Exhibit 10.2

LOGO [g214779ex10_2pg001.jpg]

 

   July 28, 2011 To:   

BGC Partners, Inc.

110 East 59th Street

New York, NY 10022

  

Attn:

Telephone:

Facsimile:

  

Stephen Merkel, General Counsel

212-829-4829

212-829-4708

From:   

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

Telephone: 44 20 7545 8000

  

c/o Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005

Telephone: 1-212-250-2500

Re:   

Additional Capped Call Transaction

(Transaction Reference Number: 446588)

Ladies and Gentlemen:

The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between Deutsche Bank AG, London
Branch (“Dealer”), with Deutsche Bank Securities Inc. (“DBSI”) as agent, and BGC
Partners, Inc. (“Counterparty”). This communication constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below.

DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER OR DEALER UNDER THE U.S.
SECURITIES EXCHANGE ACT OF 1934. DBSI HAS ACTED SOLELY AS AGENT IN CONNECTION
WITH THE TRANSACTION GOVERNED BY THIS CONFIRMATION AND HAS NO OBLIGATION, BY WAY
OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE
OF EITHER PARTY UNDER SUCH TRANSACTION. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A
MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).

1. This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2006 ISDA Definitions (including the Annex thereto) (the “2006
Definitions”) and the definitions and provisions of the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”, and together with the 2006
Definitions, the “Definitions”), in each case as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any
inconsistency between the 2006 Definitions and the Equity Definitions, the
Equity Definitions will govern. Certain defined terms used herein have the
meanings assigned to them in the Indenture to be dated as of the closing date
for the initial issuance of the Convertible Securities described below between
Counterparty and U.S. Bank, National Association as trustee (the “Indenture”)
relating to the USD135,000,000 principal amount of 4.50% convertible senior
notes due 2016 and the additional USD25,000,000 principal amount of 4.50%
convertible senior notes due 2016 issued pursuant to the over-allotment option
exercised on the date hereof (the “Convertible Securities”). In the event of any
inconsistency between the terms defined in the Indenture and this Confirmation,
this Confirmation shall govern. For the avoidance of doubt, references herein to
sections of the Indenture are based on the draft of the Indenture most recently
reviewed by the parties at the time of execution of this Confirmation. If any
relevant sections of the Indenture are changed, added or renumbered following
execution of this Confirmation but prior to the execution of the Indenture, the
parties will amend this Confirmation in good faith to preserve the economic
intent of the parties based on the draft of the Indenture so reviewed. The
parties further acknowledge that references to the Indenture herein are
references to the Indenture as in

 

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effect on the date of its execution and if the Indenture is amended following
its execution, any such amendment will be disregarded for purposes of this
Confirmation (other than as provided in Section 8(a) below) unless the parties
agree otherwise in writing.

This Confirmation evidences a complete and binding agreement between Dealer and
Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall be subject to an agreement (the “Agreement”) in
the form of the 1992 ISDA Master Agreement (Multicurrency Cross Border) (the
“ISDA Form”) as if Dealer 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.

All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein. In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.

2. The Transaction constitutes a Share Option Transaction for purposes of the
Equity Definitions. The terms of the particular Transaction to which this
Confirmation relates are as follows:

General Terms:

 

Trade Date:

   July 28, 2011

Effective Date:

   The closing date of the issuance of the Convertible Securities issued
pursuant to the over-allotment option exercised on the date hereof.

Option Type:

   Call

Seller:

   Dealer

Buyer:

   Counterparty

Shares:

   The Class A common stock of Counterparty, par value USD0.01 per share (Ticker
Symbol: “BGCP”).

Number of Options:

   The number of Option Securities (as defined in the Purchase Agreement (as
defined below)) in denominations of USD1,000 principal amount purchased by the
Initial Purchasers (as defined in the Purchase Agreement) pursuant to the option
under Section 2(b) of the Purchase Agreement.

Number of Shares:

   As of any date, the product of the Number of Options, the Conversion Rate and
the Applicable Percentage.

Conversion Rate:

   As of any date, the “Conversion Rate” (as defined in the Indenture) as of
such date, but without regard to any adjustments to the “Conversion Rate”
pursuant to Sections 4.04, 4.05(g) or 4.05(h) of the Indenture.

Applicable Percentage:

   60%

Strike Price:

   The “Conversion Price” (as defined in the Indenture, but without regard to
any adjustments to the “Conversion Rate” (as defined in the Indenture)) pursuant
to Sections 4.04, 4.05(g) or 4.05(h) of the Indenture.

Cap Price:

   As provided in Annex A to this Confirmation.

Premium:

   As provided in Annex A to this Confirmation.

Premium Payment Date:

   The Effective Date

Exchange:

   The Nasdaq Global Select Market

 

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Related Exchange:

   All Exchanges Procedures for Exercise:   

Exercise Dates:

   Each Conversion Date.

Conversion Date:

   Each “Conversion Date”, as defined in the Indenture, occurring during the
period from and excluding the Trade Date to and including the Expiration Date,
for Convertible Securities, each in denominations of USD1,000 principal amount,
that are submitted for conversion on such Conversion Date in accordance with the
terms of the Indenture (excluding Convertible Securities that are Excluded
Convertible Securities hereunder or “Excluded Convertible Securities” under the
Base Capped Call Transaction Confirmation (as defined below)) but are not
“Relevant Convertible Securities” under, and as defined in, the confirmation
between the parties hereto regarding the Base Capped Call Transaction dated
July 25, 2011 (Transaction Ref. No. 445954) (the “Base Capped Call Transaction
Confirmation”) (such Convertible Securities, each in denominations of USD1,000
principal amount, the “Relevant Convertible Securities” for such Conversion
Date). For the purposes of determining whether any Convertible Securities will
be Relevant Convertible Securities hereunder or under the Base Capped Call
Transaction Confirmation, Convertible Securities that are converted pursuant to
the Indenture shall be allocated first to the Base Capped Call Transaction
Confirmation until all Options thereunder are exercised or terminated.

Excluded Convertible Securities:

   Convertible Securities surrendered for conversion on any date prior to
February 1, 2016 that are not “Excluded Convertible Securities” under, and as
defined in, the Base Capped Call Transaction Confirmation. For purposes of
determining whether any Convertible Securities will be Excluded Convertible
Securities hereunder or under the Base Capped Call Transaction Confirmation,
Convertible Securities that are converted prior to such date shall be allocated
first to the Base Capped Call Transaction Confirmation until all Options
thereunder are exercised or terminated. Counterparty shall, within one Scheduled
Trading Day of the “Conversion Date” (as defined in the Indenture) relating to
any Excluded Convertible Securities, provide notice in writing or by email (with
confirmation of receipt by Dealer) prior to 4:00 PM New York City time to Dealer
specifying the number of Excluded Convertible Securities converted on such
“Conversion Date”.

