Exhibit 10.1

[Insert Dealer Name]

[Insert Dealer Address]

September [    ], 2014

To:

 

Electronics ForImaging, Inc.

   

6750 Dumbarton Circle

   

Fremont, California94555

   

Attention:

  [    ]  

TelephoneNo.:

  [    ]  

FacsimileNo.:

  [    ]

 

Re: [Base][Additional] Call Option Transaction

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the call option transaction entered into between
[            ] (“Dealer”) and Electronics For Imaging, Inc. (“Counterparty”) as
of the Trade Date specified below (the “Transaction”). This letter agreement
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below. This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc. (“ISDA”) are incorporated into this
Confirmation. In the event of any inconsistency between the Equity Definitions
and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated
September [    ], 2014, (the “Offering Memorandum”) relating to the [    ]%
Convertible Senior Notes due 2019 (as originally issued by Counterparty, the
“Convertible Notes” and each USD 1,000 principal amount of Convertible Notes, a
“Convertible Note”) issued by Counterparty in an aggregate initial principal
amount of USD 300,000,000 [(as increased by up to an additional aggregate
principal amount of USD 45,000,000 if and to the extent that the Initial
Purchasers (as defined herein) exercise their option to purchase additional
Convertible Notes pursuant to the Purchase Agreement (as defined herein))]
pursuant to an Indenture [to be] dated September [            ], 2014 between
Counterparty and U.S. Bank National Association, as trustee (the “Indenture”).
In the event of any inconsistency between the terms defined in the Offering
Memorandum, the Indenture and this Confirmation, this Confirmation shall govern.
The parties acknowledge that this Confirmation is entered into on the date
hereof with the understanding that (i) definitions set forth in the Indenture
which are also defined herein by reference to the Indenture and (ii) sections of
the Indenture that are referred to herein, in each case, will conform to the
descriptions thereof in the Offering Memorandum. If any such definitions in the
Indenture or any such sections of the Indenture differ from the descriptions
thereof in the Offering Memorandum, the descriptions thereof in the Offering
Memorandum will govern for purposes of this Confirmation. The parties further
acknowledge that the Indenture section numbers used herein are based on the
[draft of the Indenture last reviewed by Dealer as of the date of this
Confirmation, and if any such section numbers are changed in the Indenture as
executed, the parties will amend this Confirmation in good faith to preserve the
intent of the parties] [Indenture as executed]. Subject to the foregoing,
references to the Indenture herein are references to the Indenture as in effect
on the date of its execution, and if the Indenture is amended or supplemented
following such date, any such amendment or supplement (other than any amendment
or supplement pursuant to Section 10.01(j) of the Indenture that, as determined
by the Calculation Agent, conforms the Indenture to the description of the
Convertible Notes in the Offering Memorandum) will be disregarded for purposes
of this Confirmation unless the parties agree otherwise in writing.

Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

1. 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 supplement, form a part of, and be subject to
an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as
if Dealer and Counterparty had executed an agreement in such form on the Trade
Date (but without any Schedule except for (i) the election of the laws of the
State of New York as the governing law (without reference to choice of law
doctrine)

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and (ii) the election that the “Cross-Default” provisions of Section 5(a)(vi) of
the Agreement will apply to Dealer as if (w) the phrase “, or becoming capable
at such time of being declared,” were deleted from Section 5(a)(vi)(1) of the
Agreement, (x) the “Threshold Amount” with respect to Dealer were three percent
(3%) of shareholders’ equity of Dealer on the date of determination, (y) the
term “Specified Indebtedness” had the meaning specified in Section 14 of the
Agreement, except that such term did not include obligations in respect of
deposits received in the ordinary course of a party’s banking business and
(z) the following language were added to the end of Section 5(a)(vi) of the
Agreement: “Notwithstanding the foregoing, a default under subsection (2) hereof
shall not constitute an Event of Default if (1) the default was caused solely by
error or omission of an administrative or operational nature; (2) funds were
available to enable the party to make the payment when due; and (3) the payment
is made within two Exchange Business Days of such party’s receipt of written
notice of its failure to pay.”). In the event of any inconsistency between
provisions of the Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates.
The parties hereby agree that no transaction other than the Transaction to which
this Confirmation relates shall be governed by the Agreement.

 

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

General Terms.

 

Trade Date:

     September [    ], 2014

Effective Date:

     September [    ], 2014

Option Style:

     “Modified American”, as described under “Procedures for Exercise” below

Option Type:

     Call

Buyer:

     Counterparty

Seller:

     Dealer

Shares:

     The common stock of Counterparty, par value USD 0.01 per Share (Exchange
symbol “EFII”)

Number of Options:

     [    ]. For the avoidance of doubt, the Number of Options shall be reduced
by any Options exercised by Counterparty. In no event will the Number of Options
be less than zero.

Applicable Percentage:

     [    ]%

Option Entitlement:

     A number equal to the product of the Applicable Percentage and [    ].

Strike Price:

     USD [    ]

Premium:

     USD [    ]

Premium Payment Date:

     September [    ], 2014

Exchange:

     The NASDAQ Global Select Market

Related Exchange(s):

     All Exchanges

Excluded Provisions:

     Section 14.03 and Section 14.04(h) of the Indenture.

 

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Procedures for Exercise.   

Conversion Date:

   With respect to any conversion of a Convertible Note, the date on which the
“Holder” (as defined in the Indenture) of such Convertible Note satisfies all of
the requirements for conversion thereof as set forth in Section 14.02(b) of the
Indenture. Options may only be exercised hereunder on a Conversion Date in
respect of the Convertible Notes and only in an amount equal to the number of
$1,000 principal amount of Convertible Notes converted on such Conversion Date.

Free Convertibility Date:

   March 1, 2019

Expiration Time:

   The Valuation Time

Expiration Date:

   September 1, 2019, subject to earlier exercise.

Multiple Exercise:

   Applicable, as described under “Automatic Exercise” below.

Automatic Exercise:

   Notwithstanding Section 3.4 of the Equity Definitions and subject to Section
9(h)(ii), on each Conversion Date, a number of Options equal to [(i)] the number
of Convertible Notes in denominations of USD 1,000 as to which such Conversion
Date has occurred [minus (ii) the number of Options that are or are deemed to be
automatically exercised on such Conversion Date under the Base Call Option
Transaction Confirmation letter agreement dated September [    ], 2014 between
Dealer and Counterparty (the “Base Call Option Confirmation”),] shall be deemed
to be automatically exercised; provided that such Options shall be exercised or
deemed exercised only if Counterparty has provided a Notice of Exercise to
Dealer in accordance with “Notice of Exercise” below.    Notwithstanding the
foregoing, in no event shall the number of Options that are exercised or deemed
exercised hereunder exceed the Number of Options.

