwise. No waiver of or consent to any departure by the Company or the Initial Purchasers from any provision of this Agreement shall be effective unless signed in writing by the party entitled to the benefit thereof; provided that notice of any such waiver shall be given to each party hereto as set forth above. Except as otherwise provided herein, no amendment, modification or termination of any provision of this Agreement shall be effective unless signed in writing by or on behalf of the Company and the Initial Purchasers. Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or the Initial Purchasers from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances.

     18. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof.

     19. Applicable Law. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. TIME IS OF THE ESSENCE IN THIS AGREEMENT.

     20. Contractual Relationship. The Company acknowledges and agrees that each of the Initial Purchasers has acted and is acting solely in the capacity of a principal in an arm’s length transaction between the Company, on the one hand, and the Initial Purchasers, on the other hand, with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor, agent or fiduciary to the Company or any other person. Additionally, the Company acknowledges and agrees that the Initial Purchasers have not and will not advise the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company has consulted with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Initial Purchasers shall have no responsibility or liability to the Company or any other person with respect thereto, whether arising prior to or after the date hereof. Any review by the Initial Purchasers of the Company, the transactions contemplated hereby or other matters relating to such transactions have been and will be performed solely for the benefit of the Initial Purchasers and shall not be on behalf of the Company. The Company agrees that it will not claim that the Initial Purchasers, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary duty to the Company or any other person in connection with any such transaction or the process leading thereto.

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     21. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof.

     22. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

     23. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile transmission shall constitute valid and sufficient delivery thereof.

[Signature page follows]

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If the foregoing correctly sets forth the understanding among the Initial Purchasers and the Company please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

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

Accepted and agreed to as of the date first above written:

OPPENHEIMER & CO. INC.
RAYMOND JAMES & ASSOCIATES INC.

ACTING SEVERALLY ON BEHALF OF THEMSELVES AND AS REPRESENTATIVES OF THE SEVERAL INITIAL PURCHASERS NAMED IN SCHEDULE 1 HERETO.

By:	OPPENHEIMER & CO. INC.
	/s/ Andrew MacInnes
	Name:	Andrew MacInnes
	Title:	Head of Equity Capital Markets
By:	RAYMOND JAMES & ASSOCIATES INC.
	/s/ Raymond James & Associates Inc.
	Name:	Ryan D. Lund
	Title:	Senior Vice President

SCHEDULE I

INITIAL PURCHASERS

	Aggregate
	Amount of
	Firm Notes
Name	to be Purchased
Oppenheimer & Co. Inc.	$	63,000,000
Raymond James & Associates Inc.	$	27,000,000
Total	$	90,000,000

SCHEDULE II

PRICING TERM SHEET

Pricing Term Sheet — TeleCommunication Systems, Inc.

The information in this pricing term sheet supplements TeleCommunication Systems, Inc.’s (“TCS”) preliminary offering memorandum, dated November 9, 2009 (the “Preliminary Offering Memorandum”), and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. In all other respects, this term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Offering Memorandum.

Adjustment to Conversion Rate upon a Make-Whole Adjustment Event:

Issuer:	TeleCommunication Systems, Inc.
Ticker Symbol (Exchange):	TSYS (NASDAQ)
Offering Type:	144A Offering (QIBs Only)
Title of Securities:	4.5% Convertible Senior Notes due 2014
Aggregate principal amount offered:	$90,000,000
Over-Allotment Option:	$13,500,000
Maturity:	November 1, 2014
Principal Amount per Note:	$1,000
Coupon:	4.5% per Annum (Payable Semi-Annually)
Issue Price:	100% of principal amount
Reference Price (Last Reported Sale Price per Share of TSYS Class A Common Stock on NASDAQ on November 10, 2009):	$7.96
Initial Conversion Price:	$10.348 per share of our Class A common stock for each $1,000 aggregate principal amount of notes
Initial Conversion Rate:	96.637 shares of TCS Class A common stock for each $1,000 aggregate principal amount of notes
Conversion Premium:	30% above the last reported sale price per share of TCS Class A common stock on NASDAQ on November 10, 2009
Call Protection:	Non-Callable for Life
use of proceeds	We estimate that the net proceeds from this offering, after deducting estimated fees and expenses and the initial purchasers’ discounts and commissions, will be approximately $87.3 million, if the overallotment option is not exercised.
	We intend to use:
	• approximately $9.4 million (without giving effect to the exercise of the initial purchasers’ overallotment option, if any) of the net proceeds from this offering to pay the cost to us of the convertible note hedge transactions (after such cost is partially offset by the proceeds to us from the warrant transactions), as described below; and
	• we intend to use the remainder of the net proceeds from this

	offering for general corporate purposes, including working capital. In addition, our use of the remaining net proceeds may include the selective acquisition or investment in businesses, products and technologies that are complementary to our own. As of the date of this offering memorandum, we do not have any binding commitments or agreements relating to any of these types of transactions. However, from time to time, we will consider a proposed transaction when it is presented to us and, if appropriate, enter into a non-binding letter of intent with respect to such a proposed transaction. As of the date of this offering memorandum, we are party to two such non-binding letters of intent.
Moodys/ S&P Rating:	Not Rated
Dividend and Takeover Protection:	Yes
Interest Payment Dates:	November 1 and May 1, commencing May 1, 2010
Trade Date:	November 11, 2009
Settlement Date:	November 16, 2009
144A CUSIP:	87929JAA1
Convertible Note Hedge and Warrant Transactions:	in connection with the offering of the notes, tcs entered into convertible note hedge transactions and warrant transactions with each of Deutsche Bank AG, société generale and royal bank of canada
Book-Running Managers:	Oppenheimer & Co., Raymond James

The following table sets forth the number of additional shares to be added to the conversion rate per $1,000 principal amount of the Notes in connection with a Make-Whole Adjustment Event as described in the Preliminary Offering Memorandum, based on the stock price and effective date of the Make-Whole Adjustment Event.

	Stock Price
Effective Date	$	7.96	$	8.50	$	10.00	$	11.50	$	13.00	$	14.50	$	16.00	$	20.00	$	24.00	$	28.00	$	32.00	$	36.00
November 16, 2009		28.979		25.435		18.374		13.874		10.839		8.692		7.107		4.420		2.879		1.899		1.240		0.785
November 1, 2010		28.979		23.698		16.585		12.214		9.369		7.418		6.016		3.706		2.406		1.581		1.025		0.640
November 1, 2011		28.979		21.669		14.424		10.198		7.595		5.898		4.729		2.884		1.871		1.225		0.785		0.478
November 1, 2012		28.979		20.306		12.384		8.104		5.702		4.277		3.370		2.050		1.348		0.890		0.570		0.342
November 1, 2013		28.979		19.252		9.724		5.238		3.194		2.232		1.728		1.088		0.740		0.499		0.322		0.190
November 1, 2014		28.979		21.010		3.363		0.000		0.000		0.000		0.000		0.000		0.000		0.000		0.000		0.000

The exact stock prices and effective dates may not be set forth in the table above, in which case if the stock price is:

• between two stock price amounts in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year;

• in excess of $36.00 per share (subject to adjustment), no additional shares will be issued upon conversion; and

• less than $7.96 per share (subject to adjustment), no additional shares will be issued upon conversion.

Ratio of Earnings to Fixed Charges

     On page 37 of the Preliminary Offering Memorandum the ratio of earnings to fixed charges for the nine months ended September 30, 2009 was noted as 36.5 to 1. This ratio should read 32.7 to 1 for the said period.

Capitalization

The following table sets forth our cash and cash equivalents and consolidated capitalization as of September 30, 2009:

• on an actual basis; and

• on an as adjusted basis to give effect to (i) the issuance and sale of $90,000,000 aggregate principal amount of notes in this offering, after deducting the underwriting discounts and commissions and before estimated offering expenses (assuming no exercise of the underwriters’ over-allotment option to purchase additional notes) and (ii) the use of approximately $9.4 million in net proceeds to fund the cost of the convertible note hedge transactions after giving effect to the proceeds from the warrant transactions.

This table should be read in conjunction with our consolidated financial statements and related notes incorporated by reference in this offering memorandum. See “Where You Can Find More Information.” The following table assumes that the initial purchasers have not exercised their over-allotment option.

Amounts representing the number of shares of Class A common stock outstanding exclude:

• options outstanding on September 30, 2009 to purchase 12,247,277 shares of Class A common stock at a weighted exercise price of $4.45;

• Class A restricted stock outstanding on September 30, 2009 at a weighted-average grant date fair value of $6.95;

• an aggregate of 2,823,921 shares of Class A common stock that were reserved for future issuance under our 1997 Stock Incentive Plan and Employee Stock Purchase Plan on September 30, 2009; and

• shares of Class A common stock issuable upon exercise of the warrants that we expect to sell to one or more counterparties.

	As of September 30, 2009
			As
	Actual		Adjusted(1)
	(in thousands, except share data)
Cash and cash equivalents	$	79,296	$	157,141
Indebtedness:
Capital lease obligations and notes payable, less current portion, and other long-term liabilities	$	21,920	$	21,920
Convertible Senior Notes Due 2014 offered hereby		—		90,000
Total Long-Term Debt	$	21,920	$	111,920
Stockholder’s equity:

	As of September 30, 2009
				As
	Actual			Adjusted(1)
	(in thousands, except share data)
Class A common stock; $0.01 par value:
Authorized shares — 225,000,000; issued and outstanding shares of 42,273,555		423			423
Class B common stock; $0.01 par value:
Authorized shares — 75,000,000; issued and outstanding shares of 6,391,334		64			64
Additional paid-in capital(2)		259,835			258,490
Accumulated other comprehensive income		115			115
Accumulated deficit		(109,809	)		(109,809	)
Total stockholder’s equity		150,568			149,223
Total capitalization	$	172,488		$	261,143

(1)	“As Adjusted” financial data assumes issuance and sale of the notes, less the initial purchasers’ discounts and commissions and estimated offering expenses payable by us, and assumes that the initial purchasers have not exercised their over-allotment option.
(2)	Additional paid-in capital adjusted for the net cost of the convertible note hedge, net of tax, and warrants transactions.

General

The notes and the shares of common stock issuable upon conversion of the notes (together, the “Securities”) have not been and will not be registered under the Securities Act or any state securities laws and may not be offered in the United States, except that Securities may be offered and sold to Qualified Institutional Buyers exclusively in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

The Securities have not been approved or disapproved by the Securities and Exchange Commission or by any state securities commission or regulatory authority, nor have the foregoing authorities passed on the accuracy or adequacy of the attached documents. Any representation to the contrary is a criminal offense.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities of TeleCommunication Systems, Inc., nor shall there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Copies of the Final Offering Memorandum can be obtained from your Oppenheimer sales representative.

This message is intended solely for the benefit of the initial recipient. No retransmission, copying or distribution is permitted.

SCHEDULE III

FREE WRITING OFFERING DOCUMENTS

SCHEDULE IV

PERSONS PARTY TO LOCK-UP AGREEMENT

Maurice B. Tosé
James M. Bethmann
Thomas M. Brandt, Jr.
Richard A. Young
Clyde A. Heintzelman
Jan C. Huly
Richard A. Kozak
Weldon H. Latham
Drew Morin
Tim Lorello

EXHIBIT A

FORM OF LOCK UP AGREEMENT

November 9, 2009

Oppenheimer & Co. Inc.
Raymond James & Associates Inc.

c/o Oppenheimer & Co. Inc.
300 Madison Avenue
New York, New York 10017

Ladies and Gentlemen:

The undersigned, a holder of Class A common stock, par value $0.01 (“Common Stock”), or rights to acquire Common Stock, of TeleCommunication Systems, Inc., a Maryland corporation (the “Company”) understands that you, as Representatives of the several Initial Purchasers, propose to enter into a Purchase Agreement (the “Purchase Agreement”) with the Company, with respect to the offering (the “Offering”) without registration under the Securities Act of 1933, as amended (the “Act”), and initial resale in reliance on Rule 144A under the Act, of $90,000,000 of 4.5% Convertible Senior Notes due 2014 (the “Securities”) of the Company. Capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Purchase Agreement.

     In consideration of the Initial Purchasers ‘ agreement to enter into the Purchase Agreement and to proceed with the Offering of the Securities, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees for the benefit of the Company, you and the other Initial Purchasers that, without the prior written consent of Oppenheimer & Co. Inc. on behalf of the Initial Purchasers, the undersigned will not, during the period ending 90 days (the “Lock-Up Period”) after the date of the Purchase Agreement, directly or indirectly (1) offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock owned either of record or beneficially (as defined in the Securities Exchange Act of 1934, as amended) by the undersigned on the date hereof or hereafter acquired or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, or publicly announce an intention to do any of the foregoing. In addition, the undersigned agrees that, without the prior written consent of Oppenheimer & Co. Inc. on behalf of the Initial Purchasers, it will not, during the period ending 90 days after the date of the Purchase Agreement, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable

for Common Stock. The foregoing shall not apply to (x) Common Stock to be transferred as a gift or gifts (provided that any donee thereof agrees in writing to be bound by the terms hereof), (y) the exercise by you of options or other rights to purchase Common Stock held by you (provided, however, that shares of Common Stock acquired upon such exercise shall be subject to this letter) and (y) sales under any 10b-5 plan.

     In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.

     The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

     The undersigned understands that, if the Purchase Agreement does not become effective, or if the Purchase Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, the undersigned shall be released form all obligations under this Letter Agreement.

     The undersigned, understands that the Initial Purchasers are entering into the Purchase Agreement and proceeding with the Offering in reliance upon this Letter Agreement.

     This lock-up agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.

Very truly yours,
By:
	Name:
	Title:

EXHIBIT B

FORM OF OPINION OF COMPANY COUNSEL

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EX-10.2.A

Exhibit 10.2(a)

Deutsche Bank

Deutsche Bank AG, London Branch
Winchester house
1 Great Winchester St,
London EC2N 2DB
Telephone: 44 20 7545 8000

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 212-250-2500

DATE:	November 10, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Deutsche Bank AG, London Branch
TELEPHONE:	44 20 7545 0556
FACSIMILE:	44 11 3336 2009
SUBJECT:	Equity Derivatives Note Hedge Confirmation
REFERENCE NUMBER(S):	356505

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Deutsche Bank AG, London Branch (“Deutsche”) 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.

DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER OR DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. DEUTSCHE BANK SECURITIES INC. (“AGENT”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

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

Chairman of the Supervisory Board: Clemens Börsig Board of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo Banziger, Anthony Dilorio	Deutsche Bank AG is regulated by the FSA for the conduct of designated investment business in the UK, is a member of the London Stock Exchange and is a limited liability company incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in England and Wales BR000005, Registered address:
	Winchester House, 1 Great Winchester Street, London EC2N 2DB.

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 Deutsche 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 Deutsche and Counterparty had executed an 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:	Deutsche.
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 Deutsche 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.

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Applicable Percentage:	45%
Premium:	As provided in Annex A to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Deutsche.
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 Deutsche in writing (and use reasonable efforts to confirm receipt by telephone to Deutsche’s Origination Convertible Desk (telephone: 212-250-5600)) 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).

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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, Deutsche shall deliver to Counterparty, on the related Settlement Date, the Settlement Amount. For the avoidance of doubt, to the extent Deutsche 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”).
	Deutsche 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.

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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.

5

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, Deutsche 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.
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

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	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 Deutsche 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”.

7

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

Mutual Representations: Each of Deutsche 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.

8

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 Deutsche 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 Deutsche 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 Deutsche as if set forth herein.
(vii)	Counterparty understands, agrees and acknowledges that Deutsche 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 Deutsche to it hereunder shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Deutsche 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 Deutsche 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 recommendation to enter into the Transaction) and (C) no communication (written or oral)

9

	received from Deutsche 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 Deutsche 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 Deutsche an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Deutsche in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Deutsche 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 Deutsche and Counterparty shall be transmitted exclusively through Agent.

Staggered Settlement. Deutsche 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

10

(each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date as follows: (i) in such notice, Deutsche 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 Deutsche will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Deutsche 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 Deutsche 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 Deutsche’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 Deutsche, the Shares (the “Hedge Shares”) acquired by Deutsche for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Deutsche without registration under the Securities Act, Counterparty shall, at its election: (i) in order to allow Deutsche to sell the Hedge Shares in a registered offering, make available to Deutsche 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 Deutsche, 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 Deutsche, (D) provide other customary opinions, certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Deutsche 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 Deutsche, 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 Deutsche 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 Deutsche, including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Deutsche, due diligence rights (for Deutsche or any designated buyer of the Hedge Shares from Deutsche), opinions and certificates and such other documentation as is customary for private placements agreements of similar size, all

11

reasonably acceptable to Deutsche (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Deutsche 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 Deutsche at the VWAP Price on such Exchange Business Days, and in the amounts, requested by Deutsche. “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 7,827,600 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 Deutsche 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. Deutsche acknowledges and agrees that this Confirmation is not intended to convey to Deutsche 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 Deutsche’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 Deutsche’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 Deutsche 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 Deutsche 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.

12

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Deutsche 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 Deutsche 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 Deutsche’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 Deutsche 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 Deutsche Payment on Early Termination and on Certain Extraordinary Events. If Deutsche 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

13

the Agreement that in the case of either (x) or (y) resulted from an event or events outside Counterparty’s control) (a “Deutsche Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Deutsche to satisfy any such Deutsche Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Deutsche, 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 Deutsche Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Deutsche Termination Delivery, Deutsche shall deliver to Counterparty a number of Termination Delivery Units having a cash value equal to the amount of such Deutsche 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 Deutsche in writing prior to the date on which the offering of the Convertible Notes was first announced, Counterparty represents and warrants to Deutsche 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 Deutsche 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 Deutsche 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 Deutsche has informed Counterparty in writing that Deutsche has completed all purchases of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Deutsche that it is not aware of any material nonpublic information concerning itself or the Shares.

Right to Extend. Deutsche may postpone any potential Exercise Date or postpone or extend any other date of

14

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 Deutsche determines, in its reasonable discretion, that (a) a Regulatory Disruption has occurred or (b) such extension is reasonably necessary or appropriate to (i) preserve Deutsche’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or (ii) enable Deutsche to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Deutsche 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 Deutsche. “Regulatory Disruption” shall mean any event that Deutsche, 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 Deutsche, 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 Deutsche as if it were the Issuer or an affiliated purchaser of the Issuer), for Deutsche 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 Deutsche. Deutsche 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 Deutsche, without the consent of Counterparty.

If, as determined in Deutsche’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0%, (2) Deutsche, Deutsche Group (as defined below) or any person whose ownership position would be aggregated with that of Deutsche or Deutsche Group (Deutsche, Deutsche Group or any such person, a “Deutsche 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 Deutsche 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 Deutsche 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) Deutsche 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, Deutsche 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 Deutsche 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 Deutsche Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Deutsche 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 Deutsche and any of its affiliates subject to aggregation with Deutsche 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 Deutsche (collectively, “Deutsche Group”) “beneficially own” (within the meaning of

15

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 Deutsche to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Deutsche may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Deutsche’s obligations in respect of the Transaction and any such designee may assume such obligations. Deutsche 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 Deutsche 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 Deutsche on the Early Unwind Date all Shares purchased by Deutsche or one or more of its affiliates, and assume, or reimburse the cost of, derivatives and other hedging activities entered into by Deutsche 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 Deutsche’s (or its affiliates) actual cost of such Shares and unwind cost of such derivatives and other hedging activities as Deutsche 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. Deutsche 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.

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Governing law: The law of the State of New York.

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
Fax:            (410) 263-7617

(b) Deutsche

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention:  Faiz Khan

Telephone: (212) 250-0668
Email:           faiz.khan@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Attention:  Lars Kestner

Telephone: (212) 250-6043
Email:           Lars.Kestner@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention:  Andrew Yaeger

Telephone: (212) 250-2717
Email:           andrew.yaeger@db.com

17

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 Deutsche a facsimile of the fully-executed Confirmation to Deutsche at 44 113 336 2009. 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,

DEUTSCHE BANK AG, LONDON BRANCH

By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ Jon Arnone
	Name:	Jon Arnone
	Title:	Managing Director
DEUTSCHE BANK SECURITIES INC., acting solely as Agent in connection with this Transaction
By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ John Arnone
	Name:	John Arnone
	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.
	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: USD9,303,255

A-1

EX-10.2.B

Exhibit 10.2(b)

SOCIÉTÉ GÉNÉRALE
17 COURS VALMY
92987 PARIS-LA DEFENSE,
FRANCE

DATE:	November 10, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Société Générale
FACSIMILE:	(212) 278-5624
SUBJECT:	Equity Derivatives Note Hedge Confirmation
REFERENCE NUMBER(S):	[      ]

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Société Générale (“Société Générale”) 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.

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 Société Générale 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 Société Générale and Counterparty had executed an 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:	Société Générale.
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 Société Générale 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:	35%
Premium:	As provided in Annex A to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Société Générale.
Procedure for Exercise:

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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 Société Générale in writing (and use reasonable efforts to confirm receipt by telephone to Société Générale (telephone: 212-278-5187)) 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).
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, Société Générale shall deliver to Counterparty, on the related Settlement Date, the Settlement Amount. For the avoidance of doubt, to the extent Société Générale 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

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	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”).
	Société Générale 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

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	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.
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.

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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, Société Générale 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.
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

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	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 Société Générale 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”.
Failure to Deliver:	Applicable
Insolvency Filing:	Applicable
Increased Cost of Hedging:	Applicable
Hedging Party:	Société Générale for all applicable Additional Disruption Events
Determining Party:	Société Générale for all applicable Additional Disruption Events
Acknowledgements:
Non-Reliance:	Applicable

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Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable

Mutual Representations: Each of Société Générale 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.

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.

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(ii)	Counterparty shall immediately provide written notice to Société Générale 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 Société Générale 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 Société Générale as if set forth herein.
(vii)	Counterparty understands, agrees and acknowledges that Société Générale 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 Société Générale to it hereunder shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Société Générale 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 Société Générale 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 recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Société Générale 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 Société Générale 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.

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(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 Société Générale an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Société Générale in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Société Générale 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 will be effected through Agent. In addition, all notices, demands and communications of any kind relating to the Transaction between Société Générale and Counterparty may be transmitted exclusively through Agent.

Staggered Settlement. Société Générale 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 (each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date as follows: (i) in such notice, Société Générale 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 Société Générale will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Société

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Générale 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 Société Générale 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 Société Générale’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 Société Générale, the Shares (the “Hedge Shares”) acquired by Société Générale for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Société Générale without registration under the Securities Act, Counterparty shall, at its election: (i) in order to allow Société Générale to sell the Hedge Shares in a registered offering, make available to Société Générale 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 Société Générale, 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 Société Générale, (D) provide other customary opinions, certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Société Générale 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 Société Générale, 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 Société Générale 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 Société Générale, including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Société Générale, due diligence rights (for Société Générale or any designated buyer of the Hedge Shares from Société Générale), opinions and certificates and such other documentation as is customary for private placements agreements of similar size, all reasonably acceptable to Société Générale (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Société Générale 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 Société Générale at the VWAP Price on such Exchange Business Days, and in the amounts, requested by Société Générale. “VWAP Price” means, on any Exchange Business Day, the per

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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 6,088,133 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 Société Générale 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. Société Générale acknowledges and agrees that this Confirmation is not intended to convey to Société Générale 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 Société Générale’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 Société Générale’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 Société Générale 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 Société Générale 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.

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Société Générale 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

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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 Société Générale 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 Société Générale’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 Société Générale 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 Société Générale Payment on Early Termination and on Certain Extraordinary Events. If Société Générale 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 “Société Générale Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Société Générale to satisfy any such Société Générale Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Société Générale,

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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 Société Générale Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Société Générale Termination Delivery, Société Générale shall deliver to Counterparty a number of Termination Delivery Units having a cash value equal to the amount of such Société Générale 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 Société Générale in writing prior to the date on which the offering of the Convertible Notes was first announced, Counterparty represents and warrants to Société Générale 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 Société Générale 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 Société Générale 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 Société Générale has informed Counterparty in writing that Société Générale has completed all purchases of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Société Générale that it is not aware of any material nonpublic information concerning itself or the Shares.

