Document:

Capped Call Confirmation

 Exhibit 10.2 

 
  

					
		  	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 

  
 1 

 
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)

  
 6 

			
		  	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

  
 7 

			
		  	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.

  
 8 

			
	 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. 

  
 11 

 (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 

  
 12 

 
(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

  
 13 

 
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 

  
 14 

 
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

  
 15 

 
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 

  
 16 

 (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 

 
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 

 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

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

					
	 Cap Price:
	 	USD12.30	 	
			
	 Premium:
	 	USD1,068,000	 	

  
 Annex A - 1Unassociated Document

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is effective as of August 1, 2011, by and between Tanke Biosciences Corporation, a Nevada corporation (the “Company”), and Gilbert Lee (the “Executive”).

 

In consideration of the mutual covenants herein contained and of the mutual benefits herein provided, the Company and the Executive agree as follows:

 

1.           Representations and Warranties.  The Executive represents and warrants to the Company that the Executive is not bound by any restrictive covenants and has no prior or other obligations or commitments of any kind that would in any way prevent, restrict, hinder or interfere with the Executive’s acceptance of continued employment or the performance of all duties and services hereunder to the fullest extent of the Executive’s ability and knowledge.

 

2.           Term of Employment.  The Company will employ the Executive and the Executive accepts continued employment by the Company on the terms and conditions herein contained for a period (the “Employment Period”) provided in Section 5.

 

3.           Duties and Functions.

 

(a)           The Executive shall be employed as the Chief Financial Officer (“Officer”) of the Company, reporting to the Chief Executive Officer (the “CEO”) of the Company and shall perform duties consistent with the position of a chief financial officer of a U.S. publicly-listed corporation with operations in the People’s Republic of China.  Without limiting the generality of the foregoing, the Executive shall, under the supervision and direction of the Chief Executive Officer:

 

	
  

	
(1)

	
Serve and execute all applicable documents, filings and reports as the principal accounting officer of the Company for purposes of the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”) and, in connection therewith, be responsible, in coordination with the Company’s existing accounting personnel, for: (A) all accounting and financial reporting and controls of the Company and its wholly-owned subsidiaries and (B) all financial related disclosure controls of the Company and its wholly-owned subsidiaries;

 

	
  

	
(2)

	
Oversee all aspects of the Company’s annual audit, including communications and interactions with the Company’s independent registered accounting firm, the Board of Directors of the Company (the “Board”) or any designated audit committee thereof, the Chief Executive Officer and the Company’s outside legal counsel;

 

	
  

	
(3)

	
Oversee the preparation and filing the Company’s annual and quarterly financial statements and related SEC reports (including the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained therein) in conformance with all SEC rules and regulations and generally accepting accounting principles (“GAAP”) of the United States of America;

 

  

  

  

 

	
  

	
(4)

	
Oversee the conversion of the Company’s financial statements from Chinese GAAP to U.S. GAAP;

 

	
  

	
(5)

	
Design and implement Sarbanes-Oxley Act, ensure the corporate internal governance  in compliance with the relevant provisions of the U.S. securities laws and applicable stock market regulations.

 

	
  

	
(6)

	
Work with the Company’s other accounting and finance personnel to implement the finance function of the Company, including the preparation or review of budgets, projections and financial analyses;

 

	
  

	
(7)

	
Assist the Company in its communications with the SEC and all other applicable regulatory authorities;

 

	
  

	
(8)

	
Assist company’s executives to prepare and implement  a strategic acquisition program and provide supports for the Company’s acquisition initiatives;

 

	
  

	
(9)

	
During the Employment Term, the Executive shall lead and coordinate the Company’s investor relations activities which shall include, but is not limited to, communications with investors, analysts and media, and the Company’s press releases. The Executive shall work in conjunction with other members of the executive management team to support the Company’s business growth; and

 

	
  

	
(10)

	
Assist the Chief Executive Officer in communications with the investment community.  Prepare road show for the company or introduce the company to potential investors at meetings to promote the company in the U.S. capital market.

 

The Executive agrees to undertake the duties and responsibilities commensurate with the position of Officer, which may encompass such different or additional duties as may, from time to time, be reasonably assigned by the CEO, and the duties and responsibilities undertaken by the Executive may be reasonably altered or modified from time to time by the CEO, subject to the limitations on reduction of duties provided in Section 5(c) of this Agreement.  The Executive shall comply with all of the Company’s policies and procedures.