Notice of Exercise:

   Notwithstanding anything to the contrary in the Equity Definitions or under
“Automatic Exercise” above, in order to exercise any Options on any Conversion
Date, Counterparty must notify Dealer in writing before 5:00 p.m. (New York City
time) on the Scheduled Valid Day immediately preceding the scheduled first day
of the Settlement Averaging Period for the Options being exercised (the
“Exercise Notice Deadline”) of (i) the number of such Options (and the number of
$1,000 principal amount of Convertible Notes being converted on such Conversion
Date), (ii) the scheduled first day of the Settlement Averaging Period and the
scheduled Settlement Date, (iii) the settlement method for the related
Convertible Notes and (iv) if a Settlement Method for such Options other than
Net Share Settlement will apply, such notice shall also include information
required

 

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   pursuant to “Settlement Method Election Conditions” below; provided that in
respect of any Options relating to Convertible Notes with a Conversion Date
occurring on or after the Free Convertibility Date, (A) such notice may be given
at any time before 5:00 p.m. (New York City time) on the Scheduled Valid Day
immediately preceding the Expiration Date and need only specify the information
required in clause (i) above, and (B) Counterparty shall deliver to Dealer a
separate notice (the “Notice of Final Settlement Method”) in respect of all such
Convertible Notes before 5:00 p.m. (New York City time) on the Free
Convertibility Date specifying the information required in clauses (iii) and
(iv) above; provided further that notwithstanding the foregoing, such Notice of
Exercise (and the related exercise of Options) shall be effective if given after
5:00 p.m. (New York City time) on the Exercise Notice Deadline, but prior to
5:00 p.m. (New York City time) on the fifth Scheduled Valid Day following the
Exercise Notice Deadline, in which event the Calculation Agent shall have the
right to adjust the number of Shares deliverable and/or the amount of cash
payable by Dealer with respect to such Options in a commercially reasonable
manner 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 not having received such notice on or
prior to the Exercise Notice Deadline and, if appropriate, to delay the
Settlement Date. Counterparty acknowledges its responsibilities under applicable
securities laws, and in particular Section 9 and Section 10(b) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and
regulations thereunder, in respect of any election (or deemed election) of a
settlement method with respect to the Convertible Notes.

Valuation Time:

   The close of trading of the regular trading session on the Exchange; provided
that if the principal trading session is extended, the Calculation Agent shall
determine the Valuation Time in its reasonable discretion.

Market Disruption Event:

   Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety
by the following:    “‘Market Disruption Event’ means (i) a failure by the
primary U.S. national or regional securities exchange or market on which the
Shares are listed or admitted for trading to open for trading during its regular
trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York
City time, on any Scheduled Valid Day for the Shares for more than one half-hour
period in the aggregate during regular trading hours of any suspension or
limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the relevant exchange or market or otherwise) in the Shares or in
any options contracts or futures contracts relating to the Shares.”

 

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Settlement Terms.   

Settlement Method:

   For any Option, Net Share Settlement; provided that Counterparty may elect
Cash Settlement or Combination Settlement for such Option if the Settlement
Method Election Conditions have been satisfied and Counterparty shall have
notified Dealer of the Settlement Method in the Notice of Exercise or Notice of
Final Settlement Method, as applicable, for such Option; provided further that
if Counterparty has elected (or is deemed to have elected) to settle its
conversion obligations in respect of the related Convertible Notes (i) entirely
in Shares pursuant to Section 14.02(a)(iv)(A) of the Indenture (together with
cash in lieu of fractional Shares) (such settlement method, “Settlement in
Shares”), or (ii)(x) in a combination of cash and Shares pursuant to Section
14.02(a)(iv)(C) of the Indenture with a Specified Option Cash Amount (as defined
below) less than USD 1,000 (such settlement method, “Low Cash Combination
Settlement”), or (y) in a combination of cash and Shares pursuant to Section
14.02(a)(iv)(C) of the Indenture with a Specified Option Cash Amount (as defined
below) equal to USD 1,000, then, in each case, the relevant Settlement Method
for such Option shall be Net Share Settlement.

Settlement Method Election Conditions:

   In order to elect a Settlement Method other than Net Share Settlement for any
Option, the Notice of Exercise or Notice of Final Settlement Method, as
applicable, shall contain:    (i) Counterparty’s election of such other
Settlement Method, which shall correspond to Counterparty’s election (or deemed
election) to settle its conversion obligations in respect of the related
Convertible Note:    (A) in a combination of cash and Shares pursuant to Section
14.02(a)(iv)(C) of the Indenture with a Specified Option Cash Amount (as defined
below) greater than USD 1,000, in which case such other Settlement Method shall
be Combination Settlement; or    (B) entirely in cash pursuant to Section
14.02(a)(iv)(B) of the Indenture, in which case such other Settlement Method
shall be Cash Settlement; and    (ii) if such other Settlement Method is
Combination Settlement, the fixed amount of cash per Convertible Note applicable
to the settlement of each related Convertible Note (the “Specified Option Cash
Amount”).

Net Share Settlement:

   If Net Share Settlement is applicable to any Option exercised or deemed
exercised hereunder, Dealer will deliver to Counterparty, on the relevant
Settlement Date for each such Option, a number of Shares (the “Net Share

 

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   Settlement Amount”) equal to the sum, for each Valid Day during the
Settlement Averaging Period for each such Option, of (i) (a) the Daily Option
Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day,
divided by (ii) the number of Valid Days in the Settlement Averaging Period;
provided that for any Option exercised or deemed exercised hereunder on a
Conversion Date occurring on or after the Free Convertibility Date, in no event
shall the Net Share Settlement Amount for such Option exceed a number of Shares
equal to the Applicable Limit for such Option, divided by the Applicable Limit
Price on the Settlement Date for such Option.    Dealer will pay cash in lieu of
delivering any fractional Shares to be delivered with respect to any Net Share
Settlement Share Amount valued at the Relevant Price for the last Valid Day of
the applicable Settlement Averaging Period.

Combination Settlement:

   If Combination Settlement is applicable to any Option exercised or deemed
exercised hereunder, Dealer will deliver to Counterparty, on the relevant
Settlement Date for each such Option:    (i) an amount of cash (the “Combination
Settlement Cash Amount”) equal to the sum, for each Valid Day during the
Settlement Averaging Period for such Option, of (A) an amount (the “Daily
Combination Settlement Cash Amount”) equal to the lesser of (1) the product of
(x) the Applicable Percentage and (y) the excess of (i) the Specified Option
Cash Amount over (ii) USD 1,000 and (2) the Daily Option Value for such Valid
Day, divided by (B) the number of Valid Days in the Settlement Averaging Period;
provided that if the calculation in clause (A) above results in zero or a
negative number for any Valid Day, the Daily Combination Settlement Cash Amount
for such Valid Day shall be deemed to be zero; and    (ii) a number of Shares
(the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day
during the Settlement Averaging Period for such Option, of a number of Shares
for such Valid Day (the “Daily Combination Settlement Share Amount”) equal to
(A) (1) the Daily Option Value on such Valid Day minus the Daily Combination
Settlement Cash Amount for such Valid Day, divided by (2) the Relevant Price on
such Valid Day, divided by (B) the number of Valid Days in the Settlement
Averaging Period; provided that if the calculation in clause (A)(1) above
results in zero or a negative number for any Valid Day, the Daily Combination
Settlement Share Amount for such Valid Day shall be deemed to be zero;   
provided that for any Option exercised or deemed exercised hereunder on a
Conversion Date occurring on or

 

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     after the Free Convertibility Date, in no event shall the sum of (x) the
Combination Settlement Cash Amount for such Option and (y) the Combination
Settlement Share Amount for such Option, multiplied by the Applicable Limit
Price on the Settlement Date for such Option exceed the Applicable Limit for
such Option.      Dealer will pay cash in lieu of delivering any fractional
Shares to be delivered with respect to any Combination Settlement Share Amount
valued at the Relevant Price for the last Valid Day of the applicable Settlement
Averaging Period.

Cash Settlement:

     If Cash Settlement is applicable to any Option exercised or deemed
exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer
will pay to Counterparty, on the relevant Settlement Date for each such Option,
an amount of cash (the “Cash Settlement Amount”) equal to the sum, for each
Valid Day during the Settlement Averaging Period for such Option, of (i) the
Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days
in the Settlement Averaging Period; provided that in no event shall the Cash
Settlement Amount exceed the Applicable Limit for such Option.