Required Exercise on

  

Conversion Dates:

   On each Conversion Date, a number of Options equal to the number of Relevant
Convertible Securities for such Conversion Date in denominations of USD1,000
principal amount shall be automatically exercised.

Expiration Date:

   The second “Scheduled Trading Day” immediately preceding the “Maturity Date”
(each as defined in the Indenture).

Automatic Exercise:

   As provided above under “Required Exercise on Conversion Dates”.

 

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Exercise Notice Deadline:

   In respect of any exercise of Options hereunder on any Conversion Date, the
Exchange Business Day immediately following such Conversion Date.

Notice of Exercise:

   Notwithstanding anything to the contrary in the Equity Definitions, Dealer
shall have no obligation to make any payment or delivery in respect of any
exercise of Options hereunder unless Counterparty notifies Dealer in writing or
by email (with confirmation of receipt by Dealer) prior to 4:00 PM, New York
City time, on the Exercise Notice Deadline in respect of such exercise of the
number of Options being exercised on the relevant Exercise Date; provided that
any “Notice of Exercise” delivered to Dealer pursuant to the Base Capped Call
Transaction Confirmation shall deemed to be a Notice of Exercise pursuant to
this Confirmation and the terms of such Notice of Exercise shall apply, mutatis
mutandis, to this Confirmation. Counterparty acknowledges its responsibilities
under applicable securities laws, and in particular Section 9 and Section 10(b)
of the Exchange Act (as defined below) and the rules and regulations thereunder,
in respect of any election of a settlement method with respect to the
Convertible Securities. For the avoidance of doubt, if Counterparty fails to
give such notice when due in respect of any exercise of Options hereunder,
Dealer’s obligation to make any payment or delivery in respect of such exercise
shall be permanently extinguished, and late notice shall not cure such failure;
provided that notwithstanding the foregoing, such notice (and the related
exercise of Options) shall be effective if given after the Exercise Notice
Deadline, but prior to 4:00 PM, New York City time, on the fifth Exchange
Business Day following the Exercise Notice Deadline, in which event the
Calculation Agent shall have the right to adjust the Delivery Obligation as
appropriate to reflect the additional costs (including, but not limited to,
hedging mismatches and market losses) and expenses incurred by Dealer in
connection with its hedging activities (including the unwinding of any hedge
position) as a result of Dealer’s not having received such notice on or prior to
the Exercise Notice Deadline.

Notice of Convertible Security

  

Settlement Method:

   Counterparty shall notify Dealer in writing or by email (with confirmation of
receipt by Dealer) before 4:00 P.M. (New York City time) on the “Scheduled
Trading Day” (as defined in the Indenture) immediately prior to February 1, 2016
of the irrevocable election by the Counterparty, in accordance with Section
4.03(c) of the Indenture, of the settlement method and, if applicable, the
“Specified Dollar Amount” (as defined in the Indenture) applicable to Relevant
Convertible Securities with a Conversion Date occurring on or after February 1,
2016. If Counterparty fails timely to provide such notice, Counterparty shall be
deemed to have notified Dealer of settlement with solely Shares for all
conversions occurring on or after February 1. 2016. Counterparty agrees that it
shall settle any Relevant Convertible Securities with a Conversion Date
occurring on or after February 1, 2016 in the same manner as provided in the
Notice of Convertible Security Settlement Method it provides or is deemed to
have provided hereunder.

Dealer’s Telephone Number

  

 

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and Telex and/or Facsimile Number and Contact Details for purpose of Giving
Notice:

   To be provided by Dealer. Settlement Terms:   

Settlement Date:

   In respect of an Exercise Date occurring on a Conversion Date, the settlement
date for the cash and Shares (if any) to be delivered in respect of the Relevant
Convertible Securities converted on such Conversion Date pursuant to
Section 4.03(d) of the Indenture; provided that the Settlement Date will not be
prior to the latest of (i) the date one Settlement Cycle following the final day
of the relevant “Cash Settlement Averaging Period” (as defined in the
Indenture), (ii) the date one Settlement Cycle following the date on which
Counterparty gives notice to Dealer of such Settlement Date prior to 4:00 PM,
New York City time, and (iii) the date one Settlement Cycle immediately
following the date Counterparty provides the Notice of Delivery Obligation prior
to 4:00 PM, New York City time.

Delivery Obligation:

   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 and “Dividends” (under
“Share Adjustments”) below, in respect of an Exercise Date occurring on a
Conversion Date, Dealer will deliver to Counterparty, on the related Settlement
Date, the Applicable Percentage of a number of Shares and/or amount of cash in
USD equal to the aggregate number of Shares, if any, that Counterparty would be
obligated to deliver to the holder(s) of the Relevant Convertible Securities
converted on such Conversion Date pursuant to Section 4.03(b) of the Indenture
and/or the aggregate amount of cash, if any, in excess of USD1,000 per
Convertible Security (in denominations of USD1,000) that Counterparty would be
obligated to deliver to holder(s) pursuant to Section 4.03(b) of the Indenture
(except that such aggregate number of Shares shall be determined without taking
into consideration any rounding pursuant to Section 4.03(f) of the Indenture and
shall be rounded down to the nearest whole number) and cash in lieu of
fractional Shares, if any, resulting from such rounding, if Counterparty had
elected to satisfy its conversion obligation in respect of such Relevant
Convertible Securities by the Convertible Security Settlement Method,
notwithstanding any different actual election by Counterparty with respect to
the settlement of such Convertible Securities (the “Convertible Obligation”);
provided that (i) if the Convertible Obligation exceeds the Capped Convertible
Obligation, then the Delivery Obligation shall be the Capped Convertible
Obligation; (ii) the Convertible Obligation (and, for the avoidance of doubt,
the Capped Convertible Obligation) shall be determined excluding any Shares
and/or cash that Counterparty is obligated to deliver to holder(s) of the
Relevant Convertible Securities as a result of any adjustments to the
“Conversion Rate” pursuant to Sections 4.04, 4.05(g) or 4.05(h) of the Indenture
(and, for the avoidance of doubt, the Delivery Obligation shall not include any
interest payment on the Relevant Convertible Securities that the Counterparty is
(or would have been) obligated to deliver to holder(s) of the Relevant
Convertible Securities for such Conversion Date); and (iii) if such exercise
relates to the conversion of Relevant Convertible Securities in connection with