 

(b)           During the Employment Period, the Executive will devote substantially all of his full time and efforts to the best of his ability, experience and talent to the business of the Company.  The Executive shall not invest, participate or engage in (for the Executive’s own account or for the account of others), or possess an interest in, any other financial venture or investment or professional activity of any kind or description, independently or with others, if the primary business or purpose of such other financial venture or investment or professional activity is the same as, or could otherwise be deemed to be competitive with, the business of the Company.  Subject to the foregoing, the Executive may, so long as such activities do not interfere with his duties and responsibilities hereunder, invest, participate or engage in (for the Executive’s own account or for the account of others), or may possess an interest in, other financial ventures and investment and professional activities of any kind or description, independently or with others, including (i) charities and passive investments, (ii) investment in, or the acquisition or disposition of, securities (provided that no such investment may exceed 5% of the equity of any entity, without the prior approval of the Board), (iii) serving as officers, directors, representatives or agents of any entity, partners of any partnership, or trustees of any trust (and in each case may receive fees, commissions, remuneration, profits and reimbursement of expenses in connection with such ventures and activities), in each case provided that such Person does not expressly or implicitly represent that he is acting for the Company.

 

  

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4.           Compensation.

 

(a)           Base Salary.  As compensation for his services hereunder, during the Executive’s employment as Officer, the Company agrees to pay the Executive a base salary at $125,000 per annum, payable in accordance with the Company’s normal payroll schedule, or on such other periodic basis as may be mutually agreed upon.  The Executive’s base salary shall be subject to 10% increase from January 1, 2012.

 

(b)           The Executive’s salary shall be subject to annual review, based on corporate policy and contributions made by the Executive to the Company and such other factors as the CEO shall determine.

 

(c)           Bonus:  The Executive shall be eligible to receive an annual cash bonus award for the fiscal year ending December 31, 2012.  All bonuses shall be at the discretion of the Board.

 

(d)           Stock Option.                                The Executive shall be entitled to receive 30,000 options (the “Stock Option”) of common stock of the Company at exercise price of the market price of the Company’s stock on the issuance date as decided by the Board.  The Stock Option shall vest in two years, of which 50% of Stock Option (15,000 options) shall vest one year anniversary from the issuance date and the remaining 50% of Stock Option (15,000 options) shall vest the second year anniversary from the issuance date, provided that the Executive is in employment with the Company on the vesting date.

 

Upon termination of the Executive’s employment with the Company with or without cause or due to the Executive’s disability or death, the Executive’s interest in any stock options or restricted stock which he has been granted subject to vesting schedule shall fully vest on the effective date of his termination, and the Executive shall be granted a 30 days period in which the exercise all of the options, subject to the terms and conditions of the applicable stock option plan. Executive’s interest in any stock options or restricted stock eligible under the terms of the applicable stock option or restricted stock plan or agreement for which the Executive was scheduled to become eligible but not vested yet shall be terminated on the effective date of the termination date.

 

(e)           Business Expenses: In addition to the compensation provided for above, the Company agrees to pay or to reimburse the Executive during his employment for all reasonable ordinary, and necessary, properly vouchered, client-related travel, entertainment or other business expenses incurred in the performance of his services hereunder in accordance with Company policy in effect from time to time. The Executive shall submit vouchers and receipts for all expenses for which reimbursement is sought.

 

(f)           Vacation: During each calendar year, the Executive shall be entitled to four weeks of vacation per year.  To the extent that the Executive does not use his vacation in a given calendar year, he shall be entitled to carry forward accrued unused vacation over from year to year; provided, however, that in no event may he at any time have more than 30 business days of vacation accrued and once he has 30 business days of accrued unused vacation, he shall no longer continue to accrue further vacation time until he has used some of his accrued vacation time.

 

  

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(g)           During the Employment Period, the Executive shall be based in the United States and shall travel to China no less than four (4) times per year at the Company’s expense.