Daily Option Value:

     For any Valid Day, an amount equal to (i) the Option Entitlement on such
Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the
Strike Price on such Valid Day; provided that if the calculation contained in
clause (ii) above results in a negative number, the Daily Option Value for such
Valid Day shall be deemed to be zero. In no event will the Daily Option Value be
less than zero.

Applicable Limit:

     For any Option, an amount of cash equal to the Applicable Percentage,
multiplied by the excess of (i) the aggregate of (A) the amount of cash, if any,
delivered to the “Holder” (as defined in the Indenture) of the related
Convertible Note upon conversion of such Convertible Note and (B) the number of
Shares, if any, delivered to the “Holder” (as defined in the Indenture) of the
related Convertible Note upon conversion of such Convertible Note, multiplied by
the Applicable Limit Price on the Settlement Date for such Option, over (ii) USD
1,000.

Applicable Limit Price:

     On any day, the opening price as displayed under the heading “Op” on
Bloomberg page “EFII <equity>” (or its equivalent successor if such page is not
available).

Valid Day:

     A day on which (i) there is no Market Disruption Event and (ii) trading in
the Shares generally occurs on The NASDAQ Global Select Market or, if the Shares
are not then listed on The NASDAQ Global Select Market, on the principal other
U.S. national or regional securities exchange on which the Shares are then
listed or, if the Shares are not then listed on a U.S. national or regional
securities exchange, on the principal other market on

 

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     which the Shares are then listed or admitted for trading. If the Shares are
not so listed or admitted for trading, “Valid Day” means a “Business Day.”

Scheduled Valid Day:

     A day that is scheduled to be a Valid Day on the principal U.S. national or
regional securities exchange or market on which the Shares are listed or
admitted for trading. If the Shares are not so listed or admitted for trading,
“Scheduled Valid Day” means a “Business Day.”

Business Day:

     Any day other than a Saturday, a Sunday or on which the Federal Reserve
Bank of New York is authorized or required by law or executive order to close or
be closed.

Relevant Price:

     On any Valid Day, the per Share volume-weighted average price as displayed
under the heading “Bloomberg VWAP” on Bloomberg page “EFII <equity> AQR” (or its
equivalent successor if such page is not available) in respect of the period
from the scheduled open of trading on the Exchange to the Scheduled Closing Time
of the Exchange on such Valid Day (or if such volume-weighted average price is
unavailable or is manifestly incorrect, the market value of one Share on such
Valid Day determined by the Calculation Agent using a volume-weighted average
method, if practicable). The Relevant Price will be determined without regard to
after-hours trading or any other trading outside of the regular trading session
trading hours.

Settlement Averaging Period:

     For any Option and regardless of the Settlement Method applicable to such
Option:     

 

(i)     if the related Conversion Date occurs prior to the Free Convertibility
Date, the 60 consecutive Valid Day period beginning on, and including, the
second Valid Day after such Conversion Date; provided that if the Notice of
Exercise for such Option specifies that Settlement in Shares or Low Cash
Combination Settlement applies to the related Convertible Note, the Settlement
Averaging Period shall be the 120 consecutive Valid Day period beginning on, and
including, the second Valid Day after such Conversion Date; or

    

 

(ii)    if the related Conversion Date occurs on or after the Free
Convertibility Date, the 60 consecutive Valid Day period beginning on, and
including, the 62nd Scheduled Valid Day immediately preceding the Expiration
Date; provided that if the Notice of Final Settlement Method for such Option
specifies that Settlement in Shares or Low Cash Combination Settlement applies
to the related Convertible Note, the Settlement Averaging Period shall be the
120 consecutive Valid Days beginning on, and including, the 122nd Scheduled
Valid Day immediately preceding the Expiration Date.

 

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Settlement Date:

     For any Option, the third Business Day immediately following the last Valid
Day of the Settlement Averaging Period for such Option.

Settlement Currency:

     USD

Other Applicable Provisions:

     The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity
Definitions will be applicable, except that all references in such provisions to
“Physically-settled” shall be read as references to “Share Settled.” “Share
Settled” in relation to any Option means that Net Share Settlement or
Combination Settlement is applicable to that Option.

Representation and Agreement:

     Notwithstanding anything to the contrary in Equity Definitions (including,
but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any
Shares delivered to Counterparty shall be, upon delivery, subject to
restrictions and limitations arising from Counterparty’s status as issuer of the
Shares under applicable securities laws, (ii) Dealer may deliver any Shares
required to be delivered hereunder in certificated form in lieu of delivery
through the Clearance System and (iii) any Shares delivered to Counterparty may
be “restricted securities” (as defined in Rule 144 under the Securities Act of
1933, as amended (the “Securities Act”)).

3.      Additional Terms applicable to the Transaction.

Adjustments applicable to the Transaction:

Potential Adjustment Events:

     Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential
Adjustment Event” means an occurrence of any event or condition, as set forth in
any Dilution Adjustment Provision, that would result in an adjustment under the
Indenture to the “Conversion Rate” or the composition of a “unit of Reference
Property” or to any “Last Reported Sale Price,” “Daily VWAP,” “Daily Conversion
Value” or “Daily Settlement Amount” (each as defined in the Indenture). For the
avoidance of doubt, Dealer shall not have any delivery or payment obligation
hereunder, and no adjustment shall be made to the terms of the Transaction, on
account of (x) any distribution of cash, property or securities by Counterparty
to “Holders” (as defined in the Indenture) of the Convertible Notes (upon
conversion or otherwise) or (y) any other transaction in which “Holders” (as
defined in the Indenture) of the Convertible Notes are entitled to participate,
in each case, in lieu of an adjustment under the Indenture of the type referred
to in the immediately preceding sentence (including, without limitation,
pursuant to the fourth sentence of Section 14.04(c) of the Indenture or the
fourth sentence of Section 14.04(d) of the Indenture).

Method of Adjustment:

     Calculation Agent Adjustment, which means that, notwithstanding Section
11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the
Calculation

 

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     Agent shall make a corresponding adjustment to any one or more of the
Strike Price, Number of Options, Option Entitlement and any other variable
relevant to the exercise, settlement or payment for the Transaction to the
extent an analogous adjustment would be made pursuant to the Indenture; provided
that, notwithstanding the foregoing, if the Calculation Agent reasonably and in
good faith materially disagrees with any adjustment to the Convertible Notes
that involves an exercise of discretion by Counterparty or its board of
directors (including, without limitation, pursuant to Section 14.05 of the
Indenture or any supplemental indenture entered into pursuant to Section
10.01(g) of the Indenture or in connection with any proportional adjustment or
the determination of the fair value of any securities, property, rights or other
assets), then the Calculation Agent will determine the adjustment to be made to
any one or more of the Strike Price, Number of Options, Option Entitlement and
any other variable relevant to the exercise, settlement or payment for the
Transaction in a commercially reasonable manner; provided further that,
notwithstanding the foregoing, if any Potential Adjustment Event occurs during
the Settlement Averaging Period but no adjustment was made to any Convertible
Note under the Indenture because the relevant “Holder” (as defined in the
Indenture) was deemed to be a record owner of the underlying Shares on the
related Conversion Date, then the Calculation Agent shall make an adjustment, as
determined by it, to the terms hereof in order to account for such Potential
Adjustment Event.

Dilution Adjustment Provisions:

     Sections 14.04(a), 14.04(b), 14.04(c), 14.04(d) and 14.04(e) and Section
14.05 of the Indenture. Extraordinary Events applicable to the Transaction:

Merger Events:

     Applicable; provided that notwithstanding Section 12.1(b) of the Equity
Definitions, a “Merger Event” means the occurrence of any event or condition set
forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture.