Right to Extend. Société Générale 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 Société Générale determines, in its reasonable discretion, that (a) a Regulatory Disruption has occurred or (b)

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such extension is reasonably necessary or appropriate to (i) preserve Société Générale’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or (ii) enable Société Générale to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Société Générale 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 Société Générale. “Regulatory Disruption” shall mean any event that Société Générale, 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 Société Générale, 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 Société Générale as if it were the Issuer or an affiliated purchaser of the Issuer), for Société Générale 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 Société Générale. Société Générale 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 Société Générale, without the consent of Counterparty.

If, as determined in Société Générale’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0%, (2) Société Générale, Société Générale Group (as defined below) or any person whose ownership position would be aggregated with that of Société Générale or Société Générale Group (Société Générale, Société Générale Group or any such person, a “Société Générale 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 Société Générale 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 Société Générale 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) Société Générale 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, Société Générale 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 Société Générale 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 Société Générale Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Société Générale 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 Société Générale and any of its affiliates subject to aggregation with Société Générale 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 Société Générale (collectively, “Société Générale 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.

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Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Société Générale to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Société Générale may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Société Générale’s obligations in respect of the Transaction and any such designee may assume such obligations. Société Générale 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 Société Générale 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 Société Générale on the Early Unwind Date all Shares purchased by Société Générale or one or more of its affiliates, and assume, or reimburse the cost of, derivatives and other hedging activities entered into by Société Générale 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 Société Générale’s (or its affiliates) actual cost of such Shares and unwind cost of such derivatives and other hedging activities as Société Générale 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. Société Générale 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.

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Governing law: The law of the State of New York.

Terms relating to the Agent. Société Générale is not registered as a broker or dealer under the Securities Exchange Act of 1934, as amended. SG Americas Securities, LLC has acted solely as agent for Société Générale and the counterparty to the extent required by law in connection with this Transaction and has no obligations, by way of issuance, endorsement, guarantee or otherwise, with respect to the performance of either party under this Transaction. The parties agree to proceed solely against each other, and not against SG Americas Securities, LLC as agent, in seeking enforcement of their rights and obligations with respect to this Transaction, including their rights and obligations with respect to payment of funds and delivery of securities.

Broker. SG Americas Securities, LLC may have been paid a fee by Société Générale in connection with this Transaction. Further details will be furnished upon written request.

Time of Dealing. The time of the Transaction will be furnished by SG Americas Securities, LLC upon written request.

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
Fax:             (410) 263-7617

(b) Société Générale

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention: Sanjay Garg
Telephone:   (212) 278-5187
Facsimile:    (212) 278-5624
Email:           sanjay.garg@sgcib.com

with a copy to:

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention: Steve Milankov
Telephone:  (212) 278-6985
Facsimile:    (212) 278-7365
Email:          steve.milankov@sgcib.com

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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 Société Générale a facsimile of the fully-executed Confirmation to Société Générale at (212) 278-5624. 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, SOCIÉTÉ GÉNÉRALE
By:	/s/ Sanjay Garg
	Name:	Sanjay Garg
	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.
	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: USD7,235,865

A-1

EX-10.2.C

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
Tags: TSYS_A1-C1 to TSYS_A1-C40

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
Tags: TSYS_A1-C1 to TSYS_A1-C40

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
Tags: TSYS_A1-C1 to TSYS_A1-C40

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.

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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.

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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

ANNEX A

The Premium for the Transaction is set forth below.

Premium: USD4,134,780

A-1

EX-10.3.A

Exhibit 10.3(a)

Deutsche Bank

Deutsche Bank AG, London Branch
Winchester house
1 Great Winchester St,
London EC2N 2DB
Telephone: 44 20 7545 8000

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 212-250-2500

DATE:	November 10, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Deutsche Bank AG, London Branch
TELEPHONE:	44 20 7545 0556
FACSIMILE:	44 11 3336 2009
SUBJECT:	Equity Derivatives Warrant Confirmation
REFERENCE NUMBER(S):	356506

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Deutsche Bank AG, London Branch (“Deutsche”) 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.

DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER OR DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. DEUTSCHE BANK SECURITIES INC. (“AGENT”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

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

Chairman of the Supervisory Board: Clemens Börsig Board of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo Banziger, Anthony Dilorio	Deutsche Bank AG is regulated by the FSA for the conduct of designated investment business in the UK, is a member of the London Stock Exchange and is a limited liability company incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in England and Wales BR000005, Registered address:
	Winchester House, 1 Great Winchester Street, London EC2N 2DB.

govern. For the purposes of the Equity Definitions, each reference herein to a Warrant 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 Deutsche 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 Deutsche and Counterparty had executed an agreement in such form (without any Schedule but with the “Cross-Default” provisions of Section 5(a)(vi) applicable to Counterparty with a “Threshold Amount” of $5,000,000 and with such other elections set forth in this Confirmation). For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement.

The Transaction is a Warrant Transaction, which 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:	November 16, 2009.
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Warrant Style:	European.
Warrant Type:	Call.
Seller:	Counterparty.
Buyer:	Deutsche.
Shares:	Class A common stock, par value USD 0.01 per share, of Counterparty.
Number of Warrants:	For each Component, as provided in Annex C to this Confirmation.
Strike Price:	As provided in Annex B to this Confirmation.
Premium:	As provided in Annex B to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Deutsche.

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Procedure for Exercise:
In respect of any Component:
Expiration Date:	As provided in Annex C to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for the Transaction) and, notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Relevant Price for the Expiration Date shall be the prevailing market value per Share determined by the Calculation Agent in a commercially reasonable manner. Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date. “Final Disruption Date” has the meaning provided in Annex B to this Confirmation.
Automatic Exercise:	Applicable. Each Warrant not previously exercised will be deemed to be automatically exercised on the Expiration Time on the relevant Expiration Date.
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof, and by replacing the words “or (iii) an Early Closure.” with “(iii) an Early Closure or (iv) a Regulatory Disruption, in each case that the Calculation Agent determines is material.”
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.

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Regulatory Disruption:	Any event that Deutsche, 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 Deutsche, and including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M and/or analyzing Deutsche as if Deutsche were the Issuer or an affiliated purchaser of the Issuer), for Deutsche to refrain from or decrease any market activity in connection with the Transaction. Deutsche shall notify Counterparty as soon as reasonably practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it.
Settlement Terms:
In respect of any Component:
Net Share Settlement:	On each Settlement Date, Counterparty shall deliver to Deutsche a number of Shares equal to the Net Share Amount for such Settlement Date to the account specified by Deutsche, and cash in lieu of any fractional shares valued at the Relevant Price for the Valuation Date corresponding to such Settlement Date. If, in the good faith reasonable judgment of Deutsche, the Shares deliverable hereunder would not be immediately freely transferable by Deutsche under Rule 144 (“Rule 144”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any successor provision, then Deutsche may elect to either (x) accept delivery of such Shares notwithstanding the fact that such Shares are not immediately freely transferable by Deutsche under Rule 144 or any successor provision or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below.
Net Share Amount:	For any Exercise Date, a number of Shares, as calculated by the Calculation Agent, equal to (x) the product of (i) the number of Warrants being exercised or deemed exercised on such Exercise Date, and (ii) the excess, if any, of the Relevant Price for the Valuation Date occurring on such Exercise Date over the Strike Price (such product, the “Net Share Settlement Amount”), divided by (y) such Relevant Price.
Relevant Price:	On any Valuation Date, the volume weighted average price per Share for the regular trading session of the Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg Page TSYS <equity> AQR on such Valuation Date in respect of the period from 9:30 am to 4:00 p.m. (New York City time) on such Valuation Date (or if such volume weighted average price is not available, the Calculation Agent’s reasonable, good faith estimate of such price on such Valuation Date).

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Settlement Currency:	USD.
Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except 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) and 9.12 of the Equity Definitions will be applicable, 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”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to such Warrant.
Dividends:
In respect of any Component:
Dividend Adjustments:	Counterparty agrees to notify Deutsche promptly of the announcement of an ex-dividend date for any cash dividend by Counterparty. If an ex-dividend date for any cash dividend occurs at any time from, but excluding, the Trade Date to, and including, the Expiration Date, then in lieu of any adjustments as provided under “Method of Adjustment” below, the Calculation Agent shall make such adjustments to the Strike Price and/or the Number of Warrants as it deems appropriate to preserve for the parties the intended economic benefits of the Transaction.
Adjustments:
In respect of any Component:
Method of Adjustment:	Calculation Agent Adjustment; provided, however, that the Equity Definitions shall be amended by replacing the words “diluting or concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii) with the word “material” and by adding the words “or the Transaction” after the words “theoretical value of the relevant Shares” in Sections 11.2(a), 11.2(c) and 11.2(e)(vii); provided further that adjustments may be made to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate and expected liquidity relative to the relevant Share.
Extraordinary Events:
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.

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Modified Calculation Agent Adjustment:	If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Deutsche that Deutsche has determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow Deutsche to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Deutsche, and if such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.
	For greater certainty, the definition of “Modified Calculation Agent Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by adding the following italicized language to the stipulated parenthetical provision: “(including adjustments to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the Announcement Date to the Merger Date (Section 12.2) or Tender Offer Date (Section 12.3)”.
Announcement Event:	If an Announcement Event occurs, the Calculation Agent will determine the economic effect of the Announcement Event on the theoretical value of each Component of the Transaction (including without limitation any change in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the potential Announcement Date to the Expiration Date for such Component and, if such economic effect is material, the Calculation Agent will adjust the terms of the Transaction to reflect such economic effect. “Announcement Event” shall mean the occurrence of a potential Announcement Date of a Merger Event or Tender Offer, if the Merger Date or Tender Offer Date does not, or is not anticipated to, occur on or prior to the Expiration Date for, or any earlier termination of, the relevant Component.
Consequences of Merger Events:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Cancellation and Payment (Calculation Agent Determination).
(c) Share-for-Combined:	Component Adjustment.

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Tender Offer:	Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(1)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Modified Calculation Agent Adjustment.
(c) Share-for-Combined:	Modified Calculation Agent 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”.
Failure to Deliver:	Inapplicable
Insolvency Filing:	Applicable
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	200 basis points per annum
Increased Cost of Stock Borrow:	Applicable

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Initial Stock Loan Rate:	25 basis points per annum
Increased Cost of Hedging:	Applicable
Hedging Disruption:	Applicable
Hedging Party:	Deutsche for all applicable Additional Disruption Events
Determining Party:	Deutsche for all applicable Additional Disruption Events
Acknowledgements:
Non-Reliance:	Applicable
Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable

Mutual Representations: Each of Deutsche 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 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.

Counterparty Representations: In addition to the representations and warranties in the Agreement and those contained

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elsewhere herein, Counterparty represents, warrants, acknowledges and covenants that:

(i)	Counterparty shall immediately provide written notice to Deutsche 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 Deutsche in connection with this Transaction.
(ii)	(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 Deutsche 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 recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Deutsche or any of its affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction.
(iii)	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 Exchange Act.
(iv)	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.
(v)	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.
(vi)	The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement (the “Purchase Agreement”) dated as of the Trade Date between Counterparty and Oppenheimer & Co. Inc. and Raymond James & Associates are true and correct and are hereby deemed to be repeated to Deutsche as if set forth herein.
(vii)	The Shares issuable upon exercise of all Warrants (the “Warrant Shares”) have been duly authorized and, when delivered pursuant to the terms of such Transaction, shall be validly issued, fully-paid and non-assessable, and such issuance of the Warrant Shares shall not be subject to any preemptive or similar rights and shall, upon such issuance, be accepted for listing or quotation on the Exchange.
(viii)	Counterparty is not as of the Trade Date and as of the date on which Counterparty delivers any Termination Delivery Units, 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”)).
(ix)	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.

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(x)	Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Deutsche 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.
(xi)	Counterparty understands, agrees and acknowledges that no obligations of Deutsche to it hereunder, if any, shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Deutsche or any governmental agency.
(xii)	Counterparty shall deliver to Deutsche an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Deutsche in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Deutsche may reasonably request.
(xiii)	On each anniversary of the Trade Date, Counterparty shall deliver to Deutsche an officer’s certificate, signed by an authorized officer, stating the number of Available Shares (as defined in the provision titled “Limitation On Delivery of Shares” below).

Miscellaneous:

Effectiveness. If, on or prior to the Effective Date, Deutsche reasonably determines that it is advisable to cancel the Transaction because of concerns that Deutsche’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any obligation to the other party in respect of the Transaction.

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 Deutsche and Counterparty shall be transmitted exclusively through Agent.

Status of Claims in Bankruptcy. Deutsche acknowledges and agrees that this Confirmation is not intended to convey to Deutsche 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 Deutsche’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 Deutsche’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 Deutsche 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

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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 Deutsche 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.

Alternative Calculations and Counterparty Payment on Early Termination and on Certain Extraordinary Events. If Counterparty owes Deutsche any amount in connection with the Transaction pursuant to Sections 12.2, 12.3, 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 “Counterparty Payment Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any such Counterparty Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Deutsche, 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 Counterparty Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Counterparty Termination Delivery, Counterparty shall deliver to Deutsche a number of Termination Delivery Units having a cash value equal to the amount of such Counterparty 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 sold over a commercially reasonable period of time to generate proceeds equal to the cash equivalent of such payment obligation). In addition, if, in the good faith reasonable judgment of Deutsche, for any reason, the Termination Delivery Units deliverable pursuant to this paragraph would not be immediately freely transferable by Deutsche under Rule 144 or any successor provision, then Deutsche may elect either to (x) accept delivery of such Termination Delivery Units notwithstanding any restriction on transfer or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below. 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, Merger Event or Tender Offer), one Share or (b) in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, 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, Merger Event or Tender Offer. 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 deliver 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, Merger Event or Tender Offer 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.

Registration/Private Placement Procedures. If, in the reasonable opinion of Deutsche, following any delivery of Shares or Termination Delivery Units to Deutsche hereunder, such Shares or Termination Delivery Units

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would be in the hands of Deutsche subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Termination Delivery Units pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Termination Delivery Units being “restricted securities”, as such term is defined in Rule 144) (such Shares or Termination Delivery Units, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) of Annex A hereto at the election of Counterparty, unless waived by Deutsche. Notwithstanding the foregoing, solely in respect of any Warrants exercised or deemed exercised on any Exercise Date, Counterparty shall elect, prior to the first Settlement Date for the first Exercise Date, a Private Placement Settlement (as defined in Annex A hereto) or Registration Settlement (as defined in Annex A hereto) for all deliveries of Restricted Shares for all such Exercise Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) of Annex A hereto shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement Settlement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii) of Annex A, as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.

Share Deliveries. Counterparty acknowledges and agrees that, to the extent that Deutsche is not then an affiliate, as such term is used in Rule 144, of Counterparty and has not been such an affiliate of Counterparty for 90 days (it being understood that Deutsche shall not be considered such an affiliate of Counterparty solely by reason of its right to receive Shares pursuant to a Transaction hereunder), any Shares or Termination Delivery Units delivered hereunder at any time after one year from the Premium Payment Date shall be eligible for resale under Rule 144 or any successor provision, and Counterparty agrees to promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any restrictions on resale under the Securities Act from the certificates representing such Shares or Termination Delivery Units. Counterparty further agrees that with respect to any Shares or Termination Delivery Units delivered hereunder at any time after 6 months from the Premium Payment Date but prior to 1 year from the Premium Payment Date, to the extent that Counterparty then satisfies the current information requirement of Rule 144, Counterparty shall promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any such restrictions or requirements from the certificates representing such Share or Termination Delivery Units upon delivery by Deutsche to Counterparty or such transfer agent of any customary seller’s and broker’s representation letters in connection with resales of such Shares or Termination Delivery Units pursuant to Rule 144, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Deutsche. Counterparty further agrees and acknowledges that Deutsche shall run a holding period under Rule 144 with respect to the Warrants and/or any Shares or Termination Delivery Units delivered hereunder notwithstanding the existence of any other transaction or transactions between Counterparty and Deutsche relating to the Shares. Counterparty further agrees that Shares or Termination Delivery Units delivered hereunder prior to the date that is 6 months from the Premium Payment Date may be freely transferred by Deutsche to its affiliates, and Counterparty shall effect such transfer without any further action by Deutsche. Notwithstanding anything to the contrary herein, Counterparty agrees that any delivery of Shares or Termination Delivery Units shall be effected by book-entry transfer through the facilities of the Clearance System if, at the time of such delivery, the certificates representing such Shares or Termination Delivery Units would not contain any restrictive legend as described above. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court changes after the Trade Date, the agreements of Counterparty herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Counterparty, to comply with Rule 144, including Rule 144(b) or any successor provision, as in effect at the time of delivery of the relevant Shares or Termination Delivery Units.

No Material Non-Public Information. On each day during the period beginning on the Trade Date and ending on the day on which Deutsche has informed Counterparty in writing that Deutsche has completed all purchases or sales of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Deutsche that it is not aware of any material nonpublic information concerning itself or

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the Shares.

Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Deutsche may not exercise any Warrant hereunder, Automatic Exercise shall not apply with respect thereto, and no delivery hereunder (including pursuant to provisions opposite the headings “Alternative Calculations and Counterparty Payments on Early Termination and on Certain Extraordinary Events,” “Registration/Private Placement Procedures,” “Limitation on Delivery of Shares” or Annex A) shall be made, to the extent (but only to the extent) that the receipt of any Shares upon such exercise or delivery would result in the Equity Percentage (as defined below) exceeding 9% or an Ownership Trigger (as defined below) being met. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the Equity Percentage exceeding 9% or an Ownership Trigger being met. If any delivery owed to Deutsche or exercise hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery and Deutsche’s right to exercise a Warrant shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Clearance System Business Day after, Deutsche gives notice to Counterparty that such exercise or delivery would not result in the Equity Percentage exceeding 9% or an Ownership Trigger being met.

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Deutsche with a written notice of such repurchase (a “Repurchase Notice”) on such day if, following such repurchase, the Warrant Equity Percentage (as defined below) is (a) equal to or greater than 4.5% and (b) greater by 0.5% or more than the Warrant Equity Percentage set forth in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater by 0.5% or more than the Warrant Equity Percentage as of the date hereof). The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, of (1) the numerator of which is the Number of Warrants, and (2) the denominator of which is the number of Shares outstanding on such day. Counterparty agrees to indemnify and hold harmless Deutsche and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling person (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Deutsche’s hedging activities as a consequence of becoming, or of the risk of becoming, an “insider” as defined under Section 16 of the Exchange Act, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages, judgments, liabilities and expense (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of Counterparty’s failure to provide Deutsche with a Repurchase Notice on the day and in the manner specified herein, and to reimburse, upon written request, each of such 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 Indemnified Person, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the 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 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 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 Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty, in lieu of indemnifying such Indemnified Person thereunder, shall

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contribute to the amount paid or payable by such 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 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.

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 7,827,600 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 Deutsche 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.

Additional Termination Event. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which (1) Counterparty shall be the sole Affected Party and (2) the Transaction shall be the sole Affected Transaction; provided that with respect to any Additional Termination Event, Deutsche may choose to treat part of the Transaction as the sole Affected Transaction, and, upon termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

(i) Deutsche reasonably determines, upon advice of counsel, that it is advisable to terminate a portion of the Transaction so that Deutsche’s related hedging activities will comply with applicable securities laws, rules or regulations;

(ii) The Shares are not approved for listing on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);

(iii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act or any successor provisions, including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision) is or becomes the “beneficial owner” (as that term is used in Rule 13d-3 under the Exchange Act as in effect on the Effective Date, except that the number of shares of Counterparty’s voting stock will be deemed to include, in addition to all outstanding shares of Counterparty’s voting stock and shares of voting stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination (“unissued shares”) deemed to be held by the “person” or “group” or other person with respect to which the determination is being made, all unissued shares deemed to be held by all other persons), directly or indirectly, of shares representing 50% or more of the total voting power of all outstanding classes of Counterparty’s capital stock or other interests normally entitled (without regard to the occurrence of any contingency) to vote in the election of the board of directors, managers or trustees (“voting stock”) or has the power, directly or indirectly, to elect a majority of the members of Counterparty’s board of directors, unless the exception provided in clause (iv)(2) below applies;

14

(iv) Counterparty consolidates with, enters into a binding share exchange with, or merges with or into, another person, or Counterparty sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets, or any person consolidates with, or merges with or into, Counterparty, in any such event, other than any transaction:

(1) pursuant to which the persons that “beneficially owned,” directly or indirectly, the shares of Counterparty’s voting stock immediately prior to such transaction “beneficially own,” directly or indirectly, shares of Counterparty’s voting stock representing at least a majority of the total voting power of all outstanding classes of voting stock of the surviving or transferee person and such holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction shall be in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction;

(2) in which at least 90% of the consideration paid for the Shares (other than cash payments for fractional shares or pursuant to dissenters’ appraisal rights) consists of shares of common stock traded on the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), or which will be so traded immediately following such transaction; or

(3) which is effected solely to change Counterparty’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding Shares solely into shares of common stock of the surviving person;

(v) (a) individuals who on the Effective Date constituted Counterparty’s board of directors and (b) any new directors whose election to Counterparty’s board of directors or whose nomination for election by Counterparty’s stockholders was approved by at least a majority of the directors at the time of such election or nomination still in office either who were directors on the Effective Date or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of Counterparty’s board of directors; or

(vi) the holders of Counterparty’s capital stock approve any plan or proposal for liquidation or dissolution of Counterparty.

Transfer or Assignment. Notwithstanding any provision of the Agreement to the contrary, Deutsche may, subject to applicable law, freely transfer and assign all of its rights and obligations under the Transaction without the consent of Counterparty.

If, as determined in Deutsche’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0% (2) Deutsche, Deutsche Group (as defined below) or any person whose ownership position would be aggregated with that of Deutsche or Deutsche Group (Deutsche, Deutsche Group or any such person, a “Deutsche 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 Deutsche Person under Applicable Laws and with respect to which such requirements have not been met or the relevant approval has not been received (this clause (2)(x), the “Ownership Trigger”) 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 Deutsche Person divided by the number of Counterparty’s outstanding Shares exceeds 8.0%, (each of such conditions described in clause (1), (2) or (3), an “Excess Ownership Position”), and (b) Deutsche 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, Deutsche 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

15

such partial termination. In the event that Deutsche 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 Warrants equal to the Terminated Portion (allocated among the Components thereof in the discretion of Deutsche), (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 Counterparty Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Counterparty to Deutsche 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 Deutsche and any of its affiliates subject to aggregation with Deutsche 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 Deutsche (collectively, “Deutsche 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 Deutsche to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Deutsche, acting in good faith and in a commercially reasonable manner, may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Deutsche’s obligations in respect of the Transaction and any such designee may assume such obligations. Deutsche shall be discharged of its obligations to Counterparty to the extent of any such performance.

Amendments to Equity Definitions. (a) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: (i) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (ii) replacing “will lend” with “lends” in subsection (B); and (iii) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and (b) Section 12.9(b)(v) of the Equity Definitions is hereby amended by: (i) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); (ii) (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other”; and (iii) deleting subsection (X) in its entirety and the words “or (Y)” immediately following subsection (X).

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.

Payment by Deutsche. 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, Deutsche owes to Company pursuant to Section 6(d)(ii) of the Agreement an amount calculated under Section 6(e) of the Agreement, or (ii) Deutsche owes to Company, 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

16

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.