 

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   which holders thereof are entitled to receive additional Shares and/or cash
pursuant to an adjustment to the “Conversion Rate” set forth in Section 4.04 of
the Indenture, then, notwithstanding the foregoing, the Delivery Obligation
shall include the Applicable Percentage of such additional Shares and/or cash,
except that the Delivery Obligation shall be capped so that the value of the
Delivery Obligation per Option (with the value of any Shares included in the
Delivery Obligation determined by the Calculation Agent using the VWAP Price on
the last day of the relevant “Cash Settlement Averaging Period”) does not exceed
the amount as determined by the Calculation Agent that would be payable by
Dealer pursuant to Section 6 of the Agreement if such Conversion Date were an
Early Termination Date resulting from an Additional Termination Event with
respect to which the Transaction (except that, for purposes of determining such
amount (x) the Number of Options shall be deemed to be equal to the number of
Options exercised on such Exercise Date and (y) such amount payable will be
determined as if Section 4.04 of the Indenture were deleted) was the sole
Affected Transaction and Counterparty was the sole Affected Party (determined
without regard to Section 8(b) of this Confirmation), it being understood that
the cap described in this clause (iii) is in addition to, and cumulative with,
clauses (i) and (ii) of this proviso. Notwithstanding the foregoing, and in
addition to the caps described in clauses (i), (ii) and (iii) of the proviso to
the preceding sentence, in all events the Delivery Obligation shall be capped so
that the value of the Delivery Obligation does not exceed the value of the
Convertible Obligation (with the Convertible Obligation determined, for the sole
purpose of determining this cap, based on the actual settlement method elected
by Counterparty with respect to such Relevant Convertible Securities instead of
the Convertible Security Settlement Method and with the value of any Shares
included in either the Delivery Obligation or such Convertible Obligation
determined by the Calculation Agent using the VWAP Price on the last day of the
relevant “Cash Settlement Averaging Period”).

Capped Convertible Obligation:

   In respect of an Exercise Date occurring on a Conversion Date, the
Convertible Obligation that would apply if the “Daily VWAP” for each “Trading
Day” in the “Cash Settlement Averaging Period” (each as defined in the
Indenture) or, if applicable, the assumed “Cash Settlement Averaging Period”
specified in clause (ii) of “Convertible Security Settlement Method” below, were
the lesser of (x) the Cap Price and (y) the actual “Daily VWAP” for such
“Trading Day”.

Convertible Security Settlement Method:

   For any Relevant Convertible Securities, if Counterparty has notified Dealer
in the Notice of Convertible Security Settlement Method that it has elected to
satisfy its conversion obligation in respect of such Relevant Convertible
Securities in cash or in a combination of cash and Shares in accordance with
Section 4.03(c) of the Indenture (a “Cash Election”) with a “Specified Dollar
Amount” (as defined in the Indenture) of at least USD1,000, the Convertible
Security Settlement Method shall be the settlement method actually so elected by
Counterparty in respect of such Relevant Convertible Securities; otherwise, the
Convertible Security Settlement Method (and any related Delivery Obligation)

 

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   shall (i) assume Counterparty made a Cash Election with respect to such
Relevant Convertible Securities with a “Specified Dollar Amount” (as defined in
the Indenture) of USD1,000 per Relevant Convertible Security and (ii) be
calculated as if the relevant “Cash Settlement Averaging Period” (as defined in
the Indenture) pursuant to Section 4.03(b) of the Indenture consisted of 70
“Trading Days” (as defined in the Indenture) commencing on the 72nd “Scheduled
Trading Day” prior to the “Maturity Date” (each as defined in the Indenture),
with the “Daily Conversion Value”, “Daily Measurement Value”, “Daily Settlement
Amount” (each as defined in the Indenture) and related terms adjusted
accordingly.

Notice of Delivery Obligation:

   No later than the Exchange Business Day immediately following the last day of
the relevant “Cash Settlement Averaging Period”, Counterparty shall give Dealer
notice of the aggregate number of Shares and/or cash comprising the Convertible
Obligations for all Relevant Convertible Securities (it being understood, for
the avoidance of doubt, that the requirement of Counterparty to deliver such
notice shall not limit Counterparty’s obligations with respect to Notice of
Exercise or Notice of Convertible Security Settlement Method or Dealer’s
obligations with respect to Delivery Obligation, each as set forth above, in any
way).

Other Applicable Provisions:

   To the extent Dealer is obligated to deliver Shares hereunder, the provisions
of Sections 9.1(c), 9.8, 9.9, 9.10, and 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 arising as a result
of the fact that Counterparty is the Issuer of the Shares) of the Equity
Definitions will be applicable as if “Physical Settlement” applied to the
Transaction.

Restricted Certificated Shares:

   Notwithstanding anything to the contrary in the Equity Definitions, Dealer
may, in whole or in part, deliver Shares required to be delivered to
Counterparty hereunder in certificated form in lieu of delivery through the
Clearance System. With respect to such certificated Shares, the Representation
and Agreement contained in Section 9.11 of the Equity Definitions shall be
modified by deleting the remainder of the provision after the word “encumbrance”
in the fourth line thereof. Share Adjustments:   

Method of Adjustment:

   Notwithstanding Section 11.2 of the Equity Definitions, upon the occurrence
of any event or condition set forth in Sections 4.05(a) – (e) of the Indenture
that results in an adjustment under the Indenture, the Calculation Agent (i)
shall make a corresponding adjustment to the terms relevant to the exercise,
settlement, payment or other terms of the Transaction and (ii) may adjust the
Cap Price as appropriate to account for the economic effect on the Transaction
of such event or condition after giving effect to the adjustment in clause (i);
provided that the Cap Price shall not be adjusted so that it is less than the
Strike Price. Immediately upon the occurrence of any event that Counterparty
reasonably expects to result in an adjustment to the “Conversion Rate” (as
defined in the Indenture), Counterparty shall notify the Calculation Agent of
such event; and once the adjustments to be made to the terms of

 

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   the Indenture and the Convertible Securities in respect of such event have
been determined, Counterparty shall immediately notify the Calculation Agent in
writing or by email (with confirmation of receipt by Dealer) of the details of
such adjustments.

Dividends:

   If an ex-dividend date for a cash dividend on the Shares occurs on or after
the Trade Date and on or prior to the Expiration Date and the amount of such
dividend is less than Ordinary Dividend Amount, or if no ex-dividend date for a
cash dividend on the Shares occurs in any regular quarterly dividend period of
Counterparty that falls, in whole or in part, after the Trade Date and on or
prior to the Expiration Date, then the Calculation Agent will make adjustments
to the Delivery Obligation in respect of each Exercise Date as it determines
appropriate to account for the economic effect on the Transaction of such
shortfall.