 

(h)           Fringe Benefits: In addition to his compensation provided by the foregoing, the Executive shall be entitled to the benefits made available generally to Company employees pursuant to Company programs, including, by way of illustration, personal leave, paid holidays, sick leave, profit-sharing, pension plans, 401(k) plan, retirement, disability, insurance programs of the Company, and a health insurance program provided by a U.S. health insurance provider subject to the Company’s prior written consent.

 

(i)           Notwithstanding anything contained herein, the Executive shall be permitted to serve on the Board of Directors of other US companies that are not competitors with Tanke Biosciences Corporation or its subsidiaries.

 

5.           Employment Period; Termination.

 

(a)           The Executive’s employment under this Agreement shall commence on the effective date of this Agreement, and shall continue thereafter unabated until terminated upon the earlier to occur of the following events: (i) the close of business on the second anniversary of this Agreement (the initial two years term of this Agreement shall be referred to herein as the “Initial Term”) or (ii) as otherwise provided below, provided, however, that, on the second anniversary of the date of this Agreement, and on every subsequent annual anniversary, the term of this Agreement and the Employment Period may be renewed for a term ending one (1) year subsequent to such date (each such one-year term shall be referred to herein as a “Renewal Term”) , if the Company gives the Executive written notice at least thirty (30) days prior to the such anniversary date, unless sooner terminated as provided herein. For the purposes of this Agreement, the Initial Term and each Renewal Term shall collectively be referred to as the “Employment Period.”

 

(b)           Termination By Executive Without Good Reason.  Notwithstanding the provisions of Section 5(a), the Executive may terminate his employment as the Officer at any time for any reason by giving the Company written notice at least sixty (60) days prior to the effective date of termination. Unless otherwise provided by this Section, all compensation and benefits paid by the Company to the Executive shall cease upon his last day of employment, but the Executive shall be entitled to receive any accrued but unpaid base salary, and to be reimbursed for any reimbursable expenses that have not been reimbursed prior to the effective date such termination.

 

(c)           Termination By Executive With Good Reason. Subject to the provisions detailed below, upon thirty (30) days’ written notice to the Company of his intent to terminate the Agreement, the Executive shall have the right to terminate his employment under this Agreement for Good Reason. For purposes of this Agreement, “Good Reason” is defined as any one of the following: (i) Company’s willful material breach of any provision of this Agreement; or (ii) any material adverse change in the Executive’s position (including status, offices, titles and reporting requirements) authority, duties or responsibilities (other than a change due to the Executive’s Permanent Disability) which results in: (A) a diminution in any material respect in the Executive’s position, authority, duties, responsibilities or compensation, which diminution continues in time over at least thirty (30) days such that it constitutes an effective demotion; or (B) a material diversion from the Executive’s performance of the functions of the Executive’s position, excluding for this purpose material adverse changes made with the Executive’s written consent or due to the Executive’s termination for Cause (as defined below) or termination by the Executive without Good Reason; provided, however, that it shall not constitute Good Reason unless the Executive shall have provided the Company with written notice of its alleged actions constituting Good Reason (which notice shall specify in reasonable detail the particulars of such Good Reason) within 30 days of the events alleged actions constituting Good Reason and Company has not cured any such alleged Good Reason or substantially commenced its effort to cure such breach within thirty (30) days of the Company’s receipt of such written notice.

 

  

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If the Executive’s employment is terminated by the Executive with Good Reason, the Executive shall continue to receive his base salary, any unpaid bonus and health insurance coverage on the same terms as made available to the Company’s employees for a period of two (2) months from the effective date of termination (such continuation of base salary and health insurance coverage being the “Severance Benefits”).

 

Notwithstanding the foregoing, the Executive shall not be entitled to any Severance Benefits unless (i) the Executive complies with all of the restrictive covenants by which he is bound (whether pursuant to this Agreement or otherwise), including, but not limited to, any non competition agreement, non solicitation agreement or confidentiality agreement signed by the Executive, and (ii) the Executive executes, delivers and does not revoke a general release in form and substance acceptable to the Company. The parties hereto acknowledge that the Severance Benefits to be provided under this Section 5(c) are to be provided in consideration for the above specified release.