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
Fax:           (410) 263-7617

(b) Deutsche

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention: Faiz Khan

Telephone: (212) 250-0668
Email:          faiz.khan@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Attention: Lars Kestner

Telephone: (212) 250-6043
Email:          Lars.Kestner@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention: Andrew Yaeger

Telephone: (212) 250-2717
Email:          andrew.yaeger@db.com

17

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 Deutsche a facsimile of the fully-executed Confirmation to Deutsche at 44 113 336 2009. 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,

DEUTSCHE BANK AG, LONDON BRANCH

By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ Jon Arnone
	Name:	Jon Arnone
	Title:	Managing Director
DEUTSCHE BANK SECURITIES INC., acting solely as Agent in connection with this Transaction
By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ John Arnone
	Name:	John Arnone
	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.
	Name:	Thomas M. Brandt, Jr.
	Title:	Senior Vice President and Chief Financial Officer

Chairman of the Supervisory Board: Clemens Börsig Board of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo Banziger, Anthony Dilorio	Deutsche Bank AG is regulated by the FSA for the conduct of designated investment business in the UK, is a member of the London Stock Exchange and is a limited liability company incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in England and Wales BR000005, Registered address:
	Winchester House, 1 Great Winchester Street, London EC2N 2DB.

ANNEX A

Registration Settlement and Private Placement Settlement

(i)	If Counterparty elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Counterparty shall be effected in private placement procedures (customary for equity securities of the size of such private placement) with respect to such Restricted Shares reasonably acceptable to Deutsche; provided that Counterparty may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Counterparty to Deutsche (or any affiliate designated by Deutsche) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Deutsche (or any such affiliate of Deutsche). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Deutsche, due diligence rights (for Deutsche or any buyer of the Restricted Shares designated by Deutsche), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Deutsche. In the event of a Private Placement Settlement, the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, shall be deemed to be the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, plus an additional amount (determined from time to time by the Calculation Agent in its commercially reasonable judgment) attributable to interest that would be earned on such Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, (increased on a daily basis to reflect the accrual of such interest and reduced from time to time by the amount of net proceeds received by Deutsche as provided herein) at a rate equal to the open Federal Funds Rate plus 100 basis points per annum for the period from, and including, such Settlement Date or the date on which the Counterparty Payment Obligation is due, respectively, to, but excluding, the related date on which all the Restricted Shares have been sold and calculated on an Actual/360 basis.
(ii)	If Counterparty elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Counterparty shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Deutsche, to cover the resale of such Restricted Shares (and any Make-whole Shares) in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities, due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all reasonably acceptable to Deutsche. If Deutsche, in its sole reasonable discretion, is not satisfied with such procedures and documentation, Private Placement Settlement shall apply. If Deutsche is satisfied with such procedures and documentation, it shall sell the Restricted Shares (and any Make-whole Shares) pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (and any Make-whole Shares) and ending on the earliest of (i) the Exchange Business Day on which Deutsche completes the sale of all Restricted Shares or, in the case of settlement of Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Counterparty Payment Obligation, (ii) the date upon which all Restricted Shares (and any Make-whole Shares) have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) and (iii) the date upon which all Restricted Shares (and any Make-whole Shares) may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) without any further restriction whatsoever.
(iii)	If (ii) above is applicable and the Net Share Settlement Amount or the Counterparty Payment Obligation, as applicable, exceeds the realized net proceeds from such resale, or if (i) above is applicable and the Freely Tradeable Value (as defined below) of the Shares owed pursuant to the Net Share Settlement Amount, or the Counterparty Payment Obligation (in each case as adjusted pursuant to (i) above), as applicable, exceeds the realized net proceeds from such resale, Counterparty shall transfer to Deutsche by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess

A-1

(the “Additional Amount”), at its option, either in cash or in a number of Restricted Shares (“Make-whole Shares”, provided that the aggregate number of Restricted Shares and Make-whole Shares delivered shall not exceed the Maximum Delivery Amount) that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a value equal to the Additional Amount. If Counterparty elects to pay the Additional Amount in Make-whole Shares, Counterparty shall elect whether the requirements and provisions for either Private Placement Settlement or Registration Settlement shall apply to such payment. This provision shall be applied successively until the Additional Amount is equal to zero, subject to “Limitation on Delivery of Shares”. “Freely Tradeable Value” means the value of the number of Shares delivered to Deutsche which such Shares would have if they were freely tradeable (without prospectus delivery) upon receipt by Deutsche, as determined by the Calculation Agent by reference to the Relevant Price for freely tradeable Shares as of the Valuation Date, or other date of valuation used to determine the delivery obligation with respect to such Shares, or by other commercially reasonable means.

A-2

ANNEX B

The Strike Price, Premium and Final Disruption Date for the Transaction are set forth below.

Strike Price:	USD12.736
Premium:	USD5,071,005
Final Disruption Date:	July 7, 2015

B-1

ANNEX C

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

Component Number	Number of Warrants		Expiration Date
1.		43,487	Fri, 02/13/15
2.		43,487	Tue, 02/17/15
3.		43,487	Wed, 02/18/15
4.		43,487	Thu, 02/19/15
5.		43,487	Fri, 02/20/15
6.		43,487	Mon, 02/23/15
7.		43,487	Tue, 02/24/15
8.		43,487	Wed, 02/25/15
9.		43,487	Thu, 02/26/15
10.		43,487	Fri, 02/27/15
11.		43,487	Mon, 03/02/15
12.		43,487	Tue, 03/03/15
13.		43,487	Wed, 03/04/15
14.		43,487	Thu, 03/05/15
15.		43,487	Fri, 03/06/15
16.		43,487	Mon, 03/09/15
17.		43,487	Tue, 03/10/15
18.		43,487	Wed, 03/11/15
19.		43,487	Thu, 03/12/15
20.		43,487	Fri, 03/13/15
21.		43,487	Mon, 03/16/15
22.		43,487	Tue, 03/17/15
23.		43,487	Wed, 03/18/15
24.		43,487	Thu, 03/19/15
25.		43,487	Fri, 03/20/15
26.		43,487	Mon, 03/23/15
27.		43,487	Tue, 03/24/15
28.		43,487	Wed, 03/25/15
29.		43,487	Thu, 03/26/15
30.		43,487	Fri, 03/27/15
31.		43,487	Mon, 03/30/15
32.		43,487	Tue, 03/31/15
33.		43,487	Wed, 04/01/15
34.		43,487	Thu, 04/02/15
35.		43,487	Mon, 04/06/15
36.		43,487	Tue, 04/07/15
37.		43,487	Wed, 04/08/15
38.		43,487	Thu, 04/09/15
39.		43,487	Fri, 04/10/15

C-1

Component Number	Number of Warrants		Expiration Date
40.		43,487	Mon, 04/13/15
41.		43,487	Tue, 04/14/15
42.		43,487	Wed, 04/15/15
43.		43,487	Thu, 04/16/15
44.		43,487	Fri, 04/17/15
45.		43,487	Mon, 04/20/15
46.		43,487	Tue, 04/21/15
47.		43,487	Wed, 04/22/15
48.		43,487	Thu, 04/23/15
49.		43,487	Fri, 04/24/15
50.		43,487	Mon, 04/27/15
51.		43,487	Tue, 04/28/15
52.		43,487	Wed, 04/29/15
53.		43,487	Thu, 04/30/15
54.		43,487	Fri, 05/01/15
55.		43,487	Mon, 05/04/15
56.		43,487	Tue, 05/05/15
57.		43,487	Wed, 05/06/15
58.		43,487	Thu, 05/07/15
59.		43,487	Fri, 05/08/15
60.		43,487	Mon, 05/11/15
61.		43,487	Tue, 05/12/15
62.		43,487	Wed, 05/13/15
63.		43,487	Thu, 05/14/15
64.		43,487	Fri, 05/15/15
65.		43,487	Mon, 05/18/15
66.		43,487	Tue, 05/19/15
67.		43,487	Wed, 05/20/15
68.		43,487	Thu, 05/21/15
69.		43,487	Fri, 05/22/15
70.		43,487	Tue, 05/26/15
71.		43,487	Wed, 05/27/15
72.		43,487	Thu, 05/28/15
73.		43,487	Fri, 05/29/15
74.		43,487	Mon, 06/01/15
75.		43,487	Tue, 06/02/15
76.		43,487	Wed, 06/03/15
77.		43,487	Thu, 06/04/15
78.		43,487	Fri, 06/05/15
79.		43,487	Mon, 06/08/15
80.		43,487	Tue, 06/09/15
81.		43,487	Wed, 06/10/15
82.		43,487	Thu, 06/11/15
83.		43,487	Fri, 06/12/15
84.		43,487	Mon, 06/15/15
85.		43,487	Tue, 06/16/15

A-2

Component Number	Number of Warrants		Expiration Date
86.		43,487	Wed, 06/17/15
87.		43,487	Thu, 06/18/15
88.		43,487	Fri, 06/19/15
89.		43,487	Mon, 06/22/15
90.		43,457	Tue, 06/23/15

A-2

EX-10.3.B

Exhibit 10.3(b)

SOCIÉTÉ GÉNÉRALE
17 COURS VALMY
92987 PARIS-LA DEFENSE,
FRANCE

DATE:	November 10, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Société Générale
FACSIMILE:	(212) 278-5624
SUBJECT:	Equity Derivatives Warrant Confirmation
REFERENCE NUMBER(S):	[               ]

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Société Générale (“Société Générale”) 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.

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 Warrant 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 Société Générale 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 Société Générale and Counterparty had executed an agreement in such form (without any Schedule but with the “Cross-Default” provisions of Section 5(a)(vi) applicable to Counterparty with a “Threshold Amount” of $5,000,000 and with such other elections set forth in this Confirmation). For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement.

The Transaction is a Warrant Transaction, which 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:	November 16, 2009.
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Warrant Style:	European.
Warrant Type:	Call.
Seller:	Counterparty.
Buyer:	Société Générale.
Shares:	Class A common stock, par value USD 0.01 per share, of Counterparty.
Number of Warrants:	For each Component, as provided in Annex C to this Confirmation.
Strike Price:	As provided in Annex B to this Confirmation.
Premium:	As provided in Annex B to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Société Générale.
Procedure for Exercise:
In respect of any Component:
Expiration Date:	As provided in Annex C to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction

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	hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for the Transaction) and, notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Relevant Price for the Expiration Date shall be the prevailing market value per Share determined by the Calculation Agent in a commercially reasonable manner. Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date. “Final Disruption Date” has the meaning provided in Annex B to this Confirmation.
Automatic Exercise:	Applicable. Each Warrant not previously exercised will be deemed to be automatically exercised on the Expiration Time on the relevant Expiration Date.
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof, and by replacing the words “or (iii) an Early Closure.” with “(iii) an Early Closure or (iv) a Regulatory Disruption, in each case that the Calculation Agent determines is material.”
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
Regulatory Disruption:	Any event that Société Générale, 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 Société Générale, and including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M and/or analyzing Société Générale as if Société Générale were the Issuer or an affiliated purchaser of the Issuer), for Société Générale to refrain from or decrease any market activity in connection with the Transaction. Société Générale shall notify Counterparty as soon as reasonably

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	practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it.
Settlement Terms:
In respect of any Component:
Net Share Settlement:	On each Settlement Date, Counterparty shall deliver to Société Générale a number of Shares equal to the Net Share Amount for such Settlement Date to the account specified by Société Générale, and cash in lieu of any fractional shares valued at the Relevant Price for the Valuation Date corresponding to such Settlement Date. If, in the good faith reasonable judgment of Société Générale, the Shares deliverable hereunder would not be immediately freely transferable by Société Générale under Rule 144 (“Rule 144”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any successor provision, then Société Générale may elect to either (x) accept delivery of such Shares notwithstanding the fact that such Shares are not immediately freely transferable by Société Générale under Rule 144 or any successor provision or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below.
Net Share Amount:	For any Exercise Date, a number of Shares, as calculated by the Calculation Agent, equal to (x) the product of (i) the number of Warrants being exercised or deemed exercised on such Exercise Date, and (ii) the excess, if any, of the Relevant Price for the Valuation Date occurring on such Exercise Date over the Strike Price (such product, the “Net Share Settlement Amount”), divided by (y) such Relevant Price.
Relevant Price:	On any Valuation Date, the volume weighted average price per Share for the regular trading session of the Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg Page TSYS <equity> AQR on such Valuation Date in respect of the period from 9:30 am to 4:00 p.m. (New York City time) on such Valuation Date (or if such volume weighted average price is not available, the Calculation Agent’s reasonable, good faith estimate of such price on such Valuation Date).
Settlement Currency:	USD.
Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except 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) and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” and “Physically-settled” shall be read as references to

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	“Net Share Settlement” and “Net Share Settled”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to such Warrant.
Dividends:
In respect of any Component:
Dividend Adjustments:	Counterparty agrees to notify Société Générale promptly of the announcement of an ex-dividend date for any cash dividend by Counterparty. If an ex-dividend date for any cash dividend occurs at any time from, but excluding, the Trade Date to, and including, the Expiration Date, then in lieu of any adjustments as provided under “Method of Adjustment” below, the Calculation Agent shall make such adjustments to the Strike Price and/or the Number of Warrants as it deems appropriate to preserve for the parties the intended economic benefits of the Transaction.
Adjustments:
In respect of any Component:
Method of Adjustment:	Calculation Agent Adjustment; provided, however, that the Equity Definitions shall be amended by replacing the words “diluting or concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii) with the word “material” and by adding the words “or the Transaction” after the words “theoretical value of the relevant Shares” in Sections 11.2(a), 11.2(c) and 11.2(e)(vii); provided further that adjustments may be made to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate and expected liquidity relative to the relevant Share.
Extraordinary Events:
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.
Modified Calculation Agent Adjustment:	If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Société Générale that Société Générale has determined, in its reasonable discretion, to be reasonably

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	necessary or appropriate to allow Société Générale to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Société Générale, and if such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.
	For greater certainty, the definition of “Modified Calculation Agent Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by adding the following italicized language to the stipulated parenthetical provision: “(including adjustments to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the Announcement Date to the Merger Date (Section 12.2) or Tender Offer Date (Section 12.3)”.
Announcement Event:	If an Announcement Event occurs, the Calculation Agent will determine the economic effect of the Announcement Event on the theoretical value of each Component of the Transaction (including without limitation any change in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the potential Announcement Date to the Expiration Date for such Component and, if such economic effect is material, the Calculation Agent will adjust the terms of the Transaction to reflect such economic effect. “Announcement Event” shall mean the occurrence of a potential Announcement Date of a Merger Event or Tender Offer, if the Merger Date or Tender Offer Date does not, or is not anticipated to, occur on or prior to the Expiration Date for, or any earlier termination of, the relevant Component.
Consequences of Merger Events:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Cancellation and Payment (Calculation Agent Determination).
(c) Share-for-Combined:	Component Adjustment.
Tender Offer:	Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(1)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.

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(b) Share-for-Other:	Modified Calculation Agent Adjustment.
(c) Share-for-Combined:	Modified Calculation Agent 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”.
Failure to Deliver:	Inapplicable
Insolvency Filing:	Applicable
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	200 basis points per annum
Increased Cost of Stock Borrow:	Applicable
Initial Stock Loan Rate:	25 basis points per annum
Increased Cost of Hedging:	Applicable
Hedging Disruption:	Applicable
Hedging Party:	Société Générale for all applicable Additional Disruption Events
Determining Party:	Société Générale for all applicable Additional Disruption Events

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Acknowledgements:
Non-Reliance:	Applicable
Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable

Mutual Representations: Each of Société Générale 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 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.

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 shall immediately provide written notice to Société Générale 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 Société Générale in connection with this Transaction.

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(ii)	(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 Société Générale 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 recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Société Générale or any of its affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction.
(iii)	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 Exchange Act.
(iv)	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.
(v)	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.
(vi)	The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement (the “Purchase Agreement”) dated as of the Trade Date between Counterparty and Oppenheimer & Co. and Raymond James are true and correct and are hereby deemed to be repeated to Société Générale as if set forth herein.
(vii)	The Shares issuable upon exercise of all Warrants (the “Warrant Shares”) have been duly authorized and, when delivered pursuant to the terms of such Transaction, shall be validly issued, fully-paid and non-assessable, and such issuance of the Warrant Shares shall not be subject to any preemptive or similar rights and shall, upon such issuance, be accepted for listing or quotation on the Exchange.
(viii)	Counterparty is not as of the Trade Date and as of the date on which Counterparty delivers any Termination Delivery Units, 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”)).
(ix)	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.
(x)	Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Société Générale 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.
(xi)	Counterparty understands, agrees and acknowledges that no obligations of Société Générale to it hereunder, if any, shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Société Générale or any governmental agency.

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(xii)	Counterparty shall deliver to Société Générale an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Société Générale in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Société Générale may reasonably request.
(xiii)	On each anniversary of the Trade Date, Counterparty shall deliver to Société Générale an officer’s certificate, signed by an authorized officer, stating the number of Available Shares (as defined in the provision titled “Limitation On Delivery of Shares” below).

Miscellaneous:

Effectiveness. If, on or prior to the Effective Date, Société Générale reasonably determines that it is advisable to cancel the Transaction because of concerns that Société Générale’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any obligation to the other party in respect of the Transaction.

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 will be effected through Agent. In addition, all notices, demands and communications of any kind relating to the Transaction between Société Générale and Counterparty may be transmitted exclusively through Agent.

Status of Claims in Bankruptcy. Société Générale acknowledges and agrees that this Confirmation is not intended to convey to Société Générale 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 Société Générale’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 Société Générale’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 Société Générale 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

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“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 Société Générale 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.

Alternative Calculations and Counterparty Payment on Early Termination and on Certain Extraordinary Events. If Counterparty owes Société Générale any amount in connection with the Transaction pursuant to Sections 12.2, 12.3, 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 “Counterparty Payment Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any such Counterparty Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Société Générale, 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 Counterparty Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Counterparty Termination Delivery, Counterparty shall deliver to Société Générale a number of Termination Delivery Units having a cash value equal to the amount of such Counterparty 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 sold over a commercially reasonable period of time to generate proceeds equal to the cash equivalent of such payment obligation). In addition, if, in the good faith reasonable judgment of Société Générale, for any reason, the Termination Delivery Units deliverable pursuant to this paragraph would not be immediately freely transferable by Société Générale under Rule 144 or any successor provision, then Société Générale may elect either to (x) accept delivery of such Termination Delivery Units notwithstanding any restriction on transfer or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below. 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, Merger Event or Tender Offer), one Share or (b) in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, 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, Merger Event or Tender Offer. 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 deliver 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, Merger Event or Tender Offer 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.

Registration/Private Placement Procedures. If, in the reasonable opinion of Société Générale, following any delivery of Shares or Termination Delivery Units to Société Générale hereunder, such Shares or Termination Delivery Units would be in the hands of Société Générale subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Termination Delivery Units pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Termination Delivery Units being “restricted securities”, as such term is defined in Rule 144) (such Shares or Termination Delivery Units,

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“Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) of Annex A hereto at the election of Counterparty, unless waived by Société Générale. Notwithstanding the foregoing, solely in respect of any Warrants exercised or deemed exercised on any Exercise Date, Counterparty shall elect, prior to the first Settlement Date for the first Exercise Date, a Private Placement Settlement (as defined in Annex A hereto) or Registration Settlement (as defined in Annex A hereto) for all deliveries of Restricted Shares for all such Exercise Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) of Annex A hereto shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement Settlement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii) of Annex A, as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.

Share Deliveries. Counterparty acknowledges and agrees that, to the extent that Société Générale is not then an affiliate, as such term is used in Rule 144, of Counterparty and has not been such an affiliate of Counterparty for 90 days (it being understood that Société Générale shall not be considered such an affiliate of Counterparty solely by reason of its right to receive Shares pursuant to a Transaction hereunder), any Shares or Termination Delivery Units delivered hereunder at any time after one year from the Premium Payment Date shall be eligible for resale under Rule 144 or any successor provision, and Counterparty agrees to promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any restrictions on resale under the Securities Act from the certificates representing such Shares or Termination Delivery Units. Counterparty further agrees that with respect to any Shares or Termination Delivery Units delivered hereunder at any time after 6 months from the Premium Payment Date but prior to 1 year from the Premium Payment Date, to the extent that Counterparty then satisfies the current information requirement of Rule 144, Counterparty shall promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any such restrictions or requirements from the certificates representing such Share or Termination Delivery Units upon delivery by Société Générale to Counterparty or such transfer agent of any customary seller’s and broker’s representation letters in connection with resales of such Shares or Termination Delivery Units pursuant to Rule 144, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Société Générale. Counterparty further agrees and acknowledges that Société Générale shall run a holding period under Rule 144 with respect to the Warrants and/or any Shares or Termination Delivery Units delivered hereunder notwithstanding the existence of any other transaction or transactions between Counterparty and Société Générale relating to the Shares. Counterparty further agrees that Shares or Termination Delivery Units delivered hereunder prior to the date that is 6 months from the Premium Payment Date may be freely transferred by Société Générale to its affiliates, and Counterparty shall effect such transfer without any further action by Société Générale. Notwithstanding anything to the contrary herein, Counterparty agrees that any delivery of Shares or Termination Delivery Units shall be effected by book-entry transfer through the facilities of the Clearance System if, at the time of such delivery, the certificates representing such Shares or Termination Delivery Units would not contain any restrictive legend as described above. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court changes after the Trade Date, the agreements of Counterparty herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Counterparty, to comply with Rule 144, including Rule 144(b) or any successor provision, as in effect at the time of delivery of the relevant Shares or Termination Delivery Units.

No Material Non-Public Information. On each day during the period beginning on the Trade Date and ending on the day on which Société Générale has informed Counterparty in writing that Société Générale has completed all purchases or sales of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Société Générale that it is not aware of any material nonpublic information concerning itself or the Shares.

Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Société Générale may not

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exercise any Warrant hereunder, Automatic Exercise shall not apply with respect thereto, and no delivery hereunder (including pursuant to provisions opposite the headings “Alternative Calculations and Counterparty Payments on Early Termination and on Certain Extraordinary Events,” “Registration/Private Placement Procedures,” “Limitation on Delivery of Shares” or Annex A) shall be made, to the extent (but only to the extent) that the receipt of any Shares upon such exercise or delivery would result in the Equity Percentage (as defined below) exceeding 9% or an Ownership Trigger (as defined below) being met. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the Equity Percentage exceeding 9% or an Ownership Trigger being met. If any delivery owed to Société Générale or exercise hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery and Société Générale’s right to exercise a Warrant shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Clearance System Business Day after, Société Générale gives notice to Counterparty that such exercise or delivery would not result in the Equity Percentage exceeding 9% or an Ownership Trigger being met.

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Société Générale with a written notice of such repurchase (a “Repurchase Notice”) on such day if, following such repurchase, the Warrant Equity Percentage (as defined below) is (a) equal to or greater than 4.5% and (b) greater by 0.5% or more than the Warrant Equity Percentage set forth in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater by 0.5% or more than the Warrant Equity Percentage as of the date hereof). The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, of (1) the numerator of which is the Number of Warrants, and (2) the denominator of which is the number of Shares outstanding on such day. Counterparty agrees to indemnify and hold harmless Société Générale and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling person (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Société Générale’s hedging activities as a consequence of becoming, or of the risk of becoming, an “insider” as defined under Section 16 of the Exchange Act, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages, judgments, liabilities and expense (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of Counterparty’s failure to provide Société Générale with a Repurchase Notice on the day and in the manner specified herein, and to reimburse, upon written request, each of such 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 Indemnified Person, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the 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 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 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 Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such 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 Indemnified Person at law or in equity. The indemnity and

13

contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination 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 6,088,133 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 Société Générale 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.