Ordinary Dividend Amount:

   For the first cash dividend on the Shares for which the ex dividend date
occurs during any regular quarterly dividend period of Counterparty that falls,
in whole or in part, after the Trade Date and on or prior to the Expiration
Date, USD 0.17 (subject to adjustment as contemplated by Section 11.2(c) of the
Equity Definitions); for any other cash dividend on the Shares for which the ex
dividend date occurs during the same regular quarterly dividend period, USD
0.00. Extraordinary Events:   

Merger Events:

   Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event”
means the occurrence of any event or condition set forth in Section 4.06 of the
Indenture

Tender Offers:

   Notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer”
means the occurrence of any event or condition set forth in the definition of
“Fundamental Change” in the Indenture.

 

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Consequences of Merger Events

  

and Tender Offers:

   Notwithstanding Sections 12.2 and 12.3 of the Equity Definitions, (i) upon
the occurrence of a Merger Event that results in an adjustment under the
Indenture, the Calculation Agent shall make a corresponding adjustment to the
terms relevant to the exercise, settlement, payment or other terms of the
Transaction; provided that such adjustment shall be made without regard to any
adjustment to the “Conversion Rate” pursuant to Sections 4.04, 4.05(g) or
4.05(h) of the Indenture; and provided further that the Calculation Agent may
limit or alter any such adjustment referenced in this clause (i) so that the
fair value of the Transaction to Dealer is not reduced as a result of such
adjustment; and provided further that if, with respect to a Merger Event, the
consideration for the Shares includes (or, at the option of a holder of Shares,
may include) shares (or depositary receipts with respect to shares) of an entity
or person not organized under the laws of the United States, any State thereof
or the District of Columbia, Cancellation and Payment (Calculation Agent
Determination) shall apply; and (ii) upon the occurrence of a Merger Event or a
Tender Offer, the Calculation Agent may adjust the Cap Price as appropriate to
account for the economic effect on the Transaction of such event; provided that
the Cap Price shall not be adjusted so that it is less than the Strike Price.

Notice of Merger Consideration:

   Upon the occurrence of a Merger Event that causes the Shares to be converted
into the right to receive more than a single type of consideration (determined
based in part upon any form of stockholder election), Counterparty shall,
concurrent with the making public thereof (but, in any event prior to the
relevant merger date), notify the Calculation Agent of (i) the weighted average
of the types and amounts of consideration to be received by the holders of
Shares entitled to receive cash, securities or other property or assets with
respect to or in exchange for such Shares in any Merger Event who affirmatively
make such an election and (ii) the details of the adjustment to be made under
the Indenture in respect of such Merger Event.

Nationalization, Insolvency

  

or 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 thereafter be deemed to be the
Exchange.

Additional Disruption Events:

  

(a) Change in Law:

   Applicable, except to the extent such event would constitute an event under
Section 8 below

(b) Failure to Deliver:

   Applicable

(c) Insolvency Filing:

   Applicable

 

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(d) Hedging Disruption:

   Applicable, except to the extent such event would constitute an event under
Section 8 below

(e) Increased Cost of Hedging:

   Applicable

Hedging Party:

   For all applicable Potential Adjustment Events and Extraordinary Events,
Dealer

Determining Party:

   For all applicable Extraordinary Events, Dealer

Non-Reliance:

   Applicable

Agreements and Acknowledgments

  

Regarding Hedging Activities:

   Applicable

Additional Acknowledgments:

   Applicable

3. Calculation Agent:

   Dealer

4. Account Details:

  

Dealer Payment Instructions:

   Bank of New York   

ABA 021-000-018

Deutsche Bank Securities Inc.

A/C 8900327634

FFC (BGC Partners, Inc.)

Counterparty Payment Instructions:

   To be provided by Counterparty.

5. Offices:

  

The Office of Dealer for the Transaction is: New York

The Office of Counterparty for the Transaction is: Not applicable

6. Notices: For purposes of this Confirmation:

Address for notices or communications to Counterparty:

 

To:

   BGC Partners, Inc.    499 Park Avenue    New York, NY 10022

Attn:

   Stephen Merkel, General Counsel

Telephone:

   212-829-4829

Facsimile:

   212-829-4708

With a copy to:

   BGC Partners, Inc.    110 East 59th Street    New York, NY 10022

Attn:

   Treasury Department

Telephone:

   212-829-4704

Facsimile:

   212-308-7159

Address for notices or communications to Dealer:

To:

   Deutsche Bank AG, London Branch    c/o Deutsche Bank Securities Inc.

Attn:

   Paul Stowell / Andrew Yaeger

Group:

   Equity-Linked Capital Markets    60 Wall Street, 4th Floor    New York, NY
10005

Paul Tel:

   212-250-6270

 

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Paul Email:

   paul.stowell@db.com

Andrew Tel:

   212-250-2717

Andrew Email:

   Andrew.yaeger@db.com

Facsimile:

   732-460-7499

With a copy to:

Attn:

   Lars Kestner / Dushyant Chadha

Group:

   Corporate Derivatives    60 Wall Street, 4th Floor    New York, NY 10005

Lars Tel:

   212-250-6043

Lars Email:

   lars.kestner@db.com

Dushyant Tel:

   212-250-4980

Dushyant Email:

   dushyant.chadha@db.com

7. Representations, Warranties and Agreements:

(a) In addition to the representations and warranties in the Agreement and those
contained elsewhere herein, Counterparty represents and warrants to and for the
benefit of, and agrees with, Dealer as follows:

(i) On the Trade Date, and as of the date of any election by Counterparty of the
Share Termination Alternative under (and as defined in) Section 8(b) below,
(A) none of Counterparty and its officers and directors is aware of any material
nonpublic information regarding Counterparty or the Shares and (B) all reports
and other documents filed by Counterparty with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) when considered as a whole (with the more recent such reports
and documents deemed to amend inconsistent statements contained in any earlier
such reports and documents), do not contain any untrue statement of a material
fact or any omission of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading.