 

(d)           Termination by the Company for Cause. If the Executive’s employment is terminated for Cause (as defined below), the Executive will not be entitled to and shall not receive any compensation or benefits of any type following the effective date of termination, including, for the avoidance of doubt, the Severance Benefits. Except as provided below, in the event the Executive’s employment with the Company is terminated for Cause, such termination shall be effective upon the Executive’s receipt of the notice terminating his employment for Cause, which notice shall describe the bases for the Cause determination.  As used in this Agreement, the term “Cause” shall exist upon any of the following events:  (i) the Executive’s fraud or breach of fiduciary obligations in connection with performance of his duties with the Company (including but not limited to any acts of embezzlement or misappropriation of funds); (ii) the Executive’s indictment for a felony or plea of guilty or nolo contendere to a felony charge or any criminal act involving moral turpitude; (iii) the Executive’s being under the influence of any drugs (other than prescription medicine or other medically-related drugs to the extent that they are taken in accordance with their directions) or repeatedly being under the influence of alcohol, during the performance of his duties under this Agreement, or, while under the influence of such drugs or alcohol, engaging in grossly inappropriate conduct during the performance of his duties under this Agreement; (iv) the Executive’s refusal to substantially perform the Executive’s duties hereunder, except in the event that the Executive becomes permanently disabled as set forth in Section 5(f); (v) the Executive’s willful misconduct or gross negligence in connection with his employment; (vi) the Executive’s material violation of any Company policies or procedures relating to harassment, discrimination or insider trading; (vii) the Executive’s material breach of any provision of this Agreement. In the case of items (iv), (vi) and or (vii) above, the Company shall provide the Executive with written notice specifying in reasonable detail the particulars of such Cause.

 

  

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(e)           Termination by the Company Without Cause. Upon ten (10) days written notice, the Company shall have the right to terminate the Executive for any reason or no reason at all. If the Executive’s employment is terminated by the Company without Cause, the Executive shall receive Severance Benefits (subject to any limits of the Company’s applicable benefits plans and insurance policies) for a period of two (2) months from the effective date of termination.

 

Notwithstanding the foregoing, the Executive shall not be entitled to any Severance Benefits unless (i) the Executive complies with all of the restrictive covenants by which he is bound (whether pursuant to this Agreement or otherwise), including, but not limited to any non-competition agreement, non-solicitation agreement, or confidentiality agreement signed by the Executive, and (ii) the Executive executes, delivers, and does not revoke a general release in form and substance acceptable to the Company. The parties hereto acknowledge that the Severance Benefits to be provided under this Section 5(e) is to be provided in consideration for the above-specific release.

 

(f)           Termination Due to Executive’s Permanent Disability. In the event the Executive becomes permanently disabled during employment with the Company, the Company may terminate this Agreement by giving fifteen (15) days notice to the Executive of its intent to terminate, and unless the Executive resumes performance of the duties set forth in Section 3 within five (5) days of the date of such notice and continues performance for the remainder of the notice period, this Agreement shall terminate at the end of the fifteen (15) day period.  If the disability is caused by the work performed by the Executive under his employment with the company, and the Executive is terminated pursuant to this Section 5(f), he shall be entitled to receive the Severance Benefits for a period of  two months from the effective date of termination. The Executive shall reasonably cooperate with the Company in securing disability coverage, retaining disability coverage and collecting any benefits available from its disability insurance carrier. This salary continuation element of the Severance Benefits shall be payable in accordance with the Company's normal payroll schedule, or on such other periodic basis as may be mutually agreed upon, from the effective date of his termination, as if the Executive's employment had continued during the severance period. “Permanently Disabled” for the purposes of this Agreement means the inability, due to physical or mental ill health, to perform the essential functions of Executive’s job, with or without a reasonable accommodation for one hundred twenty (120) business days during any one employment year, irrespective of whether such days are consecutive. In the event of any dispute under this Section, the Executive shall submit to a physical examination by a licensed physician subject to the dictates or requirements of the Company's disability insurance carrier, the cost of which will be paid by the Company, and the determination of such physician shall be determinative.

 

  

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(g)           Termination Upon Executive's Death.  This Agreement will terminate immediately upon the Executive's death. In that event, the Executive's estate shall receive any accrued but unpaid salary or bonus.  In addition, the Executive's estate shall be entitled to receive the severance benefits for a period of two months from the effective date of termination. This salary continuation element of the Severance Benefits shall be payable in accordance with the Company's normal payroll schedule, or on such other periodic basis as may be mutually agreed upon, from the effective date of his termination, as if the Executive's employment had continued during the two  month severance period.