Additional Termination Event. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which (1) Counterparty shall be the sole Affected Party and (2) the Transaction shall be the sole Affected Transaction; provided that with respect to any Additional Termination Event, Société Générale may choose to treat part of the Transaction as the sole Affected Transaction, and, upon termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

(i) Société Générale reasonably determines, upon advice of counsel, that it is advisable to terminate a portion of the Transaction so that Société Générale’s related hedging activities will comply with applicable securities laws, rules or regulations;

(ii) The Shares are not approved for listing on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);

(iii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act or any successor provisions, including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision) is or becomes the “beneficial owner” (as that term is used in Rule 13d-3 under the Exchange Act as in effect on the Effective Date, except that the number of shares of Counterparty’s voting stock will be deemed to include, in addition to all outstanding shares of Counterparty’s voting stock and shares of voting stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination (“unissued shares”) deemed to be held by the “person” or “group” or other person with respect to which the determination is being made, all unissued shares deemed to be held by all other persons), directly or indirectly, of shares representing 50% or more of the total voting power of all outstanding classes of Counterparty’s capital stock or other interests normally entitled (without regard to the occurrence of any contingency) to vote in the election of the board of directors, managers or trustees (“voting stock”) or has the power, directly or indirectly, to elect a majority of the members of Counterparty’s board of directors, unless the exception provided in clause (iv)(2) below applies;

(iv) Counterparty consolidates with, enters into a binding share exchange with, or merges with or into, another person, or Counterparty sells, assigns, conveys, transfers, leases or otherwise disposes of all or

14

substantially all of its assets, or any person consolidates with, or merges with or into, Counterparty, in any such event, other than any transaction:

(1) pursuant to which the persons that “beneficially owned,” directly or indirectly, the shares of Counterparty’s voting stock immediately prior to such transaction “beneficially own,” directly or indirectly, shares of Counterparty’s voting stock representing at least a majority of the total voting power of all outstanding classes of voting stock of the surviving or transferee person and such holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction shall be in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction;

(2) in which at least 90% of the consideration paid for the Shares (other than cash payments for fractional shares or pursuant to dissenters’ appraisal rights) consists of shares of common stock traded on the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), or which will be so traded immediately following such transaction; or

(3) which is effected solely to change Counterparty’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding Shares solely into shares of common stock of the surviving person;

(v) (a) individuals who on the Effective Date constituted Counterparty’s board of directors and (b) any new directors whose election to Counterparty’s board of directors or whose nomination for election by Counterparty’s stockholders was approved by at least a majority of the directors at the time of such election or nomination still in office either who were directors on the Effective Date or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of Counterparty’s board of directors; or

(vi) the holders of Counterparty’s capital stock approve any plan or proposal for liquidation or dissolution of Counterparty.

Transfer or Assignment. Notwithstanding any provision of the Agreement to the contrary, Société Générale may, subject to applicable law, freely transfer and assign all of its rights and obligations under the Transaction without the consent of Counterparty. If, as determined in Société Générale’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0% (2) Société Générale, Société Générale Group (as defined below) or any person whose ownership position would be aggregated with that of Société Générale or Société Générale Group (Société Générale, Société Générale Group or any such person, a “Société Générale 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 Société Générale Person under Applicable Laws and with respect to which such requirements have not been met or the relevant approval has not been received (this clause (2)(x), the “Ownership Trigger”) 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 Société Générale Person divided by the number of Counterparty’s outstanding Shares exceeds 8.0%, (each of such conditions described in clause (1), (2) or (3), an “Excess Ownership Position”), and (b) Société Générale 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, Société Générale 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 Société Générale 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

15

Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Warrants equal to the Terminated Portion (allocated among the Components thereof in the discretion of Société Générale), (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 Counterparty Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Counterparty to Société Générale 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 Société Générale and any of its affiliates subject to aggregation with Société Générale 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 Société Générale (collectively, “Société Générale 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 Société Générale to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Société Générale, acting in good faith and in a commercially reasonable manner, may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Société Générale’s obligations in respect of the Transaction and any such designee may assume such obligations. Société Générale shall be discharged of its obligations to Counterparty to the extent of any such performance.

Amendments to Equity Definitions. (a) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: (i) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (ii) replacing “will lend” with “lends” in subsection (B); and (iii) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and (b) Section 12.9(b)(v) of the Equity Definitions is hereby amended by: (i) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); (ii) (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other”; and (iii) deleting subsection (X) in its entirety and the words “or (Y)” immediately following subsection (X).

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.

Payment by Société Générale. 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, Société Générale owes to Company pursuant to Section 6(d)(ii) of the Agreement an amount calculated under Section 6(e) of the Agreement, or (ii) Société Générale owes to Company, 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.

16

Governing law: The law of the State of New York.

Terms relating to the Agent. Société Générale is not registered as a broker or dealer under the Securities Exchange Act of 1934, as amended. SG Americas Securities, LLC has acted solely as agent for Société Générale and the counterparty to the extent required by law in connection with this Transaction and has no obligations, by way of issuance, endorsement, guarantee or otherwise, with respect to the performance of either party under this Transaction. The parties agree to proceed solely against each other, and not against SG Americas Securities, LLC as agent, in seeking enforcement of their rights and obligations with respect to this Transaction, including their rights and obligations with respect to payment of funds and delivery of securities.

Broker. SG Americas Securities, LLC may have been paid a fee by Société Générale in connection with this Transaction. Further details will be furnished upon written request.

Time of Dealing. The time of the Transaction will be furnished by SG Americas Securities, LLC upon written request.

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
Annapolis, Maryland 21401
Attention:  Bruce A. White
Facsimile: (410) 263-7617

(b) Société Générale

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention: Sanjay Garg
Telephone: (212) 278-5187
Facsimile: (212) 278-5624
Email:          sanjay.garg@sgcib.com

with a copy to:

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention: Steve Milankov
Telephone: (212) 278-6985
Facsimile: (212) 278-7365
Email:     steve.milankov@sgcib.com

17

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 Société Générale a facsimile of the fully-executed Confirmation to Société Générale at (212) 278-5624. 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, SOCIÉTÉ GÉNÉRALE
By:	/s/ Sanjay Garg
	Name:	Sanjay Garg
	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.
	Name:	Thomas M. Brandt, Jr.
	Title:	Senior Vice President and Chief Financial Officer

ANNEX A

Registration Settlement and Private Placement Settlement

(i)	If Counterparty elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Counterparty shall be effected in private placement procedures (customary for equity securities of the size of such private placement) with respect to such Restricted Shares reasonably acceptable to Société Générale; provided that Counterparty may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Counterparty to Société Générale (or any affiliate designated by Société Générale) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Société Générale (or any such affiliate of Société Générale). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Société Générale, due diligence rights (for Société Générale or any buyer of the Restricted Shares designated by Société Générale), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Société Générale. In the event of a Private Placement Settlement, the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, shall be deemed to be the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, plus an additional amount (determined from time to time by the Calculation Agent in its commercially reasonable judgment) attributable to interest that would be earned on such Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, (increased on a daily basis to reflect the accrual of such interest and reduced from time to time by the amount of net proceeds received by Société Générale as provided herein) at a rate equal to the open Federal Funds Rate plus 100 basis points per annum for the period from, and including, such Settlement Date or the date on which the Counterparty Payment Obligation is due, respectively, to, but excluding, the related date on which all the Restricted Shares have been sold and calculated on an Actual/360 basis.
(ii)	If Counterparty elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Counterparty shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Société Générale, to cover the resale of such Restricted Shares (and any Make-whole Shares) in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities, due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all reasonably acceptable to Société Générale. If Société Générale, in its sole reasonable discretion, is not satisfied with such procedures and documentation, Private Placement Settlement shall apply. If Société Générale is satisfied with such procedures and documentation, it shall sell the Restricted Shares (and any Make-whole Shares) pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (and any Make-whole Shares) and ending on the earliest of (i) the Exchange Business Day on which Société Générale completes the sale of all Restricted Shares or, in the case of settlement of Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Counterparty Payment Obligation, (ii) the date upon which all Restricted Shares (and any Make-whole Shares) have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) and (iii) the date upon which all Restricted Shares (and any Make-whole Shares) may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) without any further restriction whatsoever.
(iii)	If (ii) above is applicable and the Net Share Settlement Amount or the Counterparty Payment Obligation, as applicable, exceeds the realized net proceeds from such resale, or if (i) above is applicable and the Freely Tradeable Value (as defined below) of the Shares owed pursuant to the Net Share Settlement Amount, or the Counterparty Payment Obligation (in each case as adjusted pursuant to (i) above), as applicable, exceeds the realized net proceeds

A-1

from such resale, Counterparty shall transfer to Société Générale by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess (the “Additional Amount”), at its option, either in cash or in a number of Restricted Shares (“Make-whole Shares”, provided that the aggregate number of Restricted Shares and Make-whole Shares delivered shall not exceed the Maximum Delivery Amount) that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a value equal to the Additional Amount. If Counterparty elects to pay the Additional Amount in Make-whole Shares, Counterparty shall elect whether the requirements and provisions for either Private Placement Settlement or Registration Settlement shall apply to such payment. This provision shall be applied successively until the Additional Amount is equal to zero, subject to “Limitation on Delivery of Shares”. “Freely Tradeable Value” means the value of the number of Shares delivered to Société Générale which such Shares would have if they were freely tradeable (without prospectus delivery) upon receipt by Société Générale, as determined by the Calculation Agent by reference to the Relevant Price for freely tradeable Shares as of the Valuation Date, or other date of valuation used to determine the delivery obligation with respect to such Shares, or by other commercially reasonable means.

A-2

ANNEX B

The Strike Price, Premium and Final Disruption Date for the Transaction are set forth below.

Strike Price:	USD12.736
Premium:	USD3,944,115
Final Disruption Date:	July 7, 2015.

B-1

ANNEX C

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

Component Number	Number of Warrants		Expiration Date
1.		33,823	Fri, 02/13/15
2.		33,823	Tue, 02/17/15
3.		33,823	Wed, 02/18/15
4.		33,823	Thu, 02/19/15
5.		33,823	Fri, 02/20/15
6.		33,823	Mon, 02/23/15
7.		33,823	Tue, 02/24/15
8.		33,823	Wed, 02/25/15
9.		33,823	Thu, 02/26/15
10.		33,823	Fri, 02/27/15
11.		33,823	Mon, 03/02/15
12.		33,823	Tue, 03/03/15
13.		33,823	Wed, 03/04/15
14.		33,823	Thu, 03/05/15
15.		33,823	Fri, 03/06/15
16.		33,823	Mon, 03/09/15
17.		33,823	Tue, 03/10/15
18.		33,823	Wed, 03/11/15
19.		33,823	Thu, 03/12/15
20.		33,823	Fri, 03/13/15
21.		33,823	Mon, 03/16/15
22.		33,823	Tue, 03/17/15
23.		33,823	Wed, 03/18/15
24.		33,823	Thu, 03/19/15
25.		33,823	Fri, 03/20/15
26.		33,823	Mon, 03/23/15
27.		33,823	Tue, 03/24/15
28.		33,823	Wed, 03/25/15
29.		33,823	Thu, 03/26/15
30.		33,823	Fri, 03/27/15
31.		33,823	Mon, 03/30/15
32.		33,823	Tue, 03/31/15
33.		33,823	Wed, 04/01/15
34.		33,823	Thu, 04/02/15
35.		33,823	Mon, 04/06/15
36.		33,823	Tue, 04/07/15
37.		33,823	Wed, 04/08/15
38.		33,823	Thu, 04/09/15
39.		33,823	Fri, 04/10/15

C-1

Component Number	Number of Warrants		Expiration Date
40.		33,823	Mon, 04/13/15
41.		33,823	Tue, 04/14/15
42.		33,823	Wed, 04/15/15
43.		33,823	Thu, 04/16/15
44.		33,823	Fri, 04/17/15
45.		33,823	Mon, 04/20/15
46.		33,823	Tue, 04/21/15
47.		33,823	Wed, 04/22/15
48.		33,823	Thu, 04/23/15
49.		33,823	Fri, 04/24/15
50.		33,823	Mon, 04/27/15
51.		33,823	Tue, 04/28/15
52.		33,823	Wed, 04/29/15
53.		33,823	Thu, 04/30/15
54.		33,823	Fri, 05/01/15
55.		33,823	Mon, 05/04/15
56.		33,823	Tue, 05/05/15
57.		33,823	Wed, 05/06/15
58.		33,823	Thu, 05/07/15
59.		33,823	Fri, 05/08/15
60.		33,823	Mon, 05/11/15
61.		33,823	Tue, 05/12/15
62.		33,823	Wed, 05/13/15
63.		33,823	Thu, 05/14/15
64.		33,823	Fri, 05/15/15
65.		33,823	Mon, 05/18/15
66.		33,823	Tue, 05/19/15
67.		33,823	Wed, 05/20/15
68.		33,823	Thu, 05/21/15
69.		33,823	Fri, 05/22/15
70.		33,823	Tue, 05/26/15
71.		33,823	Wed, 05/27/15
72.		33,823	Thu, 05/28/15
73.		33,823	Fri, 05/29/15
74.		33,823	Mon, 06/01/15
75.		33,823	Tue, 06/02/15
76.		33,823	Wed, 06/03/15
77.		33,823	Thu, 06/04/15
78.		33,823	Fri, 06/05/15
79.		33,823	Mon, 06/08/15
80.		33,823	Tue, 06/09/15
81.		33,823	Wed, 06/10/15
82.		33,823	Thu, 06/11/15
83.		33,823	Fri, 06/12/15
84.		33,823	Mon, 06/15/15
85.		33,823	Tue, 06/16/15

A-2

Component Number	Number of Warrants		Expiration Date
86.		33,823	Wed, 06/17/15
87.		33,823	Thu, 06/18/15
88.		33,823	Fri, 06/19/15
89.		33,823	Mon, 06/22/15
90.		33,819	Tue, 06/23/15

A-2

EX-10.3.C

Exhibit 10.3(c)

RBC Capital Markets Corporation
One Liberty Plaza — 2^nd 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 Confirmation
REFERENCE NUMBER(S):	NY-23215 to NY-23304

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 Warrant 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-23215 to NY-23304
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agreement in such form (without any Schedule but with the “Cross-Default” provisions of Section 5(a)(vi) applicable to Counterparty with a “Threshold Amount” of $5,000,000 and with such other elections set forth in this Confirmation). For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement.

The Transaction is a Warrant Transaction, which 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:	November 16, 2009.
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Warrant Style:	European.
Warrant Type:	Call.
Seller:	Counterparty.
Buyer:	RBC.
Shares:	Class A common stock, par value USD 0.01 per share, of Counterparty.
Number of Warrants:	For each Component, as provided in Annex C to this Confirmation.
Strike Price:	As provided in Annex B to this Confirmation.
Premium:	As provided in Annex B to this Confirmation.
Premium Payment Date:	The Effective Date.
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.

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Procedure for Exercise:
In respect of any Component:
Expiration Date:	As provided in Annex C to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for the Transaction) and, notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Relevant Price for the Expiration Date shall be the prevailing market value per Share determined by the Calculation Agent in a commercially reasonable manner. Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date. “Final Disruption Date” has the meaning provided in Annex B to this Confirmation.
Automatic Exercise:	Applicable. Each Warrant not previously exercised will be deemed to be automatically exercised on the Expiration Time on the relevant Expiration Date.
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof, and by replacing the words “or (iii) an Early Closure.” with “(iii) an Early Closure or (iv) a Regulatory Disruption, in each case that the Calculation Agent determines is material.”
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
Regulatory Disruption:	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,

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	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 U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M and/or analyzing RBC as if RBC 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. RBC shall notify Counterparty as soon as reasonably practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it.
Settlement Terms:
In respect of any Component:
Net Share Settlement:	On each Settlement Date, Counterparty shall deliver to RBC a number of Shares equal to the Net Share Amount for such Settlement Date to the account specified by RBC, and cash in lieu of any fractional shares valued at the Relevant Price for the Valuation Date corresponding to such Settlement Date. If, in the good faith reasonable judgment of RBC, the Shares deliverable hereunder would not be immediately freely transferable by RBC under Rule 144 (“Rule 144”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any successor provision, then RBC may elect to either (x) accept delivery of such Shares notwithstanding the fact that such Shares are not immediately freely transferable by RBC under Rule 144 or any successor provision or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below.
Net Share Amount:	For any Exercise Date, a number of Shares, as calculated by the Calculation Agent, equal to (x) the product of (i) the number of Warrants being exercised or deemed exercised on such Exercise Date, and (ii) the excess, if any, of the Relevant Price for the Valuation Date occurring on such Exercise Date over the Strike Price (such product, the “Net Share Settlement Amount”), divided by (y) such Relevant Price.
Relevant Price:	On any Valuation Date, the volume weighted average price per Share for the regular trading session of the Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg Page TSYS <equity> AQR on such Valuation Date in respect of the period from 9:30 am to 4:00 p.m. (New York City time) on such Valuation Date (or if such volume weighted average price is not available, the Calculation Agent’s reasonable, good faith estimate of such price on such Valuation Date).
Settlement Currency:	USD.

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Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except 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) and 9.12 of the Equity Definitions will be applicable, 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”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to such Warrant.
Dividends:
In respect of any Component:
Dividend Adjustments:	Counterparty agrees to notify RBC promptly of the announcement of an ex-dividend date for any cash dividend by Counterparty. If an ex-dividend date for any cash dividend occurs at any time from, but excluding, the Trade Date to, and including, the Expiration Date, then in lieu of any adjustments as provided under “Method of Adjustment” below, the Calculation Agent shall make such adjustments to the Strike Price and/or the Number of Warrants as it deems appropriate to preserve for the parties the intended economic benefits of the Transaction.
Adjustments:
In respect of any Component:
Method of Adjustment:	Calculation Agent Adjustment; provided, however, that the Equity Definitions shall be amended by replacing the words “diluting or concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii) with the word “material” and by adding the words “or the Transaction” after the words “theoretical value of the relevant Shares” in Sections 11.2(a), 11.2(c) and 11.2(e)(vii); provided further that adjustments may be made to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate and expected liquidity relative to the relevant Share.
Extraordinary Events:
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.
Modified Calculation Agent Adjustment:	If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then with

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	respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by RBC that RBC has determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow RBC to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to RBC, and if such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.
	For greater certainty, the definition of “Modified Calculation Agent Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by adding the following italicized language to the stipulated parenthetical provision: “(including adjustments to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the Announcement Date to the Merger Date (Section 12.2) or Tender Offer Date (Section 12.3)”.
Announcement Event:	If an Announcement Event occurs, the Calculation Agent will determine the economic effect of the Announcement Event on the theoretical value of each Component of the Transaction (including without limitation any change in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the potential Announcement Date to the Expiration Date for such Component and, if such economic effect is material, the Calculation Agent will adjust the terms of the Transaction to reflect such economic effect. “Announcement Event” shall mean the occurrence of a potential Announcement Date of a Merger Event or Tender Offer, if the Merger Date or Tender Offer Date does not, or is not anticipated to, occur on or prior to the Expiration Date for, or any earlier termination of, the relevant Component.
Consequences of Merger Events:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Cancellation and Payment (Calculation Agent Determination).
(c) Share-for-Combined:	Component Adjustment.
Tender Offer:	Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(1)(ii)

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	of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Modified Calculation Agent Adjustment.
(c) Share-for-Combined:	Modified Calculation Agent 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”.
Failure to Deliver:	Inapplicable
Insolvency Filing:	Applicable
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	200 basis points per annum
Increased Cost of Stock Borrow:	Applicable
Initial Stock Loan Rate:	25 basis points per annum
Increased Cost of Hedging:	Applicable

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Hedging Disruption:	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 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.

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

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(i)	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.
(ii)	(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 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.
(iii)	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 Exchange Act.
(iv)	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.
(v)	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.
(vi)	The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement (the “Purchase Agreement”) dated as of the Trade Date between Counterparty and Oppenheimer & Co. Inc. and Raymond James & Associates are true and correct and are hereby deemed to be repeated to RBC as if set forth herein.
(vii)	The Shares issuable upon exercise of all Warrants (the “Warrant Shares”) have been duly authorized and, when delivered pursuant to the terms of such Transaction, shall be validly issued, fully-paid and non-assessable, and such issuance of the Warrant Shares shall not be subject to any preemptive or similar rights and shall, upon such issuance, be accepted for listing or quotation on the Exchange.
(viii)	Counterparty is not as of the Trade Date and as of the date on which Counterparty delivers any Termination Delivery Units, 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”)).
(ix)	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.

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(x)	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.
(xi)	Counterparty understands, agrees and acknowledges that no obligations of RBC to it hereunder, if any, 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.
(xii)	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.
(xiii)	On each anniversary of the Trade Date, Counterparty shall deliver to RBC an officer’s certificate, signed by an authorized officer, stating the number of Available Shares (as defined in the provision titled “Limitation On Delivery of Shares” below).

Miscellaneous:

Effectiveness. If, on or prior to the Effective Date, RBC reasonably determines that it is advisable to cancel the Transaction because of concerns that RBC’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any obligation to the other party in respect of the Transaction.

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.

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

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Tags: TSYS_E1-C1 to TSYS_E1-C90

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.

Alternative Calculations and Counterparty Payment on Early Termination and on Certain Extraordinary Events. If Counterparty owes RBC any amount in connection with the Transaction pursuant to Sections 12.2, 12.3, 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 “Counterparty Payment Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any such Counterparty 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 Counterparty Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Counterparty Termination Delivery, Counterparty shall deliver to RBC a number of Termination Delivery Units having a cash value equal to the amount of such Counterparty 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 sold over a commercially reasonable period of time to generate proceeds equal to the cash equivalent of such payment obligation). In addition, if, in the good faith reasonable judgment of RBC, for any reason, the Termination Delivery Units deliverable pursuant to this paragraph would not be immediately freely transferable by RBC under Rule 144 or any successor provision, then RBC may elect either to (x) accept delivery of such Termination Delivery Units notwithstanding any restriction on transfer or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below. 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, Merger Event or Tender Offer), one Share or (b) in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, 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, Merger Event or Tender Offer. 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 deliver 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, Merger Event or Tender Offer 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.

Registration/Private Placement Procedures. If, in the reasonable opinion of RBC, following any delivery of Shares or Termination Delivery Units to RBC hereunder, such Shares or Termination Delivery Units would be in

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RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

the hands of RBC subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Termination Delivery Units pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Termination Delivery Units being “restricted securities”, as such term is defined in Rule 144) (such Shares or Termination Delivery Units, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) of Annex A hereto at the election of Counterparty, unless waived by RBC. Notwithstanding the foregoing, solely in respect of any Warrants exercised or deemed exercised on any Exercise Date, Counterparty shall elect, prior to the first Settlement Date for the first Exercise Date, a Private Placement Settlement (as defined in Annex A hereto) or Registration Settlement (as defined in Annex A hereto) for all deliveries of Restricted Shares for all such Exercise Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) of Annex A hereto shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement Settlement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii) of Annex A, as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.

Share Deliveries. Counterparty acknowledges and agrees that, to the extent that RBC is not then an affiliate, as such term is used in Rule 144, of Counterparty and has not been such an affiliate of Counterparty for 90 days (it being understood that RBC shall not be considered such an affiliate of Counterparty solely by reason of its right to receive Shares pursuant to a Transaction hereunder), any Shares or Termination Delivery Units delivered hereunder at any time after one year from the Premium Payment Date shall be eligible for resale under Rule 144 or any successor provision, and Counterparty agrees to promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any restrictions on resale under the Securities Act from the certificates representing such Shares or Termination Delivery Units. Counterparty further agrees that with respect to any Shares or Termination Delivery Units delivered hereunder at any time after 6 months from the Premium Payment Date but prior to 1 year from the Premium Payment Date, to the extent that Counterparty then satisfies the current information requirement of Rule 144, Counterparty shall promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any such restrictions or requirements from the certificates representing such Share or Termination Delivery Units upon delivery by RBC to Counterparty or such transfer agent of any customary seller’s and broker’s representation letters in connection with resales of such Shares or Termination Delivery Units pursuant to Rule 144, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by RBC. Counterparty further agrees and acknowledges that RBC shall run a holding period under Rule 144 with respect to the Warrants and/or any Shares or Termination Delivery Units delivered hereunder notwithstanding the existence of any other transaction or transactions between Counterparty and RBC relating to the Shares. Counterparty further agrees that Shares or Termination Delivery Units delivered hereunder prior to the date that is 6 months from the Premium Payment Date may be freely transferred by RBC to its affiliates, and Counterparty shall effect such transfer without any further action by RBC. Notwithstanding anything to the contrary herein, Counterparty agrees that any delivery of Shares or Termination Delivery Units shall be effected by book-entry transfer through the facilities of the Clearance System if, at the time of such delivery, the certificates representing such Shares or Termination Delivery Units would not contain any restrictive legend as described above. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court changes after the Trade Date, the agreements of Counterparty herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Counterparty, to comply with Rule 144, including Rule 144(b) or any successor provision, as in effect at the time of delivery of the relevant Shares or Termination Delivery Units.