Tender Offers:

     Applicable; provided that notwithstanding Section 12.1(d) of the Equity
Definitions, a “Tender Offer” means the occurrence of any event or condition set
forth in Section 14.04(e) of the Indenture.

Consequence of Merger Events / Tender Offers:

     Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions,
upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent
shall make a corresponding adjustment in respect of any adjustment under the
Indenture to any one or more of the nature of the Shares (in the case of a
Merger Event), Strike Price, Number of Options, Option Entitlement and any other
variable relevant to the exercise, settlement or payment for the Transaction to
the extent an analogous

 

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   adjustment would be made pursuant to the Indenture in connection with such
Merger Event or Tender Offer; provided, however, that such adjustment shall be
made without regard to any adjustment to the “Conversion Rate” (as defined in
the Indenture) pursuant to any Excluded Provision; provided further that,
notwithstanding the foregoing, if the Calculation Agent reasonably and in good
faith materially disagrees with any adjustment to the Convertible Notes that
involves an exercise of discretion by Counterparty or its board of directors
(including, without limitation, pursuant to Section 10.01(g) of the Indenture),
then the Calculation Agent will determine the adjustment to be made to any one
or more of the nature of the Shares, Strike Price, Number of Options, Option
Entitlement and any other variable relevant to the exercise, settlement or
payment for the Transaction in a commercially reasonable manner; provided
further that if, with respect to a Merger Event or a Tender Offer, (i) the
consideration for the Shares includes (or, at the option of a holder of Shares,
may include) shares of an entity or person that is not a corporation or is not
organized under the laws of the United States, any State thereof or the District
of Columbia or (ii) Counterparty to the Transaction following such Merger Event
or Tender Offer will not be a corporation or will not be the Issuer following
such Merger Event or Tender Offer, then Dealer, in its sole discretion, may
elect for Cancellation and Payment (Calculation Agent Determination) to apply.

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
will 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 of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ Global Market (or their respective
successors), such exchange or quotation system shall thereafter be deemed to be
the Exchange.

Additional Disruption Events:

  

Change in Law:

   Applicable; provided that (i) Section 12.9(a)(ii) of the Equity Definitions
is hereby amended by replacing the parenthetical beginning after the word
“regulation” in the second line thereof with the words “(including, for the
avoidance of doubt and without limitation, (x) any tax law or (y) adoption or
promulgation of new regulations authorized or mandated by existing statute),”
(ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by
replacing the word “Shares” with the phrase “Hedge Positions” and (iii) Section
12.9(a)(ii)(X) of the

 

11

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   Equity Definitions is hereby amended by immediately following the word
“Transaction”, adding the phrase “in the manner contemplated by the Hedging
Party on the Trade Date”.

Failure to Deliver:

   Applicable

Hedging Disruption:

   Applicable; provided that:   

(i)     Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a)
inserting the following words at the end of clause (A) thereof: “in the manner
contemplated by the Hedging Party on the Trade Date” and (b) inserting the
following two phrases at the end of such Section:

  

“For the avoidance of doubt, the term “equity price risk” shall be deemed to
include, but shall not be limited to, stock price and volatility risk. And, for
the further avoidance of doubt, any such transactions or assets referred to in
phrases (A) or (B) above must be available on commercially reasonable pricing
terms.”; and

  

(ii)    Section 12.9(b)(iii) of the Equity Definitions is hereby amended by
inserting in the third line thereof, after the words “to terminate the
Transaction”, the words “or a portion of the Transaction affected by such
Hedging Disruption”.

Increased Cost of Hedging:

   Not Applicable

Hedging Party:

   For all applicable Additional Disruption Events, Dealer.

Determining Party:

   For all applicable Extraordinary Events, Dealer.

Non-Reliance:

   Applicable

Agreements and Acknowledgments

Regarding Hedging Activities:

   Applicable

Additional Acknowledgments:

   Applicable

4.      Calculation Agent.

   Dealer, whose judgments, determinations and calculations shall be made in
good faith and in a commercially reasonable manner. Following any determination
or calculation by the Calculation Agent hereunder, upon a written request by
Counterparty, the Calculation Agent shall promptly (but in any event within
three Scheduled Trading Days) provide to Counterparty by e-mail to the e-mail
address provided by Counterparty in such request a report (in a commonly used
file format for the storage and manipulation of financial data) displaying in
reasonable detail the basis for such determination or calculation (including any
assumptions used in making such determination or calculation), it being
understood that the Calculation Agent shall not be obligated to disclose any
proprietary or confidential models or proprietary or confidential information
used by it for such determination or calculation.

 

12

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5. Account Details.

 

  (a) Account for payments to Counterparty:

 

Bank:

  

[    ]  

  

[    ]  

  

[    ]  

ABA#:

  

[    ]  

SWIFT:

  

[    ]  

Acct Name:

  

[    ]  

Acct No.:

  

[    ]  

Account for delivery of Shares to Counterparty:

To be provided by Counterparty.

 

  (b) Account for payments to Dealer:

 

Bank:

  

[    ]  

  

[    ]  

  

[    ]  

ABA#:

  

[    ]  

SWIFT:

  

[    ]  

Acct Name:

  

[    ]  

Acct No.:

  

[    ]  

Account for delivery of Shares from Dealer:

To be provided by Dealer.

 

6. Offices.

 

  (a) The Office of Counterparty for the Transaction is: Inapplicable,
Counterparty is not a Multibranch Party.

 

  (b) The Office of Dealer for the Transaction is: [    ]

[            ]

[            ]

[            ]

 

7. Notices.

 

  (a) Address for notices or communications to Counterparty:

 

To:

  

ElectronicsFor Imaging, Inc.

  

6750Dumbarton Circle

  

Fremont,California 94555

Attention:

  

[    ]  

Telephone:

  

[    ]  

Facsimile:

  

[    ]  

 

  (b) Address for notices or communications to Dealer:

 

To:

  

[    ]  

 

13

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   [    ]    [    ]

Attention:

   [    ]

Telephone:

   [    ]

Facsimile:

   [    ]

Email:

   [    ]   

With a copy to:

   [    ]    [    ]    [    ]

Attention:

   [    ]

Telephone:

   [    ]

Facsimile:

   [    ]

Email:

   [    ]

 

8. Representations and Warranties of Counterparty.

Counterparty hereby represents and warrants to Dealer that each of the
representations and warranties of Counterparty set forth in Section 1 of the
Purchase Agreement (the “Purchase Agreement”), dated as of September [    ],
2014, between Counterparty and Morgan Stanley & Co. LLC and Goldman, Sachs &
Co., as representatives of the Initial Purchasers (the “Initial Purchasers”)
party thereto, is true and correct and is hereby deemed to be repeated to Dealer
as if set forth herein. Counterparty hereby further represents and warrants to
Dealer on the date hereof and on and as of the Premium Payment Date that:

 

  (a) Counterparty has all necessary corporate power and authority to execute,
deliver and perform its obligations in respect of the Transaction; such
execution, delivery and performance have been duly authorized by all necessary
corporate action on Counterparty’s part; and this Confirmation has been duly and
validly executed and delivered by Counterparty and constitutes its valid and
binding obligation, enforceable against Counterparty in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution hereunder
may be limited by federal or state securities laws or public policy relating
thereto.