 

(h)           Section 409A. Notwithstanding anything to the contrary in this Agreement, any cash severance payments otherwise due to the Executive pursuant to this Section 5 or otherwise on or within the six-month period following the Executive's termination will accrue during such six-month period and will become payable in a lump sum payment on the date that is six (6) months and one (1) day following the Executive's termination. In. addition, this Agreement will be deemed amended to the extent necessary to avoid imposition of any additional tax or income recognition prior to actual payment to the Executive under Section 409A of the Internal Revenue Code of 1986, as amended, and any temporary, proposed or final Treasury Regulations and guidance promulgated thereunder and the parties agree to cooperate with each other and to take reasonably necessary steps in this regard.

 

6.           Company Property.  All correspondence, records, documents, software, promotional materials, and other Company property, including all copies, which come into the Executive’s possession by, through or in the course of his employment, regardless of the source and whether created by the Executive, are the sole and exclusive property of the Company, and immediately upon the termination of the Executive’s employment, or any time at the Company’s reasonable request, the Executive shall return to the Company all such property of the Company.

 

7.           Non-Competition, Non-Solicitation.

 

(a)           The Executive agrees that, in consideration of his employment with the Company pursuant to this Agreement, and other good and valuable consideration, the receipt of which is hereby acknowledged, during the Executive’s employment with the Company and for twenty-four (24) months after termination thereof, the Executive will not either on his own behalf or on behalf of any third party, except on behalf of the Company, directly or indirectly (other than through his ownership of equity interests in the Company), as an individual proprietor, principal, manager, agent, consultant, guarantor, advisor, member, owner, participant, partner, stockholder, officer, employee, director, joint venturer, lender, or in any other capacity whatsoever (other than as a passive holder of not more than five percent (5%) of the total outstanding stock of a publicly-held company):

 

(i)           (1) recruit, offer employment to, solicit or induce, or attempt to induce, any employee or employees of the Company or any affiliate to terminate their employment with, or otherwise cease their relationship with, the Company or any affiliate or (2) recruit, offer employment to or solicit any person who has been employed by the Company or any affiliate during the 12 months preceding such solicitation or offer of employment;

 

  

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(ii)           solicit, divert, take away, or attempt to divert or take away, the business or patronage (with respect to product; or services of the kind or type developed, produced, marketed, furnished or sold by the Company) of any of the Company’s clients, customers, vendors, business or strategic partners or accounts, or prospective clients, customers, vendors, business or strategic partners or accounts, or

 

(iii)           persuade or induce any client, customer, vendor, strategic or business partner or account of the Company to restrict or cease to do business with, invest in, participate with, or otherwise work with the Company, or to reduce the amount of business, investment, participation or work that any such client, customer, vendor, or strategic or business partner has customarily done or actively contemplates doing with the Company.

 

(b)           The Executive and the Company agree that this covenant not to compete is a reasonable covenant under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction such restraint is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this covenant as to the court shall appear not reasonable and to enforce the remainder of the covenant as so amended.  The Executive agrees that any breach of the covenants contained in this Section 7 would irreparably injure the Company. Accordingly, the Executive agrees that the Company may, in addition to pursuing any other remedies it may have in law or in equity, cease making any payments or providing any benefits otherwise required by this Agreement and obtain an injunction against the Executive from any court having jurisdiction over the matter restraining any further violation of this Agreement by the Executive.

 

(c)           The provisions of Section 7 shall survive termination of this Agreement.

 

8.           Protection of Confidential Information.

 

(a)           For purposes of this Section 8, “Confidential Information” shall mean non-public information concerning the financial data, strategic business plans, product development (or other proprietary product data), projects, customer lists, marketing plans, methodologies, business or vendor relationships, relationships with strategic or business partners, its high speed networks, or equipment, tools or other materials developed for use on such networks, and all information and know-how (whether or not patentable, copyrightable or otherwise able to be registered or protected under laws governing intellectual property) owned, possessed, or used by the Company, any affiliate or any customer, including, without limitation, any formula, method, procedures, composition, project, development, plan, market research, vendor information, customer or client lists or information, contacts at or knowledge of customers or clients, prospective customers and clients, business or strategic partners of the Company, trade secret, process, research, reports, financial data, technical data, test data, know-how, computer program, software, software documentation, source code, hardware design, technology, marketing or business plan, forecast, unpublished financial statement, budget, license, patent applications, contracts, joint ventures, price, cost and personnel data, any trade names, trademarks or slogans and other non-public, proprietary and confidential information of the Company, its affiliates or customers, that, in any case, is not otherwise available to the public (other than by the Executive’s breach of the terms hereof). The Executive agrees (i) that all Confidential Information, whether or not in writing, shall be treated as being confidential and/or proprietary information and is the exclusive property of the Company and (ii) to hold in a fiduciary capacity for the sole benefit of the Company all Confidential Information.

 

  

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(b)           Confidential Information shall not include information that

 

(i)           is or becomes public knowledge through legal means without fault by the Executive,

 

(ii)           is already public knowledge prior to the signing of this Agreement,

 

(iii)           must be disclosed pursuant to applicable law or court order.

 

(c)           The Executive agrees that he will not at any time, either during the Term of this Agreement or after its termination, disclose to anyone any Confidential Information, or utilize such Confidential Information for his own benefit, or for the benefit of third parties without written approval by the CEO.  The Executive further agrees that all memoranda, notes, records, data, schematics, sketches, computer programs, prototypes, or written, photographic, magnetic or other documents or tangible objects compiled by him or made available to him during the Term of his employment concerning the business of the Company and/or its clients, including any copies of such materials, shall be the property of the Company and shall be delivered to the Company on the termination of his employment, or at any other time upon request of the Company.

 

(d)           The Executive also agrees that any breach of the covenants contained in this Section 8 would irreparably injure the Company. Accordingly, the Executive agrees that the Company may, in addition to pursuing any other remedies it may have in law or in equity, cease making any payments or providing any benefits otherwise required by this Agreement and obtain an injunction against the Executive from any court having jurisdiction over the matter restraining any further violation of this Agreement by the Executive

 

9.           Intellectual Property.  During the Term of this Agreement, the Executive will disclose to the Company all ideas, concepts, inventions, product ideas, new products, discoveries, methods, software, business plans and business opportunities developed by him during the Employment Period, which relate directly or indirectly to the Company’s business or the business of any of its affiliates or their respective clients, including without limitation, any process, product or product improvement, product ideas, new products, discoveries, methods, software, domain names or proposed domain names, trade names, trademarks or slogans, which may or may not be patentable or copyrightable, registerable or otherwise protectable. The Executive agrees that such will be the property of the Company from the moment of its inception (including, without limitation, all copyrightable works, which shall be deemed “works made for hire” under the United States Copyright Act) and that he will at the Company’s reasonable request and cost to do whatever is necessary to assign or otherwise secure for the Company the rights thereto by patent, copyright or otherwise. The Executive acknowledges and agrees that his obligations with respect to Company property discussed in this paragraph shall survive the termination or expiration of this Agreement.

 

  

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10.           Publicity. Neither party shall issue, without consent of the other party, any press release or make any public announcement with respect to this Agreement or the employment relationship between them, unless such disclosure is required by relevant Federal and State securities regulations. Following the date of this Agreement and regardless of any dispute that may arise in the future, the Executive and the Company jointly and mutually agree that they will not disparage, criticize or make statements which are negative, detrimental or injurious to the other (or, in the case of the Executive, negative, detrimental or injurious to any officer, director, stockholder or affiliate of the Company or its affiliates) to any individual, company or client, including within the Company.

 

11.           Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, personal representatives, successors and assigns. In the event the Company is acquired, is a non surviving party in a merger, or transfers substantially all of its assets, this Agreement shall not be terminated and the transferee or surviving company shall be bound by the provisions of this Agreement. The parties understand that the obligations of the Executive are personal and may not be assigned by him.

 

12.           Entire Agreement.  This Agreement contains the entire understanding of the Executive and the Company with respect to employment of the Executive and supersedes any and all prior understandings, written or oral. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing, specifically identified as an amendment to this Agreement, and signed by all parties. By entering into this Agreement, the Executive certifies and acknowledges that he has carefully read all of the provisions of this Agreement and that he voluntarily and knowingly enters into said Agreement.

 

13.           Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

14.           Governing Law and Submission to Jurisdiction. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflicts of law thereof.

 

15.           Notices. Any notice provided for in this Agreement shall be provided in writing. Notices shall be effective from the date of service, if served personally on the party to whom notice is to be given, or on the second day after mailing, if mailed by first class mail, postage prepaid. Notices shall be properly addressed to the parties at their respective addresses or to such other address as either party may later specify by notice to the other.

 

16.           Arbitration.                      Except as provided below, the parties agree that any controversy, claim or dispute arising out of or relating to this agreement, or the breach thereof or arising out of or relating to the employment of the Executive, or the termination thereof, including any statutory or common law claims under federal, state, or local law, including all laws prohibiting discrimination in the workplace, shall be resolved by arbitration in New York in accordance with the employment dispute resolution rules of JAMS. The parties agree that any award rendered by the arbitrator shall be final and binding, and that judgment upon the award may be entered in any court having jurisdiction thereof. The parties further acknowledge and agree that, due to the nature of the confidential information, trade secrets, any intellectual property belonging to the Company to which the Executive has or will be given access, and the likelihood of significant harm that the Company would suffer in the evident that such information was disclosed to third parties, nothing in this section shall preclude the company from going to court to seek injunctive relief to prevent the Executive from violating the obligations established in sections 7 through 10 of this Agreement.

 

  

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17.           Indemnification.

 

(a)           Corporate Acts. In his capacity as a director, officer, or employee of the Company or serving or having served any other entity as a director, officer, or executive at the Company’s request, the Executive shall be indemnified and held harmless by the Company to the fullest extent allowed by law, the Company’s Articles of Organization and bylaws, from and against any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Executive may be involved, or threatened to be involved, as a party or otherwise by reason of the Executive’s status, which relate to or arise out of the Company, their assets, business or affairs, if in each of the foregoing cases, (i) the Executive acted in good faith and in a manner the Executive believed to be in the best interests of the Company, and, with respect to any criminal proceeding, had no reasonable cause to believe the Executive’s conduct was unlawful, and (ii) the Executive’s conduct did not constitute gross negligence or willful or wanton misconduct. The Company shall advance all reasonable expenses incurred by the Executive in connection with the investigation, defense, settlement or appeal of any civil or criminal action or proceeding referenced in this Section, including but not necessarily limited to, reasonable fees of’ legal counsel, expert witnesses or other litigation-related expenses.

 

(b)           Directors & Officers Insurance. During the Employment Period, the Executive shall be entitled to coverage under the Company’s directors and officers liability insurance policy, in form and substance equal to the insurance policy available to the Company's directors and officers, subject to the terms of such policy, in effect at any time in the future to no lesser extent than any other officers or directors of the Company. Notwithstanding anything herein to the contrary, the provisions of this Section shall survive the termination of this Agreement and the termination of the Employment Period for any reason.

 

(c)           Personal Guarantees. The Company shall indemnify and hold harmless the Executive for any liability incurred by him by reason of his execution of any personal guarantee for the Company’s benefit (including but not limited to personal guarantees in connection with office or equipment leases, commercial loans or promissory notes).

 

  

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18.           Miscellaneous.

 

(a)           No delay or omission by either party in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by one party on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

 

(b)           The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

 

(c)           Any rights of the Executive hereunder shall be in addition to any rights the Executive may otherwise have under written benefit plans or agreements of the Company to which he is a party or in which he is a participant, including, but not limited to, any Company sponsored written employee benefit plans, stock option plans, grants and agreements.

 

(d)           The Company shall be entitled to withhold from any payment any amount of withholding required by law.

 

[Signature page follows.]

 

  

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed and delivered by its authorized officers or individually, on the date first identified above.

 

	 	
TANKE BIOSCIENCES CORPORATION

	 
	 	 	 	 
	
 

	
By: 

	/s/ Guixiong Qiu	 
	 	 	Name: Guixiong Qiu	 
	 	 	Title: CEO and President	 
	 	 	Date: July 26, 2011	 

 

	 	

EXECUTIVE:

	 
	 	 	 	 
	
 

	/s/ Gilbert Lee	 
	 	Name: Gilbert Lee	 
	 	Date: July 26, 2011

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