No Material Non-Public Information. On each day during the period beginning on the Trade Date and ending on the day on which RBC has informed Counterparty in writing that RBC has completed all purchases or sales 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.

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RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, RBC may not exercise any Warrant hereunder, Automatic Exercise shall not apply with respect thereto, and no delivery hereunder (including pursuant to provisions opposite the headings “Alternative Calculations and Counterparty Payments on Early Termination and on Certain Extraordinary Events,” “Registration/Private Placement Procedures,” “Limitation on Delivery of Shares” or Annex A) shall be made, to the extent (but only to the extent) that the receipt of any Shares upon such exercise or delivery would result in the Equity Percentage (as defined below) exceeding 9% or an Ownership Trigger (as defined below) being met. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the Equity Percentage exceeding 9% or an Ownership Trigger being met. If any delivery owed to RBC or exercise hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery and RBC’s right to exercise a Warrant shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Clearance System Business Day after, RBC gives notice to Counterparty that such exercise or delivery would not result in the Equity Percentage exceeding 9% or an Ownership Trigger being met.

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 Warrant Equity Percentage (as defined below) is (a) equal to or greater than 4.5% and (b) greater by 0.5% or more than the Warrant Equity Percentage set forth in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater by 0.5% or more than the Warrant Equity Percentage as of the date hereof). The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, of (1) the numerator of which is the Number of Warrants, and (2) 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, affiliates, advisors, agents and controlling person (each, an “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, an “insider” as defined under Section 16 of the Exchange Act, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages, judgments, liabilities and expense (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of Counterparty’s failure to provide RBC with a Repurchase Notice on the day and in the manner specified herein, and to reimburse, upon written request, each of such 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 Indemnified Person, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the 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 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 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 Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such

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RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

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 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.

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.

Additional Termination Event. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which (1) Counterparty shall be the sole Affected Party and (2) the Transaction shall be the sole Affected Transaction; provided that with respect to any Additional Termination Event, RBC may choose to treat part of the Transaction as the sole Affected Transaction, and, upon termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

(i) RBC reasonably determines, upon advice of counsel, that it is advisable to terminate a portion of the Transaction so that RBC’s related hedging activities will comply with applicable securities laws, rules or regulations;

(ii) The Shares are not approved for listing on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);

(iii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act or any successor provisions, including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision) is or becomes the “beneficial owner” (as that term is used in Rule 13d-3 under the Exchange Act as in effect on the Effective Date, except that the number of shares of Counterparty’s voting stock will be deemed to include, in addition to all outstanding shares of Counterparty’s voting stock and             shares of voting stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination (“unissued shares”) deemed to be held by the “person” or “group” or other person with respect to which the determination is being made, all unissued shares deemed to be held by all other persons), directly or indirectly, of shares representing 50% or more of the total voting power of all outstanding classes of Counterparty’s capital stock or other interests normally entitled (without regard to the occurrence of any contingency) to vote in the election of the board of directors, managers or trustees (“voting stock”) or has the power, directly or indirectly, to elect a majority of the members of Counterparty’s board of directors, unless the exception provided in clause (iv)(2) below applies;

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RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

(iv) Counterparty consolidates with, enters into a binding share exchange with, or merges with or into, another person, or Counterparty sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets, or any person consolidates with, or merges with or into, Counterparty, in any such event, other than any transaction:

(1) pursuant to which the persons that “beneficially owned,” directly or indirectly, the shares of Counterparty’s voting stock immediately prior to such transaction “beneficially own,” directly or indirectly, shares of Counterparty’s voting stock representing at least a majority of the total voting power of all outstanding classes of voting stock of the surviving or transferee person and such holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction shall be in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction;

(2) in which at least 90% of the consideration paid for the Shares (other than cash payments for fractional shares or pursuant to dissenters’ appraisal rights) consists of shares of common stock traded on the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), or which will be so traded immediately following such transaction; or

(3) which is effected solely to change Counterparty’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding Shares solely into shares of common stock of the surviving person;

(v) (a) individuals who on the Effective Date constituted Counterparty’s board of directors and (b) any new directors whose election to Counterparty’s board of directors or whose nomination for election by Counterparty’s stockholders was approved by at least a majority of the directors at the time of such election or nomination still in office either who were directors on the Effective Date or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of Counterparty’s board of directors; or (vi) the holders of Counterparty’s capital stock approve any plan or proposal for liquidation or dissolution of Counterparty.

Transfer or Assignment. Notwithstanding any provision of the Agreement to the contrary, RBC may, subject to applicable law, freely transfer and assign all of its rights and obligations under the Transaction 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 (this clause (2)(x), the “Ownership Trigger”) 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 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

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RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

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 Warrants equal to the Terminated Portion (allocated among the Components thereof in the discretion of RBC), (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 Counterparty Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Counterparty to RBC 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, acting in good faith and in a commercially reasonable manner, may designate any of its 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.

Amendments to Equity Definitions. (a) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: (i) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (ii) replacing “will lend” with “lends” in subsection (B); and (iii) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and (b) Section 12.9(b)(v) of the Equity Definitions is hereby amended by: (i) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); (ii) (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other”; and (iii) deleting subsection (X) in its entirety and the words “or (Y)” immediately following subsection (X).

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.

Payment by RBC. 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, RBC owes to Company pursuant to Section 6(d)(ii) of the Agreement an amount calculated under Section 6(e) of the Agreement, or (ii) RBC owes to Company, 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.

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RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

Governing law: The law of the State of New York.

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 Address for the Purpose of Giving Notices:	Trade Affirmations and Settlements: 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.

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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/ Steven 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

RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

ANNEX A

Registration Settlement and Private Placement Settlement

(i)	If Counterparty elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Counterparty shall be effected in private placement procedures (customary for equity securities of the size of such private placement) with respect to such Restricted Shares reasonably acceptable to RBC; provided that Counterparty may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Counterparty to RBC (or any affiliate designated by RBC) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by RBC (or any such affiliate of RBC). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to RBC, due diligence rights (for RBC or any buyer of the Restricted Shares designated by RBC), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to RBC. In the event of a Private Placement Settlement, the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, shall be deemed to be the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, plus an additional amount (determined from time to time by the Calculation Agent in its commercially reasonable judgment) attributable to interest that would be earned on such Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, (increased on a daily basis to reflect the accrual of such interest and reduced from time to time by the amount of net proceeds received by RBC as provided herein) at a rate equal to the open Federal Funds Rate plus 100 basis points per annum for the period from, and including, such Settlement Date or the date on which the Counterparty Payment Obligation is due, respectively, to, but excluding, the related date on which all the Restricted Shares have been sold and calculated on an Actual/360 basis.
(ii)	If Counterparty elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Counterparty shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to RBC, to cover the resale of such Restricted Shares (and any Make-whole Shares) in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities, due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all reasonably acceptable to RBC. If RBC, in its sole reasonable discretion, is not satisfied with such procedures and documentation, Private Placement Settlement shall apply. If RBC is satisfied with such procedures and documentation, it shall sell the Restricted Shares (and any Make-whole Shares) pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (and any Make-whole Shares) and ending on the earliest of (i) the Exchange Business Day on which RBC completes the sale of all Restricted Shares or, in the case of settlement of Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Counterparty Payment Obligation, (ii) the date upon which all Restricted Shares (and any Make-whole Shares) have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) and (iii) the date upon which all Restricted Shares (and any Make-whole Shares) may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) without any further restriction whatsoever.
(iii)	If (ii) above is applicable and the Net Share Settlement Amount or the Counterparty Payment Obligation, as applicable, exceeds the realized net proceeds from such resale, or if (i) above is applicable and the Freely Tradeable Value (as defined below) of the Shares owed pursuant to the Net Share Settlement Amount, or the Counterparty Payment Obligation (in each case as adjusted pursuant to (i) above), as applicable, exceeds the realized net proceeds from such resale, Counterparty shall transfer to RBC by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess (the

A-1

RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

"Additional Amount”), at its option, either in cash or in a number of Restricted Shares (“Make-whole Shares”, provided that the aggregate number of Restricted Shares and Make-whole Shares delivered shall not exceed the Maximum Delivery Amount) that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a value equal to the Additional Amount. If Counterparty elects to pay the Additional Amount in Make-whole Shares, Counterparty shall elect whether the requirements and provisions for either Private Placement Settlement or Registration Settlement shall apply to such payment. This provision shall be applied successively until the Additional Amount is equal to zero, subject to “Limitation on Delivery of Shares”. “Freely Tradeable Value” means the value of the number of Shares delivered to RBC which such Shares would have if they were freely tradeable (without prospectus delivery) upon receipt by RBC, as determined by the Calculation Agent by reference to the Relevant Price for freely tradeable Shares as of the Valuation Date, or other date of valuation used to determine the delivery obligation with respect to such Shares, or by other commercially reasonable means.

A-2

RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

ANNEX B

The Strike Price, Premium and Final Disruption Date for the Transaction are set forth below.

Strike Price:	USD12.736
Premium:	USD2,253,780
Final Disruption Date:	July 7, 2015.

B-1

RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

ANNEX C

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

Component Number		Number of Warrants		Expiration Date
	1.		19,327	Fri, 02/13/15
	2.		19,327	Tue, 02/17/15
	3.		19,327	Wed, 02/18/15
	4.		19,327	Thu, 02/19/15
	5.		19,327	Fri, 02/20/15
	6.		19,327	Mon, 02/23/15
	7.		19,327	Tue, 02/24/15
	8.		19,327	Wed, 02/25/15
	9.		19,327	Thu, 02/26/15
	10.		19,327	Fri, 02/27/15
	11.		19,327	Mon, 03/02/15
	12.		19,327	Tue, 03/03/15
	13.		19,327	Wed, 03/04/15
	14.		19,327	Thu, 03/05/15
	15.		19,327	Fri, 03/06/15
	16.		19,327	Mon, 03/09/15
	17.		19,327	Tue, 03/10/15
	18.		19,327	Wed, 03/11/15
	19.		19,327	Thu, 03/12/15
	20.		19,327	Fri, 03/13/15
	21.		19,327	Mon, 03/16/15
	22.		19,327	Tue, 03/17/15
	23.		19,327	Wed, 03/18/15
	24.		19,327	Thu, 03/19/15
	25.		19,327	Fri, 03/20/15
	26.		19,327	Mon, 03/23/15
	27.		19,327	Tue, 03/24/15
	28.		19,327	Wed, 03/25/15
	29.		19,327	Thu, 03/26/15
	30.		19,327	Fri, 03/27/15
	31.		19,327	Mon, 03/30/15
	32.		19,327	Tue, 03/31/15
	33.		19,327	Wed, 04/01/15
	34.		19,327	Thu, 04/02/15
	35.		19,327	Mon, 04/06/15
	36.		19,327	Tue, 04/07/15
	37.		19,327	Wed, 04/08/15
	38.		19,327	Thu, 04/09/15
	39.		19,327	Fri, 04/10/15

C-1

RBCCM Refs: NY-23215 to NY-23304
Tags: TSYS_E1-C1 to TSYS_E1-C90

Component Number		Number of Warrants		Expiration Date
	40.		19,327	Mon, 04/13/15
	41.		19,327	Tue, 04/14/15
	42.		19,327	Wed, 04/15/15
	43.		19,327	Thu, 04/16/15
	44.		19,327	Fri, 04/17/15
	45.		19,327	Mon, 04/20/15
	46.		19,327	Tue, 04/21/15
	47.		19,327	Wed, 04/22/15
	48.		19,327	Thu, 04/23/15
	49.		19,327	Fri, 04/24/15
	50.		19,327	Mon, 04/27/15
	51.		19,327	Tue, 04/28/15
	52.		19,327	Wed, 04/29/15
	53.		19,327	Thu, 04/30/15
	54.		19,327	Fri, 05/01/15
	55.		19,327	Mon, 05/04/15
	56.		19,327	Tue, 05/05/15
	57.		19,327	Wed, 05/06/15
	58.		19,327	Thu, 05/07/15
	59.		19,327	Fri, 05/08/15
	60.		19,327	Mon, 05/11/15
	61.		19,327	Tue, 05/12/15
	62.		19,327	Wed, 05/13/15
	63.		19,327	Thu, 05/14/15
	64.		19,327	Fri, 05/15/15
	65.		19,327	Mon, 05/18/15
	66.		19,327	Tue, 05/19/15
	67.		19,327	Wed, 05/20/15
	68.		19,327	Thu, 05/21/15
	69.		19,327	Fri, 05/22/15
	70.		19,327	Tue, 05/26/15
	71.		19,327	Wed, 05/27/15
	72.		19,327	Thu, 05/28/15
	73.		19,327	Fri, 05/29/15
	74.		19,327	Mon, 06/01/15
	75.		19,327	Tue, 06/02/15
	76.		19,327	Wed, 06/03/15
	77.		19,327	Thu, 06/04/15
	78.		19,327	Fri, 06/05/15
	79.		19,327	Mon, 06/08/15
	80.		19,327	Tue, 06/09/15
	81.		19,327	Wed, 06/10/15
	82.		19,327	Thu, 06/11/15
	83.		19,327	Fri, 06/12/15
	84.		19,327	Mon, 06/15/15
	85.		19,327	Tue, 06/16/15
	86.		19,327	Wed, 06/17/15
	87.		19,327	Thu, 06/18/15
	88.		19,327	Fri, 06/19/15
	89.		19,327	Mon, 06/22/15
	90.		19,364	Tue, 06/23/15

A-2

EX-10.4.A

Exhibit 10.4(a)

Deutsche Bank

Deutsche Bank AG, London Branch
Winchester house
1 Great Winchester St,
London EC2N 2DB
Telephone: 44 20 7545 8000

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 212-250-2500

DATE:	November 11, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Deutsche Bank AG, London Branch
TELEPHONE:	44 20 7545 0556
FACSIMILE:	44 11 3336 2009
SUBJECT:	Equity Derivatives Additional Note Hedge Confirmation
REFERENCE NUMBER(S):	356979

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Deutsche Bank AG, London Branch (“Deutsche”) 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.

DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER OR DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. DEUTSCHE BANK SECURITIES INC. (“AGENT”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

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

Chairman of the Supervisory Board: Clemens Börsig Board of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo Banziger, Anthony Dilorio	Deutsche Bank AG is regulated by the FSA for the conduct of designated investment business in the UK, is a member of the London Stock Exchange and is a limited liability company incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in England and Wales BR000005, Registered address:
	Winchester House, 1 Great Winchester Street, London EC2N 2DB.

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 Deutsche 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 Deutsche and Counterparty had executed an 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 11, 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:	Deutsche.
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 Deutsche 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:	13,500
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.

2

Applicable Percentage:	55%
Premium:	As provided in Annex A to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Deutsche.
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 less the number of Note Hedging Units exercised pursuant to the Equity Derivatives Note Hedge Confirmation dated November 10, 2009, between the parties hereto (the “Base Note Hedge Confirmation”) 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 Deutsche in writing (and use reasonable efforts to confirm receipt by telephone to Deutsche’s Origination Convertible Desk (telephone: 212-250-5600)) 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

3

	defined in the Indenture) immediately preceding the “Maturity Date” (as defined in the Indenture).
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, Deutsche shall deliver to Counterparty, on the related Settlement Date, the Settlement Amount. For the avoidance of doubt, to the extent Deutsche 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”).
	Deutsche will deliver cash in lieu of any fractional Shares to be

4

	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

5

	settlement terms hereunder to account for such partial Valid Day.
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, Deutsche 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.
Extraordinary Events:

6

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 Deutsche 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

7

	Date, unless the illegality is due to an act or omission of the party seeking to elect termination of the Transaction”.
Failure to Deliver:	Applicable
Insolvency Filing:	Applicable
Increased Cost of Hedging:	Applicable
Hedging Party:	Deutsche for all applicable Additional Disruption Events
Determining Party:	Deutsche for all applicable Additional Disruption Events
Acknowledgements:
Non-Reliance:	Applicable
Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable

Mutual Representations: Each of Deutsche 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

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Section 2510-3-101.

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 Deutsche 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 Deutsche 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 Deutsche as if set forth herein.
(vii)	Counterparty understands, agrees and acknowledges that Deutsche 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 Deutsche to it hereunder shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Deutsche 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 Deutsche or any of its affiliates as investment advice or as a recommendation to enter into the Transaction (it being understood that information and

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	explanations related to the terms and conditions of the Transaction shall not be considered investment advice or a recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Deutsche 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 Deutsche 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 Deutsche an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Deutsche in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Deutsche 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 Deutsche and Counterparty shall be transmitted exclusively through Agent.

Staggered Settlement. Deutsche may, by notice to Counterparty prior to any Settlement Date (a “Nominal

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Settlement Date”), elect to deliver the Shares deliverable on such Nominal Settlement Date on two or more dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date as follows: (i) in such notice, Deutsche 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 Deutsche will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Deutsche 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 Deutsche 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 Deutsche’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 Deutsche, the Shares (the “Hedge Shares”) acquired by Deutsche for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Deutsche without registration under the Securities Act, Counterparty shall, at its election: (i) in order to allow Deutsche to sell the Hedge Shares in a registered offering, make available to Deutsche 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 Deutsche, 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 Deutsche, (D) provide other customary opinions, certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Deutsche 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 Deutsche, 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 Deutsche 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 Deutsche, including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Deutsche, due diligence rights (for Deutsche or any designated buyer of the Hedge Shares from Deutsche), opinions and

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certificates and such other documentation as is customary for private placements agreements of similar size, all reasonably acceptable to Deutsche (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Deutsche 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 Deutsche at the VWAP Price on such Exchange Business Days, and in the amounts, requested by Deutsche. “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 1,435,060 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 Deutsche 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. Deutsche acknowledges and agrees that this Confirmation is not intended to convey to Deutsche 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 Deutsche’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 Deutsche’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 Deutsche 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 Deutsche 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,

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560 and 561 of the Bankruptcy Code.

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Deutsche 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 sum of (x) the number of Note Hedging Units and (y) the number of Note Hedging Units under the Base Note Hedge Confirmation 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 Deutsche 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 Deutsche’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 Deutsche 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 Deutsche Payment on Early Termination and on Certain Extraordinary Events. If Deutsche 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)

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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 “Deutsche Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Deutsche to satisfy any such Deutsche Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Deutsche, 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 Deutsche Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Deutsche Termination Delivery, Deutsche shall deliver to Counterparty a number of Termination Delivery Units having a cash value equal to the amount of such Deutsche 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 Deutsche in writing prior to the date on which the offering of the Convertible Notes was first announced, Counterparty represents and warrants to Deutsche 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 Deutsche 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 Deutsche 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 Deutsche has informed Counterparty in writing that Deutsche has completed all purchases of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Deutsche that it is not aware of any material nonpublic information concerning itself or the Shares.

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Right to Extend. Deutsche 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 Deutsche determines, in its reasonable discretion, that (a) a Regulatory Disruption has occurred or (b) such extension is reasonably necessary or appropriate to (i) preserve Deutsche’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or (ii) enable Deutsche to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Deutsche 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 Deutsche. “Regulatory Disruption” shall mean any event that Deutsche, 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 Deutsche, 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 Deutsche as if it were the Issuer or an affiliated purchaser of the Issuer), for Deutsche 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 Deutsche. Deutsche 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 Deutsche, without the consent of Counterparty.

If, as determined in Deutsche’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0%, (2) Deutsche, Deutsche Group (as defined below) or any person whose ownership position would be aggregated with that of Deutsche or Deutsche Group (Deutsche, Deutsche Group or any such person, a “Deutsche 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 Deutsche 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 Deutsche 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) Deutsche 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, Deutsche 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 Deutsche 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 Deutsche Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Deutsche 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 Deutsche and any of its affiliates subject to aggregation with Deutsche 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

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Exchange Act) with Deutsche (collectively, “Deutsche 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 Deutsche to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Deutsche may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Deutsche’s obligations in respect of the Transaction and any such designee may assume such obligations. Deutsche 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 Deutsche 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 Deutsche on the Early Unwind Date all Shares purchased by Deutsche or one or more of its affiliates, and assume, or reimburse the cost of, derivatives and other hedging activities entered into by Deutsche 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 Deutsche’s (or its affiliates) actual cost of such Shares and unwind cost of such derivatives and other hedging activities as Deutsche 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. Deutsche 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

16

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.

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
Fax:          (410) 263-7617

(b) Deutsche

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention: Faiz Khan

Telephone: (212) 250-0668
Email:          faiz.khan@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Attention: Lars Kestner

Telephone: (212) 250-6043
Email:          Lars.Kestner@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention: Andrew Yaeger

Telephone: (212) 250-2717
Email:          andrew.yaeger@db.com

17

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 Deutsche a facsimile of the fully-executed Confirmation to Deutsche at 44 113 336 2009. 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,

DEUTSCHE BANK AG, LONDON BRANCH

By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ Jon Arnone
	Name:	Jon Arnone
	Title:	Managing Director
DEUTSCHE BANK SECURITIES INC., acting solely as Agent in connection with this Transaction
By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ John Arnone
	Name:	John Arnone
	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.
	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: USD1,705,597

A-1

EX-10.4.B

Exhibit 10.4(b)

SOCIÉTÉ GÉNÉRALE

17 COURS VALMY

92987 PARIS-LA DEFENSE,

FRANCE

DATE:	November 11, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Société Générale
FACSIMILE:	(212) 278-5624
SUBJECT:	Equity Derivatives Additional Note Hedge Confirmation
REFERENCE NUMBER(S):	[          ]

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Société Générale (“Société Générale”) 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.

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 Société Générale 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 Société Générale and Counterparty had executed an 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 11, 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:	Société Générale.
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 Société Générale 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:	13,500
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:	45%
Premium:	As provided in Annex A to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Société Générale.
Procedure for Exercise:

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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 less the number of Note Hedging Units exercised pursuant to the Equity Derivatives Note Hedge Confirmation dated November 10, 2009, between the parties hereto (the “Base Note Hedge Confirmation”) 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 Société Générale in writing (and use reasonable efforts to confirm receipt by telephone to Société Générale (telephone: 212-278-5187)) 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).
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, Société Générale shall deliver to Counterparty, on the related Settlement Date, the Settlement Amount. For the avoidance of doubt, to the extent Société Générale 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

3

	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”).
	Société Générale 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

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	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.
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

5

	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, Société Générale 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.
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

6

	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 Société Générale 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”.
Failure to Deliver:	Applicable
Insolvency Filing:	Applicable
Increased Cost of Hedging:	Applicable
Hedging Party:	Société Générale for all applicable Additional Disruption Events
Determining Party:	Société Générale for all applicable Additional Disruption Events
Acknowledgements:

7

Non-Reliance:	Applicable
Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable

Mutual Representations: Each of Société Générale 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.

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.