 

  (b) Neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or
result in a breach of the certificate of incorporation or by-laws (or any
equivalent documents) of Counterparty, or any applicable law or regulation, or
any order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument filed as an exhibit to Counterparty’s
Annual Report on Form 10-K for the year ended December 31, 2013, as updated by
any subsequent filings, to which Counterparty or any of its subsidiaries is a
party or by which Counterparty or any of its subsidiaries is bound or to which
Counterparty or any of its subsidiaries is subject, or constitute a default
under, or result in the creation of any lien under, any such agreement or
instrument.

 

  (c) No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required in connection with the
execution, delivery or performance by Counterparty of this Confirmation, except
such as have been obtained or made and such as may be required under the
Securities Act or state securities laws.

 

  (d) Counterparty is not and, after consummation of 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.

 

  (e) Counterparty is an “eligible contract participant”, as such term is
defined in Section 1a(18) of the Commodity Exchange Act, as amended.

 

14

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  (f) Counterparty and each of its affiliates is not, on the date hereof, in
possession of any material non-public information with respect to Counterparty
or the Shares.

 

  (g) Counterparty (A) is capable of evaluating investment risks independently,
both in general and with regard to all transactions and investment strategies
involving a security or securities, (B) will exercise independent judgment in
evaluating the recommendations of any broker-dealer or its associated persons,
unless it has otherwise notified the broker-dealer in writing and (C) has total
assets of at least USD 50 million.

 

  (h) Without limiting the generality of Section 3(a)(iii) of the Agreement or
Section 8(b) hereof, the Transaction will not violate Rule 13e-1 or Rule 13e-4
under the Exchange Act.

 

  (i) Counterparty has received, read and understands the OTC Options Risk
Disclosure Statement and a copy of the most recent disclosure pamphlet prepared
by The Options Clearing Corporation entitled “Characteristics and Risks of
Standardized Options”.

 

  (j) Counterparty is not “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 a number of
Shares equal to the product of the Number of Options, and the Option Entitlement
in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

 

  (k) Counterparty understands that notwithstanding any other relationship
between Counterparty and Dealer and its affiliates, in connection with the
Transaction and any other over-the-counter derivative transactions between
Counterparty and Dealer or its affiliates, Dealer or its affiliate is acting as
principal and is not a fiduciary or advisor in respect of any such transaction,
including any entry, exercise, amendment, unwind or termination thereof.

 

9. Other Provisions.

 

  (a) Opinions and Board Resolutions. Counterparty shall deliver to Dealer an
opinion of counsel, dated as of the Trade Date, with respect to the matters set
forth in Sections 8(a) through (c) of this Confirmation; provided that any such
opinion of counsel may contain customary exceptions and qualifications,
including, without limitation, exceptions and qualifications relating to
indemnification provisions. Prior to the Trade Date, Counterparty shall deliver
to Dealer a resolution of Counterparty’s board of directors authorizing the
Transaction and approving the Transaction and any related hedging activity for
purposes of Section 203 of the Delaware General Corporation Law. Delivery of
such opinion and resolution to Dealer shall be a condition precedent for the
purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of
Dealer under Section 2(a)(i) of the Agreement.

 

  (b)

Repurchase Notices. Counterparty shall, on any day on which Counterparty effects
any repurchase of Shares or consummates or otherwise executes or engages in any
transaction or event (a “Conversion Rate Adjustment Event”) that would lead to
an increase in the “Conversion Rate” (as defined in the Indenture), promptly
give Dealer a written notice of such repurchase or Conversion Rate Adjustment
Event (a “Repurchase Notice”) on such day if following such repurchase or
Conversion Rate Adjustment Event, as the case may be, the number of outstanding
Shares as determined on such day is (i) less than [    ] million (in the case of
the first such notice) or (ii) thereafter more than [    ] million less than the
number of Shares included in the immediately preceding Repurchase Notice.
Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and
their respective officers, directors, employees, affiliates, advisors, agents
and controlling persons (each, an “Indemnified Person”) from and against any and
all losses (including losses relating to Dealer’s hedging activities as a
consequence of becoming, or of the risk of becoming, a Section 16 “insider”,
including without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection therewith with
respect to the Transaction), claims, damages, judgments, liabilities and
expenses (including reasonable outside counsel’s fees actually incurred), joint
or several, which an Indemnified Person

 

15

--------------------------------------------------------------------------------

  may become subject to, as a result of Counterparty’s failure to provide Dealer
with a Repurchase Notice on the day and in the manner specified in this
paragraph, and to reimburse, within 30 days, upon written request, each of such
Indemnified Persons for any reasonable legal or other expenses incurred in
connection with investigating, preparing for, providing testimony or other
evidence in connection with or defending any of the foregoing. If any suit,
action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against the Indemnified Person as a
result of Counterparty’s failure to provide Dealer with a Repurchase Notice in
accordance with this paragraph, such Indemnified Person shall promptly notify
Counterparty in writing. Counterparty shall not be liable for any settlement of
any proceeding contemplated by this paragraph that is effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Counterparty shall not, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding contemplated by this paragraph that is in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding on terms reasonably satisfactory
to such Indemnified Person. If the indemnification provided for in this
paragraph is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then
Counterparty hereunder, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities. The remedies
provided for in this paragraph (b) are not exclusive and shall not limit any
rights or remedies which may otherwise be available to any Indemnified Person at
law or in equity. The indemnity and contribution agreements contained in this
paragraph shall remain operative and in full force and effect regardless of the
termination of the Transaction.

 

  (c) Regulation M. Counterparty is not on the Trade Date engaged in a
distribution, as such term is used in Regulation M under the Exchange Act, of
any securities of Counterparty, other than a distribution meeting the
requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of
Regulation M. Counterparty shall not, until the second Scheduled Trading Day
immediately following the Effective Date, engage in any such distribution.

 

  (d) No Manipulation. Counterparty is not entering into the Transaction to
create actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or to raise or depress or
otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for the Shares) or otherwise in violation of the Exchange Act.

 

  (e) Transfer or Assignment.

 

  (i) Counterparty shall have the right to transfer or assign its rights and
obligations hereunder with respect to all, but not less than all, of the Options
hereunder (such Options, the “Transfer Options”); provided that such transfer or
assignment shall be subject to reasonable conditions that Dealer may impose,
including but not limited, to the following conditions:

 

  (A) With respect to any Transfer Options, Counterparty shall not be released
from its notice and indemnification obligations pursuant to Section 9(b) or any
obligations under Section 9(m) or 9(r) of this Confirmation;

 

  (B) Any Transfer Options shall only be transferred or assigned to a third
party that is a United States person (as defined in the Internal Revenue Code of
1986, as amended);

 

  (C)

Such transfer or assignment shall be effected on terms, including any reasonable
undertakings by such third party (including, but not limited to, an undertaking

 

16

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  with respect to compliance with applicable securities laws in a manner that,
in the reasonable judgment of Dealer, will not expose Dealer to material risks
under applicable securities laws) and execution of any documentation and
delivery of legal opinions with respect to securities laws and other matters by
such third party and Counterparty, as are requested and reasonably satisfactory
to Dealer;

 

  (D) Dealer will not, as a result of such transfer and assignment, be required
to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of
the Agreement greater than an amount that Dealer would have been required to pay
to Counterparty in the absence of such transfer and assignment;

 

  (E) An Event of Default, Potential Event of Default or Termination Event will
not occur as a result of such transfer and assignment;

 

  (F) Without limiting the generality of clause (B), Counterparty shall cause
the transferee to make such Payee Tax Representations and to provide such tax
documentation as may be reasonably requested by Dealer to permit Dealer to
determine that results described in clauses (D) and (E) will not occur upon or
after such transfer and assignment; and

 

  (G) Counterparty shall be responsible for all reasonable costs and expenses,
including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.

