Attached files
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:
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November 10, 2009 | |
TO:
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TeleCommunication Systems, Inc. | |
ATTENTION:
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Bruce A. White | |
TELEPHONE:
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(410) 263-7616 | |
FACSIMILE:
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(410) 263-7617 | |
FROM:
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RBC Capital Markets Corporation | |
as agent for | ||
Royal Bank of Canada | ||
TELEPHONE:
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(212) 858-7000 | |
FACSIMILE:
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(212) 428-3053 | |
SUBJECT:
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Equity Derivatives Note Hedge Confirmation | |
REFERENCE NUMBER(S):
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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 Banks behalf, a business in privately
negotiated transactions in options and other derivatives. You hereby are advised that RBC, the
principal and stated counterparty in such transactions, duly has authorized RBCCM to market,
structure, negotiate, document, price, execute and hedge transactions in over-the-counter
derivative products.
The definitions contained in the 2002 ISDA Equity Derivatives Definitions (the Equity
Definitions), as published by the International Swaps and Derivatives Association, Inc., are
incorporated into this Confirmation. In the event of any inconsistency between the Equity
Definitions and the terms of this Confirmation, the terms of this Confirmation shall govern. For
the purposes of the Equity Definitions, each reference herein to a Note Hedging Unit shall be
deemed to be a reference to a Call or an Option, as context requires.
This Confirmation evidences a complete and binding agreement between RBC and Counterparty as to the
terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement,
form a part of, and be subject to an agreement (the Agreement) in the form of the ISDA 2002
Master Agreement as if RBC and Counterparty had executed an
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agreement in such form (without any Schedule but with the elections set forth in this
Confirmation). For the avoidance of doubt, the Transaction shall be the only transaction under the
Agreement.
The Transaction shall be considered a Share Option Transaction for purposes of the Equity
Definitions, and shall have the following terms:
General: | ||
Trade Date: | November 10, 2009 |
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Effective Date: | The closing date for the initial issuance of the Convertible Notes. |
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Transaction Style: | American subject to the provisions below under Procedure for
Exercise. |
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Transaction Type: | Note Hedging Units. |
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Seller: | RBC. |
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Buyer: | Counterparty. |
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Shares: | Class A common stock, par value USD 0.01 per share, of
Counterparty. |
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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. |
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Number of Note Hedging Units: | 90,000 |
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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. |
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Strike Price: | USD10.348. |
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Applicable Percentage: | 20% |
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Premium: | As provided in Annex A to this Confirmation. |
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Premium Payment Date: | The Effective Date. |
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Exchange:
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The NASDAQ Global Market. | |
Related Exchanges:
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All Exchanges. | |
Calculation Agent:
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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: |
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Potential Exercise Dates:
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Each Conversion Date. | |
Conversion Date:
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Each Conversion Date as defined in the Indenture. | |
Required Exercise on Conversion Dates:
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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:
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November 1, 2014 | |
Aggregate Conversion Date:
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August 1, 2014 | |
Multiple Exercise:
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Applicable, as provided under Required Exercise on Conversion Dates. | |
Automatic Exercise:
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As provided under Required Exercise on Conversion Dates. | |
Notice of Exercise:
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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 RBCs 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). | |
RBCs Telephone Number and Telex
and/or Facsimile Number and Contact
Details for the Purpose of Giving a
Notice of Exercise:
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Steven Milke / Brian Ward Telephone: (866) 609-6009 / (416) 842-6092 Facsimile Number: (212) 428-2395 / (416) 842-4803 |
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Settlement Terms: |
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Net Share Settlement:
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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:
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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:
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In respect of any Note Hedging Unit exercised or deemed exercised, a number of Shares equal to (A) the sum of the quotients, for each Valid Day during the Settlement Averaging Period for such Note Hedging Unit, of (x) the Note Hedging Unit Entitlement on such Valid Day multiplied by (y) the Relevant Price on such Valid Day less the Strike Price, divided by (z) such Relevant Price, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Net Shares for any Note Hedging Unit exceed a number of Shares equal to the Applicable Limit for such Note Hedging Unit divided by the Relevant Price on the last Valid Day of the Settlement Averaging Period (or if such Note Hedging Unit relates to a Convertible Note with a Conversion Date occurring on or after the Aggregate Conversion Date, the Relevant Price on the second Scheduled Valid Day immediately preceding the Expiration Date); provided further that if the calculation contained in clause (y) above results in a negative number, such number shall be replaced with the number zero. For the avoidance of doubt, such obligation shall be determined excluding any Shares or cash that Counterparty is obligated to deliver to holder(s) of the Convertible Notes as a result of any adjustments to the Conversion Rate for issuance of additional Shares or cash as set forth in Section 4.02 of the Indenture (a Fundamental Change Adjustment) or any voluntary adjustment pursuant to Sections 5.08 and 5.09 of the Indenture (a Discretionary Adjustment). |