8

(ii)	Counterparty shall immediately provide written notice to Société Générale 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 Société Générale 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 Société Générale as if set forth herein.
(vii)	Counterparty understands, agrees and acknowledges that Société Générale 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 Société Générale to it hereunder shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Société Générale 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 Société Générale 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 recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Société Générale 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 Société Générale 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.

9

(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 Société Générale an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Société Générale in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Société Générale 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 will be effected through Agent. In addition, all notices, demands and communications of any kind relating to the Transaction between Société Générale and Counterparty may be transmitted exclusively through Agent.

Staggered Settlement. Société Générale 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 (each, a “Staggered Settlement Date”) or at two or more times on the Nominal Settlement Date as follows: (i) in such notice, Société Générale 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 Société Générale will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Société

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Générale 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 Société Générale 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 Société Générale’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 Société Générale, the Shares (the “Hedge Shares”) acquired by Société Générale for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Société Générale without registration under the Securities Act, Counterparty shall, at its election: (i) in order to allow Société Générale to sell the Hedge Shares in a registered offering, make available to Société Générale 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 Société Générale, 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 Société Générale, (D) provide other customary opinions, certificates and closing documents customary in form for registered offerings of equity securities and (E) afford Société Générale 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 Société Générale, 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 Société Générale 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 Société Générale, including customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Société Générale, due diligence rights (for Société Générale or any designated buyer of the Hedge Shares from Société Générale), opinions and certificates and such other documentation as is customary for private placements agreements of similar size, all reasonably acceptable to Société Générale (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Société Générale 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 Société Générale at the VWAP Price on such Exchange Business Days, and in the amounts, requested by Société Générale. “VWAP Price” means, on any Exchange Business Day, the per

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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 1,174,140 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 Société Générale 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. Société Générale acknowledges and agrees that this Confirmation is not intended to convey to Société Générale 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 Société Générale’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 Société Générale’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 Société Générale 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 Société Générale 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.

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Société Générale 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

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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, sum of (x) the the number of Note Hedging Units and (y) the number of Note Hedging Units under the Base Note Hedge Confirmation 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 Société Générale 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 Société Générale’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 Société Générale 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 Société Générale Payment on Early Termination and on Certain Extraordinary Events. If Société Générale 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 “Société Générale Payment Obligation”), Counterparty shall have the right, in its sole discretion, to require Société Générale to satisfy any such Société Générale Payment Obligation by delivery

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of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Société Générale, 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 Société Générale Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Société Générale Termination Delivery, Société Générale shall deliver to Counterparty a number of Termination Delivery Units having a cash value equal to the amount of such Société Générale 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 Société Générale in writing prior to the date on which the offering of the Convertible Notes was first announced, Counterparty represents and warrants to Société Générale 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 Société Générale 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 Société Générale 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 Société Générale has informed Counterparty in writing that Société Générale has completed all purchases of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Société Générale that it is not aware of any material nonpublic information concerning itself or the Shares.

Right to Extend. Société Générale 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

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Société Générale determines, in its reasonable discretion, that (a) a Regulatory Disruption has occurred or (b) such extension is reasonably necessary or appropriate to (i) preserve Société Générale’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or (ii) enable Société Générale to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Société Générale 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 Société Générale. “Regulatory Disruption” shall mean any event that Société Générale, 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 Société Générale, 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 Société Générale as if it were the Issuer or an affiliated purchaser of the Issuer), for Société Générale 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 Société Générale. Société Générale 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 Société Générale, without the consent of Counterparty.

If, as determined in Société Générale’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0%, (2) Société Générale, Société Générale Group (as defined below) or any person whose ownership position would be aggregated with that of Société Générale or Société Générale Group (Société Générale, Société Générale Group or any such person, a “Société Générale 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 Société Générale 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 Société Générale 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) Société Générale 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, Société Générale 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 Société Générale 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 Société Générale Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Société Générale 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 Société Générale and any of its affiliates subject to aggregation with Société Générale 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 Société Générale (collectively, “Société Générale Group”) “beneficially own” (within the meaning of Section 13 of the Exchange Act) without duplication on such day and (B) the denominator

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of which is the number of Shares outstanding on such day.

Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Société Générale to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Société Générale may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Société Générale’s obligations in respect of the Transaction and any such designee may assume such obligations. Société Générale 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 Société Générale 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 Société Générale on the Early Unwind Date all Shares purchased by Société Générale or one or more of its affiliates, and assume, or reimburse the cost of, derivatives and other hedging activities entered into by Société Générale 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 Société Générale’s (or its affiliates) actual cost of such Shares and unwind cost of such derivatives and other hedging activities as Société Générale 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. Société Générale 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.

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Governing law: The law of the State of New York.

Terms relating to the Agent. Société Générale is not registered as a broker or dealer under the Securities Exchange Act of 1934, as amended. SG Americas Securities, LLC has acted solely as agent for Société Générale and the counterparty to the extent required by law in connection with this Transaction and has no obligations, by way of issuance, endorsement, guarantee or otherwise, with respect to the performance of either party under this Transaction. The parties agree to proceed solely against each other, and not against SG Americas Securities, LLC as agent, in seeking enforcement of their rights and obligations with respect to this Transaction, including their rights and obligations with respect to payment of funds and delivery of securities.

Broker. SG Americas Securities, LLC may have been paid a fee by Société Générale in connection with this Transaction. Further details will be furnished upon written request.

Time of Dealing. The time of the Transaction will be furnished by SG Americas Securities, LLC upon written request.

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
Fax:            (410) 263-7617

(b) Société Générale

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention:   Sanjay Garg
Telephone:   (212) 278-5187
Facsimile:    (212) 278-5624
Email:           sanjay.garg@sgcib.com

with a copy to:

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention:     Steve Milankov
Telephone:   (212) 278-6985
Facsimile:    (212) 278-7365
Email:           steve.milankov@sgcib.com

17

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 Société Générale a facsimile of the fully-executed Confirmation to Société Générale at (212) 278-5624. 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, SOCIÉTÉ GÉNÉRALE
By:	/s/ Sanjay Garg
	Name:	Sanjay Garg
	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.
	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: USD1,395,488

A-1

EX-10.5.A

Exhibit 10.5(a)

Deutsche Bank

Deutsche Bank AG, London Branch
Winchester house
1 Great Winchester St,
London EC2N 2DB
Telephone: 44 20 7545 8000

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 212-250-2500

DATE:	November 11, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Deutsche Bank AG, London Branch
TELEPHONE:	44 20 7545 0556
FACSIMILE:	44 11 3336 2009
SUBJECT:	Equity Derivatives Additional Warrant Confirmation
REFERENCE NUMBER(S):	356980

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Deutsche Bank AG, London Branch (“Deutsche”) 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.

DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER OR DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. DEUTSCHE BANK SECURITIES INC. (“AGENT”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

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

Chairman of the Supervisory Board: Clemens Börsig Board of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo Banziger, Anthony Dilorio	Deutsche Bank AG is regulated by the FSA for the conduct of designated investment business in the UK, is a member of the London Stock Exchange and is a limited liability company incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in England and Wales BR000005, Registered address:
	Winchester House, 1 Great Winchester Street, London EC2N 2DB.

govern. For the purposes of the Equity Definitions, each reference herein to a Warrant 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 Deutsche 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 Deutsche and Counterparty had executed an agreement in such form (without any Schedule but with the “Cross-Default” provisions of Section 5(a)(vi) applicable to Counterparty with a “Threshold Amount” of $5,000,000 and with such other elections set forth in this Confirmation). For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement.

The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions, and shall have the following terms:

General:
Trade Date:	November 11, 2009.
Effective Date:	November 16, 2009.
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Warrant Style:	European.
Warrant Type:	Call.
Seller:	Counterparty.
Buyer:	Deutsche.
Shares:	Class A common stock, par value USD 0.01 per share, of Counterparty.
Number of Warrants:	For each Component, as provided in Annex C to this Confirmation.
Strike Price:	As provided in Annex B to this Confirmation.
Premium:	As provided in Annex B to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Deutsche.

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Procedure for Exercise:
In respect of any Component:
Expiration Date:	As provided in Annex C to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for the Transaction) and, notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Relevant Price for the Expiration Date shall be the prevailing market value per Share determined by the Calculation Agent in a commercially reasonable manner. Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date. “Final Disruption Date” has the meaning provided in Annex B to this Confirmation.
Automatic Exercise:	Applicable. Each Warrant not previously exercised will be deemed to be automatically exercised on the Expiration Time on the relevant Expiration Date.
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof, and by replacing the words “or (iii) an Early Closure.” with “(iii) an Early Closure or (iv) a Regulatory Disruption, in each case that the Calculation Agent determines is material.”
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.

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Regulatory Disruption:	Any event that Deutsche, 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 Deutsche, and including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M and/or analyzing Deutsche as if Deutsche were the Issuer or an affiliated purchaser of the Issuer), for Deutsche to refrain from or decrease any market activity in connection with the Transaction. Deutsche shall notify Counterparty as soon as reasonably practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it.
Settlement Terms:
In respect of any Component:
Net Share Settlement:	On each Settlement Date, Counterparty shall deliver to Deutsche a number of Shares equal to the Net Share Amount for such Settlement Date to the account specified by Deutsche, and cash in lieu of any fractional shares valued at the Relevant Price for the Valuation Date corresponding to such Settlement Date. If, in the good faith reasonable judgment of Deutsche, the Shares deliverable hereunder would not be immediately freely transferable by Deutsche under Rule 144 (“Rule 144”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any successor provision, then Deutsche may elect to either (x) accept delivery of such Shares notwithstanding the fact that such Shares are not immediately freely transferable by Deutsche under Rule 144 or any successor provision or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below.
Net Share Amount:	For any Exercise Date, a number of Shares, as calculated by the Calculation Agent, equal to (x) the product of (i) the number of Warrants being exercised or deemed exercised on such Exercise Date, and (ii) the excess, if any, of the Relevant Price for the Valuation Date occurring on such Exercise Date over the Strike Price (such product, the “Net Share Settlement Amount”), divided by (y) such Relevant Price.
Relevant Price:	On any Valuation Date, the volume weighted average price per Share for the regular trading session of the Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg Page TSYS <equity> AQR on such Valuation Date in respect of the period from 9:30 am to 4:00 p.m. (New York City time) on such Valuation Date (or if such volume weighted average price is not available, the Calculation Agent’s reasonable, good faith estimate of such price on such Valuation Date).

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Settlement Currency:	USD.
Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except 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) and 9.12 of the Equity Definitions will be applicable, 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”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to such Warrant.
Dividends:
In respect of any Component:
Dividend Adjustments:	Counterparty agrees to notify Deutsche promptly of the announcement of an ex-dividend date for any cash dividend by Counterparty. If an ex-dividend date for any cash dividend occurs at any time from, but excluding, the Trade Date to, and including, the Expiration Date, then in lieu of any adjustments as provided under “Method of Adjustment” below, the Calculation Agent shall make such adjustments to the Strike Price and/or the Number of Warrants as it deems appropriate to preserve for the parties the intended economic benefits of the Transaction.
Adjustments:
In respect of any Component:
Method of Adjustment:	Calculation Agent Adjustment; provided, however, that the Equity Definitions shall be amended by replacing the words “diluting or concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii) with the word “material” and by adding the words “or the Transaction” after the words “theoretical value of the relevant Shares” in Sections 11.2(a), 11.2(c) and 11.2(e)(vii); provided further that adjustments may be made to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate and expected liquidity relative to the relevant Share.
Extraordinary Events:
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.

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Modified Calculation Agent Adjustment:	If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Deutsche that Deutsche has determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow Deutsche to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Deutsche, and if such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.
	For greater certainty, the definition of “Modified Calculation Agent Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by adding the following italicized language to the stipulated parenthetical provision: “(including adjustments to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the Announcement Date to the Merger Date (Section 12.2) or Tender Offer Date (Section 12.3)”.
Announcement Event:	If an Announcement Event occurs, the Calculation Agent will determine the economic effect of the Announcement Event on the theoretical value of each Component of the Transaction (including without limitation any change in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the potential Announcement Date to the Expiration Date for such Component and, if such economic effect is material, the Calculation Agent will adjust the terms of the Transaction to reflect such economic effect. “Announcement Event” shall mean the occurrence of a potential Announcement Date of a Merger Event or Tender Offer, if the Merger Date or Tender Offer Date does not, or is not anticipated to, occur on or prior to the Expiration Date for, or any earlier termination of, the relevant Component.
Consequences of Merger Events:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Cancellation and Payment (Calculation Agent Determination).
(c) Share-for-Combined:	Component Adjustment.

6

Tender Offer:	Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(1)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Modified Calculation Agent Adjustment.
(c) Share-for-Combined:	Modified Calculation Agent 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”.
Failure to Deliver:	Inapplicable
Insolvency Filing:	Applicable
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	200 basis points per annum
Increased Cost of Stock Borrow:	Applicable

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Initial Stock Loan Rate:	25 basis points per annum
Increased Cost of Hedging:	Applicable
Hedging Disruption:	Applicable
Hedging Party:	Deutsche for all applicable Additional Disruption Events
Determining Party:	Deutsche for all applicable Additional Disruption Events
Acknowledgements:
Non-Reliance:	Applicable
Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable

Mutual Representations: Each of Deutsche 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 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.

Counterparty Representations: In addition to the representations and warranties in the Agreement and those contained

8

elsewhere herein, Counterparty represents, warrants, acknowledges and covenants that:

(i)	Counterparty shall immediately provide written notice to Deutsche 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 Deutsche in connection with this Transaction.
(ii)	(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 Deutsche 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 recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Deutsche or any of its affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction.
(iii)	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 Exchange Act.
(iv)	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.
(v)	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.
(vi)	The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement (the “Purchase Agreement”) dated as of the Trade Date between Counterparty and Oppenheimer & Co. Inc. and Raymond James & Associates are true and correct and are hereby deemed to be repeated to Deutsche as if set forth herein.
(vii)	The Shares issuable upon exercise of all Warrants (the “Warrant Shares”) have been duly authorized and, when delivered pursuant to the terms of such Transaction, shall be validly issued, fully-paid and non-assessable, and such issuance of the Warrant Shares shall not be subject to any preemptive or similar rights and shall, upon such issuance, be accepted for listing or quotation on the Exchange.
(viii)	Counterparty is not as of the Trade Date and as of the date on which Counterparty delivers any Termination Delivery Units, 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”)).
(ix)	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.

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(x)	Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Deutsche 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.
(xi)	Counterparty understands, agrees and acknowledges that no obligations of Deutsche to it hereunder, if any, shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Deutsche or any governmental agency.
(xii)	Counterparty shall deliver to Deutsche an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Deutsche in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Deutsche may reasonably request.
(xiii)	On each anniversary of the Trade Date, Counterparty shall deliver to Deutsche an officer’s certificate, signed by an authorized officer, stating the number of Available Shares (as defined in the provision titled “Limitation On Delivery of Shares” below).

Miscellaneous:

Effectiveness. If, on or prior to the Effective Date, Deutsche reasonably determines that it is advisable to cancel the Transaction because of concerns that Deutsche’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any obligation to the other party in respect of the Transaction.

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 Deutsche and Counterparty shall be transmitted exclusively through Agent.

Status of Claims in Bankruptcy. Deutsche acknowledges and agrees that this Confirmation is not intended to convey to Deutsche 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 Deutsche’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 Deutsche’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 Deutsche 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

10

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 Deutsche 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.

Alternative Calculations and Counterparty Payment on Early Termination and on Certain Extraordinary Events. If Counterparty owes Deutsche any amount in connection with the Transaction pursuant to Sections 12.2, 12.3, 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 “Counterparty Payment Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any such Counterparty Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Deutsche, 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 Counterparty Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Counterparty Termination Delivery, Counterparty shall deliver to Deutsche a number of Termination Delivery Units having a cash value equal to the amount of such Counterparty 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 sold over a commercially reasonable period of time to generate proceeds equal to the cash equivalent of such payment obligation). In addition, if, in the good faith reasonable judgment of Deutsche, for any reason, the Termination Delivery Units deliverable pursuant to this paragraph would not be immediately freely transferable by Deutsche under Rule 144 or any successor provision, then Deutsche may elect either to (x) accept delivery of such Termination Delivery Units notwithstanding any restriction on transfer or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below. 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, Merger Event or Tender Offer), one Share or (b) in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, 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, Merger Event or Tender Offer. 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 deliver 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, Merger Event or Tender Offer 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.

Registration/Private Placement Procedures. If, in the reasonable opinion of Deutsche, following any delivery of Shares or Termination Delivery Units to Deutsche hereunder, such Shares or Termination Delivery Units

11

would be in the hands of Deutsche subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Termination Delivery Units pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Termination Delivery Units being “restricted securities”, as such term is defined in Rule 144) (such Shares or Termination Delivery Units, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) of Annex A hereto at the election of Counterparty, unless waived by Deutsche. Notwithstanding the foregoing, solely in respect of any Warrants exercised or deemed exercised on any Exercise Date, Counterparty shall elect, prior to the first Settlement Date for the first Exercise Date, a Private Placement Settlement (as defined in Annex A hereto) or Registration Settlement (as defined in Annex A hereto) for all deliveries of Restricted Shares for all such Exercise Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) of Annex A hereto shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement Settlement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii) of Annex A, as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.

Share Deliveries. Counterparty acknowledges and agrees that, to the extent that Deutsche is not then an affiliate, as such term is used in Rule 144, of Counterparty and has not been such an affiliate of Counterparty for 90 days (it being understood that Deutsche shall not be considered such an affiliate of Counterparty solely by reason of its right to receive Shares pursuant to a Transaction hereunder), any Shares or Termination Delivery Units delivered hereunder at any time after one year from the Premium Payment Date shall be eligible for resale under Rule 144 or any successor provision, and Counterparty agrees to promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any restrictions on resale under the Securities Act from the certificates representing such Shares or Termination Delivery Units. Counterparty further agrees that with respect to any Shares or Termination Delivery Units delivered hereunder at any time after 6 months from the Premium Payment Date but prior to 1 year from the Premium Payment Date, to the extent that Counterparty then satisfies the current information requirement of Rule 144, Counterparty shall promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any such restrictions or requirements from the certificates representing such Share or Termination Delivery Units upon delivery by Deutsche to Counterparty or such transfer agent of any customary seller’s and broker’s representation letters in connection with resales of such Shares or Termination Delivery Units pursuant to Rule 144, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Deutsche. Counterparty further agrees and acknowledges that Deutsche shall run a holding period under Rule 144 with respect to the Warrants and/or any Shares or Termination Delivery Units delivered hereunder notwithstanding the existence of any other transaction or transactions between Counterparty and Deutsche relating to the Shares. Counterparty further agrees that Shares or Termination Delivery Units delivered hereunder prior to the date that is 6 months from the Premium Payment Date may be freely transferred by Deutsche to its affiliates, and Counterparty shall effect such transfer without any further action by Deutsche. Notwithstanding anything to the contrary herein, Counterparty agrees that any delivery of Shares or Termination Delivery Units shall be effected by book-entry transfer through the facilities of the Clearance System if, at the time of such delivery, the certificates representing such Shares or Termination Delivery Units would not contain any restrictive legend as described above. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court changes after the Trade Date, the agreements of Counterparty herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Counterparty, to comply with Rule 144, including Rule 144(b) or any successor provision, as in effect at the time of delivery of the relevant Shares or Termination Delivery Units.

No Material Non-Public Information. On each day during the period beginning on the Trade Date and ending on the day on which Deutsche has informed Counterparty in writing that Deutsche has completed all purchases or sales of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Deutsche that it is not aware of any material nonpublic information concerning itself or

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the Shares.

Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Deutsche may not exercise any Warrant hereunder, Automatic Exercise shall not apply with respect thereto, and no delivery hereunder (including pursuant to provisions opposite the headings “Alternative Calculations and Counterparty Payments on Early Termination and on Certain Extraordinary Events,” “Registration/Private Placement Procedures,” “Limitation on Delivery of Shares” or Annex A) shall be made, to the extent (but only to the extent) that the receipt of any Shares upon such exercise or delivery, after taking into account Shares deliverable to Deutsche under the Base Warrant Confirmation (as defined below), would result in the Equity Percentage (as defined below) exceeding 9% or an Ownership Trigger (as defined below) being met. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that such delivery, after taking into account Shares deliverable to Deutsche under the Base Warrant Confirmation (as defined below), would result in the Equity Percentage exceeding 9% or an Ownership Trigger being met. If any delivery owed to Deutsche or exercise hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery and Deutsche’s right to exercise a Warrant shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Clearance System Business Day after, Deutsche gives notice to Counterparty that such exercise or delivery would not result in the Equity Percentage exceeding 9% or an Ownership Trigger being met. As used herein, the “Base Warrant Confirmation” means the Equity Derivatives Warrant Confirmation dated November 10, 2009, between the parties hereto.

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Deutsche with a written notice of such repurchase (a “Repurchase Notice”) on such day if, following such repurchase, the Warrant Equity Percentage (as defined below) is (a) equal to or greater than 4.5% and (b) greater by 0.5% or more than the Warrant Equity Percentage set forth in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater by 0.5% or more than the Warrant Equity Percentage as of the date hereof). The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, of (1) the numerator of which is the Number of Warrants plus the Number of Warrants under the Base Warrant Confirmation, and (2) the denominator of which is the number of Shares outstanding on such day. Counterparty agrees to indemnify and hold harmless Deutsche and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling person (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Deutsche’s hedging activities as a consequence of becoming, or of the risk of becoming, an “insider” as defined under Section 16 of the Exchange Act, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages, judgments, liabilities and expense (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of Counterparty’s failure to provide Deutsche with a Repurchase Notice on the day and in the manner specified herein, and to reimburse, upon written request, each of such 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 Indemnified Person, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the 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 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 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 Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are

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the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such 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 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.

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 1,435,060 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 Deutsche 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.

Additional Termination Event. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which (1) Counterparty shall be the sole Affected Party and (2) the Transaction shall be the sole Affected Transaction; provided that with respect to any Additional Termination Event, Deutsche may choose to treat part of the Transaction as the sole Affected Transaction, and, upon termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

(i) Deutsche reasonably determines, upon advice of counsel, that it is advisable to terminate a portion of the Transaction so that Deutsche’s related hedging activities will comply with applicable securities laws, rules or regulations;

(ii) The Shares are not approved for listing on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);

(iii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act or any successor provisions, including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision) is or becomes the “beneficial owner” (as that term is used in Rule 13d-3 under the Exchange Act as in effect on the Effective Date, except that the number of shares of Counterparty’s voting stock will be deemed to include, in addition to all outstanding shares of Counterparty’s voting stock and shares of voting stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination (“unissued shares”) deemed to be held by the “person” or “group” or other person with respect to which the determination is being made, all unissued shares deemed to be held by all other persons), directly or indirectly, of shares representing 50% or more of the total voting power of all outstanding classes of Counterparty’s capital stock or other interests normally entitled (without regard to the occurrence of

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any contingency) to vote in the election of the board of directors, managers or trustees (“voting stock”) or has the power, directly or indirectly, to elect a majority of the members of Counterparty’s board of directors, unless the exception provided in clause (iv)(2) below applies;

(iv) Counterparty consolidates with, enters into a binding share exchange with, or merges with or into, another person, or Counterparty sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets, or any person consolidates with, or merges with or into, Counterparty, in any such event, other than any transaction:

(1) pursuant to which the persons that “beneficially owned,” directly or indirectly, the shares of Counterparty’s voting stock immediately prior to such transaction “beneficially own,” directly or indirectly, shares of Counterparty’s voting stock representing at least a majority of the total voting power of all outstanding classes of voting stock of the surviving or transferee person and such holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction shall be in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction;

(2) in which at least 90% of the consideration paid for the Shares (other than cash payments for fractional shares or pursuant to dissenters’ appraisal rights) consists of shares of common stock traded on the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), or which will be so traded immediately following such transaction; or

(3) which is effected solely to change Counterparty’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding Shares solely into shares of common stock of the surviving person;

(v) (a) individuals who on the Effective Date constituted Counterparty’s board of directors and (b) any new directors whose election to Counterparty’s board of directors or whose nomination for election by Counterparty’s stockholders was approved by at least a majority of the directors at the time of such election or nomination still in office either who were directors on the Effective Date or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of Counterparty’s board of directors; or

(vi) the holders of Counterparty’s capital stock approve any plan or proposal for liquidation or dissolution of Counterparty.

Transfer or Assignment. Notwithstanding any provision of the Agreement to the contrary, Deutsche may, subject to applicable law, freely transfer and assign all of its rights and obligations under the Transaction without the consent of Counterparty.

If, as determined in Deutsche’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0% (2) Deutsche, Deutsche Group (as defined below) or any person whose ownership position would be aggregated with that of Deutsche or Deutsche Group (Deutsche, Deutsche Group or any such person, a “Deutsche 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 Deutsche Person under Applicable Laws and with respect to which such requirements have not been met or the relevant approval has not been received (this clause (2)(x), the “Ownership Trigger”) 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 Deutsche Person divided by the number of Counterparty’s outstanding Shares exceeds 8.0%, (each of such conditions described in clause (1), (2) or (3), an “Excess Ownership Position”), and (b) Deutsche 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

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of this Transaction pursuant to the preceding paragraph such that an Excess Ownership Position no longer exists, Deutsche 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 Deutsche 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 Warrants equal to the Terminated Portion (allocated among the Components thereof in the discretion of Deutsche), (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 Counterparty Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Counterparty to Deutsche 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 Deutsche and any of its affiliates subject to aggregation with Deutsche 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 Deutsche (collectively, “Deutsche 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 Deutsche to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Deutsche, acting in good faith and in a commercially reasonable manner, may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Deutsche’s obligations in respect of the Transaction and any such designee may assume such obligations. Deutsche shall be discharged of its obligations to Counterparty to the extent of any such performance.

Amendments to Equity Definitions. (a) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: (i) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (ii) replacing “will lend” with “lends” in subsection (B); and (iii) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and (b) Section 12.9(b)(v) of the Equity Definitions is hereby amended by: (i) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); (ii) (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other”; and (iii) deleting subsection (X) in its entirety and the words “or (Y)” immediately following subsection (X).

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.

Payment by Deutsche. 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, Deutsche owes to Company pursuant to

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Section 6(d)(ii) of the Agreement an amount calculated under Section 6(e) of the Agreement, or (ii) Deutsche owes to Company, 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.

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
Fax:           (410) 263-7617

(b) Deutsche

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention: Faiz Khan

Telephone: (212) 250-0668
Email:          faiz.khan@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
Attention: Lars Kestner

Telephone: (212) 250-6043
Email:          Lars.Kestner@db.com

with a copy to:

Deutsche Bank AG, London Branch
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Attention: Andrew Yaeger

Telephone: (212) 250-2717
Email:          andrew.yaeger@db.com

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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 Deutsche a facsimile of the fully-executed Confirmation to Deutsche at 44 113 336 2009. 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,

DEUTSCHE BANK AG, LONDON BRANCH

By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ Jon Arnone
	Name:	Jon Arnone
	Title:	Managing Director
DEUTSCHE BANK SECURITIES INC., acting solely as Agent in connection with this Transaction
By:	/s/ Lars Kestner
	Name:	Lars Kestner
	Title:	Managing Director
By:	/s/ John Arnone
	Name:	John Arnone
	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.
	Name:	Thomas M. Brandt, Jr.
	Title:	Senior Vice President and Chief Financial Officer

Chairman of the Supervisory Board: Clemens Börsig Board of Managing Directors: Hermann-Josef Lamberti, Josef Ackermann, Dr. Hugo Banziger, Anthony Dilorio	Deutsche Bank AG is regulated by the FSA for the conduct of designated investment business in the UK, is a member of the London Stock Exchange and is a limited liability company incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration No. in England and Wales BR000005, Registered address:
	Winchester House, 1 Great Winchester Street, London EC2N 2DB.

ANNEX A

Registration Settlement and Private Placement Settlement

(i)	If Counterparty elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Counterparty shall be effected in private placement procedures (customary for equity securities of the size of such private placement) with respect to such Restricted Shares reasonably acceptable to Deutsche; provided that Counterparty may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Counterparty to Deutsche (or any affiliate designated by Deutsche) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Deutsche (or any such affiliate of Deutsche). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Deutsche, due diligence rights (for Deutsche or any buyer of the Restricted Shares designated by Deutsche), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Deutsche. In the event of a Private Placement Settlement, the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, shall be deemed to be the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, plus an additional amount (determined from time to time by the Calculation Agent in its commercially reasonable judgment) attributable to interest that would be earned on such Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, (increased on a daily basis to reflect the accrual of such interest and reduced from time to time by the amount of net proceeds received by Deutsche as provided herein) at a rate equal to the open Federal Funds Rate plus 100 basis points per annum for the period from, and including, such Settlement Date or the date on which the Counterparty Payment Obligation is due, respectively, to, but excluding, the related date on which all the Restricted Shares have been sold and calculated on an Actual/360 basis.
(ii)	If Counterparty elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Counterparty shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Deutsche, to cover the resale of such Restricted Shares (and any Make-whole Shares) in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities, due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all reasonably acceptable to Deutsche. If Deutsche, in its sole reasonable discretion, is not satisfied with such procedures and documentation, Private Placement Settlement shall apply. If Deutsche is satisfied with such procedures and documentation, it shall sell the Restricted Shares (and any Make-whole Shares) pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (and any Make-whole Shares) and ending on the earliest of (i) the Exchange Business Day on which Deutsche completes the sale of all Restricted Shares or, in the case of settlement of Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Counterparty Payment Obligation, (ii) the date upon which all Restricted Shares (and any Make-whole Shares) have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) and (iii) the date upon which all Restricted Shares (and any Make-whole Shares) may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) without any further restriction whatsoever.
(iii)	If (ii) above is applicable and the Net Share Settlement Amount or the Counterparty Payment Obligation, as applicable, exceeds the realized net proceeds from such resale, or if (i) above is applicable and the Freely Tradeable Value (as defined below) of the Shares owed pursuant to the Net Share Settlement Amount, or the Counterparty Payment Obligation (in each case as adjusted pursuant to (i) above), as applicable, exceeds the realized net proceeds from such resale, Counterparty shall transfer to Deutsche by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess

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(the “Additional Amount”), at its option, either in cash or in a number of Restricted Shares (“Make-whole Shares”, provided that the aggregate number of Restricted Shares and Make-whole Shares delivered shall not exceed the Maximum Delivery Amount) that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a value equal to the Additional Amount. If Counterparty elects to pay the Additional Amount in Make-whole Shares, Counterparty shall elect whether the requirements and provisions for either Private Placement Settlement or Registration Settlement shall apply to such payment. This provision shall be applied successively until the Additional Amount is equal to zero, subject to “Limitation on Delivery of Shares”. “Freely Tradeable Value” means the value of the number of Shares delivered to Deutsche which such Shares would have if they were freely tradeable (without prospectus delivery) upon receipt by Deutsche, as determined by the Calculation Agent by reference to the Relevant Price for freely tradeable Shares as of the Valuation Date, or other date of valuation used to determine the delivery obligation with respect to such Shares, or by other commercially reasonable means.

A-2

ANNEX B

The Strike Price, Premium and Final Disruption Date for the Transaction are set forth below.

Strike Price:	USD12.736
Premium:	USD929,684
Final Disruption Date:	July 7, 2015

B-1

ANNEX C

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

Component Number	Number of Warrants		Expiration Date
1.		6,523	Fri, 02/13/15
2.		6,523	Tue, 02/17/15
3.		6,523	Wed, 02/18/15
4.		6,523	Thu, 02/19/15
5.		6,523	Fri, 02/20/15
6.		6,523	Mon, 02/23/15
7.		6,523	Tue, 02/24/15
8.		6,523	Wed, 02/25/15
9.		6,523	Thu, 02/26/15
10.		6,523	Fri, 02/27/15
11.		6,523	Mon, 03/02/15
12.		6,523	Tue, 03/03/15
13.		6,523	Wed, 03/04/15
14.		6,523	Thu, 03/05/15
15.		6,523	Fri, 03/06/15
16.		6,523	Mon, 03/09/15
17.		6,523	Tue, 03/10/15
18.		6,523	Wed, 03/11/15
19.		6,523	Thu, 03/12/15
20.		6,523	Fri, 03/13/15
21.		6,523	Mon, 03/16/15
22.		6,523	Tue, 03/17/15
23.		6,523	Wed, 03/18/15
24.		6,523	Thu, 03/19/15
25.		6,523	Fri, 03/20/15
26.		6,523	Mon, 03/23/15
27.		6,523	Tue, 03/24/15
28.		6,523	Wed, 03/25/15
29.		6,523	Thu, 03/26/15
30.		6,523	Fri, 03/27/15
31.		6,523	Mon, 03/30/15
32.		6,523	Tue, 03/31/15
33.		6,523	Wed, 04/01/15
34.		6,523	Thu, 04/02/15
35.		6,523	Mon, 04/06/15
36.		6,523	Tue, 04/07/15
37.		6,523	Wed, 04/08/15
38.		6,523	Thu, 04/09/15
39.		6,523	Fri, 04/10/15

C-1

Component Number	Number of Warrants		Expiration Date
40.		6,523	Mon, 04/13/15
41.		6,523	Tue, 04/14/15
42.		6,523	Wed, 04/15/15
43.		6,523	Thu, 04/16/15
44.		6,523	Fri, 04/17/15
45.		6,523	Mon, 04/20/15
46.		6,523	Tue, 04/21/15
47.		6,523	Wed, 04/22/15
48.		6,523	Thu, 04/23/15
49.		6,523	Fri, 04/24/15
50.		6,523	Mon, 04/27/15
51.		6,523	Tue, 04/28/15
52.		6,523	Wed, 04/29/15
53.		6,523	Thu, 04/30/15
54.		6,523	Fri, 05/01/15
55.		6,523	Mon, 05/04/15
56.		6,523	Tue, 05/05/15
57.		6,523	Wed, 05/06/15
58.		6,523	Thu, 05/07/15
59.		6,523	Fri, 05/08/15
60.		6,523	Mon, 05/11/15
61.		6,523	Tue, 05/12/15
62.		6,523	Wed, 05/13/15
63.		6,523	Thu, 05/14/15
64.		6,523	Fri, 05/15/15
65.		6,523	Mon, 05/18/15
66.		6,523	Tue, 05/19/15
67.		6,523	Wed, 05/20/15
68.		6,523	Thu, 05/21/15
69.		6,523	Fri, 05/22/15
70.		6,523	Tue, 05/26/15
71.		6,523	Wed, 05/27/15
72.		6,523	Thu, 05/28/15
73.		6,523	Fri, 05/29/15
74.		6,523	Mon, 06/01/15
75.		6,523	Tue, 06/02/15
76.		6,523	Wed, 06/03/15
77.		6,523	Thu, 06/04/15
78.		6,523	Fri, 06/05/15
79.		6,523	Mon, 06/08/15
80.		6,523	Tue, 06/09/15
81.		6,523	Wed, 06/10/15
82.		6,523	Thu, 06/11/15
83.		6,523	Fri, 06/12/15
84.		6,523	Mon, 06/15/15
85.		6,523	Tue, 06/16/15

A-2

Component Number	Number of Warrants		Expiration Date
86.		6,523	Wed, 06/17/15
87.		6,523	Thu, 06/18/15
88.		6,523	Fri, 06/19/15
89.		6,523	Mon, 06/22/15
90.		6,523	Tue, 06/23/15

A-2

EX-10.5.B

Exhibit 10.5(b)

SOCIÉTÉ GÉNÉRALE

17 COURS VALMY

92987 PARIS-LA DEFENSE,

FRANCE

DATE:	November 11, 2009
TO:	TeleCommunication Systems, Inc.
ATTENTION:	Bruce A. White
TELEPHONE:	(410) 263-7616
FACSIMILE:	(410) 263-7617
FROM:	Société Générale
FACSIMILE:	(212) 278-5624
SUBJECT:	Equity Derivatives Additional Warrant Confirmation
REFERENCE NUMBER(S):	[        ]

The purpose of this facsimile agreement (this “Confirmation”) is to confirm the terms and conditions of the transaction entered into between Société Générale (“Société Générale”) 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.

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 Warrant 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 Société Générale 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 Société Générale and Counterparty had executed an agreement in such form (without any Schedule but with the “Cross-Default” provisions of Section 5(a)(vi) applicable to Counterparty with a “Threshold Amount” of $5,000,000 and with such other elections set forth in this Confirmation). For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement.

The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions, and shall have the following terms:

General:
Trade Date:	November 11, 2009.
Effective Date:	November 16, 2009.
Components:	The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.
Warrant Style:	European.
Warrant Type:	Call.
Seller:	Counterparty.
Buyer:	Société Générale.
Shares:	Class A common stock, par value USD 0.01 per share, of Counterparty.
Number of Warrants:	For each Component, as provided in Annex C to this Confirmation.
Strike Price:	As provided in Annex B to this Confirmation.
Premium:	As provided in Annex B to this Confirmation.
Premium Payment Date:	The Effective Date.
Exchange:	The NASDAQ Global Market.
Related Exchanges:	All Exchanges.
Calculation Agent:	Société Générale.
Procedure for Exercise:
In respect of any Component:
Expiration Date:	As provided in Annex C to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction

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	hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for the Transaction) and, notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Relevant Price for the Expiration Date shall be the prevailing market value per Share determined by the Calculation Agent in a commercially reasonable manner. Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent may determine that such Expiration Date is a Disrupted Day only in part, in which case the Calculation Agent shall make adjustments to the number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date. “Final Disruption Date” has the meaning provided in Annex B to this Confirmation.
Automatic Exercise:	Applicable. Each Warrant not previously exercised will be deemed to be automatically exercised on the Expiration Time on the relevant Expiration Date.
Market Disruption Event:	Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” in clause (ii) thereof, and by replacing the words “or (iii) an Early Closure.” with “(iii) an Early Closure or (iv) a Regulatory Disruption, in each case that the Calculation Agent determines is material.”
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
Regulatory Disruption:	Any event that Société Générale, 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 Société Générale, and including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M and/or analyzing Société Générale as if Société Générale were the Issuer or an affiliated purchaser of the Issuer), for Société Générale to refrain from or decrease any market activity in connection with the Transaction. Société Générale shall notify Counterparty as soon as reasonably

3

	practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it.
Settlement Terms:
In respect of any Component:
Net Share Settlement:	On each Settlement Date, Counterparty shall deliver to Société Générale a number of Shares equal to the Net Share Amount for such Settlement Date to the account specified by Société Générale, and cash in lieu of any fractional shares valued at the Relevant Price for the Valuation Date corresponding to such Settlement Date. If, in the good faith reasonable judgment of Société Générale, the Shares deliverable hereunder would not be immediately freely transferable by Société Générale under Rule 144 (“Rule 144”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or any successor provision, then Société Générale may elect to either (x) accept delivery of such Shares notwithstanding the fact that such Shares are not immediately freely transferable by Société Générale under Rule 144 or any successor provision or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below.
Net Share Amount:	For any Exercise Date, a number of Shares, as calculated by the Calculation Agent, equal to (x) the product of (i) the number of Warrants being exercised or deemed exercised on such Exercise Date, and (ii) the excess, if any, of the Relevant Price for the Valuation Date occurring on such Exercise Date over the Strike Price (such product, the “Net Share Settlement Amount”), divided by (y) such Relevant Price.
Relevant Price:	On any Valuation Date, the volume weighted average price per Share for the regular trading session of the Exchange as displayed under the heading “Bloomberg VWAP” on Bloomberg Page TSYS <equity> AQR on such Valuation Date in respect of the period from 9:30 am to 4:00 p.m. (New York City time) on such Valuation Date (or if such volume weighted average price is not available, the Calculation Agent’s reasonable, good faith estimate of such price on such Valuation Date).
Settlement Currency:	USD.
Other Applicable Provisions:	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except 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) and 9.12 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” and “Physically-settled” shall be read as references to

4

	“Net Share Settlement” and “Net Share Settled”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to such Warrant.
Dividends:
In respect of any Component:
Dividend Adjustments:	Counterparty agrees to notify Société Générale promptly of the announcement of an ex-dividend date for any cash dividend by Counterparty. If an ex-dividend date for any cash dividend occurs at any time from, but excluding, the Trade Date to, and including, the Expiration Date, then in lieu of any adjustments as provided under “Method of Adjustment” below, the Calculation Agent shall make such adjustments to the Strike Price and/or the Number of Warrants as it deems appropriate to preserve for the parties the intended economic benefits of the Transaction.
Adjustments:
In respect of any Component:
Method of Adjustment:	Calculation Agent Adjustment; provided, however, that the Equity Definitions shall be amended by replacing the words “diluting or concentrative” in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii) with the word “material” and by adding the words “or the Transaction” after the words “theoretical value of the relevant Shares” in Sections 11.2(a), 11.2(c) and 11.2(e)(vii); provided further that adjustments may be made to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate and expected liquidity relative to the relevant Share.
Extraordinary Events:
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.
Modified Calculation Agent Adjustment:	If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Counterparty being different from the issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Société Générale that Société Générale has determined, in its reasonable discretion, to be reasonably

5

	necessary or appropriate to allow Société Générale to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Société Générale, and if such conditions are not met or if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.
	For greater certainty, the definition of “Modified Calculation Agent Adjustment” in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by adding the following italicized language to the stipulated parenthetical provision: “(including adjustments to account for changes in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the Announcement Date to the Merger Date (Section 12.2) or Tender Offer Date (Section 12.3)”.
Announcement Event:	If an Announcement Event occurs, the Calculation Agent will determine the economic effect of the Announcement Event on the theoretical value of each Component of the Transaction (including without limitation any change in expected volatility, expected dividends, expected correlation, expected stock loan rate or expected liquidity relevant to the Shares or to the Transaction) from the potential Announcement Date to the Expiration Date for such Component and, if such economic effect is material, the Calculation Agent will adjust the terms of the Transaction to reflect such economic effect. “Announcement Event” shall mean the occurrence of a potential Announcement Date of a Merger Event or Tender Offer, if the Merger Date or Tender Offer Date does not, or is not anticipated to, occur on or prior to the Expiration Date for, or any earlier termination of, the relevant Component.
Consequences of Merger Events:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.
(b) Share-for-Other:	Cancellation and Payment (Calculation Agent Determination).
(c) Share-for-Combined:	Component Adjustment.
Tender Offer:	Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby amended by adding “, or of the outstanding Shares,” before “of the Issuer” in the fourth line thereof. Sections 12.1(e) and 12.1(1)(ii) of the Equity Definitions are hereby amended by adding “or Shares, as applicable,” after “voting shares”.
Consequences of Tender Offers:
(a) Share-for-Share:	Modified Calculation Agent Adjustment.

6

(b) Share-for-Other:	Modified Calculation Agent Adjustment.
(c) Share-for-Combined:	Modified Calculation Agent 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”.
Failure to Deliver:	Inapplicable
Insolvency Filing:	Applicable
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	200 basis points per annum
Increased Cost of Stock Borrow:	Applicable
Initial Stock Loan Rate:	25 basis points per annum
Increased Cost of Hedging:	Applicable
Hedging Disruption:	Applicable
Hedging Party:	Société Générale for all applicable Additional Disruption Events
Determining Party:	Société Générale for all applicable Additional Disruption Events

7

Acknowledgements:
Non-Reliance:	Applicable
Agreements and Acknowledgements Regarding Hedging Activities:	Applicable
Additional Acknowledgements:	Applicable

Mutual Representations: Each of Société Générale 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 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.

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 shall immediately provide written notice to Société Générale 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 Société Générale in connection with this Transaction.

8

(ii)	(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 Société Générale 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 recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Société Générale or any of its affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction.
(iii)	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 Exchange Act.
(iv)	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.
(v)	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.
(vi)	The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement (the “Purchase Agreement”) dated as of the Trade Date between Counterparty and Oppenheimer & Co. and Raymond James are true and correct and are hereby deemed to be repeated to Société Générale as if set forth herein.
(vii)	The Shares issuable upon exercise of all Warrants (the “Warrant Shares”) have been duly authorized and, when delivered pursuant to the terms of such Transaction, shall be validly issued, fully-paid and non-assessable, and such issuance of the Warrant Shares shall not be subject to any preemptive or similar rights and shall, upon such issuance, be accepted for listing or quotation on the Exchange.
(viii)	Counterparty is not as of the Trade Date and as of the date on which Counterparty delivers any Termination Delivery Units, 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”)).
(ix)	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.
(x)	Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Société Générale 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.
(xi)	Counterparty understands, agrees and acknowledges that no obligations of Société Générale to it hereunder, if any, shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Société Générale or any governmental agency.

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(xii)	Counterparty shall deliver to Société Générale an opinion of counsel, dated as of the Trade Date and reasonably acceptable to Société Générale in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement and such other matters as Société Générale may reasonably request.
(xiii)	On each anniversary of the Trade Date, Counterparty shall deliver to Société Générale an officer’s certificate, signed by an authorized officer, stating the number of Available Shares (as defined in the provision titled “Limitation On Delivery of Shares” below).

Miscellaneous:

Effectiveness. If, on or prior to the Effective Date, Société Générale reasonably determines that it is advisable to cancel the Transaction because of concerns that Société Générale’s related hedging activities could be viewed as not complying with applicable securities laws, rules or regulations, the Transaction shall be cancelled and shall not become effective, and neither party shall have any obligation to the other party in respect of the Transaction.

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 will be effected through Agent. In addition, all notices, demands and communications of any kind relating to the Transaction between Société Générale and Counterparty may be transmitted exclusively through Agent.

Status of Claims in Bankruptcy. Société Générale acknowledges and agrees that this Confirmation is not intended to convey to Société Générale 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 Société Générale’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 Société Générale’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 Société Générale 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

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“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 Société Générale 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.

Alternative Calculations and Counterparty Payment on Early Termination and on Certain Extraordinary Events. If Counterparty owes Société Générale any amount in connection with the Transaction pursuant to Sections 12.2, 12.3, 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 “Counterparty Payment Obligation”), Counterparty shall have the right, in its sole discretion, to satisfy any such Counterparty Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Société Générale, 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 Counterparty Termination Delivery”). Within a commercially reasonable period of time following receipt of a Notice of Counterparty Termination Delivery, Counterparty shall deliver to Société Générale a number of Termination Delivery Units having a cash value equal to the amount of such Counterparty 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 sold over a commercially reasonable period of time to generate proceeds equal to the cash equivalent of such payment obligation). In addition, if, in the good faith reasonable judgment of Société Générale, for any reason, the Termination Delivery Units deliverable pursuant to this paragraph would not be immediately freely transferable by Société Générale under Rule 144 or any successor provision, then Société Générale may elect either to (x) accept delivery of such Termination Delivery Units notwithstanding any restriction on transfer or (y) require that such delivery take place pursuant to the provisions set forth opposite the caption “Registration/Private Placement Procedures” below. 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, Merger Event or Tender Offer), one Share or (b) in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, 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, Merger Event or Tender Offer. 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 deliver 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, Merger Event or Tender Offer 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.

Registration/Private Placement Procedures. If, in the reasonable opinion of Société Générale, following any delivery of Shares or Termination Delivery Units to Société Générale hereunder, such Shares or Termination Delivery Units would be in the hands of Société Générale subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Termination Delivery Units pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Termination Delivery Units being “restricted securities”, as such term is defined in Rule 144) (such Shares or Termination Delivery Units,

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“Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) of Annex A hereto at the election of Counterparty, unless waived by Société Générale. Notwithstanding the foregoing, solely in respect of any Warrants exercised or deemed exercised on any Exercise Date, Counterparty shall elect, prior to the first Settlement Date for the first Exercise Date, a Private Placement Settlement (as defined in Annex A hereto) or Registration Settlement (as defined in Annex A hereto) for all deliveries of Restricted Shares for all such Exercise Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) of Annex A hereto shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement Settlement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii) of Annex A, as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Counterparty shall be the Defaulting Party.