 

  (ii)

Dealer may, without Counterparty’s consent, transfer or assign all or any part
of its rights or obligations under the Transaction (A) to any affiliate of
Dealer (1) that has a rating for its long term, unsecured and unsubordinated
indebtedness that is equal to or better than Dealer’s credit rating at the time
of such transfer or assignment, or (2) whose obligations hereunder will be
guaranteed, pursuant to the terms of a customary guarantee in a form used by
Dealer generally for similar transactions, by Dealer or [            ], or
(B) to any other third party with a rating for its long term, unsecured and
unsubordinated indebtedness equal to or better than the lesser of (1) the credit
rating of Dealer at the time of the transfer and (2) [    ] by Standard and
Poor’s Rating Group, Inc. or its successor (“S&P”), or [    ] by Moody’s
Investor Service, Inc. (“Moody’s”) or, if either S&P or Moody’s ceases to rate
such debt, at least an equivalent rating or better by a substitute rating agency
mutually agreed by Counterparty and Dealer, provided that Dealer and such
affiliate or third party both qualify as “dealers in securities” within the
meaning of Section 475(c)(1) of the Code (as defined below) or such transfer or
assignment does not result in a deemed exchange by Counterparty within the
meaning of Section 1001 of the Code. Dealer shall notify Counterparty of any
transfer or assignment pursuant to this Section 9(e)(ii) promptly following such
transfer or assignment. If at any time at which (A) the Section 16 Percentage
exceeds 8.5%, (B) the Option Equity Percentage exceeds 13.0%, or (C) the Share
Amount exceeds the Applicable Share Limit (if any applies) (any such condition
described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is
unable after using its commercially reasonable efforts to effect a transfer or
assignment of Options to a third party on pricing terms reasonably acceptable to
Dealer and within a time period reasonably acceptable to Dealer such that no
Excess Ownership Position exists, then Dealer may designate any Exchange
Business Day as an Early Termination Date with respect to a portion of the
Transaction (the “Terminated Portion”), such that following such partial
termination no Excess Ownership Position exists. In the event that Dealer so
designates an Early Termination Date with respect to a portion of the
Transaction, a payment shall be made pursuant to Section 6 of the Agreement as
if (1) an Early Termination Date had been designated in respect of a Transaction
having terms identical to the Transaction and a Number of Options equal to the
number of Options underlying the Terminated Portion, (2) Counterparty were the
sole Affected Party with respect to such partial termination and (3) the
Terminated Portion

 

17

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  were the sole Affected Transaction (and, for the avoidance of doubt, the
provisions of Section 9(k) shall apply to any amount that is payable by Dealer
to Counterparty pursuant to this sentence notwithstanding the fact that
Counterparty was the Affected Party). The “Section 16 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 each person subject to aggregation of Shares
with Dealer and each “group” of which Dealer is a member or may be deemed a
member, in each case, under Section 13 or Section 16 of the Exchange Act and
rules promulgated thereunder, directly or indirectly beneficially own (as
defined under Section 13 or Section 16 of the Exchange Act and rules promulgated
thereunder) and (B) the denominator of which is the number of Shares
outstanding. The “Option Equity Percentage” as of any day is the fraction,
expressed as a percentage, (A) the numerator of which is the sum of (1) the
product of the Number of Options and the Option Entitlement and (2) the
aggregate number of Shares underlying any other call option transaction sold by
Dealer to Counterparty, and (B) the denominator of which is the number of Shares
outstanding. The “Share Amount” as of any day is the number of Shares that
Dealer and any person whose ownership position would be aggregated with that of
Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule,
regulation, regulatory order or organizational documents or contracts of
Counterparty that are, in each case, applicable to ownership of Shares
(“Applicable Restrictions”), owns, beneficially owns, constructively owns,
controls, holds the power to vote or otherwise meets a relevant definition of
ownership under any Applicable Restriction, as determined by Dealer in its
reasonable discretion. The “Applicable Share Limit” means a number of Shares
equal to (A) the minimum number of Shares that could give rise to reporting or
registration obligations or other requirements (including obtaining prior
approval from any person or entity) of a Dealer Person, or could result in an
adverse effect on a Dealer Person, under any Applicable Restriction, as
determined by Dealer in its reasonable discretion, minus (B) 1% of the number of
Shares outstanding.

 

  (iii) 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, or make or receive any payment in cash, to or from
Counterparty, Dealer may designate any of its affiliates to purchase, sell,
receive or deliver such Shares or other securities, or to make or receive such
payment in cash, 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.

 

  (f) Staggered Settlement. If upon advice of counsel with respect to applicable
legal and regulatory requirements, including any requirements relating to
Dealer’s hedging activities hereunder, Dealer reasonably determines that it
would not be practicable or advisable to deliver, or to acquire Shares to
deliver, any or all of the Shares to be delivered by Dealer on any Settlement
Date for the Transaction, 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”) 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) and the number of Shares that it will deliver on each Staggered Settlement
Date;

 

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

 

  (iii)

if the Net Share Settlement or Combination Settlement terms set forth above were
to apply to the Nominal Settlement Date, then the Net Share Settlement or
Combination Settlement terms will apply on each Staggered Settlement Date,
except that the number of Shares deliverable pursuant to such terms will be
allocated among such Staggered Settlement Dates as specified by Dealer in the
notice referred to in clause (i) above.

 

18

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  (g)   [Role of Agent. [Insert relevant Dealer agency language.]]

 

  (h) Additional Termination Events.

 

  (i) Notwithstanding anything to the contrary in this Confirmation, if (1) a
Repayment Event occurs or (2) an event of default with respect to Counterparty
under the terms of the Convertible Notes as set forth in Section 6.01 of the
Indenture [that results in an acceleration of the Convertible Notes pursuant to
the terms of the Indenture] occurs, then such Repayment Event or such event of
default, as the case may be, shall constitute an Additional Termination Event
applicable to the Transaction and, with respect to such Additional Termination
Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the
Transaction shall be the sole Affected Transaction and (C) 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 a Repayment Event, the
Transaction shall be subject to termination only in respect of the number of
Convertible Notes that cease to be outstanding in connection with or as a result
of such Repayment Event. “Repayment Event” means that (A) any Convertible Notes
are repurchased (whether in connection with or as a result of a change of
control, howsoever defined, or for any other reason) by Counterparty or any of
its subsidiaries, (B) any Convertible Notes are delivered to Counterparty or any
of its subsidiaries in exchange for delivery of any property or assets of
Counterparty or any of its subsidiaries (howsoever described), (C) any principal
of any of the Convertible Notes is repaid prior to the final maturity date of
the Convertible Notes (whether following acceleration of the Convertible Notes
or otherwise) or (D) any Convertible Notes are exchanged by or for the benefit
of the holders thereof for any other securities of Counterparty or any of its
affiliates (or any other property, or any combination thereof) pursuant to any
exchange offer or similar transaction; provided that, in the case of clause
(B) and clause (D), conversions of the Convertible Notes pursuant to the terms
of the Indenture shall not be Repayment Events. Within five Scheduled Trading
Days of any Repayment Event, Counterparty shall notify Dealer of such Repayment
Event and the aggregate principal amount of Convertible Notes subject to such
Repayment Event.

