Confidential
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PRINTCAFE SOFTWARE, INC.
Forty 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
February 13, 2003
Electronics for Imaging, Inc.
000 Xxxxxxxx Xxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
In order to induce you to provide us with the standby credit facility (the
"Credit Facility") referred to in the letter agreement, dated the date of this
letter agreement, we agree that, unless (a) you have withdrawn your proposal
dated January 28, 2003 or reduced the consideration offered therein (other than
based on an increase in our debt level above $20.7 million) or (b) we have
terminated the Credit Facility without your funding your obligations thereunder
(or by paying in full all obligations to you thereunder), for so long as you are
obligated to (or have funded) the Credit Facility (the "Applicable Period"):
1. We will not, nor will we permit any of our subsidiaries to, nor will we
authorize or permit any of our directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by us or any of our subsidiaries to directly or
indirectly through another person, (i) solicit, initiate, resume or encourage
(including by way of furnishing or disclosing non-public information), any
Takeover Proposal, (ii) participate in any discussions or negotiations regarding
any Takeover Proposal, or (iii) enter into any Acquisition Agreement; provided,
that if our board of directors (or the special committee thereof) determines in
its good faith judgment, after consultation with outside legal counsel, that the
failure to furnish such information or participate in such negotiations or
discussions would likely result in a breach of its fiduciary duties to our
stockholders under applicable law, we and our representatives may, in response
to a Takeover Proposal with a price greater than that offered by you that
otherwise is reasonably likely to lead to a Superior Proposal which was not
solicited by us in violation of this letter agreement, and subject to providing
you with prior written notice of its decision to take such action and compliance
with the terms of this letter agreement, (x) furnish information with respect to
us and our subsidiaries to any person making a Takeover Proposal at a price
greater than that offered by you that otherwise is reasonably likely to lead to
a Superior Proposal pursuant to a customary confidentiality agreement that
permits the disclosures to you required by this letter agreement and (y)
participate in discussions or negotiations regarding such Takeover Proposal. For
purposes of this Agreement, "Takeover Proposal" means any inquiry, proposal or
offer from any Person or "group" (as such term is defined in Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), relating
to any direct or indirect acquisition or purchase of 15% or more of our and our
subsidiaries assets, taken as a whole, or 15% or more of any class or series of
our or any of our subsidiaries' equity securities, any tender offer or exchange
offer that if consummated would result in any person or "group" (as such term is
defined in Section 13(d) of the Exchange Act) beneficially owning 10% or more of
any class or series of our or any of our subsidiaries' equity securities, or any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction or the sale or other transfer of all or
substantially all of our or any of our subsidiaries' assets, other than the
transactions with you or your subsidiaries.
2. Neither our board of directors nor any committee thereof will (i) approve
or recommend, or propose publicly to approve or recommend, any Takeover
Proposal, or (ii) approve or recommend, or propose to approve or recommend, or
execute or enter into, any letter of intent, agreement in principle, merger
agreement, acquisition agreement, option agreement or other similar agreement or
propose publicly or agree to do any of the foregoing (each, an "Acquisition
Agreement") related to any Takeover Proposal. Notwithstanding the foregoing,
during the Applicable Period, in response to a Superior Proposal which did not
arise out of a breach of this letter agreement, our board of directors (or the
special committee thereof) may cause us to enter into and recommend any
Acquisition Agreement with respect to any Superior Proposal, but only at a time
that is after the fifth business day following your receipt of written notice
from us advising you that our board of directors (or the special committee
thereof) is prepared to accept a Superior Proposal, specifying the material
terms and conditions of such Superior Proposal and identifying the person making
such Superior Proposal. For purposes of this Agreement, a "Superior Proposal"
means any proposal made by a third party to acquire, directly or indirectly,
including pursuant to a tender offer, exchange offer, merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash and/or securities, more than
50% of the combined voting power of the shares of our capital stock then
outstanding or all or substantially all of our assets and otherwise on terms
which our board of directors (or the special committee thereof) determines in
its good faith judgment (after consultation with its financial advisor of
nationally recognized reputation), after considering all terms and conditions of
such proposal, including the likelihood and timing of its consummation, that
such proposal would result in a transaction delivering to our stockholders
superior value, from a financial point of view, to the $2.60 per share proposal
that you have made to our board of directors (or the special committee thereof)
and for which financing, to the extent required, is then committed or which, in
the good faith judgment of our board of directors (or the special committee
thereof), is reasonably capable of being obtained by such third party.
3. We will promptly (and no later than 24 hours after receipt) advise you
orally and in writing of any request for information or of any inquiry with
respect to a Takeover Proposal, the material terms and conditions of such
request, inquiry or Takeover Proposal and the identity of the person making such
request, inquiry or Takeover Proposal. We will promptly keep you informed of the
status and details (including amendments or changes or proposed amendments or
changes) of any such request, inquiry or Takeover Proposal.
4. Nothing contained in this letter agreement shall prohibit us from taking
and disclosing to our stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to our
stockholders if, in the good faith judgment of our board of directors (after
consultation with outside legal counsel), failure so to disclose would be
reasonably likely to constitute a breach of its obligations under applicable
law.
5. If during the Applicable Period we enter into an Acquisition Agreement
(other than an Acquisition Agreement with you or your affiliates) or our board
of directors (or a committee thereof) recommends a Takeover Proposal,
concurrently with entering into such Acquisition Agreement or within two
business days of such recommendation, we will pay you, by wire transfer of
immediately available funds, a fee equal to 0.0175 multiplied by the product of
(A) the highest per share price offered by you in a bona fide proposal to
acquire us (which as of the date of this letter agreement is $2.60) and (B) our
fully diluted capitalization, without giving effect to the issuance of any
option you hold to acquire shares of our common stock (or shares you have
acquired thereunder) (which as of the execution of this letter agreement is
12,129,621 shares).
This letter agreement is governed by and shall be construed under the laws of
the State of Delaware without giving effect to any conflict of law rule which
would cause the application of the laws of any other jurisdiction. We consent to
the exclusive jurisdiction and venue of the state or federal courts located in
the State of Delaware and for the County of New Castle if any dispute arises out
of this letter agreement. This letter agreement sets forth our entire
understanding with respect to the subject matter hereof and no prior draft
hereof shall be used in the construction or interpretation hereof. We intend
that (a) you will rely on this letter agreement, but no other person shall have
any rights hereunder and (b) that if you and we enter into a definitive merger
agreement (which neither of us is obligated to do), that the no solicitation
provision thereof shall supercede this letter agreement and extinguish your
right to rely on this letter agreement.
Very truly yours,
PRINTCAFE SOFTWARE, INC.
By: __________________________
Name: Xxxx X. Xxxx
Title: Chairman and Chief Executive Officer
ELECTRONICS FOR IMAGING, INC.
By: __________________________
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