Share Deliveries. Counterparty acknowledges and agrees that, to the extent that Société Générale is not then an affiliate, as such term is used in Rule 144, of Counterparty and has not been such an affiliate of Counterparty for 90 days (it being understood that Société Générale shall not be considered such an affiliate of Counterparty solely by reason of its right to receive Shares pursuant to a Transaction hereunder), any Shares or Termination Delivery Units delivered hereunder at any time after one year from the Premium Payment Date shall be eligible for resale under Rule 144 or any successor provision, and Counterparty agrees to promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any restrictions on resale under the Securities Act from the certificates representing such Shares or Termination Delivery Units. Counterparty further agrees that with respect to any Shares or Termination Delivery Units delivered hereunder at any time after 6 months from the Premium Payment Date but prior to 1 year from the Premium Payment Date, to the extent that Counterparty then satisfies the current information requirement of Rule 144, Counterparty shall promptly remove, or cause the transfer agent for such Shares or Termination Delivery Units to remove, any legends referring to any such restrictions or requirements from the certificates representing such Share or Termination Delivery Units upon delivery by Société Générale to Counterparty or such transfer agent of any customary seller’s and broker’s representation letters in connection with resales of such Shares or Termination Delivery Units pursuant to Rule 144, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Société Générale. Counterparty further agrees and acknowledges that Société Générale shall run a holding period under Rule 144 with respect to the Warrants and/or any Shares or Termination Delivery Units delivered hereunder notwithstanding the existence of any other transaction or transactions between Counterparty and Société Générale relating to the Shares. Counterparty further agrees that Shares or Termination Delivery Units delivered hereunder prior to the date that is 6 months from the Premium Payment Date may be freely transferred by Société Générale to its affiliates, and Counterparty shall effect such transfer without any further action by Société Générale. Notwithstanding anything to the contrary herein, Counterparty agrees that any delivery of Shares or Termination Delivery Units shall be effected by book-entry transfer through the facilities of the Clearance System if, at the time of such delivery, the certificates representing such Shares or Termination Delivery Units would not contain any restrictive legend as described above. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court changes after the Trade Date, the agreements of Counterparty herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Counterparty, to comply with Rule 144, including Rule 144(b) or any successor provision, as in effect at the time of delivery of the relevant Shares or Termination Delivery Units.

No Material Non-Public Information. On each day during the period beginning on the Trade Date and ending on the day on which Société Générale has informed Counterparty in writing that Société Générale has completed all purchases or sales of Shares or other transactions to hedge initially its exposure with respect to the Transaction, Counterparty represents and warrants to Société Générale that it is not aware of any material nonpublic information concerning itself or the Shares.

Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Société Générale may not

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exercise any Warrant hereunder, Automatic Exercise shall not apply with respect thereto, and no delivery hereunder (including pursuant to provisions opposite the headings “Alternative Calculations and Counterparty Payments on Early Termination and on Certain Extraordinary Events,” “Registration/Private Placement Procedures,” “Limitation on Delivery of Shares” or Annex A) shall be made, to the extent (but only to the extent) that the receipt of any Shares upon such exercise or delivery, after taking into account Shares deliverable to Société Générale under the Base Warrant Confirmation (as defined below), would result in the Equity Percentage (as defined below) exceeding 9% or an Ownership Trigger (as defined below) being met. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that such delivery, after taking into account Shares deliverable to Société Générale under the Base Warrant Confirmation (as defined below), would result in the Equity Percentage exceeding 9% or an Ownership Trigger being met. If any delivery owed to Société Générale or exercise hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery and Société Générale’s right to exercise a Warrant shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Clearance System Business Day after, Société Générale gives notice to Counterparty that such exercise or delivery would not result in the Equity Percentage exceeding 9% or an Ownership Trigger being met. As used herein, the “Base Warrant Confirmation” means the Equity Derivatives Warrant Confirmation dated November 10, 2009, between the parties hereto.

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, provide Société Générale with a written notice of such repurchase (a “Repurchase Notice”) on such day if, following such repurchase, the Warrant Equity Percentage (as defined below) is (a) equal to or greater than 4.5% and (b) greater by 0.5% or more than the Warrant Equity Percentage set forth in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater by 0.5% or more than the Warrant Equity Percentage as of the date hereof). The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, of (1) the numerator of which is the Number of Warrants, plus the Number of Warrants under the Base Warrant Confirmation, and (2) the denominator of which is the number of Shares outstanding on such day. Counterparty agrees to indemnify and hold harmless Société Générale and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling person (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Société Générale’s hedging activities as a consequence of becoming, or of the risk of becoming, an “insider” as defined under Section 16 of the Exchange Act, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to this Transaction), claims, damages, judgments, liabilities and expense (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of Counterparty’s failure to provide Société Générale with a Repurchase Notice on the day and in the manner specified herein, and to reimburse, upon written request, each of such 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 Indemnified Person, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the 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 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 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 Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is

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unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such 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 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.

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 1,174,140 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 Société Générale 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.

Additional Termination Event. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which (1) Counterparty shall be the sole Affected Party and (2) the Transaction shall be the sole Affected Transaction; provided that with respect to any Additional Termination Event, Société Générale may choose to treat part of the Transaction as the sole Affected Transaction, and, upon termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

(i) Société Générale reasonably determines, upon advice of counsel, that it is advisable to terminate a portion of the Transaction so that Société Générale’s related hedging activities will comply with applicable securities laws, rules or regulations;

(ii) The Shares are not approved for listing on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);

(iii) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act or any successor provisions, including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision) is or becomes the “beneficial owner” (as that term is used in Rule 13d-3 under the Exchange Act as in effect on the Effective Date, except that the number of shares of Counterparty’s voting stock will be deemed to include, in addition to all outstanding shares of Counterparty’s voting stock and shares of voting stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination (“unissued shares”) deemed to be held by the “person” or “group” or other person with respect to which the determination is being made, all unissued shares deemed to be held by all other persons), directly or indirectly, of shares representing 50% or more of the total voting power of all outstanding classes of Counterparty’s capital stock or other interests normally entitled (without regard to the occurrence of any contingency) to vote in the election of the board of directors, managers or trustees (“voting stock”) or has the

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power, directly or indirectly, to elect a majority of the members of Counterparty’s board of directors, unless the exception provided in clause (iv)(2) below applies;

(iv) Counterparty consolidates with, enters into a binding share exchange with, or merges with or into, another person, or Counterparty sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of its assets, or any person consolidates with, or merges with or into, Counterparty, in any such event, other than any transaction:

(1) pursuant to which the persons that “beneficially owned,” directly or indirectly, the shares of Counterparty’s voting stock immediately prior to such transaction “beneficially own,” directly or indirectly, shares of Counterparty’s voting stock representing at least a majority of the total voting power of all outstanding classes of voting stock of the surviving or transferee person and such holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction shall be in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction;

(2) in which at least 90% of the consideration paid for the Shares (other than cash payments for fractional shares or pursuant to dissenters’ appraisal rights) consists of shares of common stock traded on the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors), or which will be so traded immediately following such transaction; or

(3) which is effected solely to change Counterparty’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding Shares solely into shares of common stock of the surviving person;

(v) (a) individuals who on the Effective Date constituted Counterparty’s board of directors and (b) any new directors whose election to Counterparty’s board of directors or whose nomination for election by Counterparty’s stockholders was approved by at least a majority of the directors at the time of such election or nomination still in office either who were directors on the Effective Date or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of Counterparty’s board of directors; or

(vi) the holders of Counterparty’s capital stock approve any plan or proposal for liquidation or dissolution of Counterparty.

Transfer or Assignment. Notwithstanding any provision of the Agreement to the contrary, Société Générale may, subject to applicable law, freely transfer and assign all of its rights and obligations under the Transaction without the consent of Counterparty.

If, as determined in Société Générale’s sole discretion, (a) at any time (1) the Equity Percentage exceeds 8.0% (2) Société Générale, Société Générale Group (as defined below) or any person whose ownership position would be aggregated with that of Société Générale or Société Générale Group (Société Générale, Société Générale Group or any such person, a “Société Générale 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 Société Générale Person under Applicable Laws and with respect to which such requirements have not been met or the relevant approval has not been received (this clause (2)(x), the “Ownership Trigger”) 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 Société Générale Person divided by the number of Counterparty’s outstanding Shares exceeds 8.0%, (each of such conditions described in clause (1), (2) or (3), an “Excess Ownership Position”), and (b) Société Générale 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

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the preceding paragraph such that an Excess Ownership Position no longer exists, Société Générale 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 Société Générale 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 Warrants equal to the Terminated Portion (allocated among the Components thereof in the discretion of Société Générale), (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 Counterparty Payment on Early Termination and on Certain Extraordinary Events” shall apply to any amount that is payable by Counterparty to Société Générale 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 Société Générale and any of its affiliates subject to aggregation with Société Générale 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 Société Générale (collectively, “Société Générale 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 Société Générale to purchase, sell, receive or deliver any shares or other securities to or from Counterparty, Société Générale, acting in good faith and in a commercially reasonable manner, may designate any of its affiliates to purchase, sell, receive or deliver such shares or other securities and otherwise to perform Société Générale’s obligations in respect of the Transaction and any such designee may assume such obligations. Société Générale shall be discharged of its obligations to Counterparty to the extent of any such performance.

Amendments to Equity Definitions. (a) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: (i) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (ii) replacing “will lend” with “lends” in subsection (B); and (iii) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and (b) Section 12.9(b)(v) of the Equity Definitions is hereby amended by: (i) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); (ii) (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other”; and (iii) deleting subsection (X) in its entirety and the words “or (Y)” immediately following subsection (X).

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.

Payment by Société Générale. 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, Société Générale owes to

16

Company pursuant to Section 6(d)(ii) of the Agreement an amount calculated under Section 6(e) of the Agreement, or (ii) Société Générale owes to Company, 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.

Terms relating to the Agent. Société Générale is not registered as a broker or dealer under the Securities Exchange Act of 1934, as amended. SG Americas Securities, LLC has acted solely as agent for Société Générale and the counterparty to the extent required by law in connection with this Transaction and has no obligations, by way of issuance, endorsement, guarantee or otherwise, with respect to the performance of either party under this Transaction. The parties agree to proceed solely against each other, and not against SG Americas Securities, LLC as agent, in seeking enforcement of their rights and obligations with respect to this Transaction, including their rights and obligations with respect to payment of funds and delivery of securities.

Broker. SG Americas Securities, LLC may have been paid a fee by Société Générale in connection with this Transaction. Further details will be furnished upon written request.

Time of Dealing. The time of the Transaction will be furnished by SG Americas Securities, LLC upon written request.

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
Annapolis, Maryland 21401
Attention:  Bruce A. White
Facsimile: (410) 263-7617

(b) Société Générale

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention:  Sanjay Garg
Telephone: (212) 278-5187
Facsimile: (212) 278-5624
Email:         sanjay.garg@sgcib.com

with a copy to:

Société Générale
1221 Avenue of the Americas
New York, NY 10020
Attention:  Steve Milankov
Telephone: (212) 278-6985
Facsimile: (212) 278-7365
Email:          steve.milankov@sgcib.com

17

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 Société Générale a facsimile of the fully-executed Confirmation to Société Générale at (212) 278-5624. 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, SOCIÉTÉ GÉNÉRALE
By:	/s/ Sanjay Garg
	Name:	Sanjay Garg
	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.
	Name:	Thomas M. Brandt, Jr.
	Title:	Senior Vice President and Chief Financial Officer

ANNEX A

Registration Settlement and Private Placement Settlement

(i)	If Counterparty elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Counterparty shall be effected in private placement procedures (customary for equity securities of the size of such private placement) with respect to such Restricted Shares reasonably acceptable to Société Générale; provided that Counterparty may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Counterparty to Société Générale (or any affiliate designated by Société Générale) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Société Générale (or any such affiliate of Société Générale). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Société Générale, due diligence rights (for Société Générale or any buyer of the Restricted Shares designated by Société Générale), opinions and certificates, and such other documentation as is customary for private placement agreements, all reasonably acceptable to Société Générale. In the event of a Private Placement Settlement, the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, shall be deemed to be the Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, plus an additional amount (determined from time to time by the Calculation Agent in its commercially reasonable judgment) attributable to interest that would be earned on such Net Share Settlement Amount or the Counterparty Payment Obligation, respectively, (increased on a daily basis to reflect the accrual of such interest and reduced from time to time by the amount of net proceeds received by Société Générale as provided herein) at a rate equal to the open Federal Funds Rate plus 100 basis points per annum for the period from, and including, such Settlement Date or the date on which the Counterparty Payment Obligation is due, respectively, to, but excluding, the related date on which all the Restricted Shares have been sold and calculated on an Actual/360 basis.
(ii)	If Counterparty elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Counterparty shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Société Générale, to cover the resale of such Restricted Shares (and any Make-whole Shares) in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities, due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all reasonably acceptable to Société Générale. If Société Générale, in its sole reasonable discretion, is not satisfied with such procedures and documentation, Private Placement Settlement shall apply. If Société Générale is satisfied with such procedures and documentation, it shall sell the Restricted Shares (and any Make-whole Shares) pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (and any Make-whole Shares) and ending on the earliest of (i) the Exchange Business Day on which Société Générale completes the sale of all Restricted Shares or, in the case of settlement of Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales exceed the Counterparty Payment Obligation, (ii) the date upon which all Restricted Shares (and any Make-whole Shares) have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) and (iii) the date upon which all Restricted Shares (and any Make-whole Shares) may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) without any further restriction whatsoever.
(iii)	If (ii) above is applicable and the Net Share Settlement Amount or the Counterparty Payment Obligation, as applicable, exceeds the realized net proceeds from such resale, or if (i) above is applicable and the Freely Tradeable Value (as defined below) of the Shares owed pursuant to the Net Share Settlement Amount, or the Counterparty Payment Obligation (in each case as adjusted pursuant to (i) above), as applicable, exceeds the realized net proceeds

A-1

from such resale, Counterparty shall transfer to Société Générale by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess (the “Additional Amount”), at its option, either in cash or in a number of Restricted Shares (“Make-whole Shares”, provided that the aggregate number of Restricted Shares and Make-whole Shares delivered shall not exceed the Maximum Delivery Amount) that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a value equal to the Additional Amount. If Counterparty elects to pay the Additional Amount in Make-whole Shares, Counterparty shall elect whether the requirements and provisions for either Private Placement Settlement or Registration Settlement shall apply to such payment. This provision shall be applied successively until the Additional Amount is equal to zero, subject to “Limitation on Delivery of Shares”. “Freely Tradeable Value” means the value of the number of Shares delivered to Société Générale which such Shares would have if they were freely tradeable (without prospectus delivery) upon receipt by Société Générale, as determined by the Calculation Agent by reference to the Relevant Price for freely tradeable Shares as of the Valuation Date, or other date of valuation used to determine the delivery obligation with respect to such Shares, or by other commercially reasonable means.

A-2

ANNEX B

The Strike Price, Premium and Final Disruption Date for the Transaction are set forth below.

Strike Price:	USD12.736
Premium:	USD760,651
Final Disruption Date:	July 7, 2015.

B-1

ANNEX C

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

Component Number	Number of Warrants		Expiration Date
1.		6,523	Fri, 02/13/15
2.		6,523	Tue, 02/17/15
3.		6,523	Wed, 02/18/15
4.		6,523	Thu, 02/19/15
5.		6,523	Fri, 02/20/15
6.		6,523	Mon, 02/23/15
7.		6,523	Tue, 02/24/15
8.		6,523	Wed, 02/25/15
9.		6,523	Thu, 02/26/15
10.		6,523	Fri, 02/27/15
11.		6,523	Mon, 03/02/15
12.		6,523	Tue, 03/03/15
13.		6,523	Wed, 03/04/15
14.		6,523	Thu, 03/05/15
15.		6,523	Fri, 03/06/15
16.		6,523	Mon, 03/09/15
17.		6,523	Tue, 03/10/15
18.		6,523	Wed, 03/11/15
19.		6,523	Thu, 03/12/15
20.		6,523	Fri, 03/13/15
21.		6,523	Mon, 03/16/15
22.		6,523	Tue, 03/17/15
23.		6,523	Wed, 03/18/15
24.		6,523	Thu, 03/19/15
25.		6,523	Fri, 03/20/15
26.		6,523	Mon, 03/23/15
27.		6,523	Tue, 03/24/15
28.		6,523	Wed, 03/25/15
29.		6,523	Thu, 03/26/15
30.		6,523	Fri, 03/27/15
31.		6,523	Mon, 03/30/15
32.		6,523	Tue, 03/31/15
33.		6,523	Wed, 04/01/15
34.		6,523	Thu, 04/02/15
35.		6,523	Mon, 04/06/15
36.		6,523	Tue, 04/07/15
37.		6,523	Wed, 04/08/15
38.		6,523	Thu, 04/09/15
39.		6,523	Fri, 04/10/15

C-1

Component Number	Number of Warrants		Expiration Date
40.		6,523	Mon, 04/13/15
41.		6,523	Tue, 04/14/15
42.		6,523	Wed, 04/15/15
43.		6,523	Thu, 04/16/15
44.		6,523	Fri, 04/17/15
45.		6,523	Mon, 04/20/15
46.		6,523	Tue, 04/21/15
47.		6,523	Wed, 04/22/15
48.		6,523	Thu, 04/23/15
49.		6,523	Fri, 04/24/15
50.		6,523	Mon, 04/27/15
51.		6,523	Tue, 04/28/15
52.		6,523	Wed, 04/29/15
53.		6,523	Thu, 04/30/15
54.		6,523	Fri, 05/01/15
55.		6,523	Mon, 05/04/15
56.		6,523	Tue, 05/05/15
57.		6,523	Wed, 05/06/15
58.		6,523	Thu, 05/07/15
59.		6,523	Fri, 05/08/15
60.		6,523	Mon, 05/11/15
61.		6,523	Tue, 05/12/15
62.		6,523	Wed, 05/13/15
63.		6,523	Thu, 05/14/15
64.		6,523	Fri, 05/15/15
65.		6,523	Mon, 05/18/15
66.		6,523	Tue, 05/19/15
67.		6,523	Wed, 05/20/15
68.		6,523	Thu, 05/21/15
69.		6,523	Fri, 05/22/15
70.		6,523	Tue, 05/26/15
71.		6,523	Wed, 05/27/15
72.		6,523	Thu, 05/28/15
73.		6,523	Fri, 05/29/15
74.		6,523	Mon, 06/01/15
75.		6,523	Tue, 06/02/15
76.		6,523	Wed, 06/03/15
77.		6,523	Thu, 06/04/15
78.		6,523	Fri, 06/05/15
79.		6,523	Mon, 06/08/15
80.		6,523	Tue, 06/09/15
81.		6,523	Wed, 06/10/15
82.		6,523	Thu, 06/11/15
83.		6,523	Fri, 06/12/15
84.		6,523	Mon, 06/15/15
85.		6,523	Tue, 06/16/15

A-2

Component Number	Number of Warrants		Expiration Date
86.		6,523	Wed, 06/17/15
87.		6,523	Thu, 06/18/15
88.		6,523	Fri, 06/19/15
89.		6,523	Mon, 06/22/15
90.		6,523	Tue, 06/23/15

A-2

EX-99.1

EXHIBIT 99.1

TeleCommunication Systems Completes Offering of $103.5 Million
of 4.5% Convertible Senior Notes

ANNAPOLIS, MD, November 16, 2009 – TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS) closed its offering of $103.5 million aggregate principal amount of 4.5% convertible senior notes due in 2014. The aggregate principal amount of the notes issued reflects the full exercise of the $13.5 million over-allotment option granted to the initial purchasers with respect to the notes.

The net proceeds to TCS from the offering, after deducting the initial purchasers’ commissions and estimated fees and expenses of the offering payable by TCS, were approximately $100.4 million. TCS intends to use the net proceeds of the offering and warrant transactions discussed below for general corporate purposes, including working capital, and may include the acquisition or investment in businesses, products and technologies that are complementary to its own. TCS used a portion of the gross proceeds of the offering to pay TCS’s cost of the convertible note hedge transactions that it entered into with certain counterparties.

The notes will be convertible into shares of TCS’s Class A common stock based on an initial conversion rate for the notes of 96.637 shares of TCS’s Class A common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $10.35 per share of Class A common stock. While this represents a conversion premium of approximately 30% over the closing price of TCS’s Class A common stock on November 10, 2009 of $7.96 per share, the effect of the call spread described below increases the effective conversion premium of the notes to 60% above the November 10 closing price to $12.74 per share.

Interest on the notes will be payable semiannually on November 1 and May 1 of each year, beginning May 1, 2010. The notes will mature on November 1, 2014, unless previously converted in accordance with their terms. The notes will be TCS’s senior unsecured obligations and will rank equally with all of its present and future senior unsecured debt and senior to any future subordinated debt. The notes will be structurally subordinate to all present and future debt and other obligations of TCS’s subsidiaries and will be effectively subordinate to all of TCS’s present and future secured debt to the extent of the collateral securing that debt. The notes are not redeemable by TCS prior to the maturity date.

In connection with the note offering, TCS entered into convertible note hedge and warrant transactions (the “call spread”) with counterparties Deutsche Bank AG, Société Générate and Royal Bank of Canada. TCS has been advised by the call spread counterparties that in connection with establishing their initial call spread hedge, they expect to enter into various derivative transactions with respect to TCS’s Class A common stock that could have an effect on the market price of TCS’s Class A common stock.

The notes were offered and sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The notes, the shares of Class A common stock underlying such notes, the convertible note hedge transactions, the warrants and the shares of Class A common stock underlying such warrants have not been and will not be registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Oppenheimer & Co., Inc. and Raymond James & Associates, Inc. acted as the joint book-running managers for the offering.

About TeleCommunication Systems
TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS) engineers and delivers highly reliable wireless communications technology. TCS is a leader in wireless text messaging and location-based technology, including E9-1-1 services and commercial applications like navigation that use the precise location of a wireless device, and secure satellite-based communications systems and services. Customers include leading wireless and VoIP carriers around the world, cable MSOs, automotive telematics vendors, and agencies of the U.S. Departments of Defense, State, and Homeland Security. TCS is one of six primary vendors on a $5 billion Army Worldwide Satellite Systems Contract vehicle. For more information, visit www.telecomsys.com.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These statements are based upon TCS’s current expectations and assumptions that are subject to a number of risks and uncertainties that would cause actual results to differ materially from those anticipated. The words, “believe,” “expect,” “intend,” “anticipate,” and variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Statements in this announcement that are forward-looking include, but are not limited to statements that (i) TCS’s intention regarding the use of the net proceeds of the offering; (ii) the intention of the counterparties and/or their respective affiliates to the convertible note hedge and warrant transactions to enter into various derivative transactions; and (iii) TCS’s expectations regarding the effect on the price of its Class A common stock from the convertible note hedge and warrant transactions and various derivative transactions.

Additional risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission (SEC). These include without limitation risks and uncertainties relating to the Company’s financial results and the ability of the Company to (i) sustain profitability, (ii) continue to rely on its customers and other third parties to provide additional products and services that create a demand for TCS products and services, (iii) conduct its business in foreign countries, (iv) develop software and provide services without any errors or defects, (vii) protect its intellectual property rights, (viii) evaluate and execute acquisitions and investments, (ix) not incur substantial costs from product liability claims relating to its software, and (x) implement its sales and marketing strategy. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information in this press release, whether as a result of new information, future events or circumstances, or otherwise.