 

  (ii)

Notwithstanding anything to the contrary in this Confirmation, the receipt by
Dealer from Counterparty, within the applicable time period set forth opposite
the caption “Notice of Exercise” in Section 2 above, of any Notice of Exercise
in respect of the exercise of any Options that relate to Convertible Notes as to
which additional Shares would be added to the “Conversion Rate” (as defined in
the Indenture) pursuant to Section 14.03 of the Indenture in connection with a
“Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute
an Additional Termination Event as provided in this Section 9(h)(ii). Upon
receipt of any such Notice of Exercise, Dealer shall designate an Exchange
Business Day following such Additional Termination Event (which Exchange
Business Day shall in no event be earlier than the related settlement date for
such Convertible Notes) as an Early Termination Date (and Dealer shall use its
commercially reasonable efforts (taking into account any commercially reasonable
unwind activity by Dealer or its affiliates in respect of the Transaction and
the Settlement Method elected (or deemed to be elected) by Counterparty with
respect to the Make-Whole Conversion Options) to designate such Early
Termination Date so that the related payment or delivery, as the case may be,
hereunder in respect of the Make-Whole Conversion Options will occur on (or as
promptly as reasonably practicable after) the related settlement date for the
conversion of the relevant Convertible Notes) with respect to a number of
Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the
number of such Options specified in such Notice of Exercise [minus the number of
“Make-Whole Conversion Options” (as defined in the Base Call Option
Confirmation), if any, that relate to such Convertible Notes] and (B) the Number
of Options as of the date

 

19

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  Dealer designates such Early Termination Date and, as of such date, the Number
of Options shall be reduced by the number of Make-Whole Conversion Options. Any
payment hereunder with respect to such termination (the “Conversion Unwind
Payment”) shall be calculated pursuant to Section 6 of the Agreement as if
(1) an Early Termination Date had been designated in respect of a Transaction
having terms identical to the Transaction (except that, for purposes of this
calculation, the provisions opposite the caption “Applicable Limit” in Section 2
above shall be deemed to be deleted from this Confirmation) and a Number of
Options equal to the number of Make-Whole Conversion Options, (2) Counterparty
were the sole Affected Party with respect to such Additional Termination Event,
(3) the terminated portion of the Transaction were the sole Affected Transaction
and (4) consequences of the announcement and occurrence of the event giving rise
to the relevant “Make-Whole Fundamental Change” (as defined in the Indenture),
other than the change in price of the Shares, shall be ignored for the purposes
of this calculation (and, in determining the amount payable pursuant to
Section 6 of the Agreement, the Calculation Agent shall not take into account
any adjustments to the “Conversion Rate” (as defined in the Indenture) pursuant
to Section 14.03 of the Indenture); provided that the Conversion Unwind Payment
shall not be greater than the product of (x) the Applicable Percentage and
(y) the excess of (I) (1) the number of Make-Whole Conversion Options,
multiplied by (2) the “Conversion Rate” (as defined in the Indenture after
taking into account any adjustments thereto pursuant to Section 14.03 of the
Indenture), multiplied by (3) the Applicable Limit Price on the settlement date
for the cash and/or Shares to be delivered pursuant to Section 14.02 of the
Indenture in respect of the relevant Convertible Notes relating to such
Conversion Unwind Payment, over (II) the aggregate principal amount of such
Convertible Notes.

 

  (i) Amendments to Equity Definitions. Section 12.9(b)(i) of the Equity
Definitions is hereby amended by adding the language “, provided that
Counterparty (as such term is defined in the Confirmation) may not elect to
terminate the Transaction unless concurrently with electing to terminate the
Transaction, it represents and warrants to Dealer (as such term is defined in
the Confirmation) that it is not in possession of any material non-public
information with respect to Counterparty or the Shares” at the end of the final
sentence thereof.

 

  (j) No Setoff. Each party waives any and all rights it may have to set off
obligations arising under the Agreement and the Transaction against other
obligations between the parties, whether arising under any other agreement,
applicable law or otherwise.

 

  (k) Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If in respect of the Transaction, an amount is payable by
Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the
Equity Definitions or (ii) pursuant to Section 6(d)(ii) and Section 6(e) of the
Agreement (any such amount, a “Payment Obligation”), Dealer shall satisfy the
Payment Obligation by the Share Termination Alternative (as defined below),
unless (a) Counterparty gives irrevocable telephonic notice to Dealer, confirmed
in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York
City time) on the Merger Date, the Tender Offer Date, the Announcement Date (in
the case of Nationalization, Insolvency or Delisting), the Early Termination
Date or date of cancellation, as applicable, of its election that the Share
Termination Alternative shall not apply, (b) Counterparty remakes the
representation set forth in Section 8(f) as of the date of such election and
(c) Dealer agrees, in its sole discretion, to such election, in which case the
provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the
provisions of Section 6(d)(ii) and Section 6(e) of the Agreement, as the case
may be, shall apply.

 

Share Termination Alternative:    If applicable, Dealer shall deliver to
Counterparty the Share Termination Delivery Property on, or within a
commercially reasonable period of time after, the date when the relevant Payment
Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity
Definitions or Section 6(d)(ii) and Section

 

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   6(e) of the Agreement, as applicable (the “Share Termination Payment Date”),
in satisfaction of such Payment Obligation in the manner reasonably requested by
Counterparty free of payment. 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 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 to Dealer of property contained in one Share Termination Delivery Unit, 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. For the avoidance of doubt, the parties
agree that in determining the Share Termination Unit Price the Calculation Agent
may consider the purchase price paid in connection with the purchase of Share
Termination Delivery Property. Share Termination Delivery Unit:    One Share or,
if a Nationalization, Insolvency or Merger Event has occurred and a
corresponding adjustment to the Transaction has been made, a unit consisting of
the type and amount of such 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 Nationalization, Insolvency or
Merger Event, as determined by the Calculation Agent. If such Nationalization,
Insolvency or Merger Event involves a choice of property 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 and 9.11 (as modified above) of the Equity Definitions and the
provisions set forth opposite the caption “Representation and Agreement” in
Section 2 will be applicable, except that all references to “Physically-settled”
shall be read as references to “Share Termination Settled” and all references to
“Shares” shall be read as references to “Share Termination Delivery Units.”
“Share Termination Settled” in relation to the Transaction means that the Share
Termination Alternative is applicable to the Transaction.

 

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  (l) Waiver of Jury Trial. Each party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to the Transaction. Each party (i) certifies
that no representative, agent or attorney of either party has represented,
expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and
(ii) acknowledges that it and the other party have been induced to enter into
the Transaction, as applicable, by, among other things, the mutual waivers and
certifications provided herein.

 

  (m) Registration. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer based on the advice of counsel, any Shares (“Hedge
Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant
to the Transaction, other than any such Shares that were, at the time of
acquisition by Dealer, “restricted securities” (as defined in Rule 144(a)(3)
under the Securities Act), cannot be sold in the public market by Dealer without
registration under the Securities Act, Counterparty shall, at its election,
either (i) in order to allow Dealer to sell the Hedge Shares in a registered
offering, make available to Dealer an effective registration statement under the
Securities Act and enter into an agreement substantially similar to underwriting
agreements customary for registered secondary offerings of a substantially
similar size, in form and substance reasonably satisfactory to Dealer; provided,
however, that if Dealer, in its sole reasonable discretion, is not satisfied
with access to due diligence materials, the results of its due diligence
investigation, or the procedures and documentation for the registered offering
referred to above, then clause (ii) or clause (iii) of this paragraph shall
apply at the election of Counterparty, (ii) in order to allow 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 a substantially similar size, in form
and substance reasonably satisfactory 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
Relevant Price on such Exchange Business Days, and in the amounts, requested by
Dealer.

 

  (n) Tax 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.