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RBC will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Shares, valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. |
Applicable Limit:
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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:
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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:
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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:
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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:
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On any Valid Day, the per Share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg page TSYS <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time of the Exchange on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day, as determined by the Calculation Agent using a substantially similar volume-weighted method). Notwithstanding the foregoing, if any Valid Day is a Disrupted Day and the Calculation Agent determines that such Disrupted Day shall be a Valid Day in part in respect of a number of Net Shares, then the Relevant Price for such Valid Day and such number of Net Shares shall be the volume-weighted average price per Share on such Valid Day on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valid Day and such number of Net Shares for which the Calculation Agent determines there is no Market Disruption Event, and the Calculation Agent shall make corresponding adjustments to the settlement terms hereunder to account for such partial Valid Day. |
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Settlement Averaging Period:
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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:
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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:
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USD. | |
Restricted Certificated Shares:
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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: |
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Potential Adjustment Events:
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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:
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Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any adjustment to the Conversion Rate of the Convertible Notes pursuant to the Indenture (other than a Fundamental Change Adjustment or a Discretionary Adjustment), the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Note Hedging Units, the Note Hedging Unit Entitlement and any other variable relevant to the exercise, settlement, payment or other terms of the Transaction. |
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Extraordinary Events: |
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Merger Events:
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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:
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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:
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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:
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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: |
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Change in Law:
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Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended (i) by the replacement of the word Shares with Hedge Positions in clause (X) thereof; (ii) by adding the phrase or announcement immediately after the phrase due to the promulgation in the third line thereof and adding the phrase formal or informal before the word interpretation in the same line; and (iii) immediately following the word Transaction in clause (X) thereof, adding the phrase in the manner contemplated by the Hedging Party on the Trade Date, unless the illegality is due to an act or omission of the party seeking to elect termination of the Transaction. |
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Failure to Deliver:
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Applicable | |
Insolvency Filing:
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Applicable | |
Increased Cost of Hedging:
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Applicable | |
Hedging Party:
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RBC for all applicable Additional Disruption Events | |
Determining Party:
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RBC for all applicable Additional Disruption Events | |
Acknowledgements: |
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Non-Reliance:
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Applicable | |
Agreements and Acknowledgements |
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Regarding Hedging Activities:
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Applicable | |
Additional Acknowledgements:
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Applicable |
Mutual Representations: Each of RBC and Counterparty represents and warrants to, and agrees
with, the other party that:
(i) | Tax Disclosure. Notwithstanding anything to the contrary herein, in the Equity Definitions or in the Agreement, and notwithstanding any express or implied claims of exclusivity or proprietary rights, the parties (and each of their employees, representatives or other agents) are authorized to disclose to any and all persons, beginning immediately upon commencement of their discussions and without limitation of any kind, the tax treatment and tax structure of the Transaction, and all materials of any kind (including opinions or other tax analyses) that are provided by either party to the other relating to such tax treatment and tax structure. | ||
(ii) | Commodity Exchange Act. It is an eligible contract participant within the meaning of Section 1a(12) of the U.S. Commodity Exchange Act, as amended (the CEA). The Transaction has been subject to individual negotiation by the parties. The Transaction has not been executed or traded on a trading facility as defined in Section 1a(33) of the CEA. It has entered into the Transaction with the expectation and intent that the Transaction shall be performed to its termination date. | ||
(iii) | Securities Act. It is a qualified institutional buyer as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the Securities Act), or an accredited investor as defined under the Securities Act. | ||
(iv) | Investment Company Act. It is a qualified purchaser as defined under the U.S. Investment Company Act of 1940, as amended (the Investment Company Act). | ||
(v) | ERISA. The assets used in the Transaction (1) are not assets of any plan (as such term is defined in Section 4975 of the U.S. Internal Revenue Code (the Code)) subject to Section 4975 of the Code or any employee benefit plan (as such term is defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (ERISA)) subject to Title I of ERISA, and (2) do not constitute plan assets within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101. |
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Counterparty Representations: In addition to the representations and warranties
in the Agreement and those contained elsewhere herein, Counterparty represents,
warrants, acknowledges and covenants that:
(i) | Counterparty is not as of the Trade Date, and shall not be after giving effect to the transactions contemplated hereby, insolvent (as such term is defined in Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the Bankruptcy Code)) and Counterparty would be able to purchase a number of Shares equal to the Number of Shares in compliance with the laws of the jurisdiction of Counterpartys 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) | Counterpartys 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) | Counterpartys investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and Counterparty is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction. | ||
(vi) | The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 2 of the Purchase Agreement dated as of the Trade Date between Counterparty and Oppenheimer & Co. Inc.and Raymond James & Associates (the Purchase Agreement) are true and correct and are hereby deemed to be repeated to RBC as if set forth herein. | ||
(vii) | Counterparty understands, agrees and acknowledges that RBC has no obligation or intention to register the Transaction under the Securities Act, any state securities law or other applicable federal securities law. | ||
(viii) | Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, an investment company as such term is defined in the Investment Company Act. | ||
(ix) | Counterparty understands, agrees and acknowledges that no obligations of RBC to it hereunder shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of RBC or any governmental agency. | ||
(x) | (A) Counterparty is acting for its own account, and it has made its own independent decisions to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary, (B) Counterparty is not relying on any communication (written or oral) of RBC or any of its affiliates as investment advice or as a recommendation to enter into the Transaction (it being understood that information and explanations related to the terms and conditions of the Transaction shall not be considered investment advice or a |
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recommendation to enter into the Transaction) and (C) no communication (written or oral) received from RBC or any of its affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction. | |||
(xi) | Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that RBC is not making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, 149 or 150 (or under any successor statement), EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements), under FASBs 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) | Counterpartys 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 Counterpartys 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 Partys rights under Sections 5 and 6 of the
Agreement constitute rights of the kind referred to in 12
U.S.C. Section 1821(e)(8)(A).
Method of Delivery. Whenever delivery of funds or other assets
is required hereunder by or to Counterparty, such delivery
shall be effected through Agent. In addition, all notices,
demands and communications of any kind relating to the
Transaction between RBC and Counterparty shall be transmitted
exclusively through Agent.
Staggered Settlement. RBC may, by notice to Counterparty prior
to any Settlement Date (a Nominal Settlement Date), elect to
deliver the Shares deliverable on such Nominal Settlement Date
on two or more dates
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(each, a Staggered Settlement Date) or
at two or more times on the Nominal Settlement Date as follows:
(i) in such notice, RBC will specify to Counterparty the
related Staggered Settlement Dates (each of which will be on or
prior to such Nominal Settlement Date or delivery times and how
it will allocate the Shares it is required to deliver under
Net Share Settlement above among the Staggered Settlement
Dates or delivery times; and (ii) the aggregate number of
Shares that RBC will deliver to Counterparty hereunder on all
such Staggered Settlement Dates and delivery times will equal
the number of Shares that RBC would otherwise be required to
deliver on such Nominal Settlement Date.
Additional Termination Events. The occurrence of (i) an Event
of Default with respect to Counterparty under the terms of the
Convertible Notes as set forth in Section 9.01 of the
Indenture, (ii) an Amendment Event or (iii) a Repayment Event
shall be an Additional Termination Event, in each case with the
Transaction as the sole Affected Transaction and Counterparty
as the sole Affected Party and RBC as the party entitled to
designate an Early Termination Date pursuant to Section 6(a) of
the Agreement; provided that in the case of a Repayment Event
the Transaction shall be subject to termination only in respect
of the portion of the Transaction corresponding to the number
of Convertible Notes subject to such Repayment Event.
Amendment Event means that Counterparty amends, modifies,
supplements or obtains a waiver with respect to any term of the
Indenture or the Convertible Notes if such amendment,
modification, supplement or waiver has an adverse effect on
this Transaction or RBCs 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
accountants 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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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 RBCs 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 RBCs
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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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 RBCs 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
attorneys fees), joint or several, to which a Section 16
Indemnified Person may become subject, as a result of
Counterpartys 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 Counterpartys control) (a RBC Payment Obligation),
Counterparty shall have the right, in its sole discretion, to
require RBC to satisfy
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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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is reasonably necessary or appropriate to (i) preserve RBCs
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 & Poors Ratings Services or its
successor (S&P), or A1 or better by Moodys Investors
Service, Inc. or its successor (Moodys) or, if either S&P or
Moodys 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 RBCs 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 Counterpartys
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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affiliates to
purchase, sell, receive or deliver such shares or other
securities and otherwise to perform RBCs 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 RBCs (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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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
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.:
RBCs 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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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