(ii) (A) On the Trade Date, the Shares or securities (other than the Convertible
Securities) that are convertible into, or exchangeable or exercisable for
Shares, are not, and shall not be, subject to a “restricted period,” as such
term is defined in Regulation M under the Exchange Act (“Regulation M”) and
(B) Counterparty shall not engage in any “distribution,” as such term is defined
in Regulation M, other than a distribution meeting the requirements of the
exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until
the second Exchange Business Day immediately following the Trade Date. During
(x) the relevant “Cash Settlement Averaging Period” applicable to the Relevant
Convertible Securities and (y) in the event an Early Termination Date is
designated due to an Additional Termination Event as a result of an Excluded
Conversion Event, a period starting on or about such Early Termination Date as
reasonably determined by Dealer and notified to Counterparty (an “Early
Termination Period”), the Shares or securities that are convertible into, or
exchangeable or exercisable for, Shares will not be subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act.

(iii) On the Trade Date and on each day during the relevant “Cash Settlement
Averaging Period” applicable to the Relevant Convertible Securities and any
Early Termination Period, neither Counterparty nor any “affiliate” or
“affiliated purchaser” (each as defined in Rule 10b-18 under the Exchange Act
(“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by
means of any cash-settled or other derivative instrument) purchase, offer to
purchase, place any bid or limit order that would effect a purchase of, or
commence any tender offer relating to, any Shares (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a
depository share) or any security convertible into or exchangeable or
exercisable for Shares; provided, however, that Counterparty may purchase Shares
(or an equivalent interest, including a unit of beneficial interest in a trust
or limited partnership or a depository share) pursuant to privately negotiated
agreements with current or former employees of Counterparty or any of its
affiliates.

 

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(iv) Without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that Dealer is not making any representations or
warranties with respect to the treatment of the Transaction under any accounting
standards including FASB Statements 128, 133, 149 (each as amended), or 150,
EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements) or
under FASB’s Liabilities & Equity Project.

(v) Without limiting the generality of Section 3(a)(iii) of the Agreement, the
Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(vi) Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution
of Counterparty’s board of directors authorizing the Transaction and such other
certificate or certificates as Dealer shall reasonably request.

(vii) Counterparty is not entering into this Confirmation, and will not make any
election hereunder or under the Convertible Securities, to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for
Shares) or otherwise in violation of the Exchange Act.

(viii) Counterparty is not, and after giving effect to the transactions
contemplated hereby will not be, required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as amended.

(ix) On each of the Trade Date and the Premium Payment Date, Counterparty is
not, or will not be, “insolvent” (as such term is defined under 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 the Number of
Shares hereunder in compliance with the laws of the jurisdiction of its
incorporation.

(x) To Counterparty’s knowledge, no state or local (including non-U.S.
jurisdictions) law, rule, regulation or regulatory order applicable to the
Shares would give rise to any reporting, consent, registration or other
requirement (including without limitation a requirement to obtain prior approval
from any person or entity) as a result of Dealer or its affiliates owning or
holding (however defined) Shares other than due to laws, rules, regulations or
regulatory orders applicable to Dealer as a regulated financial institution and
affiliate of regulated financial institutions and not of general applicability.

(xi) The representations and warranties of Counterparty set forth in Section 3
of the Agreement and Section 1 of the Purchase Agreement, dated July 25, 2011,
among Counterparty and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Cantor Fitzgerald & Co. and Deutsche Bank Securities Inc., as representatives of
the Initial Purchasers listed on Schedule A thereto (the “Purchase Agreement”),
were true and correct as of the date made or deemed made and are hereby deemed
to be repeated to Dealer as if set forth herein.

(xii) Counterparty understands no obligations of Dealer to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will not
be guaranteed by any affiliate of Dealer or any governmental agency.

(b) Each of Dealer and Counterparty agrees and represents that it is an
“eligible contract participant” as defined in Section 1a(12) of the U.S.
Commodity Exchange Act, as amended.

(c) Each of Dealer and Counterparty acknowledges that the offer and sale of the
Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(2) thereof. Accordingly, Counterparty represents and warrants to
Dealer that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its
investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act, (iii) it is entering into
the Transaction for its own account and without a view to the distribution or
resale thereof and (iv) the assignment, transfer or other disposition of the
Transaction has not been and will not be registered under the Securities Act and
is restricted under this Confirmation, the Securities Act and state securities
laws.

(d) Each of Dealer and Counterparty agrees and acknowledges that Dealer is a
“financial institution,” “swap participant” and, to the best of Counterparty’s
information and belief, “financial participant” within the meaning of Sections
101(22), 101(22A) and 101(53C) of the Bankruptcy Code. The parties hereto
further agree and acknowledge

 

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(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,” as such term is
defined in Section 741(8) 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,” “payment amount” or “other transfer obligation” within the
meaning of Section 362 of the Bankruptcy Code and a “transfer,” as such term is
defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is
entitled to the protections afforded by, among other sections, Sections
362(b)(6), 362(b)(17), 362(o), 546(e), 546(g), 548(d)(2), 555 and 560 of the
Bankruptcy Code.

(e) Counterparty shall deliver to Dealer an opinion of counsel, dated as of the
Effective Date and reasonably acceptable to Dealer in form and substance, with
respect to the matters set forth in Section 3(a) of the Agreement.

8. Other Provisions:

(a) Additional Termination Events. The occurrence (and, in the case of clause
(i), continuation) of (i) an “Event of Default” with respect to Counterparty
under the terms of the Convertible Securities as set forth in Section 7.01 of
the Indenture, (ii) an Amendment Event or (iii) an Excluded Conversion Event
shall be an Additional Termination Event with respect to which the Transaction
is the sole Affected Transaction and Counterparty is the sole Affected Party,
and Dealer shall be the party entitled to designate an Early Termination Date
pursuant to Section 6(b) of the Agreement; provided that, in the case of an
Excluded Conversion Event, the Transaction shall be subject to termination only
in respect of a number of Options equal to the number of Convertible Securities
that cease to be outstanding in connection with or as a result of such Excluded
Conversion Event. For the avoidance of doubt, in determining the amount payable
in respect of such Affected Transaction pursuant to Section 6 of the Agreement
in connection with an Excluded Conversion Event, the Calculation Agent shall
assume that (x) the relevant Excluded Convertible Securities shall not have been
converted and remain outstanding, and (y) in the case of an Induced Conversion,
any adjustments, agreements, additional payments, deliveries or acquisitions by
or on behalf of Counterparty or any affiliate of Counterparty in connection
therewith had not occurred.

“Amendment Event” means that Counterparty amends, modifies, supplements, waives
or obtains a waiver in respect of any term of the Indenture or the Convertible
Securities that would require consent of the holders of not less than 100% of
the principal amount of the Convertible Securities to amend, in each case
without the consent of Dealer.

“Excluded Conversion Event” means any conversion of any Excluded Convertible
Securities.

“Induced Conversion” means a conversion of any Excluded Convertible Securities
(A) in connection with (x) an adjustment to the “Conversion Rate” (as defined in
the Indenture) effected by Counterparty (whether pursuant to Section 4.05(g) of
the Indenture or otherwise) that is not required under the terms of the
Indenture or (y) an agreement by Counterparty with the holder(s) of such
Convertible Securities whereby, in the case of either (x) or (y), the holder(s)
of such Convertible Securities receive upon conversion or pursuant to such
agreement, as the case may be, a payment of cash or delivery of Shares or any
other property or item of value that was not required under the terms of the
Indenture or (B) after having been acquired from a holder of Convertible
Securities by or on behalf of Counterparty or any of its affiliates other than
pursuant to a conversion by such holder and thereafter converted by or on behalf
of Counterparty or any affiliate of Counterparty.

(b) Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If Dealer shall owe Counterparty any amount pursuant to
“Consequences of Merger Events and Tender Offers” above or Sections 12.6, 12.7
or 12.9 of the Equity Definitions or pursuant to Section 6(d)(ii) of the
Agreement (a “Payment Obligation”), Counterparty shall have the right, in its
sole discretion, to require Dealer to satisfy any such Payment Obligation by the
Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Dealer, confirmed in writing or by email (with confirmation
of receipt by Dealer) within one Scheduled Trading Day, no later than 9:30 A.M.
New York City time on the relevant merger date or date of cancellation or
termination in respect of an Extraordinary Event, as applicable, or within one
hour of receipt of notice designating an Early Termination Date or the public
announcement of the event giving rise to the Announcement Date (“Notice of Share
Termination”); provided that if Counterparty does not elect to require Dealer to
satisfy its Payment Obligation by the Share Termination Alternative, Dealer
shall have the right, in its sole discretion, to elect to satisfy its Payment
Obligation by the Share

 

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Termination Alternative, notwithstanding Counterparty’s failure to elect or
election to the contrary; and provided further that Counterparty shall not have
the right to so elect (but, for the avoidance of doubt, Dealer shall have the
right to so elect) in the event of (i) an Insolvency, a Nationalization or a
Merger Event, in each case, in which the consideration or proceeds to be paid to
holders of Shares consists solely of cash or (ii) an Event of Default in which
Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party, which Event of Default or Termination Event
resulted from an event or events within Counterparty’s control. Upon such Notice
of Share Termination, the following provisions shall apply on the Scheduled
Trading Day immediately following the relevant merger date, Announcement Date,
Early Termination Date or date of cancellation or termination in respect of an
Extraordinary Event, as applicable:

 

Share Termination Alternative:    Applicable and means that Dealer shall deliver
to Counterparty the Share Termination Delivery Property on the date on which the
Payment Obligation would otherwise be due pursuant to “Consequences of Merger
Events and Tender Offers” above, Section 12.6, 12.7 or 12.9 of the Equity
Definitions or Section 6(d)(ii) of the Agreement, as applicable, or such later
date as the Calculation Agent may reasonably determine (the “Share Termination
Payment Date”), in satisfaction of the Payment Obligation. Share Termination
Delivery   

Property:

   A number of Share Termination Delivery Units, as calculated by the
Calculation Agent, equal to the Payment Obligation divided by the Share
Termination Unit Price. The Calculation Agent shall adjust the Share Termination
Delivery Property by replacing any fractional portion of the aggregate amount of
a security therein with an amount of cash equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price.
Share Termination Unit Price:    The value of property contained in one Share
Termination Delivery Unit on the date such Share Termination Delivery Units are
to be delivered as Share Termination Delivery Property, as determined by the
Calculation Agent in its discretion by commercially reasonable means and
notified by the Calculation Agent to Dealer at the time of notification of the
Payment Obligation. Share Termination Delivery Unit:    In the case of a
Termination Event, Event of Default, Delisting or Additional Disruption Event,
one Share or, in the case of an Insolvency, Nationalization or Merger Event, one
Share or 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, as applicable. 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. Failure to Deliver:    Applicable
Other applicable provisions:    If Share Termination Alternative is applicable,
the provisions of Sections 9.8, 9.9, 9.10, and 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 arising as a result of the fact that Counterparty is the issuer
of the Shares or any portion of the Share Termination Delivery Units) of the
Equity Definitions will be applicable as if “Physical Settlement” applied to the
Transaction, except that all references to “Shares” shall be read as references
to “Share Termination Delivery Units.”

(c) Disposition of Hedge Shares. Counterparty hereby agrees that if, in the good
faith reasonable judgment of Dealer based upon advice of legal counsel, any
Shares (the “Hedge Shares”) acquired by Dealer for the purpose of hedging its
obligations pursuant to the Transaction cannot be sold in the public market by
Dealer without registration under the Securities Act, Counterparty shall, at its
election: (i) in order to allow Dealer to sell the Hedge

 

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Shares in a registered offering, make available to Dealer 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 Dealer, 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 Dealer, (D) provide other customary opinions, certificates and
closing documents customary in form for registered offerings of equity
securities and (E) afford Dealer 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 Dealer,
in its 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 Section 8(c) shall apply at the election of Counterparty;
(ii) in order to allow Dealer 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 reasonably satisfactory to Dealer,
including customary representations, covenants, blue sky and other governmental
filings and/or registrations, indemnities to Dealer, due diligence rights (for
Dealer or any designated buyer of the Hedge Shares from Dealer), opinions and
certificates and such other documentation as is customary for private placement
agreements relating to private placements of such size, all reasonably
acceptable to Dealer (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 Dealer 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 Dealer at the VWAP Price on
such Exchange Business Days, and in the amounts, requested by Dealer. “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
“BGCP.UQ <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 or is manifestly incorrect,
the market value of one Share on such Exchange Business Day, as determined by
the Calculation Agent using a volume-weighted method). For purposes of this
Section 8(c) and Section 8(n) below, in connection with unwinding its hedge
position, Dealer shall act in accordance with customary practices in connection
with transactions of this nature.

(d) Amendment to Equity Definitions. The following amendment shall be made to
the Equity Definitions:

Section 12.6(a)(ii) of the Equity Definitions is hereby amended by deleting from
the fourth line thereof the word “or” after the word “official” and inserting a
comma therefor.

(e) Repurchase and Conversion Rate Adjustment Notices. Counterparty shall, at
least 10 Scheduled Trading Days prior to effecting any repurchase of Shares or
consummating or otherwise executing or engaging in any transaction or event (a
“Conversion Rate Adjustment Event”) that would lead to an increase in the
Conversion Rate (as such term is defined in the Indenture), give Dealer a
written notice of such repurchase or Conversion Rate Adjustment Event (a
“Repurchase Notice”) if, following such repurchase or Conversion Rate Adjustment
Event, the Notice Percentage as determined on the date of such Repurchase Notice
is (i) greater than 4.5% and (ii) greater by 0.5% than the Notice Percentage
included in the immediately preceding Repurchase Notice (or, in the case of the
first such Repurchase Notice, greater than the Notice Percentage as of the date
hereof). The “Notice Percentage” as of any day is the fraction, expressed as a
percentage, the numerator of which is the Applicable Percentage of the sum of
(x) the Number of Shares for the Transaction and (y) the “Number of Shares” as
defined in the Base Capped Call Transaction Confirmation and the denominator of
which is the number of Shares outstanding on such day. In the event that
Counterparty fails to provide Dealer with a Repurchase Notice on the day and in
the manner specified in this Section 8(e) then Counterparty agrees to indemnify
and hold harmless Dealer, its affiliates and their respective directors,
officers, employees, agents and controlling persons (Dealer and each such person
being an “Indemnified Party”) from and against any and all losses, claims,
damages and liabilities (or actions in respect thereof), joint or several, to
which such Indemnified Party may become subject under applicable securities
laws, including without limitation, Section 16 of the Exchange Act, relating to
or arising out of such failure. If for any reason the foregoing indemnification
is unavailable to any Indemnified Party or insufficient to hold harmless any
Indemnified Party, then Counterparty shall contribute, to the maximum extent
permitted by law, to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage or liability. In addition, Counterparty will
reimburse any Indemnified Party for all expenses (including reasonable counsel
fees and expenses) as they are incurred (after notice to Counterparty) in
connection with the investigation of, preparation for or defense or settlement
of any pending or threatened claim or any action, suit or proceeding arising
therefrom, whether or not such Indemnified Party is a party thereto and whether
or not such claim, action, suit or proceeding is initiated or brought by or on
behalf of Counterparty. This indemnity shall survive the completion of the
Transaction

 

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contemplated by this Confirmation and any assignment and delegation of the
Transaction made pursuant to this Confirmation or the Agreement shall inure to
the benefit of any permitted assignee of Dealer.

(f) Transfer and Assignment. Either party may transfer any of its rights or
obligations under the Transaction with the prior written consent of the
non-transferring party, such consent not to be unreasonably withheld or delayed.
For the avoidance of doubt, Dealer may condition its consent on any of the
following, without limitation: (i) the receipt by Dealer of opinions and
documents reasonably satisfactory to Dealer in connection with such assignment,
(ii) such assignment being effected on terms reasonably satisfactory to Dealer
with respect to any legal and regulatory requirements relevant to Dealer, and
(iii) Counterparty continuing to be obligated to provide notices hereunder
relating to the Convertible Securities and continuing to be obligated with
respect to “Disposition of Hedge Shares” and “Repurchase and Conversion Rate
Adjustment Notices” above. In addition, Dealer may transfer or assign without
any consent of the Counterparty its rights and obligations hereunder and under
the Agreement, in whole or in part, to any person, which may include affiliates
of Dealer or entities sponsored or organized by, or on behalf of or for the
benefit of Dealer, so long as (i) such person has a credit rating at least
equivalent to that of Dealer at the time of such transfer or assignment or
(ii) such person’s performance of the obligations under this Confirmation are
fully and unconditionally guaranteed by Dealer or an affiliate of Dealer with a
credit rating at least equivalent to that of Dealer at the time of such transfer
or assignment; provided, however, that in no event shall Dealer transfer or
assign without any consent of the Counterparty its rights and obligations
hereunder and under the Agreement, in whole or in part, to any of the entities
listed on Schedule I hereto or their respective affiliates. At any time at which
any Excess Ownership Position exists, if Dealer, in its discretion, is unable to
effect a transfer or assignment to a third party in accordance with the
requirements set forth above after using its commercially reasonable efforts on
pricing terms and within a time period reasonably acceptable to Dealer such that
an Excess Ownership Position no longer exists, Dealer may designate any
Scheduled Trading Day as an Early Termination Date with respect to a portion
(the “Terminated Portion”) of the Transaction, such that such Excess Ownership
Position no longer exists. In the event that Dealer so designates an Early
Termination Date with respect to a portion of the Transaction, a payment or
delivery shall be made pursuant to Section 6 of the Agreement and Section 8(b)
of this Confirmation as if (i) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Terminated Portion of the
Transaction, (ii) Counterparty shall be the sole Affected Party with respect to
such partial termination and (iii) such portion of the Transaction shall be the
only Terminated Transaction. “Excess Ownership Position” means any of the
following: (i) the Equity Percentage exceeds 9.0%, (ii) Dealer or any
“affiliate” or “associate” of Dealer would own in excess of 13% of the
outstanding Shares for purposes of Section 203 of the Delaware General
Corporation Law or (iii) Dealer, Dealer Group (as defined below) or any person
whose ownership position would be aggregated with that of Dealer or Dealer Group
(Dealer, Dealer Group or any such person, a “Dealer Person”) under any 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 in excess of a number of Shares equal to (x) the number of Shares that
would give rise to reporting or registration obligations or other requirements
(including obtaining prior approval by a state or federal regulator) of a Dealer
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. 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 Dealer and any of its affiliates
or any other person subject to aggregation with Dealer, for purposes of the
“beneficial ownership” test under Section 13 of the Exchange Act, or any “group”
(within the meaning of Section 13) of which Dealer is or may be deemed to be a
part (Dealer and any such affiliates, persons and groups, collectively, “Dealer
Group”), beneficially owns (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.

(g) Staggered Settlement. Dealer may, by notice to Counterparty on or prior to
any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares
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, Dealer will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to such Nominal Settlement
Date, but not prior to the beginning of the related “Cash Settlement Averaging
Period”, as defined in the Indenture) or delivery times and how it will allocate
the Shares it is required to deliver under “Delivery Obligation” (above) among
the Staggered Settlement Dates or delivery times; and

 

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(ii) the aggregate number of Shares that Dealer will deliver to Counterparty
hereunder on all such Staggered Settlement Dates and delivery times will equal
the number of Shares that Dealer would otherwise be required to deliver on such
Nominal Settlement Date.

(h) Right to Extend. Dealer may postpone any Exercise Date or Settlement Date or
any other date of valuation or delivery by Dealer with respect to some or all of
the relevant Options (in which event the Calculation Agent shall make
appropriate adjustments to the Delivery Obligation), if Dealer determines, in
its reasonable discretion, taking into account advice of nationally recognized
counsel experienced in such matters selected by Dealer in consultation with
Counterparty, that such extension is reasonably necessary or appropriate to
(i) preserve Dealer’s hedging or hedge unwind activity hereunder in light of
existing liquidity conditions in the cash market, the stock loan market or any
other relevant market or (ii) to enable Dealer to effect purchases of Shares in
connection with its hedging, hedge unwind or settlement activity hereunder, in
each case, in a manner that would be in compliance with applicable legal,
regulatory or self-regulatory requirements.

(i) Adjustments. For the avoidance of doubt, whenever the Calculation Agent is
called upon to make an adjustment pursuant to the terms of this Confirmation or
the Definitions to take into account the effect of an event, the Calculation
Agent shall make such adjustment on a commercially reasonable basis by reference
to the effect of such event on the Hedging Party, assuming that the Hedging
Party maintains a commercially reasonable hedge position.

(j) Disclosure. Effective from the date of commencement of discussions
concerning the Transaction, Counterparty and each of its employees,
representatives, or other agents may disclose to any and all persons, 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 to Counterparty relating to such tax treatment and tax structure.

(k) Designation by Dealer. Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing Dealer to purchase, sell,
receive or deliver any Shares or other securities to or from Counterparty,
Dealer may designate any of its affiliates to purchase, sell, receive or deliver
such Shares or other securities and otherwise to perform Dealer’s obligations in
respect of the Transaction and any such designee may assume such obligations.
Dealer shall be discharged of its obligations to Counterparty to the extent of
any such performance.

(l) No Netting and Set-off. Notwithstanding any provision of the Agreement
(including without limitation Section 6(f) thereof) and this Confirmation or any
other agreement between the parties to the contrary, neither party shall net or
set off its obligations under the Transaction against its rights against the
other party under any other transaction or instrument.

(m) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not
intended to convey to it rights with respect to the Transaction that are senior
to the claims of common stockholders in the event of Counterparty’s bankruptcy.
For the avoidance of doubt, the parties agree that the preceding sentence shall
not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under
this Confirmation or the Agreement. For the avoidance of doubt, the parties
acknowledge that this Confirmation is not secured by any collateral that would
otherwise secure the obligations of Counterparty herein under or pursuant to any
other agreement.

(n) Early Unwind. In the event the sale by Counterparty of the Option Securities
(as defined in the Purchase Agreement) is not consummated with the Initial
Purchasers pursuant to the Purchase Agreement for any reason by the close of
business in New York on the relevant “Date of Delivery” (as defined in the
Purchase Agreement) (or such later date as agreed upon by the parties (such
“Date of Delivery” or such later date being the “Early Unwind Date”), the
Transaction shall automatically terminate (the “Early Unwind”) on the Early
Unwind Date and (i) the Transaction and all of the respective rights and
obligations of Dealer and Counterparty thereunder shall be cancelled and
terminated and (ii) other than in the case of the failure of such sale to be
consummated due to a breach by Dealer of its obligations under the Purchase
Agreement, Counterparty shall pay to Dealer an amount in cash equal to the
aggregate amount of reasonable costs and expenses relating to the unwinding of
Dealer’s hedging activities in respect of the Transaction (including market
losses incurred in reselling any Shares purchased by Dealer or its affiliates in
connection with such hedging activities, unless Counterparty agrees to purchase
any such Shares at the cost at which Dealer or its affiliates purchased such
Shares) or, at the election of Counterparty, deliver to Dealer Shares with a
value equal to such amount, as determined by the Calculation Agent, in which
event the parties shall enter into customary and commercially reasonable
documentation relating to the registered or exempt resale of such Shares;
provided that in no event shall the number of such Shares, together with the
number of any Shares delivered pursuant to the corresponding provision of the
Base

 

17

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Capped Call Transaction Confirmation, exceed the lesser of 27,439,020 and the
number of Shares then authorized for issuance under Counterparty’s certificate
of incorporation which are unissued at that time. Following such termination,
cancellation and payment or delivery, 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 either party
arising out of and to be performed in connection with the Transaction either
prior to or after the Early Unwind Date. Dealer and Counterparty represent and
acknowledge to the other that upon an Early Unwind and following the payment or
delivery referred to above, all obligations with respect to the Transaction
shall be deemed fully and finally discharged.

(o) Special Provisions for Counterparty Payments. The parties hereby agree that,
notwithstanding anything to the contrary herein or in the Agreement or the
Equity Definitions, in the event that an Early Termination Date (whether as a
result of an Event of Default or a Termination Event) occurs or is designated
with respect to the Transaction and, as a result, Counterparty owes to Dealer an
amount calculated under Section 6(e) of the Agreement, or Counterparty owes
Dealer a Cancellation Amount pursuant to Article 12 of the Equity Definitions,
such amount shall be deemed to be zero.

(p) Payments on Early Termination. Counterparty and Dealer each agree that for
the purpose of Section 6(e) of the Agreement: (i) Loss shall apply and (ii) the
Second Method shall apply.

(q) Waiver of Trial by Jury. EACH OF COUNTERPARTY AND DEALER HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE TRANSACTION OR THE ACTIONS OF DEALER OR ITS AFFILIATES IN THE
NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

(r) Governing Law; Jurisdiction. THIS CONFIRMATION (INCLUDING THE AGREEMENT) AND
ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS CONFIRMATION
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN
CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE
LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE
COURTS.

[Remainder of Page Intentionally Blank]

 

18

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Counterparty hereby agrees (a) to check this Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the exact
form provided by Dealer) correctly sets forth the terms of the agreement between
Dealer and Counterparty with respect to the Transaction, by manually signing
this Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately returning an
executed copy to Deutsche Bank AG, London Branch via facsimile to 44 113 336
2009.

 

Yours faithfully, DEUTSCHE BANK AG, LONDON BRANCH By:  

/s/ Lars Kestner

  Name:   Lars Kestner   Title:   Managing Director By:  

/s/ Michael Sanderson

  Name:   Michael Sanderson   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/ Michael Sanderson

  Name:   Michael Sanderson   Title:   Managing Director

 

Agreed and Accepted By: BGC PARTNERS, INC. By:  

/s/ A. Graham Sadler

  Name:   A. Graham Sadler   Title:   Chief Financial Officer

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ANNEX A

The Cap Price and Premium for the Transaction are set forth below.

 

Cap Price:

  USD12.30  

Premium:

  USD1,068,000  

 

Annex A - 1