 

  (o) Right to Extend. Dealer may postpone or add, in whole or in part, any
Valid Day or Valid Days during the Settlement Averaging Period or any other date
of valuation, payment or delivery by Dealer, with respect to some or all of the
Options hereunder, if Dealer reasonably determines, based on the advice of
counsel in the case of the immediately following clause (ii), that such action
is reasonably necessary or appropriate (i) to preserve Dealer’s hedging or hedge
unwind activity hereunder in light of existing liquidity conditions (but only in
the case of a material decrease in liquidity relative to Dealer’s expectations
as of the Trade Date) or (ii) to enable Dealer to effect transactions in Shares
in connection with its hedging, hedge unwind or settlement activity hereunder in
a manner that would, if Dealer were Counterparty or an affiliated purchaser of
Counterparty, be in compliance with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable
to Dealer.

 

  (p) Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this
Confirmation is not intended to convey to Dealer rights against Counterparty
with respect to the Transaction that are senior to the claims of common
stockholders of Counterparty in any United States bankruptcy proceedings of
Counterparty; provided that nothing herein shall limit or shall be deemed to
limit Dealer’s right to pursue remedies in the event of a breach by Counterparty
of its obligations and agreements with respect to the Transaction other than
during any such bankruptcy proceedings; provided further that nothing herein
shall limit or shall be deemed to limit Dealer’s rights in respect of any
transactions other than the Transaction.

 

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  (q) Securities Contract; Swap Agreement. The parties hereto intend for (i) the
Transaction to be a “securities contract” and a “swap agreement” as defined in
the Bankruptcy Code, and the parties hereto to be entitled to the protections
afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e),
546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s right to liquidate
the Transaction and to exercise any other remedies upon the occurrence of any
Event of Default under the Agreement with respect to the other party to
constitute a “contractual right” as described in the Bankruptcy Code, and
(iii) each payment and delivery of cash, securities or other property hereunder
to constitute a “margin payment” or “settlement payment” and a “transfer” as
defined in the Bankruptcy Code.

 

  (r) Notice of Certain Other Events. Counterparty covenants and agrees that:

 

  (i) promptly following the public announcement of the results of any election
by the holders of Shares with respect to the consideration due upon consummation
of any Merger Event, Counterparty shall give Dealer written notice of the types
and amounts of consideration that holders of Shares have elected to receive upon
consummation of such Merger Event (the date of such notification, the
“Consideration Notification Date”); provided that in no event shall the
Consideration Notification Date be later than the date on which such Merger
Event is consummated; and

 

  (ii) promptly following any adjustment to the Convertible Notes in connection
with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty
shall give Dealer written notice of the details of such adjustment.

 

  (s) Wall Street Transparency and Accountability Act. In connection with
Section 739 of the Wall Street Transparency and Accountability Act of 2010
(“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any
regulation under the WSTAA, nor any requirement under WSTAA or an amendment made
by WSTAA, shall limit or otherwise impair either party’s otherwise applicable
rights to terminate, renegotiate, modify, amend or supplement this Confirmation
or the Agreement, as applicable, arising from a termination event, force
majeure, illegality, increased costs, regulatory change or similar event under
this Confirmation, the Equity Definitions incorporated herein, or the Agreement
(including, but not limited to, rights arising from Change in Law, Hedging
Disruption, Increased Cost of Hedging, an Excess Ownership Position, or
Illegality (as defined in the Agreement)).

 

  (t) Agreements and Acknowledgements Regarding Hedging. Counterparty
understands, acknowledges and agrees that: (A) at any time on and prior to the
Expiration Date, Dealer and its affiliates may buy or sell Shares or other
securities or buy or sell options or futures contracts or enter into swaps or
other derivative securities in order to adjust its hedge position with respect
to the Transaction, (B) Dealer and its affiliates also may be active in the
market for Shares other than in connection with hedging activities in relation
to the Transaction, (C) Dealer shall make its own determination as to whether,
when or in what manner any hedging or market activities in securities of Issuer
shall be conducted and shall do so in a manner that it deems appropriate to
hedge its price and market risk with respect to the Relevant Prices, (D) any
market activities of Dealer and its affiliates with respect to Shares may affect
the market price and volatility of Shares, as well as the Relevant Prices, each
in a manner that may be adverse to Counterparty, (E) any transaction by Dealer
following Counterparty’s election of a Settlement Method and the settlement
method for any Convertible Note shall be made at Dealer’s sole discretion and
for Dealer’s own account and (F) Counterparty does not have, and shall not
attempt to exercise, any influence over how, when, whether or at what price to
effect such transactions, including, without limitation, the price paid or
received per Share pursuant to such transactions, or whether such transactions
are made on any securities exchange or privately.

 

  (u)

Early Unwind. In the event the sale of the [“Firm] [“Additional] Securities” (as
defined in the Purchase Agreement) is not consummated with the Initial
Purchasers for any reason, or Counterparty fails to deliver to Dealer opinions
of counsel as required pursuant to Section 9(a), in each case by 5:00 p.m. (New
York City time) on the Premium Payment Date, or such later date as

 

23

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  agreed upon by the parties (the Premium Payment Date or such later date, 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 under the
Transaction shall be cancelled and terminated and (ii) each party shall be
released and discharged by the other party from and agrees not to make any claim
against the other party with respect to any obligations or liabilities of the
other party arising out of and to be performed in connection with the
Transaction either prior to or after the Early Unwind Date. Each of Dealer and
Counterparty represents and acknowledges to the other that, upon an Early
Unwind, all obligations with respect to the Transaction shall be deemed fully
and finally discharged.

 

  (v) Payment by Counterparty. In the event that, following payment of the
Premium, (i) an Early Termination Date occurs or is designated with respect to
the Transaction as a result of a Termination Event or an Event of Default (other
than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the
Agreement) and, as a result, Counterparty owes to Dealer an amount calculated
under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer,
pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount
calculated under Section 12.8 of the Equity Definitions, such amount shall be
deemed to be zero.

 

  (w) Acknowledgements Regarding Accounting. Without limiting the generality of
Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither
Dealer nor any of its affiliates is making any representations or warranties or
taking any position or expressing any view with respect to the treatment of the
Transaction under any accounting standards including ASC Topic 260, Earnings Per
Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing
Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in
Entity’s Own Equity (or any successor issue statements).

 

  (x) Conduct Rules. Each party acknowledges and agrees to be bound by the
Conduct Rules of the Financial Industry Regulatory Authority, Inc. applicable to
transactions in options, and further agrees not to violate the position and
exercise limits set forth therein.

 

  (y) Private Placement Representations. 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 by virtue of Section 4(a)(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 and its
investments in and liabilities in respect of the Transaction, which it
understands are not readily marketable, are not disproportionate to its net
worth, and it is able to bear any loss in connection with the Transaction,
including the loss of its entire investment in the Transaction, (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, (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, and (v) its
financial condition is such that it has no need for liquidity with respect to
its investment in the Transaction and no need to dispose of any portion thereof
to satisfy any existing or contemplated undertaking or indebtedness and is
capable of assessing the merits of and understanding (on its own behalf or
through independent professional advice), and understands and accepts, the
terms, conditions and risks of the Transaction.

 

  (z) Exclusive Jurisdiction. The word “non-” in Section 13(b)(i)(2) of the
Agreement is hereby deleted.

 

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Please confirm that the foregoing 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 returning
an executed copy to us.

 

Yours faithfully, [            ] By:  

 

Name:   Title:  

[[            ]

as Agent

By:  

 

Name:   Title:                                         
                              ]

Accepted and confirmed

as of the Trade Date:

 

ELECTRONICS FOR IMAGING, INC. By:  

 

  Authorized Signatory   Name: