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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549
                                    FORM 10-K
(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

  For the fiscal year ended December 31, 1999 Commission File Number: 0-18805

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                          ELECTRONICS FOR IMAGING, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                                      94-3086355
       (State or other jurisdiction of                     (I.R.S. Employer
       incorporation or organization)                     Identification No.)

     303 Velocity Way, Foster City, CA                           94404
  (Address of principal executive offices)                    (Zip Code)

                                 (650) 357-3500
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
                                                                 None.

Securities registered pursuant to Section 12(g) of the Act:
                                                    Common Stock, $.01 Par Value
                                                           (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. Yes X     No
                     ---      ---
     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant as of March 11, 2000.

      Common Stock, $.01 par value:                      $1,370,167,760 **

     The number of shares  outstanding  of each of the  registrant's  classes of
common stock as of March 11, 2000.

      Common Stock, $.01 par value:                          53,696,238

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive  Proxy  Statement to be delivered to  stockholders in
connection  with the Annual Meeting of  Stockholders  to be held on May 11, 2000
are incorporated by reference into Part III hereof.

** Based upon the last trade  price of the Common  Stock  reported on the NASDAQ
National Market on March 11, 2000. Excludes  approximately  16,974,824 shares of
common  stock  held  by  Directors,  Officer  and  holders  of 5% or more of the
Registrant's  outstanding Common Stock on December 31, 1999. Exclusion of shares
held by any  person  should  not be  construed  to  indicate  that  such  person
possesses the power, direct or indirect, to direct or cause the direction of the
management or policies of the  Registrant,  or that such person is controlled by
or under common control with the Registrant.



<PAGE>



PART I

This Annual  Report on Form 10-K  includes  certain  registered  trademarks  and
trademarks of Electronics  for Imaging,  Inc. ("EFI or the Company") and others.
EFI, the EFI logo,  Fiery, the Fiery logo, Fiery Driven,  the Fiery Driven logo,
ColorWise,   RIP-While-Print,   PowerPage,   the  PowerPage   logo,   PowerBand,
PowerSmooth,  PSClone,  PSView, EDOX and Solitaire are registered  trademarks of
Electronics  for Imaging,  Inc. with the U.S. Patent and Trademark  Office,  and
certain other foreign jurisdictions. Fiery Prints, Fiery ZX, Fiery LX, Fiery SI,
Fiery XJ, Fiery XJe, Fiery XJ-W,  BookletMaker,  Fiery  Downloader,  Fiery Scan,
Fiery Spooler, Fiery FreeForm, Fiery Link, Fiery Driver, PowerWise Architecture,
RIPChips, WebTools,  WebSpooler,  WebInstaller,  WebStatus, Command Workstation,
Continuous  Print,  DocBuilder,   EFICOLOR,  EFICOLOR  Works,  FreeForm,  Memory
Multiplier, NetWise, STARR Compression, Mousitometer, Spot-One, Check Mate, EDOX
Profile Manager, RIP Ahead, Instant Reprint,  Document Recovery,  Sapphire, Opal
and eBeam are  trademarks of Electronics  for Imaging,  Inc. All other terms and
product  names may be registered  trademarks  or trademarks of their  respective
owners, and are hereby acknowledged.

Certain  of the  information  contained  in this  Annual  Report  on Form  10-K,
including  without  limitation,  statements  made  under  this  Part  I,  Item 1
"Business"  and  Part II,  Item 7,  "Management's  Discussion  and  Analysis  of
Financial  Condition and Results of Operations  and Item 7A,  "Quantitative  and
Qualitative  Disclosures  about Market Risk" which are not historical facts, may
include  "forward-looking  statements"  within the meaning of Section 21E of the
Securities  Exchange  Act of 1934,  as  amended.  When  used  herein,  the words
"anticipate,"  "believe,"  "estimate,"  "expect,"  "intend,"  "will" and similar
expressions,  as they relate to the Company or its  management,  are intended to
identify  such  statements  as  "forward-looking  statements."  Such  statements
reflect the current  views of the Company  and its  management  with  respect to
future events and are subject to certain risks,  uncertainties  and assumptions.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying   assumptions   prove   incorrect,   the  Company's  actual  results,
performance or achievements  could differ  materially from the results expressed
in, or implied by,  these  forward-looking  statements.  Important  factors that
could  cause the  Company's  actual  results  to differ  materially  from  those
included  in  the  forward-looking   statements  made  herein  include,  without
limitation,  those factors discussed in Item 1 "Business -Competition," in "Item
7  Management's  Discussion  and Analysis of Financial  Condition and Results of
Operations  -Factors That Could Adversely  Affect  Performance" and elsewhere in
this Annual  Report on Form 10-K and in the  Company's  other  filings  with the
Securities  and  Exchange  Commission,   including  the  Company's  most  recent
Quarterly Report on Form 10-Q. The Company assumes no obligation to update these
forward-looking  statements to reflect  actual  results or changes in factors or
assumptions affecting such forward-looking statements.


Item 1: Business.

General

Electronics for Imaging,  Inc., a Delaware  corporation (the "Company" or "EFI")
was founded in 1989 by Efraim  Arazi.  EFI designs  and  markets  products  that
support color and  black-and-white  printing on a variety of peripheral devices.
Its  Fiery(R)  products  incorporate  hardware and  software  technologies  that
transform  digital  copiers and printers from many leading copier  manufacturers
into fast, high-quality networked printers. The Company's Fiery products include
stand-alone servers, which are connected to digital copiers and other peripheral
devices,  and Fiery  controllers,  which are  embedded  in digital  copiers  and
desktop  color laser  printers.  The Company  sells its  products  primarily  to
original equipment manufacturers in North America, Europe and Japan.

The Company was founded to develop innovative  solutions to enable color desktop
publishing.  In pursuit of this goal,  the Company first  developed the Fiery(R)
line  of  color   servers   ("Fiery   Color   Servers")   to  enable   in-house,
short-production  run color  printing,  together  with  application  and  system
software to facilitate  color  correction and  device-independent  color.  Fiery
Color  Servers are  sophisticated,  stand-alone  computers  that enable  digital
copier  machines to accept,  process,  and print  digital  images from  personal
computers and computer networks. Historically, the Company primarily focused its
efforts on its stand-alone  Fiery Color Servers that support printing on digital
color copiers and, until 1998,  substantially  all of its revenue  resulted from
the development and sale of these stand-alone products. During 1998, the Company
expanded its focus to include several additional embedded solutions that support
printing  on a  broader  range of  devices,  including  digital  black-and-white
copiers and desktop color laser and inkjet printers  ("Fiery  Controllers"  and,
together with Fiery Color Servers, "Fiery Products").  In 1998, the Company also
developed  stand-alone Fiery Color Servers for wide-format color inkjet printers
and restructured its sales model by entering into direct  relationships with the
manufacturers  of  such  wide-format  printers  rather  than  selling  to  sales
distributors.

In 1999,  the Company  continued  to develop  Fiery  Products  and new  software
applications  for  existing  and new  generations  of a  variety  of  peripheral
devices.  In 1999,  the Company also  expanded its line of digital color servers
through its  acquisition of Management  Graphics,  Inc.  ("MGI") and its EDOX(R)
line of digital color servers ("EDOX Color Servers"). In an effort to expand its
product  lines and markets,  the Company  recently  announced  EFI  Professional
Services  in an effort to provide  technical  support,  training  and  strategic
consulting  to end users.  See "-Growth and  Expansion  Strategies - Develop and
Expand Professional Services." Additionally, in 1999, the Company introduced its
first Internet appliance product, eBeamTM. See "-Growth and Expansion Strategies
- Proliferate and Expand Product Lines."

                                                                               2

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The Electronics for Imaging Solution

The Company develops products with a wide range of price and performance  levels
designed to make high-quality color printing in short-run productions easier and
more  accessible to the broader  market.  The Company  believes  that  consumers
generally  prefer  color as evidenced by the  migration of  photographs,  motion
pictures and television from  black-and-white to color. In the personal computer
field,  EFI believes  this  preference  is shown by the almost  exclusive use of
color  monitors  with color  oriented  graphical  user  interfaces,  application
software  and  Internet  content.  In each of these  cases,  once  the  enabling
technology developed sufficiently,  consumer adoption of color quickly followed.
The Company  believes that consumers  prefer color in documents  created through
desktop publishing. Until recently, however, the technology was not available to
do this in a high quality, quick and cost-effective manner due to the complexity
of  accurate  color  reproduction.  EFI's Fiery Color  Servers  permit  users of
digital color copiers to transmit and convert  digital data from a computer to a
color copier so that the color copier can print color documents easily,  quickly
and  cost-effectively.  As a result, Fiery Color Servers transform digital color
copiers into fast, high-quality networked color printers.

The Company also  believes that the  black-and-white  copier market is migrating
toward the  development  and use of digital  black-and-white  copiers.  Thus, in
addition  to Fiery  Color  Servers  and EDOX Color  Servers  for  digital  color
copiers,  the Company has  leveraged its  technology to develop and  manufacture
other  products  that support  both color and  black-and-white  printing.  These
products include: (i) Fiery servers for digital  black-and-white  copiers;  (ii)
Fiery Color Servers for wide-format  inkjet  printers;  and (iii) embedded Fiery
Controllers  for  digital   black-and-white  copiers  and  desktop  color  laser
printers. See "-Products and Technology."

Growth and Expansion Strategies

The  Company's  overall  objective is to continue its pattern of growth in sales
and profitability by introducing new generations of Fiery Products, new software
applications, and other new product lines. With respect to its current products,
the  Company's  primary  goal is to provide a range of  processing  and printing
solutions  that  address  broad  sections  of the color  printing  market and to
continue to leverage its technology to enable digital  black-and-white  printing
on additional peripheral devices including digital  black-and-white  copiers and
multi-function  devices.  The  Company's  strategy  to  accomplish  these  goals
consists of five key elements.

Proliferate and Expand Product Lines

The Company  intends to continue to develop new Fiery Products that are scalable
and  offer a broad  range of  features  and  performance  when  connected  to or
integrated with digital color and  black-and-white  copiers,  as well as desktop
color laser  printers.  Historically,  the Company sold products that  supported
digital color copiers. In 1996 the Company expanded its line of color servers to
drive a wide range of output devices  including desktop color laser printers and
wide-format color inkjet printers with poster-size  output. In 1997, the Company
further  expanded the use of its  technology,  shipping its first  products that
support  black-and-white  printing  systems and  copiers.  In 1998,  the Company
introduced  its next  generation of products based upon EFI's Fiery ZX and Fiery
X2 platforms.  In 1999,  the Company  again  introduced  its next  generation of
products  based  upon  EFI's  new  Fiery Z4 and  Fiery X4  platforms.  These new
platforms   include  more   advanced   hardware  and  EFI's  latest   technology
innovations,  including  ColorWise(R)  2.0,  NetWiseTM  2.0,  DocBuilderPro  and
PowerWise   Architecture  which  provide  for  advances  in  color  performance,
networking  capabilities and workflow productivity.  By utilizing the advantages
of these new  platforms,  the  Company  intends to continue to develop new Fiery
Products.  The  Company  also  intends  to  continue  to  develop  new  software
applications that advance the performance and usability of its Fiery servers and
embedded controllers. The Company is currently developing a new line of software
designed to maximize  workflow  efficiencies  which includes  VelocityBalanceTM,
VelocitySplitTM and  VelocityDesignTM.  These new software  applications are the
first of many Velocity software offerings from the Company.

On August 31, 1999, the Company acquired MGI in a stock-for-stock merger, valued
at  approximately  $30.1  million.   MGI  was  a  Minneapolis,   Minnesota-based
corporation that developed and manufactured digital print on demand products and
other  digital  imaging   products,   including  EDOX(R)  Document  Servers  and
Solitaire(R),  SapphireTM and OpalTM film recorders. The acquisition of MGI adds
to EFI's  engineering  talent and complements the Company's  product strategy of
bringing high-performance,  cost-effective digital printing technology to a wide
range of markets.  EFI's Minnesota office will retain  responsibility  for MGI's
current product lines.

The Company also plans to expand its product line to include Internet  appliance
products. In November, 1999, the Company introduced the first in a new family of
Internet  appliance  products,  eBeamTM.  eBeamTM converts any whiteboard into a
digital workspace,  allowing users to capture meeting-notes and diagrams in real
time on their  personal  computers.  Words and images can be viewed,  edited and
shared across the world using a web browser.  eBeamTM will be competing in a new
market for EFI:  the market for office  supplies and  meeting-related  services.
Currently, eBeamTM is being sold through resellers and distributers,  as well as
directly to consumers via the Web and a toll-free number.

                                                                               3

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Develop and Expand Professional Services

The Company recently announced EFI Professional  Services.  While contract-based
technical  support has been available from EFI, an  expanded-services  group has
been formed and is offering end users  greater  options for  technical  support,
training  with both  standardized  and  customized  curriculums,  and  strategic
consulting. EFI strategic consultants are offering large organizations expertise
in  network  print   architecture   and  support,   printer   management,   data
visualization,  and document management. EFI believes that offering professional
services will help to lower the total cost of networked corporate printing, lead
to greater  productivity,  and improve the overall  quality and visual appeal of
documents.  EFI believes  that  offering  professional  services  will also help
accelerate the migration of color printing in the corporate marketplace.


Develop and Expand Relationships with Key Industry Participants

The Company has established  relationships  with such companies as Canon,  Danka
Business Systems,  ENCAD,  Epson,  Fuji-Xerox,  Hewlett-Packard,  Hitachi,  Ikon
Office  Solutions,  Konica,  Minolta,  Oce,  Ricoh,  Sharp,  Toshiba,  and Xerox
(collectively,  the "Strategic Partners"). EFI seeks to expand its relationships
with its  Strategic  Partners in pursuit of the goal of offering  Fiery and EDOX
products for additional  digital color and  black-and-white  devices produced by
its Strategic Partners.  The Company is also seeking to establish  relationships
with other digital copier and printer  companies for the  distribution  of Fiery
and EDOX products with their copiers and printers.


Establish Enterprise Coherence

In its  development  of new  products  and  platforms,  EFI  seeks to  establish
coherence  across its entire  product line by designing  products that provide a
consistent "look and feel" to the end-user.  EFI believes  enterprise  coherence
should  create  higher  productivity  levels as a result of  shortened  learning
curves.  Additionally,  enterprise  coherence  should  lower the  total  cost of
ownership by providing one source for sales,  support and training.  The Company
believes  that this  effort to achieve  enterprise  coherence  will  continue to
engender goodwill among its Strategic Partners and the end-users of its products
and assist in the development of new strategic relationships and markets for the
Company.


Leverage Color Expertise to Expand the Scope of Products and Markets

The Company has  assembled  an  experienced  team of  technical  personnel  with
backgrounds in color reproduction,  electronic  pre-press,  image processing and
software and hardware  engineering.  By applying its expertise in color imaging,
the Company  expects to continue to expand the scope and  sophistication  of its
products and gain access to new markets.


Products and Technology

The Company is a leader in enabling networked printing solutions. EFI technology
allows  copiers,  printers and digital  presses to be shared across work groups,
the enterprise and the Internet. The Company develops products with a wide range
of price and performance levels designed to make  high-quality,  short-run color
and black and white digital  printing  easier and more accessible to the broader
market.  The  Company  has a model  for  almost  every  major  digital  printing
technology today, including:

|X|      desktop color laser printers,
|X|      high-end desktop ink jet printers,
|X|      wide-format printers,
|X|      mid-range color copiers,
|X|      mid-range digital black and white copiers,
|X|      production color copiers and
|X|      high-speed digital presses.

Thus, the Company's products are attractive to a variety of end users including,
a  multimedia  author,  advertising  agency,   print-for-pay  business,  graphic
designer,  pre-press provider or small to large business.  The Company currently
has two main product lines that support color and black-and-white  printing: (i)
stand-alone  servers which are connected to digital copiers and other peripheral
devices and (ii)  controllers  which are embedded in digital copiers and desktop
laser printers. All of EFI's products incorporate EFI's proprietary software and
hardware features.

                                                                               4

<PAGE>


EFI Technology

From its inception,  EFI has invested heavily in research and  development.  EFI
has focused on developing technologies that could be implemented in a variety of
products.  Examples  of such  technologies  include  Fiery  DocBuilderTM,  which
enables electronic collation,  reverse order printing,  job merging and editing,
and Fiery WebToolsTM which enables print job management from different  computer
platforms  via a  JavaTM-enabled  Web Browser.  Fiery  WebToolsTM  also provides
remote access to the print queue so an administrator  can obtain instant updates
on job status and error  messages,  allowing for a timely  response to problems,
and provides job accounting and job security capabilities which are essential in
network  printing  environments.  Other  examples of EFI  technologies  include,
RIP-While-Print(R)  which allows one page to be printed while  subsequent  pages
are  simultaneously  processed,  and Continuous  PrintTM which allows  processed
pages to be stored  in  memory  before  printing,  eliminating  the need for the
copier or  printer to cycle down  between  unique  pages.  In  addition  to such
software innovations,  EFI custom designs its hardware to increase productivity.
For example,  EFI's custom designed RipChipsTM,  application specific integrated
circuit  ("ASIC")  chips,  decrease  overall  print  times by  off-loading  data
movement from the microprocessor. The Company continues to refine these printing
technologies.

In 1999, the Company continued its efforts to improve its products' performance,
features  and  ease  of  use.  The  Company  developed  and  announced  the  new
PowerWiseTM  architecture  which  combines  the benefits of Fiery  hardware,  an
advanced  Intel  processor  and a high-speed  PCI bus to provide the  throughput
required for maximum printing  productivity.  Software features developed by the
Company during 1999 include: (i) ColorWise(R)2.0,  EFI's  next-generation  color
management system which simplifies color printing for beginners through features
like automatic Pantone-matching and the ability to process multiple files on the
same page while  providing  expert  users with even  greater  color  control and
accuracy;  (ii) NetWiseTM 2.0, EFI's second generation  networking  architecture
which simplifies network installation,  configuration and maintenance; (iii) the
next  generation  DocBuilder  ProTM which provides users with all of the classic
DocBuilder ProTM  capabilities but now at the pre-RIP stage; (iv) Fiery DriverTM
which is a unified printing interface that simplifies the printing process;  (v)
Fiery  LinkTM  which  provides  users with  information  on print job status and
connected  Fierys  allowing  users to monitor  the status of any print job,  its
position in the queue, as well as general information on the Fiery and paper and
toner levels from any  workstation;  and (vi) ECT  compression,  an improved and
more  advanced  compression  scheme  than  EFI's  previous  STARRTM  compression
technologies,  which offers definite  compression  ratios and virtually lossless
image quality.  Compression software decreases the amount of memory necessary to
store documents during processing and enables faster printing of documents.


Stand-Alone Servers

Fiery Color Servers and EDOX Color Servers permit users of digital color copiers
to transmit  and convert  digital data from a computer to a color copier so that
the color copier can print color documents easily, quickly and cost-effectively.
As a result,  Fiery Color Servers and EDOX Color Servers transform digital color
copiers into fast,  high-quality  networked color printers. In addition to Fiery
Color Servers and EDOX Color Servers for digital color copiers,  the Company has
leveraged its technology to develop and manufacture  other products that support
both color and  black-and-white  printing.  These products include Fiery servers
for digital  black-and-white  copiers and Fiery  Color  Servers for  wide-format
inkjet printers. EDOX Color Servers also support wide-format inkjet printers.

Since the  introduction of the first Fiery Color Server in 1991, the Company has
expanded its product line. In 1995, the Company introduced its  third-generation
platform,  the Fiery XJ.  During 1996,  the Company  shifted the majority of its
product  line  to  the  XJ  platform  and  later  refined   these   products  by
transitioning  to a variation of the XJ platform known as the Fiery XJ+.  During
1998, the Company  introduced two new platforms,  the Fiery ZX and the Fiery X2,
which included  software  features  developed or further  refined by the Company
during 1998, and began migrating its product line to these  platforms.  In 1999,
the  Company  again  focused  its  development  efforts on  improvements  to its
products'  performance,  features and ease of use and again  introduced  two new
server  platforms,  the Fiery Z4 and the Fiery X4.  The Fiery Z4 and X4  product
lines  incorporate  several new technologies or enhancements from EFI including,
ColorWise(R)2.0,  NetWiseTM  2.0,  the  PowerWiseTM  architecture  and the  next
generation  DocBuilder ProTM. The Fiery Z4 is approximately twice as fast as its
predecessor   the  Fiery  ZX,  is  optimized  for   high-speed   processing  and
photographic-quality   color  and  is  designed  for  demanding   graphic  arts,
print-for-pay and advertising agency environments. The Fiery X4 is approximately
three times as fast as its predecessor the Fiery X2 and is designed for users in
a corporate  environment.  In 1999, the Company shipped  stand-alone Fiery Color
Servers and EDOX Color Servers for use with color copiers, color inkjet printers
and  wide-format  color  printers to be  distributed by companies such as Canon,
Epson,  Fuji-Xerox,  Ikon Office  Solutions,  Minolta,  Oce, Ricoh,  Toshiba and
Xerox.  In 1999,  the Company  also shipped  Fiery  servers for use with digital
black-and-white  copiers to be distributed by Canon, ENCAD, Konica, Minolta, Oce
and Sharp.


Controllers

                                                                               5

<PAGE>

Unlike  Fiery and EDOX  servers  which are sold as  stand-alone  products  to be
connected to copiers,  Fiery Controllers are embedded inside copiers and desktop
printers.  Fiery Controllers allow users to print documents  directly from their
computers to the digital copier.  Embedded Fiery Controllers  support both color
and  black-and-white  printing for digital  black-and-white  copiers and desktop
color laser printers.  The Company seeks to have printing solutions that include
an embedded  Fiery  Controller  marketed with the "Fiery  Driven(R)"  logo.  The
Company  believes  that the Fiery name and  trademark,  including  the trademark
"Fiery  Driven(R)," are associated with substantial  goodwill and recognition in
the  marketplace.  In 1999, the Company  shipped Fiery  Controllers  embedded in
color and  digital  black-and-white  copiers and  desktop  color  printers to be
distributed by companies such as Canon,  Fuji-Xerox,  Hewlett  Packard,  Konica,
Minolta, Ricoh and Xerox.

Significant Relationships

The  Company  has  established,  and  continues  to  try  to  build  and  expand
relationships  with its Strategic  Partners and other leading copier and printer
companies  (collectively,  the  "OEMs"),  in order  to  benefit  from the  OEMs'
products,  distribution  channels and  marketing  resources.  These OEMs include
domestic and  international  manufacturers,  distributors and sellers of digital
copiers (both black-and-white and color), wide-format printers and desktop color
printers.  The Company  works  closely with the OEMs with the aim of  developing
solutions that incorporate  leading technology and which are optimally suited to
work in conjunction  with such companies'  products.  OEMs that the Company sold
products to in 1999 include,  among others,  Canon,  ENCAD,  Epson,  Fuji-Xerox,
Hewlett-Packard,  Ikon Office Solutions,  Konica,  Minolta,  Oce, Ricoh,  Sharp,
Toshiba  and Xerox.  Together,  sales to Canon,  Ricoh and Xerox  accounted  for
approximately  68% of the Company's  1999  revenue,  with sales to each of these
customers accounting for more than 10% of the Company's revenue.

In 1999, the Company  announced a strategic  relationship  with  Hewlett-Packard
pursuant to which the  Company  developed  the new Fiery X2-CP color  server for
Hewlett Packard's newest graphics  large-format  printers.  Hewlett-Packard also
distributes  Fiery  Controllers  designed for use with their  wide-format  color
inkjet.  Also in 1999,  the  Company  announced a  strategic  relationship  with
Toshiba,  pursuant to which Toshiba has the right to sell the Company's Fiery Z4
server  and  Fiery  Controller  in  support  of  Toshiba's   full-color  digital
copier/printer.

The Company customarily enters into development and distribution agreements with
its  OEM  customers.  These  agreements  can be  terminated  under  a  range  of
circumstances,  and often upon relatively short notice. The circumstances  under
which an agreement can be terminated  vary from agreement to agreement and there
can be no assurance  that the Company's OEM customers  will continue to purchase
products from the Company in the future,  despite such  agreements.  The Company
recognizes the importance of, and works hard to maintain, its good relationships
with its customers.  However, the Company's relationships with its customers can
be affected by a number of factors  including,  among others:  competition  from
other suppliers,  competition from internal development efforts by the customers
themselves (including the OEMs), and changes in general economic, competitive or
market  conditions  (such as changes in demand  for the  Company's  or the OEM's
products, or fluctuations in currency exchange rates). There can be no assurance
that the Company  will  continue to maintain or build the  relationships  it has
developed to date.

In  addition  to its  development  and sales  relationships  with the  OEMs,  to
increase the distribution and presence of Fiery Color Servers  connected to both
color and black-and-white  copiers and wide-format printing devices, the Company
has developed strategic relationships with well-known  print-for-pay  companies,
including  Kinko's,  AlphaGraphics,  the CopyMax  operations of office  products
superstore  OfficeMax,  the American Speedy group of franchised printing centers
(including  Allegra Print and Imaging,  American Speedy,  Speedy Printer,  Zippy
Print and Quik Print) and the SAMPA  Corporation,  franchiser of Signal Graphics
Printing Centers. In 1999, several of these print-for-pay companies,  including,
American  Speedy,  OfficeMax  and  SAMPA  Corporation,  entered  into  worldwide
strategic   alliances   with  the  Company   whereby  they  agreed  to  continue
standardization  efforts on EFI's  Fiery(R)  Color Servers with respect to their
printing services.

The Company also has a continuing  relationship  pursuant to a license agreement
with Adobe and licenses  PostScript(R) software from Adobe for use in many Fiery
Products.  This  relationship is important  because each Fiery Product  requires
page description  language software in order to operate.  Adobe's  PostScript(R)
software is widely used to manage the  geometry,  shape and  typography  of hard
copy documents and Adobe is a recognized  leader in providing  page  description
software.  Pursuant  to its  October  1997  acquisition  of the former  Pipeline
Associates, Inc. and Pipeline Asia, Inc. (collectively, "Pipeline"), the Company
acquired  software  development  expertise  and  certain  intellectual  property
associated  with  Pipeline's  specialization  in  PostScript(R),  HTML  and  PCL
interpreter technologies.

Distribution and Marketing

The Company's primary distribution method for its Fiery servers has been to sell
the Fiery servers to its OEMs. The Company's

                                                                               6

<PAGE>

OEMs in turn sell these products to distributors  and end-users for use with the
OEMs' copiers or printers as part of an integrated  printing  system.  For Fiery
Controllers,  the  Company's  primary  distribution  method has been to sell the
products to the OEMs that embed the products  into their  copiers and  printers.
The Company's primary  distribution method for its EDOX servers has been to sell
the EDOX servers  directly to its  distributors.  There can be no assurance that
the risks of  distributing  the  Company's  products  primarily  through its OEM
customers   will  not  negatively   impact  the  Company  in  the  future.   See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Factors That Could Adversely  Affect  Performance - Reliance on OEM
Resellers; Risks Associated With Significant OEM Group Concentration".

The Company promotes all of its products through public relations,  direct mail,
advertising,   promotional   material,   trade   shows  and   ongoing   customer
communication programs.


Research and Development

Research and  development  costs for 1999,  1998,  and 1997 were $75.0  million,
$60.2 million, and $42.9 million,  respectively. As of December 31, 1999, 386 of
the Company's 758 full-time employees were involved in research and development.
The Company  believes  that  development  of new  products  and  enhancement  of
existing products are essential to its continued success, and management intends
to  continue  to  devote  substantial  resources  to  research  and new  product
development. The Company expects to make significant expenditures to support its
research and development programs for the foreseeable future.

The   Company  is   developing   products  to  support   additional   color  and
black-and-white  printing devices  including  desktop  printers,  high-end color
copiers,  digital  black-and-white  copiers  and  multi-function  devices.  This
ongoing  development  work includes a  multiprocessor  architecture for high-end
systems and lower-cost designs for desktop color laser printers.  The Company is
also  developing  new  software   applications  designed  to  maximize  workflow
efficiencies.    This   includes    VelocityBalanceTM,    VelocitySplitTM    and
VelocityDesignTM.

The Company is also developing  Internet  appliance  products.  See "-Growth and
Expansion  Strategies  -  Proliferate  and Expand  Product  Lines".  Substantial
additional  work will be required to complete the development of these projects.
See "Management's  Discussion and Analysis of Financial Condition and Results of
Operations  -  Factors  That  Could  Adversely  Affect   Performance  -  Product
Transitions".


Manufacturing

The  Company  utilizes   subcontractors  to  manufacture  its  products.   These
subcontractors  work  closely  with the  Company  to  ensure  low costs and high
quality in the manufacture of the Company's  products.  Subcontractors  purchase
components needed for the Company's products from third parties.  The Company is
totally reliant on the ability of its subcontractors to produce products sold by
the Company,  and although the Company supervises its subcontractors,  there can
be no  assurance  that such  subcontractors  will  continue  to perform  for the
Company as well as they have in the past.  There can also be no  assurance  that
difficulties  experienced by the Company's subcontractors (such as interruptions
in a subcontractor's  ability to make or ship the Company's  products or quality
assurance problems) would not adversely affect the Company's operations.

Certain  components  necessary for the  manufacture  of the  Company's  products
including ASICs and certain other semiconductor components,  are obtained from a
sole supplier or a limited group of suppliers.  The purchase of certain of these
key components may involve significant lead times. Accordingly,  in the event of
interruptions in the supply of these key components or  unanticipated  increases
in demand for the Company's products, the Company could be unable to manufacture
certain of its products in a quantity sufficient to meet customer demand.  There
can be no  assurance  that  such  supply  or  manufacturing  problems  would not
adversely affect the Company's results of operations or financial condition.


Human Resources

As of December 31, 1999, the Company  employed 758  employees.  Of the 758 total
employees,  approximately 213 were in sales and marketing, 91 were in management
and  administration,  68 were in  manufacturing,  and 386 were in  research  and
development. Of the total number of employees, the Company had approximately 662
employees  located in Canadian and U.S.  offices,  and 96  employees  located in
international  offices  including  employees  based in The United  Kingdom,  The
Netherlands,   Germany,   Japan,  France,  Italy,  Finland,   Spain,  Australia,
Singapore,  Brazil,  Sweden  and Hong  Kong.  The  Company's  employees  are not
represented by any collective bargaining  organization and the Company has never
experienced a work stoppage.

                                                                               7

<PAGE>


Competition

Competition in the Company's  markets is intense and involves  rapidly  changing
technologies and frequent new product introductions. To maintain and improve its
competitive position,  the Company must continue to develop and introduce,  on a
timely and  cost-effective  basis, new products and features that keep pace with
the evolving needs of its customers. The principal competitive factors affecting
the markets for the  Company's  Fiery and EDOX products  include,  among others,
customer service and support, product reputation,  quality,  performance,  price
and product features such as  functionality,  scalability,  ability to interface
with OEM  products  and  ease of use.  The  Company  believes  it has  generally
competed effectively in the past against product offerings of its competitors on
the basis of such factors.  However,  there can be no assurance that the Company
will continue to be able to compete  effectively in the future based on these or
any other competitive factors.

The Company  competes  directly with other  independent  manufacturers  of color
servers,  independent manufacturers of embedded solutions, copier manufacturers,
printer  manufacturers  and others.  The  Company  also faces  competition  from
wide-format  printer  manufacturers that develop their own controllers and other
companies that develop  controllers for wide-format  printers.  The Company also
faces  competition from copier and printer  manufacturers  that offer internally
developed  server products or that  incorporate  internally  developed  embedded
solutions  or  server   features  into  their  copiers  and  printers,   thereby
eliminating   the  need  for  the   Company's   products  and  limiting   future
opportunities for the Company.  In addition,  the Company faces competition from
manufacturers  of desktop color laser printers which do not utilize a controller
(relying  instead on host based  processing of data) and which offer  increasing
speed and color  capability.  The Company believes that it competes  effectively
due to, among other things,  its efforts to continually  advance its technology,
name  recognition,  sizable  installed  base,  number of products  supported and
price. The Company expects that competition in its markets will increase due to,
among other  factors,  market  demand for higher  performance  products at lower
prices,  rapidly changing  technology and product offerings from competitors and
customers.  There can be no assurance  that the Company will be able to continue
to compete  effectively  against other  companies'  product  offerings,  and any
failure  to do so would  have a  material  adverse  effect  upon  the  Company's
business, operating results and financial condition.


Intellectual Property Rights

The Company  relies on a combination of patent,  copyright,  trademark and trade
secret laws,  non-disclosure  agreements  and other  contractual  provisions  to
establish,  maintain and protect its intellectual  property rights, all of which
afford only limited  protection.  As of December  31,  1999,  the Company had 39
issued U.S.  patents,  60 pending U.S. patent  applications  and various foreign
counterparts.  There can be no  assurance  that  patents  will  issue from these
pending  applications or from any future  applications  or that, if issued,  any
claims allowed will be sufficiently  broad to protect the Company's  technology.
The Company's  issued  patents  expire between May 4, 2002 and January 19, 2019.
Failure of any patents to protect the  Company's  technology  may make it easier
for the Company's  competitors to offer  equivalent or superior  technology.  In
addition,  third parties may independently  develop similar  technology  without
breach of the Company's trade secrets or other proprietary  rights.  Any failure
by the Company to take all necessary steps to protect its trade secrets or other
intellectual property rights may have a material adverse effect on the Company's
ability to compete in its markets.

The  Company  has  registered  certain  trademarks,  which  include  its EFI(R),
Fiery(R),  Fiery and  Design(R),  Fiery  Driven(R),  Fiery Driven and Design(R),
ColorWise(R) and RIP-While-Print(R) trademarks, and has applied for registration
of certain  additional  trademarks.  The Company  will  continue to evaluate the
registration of additional trademarks as appropriate. Any failure by the Company
to  properly  register or  maintain  its  trademarks  or to  otherwise  take all
necessary steps to protect its trademarks may diminish the value associated with
the Company's trademarks.  The Company's products include software sold pursuant
to "shrink wrap"  licenses  that are not signed by the end user and,  therefore,
may be unenforceable under the laws of certain  jurisdictions.  In addition, the
laws of some foreign countries,  including several in which the Company operates
or sells its products,  do not protect  proprietary rights to as great an extent
as do the laws of the United States.

From time to time,  litigation  may be  necessary  to  defend  and  enforce  the
Company's  proprietary  rights.  Such  litigation,   whether  or  not  concluded
successfully  for  the  Company,  could  involve  significant  expense  and  the
diversion of management's attention and other Company resources.

Risk Factors

In addition to the above information, a discussion of factors that may adversely
affect the Company's  future  performance and financial  results can be found in

I
tem 7: Management's  Discussion and Analysis of Financial Condition and Results
of Operation.


Financial Information About Foreign and Domestic Operations and Export Sales

                                       8

<PAGE>


See Note 10 of the Company's Notes to  Consolidated  Financial  Statements.  See
also Item 7  "Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations  -Factors That Could Adversely Affect Performance -We face
risks from our international operations and from currency fluctuations."


I
tem 2: Properties

The Company's  principal  offices are located at 303 Velocity Way,  Foster City,
California.  These offices are situated on  approximately 35 acres of land which
the Company owns. In 1997, the Company  entered into an agreement for a building
to be constructed on the Foster City property. Construction of this facility was
completed and an operating lease commenced in July,  1999. This facility,  which
includes  approximately  295,000  square  feet of space,  is used as a corporate
headquarters  for the  Company.  The  Company  subleases  its former  facilities
located in San Mateo and Foster City,  California.  In 1999, the Company entered
into an agreement to lease additional facilities,  for up to 543,000 square feet
of space,  to be constructed  on the Foster City  property.  Two parcels of land
remain  undeveloped  for  future  use on the  Foster  City  property.  Employees
formerly with Pipeline  Associates,  Inc.,  acquired by the Company in 1997, are
based in an office in Parsippany,  New Jersey.  Employees  formerly with MGI are
based in an office in Minneapolis,  Minnesota.  The Company also leases a number
of domestic and international sales offices.

The Company  believes  that its  facilities,  in general,  are  adequate for its
present and currently foreseeable future needs.



Item 3: Legal Proceedings.

On December 15, 1997, a shareholder  class action lawsuit,  entitled Steele,  et
al. v. Electronics for Imaging,  Inc., et al., No. CV 403099,  was filed against
the Company and certain of its officers and directors in the California Superior
Court,  San Mateo  County  (the "San  Mateo  Superior  Court").  Five  virtually
identical  class  action  complaints  were  subsequently  filed in the San Mateo
Superior  Court.  On December  31,  1997,  a putative  shareholder  class action
entitled Smith v. Electronics for Imaging,  Inc., et al., No. C97-4739 was filed
against  the Company and certain of its  officers  and  directors  in the United
States District Court for the Northern  District of California.  The state court
class  actions  allege that the  Company  made false and  misleading  statements
concerning its business during a putative class period of April 10, 1997 through
December 11, 1997 and allege violations of California Corporations Code Sections
25400 and 25500 and Civil Code Sections  1709 and 1710.  The federal court class
action complaint makes the same factual  allegations,  but alleges violations of
certain United States federal securities laws. The complaints do not specify the
damages sought.  The Company  believes that these lawsuits are without merit and
intends  to  contest  them  vigorously,  but there can be no  assurance  that if
damages are ultimately  awarded  against the Company,  the  litigation  will not
adversely affect the Company's results of operations.

In addition, the Company is involved from time to time in litigation relating to
claims arising in the normal course of its business.  The Company  believes that
the ultimate  resolution of such claims will not materially affect the Company's
business  or  financial  condition.  See "Item 7.  Management's  Discussion  and
Analysis of Financial  Condition  and Results of Operations - Factors That Could
Adversely Affect Performance - Infringement and Potential Litigation."



Item 4: Submission of Matters to a Vote of Security Holders.

No matters were  submitted to the Company's  stockholders  for a vote during the
fourth quarter of 1999.



<PAGE>



PART  II



Item 5: Market for Registrant's Common Equity and Related Stockholder Matters.


<TABLE>
The Company's  common stock was first traded on the Nasdaq National Market under
the  symbol  EFII on October 2,  1992.  The table  below  lists the high and low
closing sales price during each quarter the stock was traded in 1999 and 1998.

<CAPTION>
                                      1998                                                         1999
                    Q1            Q2           Q3          Q4                     Q1          Q2           Q3          Q4
-------------------------------------------------------------------------------------------------------------------------
<S>              <C>           <C>         <C>          <C>                    <C>         <C>          <C>
High             $28.00        $25.19      $22.38       $40.00                 $41.56      $54.75       $62.69     $58.88
Low               15.66         18.69       13.75        15.63                  32.75       41.13        51.41      36.19
-------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                               9

<PAGE>

As of February 28, 2000,  there were  approximately  348 stockholders of record.
The Company has never paid cash  dividends  on its  capital  stock.  The Company
currently anticipates that it will retain all available funds for business,  and
does not anticipate paying any cash dividends in the foreseeable future.


                                                                              10


<PAGE>



Item 6: Selected Financial Data.

<TABLE>
The following tables summarize selected  consolidated  financial data as of, and
for the five years ended December 31, 1999. This  information  should be read in
conjunction with the audited consolidated financial statements and related notes
thereto.  All periods  presented  have been  restated  to include the  financial
results of the company  formerly  known as Management  Graphics Inc. that merged
with Electronics for Imaging,  Inc. on August 31, 1999 in a pooling of interests
transaction,  as if  the  acquired  entity  was  a  wholly-owned  subsidiary  of
Electronics for Imaging, Inc. since inception.

<CAPTION>
                                                                     As of and for the years ended December 31,

(In thousands, except per share amounts)                  1999            1998            1997           1996            1995
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>             <C>             <C>            <C>             <C>
      Operations
Revenue                                               $570,752        $446,999        $373,404       $316,458        $208,934
Cost of revenue                                        290,636         249,179         171,138        155,171         105,415
-----------------------------------------------------------------------------------------------------------------------------

Gross profit                                           280,116         197,820         202,266        161,287         103,519

-----------------------------------------------------------------------------------------------------------------------------
Operating expenses
      Research and development                          74,971          60,150          42,868         25,388          15,380
      Sales and marketing                               59,373          60,615          46,776         34,275          26,149
      General and administrative                        18,403          16,637          13,578         11,142           7,937
      In-process research and development *                 --              --           9,400             --              --
      Merger related expenses **                         1,422              --              --             --              --
                                                       -------         -------         -------          -----          ------
           Total operating expenses                    154,169         137,402         112,622         70,805          49,466

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

Income from operations                                 125,947          60,418          89,644         90,482          54,053

-----------------------------------------------------------------------------------------------------------------------------
Other income, net                                       16,250           9,859          10,309          7,426           5,542
                                                        ------           -----          ------          -----           -----

Income before income taxes                             142,197          70,277          99,953         97,908          59,595

Provision for income taxes                             (46,914)        (22,456)        (35,944)       (35,211)        (21,340)

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

Net income                                             $95,283         $47,821         $64,009        $62,697         $38,255
                                                       =======         =======         =======        =======         =======

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

Net income per basic common share  ***                   $1.74           $0.89           $1.21          $1.23           $0.77
Net income per diluted common share  ***                 $1.67           $0.87           $1.13          $1.13           $0.71
Shares used in computing net income
    per basic common share  ***                         54,853          53,507          52,831         51,144          49,681
Shares used in computing net income per
    diluted common share  ***                           56,963          54,972          56,713         55,338          53,581

-----------------------------------------------------------------------------------------------------------------------------
      Financial Position
Cash and short-term investments                       $470,328        $328,732        $246,764       $215,781        $146,345
Working capital                                        487,591         355,361         293,972        245,245         164,474
Long term liabilities, less current portion              3,467           4,142           4,267            398             448
Total assets                                           656,075         484,191         395,949        310,058         205,398
Stockholders' equity                                  $551,187        $408,680        $346,727       $258,105        $172,162

-----------------------------------------------------------------------------------------------------------------------------
      Ratios and Benchmarks
Current ratio                                              5.8             6.0             7.5            5.8             6.0
Inventory turns                                           20.5            11.6             8.3           11.5             8.5
Full-time employees                                        758             660             614            456             322

-----------------------------------------------------------------------------------------------------------------------------
<FN>
*   Consists solely of a charge taken in connection with the acquisition of Pipeline Associates, Inc. and
    Pipeline Asia, Inc. in October 1997.
**  See Item 7: Management's Discussion and Analysis of Financial Condition and Results: - Results of Operations
    - Operating expenses - Merger related expenses.
*** See Note 1 of Notes to Consolidated Financial Statements.
</FN>
</TABLE>


                                                                              11


<PAGE>



Item 7:  Management's Discussion and Analysis of Financial Condition and Results
         of  Operations.

The following  discussion and analysis  should be read in  conjunction  with the
audited consolidated  financial statements and related notes thereto included in
this Annual  Report on Form 10K.  All periods  presented  have been  restated to
include  the  financial  results of the  company  formerly  known as  Management
Graphics Inc. that merged with Electronics for Imaging,  Inc. on August 31, 1999
in a  pooling  of  interests  transaction  as  if  the  acquired  entity  was  a
wholly-owned  subsidiary of Electronics for Imaging,  Inc. since inception.  

All assumptions, anticipations,  expectations and forecasts contained herein are
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  could  differ  materially  from  those  discussed  here.  For a
discussion of the factors that could impact the Company's  results,  readers are
referred to the section below entitled " - Factors that Could  Adversely  Affect
Performance. "

Results of Operations


<TABLE>
The following tables set forth items in the Company's consolidated statements of
income  as a  percentage  of total  revenue  for 1999,  1998 and  1997,  and the
year-to-year  percentage  change  from 1999  over 1998 and from 1998 over  1997,
respectively.  These operating results are not necessarily indicative of results
for any future period.

<CAPTION>
                                                         Years ended December 31,                             % change
                                                                                                         1999          1998
                                                                                                         over          over
                                                     1999          1998          1997                    1998          1997
---------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>          <C>           <C>                      <C>           <C>
Revenue                                             100 %         100 %         100 %                    28 %          20 %
Cost of revenue                                      51 %          56 %          46 %                    17 %          46 %
---------------------------------------------------------------------------------------------------------------------------

Gross profit                                         49 %          44 %          54 %                    42 %          (2)%
---------------------------------------------------------------------------------------------------------------------------

Research and development                             13 %          13 %          11 %                    25 %          40 %
Sales and marketing                                  11 %          13 %          12 %                    (2)%          30 %
General and administrative                            3 %           4 %           4 %                    11 %          23 %
In-process research and development                  -- %          -- %           3 %                    -- %        (100)%
Merger related expenses                              -- %          -- %          -- %                    -- %          -- %

Operating expenses                                   27 %          30 %          30 %                    12 %          22 %

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

Income from operations                               22 %          14 %          24 %                   108 %         (33)%

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

Other income, net                                     3 %           2 %           3 %                    65 %          (4)%

Income before income taxes                           25 %          16 %          27 %                   102 %         (30)%
Provision for income taxes                            8 %           5 %          10 %                   109 %         (38)%

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

Net income                                           17 %          11 %          17 %                    99 %         (25)%
</TABLE>



Revenue

Revenue increased to $570.8 million in 1999,  compared to $447.0 million in 1998
and $373.4 million in 1997,  which yielded a 28% increase in 1999 as compared to
1998 and a 20%  increase  in 1998 as compared to 1997.  The  corresponding  unit
volume  increased  by 75% in 1999 over 1998 and by 164% in 1998 over  1997.  The
increase in revenue in 1999 from 1998 and in 1998 from 1997 was primarily due to
significant increases in unit volumes, positive market acceptance of new product
introductions  and the  impact  of new  customers,  partially  offset  by  price
reductions  on older  product  lines  late in the  year  following  new  product
introductions  and a decline in average selling prices due to changes in product
mix.

                                                                              12

<PAGE>

The Company's revenue is principally  derived from three major  categories.  The
first  category was made up of stand-alone  servers which connect  digital color
copiers with computer networks.  This category includes the Fiery X2, X4, ZX and
Z4 products and accounted for a majority of the Company's revenue prior to 1998.
The second category  consisted of embedded  desktop  controllers,  bundled color
solutions  and chipsets  primarily  for the office  market.  The third  category
consisted of controllers for digital black and white products.


<TABLE>
The  following  is a  break-down  of  categories  by  revenue,  both in terms of
absolute dollars and as a percentage (%) of total revenue.  Also shown is volume
as a percentage (%) of total units shipped.
<CAPTION>
                                                                                                               % change
1999                                                                                                      1998
Revenue                                   1999                  1998                1997                  over         over
(in thousands)                           Revenue               Revenue             Revenue                1998         1997
---------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>      <C>         <C>       <C>         <C>            <C>          <C>
Stand-alone Servers Connecting
    to Digital Color Copiers        $244,028    43%      $291,785    66%       $293,708    79%             (16)%        (1)%
Embedded Desktop Controllers,
    Bundled Color Solutions
    & Chipset Solutions              149,899    26%        90,133    20%         34,133     9%              66%        164%
Controllers for Digital
    Black and White Solutions        121,071    21%        19,196     4%             --     --             531%          --
Spares, Licensing
    & Other misc. sources             55,754    10%        45,885    10%         45,563    12%              22%          1%
---------------------------------------------------------------------------------------------------------------------------

Total Revenue                       $570,752   100%      $446,999   100%       $373,404   100%              28%         20%

---------------------------------------------------------------------------------------------------------------------------
</TABLE>





<TABLE>
<CAPTION>
                                                   1999                     1998                    1997
Volume                                            Volume                   Volume                  Volume
---------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                      <C>                     <C>
Stand-alone Servers Connecting
    to Digital Color Copiers                        14%                      27%                     73%
Embedded Desktop Controllers,
    Bundled Color Solutions
    & Chipset Solutions                             50%                      62%                     26%
Controllers for Digital
    Black and White Solutions                       36%                     11%                       --
Spares, Licensing
    & Other misc. sources                            --                       0%                      1%
---------------------------------------------------------------------------------------------------------------------------

Total Volume                                       100%                     100%                    100%
</TABLE>



Growth in 1999 primarily  took place in the category of controllers  for digital
black  and  white  solutions  as well as in the  category  of  embedded  desktop
controllers, bundled color solutions and chipset solutions.

The black and white  product  category  made up 21% of total  revenue and 36% of
total unit volume in 1999. In 1998, the year the product line was introduced, it
made up 4% of total revenue and 11% of total unit volume.  This product category
can be  characterized  by much  higher  unit  volumes  and lower unit prices and
associated  margins  than the Company has  experienced  in its more  traditional
stand-alone server line of products. The desktop product category made up 26% of
total  revenue  and 50% of total  unit  volume in 1999.  It made up 20% of total
revenue and 62% of total unit volume in 1998 and 9% of total  revenue and 26% of
total unit volume in 1997. These products, except for the chipset solutions, are
also generally  characterized  by much higher unit volumes but lower unit prices
and associated  margins than the Company has experienced in its more traditional
stand-alone server line of products.  The chipset solutions can be characterized
by lower unit prices but  significantly  higher per unit margins compared to the
traditional stand-alone server line of products. The Company anticipates further
growth in the black and white as well as in the desktop category as a

                                                                              13

<PAGE>

percentage  of total  revenue.  To the extent these  categories do not grow over
time in absolute  terms, or if the Company is not able to meet demand for higher
unit volumes, it could have a material adverse effect on the Company's operating
results.  The Company  believes  that revenue for  stand-alone  server  products
decreased in 1999 due to the fact that low-end products which previously shipped
as stand-alone products have been shipped as embedded products.  There can be no
assurance  that the new products for 2000 will be qualified by all the OEMs,  or
that they will successfully  compete, or be accepted by the market, or otherwise
be able to  effectively  replace  the volume of revenue and / or income from the
older products.

The Company also believes that in addition to the factors described above, price
reductions  for all of its  products  may affect  revenues  in the  future.  The
Company has made and may in the future make price  reductions  for its products.
Depending upon the  price-elasticity of demand for the Company's  products,  the
pricing and quality of competitive products,  and other economic and competitive
conditions,  such price  reductions  may have an adverse impact on the Company's
revenues and profits.  If the Company is not able to compensate  for lower gross
margins that may result from price reductions with an increased volume of sales,
its results of  operations  could be adversely  affected.  In  addition,  if the
Company's  revenue  in the  future  depends  more upon  sales of  products  with
relatively  lower  gross  margins  than the  Company  obtained  in 1999 (such as
embedded   controllers  for  printers,   embedded   controllers  for  color  and
black-and-white   copiers,  and  stand-alone   controllers  for  black-and-white
copiers), results of operations may be adversely affected.


<TABLE>
Shipments  by  geographic  area for the years ended 1999,  1998 and 1997 were as
follows:
<CAPTION>
                                                       Years ended December 31,                                  % change
                                                                                                               1999    1998
                                                                                                               over    over
(In thousands)                   1999                      1998                      1997                      1998    1997
---------------------------------------------------------------------------------------------------------------------------
<S>                          <C>         <C>           <C>          <C>          <C>          <C>               <C>     <C>
North America *              $277,997    49%           $221,638     50%          $181,811     49%               25%     22%
Europe *                      182,602    32%            144,076     32%           111,023     30%               27%     30%
Japan                          90,781    16%             68,991     15%            64,323     17%               32%      7%
Rest of World                  19,372     3%             12,294      3%            16,247      4%               58%   (24)%
---------------------------------------------------------------------------------------------------------------------------
                             $570,752   100%           $446,999    100%          $373,404    100%               28%     20%
---------------------------------------------------------------------------------------------------------------------------
<FN>

* In the  middle of the  second  quarter  of 1997,  one of the  Company's  major
customers began having its products for the European market shipped  directly to
Europe  rather than  through the United  States.  The Company  does not know the
dollar amount of the corresponding  shipments that went through North America to
Europe for the periods prior to the second quarter of 1997.  Therefore shipments
to North America in early 1997 are slightly  overstated  and shipments that went
to Europe in the same period are  slightly  understated  when  compared to 1998.
Consequently  the above  indicated  revenue  information  and the  increases and
decreases  from 1998 over 1997 for North  America and Europe should be read with
caution.
</FN>
</TABLE>


Shipments to each  geographic  area increased over 25% in 1999 compared to 1998,
with the largest  increase of 58% in the Rest of the World region and the second
largest  increase  of 32% in  Japan.  The Rest of  World  region  experienced  a
decrease of 24% and Japan an increase of 7% in 1998  compared to 1997.  The Rest
of World region is  predominately  represented by the Southeast  Asian countries
and the  increase  in  1999  over  1998 in the  Rest of  World  and  Japan  is a
reflection of the economic  recovery in these regions.  The Rest of World region
experienced  a  decrease  in 1998  over  1997,  which  was a  reflection  of the
challenging economic situation in that region. Worldwide economic conditions may
have an adverse impact on the Company's results of operations in the future.

As shipments  to some of the  Company's  OEM  partners  are made to  centralized
purchasing  and  manufacturing  locations  which in turn sell  through  to other
locations,  the Company  believes  that export sales of its  products  into each
region may differ from what is reported,  though  accurate  data is difficult to
obtain.  The Company  expects  that export  sales will  continue to  represent a
significant portion of its total revenue.

Substantially  all of the revenue for the last three years was  attributable  to
sales of products  through the  Company's  OEM  channels  with such  partners as
Canon, Encad, Epson,  Fuji-Xerox,  IBM,  Hewlett-Packard,  Kodak/Danka  Business
Systems,  Konica,  Lanier,  Minolta, Oce, Ricoh, Sharp, Xerox and others. During
1999,  the Company has  continued to work on both  increasing  the number of OEM
partners,  and expanding the size of existing  relationships  with OEM partners.
The Company relied on three OEM customers,  Canon,  Xerox and Ricoh in aggregate
for 68%, 67%, and 85% of its revenue for 1999, 1998 and 1997,  respectively.  In
the event that any of these OEM  relationships  are scaled back or discontinued,
the Company may  experience a significant  negative  impact on its  consolidated
financial position and results of operations.  In addition,  no assurance can be
given that the Company's relationships with these OEM partners will continue.

                                                                              14

<PAGE>

The Company continues to work on the development of products  utilizing both the
Fiery  architecture  and other products and intends to continue to introduce new
generations  of Fiery  products and other new product lines with current and new
OEM's in 2000 and beyond.  No assurance  can be given that the  introduction  or
market acceptance of new, current or future products will be successful.


Cost of Revenue


Fiery color servers as well as embedded  desktop  controllers  and digital black
and white products are  manufactured by third-party  manufacturers  who purchase
most of the  necessary  components.  The Company  sources  directly  processors,
memory,  certain ASICs, and software  licensed from various  sources,  including
PostScript interpreter software,  which the Company licenses from Adobe Systems,
Inc.


Gross Margins


The  Company's  gross  margin  was  49%,  44% and 54% for  1999,  1998  and 1997
respectively. The increase in gross margin from 44% to 49% from 1998 to 1999 was
attributable  to  volume  driven   economies  of  scale  as  well  as  increased
outsourcing of manufacturing operations to lower cost subcontract manufacturers.
The  decrease  in gross  margin  from 54% to 44% from  1997 to 1998 was due to a
combination  of  factors,  including  a  higher  mix of  low-end  products  with
relatively  lower  margins  and a different  mix of OEM  partners  purchasing  a
different  mix of products  during 1998 as  compared to 1997.  The Company  also
initiated  price  reductions on older products  during the first half of 1998 in
light of pending introductions of newer generations of products.

The Company  expects that sales of products  with  relatively  lower margins may
further  increase as a percentage  of revenue.  Such products  include  embedded
products for both desktop printers and copiers,  stand-alone  servers,  embedded
controllers for black-and-white  copiers and older products for which prices are
reduced  during product  transitions.  If such sales increase as a percentage of
the Company's revenue, gross margins may decline.

In  addition to the  factors  affecting  revenue  described  above,  the Company
expects to be subject to  pressures  to reduce  prices,  and as a result,  gross
margins for all of its products may be lower and therefore the Company's ability
to maintain current gross margins may not continue.

In general,  the Company believes that gross margin will continue to be impacted
by a variety of factors.  These  factors  include the market  prices that can be
achieved on the Company's  current and future  products,  the  availability  and
pricing of key components (including DRAM, Processors and Postscript interpreter
software), third party manufacturing costs, product, channel and geographic mix,
the success of the Company's product transitions and new products,  competition,
and general economic  conditions in the United States and abroad.  Consequently,
the Company anticipates gross margins will fluctuate from period to period.


Operating Expenses

Operating  expenses  increased  by 12% in 1999 over 1998 and by 22% in 1998 over
1997. Operating expenses as a percentage of revenue amounted to 27%, 30% and 30%
for 1999,  1998 and 1997,  respectively.  Increases  in  operating  expenses  in
absolute  dollars of $16.8 million in 1999 compared to 1998 and $24.8 million in
1998  compared  to 1997,  were  primarily  caused by costs  associated  with the
development  and  introduction of new products and the hiring of additional full
time  employees to support the growing  business (a net increase of 98 people at
December  31, 1999 over  December  31,  1998 and a net  increase of 46 people at
December 31, 1998 over  December  31,  1997).  The Company has hired  additional
employees  to  support  product  development  as  well  as to  support  expanded
operations.

Operating  expenses  for 1999  included  approximately  $1.4  million  of merger
related costs in connection  with the  acquisition of Management  Graphics,  Inc
("MGI") on August 31, 1999.  Excluding the $1.4 million of expenses in 1999, the
increase  in  operating  expenses in 1999 over 1998 would have been 11% or $15.4
million.  In addition,  the Company incurred additional  non-recurring  expenses
during 1999 in connection  with the Company's move to a new central  facility in
Foster City,  California.  Total moving costs  amounted to $1.8 million of which
approximately $0.2 million related to cost of revenue.

                                                                              15


<PAGE>

Operating  expenses  in  1997  include  a $9.4  million  charge  for  in-process
technology  that was  expensed  in 1997 as part of the  acquisition  of Pipeline
Associates, Inc. and Pipeline Asia, Inc. (the "Pipeline Acquisition"). Excluding
the $9.4 million charge in 1997, the increase in operating expenses in 1998 over
1997 would have been 33% or $34.2 million.

The lower  percentage  increase in  operating  expenses in 1999 over 1998 of 12%
compared  to 1998 over 1997 of 22% is the  result  of the  Company's  successful
spending control as well as the leverage realized from additional revenue in the
black and white and embedded,  bundled and chipset categories which require less
support.

The Company  anticipates  that operating  expenses will continue to grow and may
increase both in absolute dollars and as a percentage of revenue.

The components of operating expenses are detailed below.

           Research and Development

           Expenses for research and development  consist primarily of personnel
           expenses and, to a lesser extent, consulting,  depreciation and costs
           of prototype materials.  Research and development expenses were $75.0
           million or 13% of revenue in 1999 compared to $60.2 million or 13% of
           revenue in 1998 and $42.9 million or 11% of revenue in 1997. The year
           over year  increase in research and  development  expenses was mainly
           due to an increase in research and development projects. The majority
           of the 25%  increase in  research  and  development  expenses in 1999
           compared  to 1998 was due to a 21% growth in  engineering  headcount.
           The 40%  increase of research and  development  expenses in 1998 over
           1997  was  primarily  due to  headcount  related  costs  as well as a
           significant  increase  in  costs  of  prototype  materials  used  for
           pre-production  units on  projects  under  development.  The  Company
           believes that the  development of new products and the enhancement of
           existing products are essential to its continued success, and intends
           to  continue to devote  substantial  resources  to  research  and new
           product development  efforts.  Accordingly,  the Company expects that
           its  research  and  development  expenses may continue to increase in
           absolute dollars and also as a percentage of revenue.

           Sales and Marketing

           Sales and marketing  expenses include personnel  expenses,  costs for
           trade shows,  marketing  programs and  promotional  materials,  sales
           commissions,  travel and entertainment  expenses,  depreciation,  and
           costs  associated  with sales offices in the United  States,  Europe,
           Japan and other  locations  around  the  world.  Sales and  marketing
           expenses  for 1999 were $59.4  million or 11% of revenue  compared to
           $60.6  million or 13% of revenue in 1998 and $46.8  million or 12% in
           1997. Sales and marketing  expenses  decreased in 1999 over 1998 as a
           percentage of revenue as well as in absolute dollars. The decrease is
           due to successful  spending  control  across the Company during 1999,
           offset by increased salary expenses caused by an increased  headcount
           of 12%. In  addition  the  gravitation  toward  desktop and  embedded
           products  require less support from the Company as the OEMs take over
           some  of the  financial  responsibilities  for the  support.  The 30%
           increase of sales and marketing  expenses in 1998 over 1997 is due to
           a 9%  increase  in  headcount,  as well  as  costs  required  for the
           introduction,  promotion  and  support of a broader  range of current
           products  with  both  existing  and  new  OEMs  and  an  increase  in
           technology   alliance  partners.   The  Company  has  also  developed
           strategic  relationships  with well  known  print-for-pay  companies,
           including  Kinko's,  AlphaGraphics,  the CopyMax operations of office
           products   superstore   OfficeMax,   the  American  Speedy  group  of
           franchised  printing  centers  (including  Allegra Print and Imaging,
           American Speedy, Speedy Printer,  Zippy Print and Quik Print) and the
           SAMPA  Corporation,  franchiser of Signal Graphics  Printing Centers.
           Although these  relationships  increase the demand for Fiery products
           they also increase the sales and marketing expenses.

           The  Company  expects  that its  sales  and  marketing  expenses  may
           increase in absolute  dollars and possibly  also as a  percentage  of
           revenue as it continues to actively promote its products,  launch new
           products and continue to build its sales and marketing  organization,
           particularly  in  Europe  and Asia  Pacific,  including  Japan.  This
           increase might not proportionally  increase with increases in volume,
           if the  Company's  sales  continue to  gravitate  toward  desktop and
           embedded  products which require less support from the Company as the
           OEM partners take over this role.

           General and Administrative

           General and  administrative  expenses consist  primarily of personnel
           expenses and, to a lesser extent,  depreciation  and facility  costs,
           professional  fees and other costs associated with public  companies.
           General  and  administrative  expenses  were  $18.4  million or 3% of
           revenue in 1999,  compared to $16.6  million or 4% of revenue in 1998
           and  $13.6  million  or 4% of  revenue  in 1997.  While  general  and
           administrative  expenses  have  remained  relatively  constant  as  a
           percentage  of total  revenue  over the three year period ended 1999,
           these expenses have increased in absolute  dollars.  The increases in
           1999  over  1998 and in 1998  over  1997  were  primarily  due to the
           increase in headcount  to support the needs of the

                                                                              16

<PAGE>

           growing   Company's   operations,   including   the  use  of  outside
           consultants.  The Company expects that its general and administrative
           expenses  may  continue to increase in absolute  dollars and possibly
           also as a  percentage  of revenue in order to support  the  Company's
           efforts to grow its business.


           In-process research and development

           In October of 1997, the Company acquired  Pipeline  Associates,  Inc.
           and Pipeline Asia, Inc. for $12.6 million, net of cash received.  The
           Pipeline  Acquisition  was  intended  to expand  the  Company's  core
           technologies and thereby decrease its dependence on software licensed
           from  outside  sources.  In  conjunction  with the  acquisition,  the
           Company recorded a charge of $9.4 million for in-process research and
           development, representing the appraised value of product that was not
           considered to have reached technological feasibility.


           Merger related expenses

           On August  31,  1999 the  Company  acquired  MGI,  a  Minnesota-based
           corporation  that develops digital print on demand products and other
           digital imaging  products.  The Company incurred  approximately  $1.4
           million  of  non-recurring  expenses  related  to  the  merger  which
           consisted primarily of professional fees, severance costs, and travel
           expenses. Severance costs were incurred on 33 former employees of MGI
           whose  positions  were  eliminated  due to  duplication  of resources
           between the California  and Minnesota  locations.  Functionally,  the
           Company  eliminated 6  manufacturing,  15 service,  1 engineering,  6
           sales and marketing, and 5 administrative positions. The terminations
           were completed as of September 30, 1999.



Other Income


Other income relates mainly to interest income and expense, and gains and losses
on  foreign  currency  transactions.  Other  income  of  $16.3  million  in 1999
increased by 65% from $9.9 million in 1998. Other income of $9.9 million in 1998
decreased  by 4% from $10.3  million in 1997.  The increase in 1999 from 1998 is
due to a 39%  increase  in the  average  investment  balance as well as a higher
return on  investments as a result of more  favorable  market  interest rates in
1999  compared  to  1998.  The  decrease  in 1998  from  1997 is  mainly  due to
approximately  $1.3  million in losses  suffered on Asian  currency  denominated
transactions in the first half of 1998. In response to currency  fluctuations in
Asia,  the  Company  began to  implement  a hedging  program  in June  1998.  In
addition,  the Company  earned less  interest in 1998  compared to 1997 due to a
decline in market interest rates in 1998.


Income Taxes


The Company's  effective tax rate was 33% in 1999,  32% in 1998 and 36% in 1997,
respectively.  In each of these years,  the Company  benefited  from  tax-exempt
interest  income,  foreign  sales,  and  the  utilization  of the  research  and
development  credits in achieving a  consolidated  effective tax rate lower than
that  prescribed by the  respective  Federal and State taxing  authorities.  The
Company anticipates that the tax rate for 2000 will remain approximately 33%.


Liquidity and Capital Resources


Cash, cash equivalents and short-term investments increased by $141.6 million to
$470.3  million as of December 31, 1999,  from $328.7 million as of December 31,
1998.  Working  capital  increased  by $132.2  million  to $487.6  million as of
December  31,  1999,  up from $355.4  million as of  December  31,  1998.  These
increases  are  primarily  the result of net  income,  changes of balance  sheet
components and the exercise of employee stock options.

Net cash provided by operating activities was $131.5 million,  $81.1 million and
$72.9 million in 1999, 1998 and 1997,  respectively.  Cash provided by operating
activities  increased in 1999  primarily  due to a  significant  increase in net
income and an increase in income tax payables,  partially  offset by an increase
in deferred taxes and a decrease in receivables from subcontract manufacturers.

The  Company has  continued  to invest cash in  short-term  investments,  mainly
municipal  securities.  Purchases in excess of sales of  short-term  investments
were $38.0  million,  $84.3  million and $45.4  million in 1999,  1998 and 1997,
respectively.   The  Company's

                                                                              17

<PAGE>

capital  expenditures  generally consist of investments in computers and related
peripheral  equipment and office furniture for use in the Company's  operations.
The Company  purchased  approximately  $15.6  million,  $13.2  million and $11.3
million  of  such   equipment  and  furniture   during  1999,   1998  and  1997,
respectively.  During 1997,  the Company  invested  $12.6  million,  net of cash
received, in the Pipeline Acquisition.

Also in 1997, the Company began  development of a corporate  campus on a 35-acre
parcel  of land in  Foster  City,  California.  During  1997 the  Company  spent
approximately $27.0 million on the land and associated improvement costs. During
1998 the Company spent  approximately $0.3 million on land improvement costs. In
addition to purchasing the land, the Company  entered into an agreement to lease
a ten-story  295,000  square foot building to be  constructed  on the site.  The
lessor of the building  committed to fund the construction of the building which
amounted to $57.0  million.  Rent  payments for the  building  commenced in July
1999,  the time the  construction  was  completed.  Rent  payments bear a direct
relationship to the carrying cost of the commitment  amount. The initial term of
the lease is 7 years with options to purchase at any time.  Also in  conjunction
with the lease,  the Company has entered  into a separate  ground lease with the
lessor of the building for  approximately 35 years. The Company has guaranteed a
residual value associated with the building to the lessor of 82% of the lessor's
funding.  If the Company defaults on the lease,  does not renew the lease,  does
not purchase the building or does not arrange for a third party  purchase of the
building  at the end of the lease  term,  it may be liable to the lessor for the
amount of the residual  guarantee.  As part of the lease  agreement  the Company
must maintain a minimum tangible net worth. In addition, the Company has pledged
certain marketable securities ($69.1 million at December 31, 1999) to be held in
proportion  to the amount drawn in order to secure a more  favorable  lease rate
and avoid other  covenant  restrictions.  The Company may use these funds at any
time,  but their  release would also result in an increase to the lease rate and
the imposition of additional financial covenant restrictions.

On December 29, 1999, the Company entered into an agreement to lease  additional
facilities,  for up to 543,000  square feet, to be  constructed on the property,
which the Company  owns in Foster City,  California.  The lessor of the building
has committed to fund up to a maximum of $137.0 million for the  construction of
the  facilities,  with the portion of the  committed  amount  actually  used for
construction to be determined by the Company. The construction of the additional
facilities  is  scheduled  to  be  completed  over  the  next  36  months.  Rent
obligations  for the building  will bear a direct  relationship  to the carrying
cost of the commitments drawn down. As of December 31, 1999, the Company had not
begun construction and had not drawn any funds.

The lease  associated  with the additional  Foster City facilities has a term of
seven years with an option to renew subject to certain  conditions.  The Company
may, at its option,  purchase the facilities during or at the end of the term of
the lease for the amount expended by the lessor to construct the facilities.  In
connection  with the lease,  the  Company  entered  into a lease of the  related
parcels of land in Foster City to the lessor of the  buildings at a nominal rate
and for a term of 30 years.  If the Company  terminates or does not negotiate an
extension of its lease of the building,  the ground lease to the lessor converts
to a market rate. The Company,  at its option,  may purchase the building during
or at the end of the term of the lease for the amount  expended by the lessor to
construct the building.  The Company has guaranteed a residual value  associated
with the building to the lessor of 82% of the lessor's  funding.  If the Company
defaults on its lease,  does not renew its lease, does not purchase the building
or arrange  for a third  party the  purchase  of the  facility at the end of the
lease  term,  it may be  liable to the  lessor  for the  amount of the  residual
guarantee.

As part of this  agreement,  the Company  must  maintain a minimum  tangible net
worth.  In addition,  the Company has committed to pledge certain  securities in
proportion to the amount drawn against the  commitment to be held in a custodial
account as collateral to ensure  fulfillment  of the  obligations  to the lessor
under the lease agreement. No amounts were committed at December 31, 1999 as the
Company had not drawn any amounts under the arrangement.  The Company may invest
these  funds  in  certain  securities  and  receive  the  full  benefit  of  the
investment, however the funds are restricted as to withdrawal at all times.

Net cash provided by financing  activities of $26.7  million,  $14.2 million and
$9.7 million in 1999, 1998 and 1997, respectively,  were primarily the result of
exercises of common stock options and the tax benefits to the Company associated
with those  exercises.  Net cash provided by financing  activities in 1999, 1998
and 1997 includes approximately $892,000,  $101,000 and $373,000 of cash used to
repay long-term obligations.

The Company's inventory consists primarily of memory subsystems,  processors and
ASICs,  which are sold to third-party  contract  manufacturers  responsible  for
manufacturing  substantially all of the Company's  products.  Should the Company
decide to purchase components and do its own manufacturing,  or should it become
necessary  for the  Company  to  purchase  and sell  components  other  than the
processors, ASICs or memory subsystems for its contract manufacturers, inventory
balances would increase significantly,  thereby reducing the Company's available
cash resources.  Further, these contract manufacturers produce substantially all
of the Company's products. The Company believes that, should the services of any
of these  contract  manufacturers  become  unavailable,  a significant  negative
impact  on  the  Company's   consolidated  financial  position  and  results  of
operations  could  result.  The Company is also  reliant on several  sole-source
suppliers for certain key components and could experience a further  significant
negative impact on its consolidated financial position and results of operations
if such supply were reduced or not available.

The Company,  along with its directors and certain  officers and employees,  has
been named in class action  lawsuits filed in both the San Mateo County Superior
Court  and the  United  States  District  Court  for the  Northern  District  of
California.  The  lawsuits  are all

                                                                              18

<PAGE>

related to the  precipitous  decline in the trading price of the Company's stock
that occurred in December  1997.  The Company  believes the lawsuits are without
merit and intends to contest them vigorously, but there can be no assurance that
if damages are ultimately  awarded against the Company,  the litigation will not
adversely  affect  the  Company's  results  of  operations.  See  Item 3  "Legal
proceedings."

The Company  believes that its existing  capital  resources,  together with cash
generated from  continuing  operations will be sufficient to fund its operations
and meet capital requirements through at least 2000.


Year 2000 Status

The Company,  and to its knowledge the Company's  third party  suppliers did not
experience any  significant  problems  associated with  information  systems and
other  technology  during the  transition  to the Year 2000.  During  1999,  the
Company  spent  approximately  $700,000  out of a  budget  of $1.2  million  for
external consulting on addressing and preparing for potential Year 2000 problems
and related  issues.  As the new year  continues  the Company  will  continue to
assess the potential effects of possible Year 2000 related problems; however, as
a result of the work performed previously the Company does not currently foresee
any problems in this area.  There can be no  assurance  that such  problems,  if
incurred,  will  not  have a  materially  adverse  effect  on the  Company,  its
financial condition, or results of operations.


Euro Assessment

Eleven of the fifteen member  countries of the European  Union have  established
fixed conversion rates between their existing sovereign  currencies and the Euro
and have adopted the Euro as a common  currency as of January 1, 1999.  The Euro
is trading on currency exchanges and is available for non-cash transactions. The
conversion to the Euro is not expected to have a material  adverse effect on the
operating  results of the  Company as the Company  predominantly  invoices in US
Dollars.  The Company is currently in the process of  evaluating  the  reporting
requirements  in the  respective  countries  and the related  system,  legal and
taxation  requirements.  The Company expects that required modifications will be
made on a timely  basis and that  such  modifications  will not have a  material
adverse impact on the Company's  operating  results.  There can be no assurance,
however,  the Company will be able to complete such modifications to comply with
Euro  requirements,  which could have a material adverse effect on the Company's
operating results.


Factors That Could Adversely Affect Performance

Our performance may be adversely affected by the following factors:

We rely on sales to a relatively  small number of OEM partners,  and the loss of
any of these customers could substantially decrease our revenues

Because we sell our  products  primarily  to our OEM  partners,  we rely on high
sales volumes to a relatively small number of customers.  We expect that we will
continue  to depend on these  OEM  partners  for a  significant  portion  of our
revenues.  If we lose an  important  OEM or we are unable to recruit  additional
OEMs,  our revenues may be materially and adversely  affected.  We cannot assure
you that our major  customers  will continue to purchase our products at current
levels or that they will  continue to purchase our products at all. In addition,
our results of operations could be adversely affected by a decline in demand for
copiers or laser  printers,  other  factors  affecting our major  customers,  in
particular, or the computer industry in general.

We rely upon our OEM partners to develop new products,  applications and product
enhancements  in a timely  and  cost-effective  manner.  Our  continued  success
depends  upon the  ability of these  OEMs to meet  changing  customer  needs and
respond to emerging industry standards and other technological changes. However,
we cannot  assure you that our OEMs will  effectively  meet these  technological
challenges.  These OEMs, who are not within our control,  may  incorporate  into
their products the technologies of other companies in addition to, or instead of
our  products.  These  OEMs may  introduce  and  support  products  that are not
compatible with our products.  We rely on these OEMs to market our products with
their  products,  and if these OEMs do not  effectively  market our products our
sales revenue may be materially  and adversely  affected.  With the exception of
certain minimum purchase  obligations,  these OEMs are not obligated to purchase
products  from us. We cannot assure you that our OEMs will continue to carry our
products.

Our OEMs work  closely  with us to develop  products  that are  specific to each
OEM's copiers and printers. For many of the products we are developing,  we need
to coordinate development,  quality testing,  marketing and other tasks with our
OEMs. We cannot control our OEMs' development  efforts and coordinating with our
OEMs may cause delays that we cannot manage by ourselves. In addition, our sales
revenue and results of  operations  may be adversely  affected if we cannot meet
our OEM's product  needs for their  specific

                                                                              19

<PAGE>

copiers and printers, as well as successfully manage the additional  engineering
and  support  effort  and  other  risks  associated  with  such a wide  range of
products.

We are pursuing,  and will continue to pursue, the business of additional copier
and printer OEMs. However,  because there are a limited number of OEMs producing
copiers and printers in sufficient volume to be attractive  customers for us, we
expect that customer concentration will continue to be a risk.


If we are unable to develop new products,  or execute product introductions on a
timely basis, our future revenue and operating results may be harmed.

Our  operating  results  will  depend  to  a  significant  extent  on  continual
improvement of existing  technologies  and rapid  innovation of new products and
technologies.  Our success  depends  not only on our  ability to predict  future
requirements,  but also to develop and introduce new products that  successfully
address customer needs. Any delays in the launch or availability of new products
we are  planning  could harm our  financial  results.  During  transitions  from
existing  products to new  products,  customers  may delay or cancel  orders for
existing  products.  Our results of operations  may be adversely  affected if we
cannot successfully manage product transitions or provide adequate  availability
of products after they have been introduced.

In  this  environment,  we must  continue  to make  significant  investments  in
research and development in order to enhance  performance and  functionality  of
our  products,  including  product  lines  different  than our Fiery servers and
embedded  controllers.  We cannot assure you that we will successfully  identify
new product  opportunities,  develop and  introduce  new products to market in a
timely manner, and achieve market acceptance of our products. Also, if we decide
to develop new products,  our research and development  expenses may increase in
the short term without a corresponding  increase in revenue.  Finally, we cannot
assure you that  products and  technologies  developed by others will not render
our products or technologies obsolete or noncompetitive.


We  license   software   used  in  most  of  our  products  from  Adobe  Systems
Incorporated,  and the loss of this license would prevent us from shipping these
products

Under our license agreements with Adobe, a separate license must be granted from
Adobe to us for each  type of  copier or  printer  used  with a Fiery  Server or
Controller.  If Adobe does not grant us such licenses or approvals, if the Adobe
license  agreements  are  terminated,  or if  our  relationship  with  Adobe  is
otherwise  impaired,  our financial  condition and results of operations  may be
harmed.  To  date,  we  have  successfully  obtained  licenses  to  use  Adobe's
PostScript(TM)  software for our products,  where required.  However,  we cannot
assure  you  that  Adobe  will  continue  to  grant  future  licenses  to  Adobe
PostScript(TM)  software on reasonable  terms, in a timely manner, or at all. In
addition,  we cannot  assure you that Adobe will continue to give us the quality
assurance approvals we are required to obtain from Adobe for the Adobe licenses.


If the demand for products that enable color printing of digital data decreases,
our sales revenue may decrease

Our products are  primarily  targeted at enabling the color  printing of digital
data.  If demand  for this  service  declines,  or if the  demand  for our OEMs'
specific  printers or copiers that our products are designed for should decline,
our sales revenue may be adversely affected. Although demand for networked color
printers and copiers has  increased in recent  years,  we cannot assure you that
such demand will continue,  nor can we control  whether the demand will continue
for the  specific  OEM  printers  and copiers  that  utilize our  products  will
continue.  We believe  that  demand for our  products  may also be affected by a
variety of economic conditions and considerations, and we cannot assure you that
demand for our products will continue at current levels.


If we enter new markets or  distribution  channels  this could result in delayed
revenues or higher operating expenses

We continue to explore opportunities to develop product lines different from our
Fiery  servers  and  embedded  controllers,  such  as our new  line of  software
products and EFI  Professional  Services that we announced on February 23, 2000.
We expect to invest funds to develop new distribution and marketing channels for
these new  products and  services.  We do not know if we will be  successful  in
developing  these  channels  or whether  the market  will  accept any of our new
products or services. In addition, even if we are able to introduce new products
or services,  these  products and services may  adversely  impact the  Company's
operating results.


We face competition  from other suppliers as well as our own OEM customers,  and
if we are not able to compete successfully then our business may be harmed

                                                                              20

<PAGE>

Our industry is highly  competitive and is characterized by rapid  technological
changes. We compete against a number of other suppliers of imaging products.  We
cannot assure you that products or technologies developed by competing suppliers
will not render our products or technologies obsolete or noncompetitive.

While many of our OEMs sell our products on an exclusive  basis,  we do not have
any formal agreements that prevent the OEMs from offering alternative  products.
If an OEM offers  products  from  alternative  suppliers  our market share could
decrease,  which could reduce our revenue and  negatively  affect our  financial
results.

Our OEM partners may themselves  internally  develop and supply products similar
to our current products. These OEMs may be able to develop similar products that
are compatible  with their own products more quickly than we can. These OEMs may
choose to market their own products,  even if these products are technologically
inferior, have lower performance or cost more. We cannot assure you that we will
be able to continue to successfully  compete against similar products  developed
internally by our OEMs or against their  financial  and other  resources.  If we
cannot compete successfully against our OEMs' internally developed products, our
business may be harmed.


If we are not able to hire and retain skilled  employees,  we may not be able to
develop products or meet demand for our products in a timely fashion

We depend upon  skilled  employees,  such as software  and  hardware  engineers,
quality assurance engineers and other technical professionals. We are located in
the Silicon Valley where  competition  among  companies to hire  engineering and
technical  professionals  is intense.  It is difficult for us to locate and hire
qualified  engineers  and  technical  professionals  and for us to retain  these
people.  There are many technology companies located nearby that may try to hire
our  employees.  The  movement of our stock price may also impact our ability to
hire and retain employees. If we do not offer competitive  compensation,  we may
not be able to recruit or retain employees.  If we cannot  successfully hire and
retain  employees,  we may not be able to  develop  products  timely  or to meet
demand for our products in a timely fashion and our results of operations may be
adversely impacted.


Our  operating  results  may  fluctuate  based upon many  factors,  which  could
adversely affect our stock price

We expect our stock price to vary with our operating results and,  consequently,
adverse  fluctuations could adversely affect our stock price.  Operating results
may fluctuate due to:

o    demand for our products;

o    success and timing of new product introductions;

o    changes in interest rates and  availability of bank or financing  credit to
     consumers of digital copiers and printers;

o    price reductions by us and our competitors;

o    delay, cancellation or rescheduling of orders;

o    product performance;

o    availability of key components, including possible delays in the deliveries
     from suppliers;

o    the status of our relationships with our OEM partners;

o    the performance of third-party manufacturers;

o    the status of our relationships with our key suppliers;

o    potential excess or shortage of skilled employees; and

o    general economic conditions.

Many of our products,  and the related OEM copiers and  printers,  are purchased
utilizing  lease  contracts or bank  financing.  If  prospective  purchasers  of
digital  copiers and  printers  are unable to obtain  credit,  or interest  rate
changes make credit terms undesirable,  this may significantly reduce the demand
for  digital  copiers  and  printers,  negatively  impacting  our  revenues  and
operating results.

Typically we do not have long-term volume purchase contracts with our customers,
and a  substantial  portion of our backlog is scheduled  for delivery  within 90
days or less.  Our  customers  may cancel  orders and  change  volume  levels or
delivery times for product they have ordered from us without penalty. However, a
significant portion of our operating expenses are fixed in advance,  and we plan
these  expenditures  based on the sales  forecasts  from our OEM  customers  and
product development programs. If we were unable to adjust our operating expenses
in response to a shortfall in our sales,  it could harm our quarterly  financial
results.

We attempt to hire additional  employees to match growth in projected demand for
our products. If we project a higher demand than materializes,  we will hire too
many employees and incur expenses that we need not have incurred and our margins
may be lower. If

                                                                              21

<PAGE>

we project a lower demand than materializes,  we will hire too few employees, we
may not be able to meet  demand for our  products  and our sales  revenue may be
lower. If we cannot  successfully  manage our growth,  our results of operations
may be harmed.


The value of our investment portfolio will decrease if interest rates increase

We have an investment portfolio of mainly fixed income securities  classified as
available-for-sale  securities. As a result, our investment portfolio is subject
to interest rate risk and will fall in value if market  interest rates increase.
We attempt to limit this exposure to interest  rate risk by investing  primarily
in short-term  securities.  We may be unable to  successfully  limit our risk to
interest  rate  fluctuations  and this may cause  our  investment  portfolio  to
decrease in value.


Our stock price has been and may continue to be volatile

Our  common  stock,  and the  stock  market  generally,  have  from time to time
experienced  significant  price and volume  fluctuations.  The market prices for
securities  of  technology   companies  have  been  especially   volatile,   and
fluctuations   in  the  stock  market  are  often  unrelated  to  the  operating
performance  of  particular  companies.  These  broad  market  fluctuations  may
adversely  affect the market price of our common  stock.  Our common stock price
may also be affected by the factors discussed above in this section as well as:

o    Fluctuations in our results of operations, revenues or earnings or those of
     our competitors;

o    Failure of such  results of  operations,  revenues  or earnings to meet the
     expectations of stock market analysts and investors;

o    Changes in stock market analysts' recommendations regarding us;

o    Real or perceived technological advances by our competitors;

o    Political or economic instability in regions where our products are sold or
     used; and

o    General market and economic conditions.


We face risks from our international operations and from currency fluctuations

Approximately  51% and 50% of our  revenue  from  the sale of  products  for the
twelve  month   periods   ended   December  31,  1999  and  December  31,  1998,
respectively,  came from sales  outside North  America,  primarily to Europe and
Japan. We expect that sales to international  destinations will continue to be a
significant  portion  of our total  revenue.  You  should  be aware  that we are
subject to certain risks because of our  international  operations.  These risks
include the regulatory  requirements of foreign  governments  which may apply to
our products,  as well as requirements for export licenses which may be required
for the export of certain  technologies.  The necessary  export  licenses may be
delayed or difficult to obtain,  which could cause a delay in our  international
sales  and hurt our  product  revenue.  Other  risks  include  trade  protection
measures,  natural disasters, and political or economic conditions in a specific
country or region.

We believe that economic conditions in other parts of the world, such as Brazil,
may also limit demand for our products.  The move to a single European currency,
the Euro,  and the  resulting  central  bank  management  of  interest  rates to
maintain  fixed  currency  exchange  rates among the member  nations may lead to
economic conditions which adversely impact sales of our products.

Given the significance of our export sales to our total product revenue, we face
a continuing risk from the  strengthening of the U.S. dollar versus the Japanese
yen, the Euro and other major European currencies,  and numerous Southeast Asian
currencies,  which could cause lower unit demand and the necessity that we lower
average selling prices for our products because of the reduced strength of local
currencies.  Either of these events  could harm our  revenues and gross  margin.
Although we typically invoice our customers in U.S. dollars,  when we do invoice
our  customers in local  currencies,  our cash flows and earnings are exposed to
fluctuations in interest rates and foreign  currency  exchange rates between the
currency of the invoice and the U.S. dollar.  We attempt to limit or hedge these
exposures through operational  strategies and financial market instruments where
we consider it  appropriate.  To date we have mostly used  forward  contracts to
reduce our risk from  interest  rate and  currency  fluctuations.  However,  our
efforts  to  reduce  the  risk  from  our  international   operations  and  from
fluctuations  in foreign  currencies  or interest  rates may not be  successful,
which harm our financial condition and operating results.


We may be unable to adequately protect our proprietary information

We rely on a  combination  of  copyright,  patent and trade  secret  protection,
nondisclosure  agreements,  and licensing and  cross-licensing  arrangements  to
establish and protect our proprietary  rights. Any failure to adequately protect
our  proprietary  information  could harm our financial  condition and operating
results.  We cannot be  certain  that any  patents  that may be issued to us, or
which we license from third parties, or any other of our proprietary rights will
not be  challenged,  invalidated  or  circumvented.  In  addition,  we cannot be

                                                                              22

<PAGE>

certain  that any rights  granted  to us under any  patents,  licenses  or other
proprietary   rights  will  provide  adequate   protection  of  our  proprietary
information.


We face risks from third party claims of infringement and potential litigation

Third  parties may claim that our  products  infringe,  or may  infringe,  their
proprietary   rights.   Such  claims  could  result  in  lengthy  and  expensive
litigation.  Such  claims  and any  related  litigation,  whether  or not we are
successful in the litigation, could result in substantial costs and diversion of
our  resources.  Although  we may seek  licenses  from  third  parties  covering
intellectual property that we are allegedly infringing, we cannot guarantee that
any such licenses could be obtained on acceptable terms, if at all.


Seasonal purchasing patterns of our OEM customers have historically caused lower
fourth quarter revenue, which may negatively impact the stock price

Our results of operations have typically  followed a seasonal pattern reflecting
the buying  patterns of our large OEM customers.  In the past, our fiscal fourth
quarter  results  have been  adversely  affected  because some or all of our OEM
customers  wanted to decrease,  or otherwise  delay,  fourth quarter orders.  In
addition,  the first  fiscal  quarter  traditionally  has been a weaker  quarter
because our OEM partners  focus on training of their sales  forces.  The primary
reasons for this seasonal pattern are:

o    Fluctuation  in demand for our  products  from our OEM  partners,  who have
     historically  sought to minimize year-end inventory  investment  (including
     the reduction in demand following  introductory  "channel fill" purchases).
     Fluctuation in demand is also caused by timing of new product  releases and
     training by our OEM partners; and

o    The fact that our OEM partners have achieved their yearly sales targets and
     consequently  delayed further  purchases into the next fiscal year, and the
     fact that we do not know when our  partners  reach these  sales  targets as
     they generally do not share them with us.

As a result of these  factors,  we believe that period to period  comparisons of
our  operating  results  are not  meaningful,  and you  should  not rely on such
comparisons  to predict  our  future  performance.  We  anticipate  that  future
operating  results  may  fluctuate  significantly  due to this  seasonal  demand
pattern.


We may make future  acquisitions  and acquisitions  involve  numerous  financial
risks

We seek to develop new technologies and products from both internal and external
sources.  As part of this effort,  we may make  acquisitions  of, or significant
investments in, other companies.  Acquisitions involve numerous risks, including
the following:

o    Difficulties in integration of operations, technologies, or products;

o    Risks of entering  markets in which we have little or no prior  experience,
     or entering markets where competitors have stronger market positions;

o    Possible write-downs of impaired assets; and

o    Potential loss of key employees of the acquired company.

Mergers and acquisitions of companies are inherently risky, and we cannot assure
you that our previous or future  acquisitions  will be  successful  and will not
harm our business, operating results, financial condition, or stock price.


The  location and  concentration  of our  facilities  subjects us to the risk of
earthquakes, floods or other natural disasters

Our  corporate  headquarters,  including  most of our research  and  development
facilities and  manufacturing  operations,  are located in the San Francisco Bay
Area of Northern California,  an area known for seismic activity.  This area has
also  experienced  flooding in the past.  In  addition,  many of the  components
necessary to supply our products are purchased  from  suppliers  subject to risk
from natural  disasters,  based in areas  including  the San Francisco Bay Area,
Taiwan,  and Japan. A significant  natural disaster,  such as an earthquake or a
flood, could harm our business, financial condition, and operating results.


We are dependent on  sub-contractors  to manufacture and deliver products to our
customers

We subcontract with other companies to manufacture our products.  We are totally
reliant  on the  ability  of our  subcontractors  to  produce  products  sold to
customers,  and while we closely  monitor  our  subcontractors  performance.  We
cannot  assure you that such

                                                                              23

<PAGE>

subcontractors will continue to perform for us as well as they have in the past.
We also can not assure you that difficulties experienced by our subcontractors (
such as interruptions in a subcontractor's ability to make or ship our products,
or fix  quality  assurance  problems  ) would not harm our  business,  operating
results, or financial condition.




Item 7A:Quantitative and Qualitative Disclosures About Market Risk


Market Risk

The Company is exposed to various market risks, including the changes in foreign
currency exchange rates.  Market risk is the potential loss arising from adverse
changes in market  rates and  prices,  such as  foreign  currency  exchange  and
interest rates.  The Company does not enter into  derivatives or other financial
instruments  for  trading or  speculative  purposes.  The  Company  enters  into
financial  instrument  contracts  to manage  and reduce the impact of changes in
foreign  currency  exchange  rates.  The   counterparties  are  major  financial
institutions.

Foreign Exchange Contracts

During 1998, the Company began utilizing  forward foreign exchange  contracts to
hedge  the  currency   fluctuations  in  transactions   denominated  in  foreign
currencies, thereby limiting the Company's risk that would otherwise result from
changes in exchange rates. The transactions  hedged were  intercompany  accounts
receivable  and payable  between the Company and its  Japanese  subsidiary.  The
periods of the forward foreign  exchange  contracts  correspond to the reporting
periods  of the  hedged  transactions.  Foreign  exchange  gains  and  losses on
intercompany  balances and the  offsetting  losses and gains on forward  foreign
exchange contracts are reflected in the income statement.

As of  December  31,  1999,  the  Company had one  outstanding  forward  foreign
exchange  contract to sell Yen equivalent to approximately  $1.8 million with an
expiration  date of January 31, 2000.  The  estimated  fair value of the foreign
currency  contract  represents  the amount  required  to enter  into  offsetting
contracts with similar remaining maturities based on quoted market prices. As of
December  31, 1999,  the  difference  between the fair value of the  outstanding
contract and the contract  amount was  immaterial.  Market risk was estimated as
the potential  decrease in fair value resulting from a hypothetical 10% increase
of the  amount  of Yen to  purchase  one US  Dollar.  A 10%  fluctuation  in the
exchange  rate for this  currency  would change the fair value by  approximately
$0.2 million.  However,  since the contract hedges foreign currency  denominated
transactions,  any change in the fair value of the  contract  would be offset by
changes in the underlying value of the transactions being hedged.

Interest Rate Risk

The  fair  value  of  the  Company's   cash  portfolio  at  December  31,  1999,
approximated carrying value. Market risk was estimated as the potential decrease
in fair value  resulting  from an  instantaneous  hypothetical  100  basis-point
increase in interest rates for any debt instruments in the Company's  investment
portfolio. As of December 31, 1999, the Company's cash and short-term investment
portfolio  includes debt  securities of $424.9 million  subject to interest rate
risk.  A 100  basis-point  increase in market  interest  rates would result in a
decrease of fair value of approximately $3.1 million.

The fair value of the Company's  long-term debt,  including current  maturities,
was  estimated  to be $3.8  million as of  December  31,  1999,  and equaled the
carrying value. The Company's long-term debt requires interest payments based on
a  variable  rate  and  therefore  is  subject  to  interest  rate  risk.  A 10%
fluctuation in interest rates would not have a material effect on the fair value
of the outstanding long-term debt of the Company as of December 31, 1999.

                                                                              24

<PAGE>



<TABLE>

Item 8:  Financial Statements and Supplementary Data

<CAPTION>
                                    Electronics for Imaging, Inc.
                                     Consolidated Balance Sheets

                                                                                 December 31,
(In thousands, except share and per share amounts)                          1999             1998
-----------------------------------------------------------------------------------------------------

<S>                                                                       <C>               <C>     
Assets

Current assets:
Cash and cash equivalents                                                 $163,824          $ 58,909
Short-term investments                                                     306,504           269,823
Accounts receivable, net                                                    81,904            59,660
Inventories                                                                 11,878            16,485
Other current assets                                                        24,902            21,853

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

          Total current assets                                             589,012           426,730

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

Property and equipment, net                                                 49,776            47,632
Other assets                                                                17,287             9,829

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

                    Total assets                                          $656,075          $484,191

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

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable                                                          $ 47,102          $ 32,849
Accrued and other liabilities                                               29,771            29,009
Income taxes payable                                                        24,548             9,511

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

          Total current liabilities                                        101,421            71,369

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

Long - term obligations, less current portion                                3,467             4,142

Commitments and Contingencies (Note 6)

Stockholders' equity:

Preferred stock, $.01 par value; 5,000,000 shares
authorized; none
      issued and outstanding                                                  --                --

Commonstock,  $.01 par value;                                          150,000,000            shares
 authorized;                                                            55,722,214               and
      53,984,484 shares issued and outstanding,
      respectively                                                             557               540

Additional paid-in capital                                                 201,679           153,899
Accumulated other comprehensive income (loss)                                 (772)             (199)
Retained earnings                                                          349,723           254,440

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

          Total stockholders' equity                                       551,187           408,680

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

                    Total liabilities and
                          stockholders' equity                       $     656,075     $     484,191

-----------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>


                                                                              25

<PAGE>


<TABLE>
                                            Electronics for Imaging, Inc.
                                          Consolidated Statements of Income
<CAPTION>
                                                                                     Years ended December 31,
(In thousands, except per share amounts)                                       1999            1998            1997
-------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>             <C>             <C>     
Revenue                                                                    $570,752        $446,999        $373,404

Cost of revenue                                                             290,636         249,179         171,138

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

Gross profit                                                                280,116         197,820         202,266

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

Operating expenses:

Research and development                                                     74,971          60,150          42,868

Sales and marketing                                                          59,373          60,615          46,776

General and administrative                                                   18,403          16,637          13,578

In-process R&D                                                                   --              --           9,400

Merger related expenses                                                       1,422              --              --
                                                                            -------         -------         -------
                                                                            154,169         137,402         112,622

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

Income from operations                                                      125,947          60,418          89,644

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

Other income, net                                                            16,250           9,859          10,309
                                                                           --------        --------        --------

Income before income taxes                                                  142,197          70,277          99,953

Provision for income taxes                                                 (46,914)        (22,456)        (35,944)

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

Net income                                                                  $95,283         $47,821         $64,009

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

Net income per basic common share                                             $1.74           $0.89           $1.21

Shares used in per-share calculation                                         54,853          53,507          52,831

Net income per diluted common share                                           $1.67           $0.87           $1.13

Shares used in per-share calculation                                         56,963          54,972          56,713

-------------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>


                                                                              26

<PAGE>


<TABLE>
                                                Electronics for Imaging, Inc.
                                       Consolidated Statements of Stockholders' Equity

<CAPTION>
                                                    Additional          Accumulated     Other          Total
                                                   Common Stock           Paid-In   Comprehensive     Retained  Stockholders'
(In thousands)                                 Shares         Amount      Capital   Income (Loss)     Earnings     Equity
---------------------------------------------------------------------------------------------------------------------------
<S>                     <C> <C>                <C>             <C>       <C>                <C>      <C>           <C>     
Balances as of December 31, 1996               51,975          $520      $114,975           $--      $142,610      $258,105

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

Comprehensive income
      Net income                                   --            --            --            --        64,009        64,009
                                                                                                       ------        ------

Comprehensive income                               --            --            --            --        64,009        64,009

Exercise of common stock options                1,055            10        10,058            --            --        10,068

Tax benefit related to stock plans                 --            --        14,545            --            --        14,545

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

Balances as of December 31, 1997               53,030           530       139,578            --       206,619       346,727

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

Comprehensive income
      Net income                                   --            --            --            --        47,821        47,821
      Functional currency adjustment               --            --            --          (199)           --          (199)
                                                                                          -----            --         -----
Comprehensive income                                                                       (199)       47,821        47,622

Exercise of common stock options                  954            10         8,683            --            --         8,693

Tax benefit related to stock plans                 --            --         5,638            --            --         5,638

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

Balances as of December 31, 1998               53,984           540       153,899         (199)       254,440       408,680

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

Comprehensive income
      Net income                                   --            --            --            --        95,283        95,283
      Functional currency adjustment                                                         71            --            71
      Market valuation adjustment 
      short-term investments                       --            --            --          (644)           --          (644)
                                                                                                        -----          ----
   
Comprehensive income                               --            --            --         (573)        95,283        94,710


Exercise of common stock options                1,738            17        27,573            --            --        27,590

Tax benefit related to stock plans                 --            --        20,207            --            --        20,207

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

Balances as of December 31, 1999               55,722          $557      $201,679        ($772)      $349,723      $551,187

---------------------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>



                                                                              27

<PAGE>


<TABLE>
                                             Electronics for Imaging, Inc.
                                         Consolidated Statements of Cash Flows
<CAPTION>
                                                                                      Years ended December 31,
(In thousands)                                                                 1999              1998             1997
----------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>               <C>              <C>    
Cash flows from operating activities:
Net income                                                                  $95,283           $47,821          $64,009
Adjustments to reconcile net income to net cash
provided by operating activities:
    Depreciation and amortization                                            14,464            14,051            7,489
    Deferred taxes                                                         (13,304)           (2,110)          (4,300)
    Change in reserve for bad debts                                           (431)               250             (41)
    In-process research and development                                          --                --            9,400
    Other                                                                        71             (199)               --

    Changes in operating assets and liabilities:
        Accounts receivable                                                (21,813)          (27,431)           10,752
        Inventories                                                           4,607             9,912         (11,493)
        Receivable from subcontract manufacturers                             (407)            12,276          (5,854)
        Other current assets                                                  2,245              (38)          (4,419)
        Accounts payable and accrued liabilities                             13,988            19,802          (2,870)
        Income taxes payable                                                 36,806             6,795           10,195

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

    Net cash provided by operating activities                               131,509            81,129           72,868

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

Cash flows from investing activities:
Purchases of short-term investments                                       (132,188)         (327,483)        (195,669)
Sales / maturities of short-term investments                                 94,171           243,196          150,287
Investment in property and equipment, net                                  (15,622)          (13,210)         (38,317)
Business acquired, net of cash received                                          --                --         (12,626)
Purchase of other assets                                                        347             (181)            (636)

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

    Net cash used for investing activities                                 (53,292)          (97,678)         (96,961)

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

Cash flows from financing activities:

Repayment of long-term obligations                                            (892)             (101)            (374)
Issuance of common stock                                                     27,590            14,331           10,068

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

    Net cash provided by financing activities                                26,698            14,230            9,694

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

Increase (decrease) in cash and cash equivalents                            104,915           (2,319)         (14,399)
Cash and cash equivalents at beginning of year                               58,909            61,228           75,627

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

Cash and cash equivalents at end of year                                   $163,824           $58,909          $61,228

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

Supplemental disclosures of Cash Flow Information:

Cash paid for interest                                                         $303              $369             $225
Cash paid for income taxes                                                   22,591            11,448           30,225
Assumption of debt in conjunction with land acquisition                          --                --            4,467
Equipment purchased under capital leases                                         --               430               73

----------------------------------------------------------------------------------------------------------------------
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>


                                                                              28


<PAGE>


Electronics for Imaging, Inc.

Notes to Consolidated Financial Statements

Note 1:  The Company and Its Significant Accounting Policies


The Company and Its Business

Electronics For Imaging,  Inc., a Delaware corporation (the "Company"),  designs
and  markets  products  that  support  color and  black-and-white  printing on a
variety of peripheral devices.  Its Fiery(R) products  incorporate  hardware and
software  technologies  that  transform  digital  copiers and printers from many
leading copier  manufacturers into fast,  high-quality  networked printers.  The
Company's Fiery products  include  stand-alone  servers,  which are connected to
digital copiers and other peripheral devices,  and Fiery controllers,  which are
embedded  in digital  copiers  and desktop  color  laser  printers.  The Company
operates in one industry and sells its products  primarily to original equipment
manufacturers  in North  America,  Europe  and Japan.  Substantially  all of the
Company's revenue to date has resulted from the sale of Fiery products.


Basis of Presentation

The accompanying combined consolidated financial statements include the accounts
of the Company and its  subsidiaries,  including the company  formerly  known as
Management  Graphics  Inc.  that merged with  Electronics  For Imaging,  Inc. on
August 31, 1999 in a pooling of  interests  transaction.  All periods  presented
have been  restated  in order to include  the  financial  results of  Management
Graphics  Inc.  as if the  acquired  entity  was a  wholly-owned  subsidiary  of
Electronics For Imaging,  Inc. since  inception.  All significant  inter-company
accounts and transactions have been eliminated in consolidation.


Revenue Recognition

Revenue is  recognized  when the  product is shipped,  provided  no  significant
obligations  remain and  collectibility is reasonably  probable.  Provisions for
estimated  warranty costs and potential  sales returns are recorded when revenue
is recognized.


Fair Value of Financial Instruments

The carrying amounts of cash, cash equivalents, short-term investments, accounts
receivable, accounts payable, accrued liabilities and bonds payable as presented
in the financial statements, approximate fair value based on the nature of these
instruments and prevailing interest rates.


Concentration of Credit Risk

The  Company  is  exposed  to credit  risk in the event of default by any of its
customers to the extent of amounts recorded on the  consolidated  balance sheet.
The Company performs ongoing  evaluations of the  collectibility of the accounts
receivable  balances for its  customers  and  maintains  reserves for  estimated
credit losses; such actual losses have been within management's expectations.


Cash, Cash Equivalents and Short-Term Investments

The Company  generally  invests its excess  cash in deposits  with major  banks,
money  market  securities,   municipal,   U.S.  government  and  corporate  debt
securities.  By policy,  the Company invests primarily in high-grade  marketable
securities. The Company is exposed to credit risk in the event of default by the
financial  institutions or issuers of these investments to the extent of amounts
recorded on the consolidated balance sheet.

The Company considers all highly liquid  investments,  generally with a maturity
of three months or less at the time of  purchase,  to be cash  equivalents.  The
cost of these  investments has generally  approximated  fair value.  Investments
with longer maturities are classified as available-for-sale.  Available-for-sale
securities are stated at fair value with unrealized gains and losses reported as
a separate  component of  stockholders'  equity,  net of deferred  income taxes.
Realized  gains  and  losses  on  sales of  investments  are  included  in other
revenues.

                                                                              29

<PAGE>


Inventories

Inventories are stated at standard cost which  approximates  the lower of actual
cost using a first-in,  first-out  method, or market.  The Company  periodically
reviews its inventories  for potential  slow-moving or obsolete items and writes
down specific items to net realizable value as appropriate.


Property and  Equipment

Property and equipment is recorded at cost.  Depreciation  on assets is computed
using the  straight-line  method over the estimated  useful lives of the assets,
generally  10 to 60  months.  Leasehold  improvements  are  amortized  using the
straight-line  method over the estimated useful lives of the improvements or the
lease term, if shorter.  Land improvements are amortized using the straight-line
method over the estimated useful lives of the improvements.


Amortization of Intangibles

Current  goodwill  and  other  intangible  assets  acquired  to date  are  being
amortized on a straight-line basis over periods ranging from 1 to 5 years.


Income Taxes

The Company  accounts  for income  taxes under the  provisions  of  Statement of
Financial  Accounting  Standards  No.  109 (SFAS  109),  "Accounting  for Income
Taxes". Under SFAS 109, deferred tax liabilities and assets are determined based
on the differences  between the financial  statement and tax bases of assets and
liabilities,  using  enacted  tax  rates in  effect  for the  year in which  the
differences  are expected to reverse.  No provision for U.S.  income tax is made
for undistributed earnings of the Company's foreign subsidiaries,  to the extent
it is the Company's  intention to  indefinitely  reinvest  these earnings in the
respective subsidiaries.


Foreign Currency Translation

The functional currency for all of the Company's foreign operations,  except for
Japan,  is the U.S.  dollar.  The functional  currency for Japan is the Japanese
Yen. Where the U.S. dollar is the functional currency,  translation  adjustments
are  recorded in income.  Where the  Japanese  Yen is the  functional  currency,
translation  adjustments are recorded as a separate  component of  Stockholders'
Equity.  Foreign currency  translation and transaction gains and losses have not
been significant in any period presented.


Accounting for Derivative Instruments and  Risk Management

The  Company  operates  internationally,  giving rise to exposure to market risk
from changes in foreign  exchange rates.  Derivative  financial  instruments are
used by the Company to reduce  those  risks.  The Company does not hold or issue
financial  or  derivative  financial  instruments  for  trading  or  speculative
purposes.  The magnitude and volume of such  transactions  were not material for
the periods presented.  As of December 31, 1999, the Company had one outstanding
forward foreign exchange  contract to sell Yen equivalent to approximately  $1.8
million with an expiration date of January 31, 2000.

In June 1998,  the  Financial  Accounting  Standards  Board (the "FASB")  issued
Statement of Financial  Accounting  Standards No. 133 (SFAS 133) "Accounting for
Derivative  Instruments and Hedging".  This statement establishes accounting and
reporting  standards for derivative  instruments and for hedging  activities and
requires,  among other  things,  that all  derivatives  be  recognized as either
assets or liabilities  in the statement of financial  position and measure those
instruments at fair value. In June 1999, the FASB issued  Statement of Financial
Accounting Standards No. 137 (SFAS 137),  "Accounting for Derivative Instruments
and Hedging  Activities - Deferral of Effective Date of FASB Statement No. 133".
SFAS 133, as amended by SFAS 137, is  effective  for fiscal  quarters and fiscal
years  beginning  after June 15,  2000.  The Company is  currently  studying the
provisions of the SFAS 133 and the potential impact it may have on its financial
statements.


Stock Options

In 1997, the Company adopted Statement of Financial Accounting Standards No. 123
(SFAS 123), "Accounting for Stock-Based  Compensation".  As permitted under this
standard,  the Company has elected to follow Accounting Principles Board Opinion
No. 25

                                                                              30

<PAGE>

(APB 25), "Accounting for Stock Issued to Employees" in accounting for its stock
options and other stock-based  employee awards. Pro forma information  regarding
net income and earnings per share,  as calculated  under the  provisions of SFAS
123, are disclosed in Note 9.


Computation  of Net Income per Common  Share

Net income per basic common share is computed using the weighted  average number
of common shares  outstanding  during the period.  Net income per diluted common
share is  computed  using the  weighted  average  number of  common  shares  and
potential common shares outstanding  during the period.  Potential common shares
result  from  the  assumed  exercise,   using  the  treasury  stock  method,  of
outstanding common stock options having a dilutive effect.


Comprehensive Income

Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 (SFAS 130), "Reporting  Comprehensive  Income". This Statement
requires that all items recognized  under accounting  standards as components of
comprehensive  earnings  be reported in an annual  financial  statement  that is
displayed with the same prominence as other annual  financial  statements.  This
Statement  also requires that an entity  classify  items of other  comprehensive
earnings by their nature in an annual financial statement.  Comprehensive income
has  been  presented  as part of the  Consolidated  Statements  of  Stockholder'
Equity.  Accumulated other  comprehensive  income (losses),  as presented in the
accompanying  consolidated balance sheets,  consists of the net unrealized gains
(losses)  on  available-for-sale  investments,  net of tax,  and the  cumulative
translation adjustment.


Reclassifications

Certain prior year balances have been  reclassified  to conform with the current
year presentation.


Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could differ from those estimates.



Note 2: Acquisitions

In October of 1997, the Company acquired Pipeline Associates,  Inc. and Pipeline
Asia,  Inc.  (collectively,  "Pipeline")  -  a  leading  software  developer  of
PostScript, HTML and PCL interpreter technologies.  The acquisition cost, net of
cash received was $12.6 million and was accounted for as a purchase.  The excess
of the  acquisition  cost  over the fair  market  value of net  tangible  assets
acquired was $ 12.5 million,  of which $ 9.4 million was allocated to in-process
research  and  development  and  expensed  immediately.  The  allocation  of the
purchase  price to in-process  research and  development  cost was based upon an
independent  appraiser's  evaluation and was determined by identifying  research
projects in areas for which  technological  feasibility had not been established
and no  alternative  future uses existed.  Substantially  all of the  in-process
research and development  projects  acquired were expected to be complete within
the 26 months  following the  acquisition  date.  However,  development of these
projects  remains a  significant  risk due to the remaining  effort  required to
achieve  technological  feasibility,   rapidly  changing  customer  markets  and
significant competitive threats from numerous companies. Failure to bring any of
these  products to market in a timely  manner could  adversely  affect sales and
profitability  of the  Company  in the  future.  Additionally,  the value of net
assets and other intangible assets acquired may become impaired.  The balance of
the excess acquisition cost was allocated to acquired  technology and trademarks
- $ 2.8 million,  and goodwill - $0.3 million which are being  amortized  over 3
and 5 years  respectively.  The Pipeline  acquisition was not deemed material to
the Company's  financial  condition or results of operations,  accordingly,  pro
forma disclosures associated with purchase accounting have not been provided.


On August 31, 1999 the Company  acquired  Management  Graphics,  Inc ("MGI"),  a
Minnesota-based  corporation  that develops digital print on demand products and
other digital imaging products. The acquisition was accounted for as a tax free,
pooling of interests  combination and, accordingly,  the consolidated  financial
statements  have been restated to include the historical  results of MGI for all
periods  presented  prior to the  acquisition,  as if the acquired  entity was a
wholly-owned  subsidiary of Electronics For Imaging,  Inc. 

                                                                              31

<PAGE>

since inception. In connection with the acquisition,  the Company issued a total
of 490,325  shares of its common  stock to the existing  shareholders  of MGI as
consideration  for all shares of capital  stock of MGI. In addition,  holders of
MGI  options  outstanding  at the time of the  acquisition  will  receive,  upon
exercise of such options,  in the aggregate up to 34,170 shares of the Company's
common stock.  The combination  was approved by a majority of shareholders  from
MGI.

During the three month  period  ended  September  30, 1999 the Company  incurred
approximately  $1.4  million of  non-recurring  expenses  related to the merger.
These costs are  included in  operating  expenses  and  consisted  primarily  of
professional fees, severance costs, and travel expenses. Severance costs related
to 33 former  employees of MGI and the related  positions were eliminated due to
duplication   of  resources   between   California   and  Minnesota   locations.
Functionally, the Company eliminated 6 manufacturing, 15 service, 1 engineering,
6 sales and marketing,  and 5 administrative  positions.  The terminations  were
completed as of September 30, 1999.


<TABLE>
Components  of  the  consolidated  statements  of  EFI  and  MGI,  prior  to the
acquisition by EFI are as follows:
<CAPTION>
                                                                          Six             Twelve           Twelve
                                                                        Months            Months           Months
                                                                         Ended             Ended            Ended
                                                                       June 30,        December 31,     December 31,
(In thousands)                                                           1999              1998             1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>               <C>     
Net revenues
     EFI                                                                $256,049         $430,723          $360,631
     MGI                                                                   8,841           16,276            12,773
                                                                        --------         --------          --------
                                                                        $264,890         $446,999          $373,404
                                                                        ========         ========          ========
---------------------------------------------------------------------------------------------------------------------

Net income
     EFI                                                                 $40,442          $46,041           $64,882
     MGI                                                                     368            1,780             (873)
                                                                        --------         --------          --------
                                                                         $40,810          $47,821           $64,009
                                                                        ========         ========          ========
---------------------------------------------------------------------------------------------------------------------
<FN>
Note:  MGI revenue and net income for the eight month period ended August 31, 1999 amounted to $11,245 and $319,
respectively.
</FN>
</TABLE>


                                                                              32

<PAGE>



<TABLE>
Note 3: Balance Sheet Components
<CAPTION>
                                                                                               December 31,
(In thousands)                                                                      1999                          1998
----------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                           <C>    
Accounts receivable:

Accounts receivable                                                              $83,170                       $61,357
Less reserves and allowances                                                     (1,266)                       (1,697)
                                                                                 -------                       -------
                                                                                 $81,904                       $59,660

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

Inventories:

Raw materials                                                                    $10,844                       $15,289
Work in process                                                                       33                           250
Finished goods                                                                     1,001                           946
                                                                                 -------                       -------
                                                                                 $11,878                       $16,485

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

Other current assets:

Receivable from subcontract manufacturers                                         $4,742                        $4,335
Deferred income taxes, current portion                                            14,772                         9,885
Other                                                                              5,388                         7,633
                                                                                 -------                       -------
                                                                                 $24,902                       $21,853

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

Property and equipment:

Land and land improvements                                                       $27,681                       $27,706
Equipment and purchased software                                                  59,499                        49,574
Furniture and leasehold improvements                                              13,261                         7,753
                                                                                  ------                         -----
                                                                                 100,441                        85,033
Less accumulated depreciation and amortization                                  (50,665)                      (37,401)
                                                                                 -------                       -------

                                                                                 $49,776                       $47,632

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

Other assets:

Deferred income taxes, non-current portion                                       $14,915                        $6,124
Other                                                                              2,372                         3,705
                                                                                 -------                       -------
                                                                                 $17,287                        $9,829

----------------------------------------------------------------------------------------------------------------------
Accrued and other liabilities:

Accrued product-related obligations                                               $7,809                        $4,650
Accrued royalty payments                                                           7,327                         8,662
Accrued compensation and benefits                                                  7,263                         6,047
Other accrued liabilities                                                          7,372                         9,650
                                                                                 -------                       -------
                                                                                 $29,771                       $29,009

----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                              33

<PAGE>

Note 4: Marketable Securities


<TABLE>
The following tables summarize the Company's investment in securities:


<CAPTION>
                                             Amortized     Gross Unrealized  Gross Unrealized       Fair
December 31, 1999                               Cost             Gains            Losses            Value
----------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                          <C>                  <C>             <C>             <C>     
Municipal Securities                         $246,861                --           $(804)          $246,057
U.S. Government Securities                     54,636                --            (139)            54,497
U.S. Corporate Debt Securities                  5,969                --             (19)             5,950
----------------------------------------------------------------------------------------------------------

Total investments                            $307,466                --           $(962)          $306,504

----------------------------------------------------------------------------------------------------------
</TABLE>




<TABLE>
<CAPTION>
                                             Amortized     Gross Unrealized  Gross Unrealized       Fair
December 31, 1998                               Cost             Gains            Losses            Value
---------------------------------------------------------------------------------------------------------
(In thousands)
<S>                                          <C>                  <C>              <C>            <C>     
Municipal Securities                         $218,431                --               --          $218,431
U.S. Government Securities                     16,457                --               --            16,457
U.S. Corporate Debt Securities                 34,935                --               --            34,935
----------------------------------------------------------------------------------------------------------

Total debt securities                        $269,823                --               --          $269,823

----------------------------------------------------------------------------------------------------------
</TABLE>




<TABLE>
The following table summarizes debt maturities as of December 31, 1999:

<CAPTION>
                                                                                 Amortized          Fair
(In thousands)                                                                     Cost             Value
----------------------------------------------------------------------------------------------------------
<S>                                                                             <C>               <C>     
Less than one year                                                              $123,243          $122,896
Due in 1-2 years                                                                 177,078           176,490
Due in 2-5 years                                                                   7,145             7,118
Due after 5 years                                                                     --                --
----------------------------------------------------------------------------------------------------------

Total investments                                                               $307,466          $306,504

----------------------------------------------------------------------------------------------------------
</TABLE>


                                                                              34


<PAGE>


Note 5: Long -Term Debt


<TABLE>
Long Term Debt  consists  of amounts  due to the City of Foster City for certain
bonds assumed by the Company during the purchase of land (see Note 6). Principal
amounts owing under the bonds are as follows:

<CAPTION>
(In thousands)                                                              Year  ending December 31, 1999
----------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>   
Total principal                                                                                     $3,775
Less: current portion                                                                                (308)
----------------------------------------------------------------------------------------------------------
                                                                                                    $3,467

----------------------------------------------------------------------------------------------------------
</TABLE>



<TABLE>
The  bonds  are  secured  by the  land  and  bear  an  annual  interest  rate of
approximately 7%. Interest and principal payments are due semi-annually with the
last payment occurring in June 2009.  Principal payments under the bonds payable
are as follows:

<CAPTION>
(In thousands)                                                              Year  ending December 31, 1999
----------------------------------------------------------------------------------------------------------
<S>                                                                                                  <C>  
2000                                                                                                  $308
2001                                                                                                   317
2002                                                                                                   332
2003                                                                                                   352
2004                                                                                                   373
Thereafter                                                                                           2,093
----------------------------------------------------------------------------------------------------------
                                                                                                    $3,775

----------------------------------------------------------------------------------------------------------
</TABLE>


Note 6: Commitments and Contingencies

Leases

On July 18,  1997,  the Company  entered  into an agreement to lease a ten-story
295,000 square foot building to be  constructed  on 35 acres,  which the Company
owns in Foster City, California.  The construction of the building was completed
in July 1999. The lessor of the building  committed to fund the  construction of
the building which amounted to $57.0 million Rent  obligations  for the building
bear a direct  relationship  to the carrying cost of the commitment  drawn.  The
amount  of  this  rent  obligation  is  included  in the  future  minimum  lease
commitments under non-cancelable operating leases.

The lease  associated  with the Foster City  building  has a term of seven years
from the date of inception  with an option to renew the lease for an  additional
three to five years subject to certain conditions. In connection with the lease,
the Company  entered into a lease of a portion of the land in Foster City to the
lessor  of the  building  at a  nominal  rate and for a term of 34 years  and 11
months.  If the Company  terminates  or does not  negotiate  an extension of its
lease of the building, the ground lease to the lessor converts to a market rate.
The Company,  at its option,  may purchase the building  during or at the end of
the terms of the lease at the amount  expended  by the lessor to  construct  the
building.  The Company  has  guaranteed  a residual  value  associated  with the
building to the lessor of  approximately  82% of the  lessor's  funding.  If the
Company defaults on its lease,  does not renew its lease,  does not purchase the
building or arrange for a third party to purchase the building at the end of the
lease  term,  it may be  liable to the  lessor  for the  amount of the  residual
guarantee. The lease has been classified as an operating lease.

As part of this  agreement,  the Company  must  maintain a minimum  tangible net
worth.  In addition,  in order to obtain a favorable lease rate, the Company has
pledged certain  securities  ($69.1 million at December  31,1999) in a custodial
account as collateral to ensure  fulfillment  of the  obligations  to the lessor
under the lease  agreement.  The  Company  may  invest  these  funds in  certain
securities  and  receive the full  benefit of the  investment.  However,  if the
Company uses or transfers  these funds,  the rent on the building would increase
and the Company  would be required to comply with certain  additional  financial
covenants.


On December 29, 1999, the Company entered into an agreement to lease  additional
facilities,  for up to 543,000 square feet, to be constructed on 35 acres, which
the Company  owns in Foster  City,  California.  The lessor of the  building has
committed to fund up to a maximum of $137.0 million for the  construction of the
facilities,  with  the  portion  of  the  committed  amount  actually  used  for
construction to be determined by the Company. The construction of the additional
facilities is scheduled to be completed over the


next 36 months.  Rent obligations for the building bear a direct relationship to
the carrying cost of the commitments drawn. As of December 31, 1999, the Company
had not drawn any amounts under the arrangement.

The lease  associated  with the additional  Foster City facilities has a term of
seven years with an option to renew subject to certain  conditions.  The Company
may, at its option,  purchase the facilities during or at the end of the term of
the lease at the amount expended by the lessor to construct the  facilities.  In
connection  with the  lease,  the  Company  entered  into a lease of its land in
Foster City to the lessor of the  buildings  at a nominal rate and for a term of
30 years.  If the Company  terminates  or does not negotiate an extension of its
lease of the building, the ground lease to the lessor converts to a market rate.
The Company,  at its option,  may purchase the building  during or at the end of
the term of the lease at  approximately  the  amount  expended  by the lessor to
construct the building.  The Company has guaranteed a residual value  associated
with the building to the lessor of 82% of the lessor's  funding.  If the Company
defaults on its lease,  does not renew its lease, does not purchase the building
or arrange for a third party to  purchase  the  facility at the end of the lease
term, it may be liable to the lessor for the amount of the residual guarantee.

As part of this  agreement,  the Company  must  maintain a minimum  tangible net
worth.  In addition,  the Company has committed to pledge certain  securities in
proportion to the amount drawn against the  commitment to be held in a custodial
account as collateral to ensure  fulfillment  of the  obligations  to the lessor
under the lease agreement.  No amounts were committed at December 31,1999 as the
Company had not drawn any amounts under the arrangement.  The Company may invest
these  funds  in  certain  securities  and  receive  the  full  benefit  of  the
investment, however the funds are restricted as to withdrawal at all times.


The Company has one operating lease commitment  related to a previous  corporate
facility.  The  operating  lease  expires in June 2000 and is currently  earning
sublease income.  The Company has also operating  leases for facilities  located
outside of California, expiring between May 2001 and October 2002.



<TABLE>
The   following   summarizes   the  future   minimum  lease  payment  under  the
non-cancelable operating leases:

<CAPTION>
Fiscal Year                                                                                 (In thousands)
----------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>   
2000                                                                                                $5,063
2001                                                                                                 4,188
2002                                                                                                 4,027
2003                                                                                                 3,839
2004                                                                                                 2,240
Thereafter                                                                                              --
----------------------------------------------------------------------------------------------------------
Total                                                                                              $19,357

Less:  sublease income                                                                                (912)

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

Net lease obligation                                                                               $18,445

----------------------------------------------------------------------------------------------------------
<FN>
Note:  Lease  obligation  related to the principal  corporate  facility is estimated and is based on 
current market interest rates (LIBOR) and based on collateralized assumptions.
</FN>
</TABLE>


The Company was  assigned an  agreement  with a financing  company for a line of
credit,  to  fund  certain  equipment  additions,  as part  of the  merger  with
Management Graphics, Inc. All equipment purchases under this line of credit were
structured as capital leases. As of December 31, 1999, all obligations under the
line of credit have been satisfied.

Rental expense amounted to approximately  $6.6 million,  $4.6 million,  and $3.4
million for the fiscal years ended 1999, 1998 and 1997, respectively.


Legal Proceedings

The  Company  and  certain  principal  officers  and  directors  were  named  as
defendants  in class action  complaints  filed in both the  California  Superior
Court of the County of San Mateo on December  15,  1997,  and the United  States
District  Court for the Northern  District of California on December 31, 1997 on
behalf of purchasers of the common stock of the Company  during the class period

                                                                              36


<PAGE>

from April 10, 1997, through December 11, 1997. The complaints allege violations
of securities laws during the class period. Management believes the lawsuits are
without  merit and that the outcome will not have a material  adverse  effect on
the  financial  position or overall  trends in the results of  operations of the
Company.  However, due to the inherent uncertainties of litigation,  the Company
cannot  accurately   predict  the  ultimate  outcome  of  the  litigation.   Any
unfavorable  outcome  of the  litigation  could  have an  adverse  impact on the
Company's  financial  condition  and results of  operations.  In  addition,  the
Company is involved from time to time in litigation  relating to claims  arising
in the normal  course of its  business.  The Company  believes that the ultimate
resolution of such claims will not materially  affect the Company's  business or
financial condition.


Note 7: Income Taxes


<TABLE>
The provision (benefit) for income taxes is summarized as follows:

<CAPTION>
                                                                                     Years ended December 31,
(In thousands)                                                               1999              1998             1997
--------------------------------------------------------------------------------------------------------------------
<S>                                                                       <C>               <C>              <C>    
Current:
U.S. Federal                                                              $51,085           $20,771          $34,231
State                                                                       8,044             3,749            5,741
Foreign                                                                     1,463                46              272
--------------------------------------------------------------------------------------------------------------------

       Total current                                                       60,592            24,566           40,244

Deferred:
U.S. Federal                                                              (13,265)           (2,348)          (3,483)
State                                                                        (408)              238             (817)
Foreign                                                                        (5)                0                0
--------------------------------------------------------------------------------------------------------------------
      Total deferred                                                      (13,678)           (2,110)          (4,300)

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

Total provision (benefit) for income taxes                                $46,914           $22,456          $35,944

--------------------------------------------------------------------------------------------------------------------
</TABLE>



<TABLE>

The tax effects of temporary  differences  that give rise to deferred tax assets
are as follows:
<CAPTION>
                                                                                                   December 31,
(In thousands)                                                                                 1999             1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                          <C>                <C> 
Depreciation                                                                                 $1,901             $825
Inventory reserves                                                                            4,532            3,379
Other reserves and accruals                                                                   6,762            5,185
State taxes payable                                                                           1,568              672
Deferred revenue                                                                                496              631
Intangibles                                                                                   4,636            3,803
Deferred tax on I/C transactions                                                              8,148               --
Other                                                                                         1,644            1,514
--------------------------------------------------------------------------------------------------------------------

Total deferred tax assets                                                                   $29,687          $16,009

--------------------------------------------------------------------------------------------------------------------
</TABLE>






<TABLE>
A  reconciliation  between  the income tax  provision  computed  at the  federal
statutory rate and the actual tax provision is as follows:

<CAPTION>
                                                                        Years ended December 31,
(In thousands)                                          1999                      1998                      1997
                                                        ----                      ----                      ----
<S>                                               <C>         <C>           <C>          <C>          <C>          <C> 
                                                  $               %         $                %        $                %
-----------------------------------------------------------------------------------------------------------------------



                                                                              37

<PAGE>

Tax expense at federal statutory rate             $49,769     35.0          $24,572      35.0         $34,998      35.0
State income taxes, net of federal benefit          5,502      3.9            3,063       4.4           3,167       3.2
Tax-exempt interest income                         (3,601)    (2.5)          (2,717)     (4.0)         (2,245)     (2.2)
Tax credits                                        (2,725)    (1.9)          (1,874)     (2.8)         (1,129)     (1.1)
FSC benefit                                        (3,360)    (2.4)          (1,039)     (1.5)         (2,077)     (2.1)
Other                                               1,329      0.9              451       0.9           3,230       3.2
-----------------------------------------------------------------------------------------------------------------------

                                                  $46,914     33.0          $22,456      32.0         $35,944      36.0

-----------------------------------------------------------------------------------------------------------------------
</TABLE>


Income before income taxes includes $2.0 million,  $3.2 million and $1.0 million
of  income   relating  to  non  -U.S.   operations  for  1999,  1998  and  1997,
respectively.


Note 8: Earnings Per Share


<TABLE>
The following table presents a reconciliation  of basic and diluted earnings per
share for the three years in the period ended December 31, 1999:

<CAPTION>
                                                                                     Years ended December 31,
(In thousands)                                                              1999             1998              1997
-------------------------------------------------------------------------------------------------------------------

<S>                                                                      <C>              <C>               <C>    
Net income available to common shareholders                              $95,283          $47,821           $64,009

Shares

   Basic shares                                                           54,853           53,507            52,831
   Effect of Dilutive Securities                                           2,110            1,465             3,882
                                                                          ------           ------            ------

Diluted shares                                                            56,963           54,972            56,713
-------------------------------------------------------------------------------------------------------------------

Earnings per common share

   Basic EPS                                                               $1.74            $0.89             $1.21
   Diluted EPS                                                             $1.67            $0.87             $1.13

-------------------------------------------------------------------------------------------------------------------
<FN>
Antidilutive Options. Options to purchase 349,791,  2,742,510 and 586,540 shares
of  common  stock   outstanding  as  of  December  31,  1999,  1998,  and  1997,
respectively,  were not included in the  computations of diluted EPS because the
options'  exercise  prices were  greater  than the average  market  price of the
common shares for the years then ended.
</FN>
</TABLE>




Note 9:  Employee Benefit Plans


Stock Option Plans


<TABLE>
As of December 31, 1999, the Company has four  stock-based  compensation  plans,
described  below.  The Company  applies APB 25 and  related  interpretations  in
accounting for its plans. Accordingly,  no compensation cost has been recognized
for its fixed stock option plans. Had  compensation  cost for options granted in
1999, 1998 and 1997 under the Company's  option plans been  determined  based on
the fair value at the grant dates as  prescribed  by SFAS 123, the Company's net
income and pro forma net income per share would have been as follows:

<CAPTION>
                                                                                    Years ended December 31,
(In thousands, except per share amounts)                                   1999                 1998             1997
-----------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                             <C>                 <C>               <C>    
Net income                                As reported                     $95,283             $47,821           $64,009
                                          Pro forma                       $61,410             $18,543           $40,996

Earnings per basic                        As reported                       $1.74               $0.89             $1.21

                                                                              38

<PAGE>

        common share                      Pro forma                         $1.12               $0.35            $0.78

Earnings per diluted                      As reported                       $1.67               $0.87            $1.13
        common share                      Pro forma                         $1.08               $0.34            $0.72
</TABLE>



The Company has four stock  option  plans:  the 1989 Stock Plan (a  "Predecessor
Plan") , the 1990 Stock Plan (a "Stock Plan"),  the MGI 1985 Nonqualified  Stock
Option Plan (a "Predecessor  Plan") and the 1999 Equity Incentive Plan (a "Stock
Plan").  The Company  does not grant any options  under the  Predecessor  Plans,
however all  outstanding  options  under the  Predecessor  Plans  continue to be
governed by the terms and conditions of the existing option agreements for those
grants.  Under the Stock  Plans,  the exercise  price of each option  equals the
market price of the Company's stock on the date of grant and an option's maximum
term is 10 years.  Options  are  granted  periodically  throughout  the year and
generally vest ratably over four years. At December 31, 1999,  approximately 5.3
million  shares were  available  for future  grants to  employees,  directors or
consultants.


<TABLE>
The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes  option-pricing  model,  the  attribution  method with  respect to
graded vesting and the following weighted-average assumptions:

<CAPTION>
                                                                                 Years Ended December 31,
Black Scholes Assumptions & Fair Value                                 1999               1998             1997
---------------------------------------------------------------------------------------------------------------------
 
<S>                                                               <C>      <C>        <C>      <C>     <C>      <C>  
Expected Volatility                                                   76.3%               76.0%            69.0%
Dividend Yield                                                         0.0%                0.0%             0.0%
Risk Free Interest Rate                                           5.95% to 6.44%      4.49% to 4.65%   5.35% to 5.83%
Weighted Average Expected Option Term                               4.5 years           4.4 years        5.2 years

Weighted Average Fair Value of Options Granted                       $19.35               $6.98           $25.22

---------------------------------------------------------------------------------------------------------------------
</TABLE>




<TABLE>
A summary of the status of the  Company's  stock  option  activity is  presented
below:
<CAPTION>
                                                                      Years ended December 31,
(In thousands, except exercise price)         1999                             1998                                1997
-------------------------------------------------------------------------------------------------------------------------------

                                                  Average                            Average                            Average
                                                 Exercise                           Exercise                           Exercise
                                      Shares        Price                 Shares       Price                 Shares       Price
-------------------------------------------------------------------------------------------------------------------------------

<S>                                   <C>          <C>                     <C>        <C>                    <C>         <C>   
Beginning of Year                      6,734       $21.04                  6,401      $21.76                  6,151      $13.19

Granted                                2,955        36.81                  1,931       16.05                  1,615       45.24
Exercised                             (1,738)       16.06                   (954)       9.19                 (1,055)       9.51
Forfeited                               (616)       31.09                   (644)      30.73                   (310)      25.36
-------------------------------------------------------------------------------------------------------------------------------

End of Year                            7,335       $27.73                  6,734      $21.04                  6,401      $21.76

-------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                              39


<PAGE>



<TABLE>
The following table summarizes  information  about stock options  outstanding at
December 31, 1999:

<CAPTION>
                                             Options Outstanding                             Options Exercisable
--------------------------------------------------------------------------------------------------------------------------
                                 Number                                                   Number           
        Range of             Outstanding         Weighted Avg.       Weighted Avg.      Exercisable         Weighted Avg.
    Exercise Prices         (in thousands)      Remaining Life      Exercise Price      in thousands)      Exercise Price
--------------------------------------------------------------------------------------------------------------------------
<S>                                <C>               <C>                  <C>                 <C>               <C>  
   $0.01 to $5.63                  897               3.48                 $3.50               897               $3.50
   $5.64 to $14.12                 841               6.54                $12.98               610              $12.69
   $14.13 to $15.64                 76               6.00                $15.07                49              $15.06
   $15.65 to $20.80                855               7.94                $16.10               279              $16.29
   $20.81 to $26.80                670               6.65                $25.38               423              $25.54
   $26.81to $34.37               2,177               9.12                $33.58                54              $29.88
   $34.38 to $47.37              1,245               8.12                $43.27               402              $45.28
   $47.38 to $58.37                562               8.87                $52.94               115              $52.67
   $58.38 to $59.87                  3               9.53                $58.38                 0               $0.00
   $59.88 to $59.88                  9               9.68                $59.88                 0               $0.00
--------------------------------------------------------------------------------------------------------------------------

   $0.01 to $59.88               7,335               7.55                $27.73             2,829              $18.68

--------------------------------------------------------------------------------------------------------------------------
</TABLE>



Employee 401(k) Plan

As of 1999, the Company  sponsors a 401 (k) Savings Plan (the "401 (k) Plan") to
provide  retirement  and incidental  benefits for its  employees.  Employees may
contribute from 1% to 20% of their annual compensation to the Plan, limited to a
maximum annual amount as set periodically by the Internal  Revenue Service.  The
Company currently matches employee contributions 50 cents on the dollar, up to a
maximum  of a 2%  match  on the  first 4% of the  employee's  contribution.  The
Company match is annually  determined  by the Board of  Directors.  All matching
contributions vest over four years starting with the hire date of the individual
employee.  Company  matching  contributions  to the Plan totaled $0.6 million in
1999.



Note 10: Information Concerning Business Segments and Major Customers



Information about Products and Services

The Company operates in a single industry  segment,  technology for high-quality
printing in short production runs. The Company does not have separate  operating
segments for which discrete  financial  statements  are prepared.  The Company's
management makes operating decisions and assesses performance based on primarily
product revenues and related gross margins.


                                                                              40

<PAGE>


<TABLE>
The following is a breakdown of revenues for the years ended  December 31, 1999,
1998 and 1997 by product category:



<CAPTION>
                                                                  1999             1998              1997
(In thousands)                                                  Revenue          Revenue           Revenue
----------------------------------------------------------------------------------------------------------
<S>                                                            <C>              <C>               <C>     
Stand-alone Servers Connecting
    to Digital Color Copiers                                   $244,028         $291,785          $293,708
Embedded Desktop Controllers,
    Bundled Color Solutions
    & Chipset Solutions                                         149,899           90,133            34,133
Controllers for Digital
    Black and White Solutions                                   121,071           19,196                --
Spares, Licensing
    & Other misc. sources                                        55,754           45,885            45,563
----------------------------------------------------------------------------------------------------------

Total Revenue
                                                               $570,752         $446,999          $373,404
----------------------------------------------------------------------------------------------------------
</TABLE>






Information about Geographic Areas

Except  for  Japan,  all of the  Company's  sales are  originated  in the United
States.  Shipments to some of the Company's OEM partners are made to centralized
purchasing  and  manufacturing  locations,  which in turn sell  through to other
locations.  As a result of these  factors,  the Company  believes  that sales to
certain geographic  locations might be higher or lower,  though accurate data is
difficult to obtain.



<TABLE>
The following is a breakdown of revenues by shipment  destination  for the years
ended 1999, 1998 and 1997, respectively:

<CAPTION>
                                                     Years ended December 31,
(In thousands)                          1999                  1998                1997
----------------------------------------------------------------------------------------------------
<S>                                  <C>                    <C>                 <C>     
United States                        $267,885               $209,938            $175,835
Netherlands                            94,727                 79,878              62,149
Japan                                  90,781                 68,991              64,323
Rest of World                         117,359                 88,192              71,097
----------------------------------------------------------------------------------------------------
                                     $570,752               $446,999            $373,404

----------------------------------------------------------------------------------------------------
</TABLE>



Information about Major Customers

Two customers, with total revenues greater than 10%, accounted for approximately
42% and 18% of revenue in 1999 and 36% and 23% of revenue in 1998, respectively.
Three  customers,   with  total  revenues   greater  than  10%,   accounted  for
approximately 44%, 27% and 14% of revenue in 1997. Two customers,  with accounts
receivable  balances greater than 10%,  accounted for  approximately  61% of the
accounts  receivable  balance as of December 31,  1999.  Three  customers,  with
accounts  receivable  balances greater than 10%, accounted for approximately 69%
and 85% of the accounts  receivable balance as of December 31, 1998 and December
31, 1997, respectively.


                                                                              41



<PAGE>


 
                       Report of Independent Accountants


To the Board of Directors and Stockholders of
Electronics For Imaging, Inc.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements of income,  of  stockholders'  equity and of cash flows
present fairly, in all material respects,  the financial position of Electronics
For Imaging,  Inc. and its  subsidiaries  at December 31, 1999 and 1998, and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 1999, in  conformity  with  principles  generally
accepted in the United States. These financial statements are the responsibility
of the  Company's  management;  our  responsibility  is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States,  which  require  that we plan and  perform  the  audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.


PRICEWATERHOUSECOOPERS LLP

San Jose, California
January 18, 2000




                                                                              42

<PAGE>


                  Quarterly Consolidated Financial Information

(Unaudited)
(In thousands, except per share data)


<TABLE>
The following  table  presents the Company's  operating  results for each of the
eight quarters in the two-year  period ended December 31, 1999. The  information
for each of these  quarters is unaudited but has been prepared on the same basis
as the audited  consolidated  financial  statements  appearing elsewhere in this
Annual  Report.  In  the  opinion  of  management,   all  necessary  adjustments
(consisting only of normal recurring  adjustments) have been included to present
fairly the unaudited quarterly results when read in conjunction with the audited
consolidated financial statements of the Company and the notes thereto appearing
in this Annual Report. These operating results are not necessarily indicative of
the results for any future period.

<CAPTION>
1999:                                                                Q1               Q2                Q3               Q4
---------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>              <C>               <C>              <C>     
Revenue                                                        $124,204         $140,686          $158,211         $147,651
Gross profit                                                     58,655           69,260            78,975           73,226
Income from operations                                           22,694           31,644            38,743           32,866
Net income                                                       17,286           23,524            29,358           25,115
Net income per basic common share                                  0.32             0.43              0.53             0.45
Net income per diluted common share                               $0.31            $0.41             $0.51            $0.44

Revenue by product
    Stand-alone Servers Connecting to Digital Copiers           $62,221          $58,106           $60,184          $63,517
    Embedded Desktop Controllers, Bundled
       Color Solutions & Chipset Solutions                       31,664           36,913            43,940           37,382
    Controllers for Digital Black and White Solutions            16,794           35,176            41,907           27,194
    Spares, Licensing & other misc. sources                      13,525           10,491            12,180           19,558
                                                                 ------           ------            ------           ------
Total revenue                                                  $124,204         $140,686          $158,211         $147,651

Shipments by geographic area
    North America                                               $56,784          $65,633           $77,762          $77,818
    Europe                                                       42,690           47,403            45,833           46,676
    Japan                                                        22,175           22,832            27,614           18,160
    Rest of World                                                 2,555            4,818             7,002            4,997
                                                                  -----            -----             -----            -----
Total                                                          $124,204         $140,686          $158,211         $147,651

1998:                                                                Q1               Q2                Q3               Q4
---------------------------------------------------------------------------------------------------------------------------

Revenue                                                         $85,572         $100,839          $129,804         $130,784
Gross profit                                                     38,685           43,845            56,613           58,677
Income loss from operations                                       4,252           10,278            21,766           24,122
Net income loss                                                   4,164            7,687            17,139           18,831
Net income loss per basic common share                             0.08             0.14              0.32             0.35
Net income loss per diluted common share                          $0.08            $0.14             $0.31            $0.34

Revenue by product
    Stand-alone Servers Connecting to Digital Copiers           $65,188          $63,767           $87,169          $75,661
    Embedded Desktop Controllers, Bundled
       Color Solutions & Chipset Solutions                        9,909           18,717            26,422           35,085
    Controllers for Digital Black and White Solutions             1,128            7,710             4,319            6,039
    Spares, Licensing & other misc. sources                       9,347           10,645            11,894           13,999
                                                                  -----           ------            ------           ------
Total revenue                                                   $85,572         $100,839          $129,804         $130,784

Shipments by geographic area
    North America                                               $39,996          $49,118           $67,461          $65,063
    Europe                                                       30,194           34,849            39,868           39,165
    Japan                                                        12,852           13,181            18,886           24,072
    Rest of World                                                 2,530            3,691             3,589            2,484
                                                                  -----            -----             -----            -----
Total                                                           $85,572         $100,839          $129,804         $130,784

---------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                              43

<PAGE>



                                    PART III



Item  9:  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure

     None.



Item 10: Directors and Executive Officers of the Registrant

     Information regarding directors of the Company is incorporated by reference
     from the information contained under the caption "Election of Directors" in
     the Company's  Proxy  Statement for the  Company's  2000 Annual  Meeting of
     Stockholders (the "2000 Proxy  Statement").  Information  regarding current
     executive  officers of the  Registrant is  incorporated  by reference  from
     information  contained  under  the  caption  "Executive  Officers"  in  the
     Company's 2000 Proxy Statement.  Information regarding Section 16 reporting
     compliance is  incorporated by reference from  information  contained under
     the caption "Section 16 (a) Beneficial  Ownership Reporting  Compliance" in
     the Company's 2000 Proxy Statement.



Item 11:  Executive Compensation

     The information required by this item is incorporated by reference from the
     information  contained under the caption  "Executive  Compensation"  in the
     Company's 2000 Proxy Statement.



Item 12:  Security Ownership of Certain Beneficial Owners and Management

     The information required by this item is incorporated by reference from the
     information  contained  under  the  caption  "Security  Ownership"  in  the
     Company's 2000 Proxy Statement.



Item 13:  Certain Relationships and Related Transactions

     The information required by this item is incorporated by reference from the
     information  contained  under the  caption  "Related  Transactions"  in the
     Company's 2000 Proxy Statement.


                                                                              44

<PAGE>



                                     PART IV


Item 14:  Exhibits, Financial Statement Schedules, and Reports on Form 10-K.

(a) Documents Filed as Part of Form 10-K



        (1) Index to Financial Statements

        The Financial  Statements required by  this item are submitted in Item 8
of this report as follows:

             Report of Independent Accountants.
             Consolidated   Balance   Sheets  at  December  31,  1999  and  1998
             Consolidated  Statements  of  Income  for  the  three  years  ended
             December 31, 1999 Consolidated  Statements of Stockholders'  Equity
             for the three years ended December 31, 1999 Consolidated Statements
             of Cash Flows for the three years ended  December 31, 1999 Notes to
             Consolidated Financial Statements

         (2) Index to Financial Statement Schedule

         Schedule II - Valuation and Qualifying Accounts


         Report of Independent Accountants on Financial Statement Schedule

         (All other  schedules are omitted  because of the absence of conditions
         under which they are required or because the necessary  information  is
         provided in the consolidated financial statements or notes thereto.)


         (3) Exhibits


         Exhibit
         No.     Description
         ---     -----------

         2.2     Agreement  and Plan of Merger and  Reorganization,  dated as of
                 July 14, 1999, among the Company, Redwood Acquisition Corp. and
                 Management Graphics, Inc. (5)


         3.1     Amended and Restated Certificate of Incorporation. (2)

         3.2     Bylaws as amended. (1)

         4.1     See Exhibit 3.1

         4.2     Specimen Common Stock certificate of the Company. (1)

         10.1    Agreement  of Lease dated as of July 30,  1992,  by and between
                 the Company and The Joseph and Eda Pell Revocable Trust for the
                 Company's new executive office in San Mateo, California. (1)

         10.2    First  Addendum  to Lease  dated as of July  30,  1992,  by and
                 between  the  Company  and The  Joseph  and Eda Pell  Revocable
                 Trust. (1)

         10.3+   License  Agreement,  dated as of February 9, 1990,  between the
                 Company and the Massachusetts Institute of Technology. (1)

         10.4    Amendment to License Agreement dated December 31, 1990, between
                 the Company and the Massachusetts Institute of Technology. (1)

                                                                              45


<PAGE>


         Exhibit
         No.     Description
         ---     ------------

         10.5    Amendment to License Agreement dated May 29, 1991 and March 19,
                 1991,  by  and  between  the  Company  and  the   Massachusetts
                 Institute of Technology. (1)

         10.6+   Third Amendment to License Agreement dated June 1, 1992, by and
                 between  the  Company  and  the   Massachusetts   Institute  of
                 Technology. (1)

         10.7+   Custom PostScript  Interpreter OEM License Agreement,  dated as
                 of March 1, 1991,  by and between the Company and Adobe Systems
                 Incorporated. (1)

         10.8++  Postscript Support Source and Object Code Distribution  License
                 Agreement,  dated as of September  12, 1995, by and between the
                 Company and Adobe Systems Incorporated.

         10.9    1989 Stock Plan of the Company. (1)

         10.10   1990 Stock Plan of the Company. (1)

         10.11   Management Graphics, Inc. 1985 Nonqualified Stock Option Plan.

         10.12   The 1999 Equity Incentive Plan. (6)

         10.13** Form of Indemnification Agreement.(1)

         10.14   Employment  Agreement dated January 11, 2000 by and between Dan
                 Avida and the Company.

         10.15   Employment  Agreement  dated March 8, 2000, by and between Fred
                 Rosenzweig and the Company.

         10.16   Employment  Agreement  dated March 8, 2000, by and between Eric
                 Saltzman and the Company.

         10.17   Employment  Agreement  dated March 8, 2000,  by and between Jan
                 Smith and the Company.

         10.18   Employment  Agreement  dated March 8, 2000,  by and between Guy
                 Gecht and the Company.

         10.19** Master Lease and Open End  Mortgages  dated as of July 18, 1997
                 by and between the Company and FBTC Leasing Corp. for the lease
                 financing of the Company's corporate  headquarters  building to
                 be built in Foster City, California.(4)

         10.20   Lease   Financing  of   Properties   Located  in  Foster  City,
                 California,  dated as of January  18,  2000 among the  Company,
                 Societe Generale Financial Corporation and Societe Generale.

         21.1    List of Subsidiaries.

         23.1    Consent of PricewaterhouseCoopers LLP.

         24.1    Power of Attorney (see signature page)

         27      Financial Data Schedule

                 +    The  Company  has  received  confidential  treatment  with
                      respect to portions of these documents.

                 ++   The  Company has  requested  confidential  treatment  with
                      respect to portions of these documents.

                 (1)  Filed  as  an  exhibit  to  the   Company's   Registration
                      Statement  on Form S-1  (No.  33-50966)  and  incorporated
                      herein by reference.

                                                                              46


<PAGE>

                 (2)  Filed  as  an  exhibit  to  the   Company's   Registration
                      Statement on Form S-1 (File No. 33-57382) and incorporated
                      herein by reference.

                 (3)  Filed as an exhibit to the Company's Annual Report on Form
                      10-K  for the year  ended  December  31,  1995  (File  No.
                      0-18805) and incorporated herein by reference.

                 (4)  Filed as an exhibit to the Company's  Quarterly  Report on
                      Form 10-Q for the  quarter  ended June 30,  1997 (File No.
                      0-18805) and incorporated herein by reference.

                 (5)  Filed as an exhibit to the Company's Report of Unscheduled
                      Material Events on Form 8-K on September 8, 1999 (File No.
                      0-18805) and incorporated herein by reference.

                 (6)  Filed  as  an  exhibit  to  the   Company's   Registration
                      Statement   on  Form  S-8   (File   No.   333-88135)   and
                      incorporated herein by reference.



(b)      Reports on Form 8-K

         None filed during the quarter ended December 31, 1999.


(c)      List of Exhibits

         See Item 14 (a).


(d)      Consolidated  Financial  Statement  Schedule  II for  the  years  ended
         December 31, 1999, 1998 and 1997, respectively.

         See Page 45 of this Annual Report on Form 10-K.




<TABLE>

                                             ELECTRONICS FOR IMAGING, INC.

                                                      Schedule II

                                           Valuation and Qualifying Accounts

<CAPTION>
                                               Balance at       Charged to      Charged to                   Balance at
                                               beginning        costs and         other                        end of
Description                                    of period         expenses        accounts       Deductions     period
----------------------------------------------------------------------------------------------------------------------
(In thousands)

<S>                                              <C>                 <C>             <C>          <C>          <C>   
Year Ended December 31, 1999
Allowance for doubtful accounts and
sales-related reserves                           $1,697             $200               $--        $(631)       $1,266

----------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998
Allowance for doubtful accounts and
sales-related reserves                           $1,628             $250               $--        $(181)       $1,697

----------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1997
Allowance for doubtful accounts and
sales-related reserves                           $2,046              $29             $(150)       $(297)       $1,628

----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                              47


<PAGE>



                      Report of Independent Accountants on
                          Financial Statement Schedule

To the Board of Directors and Stockholders
of Electronics for Imaging, Inc.

Our audits of the  consolidated  financial  statement  referred to in our report
dated January 18, 2000 appearing in this Form 10-K also included an audit of the
Consolidated  Financial  Statement  Schedule  listed in Item  14(a) of this Form
10-K. In our opinion,  the Consolidated  Financial  Statement  Schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

PRICEWATERHOUSECOOPERS LLP

San Jose, California
January 18, 2000


                                                                              48


<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     ELECTRONICS FOR IMAGING, INC.

March 17, 2000                       By:           /s/ Guy Gecht
                                                   -------------
                                    Guy Gecht
                                                   Chief Executive Officer

                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE  PRESENT,  that each person  whose  signature  appears
below  constitutes  and  appoints  Guy  Gecht  and  Eric  Saltzman  jointly  and
severally, his attorneys-in-fact,  each with the power of substitution,  for him
in any and all  capacities,  to sign  any  amendments  to the Form  10-K  Annual
Report,  and to file the same,  with  exhibits  thereto and other  documents  in
connection  therewith,  with the  Securities  and  Exchange  Commission,  hereby
ratifying  and  confirming  all  that  each  of said  attorneys-in-fact,  or his
substitute or substitutes, may do or cause to be done by virtue thereof.


<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

<CAPTION>
       Signature                              Title                                          Date
       ---------                              -----                                          ----

<S>                                 <C>                                                  <C> 
/s/ Guy Gecht                       Chief Executive Officer                              March 17, 2000
-------------                       (Principal Executive Officer)
    Guy Gecht

    /s/ Eric Saltzman               Chief Financial Officer and Corporate Secretary      March 17, 2000
    -----------------               (Principal Financial and Accounting Officer)
        Eric Saltzman

    /s/ Dan Avida                   Chairman of the Board                                March 17, 2000
    -------------
        Dan Avida

    /s/ Gill Cogan                  Director                                             March 17, 2000
    --------------
        Gill Cogan

    /s/ Jean-Louis Gassee           Director                                             March 17, 2000
    ---------------------
        Jean-Louis Gassee

    /s/ Dan Maydan                  Director                                             March 17, 2000
    --------------
        Dan Maydan

    /s/ Thomas Unterberg            Director                                             March 17, 2000
    --------------------
        Thomas Unterberg
</TABLE>

                                                                              49


<PAGE>


         Exhibit Index

         Exhibit
         No.     Description
         ---     -----------
         2.2     Agreement  and Plan of Merger and  Reorganization,  dated as of
                 July 14, 1999, among the Company, Redwood Acquisition Corp. and
                 Management Graphics, Inc. (5)

         3.1     Amended and Restated Certificate of Incorporation. (2)

         3.2     Bylaws as amended. (1)

         4.1     See Exhibit 3.1

         4.2     Specimen Common Stock certificate of the Company. (1)

         10.1    Agreement  of Lease dated as of July 30,  1992,  by and between
                 the Company and The Joseph and Eda Pell Revocable Trust for the
                 Company's new executive office in San Mateo, California. (1)

         10.2    First  Addendum  to Lease  dated as of July  30,  1992,  by and
                 between  the  Company  and The  Joseph  and Eda Pell  Revocable
                 Trust. (1)

         10.3+   License  Agreement,  dated as of February 9, 1990,  between the
                 Company and the Massachusetts Institute of Technology. (1)

         10.4    Amendment to License Agreement dated December 31, 1990, between
                 the Company and the Massachusetts Institute of Technology. (1)

         10.5    Amendment to License Agreement dated May 29, 1991 and March 19,
                 1991,  by  and  between  the  Company  and  the   Massachusetts
                 Institute of Technology. (1)

         10.6+   Third Amendment to License Agreement dated June 1, 1992, by and
                 between  the  Company  and  the   Massachusetts   Institute  of
                 Technology. (1)

         10.7+   Custom PostScript  Interpreter OEM License Agreement,  dated as
                 of March 1, 1991,  by and between the Company and Adobe Systems
                 Incorporated. (1)

         10.8++  Postscript Support Source and Object Code Distribution  License
                 Agreement,  dated as of September  12, 1995, by and between the
                 Company and Adobe Systems Incorporated.

         10.9    1989 Stock Plan of the Company. (1)

         10.10   1990 Stock Plan of the Company. (1)

         10.11   Management Graphics, Inc. 1985 Nonqualified Stock Option Plan.

         10.12   The 1999 Equity Incentive Plan. (6)

         10.13** Form of Indemnification Agreement.(1)

         10.14   Employment  Agreement dated January 11, 2000 by and between Dan
                 Avida and the Company.

         10.15   Employment  Agreement  dated March 8, 2000, by and between Fred
                 Rosenzweig and the Company.

         10.16   Employment  Agreement  dated March 8, 2000, by and between Eric
                 Saltzman and the Company.

         10.17   Employment  Agreement  dated March 8, 2000,  by and between Jan
                 Smith and the Company. Exhibit No. Description

                                                                              50


<PAGE>

         10.18   Employment  Agreement  dated March 8, 2000,  by and between Guy
                 Gecht and the Company.

         10.19** Master Lease and Open End  Mortgages  dated as of July 18, 1997
                 by and between the Company and FBTC Leasing Corp. for the lease
                 financing of the Company's corporate  headquarters  building to
                 be built in Foster City, California.(4)

         10.20   Lease   Financing  of   Properties   Located  in  Foster  City,
                 California,  dated as of January  18,  2000 among the  Company,
                 Societe Generale Financial Corporation and Societe Generale.

         21.1    List of Subsidiaries.

         23.1    Consent of PricewaterhouseCoopers LLP.

         24.2    Power of Attorney (see signature page)

         27      Financial Data Schedule

                 +    The  Company  has  received  confidential  treatment  with
                      respect to portions of these documents.

                 ++   The  Company has  requested  confidential  treatment  with
                      respect to portions of these documents.


                 (1)  Filed  as  an  exhibit  to  the   Company's   Registration
                      Statement  on Form S-1  (No.  33-50966)  and  incorporated
                      herein by reference.

                 (2)  Filed  as  an  exhibit  to  the   Company's   Registration
                      Statement on Form S-1 (File No. 33-57382) and incorporated
                      herein by reference.

                 (3)  Filed as an exhibit to the Company's Annual Report on Form
                      10-K  for the year  ended  December  31,  1995  (File  No.
                      0-18805) and incorporated herein by reference.

                 (4)  Filed as an exhibit to the Company's  Quarterly  Report on
                      Form 10-Q for the  quarter  ended June 30,  1997 (File No.
                      0-18805) and incorporated herein by reference.

                 (5)  Filed as an exhibit to the Company's Report of Unscheduled
                      Material Events on Form 8-K on September 8, 1999 (File No.
                      0-18805) and incorporated herein by reference.

                 (6)  Filed  as  an  exhibit  to  the   Company's   Registration
                      Statement   on  Form  S-8   (File   No.   333-88135)   and
                      incorporated herein by reference.

                                                                              51







CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS  BEEN  OMITTED  AND  FILED  SEPARATELY  WITH  THE  SECURITIES  AND  EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


                                                                    Exhibit 10.8

                               ADOBE CONFIDENTIAL



                            POSTSCRIPT SUPPORT SOURCE
                          AND OBJECT CODE DISTRIBUTION
                                LICENSE AGREEMENT

                                     BETWEEN

                           ADOBE SYSTEMS INCORPORATED

                                       AND

                      ELECTRONICS FOR IMAGING INCORPORATED

                         Dated as of September 12, 1995



<PAGE>


                               TABLE OF CONTENTS

                                                                            Page

RECITALS ..................................................................   1.

AGREEMENT .................................................................   1.

1.   DEFINITIONS ..........................................................   1.
     1.1  "Adobe Deliverables" ............................................   1.
     1.2  "Adobe Screening Test Suite" ....................................   1.
     1.3  "Adobe Software" ................................................   1.
          1.3.1     "Abode Source" ........................................   1.
     1.4  "Adobe Support Information" .....................................   2.
     1.5  "Adobe Trademarks" ..............................................   2.
     1.6  "Bitmap Font" ...................................................   2.
     1.7  "Confidentiality Agreement" .....................................   2.
     1.8  "Clone Product" .................................................   2.
     1.9  "Development Site" ..............................................   2.
     1.10 "EFI Hardware Product" ..........................................   2.
     1.11 "EFI Modifications" .............................................   2.
          1.12.1    "Major Revisions to EFI Standard Controller" ..........   2.
          1.12.2    "Major Revisions to EFI Standard Controller" ..........   3.
     1.13 "End User" ......................................................   3.
     1.14 "Error" .........................................................   3.
     1.15 "First Commercial Shipment" .....................................   3.
     1.16 "Font Programs" .................................................   3.
          1.16.1    "Initial Installation Font Programs" ..................   3.
          1.16.2    "Additional Font Programs" ............................   3.
          1.16.3    "Other Font Programs" .................................   3.
     1.17 "Licensed Systems" ..............................................   3.
          1.17.1    "Licensed System Appendix" ............................   3.
     1.18 "PostScript Language Specification" .............................   4.
     1.19 "PostScript Language
 Specification Addendum" ....................   4.
     1.20 "PPD File" ......................................................   4.
     1.21 "Reference Port" ................................................   4.
          1.21.1    "Reference Port Support Source" .......................   4.
          1.21.2    "Reference Port Appendix" .............................   4.
          1.21.3    "Reference System" ....................................   4.
          1.21.4    "Unmodified Core" .....................................   4.
     1.22 "Reproduction Site" .............................................   5.
     1.23 "Revised Software" ..............................................   5.
          1.23.1    "Revised Support Software" ............................   5.
          1.23.2    "Revised Object" ......................................   5.
     1.24 "Subsidiary" ....................................................   5.

                                       i.


<PAGE>


                               TABLE OF CONTENTS
                                  (continued)

                                                                            Page
                                                                            ----

     1.25 "Technical Coordinator" .........................................   5.
     1.26 "Typeface" ......................................................   5.
     1.27 "Typeface Trademarks" ...........................................   5.
     1.28 "Update" ........................................................   5.
     1.29 "Upgrade" .......................................................   6.

2.   SCOPE OF EFI'S LICENSES ..............................................   6.
     2.1  License to Use Reference Port Support Source and Adobe Support
          Information .....................................................   6.
     2.2  License to Sublicense Certain Software ..........................   6.
          2.2.1     Revised Object ........................................   6.
          2.2.2     Font Programs .........................................   6.
     2.3  PPD File License ................................................   7.
     2.4  PostScript Language Specification ...............................   7.
          2.4.1     Addison-Wesley ........................................   7.
          2.4.2     License Grant .........................................   7.
          2.4.3     Right to Sublicense ...................................   8.
          2.4.4     Proprietary Rights With Respect to PostScript Language
                    Specification .........................................   8.
     2.5  PostScript Language Specification Addendum License ..............   8.
     2.6  Limitations on License to EFI ...................................   9.
          2.6.1     No Right to Sublicense ................................   9.
          2.6.2     Changes to the Adobe Software .........................   9.
          2.6.3     EFI Modifications .....................................   9.
     2.7  End User License ................................................   9.
     2.8  No Other Rights .................................................   9.
     2.9  Subsidiaries and Contractors ....................................  10.

3.   SCOPE OF ADOBE'S LICENSES ............................................  10.
     3.1  License to EFI Revised Support Software .........................  10.
     3.2  PPD File License ................................................  10.
     3.3  PostScript Language Specification Addendum ......................  10.

4.   REFERENCE PORT APPENDICES ............................................  10.
     4.1  Initial Adobe Reference Port Delivery ...........................  10.
     4.2  Future Reference Ports ..........................................  10.
     4.3  Technical Coordinators ..........................................  11.

5.   LICENSED SYSTEM APPENDICES ...........................................  11.

                                       ii.


<PAGE>


                               TABLE OF CONTENTS
                                  (continued)

                                                                            Page
                                                                            ----

     5.1  Future Licensed Systems .........................................  11.
          5.1.1     Revised Software for Major Revisions to EFI Standard
                    Controller ............................................  11.
          5.1.2     Revised Software for Minor Revisions to EFI Standard
                    Controller ............................................  11.
          5.1.3     EFI Responsibilities ..................................  11.
     5.2  Technical Coordinators ..........................................  12.
     5.3  Licensed System Appendices for Revised Software .................  12.
          5.3.1     PPD File ..............................................  12.
          5.3.2     PostScript Language Specification Addendum ............  12.

6.   ACCEPTANCE ...........................................................  12.
     6.1  Acceptance of Reference Ports ...................................  12.
     6.2  Acceptance of Revised Software ..................................  13.

7.   LOANED EQUIPMENT .....................................................  13.
     7.1  EFI Revised Software Versions ...................................  13.
     7.2  Terms of Loan ...................................................  13.
     7.3  Restrictions on Use .............................................  14.

8.   PROPRIETARY RIGHTS AND LEGENDS .......................................  14.
     8.1  Proprietary Notices .............................................  14.
     8.2  Restricted Rights ...............................................  14.
     8.3  Foreign Government Agreements ...................................  15.

9.   MARKETING AND LICENSE TO USE TRADEMARKS ..............................  15.
     9.1  Marketing .......................................................  15.
     9.2  Trademark License ...............................................  15.

10.  PAYMENTS .............................................................  16.
     10.1 Source Payments .................................................  16.
     10.2 Licensed System Payments ........................................  16.
     10.3 Font Program Royalties ..........................................  16.
     10.5 Other Payments ..................................................  16.
     10.6 Taxes ...........................................................  16.
     10.7 Payment of Royalties ............................................  17.
     10.8 Right of Audit ..................................................  17.
     10.9 When Royalties Earned ...........................................  17.

                                      iii.


<PAGE>


                               TABLE OF CONTENTS
                                  (continued)

                                                                            Page
                                                                            ----

11.  PERFORMANCE WARRANTY .................................................  18.
     11.1 Reference Port Warranties .......................................  18.
     11.2 Update Warranties ...............................................  18.
     11.3 Limitations on Warranties .......................................  18.

12.  TRAINING AND SUPPORT .................................................  19.
     12.1 Adobe Training ..................................................  19.
     12.2 EFI Support .....................................................  19.

13.  PROPRIETARY RIGHTS INDEMNITY .........................................  19.
     13.1 By Adobe ........................................................  19.
     13.2 By EFI ..........................................................  20.

14.  TERM AND CANCELLATION ................................................  21.
     14.1 Term ............................................................  21.
     14.2 Cancellation by Adobe for Cause .................................  21.
     14.3 Cancellation by EFI for Cause ...................................  21.
     14.4 Termination by EFI for Convenience ..............................  21.
     14.5 Bankruptcy ......................................................  21.
     14.6 Obligations on Cancellation, Termination or Expiration ..........  21.
          14.6.1    Licenses Terminated ...................................  21.
          14.6.2    Safeguarding of Proprietary Rights ....................  21.
          14.6.3    Return or Destruction of Adobe Information ............  21.
          14.6.4    Payment ...............................................  22.
          14.6.5    Continued Use by End Users ............................  22.
          14.6.6    Assignment on Default .................................  22.
          14.6.7    Support and Maintenance: No Right to Sublicense .......  22.
          14.6.8    Right to Sell-Off Inventory ...........................  22.

15.  LIMITATION OF LIABILITY ..............................................  22.
     15.1 Adobe ...........................................................  22.
     15.2 EFI .............................................................  22.

16.  GENERAL ..............................................................  23.
     16.1 Governing Law ...................................................  23.
     16.2 Attorneys' Fees .................................................  23.
     16.3 Forum ...........................................................  23.
     16.4 Notices .........................................................  23.
     16.5 Injunctive Relief ...............................................  23.

                                       iv.



<PAGE>


                               TABLE OF CONTENTS
                                  (continued)

                                                                            Page
                                                                            ----

     16.6  No Agency ......................................................  24.
     16.7  Force Majeure ..................................................  24.
     16.8  Waiver .........................................................  24.
     16.9  Severability ...................................................  24.
     16.10 Headings .......................................................  24.
     16.11 No Patent License ..............................................  24.
           16.11.1  Definitions ...........................................  24.
           16.11.2  Adobe Patents .........................................  24.
           16.11.3  EFI Patents ...........................................  25.
     16.12 Assignment .....................................................  25.
     16.13 Export .........................................................  25.
     16.14 Full Power .....................................................  25.
     16.15 Confidential Agreement .........................................  25.
     16.16 Counterparts ...................................................  25.
     16.17 Entire Agreement ...............................................  25.

                                       v.



<PAGE>


                                    EXHIBITS

Title                                   Exhibit   Paragraph References

Adobe Deliverables                         A      1.1

Confidentiality Agreements                 B      1.7, EXHIBIT J

Development and Reproduction Sites         C      1.9, 1.22

Sample Format for Licensed System Appendix D      1.17.1, 5.1

Reference Port Training and Support        E      1.21, 1.28, 5.1.3, 11.2, 12.1,
                                                  EXHIBIT H, EXHIBIT J

Sample Format for Reference Port Appendix  F      1.21.2, 4.2

Minimum Terms of End User Agreements       G      2.7

Payments                                   H      4.1, 4.2, 10.1, 10.2,
                                                  EXHIBIT E

Revised Software Test Procedures           I      5.1.1, 5.1.2, 5.3, 5.3.1, 6.2,
                                                  7.1, EXHIBIT E, EXHIBIT H

Secure Procedures for Handling Adobe
Support Information                        J      8, 14.6.2, EXHIBIT E

Use of Adobe Trademarks                    K      9.2

                                       vi.



<PAGE>


                           ADOBE SYSTEMS INCORPORATED

                            POSTSCRIPT SUPPORT SOURCE
                 AND OBJECT CODE DISTRIBUTION LICENSE AGREEMENT

         This  Agreement is between  Adobe  Systems  Incorporated,  a California
corporation having its principal place of business at 1585 Charleston Road, P.O.
Box 7900, Mountain View, California  94039-7900  ("Adobe"),  and Electronics for
Imaging, Inc., a Delaware corporation, having its principal place of business at
2855 Campus  Drive,  San Mateo,  California  94403  ("EFl").  This  Agreement is
effective as of September 12, 1995 (the "Effective Date").


                                    RECITALS

         A. Adobe owns certain computer programs which are useful in controlling
raster devices including, but not limited to, CRT displays, dot-matrix printers,
and laser printers, known collectively as the PostScript software.

         B. EFI has  requested  that Adobe  license  portions of the  PostScript
software (in source code form as defined  below) to EFI that EFI will be able to
adapt and develop  such source  code for use with  Licensed  Systems (as defined
below)  specified in Licensed System  Appendices  attached to this Agreement and
distribute  object  code  versions  thereof  in  accordance  with the  terms and
conditions set forth in this Agreement.


                                    AGREEMENT

1. DEFINITIONS. Capitalized terms shall have the meaning set forth below.

         1.1 "Adobe  Deliverables" means the deliverables set forth in Exhibit A
("Adobe Deliverables").

         1.2 "Adobe  Screening Test Suite" means the test  programs,  procedures
and  accompanying  documentation  developed  by Adobe,  and subject to change by
Adobe  in its  sole  discretion,  to be used by EFl to test  implementations  of
Licensed  Systems and Revised Object for  conformity to the PostScript  Language
Specification.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


         1.3 "Adobe  Software"  means (a) all or any  portion of the  unmodified
computer  programs,  both in source  and  object  code  form,  and  compilations
thereof,  as described in the  applicable  Reference  Port Appendix  provided by
Adobe to EFI and (b) any changes to such software which Adobe may supply to EFI.

                  1.3.1  "Adobe  Source"  means  the  source  code of the  Adobe
Software and any corresponding source documentation  described in the applicable
Reference Port Appendix.

         1.4 "Adobe  Support  Information"  means any (a) Adobe  Software,  Font
Programs,  Adobe  Screening  Test Suite,  and other  documentation  and computer
recorded  data  related  to any of the  above,  and (b) any other  software  and
accompanying  documentation,  including utility tools, which Adobe may supply to
EFI.  Adobe Support  Information  shall not include any EFI  Modifications  made
pursuant to this Agreement.

         1.5 "Adobe Trademarks" means (a) the registered  trademarks "Adobe" and
"PostScript",  (b) the respective stylistic marks and distinctive  logotypes for
such  trademarks,  and (c) other marks and  logotypes  as Adobe may from time to
time designate during the course of this Agreement.

         1.6  "Bitmap  Font"  means the  applicable  digitally  encoded  machine
readable data in bitmap form for screen display having a resolution of less than
150 dots per inch for use with the associated  Font Program.  Bitmap Fonts shall
be made available in the plurality of sizes for single Typefaces  deliverable by
Adobe to EFI when such Bitmap  Fonts  become  generally  available  to Adobe for
distribution to its OEM licensees.

         1.7 "Confidentiality Agreement" means individually and collectively the
agreements  in  writing,  substantially  in the form  attached  as  Exhibit  B-1
("Employee Nondisclosure  Agreement"),  Exhibit B-2 ("Contractor Agreement") and
Exhibit B-3 ("Notice Regarding Confidentiality").

         1.8  "Clone   Product"   means  a  product   having  page   description
capabilities that are substantially compatible with the PostScript language.

         1.9   "Development   Site"  means  a  site   specified   in  Exhibit  C
("Development  and  Reproduction  Sites") at which EFI may use the Adobe Support
Information, including the Reference Port Support Source.

         1.10 "EFI  Hardware  Product"  means a device  consisting  of a marking
engine  or other  output  device  and  EFI-Standard  Controller  (if any)  which
executes  or  operates  with the  Revised  Object  and which is  described  in a
Licensed System Appendix.

         1.11 "EFI  Modifications"  means all  modifications  made by EFI to the
Adobe Source in creating Revised Software pursuant to this Agreement.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         1.12 "EFI  Standard  Controller"  means a  controller  for color output
devices  manufactured by or for EFI and distributed by EFI,  consisting of (i) a
RIP processing  system,  which includes  connectivity  and I/O (Disk,  Ethernet,
parallel,  SCSI), CPU coprocessors,  ASICs, DRAM and Video Bus, and (ii) a video
interface  board,  which  provides the interface  between the controller and the
print engine.

                  1.12.1  "Major  Revisions  to EFI Standard  Controller"  means
revisions to the RIP processing system,  hardware core architecture changes, CPU
co-processor changes, Video Bus Changes and ASIC functionality changes.

                  1.12.2 "Minor Revisions to EFI Standard  Controller" means (i)
revisions to the video controller for the purpose of adding new engines to those
supported by the RIP processing  system,  (ii)  different  DRAM  configurations,
(iii)  software  updates  that  are  not  directly  linked  to any of the  Adobe
Deliverables (e.g., new scan functionality,  additional reporting  capabilities,
updated/additional  protocol stacks),  and (iv) minor hardware  revisions (e.g.,
faster CPUs, enlarged Cache).

         1.13 "End User"  means a third  party  using a Licensed  System for its
ordinary and customary business or personal purposes, but not for redistribution
or resale.

         1.14  "Error"  means a defect in a  Reference  Port  which  causes  the
Reference  Port, when compiled and run in the Reference  System,  not to operate
substantially in accordance with the PostScript Language Specification.

         1.15 "First  Commercial  Shipment" as to each Licensed  System Appendix
means the earlier of (a) EFI's first internal use of a Licensed System described
in a Licensed  System  Appendix other than for  development or testing,  and (b)
shipment of such Licensed System to a third party.

          1.16 "Font Programs"  means the digitally  encoded,  machine  readable
outline  programs for the  Typefaces  identified  as Initial  Installation  Font
Programs,  Additional  Font  Programs (if any) and Other Font  Programs (if any)
encoded in a special format.

                  1.16.1  "Initial  Installation  Font Programs"  means the Font
Programs for the Roman Typefaces specified as Initial Installation Font Programs
in a  Reference  Port or  Licensed  System  Appendix,  bundled  with  the  Adobe
Software, and shipped as a part of a Licensed System.

                  1.16.2  "Additional Font Programs" means the Font Programs for
any Roman Typefaces specified as Additional Font Programs in a Reference Port or
Licensed System Appendix, bundled with the Adobe Software, and shipped as a part
of a Licensed System.

                  1.16.3 "Other Font  Programs"  means the Font Programs  (which
may include,  but are not limited to, Font Programs for Japanese  Typefaces) for
non-Roman-Typefaces

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


which are specified in a Reference  Port or Licensed  System  Appendix,  bundled
with the Adobe  Software,  and shipped as a part of, or for use with, a Licensed
System.

         1.17 "Licensed  System" means the  collective  term for a final product
comprising  Revised Object,  the EFI Hardware  Product(s) (if any), and any Font
Programs,  bundled as a single  commercial  product and  described in a Licensed
System Appendix.

                  1.17.1  "Licensed  System  Appendix" means any Licensed System
Appendix added to this Agreement in a form similar to EXHIBIT D ("Sample  Format
for Licensed System Appendix") hereto.

         1.18 "PostScript Language  Specification" means the PostScript Language
Reference  Manual,  Second  Edition,  as printed  in English by  Addison-Wesley,
current as of April 1991, and any Adobe  Supplement  thereto  provided to EFI by
Adobe, but shall not include any PostScript Language Specification Addendum.

         1.19 "PostScript Language Specification Addendum" means a supplement to
the PostScript Language  Specification for each Licensed System to be written by
EFI that describes the features  specific to a Licensed  System and the means of
accessing   those  features  via  the  Adobe   Software.   PostScript   Language
Specification  Addenda  will be based on a  template  provided  by  Adobe,  with
technical content approved by Adobe.

         1.20 "PPD File" means a human readable,  machine parseable,  PostScript
printer  description  file containing  device-specific  information as to how to
invoke the  features  of a  particular  Licensed  System,  as  described  in the
PostScript  Printer  Description  File  Specification  (which  specification  is
available  from Adobe and  subject to change by Adobe,  in its sole  discretion,
from time to time).

         1.21 "Reference Port" means a release of the Adobe Software, consisting
of source code and object code modules as defined in a Reference  Port Appendix,
ported by Adobe to a controller  platform and printer engine specified by Adobe,
from which EFI  develops  Licensed  Systems.  A  "Reference  Port" refers to the
Reference  Port  Support  Source  and  the  object  code  version  thereof,  the
Unmodified  Core and any  Update to a  Reference  Port  described  in  Exhibit E
("Reference  Port Training and  Support"),  which is provided to EFI pursuant to
this Agreement.

                  1.21.1 "Reference Port Support Source" means those portions of
the source code version of the Reference  Port,  supplied to EFI on  agreed-upon
media,  identified  in a  Reference  Port  Appendix as Adobe  Reference  Support
Source, and which may be modified to adapt the Reference Port for use as part of
Licensed Systems.

                  1.21.2  "Reference  Port  Appendix"  means any Reference  Port
Appendix added to this Agreement in a form similar to Exhibit F ("Sample  Format
for  Reference  Port  Appendix")  hereto,  pursuant  to which  Adobe  delivers a
Reference  Port to EFI,  ported to a  controller  platform  and  printer  engine
specified by Adobe, from which EFI will develop Licensed Systems pursuant to one
or more Licensed System Appendices.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                  1.21.3  "Reference  System" means a compiled  Reference  Port,
together  with  the  controller  and  printer  engine  that the  Reference  Port
supports, which is identified in a Reference Port Appendix.

                  1.21.4 "Unmodified Core" means those portions of the Reference
Port which Adobe  identifies in a Reference Port Appendix that it will supply on
agreed-upon  media in object code form only, and which may be supplied in either
binary object or linkable object code form, as determined by Adobe.

         1.22  "Reproduction  Site"  means the Site(s)  designated  in Exhibit C
("Development  and  Reproduction  Sites")  at which EFI can  reproduce  (or have
reproduced) the Revised Object and Font Programs.

         1.23  "Revised  Software"  means  collectively,   the  Revised  Support
Software,  Reference Port Support Source (if any), and Unmodified  Core which is
intended to be implemented for use as part of a Licensed System. All versions of
the Revised Software shall be deemed to be derivative works based upon the Adobe
Software and shall be subject to all provisions of this Agreement  applicable to
the Adobe Software.

                  1.23.1 "Revised Support  Software" means the source and object
code  versions of any portions of the  Reference  Port  Support  Source that are
modified by EFI to create a new version which is intended to be compatible with,
and used with, a Licensed System.

                  1.23.2 "Revised Object" means the machine readable object code
version of the Revised Software.

         1.24 "Subsidiary" means any corporation, partnership or other entity as
to which EFI:  (a) owns or  controls,  directly  or  indirectly,  at least fifty
percent (50%) by nominal value or number of units of the outstanding stock or of
the outstanding stock conferring the right to vote at a general meeting,  or (b)
has the right to elect a majority of the Board of Directors  or its  equivalent,
or (c) has  the  right,  directly  or  indirectly,  to  appoint  or  remove  the
management.

         1.2.5  "Technical  Coordinator"  means a technically  qualified  person
identified by EFI or Adobe to serve as primary contact for information  requests
by the other party, who, when so requested, shall use his or her best efforts to
respond promptly after receipt of such request.

         1.26 "Typeface" means a human readable set of glyphs, including letters
of the  alphabet,  upper  and/or lower case,  the  numerals  0-9 and  additional
special  characters  and  punctuation  marks  as  may be  offered  by  Adobe  in
conjunction with such letters and numerals of one typeface design and identified
in a Reference  Port or Licensed  System  Appendix.  Each weight or version of a
single  typeface  design (such as Roman or Italic or in an expanded or condensed
form)  marketed by Adobe as a separate  typeface  will be  considered a separate
Typeface.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         1.27 "Typeface Trademarks" means the trademarks,  if any, used by Adobe
to identify the Font Programs and Typefaces.

         1.28  "Update"  means updated  versions of a Reference  Port, in source
code form for Reference  Port Support  Source and in object code for  Unmodified
Core,  which include all changes,  alterations,  corrections and enhancements to
such  Reference  Port which Adobe makes  generally  available  to OEM  licensees
receiving  Adobe Support (as defined in Exhibit E ("Reference  Port Training and
Support")) for that particular Reference Port.

         1.29  "Upgrade"  means the  installation  of  Revised  Object  and,  if
required,  Font Programs in a Licensed  System which contains an earlier version
of the Revised Object and Font Programs for the purpose of updating,  enhancing,
or extending the Licensed System.

2. SCOPE OF EFI'S LICENSES.

         2.1 License to Use  Reference  Port  Support  Source and Adobe  Support
Information. Subject to EFI's compliance with the terms of this Agreement, Adobe
hereby  grants  to EFI a  non-exclusive,  non-transferable  license  (except  as
provided in PARAGRAPH 16.12 ("Assignment")) to use each version of the Reference
Port Support Source and Adobe Support Information solely at the Development Site
for the sole purpose of designing, developing, adapting, testing and maintaining
Revised  Software which is (a) implemented as part of present or future Licensed
Systems set forth in Licensed System  Appendices and (b) is in conformance  with
the specifications set forth in the PostScript Language Specification.

         2.2 License to Sublicense Certain Software.

                  2.2.1 Revised Object.  EFI's right to distribute  commercially
or use the Revised  Object is  contingent  upon  execution of a Licensed  System
Appendix to this Agreement  that  authorizes  such  commercial  distribution  or
internal use. All such commercial distribution or use of Revised Object shall be
limited  to  versions  in  ROM,  EPROM  or  PROM  form,  or  encrypted  versions
downloadable  to RAM (which shall be encrypted in a manner  approved by Adobe in
writing),  as set forth in a Licensed System Appendix.  Subject to the foregoing
and to EFI's compliance with the terms of this Agreement, Adobe hereby grants to
EFI  a  worldwide,  non-exclusive,   non-transferable  (except  as  provided  in
PARAGRAPH 16.12  ("Assignment"))  license to use, reproduce (or have reproduced)
at the  Development  Site  and  Reproduction  Site,  sublicense  and  distribute
directly and indirectly, through EFI's usual distribution channels, each copy of
Revised Object only as a part of a Licensed System or as an Upgrade on the terms
set forth in this Agreement.

                  2.2.2  Font  Programs.  Subject to EFI's  compliance  with the
terms of this Agreement, Adobe hereby grants to EFI a worldwide,  non-exclusive,
non-transferable (except as provided in PARAGRAPH 16.12 ("Assignment")) license,
(a) to  reproduce  (or have  reproduced)  the Font  Programs  set  forth in each
Licensed  System  Appendix  provided  by  Adobe  at  the  Development  Site  and
Reproduction Site and to distribute the Font Programs,  directly and

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


indirectly,  through  EFI's  usual  distribution  channels,  only as part of the
applicable Licensed System; (b) to sublicense the Font Programs to End Users for
the  reproduction and display of Typefaces on the Licensed  Systems;  (c) to use
the Font Programs to reproduce and display the Typefaces on the Licensed Systems
for purposes of test, evaluation,  demonstration or development of applications;
and (d) to use, and to sublicense each End User to use, the Typeface  Trademarks
used by Adobe to identify the Font Programs.  EFI's license under this paragraph
will terminate upon termination of the agreement  between Adobe and the Typeface
Trademark owner, if any,  pertaining to such Font Program,  and Adobe shall have
the right at such time to substitute a Font Program for an equivalent Typeface.

                           (a) Initial  Installation  Font Programs.  EFI agrees
that the Revised  Object will contain,  at a minimum,  the Initial  Installation
Font Programs.

                           (b) Bitmap  Fonts.  EFI agrees that the Bitmap  Fonts
provided by Adobe will be distributed  only in  conjunction  with the associated
Font Programs at a price not to exceed the direct and allocable costs associated
with the production of such Bitmap Fonts. EFI acknowledges that the Bitmap Fonts
will be available in a limited number of point sizes and may not be available at
all for some Font Programs.  All of the terms and  conditions  applicable to the
Font Programs herein apply to the Bitmap Fonts.  Notwithstanding  the foregoing,
so long as the  Bitmap  Fonts  are  distributed  in  conjunction  with  the Font
Programs,  no additional  royalty is due Adobe under the terms of PARAGRAPH 10.3
("Font Program Royalties") for distribution of Bitmap Fonts.

         2.3 PPD File  License.  Subject to EFI's  compliance  with the terms of
this  Agreement,  Adobe  hereby  grants  to  EFI  a  worldwide,   non-exclusive,
non-transferable  (except as provided in PARAGRAPH 16.12 ("Assignment")) license
to  reproduce  and  distribute  any PPD Files,  and updates  thereto,  for Adobe
Revised  Software  contained in each Licensed System and the right to sublicense
all such licensed rights through multiple tiers of distribution.

         2.4 PostScript Language Specification.

                  2.4.1  Addison-Wesley.  Adobe has  entered  into a  Publishing
Agreement  ("Publishing  Agreement") with the Addison-Wesley  Publishing Company
Inc.  ("AddisonWesley") whereby Addison-Wesley publishes the PostScript Language
Specification.  The Publishing  Agreement provides that  Addison-Wesley  will be
available to negotiate  with OEM  customers  concerning  publication  of special
versions of the PostScript  Language  Specification for inclusion with shipments
of Licensed Systems.

                  2.4.2 License  Grant.  Notwithstanding  the above,  subject to
EFI's  compliance  with the terms of this  Agreement,  Adobe hereby grants EFI a
worldwide,  non-exclusive,  non-transferable  (except as provided  in  PARAGRAPH
16.12  ("Assignment"))  license  (a) to  translate  the  English  version of the
PostScript  Language  Specification into a language other than English, in whole
or in  part,  and  (b) to  reproduce  and  distribute  the  PostScript  Language
Specification and any EFI translations  thereof,  which may include supplemental
information regarding the EFI

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


Hardware Product,  solely in hard copy format to EFI's customers,  provided that
such PostScript  Language  Specification shall not be made available for general
distribution  or resale  through the retail trade,  either  through EFI or EFI's
publisher and provided  further that EFI can only provide two (2) copies of such
EFI produced  PostScript  Language  Specification  (the  English  version or any
EFI-translated   version)  for  any  one  (1)  Licensed  System.  Any  such  EFI
translation  will be  performed  only by  EFI's  employees  or  Subsidiaries  in
accordance with the terms of this Agreement. EFI agrees that no right is granted
herein to reproduce Addison-Wesley's foreign language versions of the PostScript
Language Specification other than the English version.

                  2.4.3 Right to Sublicense.  Adobe further grants EFI the right
to sublicense  its OEM customers to reproduce,  in whole in part, and distribute
the  PostScript  Language  Specification  solely  in  hard-copy  format to their
customers in  accordance  with the same terms and  conditions  imposed on EFI in
this  paragraph.  Such EFI  customers  shall not have the  right to  modify  the
PostScript Language Specification received from EFI.

                  2.4.4 Proprietary  Rights With Respect to PostScript  Language
Specification.  EFI agrees that Adobe will own the original  PostScript Language
Specification  as  included  in any  version or  translation  of the  PostScript
Language  Specification  created  by EFI and  that EFI  will  take  commercially
reasonable steps to assure that all right,  title and interest to the PostScript
Language Specification  (including the versions and translations created by EFI)
remain with Adobe. EFI's own version of the PostScript Language Specification is
a derivative  work  created  from the  PostScript  Language  Specification,  and
reproduction  and distribution by EFI of EFI's own version or translation of the
PostScript  Language  Specification shall be subject to the terms and conditions
herein,  including but not limited to the  prohibition  against  distribution or
resale through the retail trade described in PARAGRAPH  2.4.2 ("License  Grant")
above. EFI's own translation or version of the PostScript Language Specification
shall be made faithfully and accurately,  shall be of good literary quality, and
shall consist of the whole of the textual,  pictorial and diagrammatic  material
constituting  the  PostScript   Language   Specification,   without  alteration,
abridgment or supplement  except as provided  herein or with the express written
permission  of  Adobe.  EFI  grants  Adobe  permission  to:  (a)  make  any  EFI
translations of the PostScript Language  Specification public; (b) place Adobe's
name and copyright  notice on any EFI  translation  of the  PostScript  Language
Specification;  and (c) make any necessary modification or alteration to the EFI
translation of the PostScript Language  Specification.  Adobe reserves the right
to approve the final manuscript of EFI's (or its  Subsidiaries')  own version or
any translation before its publication provided that EFI gives Adobe thirty (30)
days  prior  written  notice  of the  date on which it will  deliver  the  final
manuscript to Adobe, Adobe shall review the manuscript within fourteen (14) days
of its  submission  to Adobe.  Adobe's  failure  to provide  EFI with  notice of
disapproval of the final  manuscript  within such fourteen (14) day period shall
constitute approval for purposes of this paragraph. Nothing herein shall prevent
Adobe  or  any  of  its  OEMs  from  creating  their  own  derivative  works  or
translations of the PostScript Language Specification.

         2.5 PostScript  Language  Specification  Addendum  License.  Subject to
EFI's compliance with the terms of this Agreement,  Adobe hereby grants to EFI a
worldwide,  non-exclusive,  non-transferable  (except as provided  in  PARAGRAPH
16.12  ("Assignment"))  license

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


to use the PostScript Language Specification Addendum template provided by Adobe
to create,  reproduce and distribute  (with technical  content approved by Adobe
pursuant to PARAGRAPH  5.3.2  ("PostScript  Language  Specification  Addendum"))
PostScript Language Specification Addenda for Licensed Systems.

         2.6 Limitations on License to EFI.

                  2.6.1 No Right to Sublicense. Except as set forth in PARAGRAPH
2.2  ("License  to  Sublicense  Certain  Software"),  PARAGRAPH  2.3 ("PPD  File
License"), PARAGRAPH 2.4 ("PostScript Language Specification") and PARAGRAPH 2.5
("PostScript Language Specification Addendum License"),  with respect to Revised
Object and Font Programs,  EFI shall have no right to sublicense any rights to a
third party.

                  2.6.2 Changes to the Adobe Software.

                           (a)  In  view  of the  desire  of EFI  and  Adobe  to
establish and maintain an industry standard  PostScript  interpreter,  EFI shall
not make,  without  the  express  written  permission  of Adobe,  any changes or
additions to,  enhancements in, or deletions from, the Adobe Software (including
Reference Port Support Source), if such changes or enhancements would in any way
(i)  change  the  PostScript  language  imaging  model,  syntax,  semantics,  or
functionality  of the  PostScript  language,  or (ii)  change or disable  use of
Adobe's Type 1 font rendering code.

                           (b) EFI agrees not to distribute to third parties any
version of the Revised  Object  containing  any symbol  table  information  with
respect to external variables or procedure entry points.

                  2.6.3 EFI Modifications.  EFI shall own the EFI Modifications,
provided that any Revised Object containing EFI  Modifications  shall be subject
to the terms and conditions of this Agreement.

         2.7 End User License.  EFI will take the same steps to protect  Adobe's
proprietary  rights in the Adobe  Software and Font  Programs  which it takes to
protect its own software,  but in no event will it use less than reasonable care
to protect  Adobe's  proprietary  rights.  Except as provided  below,  EFI shall
ensure that each copy of the Revised Object or any Font Programs  distributed by
EFI will be accompanied by a copy of EFI's standard software license  agreement.
The terms of such license  will be drafted so as to apply to the Revised  Object
and Font Programs.  In addition,  such license will include terms and conditions
substantially  equivalent to those set forth in Exhibit G ("Minimum Terms of End
User  Agreements")  to this  Agreement.  Notwithstanding  the foregoing,  in the
United States and in other jurisdictions where an enforceable copyright covering
the Revised Object and Font Programs exists,  the license specified above may be
a written  agreement  in the  package  containing  the  Revised  Object and Font
Programs,  or the user  documentation  for the Revised Object and Font Programs,
that is fully  visible to the End User and that the End User  accepts by opening
the package.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         2.8 No Other Rights. EFI specifically  acknowledges that, other than as
expressly set forth in PARAGRAPH  2.1  ("License to Use  Reference  Port Support
Source and Adobe Support  Information")  above, no -rights to the Reference Port
Support Source are granted to it.

         2.9 Subsidiaries and Contractors.  This Agreement applies to EFI and to
any Subsidiaries of EFI which agree with EFI in writing to be bound by the terms
and conditions  imposed on EFI  hereunder.  Notwithstanding  the foregoing,  EFI
agrees to make all  payments  due Adobe under the terms of this  Agreement.  The
exercise of any right granted under this  Agreement by any such  Subsidiary  (or
the  contractor of EFI or such  Subsidiary)  is subject to EFI's guaranty of the
performance  by such  Subsidiary  and  contractors  of all of EFI's  obligations
hereunder.

3. SCOPE OF ADOBE'S LICENSES.

         3.1 License to EFI Revised Support Software. EFI shall use best efforts
to provide to Adobe those  portions  of the source code of any Revised  Software
which have been modified by EFI to correct  Errors found in the  Reference  Port
Support  Source  supplied to EFI  hereunder.  EFI may,  in its sole  discretion,
provide to Adobe any other source code of any Revised Software. If, at any time,
EFI provides source code of any Revised  Software to Adobe,  EFI shall be deemed
to have granted to Adobe a perpetual,  worldwide,  royalty-free,  fully  paid-up
license to use,  modify,  reproduce  and  distribute  such source code,  and any
object code  versions  thereof,  and the right to  sublicense  all such licensed
rights through multiple tiers of distribution.

         3.2  PPD  File  License.  EFI  hereby  grants  to  Adobe  a  perpetual,
worldwide,  royalty-free,  fully paid-up license to use,  modify,  reproduce and
distribute  any PPD Files and  updates  thereto  which EFI  creates  for Revised
Software contained in each Licensed System, and the right to sublicense all such
licensed rights through multiple tiers of  distribution,  in order to facilitate
access to such files by End Users and software  developers to enhance the use of
the Licensed Systems by such End Users and software developers.

         3.3 PostScript Language  Specification  Addendum. EFI grants to Adobe a
perpetual,  worldwide,   royalty-free,   fully  paid  license  to  use,  modify,
reproduce,  and  distribute the PostScript  Language  Specification  Addenda for
Revised  Software,  and the right to sublicense all such licensed rights through
multiple tiers of distribution.

4. REFERENCE PORT APPENDICES.

         4.1 Initial  Adobe  Reference  Port  Delivery.  Upon  execution of this
Agreement and payment by EFI of the source  license fee described in PARAGRAPH 1
of Exhibit H ("Payments"),  and upon a mutually agreeable  schedule,  Adobe will
provide EFI with the Adobe Deliverables.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         4.2 Future  Reference  Ports.  Adobe will supply the Reference Port and
deliverables  described  in each  Reference  Port  Appendix in a form similar to
Exhibit F ("Sample  Format for Reference Port  Appendix") in accordance with the
schedule set forth  therein and EFI shall pay to Adobe fees in  accordance  with
EXHIBIT H ("Payments") for each such additional delivery of a Reference Port.

         4.3  Technical  Coordinators.  EFI  and  Adobe  agree  to  designate  a
Technical Coordinator in each Reference Port Appendix.

5. LICENSED SYSTEM APPENDICES.

         5.1  Future  Licensed  Systems.  The  initial  version  of the  Revised
Software  developed  by EFI  pursuant to this  Agreement  for each EFI  Standard
Controller  will be added by way of a Licensed System Appendix in a form similar
to Exhibit D ("Sample Format for Licensed System  Appendix").  Each EFI Hardware
Product which uses that EFI Standard  Controller  shall be added by an amendment
to such Licensed System Appendix.

                  5.1.1  Revised  Software  for Major  Revisions to EFI Standard
Controller.  EFI shall  notify  Adobe in writing of its  intention  to develop a
Revised  Software  version for each new EFI  Standard  Controller  or each Major
Revision to EFI Standard  Controller  at least four (4) months in advance of the
First Commercial  Shipment of such Revised  Software;  provided,  however,  that
Adobe  will,  in good faith,  approve  exceptions  to the four (4) month  notice
period.  Promptly  following such notice, the parties will meet to negotiate and
sign a  Licensed  System  Appendix  for each new EFI  Standard  Controller  upon
mutually  acceptable  terms.  The  Revised  Software  for each new EFI  Standard
Controller or each Major Revision of EFI Standard  Controller shall be tested in
accordance  with  PARAGRAPHS 1. 2. 3 and 4 of Exhibit I ("Revised  Software Test
Procedures").

                  5.1.2  Revised  Software  for Minor  Revisions to EFI Standard
Controller. EFI shall notify Adobe in writing of its intention to ship a Revised
Software version for each Minor Revision of an EFI Standard Controller which has
been tested and approved by Adobe in accordance  with PARAGRAPH  5.1.1 ("Revised
Software  for Major  Revisions  to EFI  Standard  Controller")  at least two (2)
months  in  advance  of First  Commercial  Shipment  of such  Revised  Software;
provided,  however,  that  Adobe will  accept a less than two (2) month  advance
notice  in the  case  of  minor  bug  fixes  as  long as the  notice  period  is
reasonable.  If  EFI's  intention  is to  include  such  modified  EFI  Standard
Controller in a new EFI Hardware Product,  concurrent with such notice, EFI will
deliver a product  description of the Licensed  System to Adobe QA, from which a
test plan will be created by Adobe QA within one (1) week and  submitted to EFI.
EFI shall test the Revised  Software in accordance with PARAGRAPH 2 of Exhibit I
("Revised  Software  Test  Procedures")  and  Adobe  will  have  one (1) week to
evaluate the test results.  If the test results for the Revised Software running
on the new EFI Hardware Product are acceptable, Adobe will provide certification
of the Licensed System and will add the new EFI Hardware  Product to the list of
permitted output devices in the Licensed System Appendix for the

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


applicable EFI Standard Controller.

                  5.1.3  EFI  Responsibilities.  EFI  shall be  responsible  for
modifying  the  Reference  Port  Support  Source to create the Revised  Software
versions  pursuant  to  either  PARAGRAPH  5.1.1  ("Revised  Software  for Major
Revisions to EFI Standard Controller") or PARAGRAPH 5.1.2 ("Revised Software for
Minor  Revisions to EFI  Standard  Controller")  to create the Revised  Software
version,  to the extent  permitted by PARAGRAPH  2.1  ("License To Use Reference
Port Support Source and Adobe Support Information") above; compiling and linking
the foregoing to produce  Revised  Object fully adapted to Licensed  Systems and
suitable for  distribution to End Users;  and promptly  merging with the Revised
Software  any Updates  which it receives as a result of its decision to purchase
support  services  as  described  in Exhibit E  ("Reference  Port  Training  and
Support").  EFI may elect not to merge any such Update into the Revised Software
for a Licensed System that is undergoing  development at the time of delivery of
such Update,  provided  Adobe is consulted and consents,  such consent not to be
unreasonably  withheld,  to the  decision to  continue  the  development  effort
without  including the Update.  Adobe shall have no responsibility in connection
with any such  modifications,  including the development and bundling of the PPD
Files with each  Licensed  System,  except as expressly  provided in a Reference
Port Appendix.

         5.2  Technical  Coordinators.  EFI  and  Adobe  agree  to  designate  a
Technical Coordinator in each Licensed System Appendix.

         5.3 Licensed System Appendices for Revised Software.  EFI will promptly
provide Adobe with two (2) copies of the machine readable version of any Revised
Object  and any  updated  versions  thereof  in a timely  manner as the  updated
versions become available,  and at EFI's sole option, with two (2) copies of the
source  code   version  of  the  Revised   Software   (collectively,   the  "EFI
Deliverables") for evaluation and testing in accordance with Exhibit I ("Revised
Software Test Procedures").

                  5.3.1 PPD File. EFI shall also create and deliver to Adobe one
(1) master copy of the PPD File for each Revised Object  contained in a Licensed
System at the time EFI provides the Revised Object to Adobe for testing pursuant
to Exhibit I  ("Revised  Software  Test  Procedures")  and any  updated  version
thereof in a timely manner  following the  availability of any updated  version.
EFI shall  include with each  Licensed  System a copy of the  corresponding  PPD
File.

                  5.3.2 PostScript Language  Specification  Addendum.  EFI shall
provide  Adobe  with a draft  version  of a  PostScript  Language  Specification
Addendum for Revised Software  contained in a Licensed System prior to execution
of the applicable  Licensed System Appendix and any updated versions in a timely
manner following the  availability of any updated  version.  The contents of the
PostScript  Language  Specification  Addendum and any updated  versions shall be
reviewed and approved by Adobe for compliance with Adobe's  PostScript  language
standards before the PostScript Language  Specification  Addendum is distributed
with  a  Licensed  System.  Adobe's  failure  to  provide  EFI  with  notice  of
disapproval of the PostScript  Language

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


Specification  Addendum  within fourteen (14) days after its submission to Adobe
shall constitute approval for purposes of this paragraph. EFI shall include with
each  Licensed  System  a  copy  of  the   corresponding   PostScript   Language
Specification Addendum.

6. ACCEPTANCE.

         6.1 Acceptance of Reference  Ports.  For each Reference Port, EFI shall
have  forty-five  (45)  days  (or such  other  time as may be  specified  in the
applicable Reference Port

Appendix)  from the date on which Adobe meets the final delivery  milestone,  as
contained in the applicable  Reference  Port  Appendix,  to examine and test the
Reference Port to determine that the Reference Port, when compiled, will execute
as part of the  appropriate  Reference  System or Licensed  System in accordance
with the  PostScript  Language  Specification  and in accordance  with any other
acceptance criteria in the appendix.  Within such period EFI shall provide Adobe
with  written  acceptance  or a  statement  of any Errors to be  corrected.  The
Reference  Port will be deemed to have been  accepted  by EFI if Adobe  does not
receive such written  acceptance or statement of Errors  within such  forty-five
(45) day time period.  Adobe shall use reasonable  commercial efforts to correct
any such  reproducible  Errors and redeliver the Reference  Port to EFI, and EFI
shall within  fifteen (15) days of such  redelivery  provide  Adobe with written
acceptance or a statement of Errors.  Should the  Reference  Port not conform to
the PostScript Language  Specification or other acceptance  criteria,  or in the
event Adobe is not able to deliver the  Reference  Port in  accordance  with the
milestone  schedule  set  forth  in the  applicable  appendix,  EFI's  sole  and
exclusive remedy shall be to elect one of the following remedies by giving Adobe
notice thereof (including a statement of Errors where applicable) within fifteen
(15) days: (a) to extend the correction  period for a mutually  agreeable  time,
(b) to revise the acceptance  criteria in a mutually agreeable manner, or (c) to
terminate the applicable Reference Port Appendix and obtain a refund of one-half
of the fee or advance paid to Adobe for such Reference  Port,  provided that EFI
has returned all existing copies of the Reference Port and related documentation
and certified in writing that it has no right to use,  market or distribute such
Reference Port (or any Adobe Revised Software based on such Reference Port).

         6.2  Acceptance  of  Revised  Software.  EFI and  Adobe  will test each
Revised  Software  version in accordance with Exhibit I ("Revised  Software Test
Procedures").  Upon  successful  completion  of acceptance  testing  pursuant to
Exhibit I  ("Revised  Software  Test  Procedures"),  EFI shall have the right to
distribute the Revised Object in accordance with the terms of this Agreement.

7. LOANED EQUIPMENT.

         7.1 EFI Revised Software  Versions.  EFI shall loan Adobe all necessary
equipment  as  specified  in the  applicable  Licensed  System  Appendix for any
Revised  Software  in order to permit  Adobe to conduct  adequate  and  thorough
testing of such EFI Deliverables in accordance with Exhibit I ("Revised Software
Test Procedures").

          7.2 Terms of Loan.  All equipment  loaned by EFI to Adobe shall remain
the property

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


of EFI,  shall be fully  insured by Adobe,  and shall be  returned to EFI at its
request after  termination of Adobe's  development,  warranty,  and  maintenance
activities  hereunder.  EFI shall pay shipping costs for delivery of such loaned
equipment  to Adobe.  Any loaned  equipment  shall be  returned to EFI by Adobe,
shipping and insurance  costs prepaid by EFI.  While in the possession of Adobe,
the loaned  equipment  shall be maintained by EFI in good working order.  During
the term of this Agreement for as long as Adobe is performing testing, warranty,
and maintenance services, if any, hereunder, EFI will continue to ensure that at
least one unit on loan to Adobe is the then current production unit which EFI is
actually shipping.

         7.3 Restrictions on Use. Adobe agrees that it will not reverse engineer
any  hardware  or software  provided by EFI in object code form  pursuant to the
terms of this paragraph and that it shall not use any equipment  provided by EFI
pursuant to this  paragraph  for any purpose  other than  testing,  warranty and
maintenance as required under this Agreement.  Adobe further agrees that it will
only provide access to software to its authorized employees and contractors with
a need to know and that it will not copy such  software  except  for  backup and
archival  purposes.  (The foregoing  restriction  shall not preclude  legitimate
reverse   engineering  of  such  hardware  or  software  which  Adobe  purchases
commercially.) The  confidentiality  provisions of this Agreement and the Mutual
Confidentiality  Agreement  entered  into by Adobe and EFI on February  27, 1990
(the  "Confidentiality  Agreement")  shall  apply to any  hardware  or  software
provided  under this  provision  for so long as such hardware or software is not
yet commercially available.

8.  PROPRIETARY  RIGHTS AND LEGENDS.  Adobe and its  suppliers  are the sole and
exclusive  owners of all rights,  title and interest,  including all trademarks,
copyrights, patents, trade names, trade secrets, and other intellectual property
rights  to the  Adobe  Support  Information.  Except  for the  rights  expressly
enumerated herein, EFI is not granted any rights to patents,  copyrights,  trade
secrets,  trade  names,  trademarks  (whether or not  registered),  or any other
rights,  franchises or licenses  with respect to the Adobe Support  Information.
EFI agrees to protect the Adobe Support Information in accordance with EXHIBIT J
("Secure Procedures for Handling Adobe Support Information"). EFI agrees that it
will not attempt to reverse  engineer  the Font  Programs or any portions of the
Unmodified  Core or other  Adobe  Support  Information  which is provided to EFI
solely in object code form.

         8.1 Proprietary  Notices.  EFI agrees that as a condition of its rights
hereunder,  each copy of the Adobe Software, Font Programs,  PostScript Language
Specification (both the English version and any EFI-translated  version, if any)
and any other Adobe  Support  Information  shall  contain  the same  proprietary
notices which appear on or in such Adobe  Software,  Font  Programs,  PostScript
Language  Specification  and any other Adobe  Support  Information  delivered by
Adobe to EFI and as otherwise  reasonably  required by Adobe. More specifically,
EFI agrees that a valid Adobe  copyright  notice for the Adobe Software and Font
Programs will appear on the media.

         8.2  Restricted  Rights.  EFI will (a)  identify  and license the Adobe
Software,   Font  Programs  and  related  documentation  in  all  proposals  and
agreements with the United States Government or any contractor therefor; and (b)
legend or mark the Adobe  Software,  Font

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


Programs and related  documentation  provided pursuant to any agreement with the
United States Government or any contractor therefor, as follows:

                  (i) For acquisition by or on behalf of civilian  agencies,  as
necessary to obtain  protection  substantially  equivalent  to that  afforded to
restricted  computer software and related  documentation  developed at a private
expense and which is existing  computer  software no part of which was developed
with government  funds and provided with'  Restricted  Rights in accordance with
subparagraphs (a) through (d) of the "Commercial  Computer Software - Restricted
Rights" clause at 48 C.F.R. 52.227-19 of the Federal Acquisition Regulations and
its successors;

                  (ii)  For  acquisition  by  or  on  behalf  of  units  of  the
Department of Defense  ("DoD") as necessary to obtain  protection  substantially
equivalent  to  that  afforded  to  commercial  computer  software  and  related
documentation  developed at private expense and provided with Restricted  Rights
as  defined  in DoD FAR  Supplement  48  C.F.R.  252.227-7013(c)(l)(ii)  and its
successors in effect for all solicitations and resulting  contracts issued on or
after May 18, 1987.

          8.3 Foreign Government Agreements.  EFI will take all reasonable steps
in making proposal/and agreements with foreign governments other than the United
States  which  involve  the  Adobe   Software,   Font   Programs,   and  related
documentation to ensure that Adobe's  proprietary rights in such Adobe Software,
Font Programs and related documentation receive the maximum protection available
from such  foreign  government  for  commercial  computer  software  and related
documentation developed at private expense.

9. MARKETING AND LICENSE TO USE TRADEMARKS.

         9.1 Marketing. EFI shall use reasonable efforts, in connection with the
First Commercial  Shipment of each Revised Object version,  to (a) provide sales
and  technical  training to relevant EFI dealers,  field sales  representatives,
sales support engineers,  systems engineers and customer support personnel;  (b)
consult  with  Adobe  in  the  development  of  applicable   product  brochures,
announcements  to the trade  press  and other  marketing  materials  related  to
Licensed  Systems;  (c) permit Adobe  participation in EFI's press  conferences,
dealer roll-outs and similar  activities  involving  Licensed  Systems;  and (d)
promote the  Licensed  Systems at trade shows at which  other EFI  products  are
displayed.  EFI shall  use  reasonable  efforts,  in  connection  with the First
Commercial  Shipment of each Revised Object version, to (a) provide the contract
representative designated in the applicable Licensed System Appendix with a copy
of  announcements  and press  releases  pertaining to Licensed  Systems prior to
their release to the public or the press,  and (b)  incorporate all changes that
Adobe  may  reasonably  request  to ensure  correct  Adobe  Trademark  usage and
accuracy  of content,  so long as Adobe has  provided  EFI with such  reasonably
requested  changes within five (5) business days following  EFI's  submission of
each such press release.

         9.2 Trademark License. Subject to this Agreement and Exhibit K ("Use of
Adobe Trademarks") hereto,  Adobe hereby grants to EFI a non-exclusive,  limited
license to use the

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


Adobe Trademarks and the Typeface  Trademarks,  on Licensed Systems and in EFI's
advertising  and printed  materials  for the Revised  Object,  Font Programs and
Licensed Systems.

10. PAYMENTS.

         10.1 Source  Payments.  EFI shall pay Adobe the fees and  royalties set
forth in Exhibit H ("Payments") or in any Reference Port Appendix hereto.

         10.2 Licensed System  Payments.  EFI shall pay to Adobe the development
fees, if any, and royalties as set forth in each  Licensed  System  Appendix for
each  Licensed   System  which  is  used   internally  or  distributed  by  EFI.
Notwithstanding the foregoing,  EFI shall have no obligation to pay royalties on
units of Licensed  Systems which are used solely for development  and/or testing
purposes.  Adobe  agrees that EFI shall be  entitled  to receive a  volume-based
percentage  discount  to be  applied  against  royalties  owed to  Adobe  by EFI
hereunder  for Licensed  Systems and Font Programs  distributed  or used under a
Licensed System  Appendix.  Such volume  discounts shall be as reflected in, and
shall be granted in  accordance  with the terms and  conditions  of Paragraph 17
("Qualifying for Royalty  Discounts") of the Custom  PostScript  Interpreter OEM
License  Agreement,  effective  March 1, 1991,  between EFI and Adobe (the "CPSI
Agreement").  Quarterly  revenue  received by Adobe under this Agreement and the
CPSI Agreement  shall be aggregated  for the purpose of  determining  applicable
discount levels. In addition, Adobe agrees that the pricing for Licensed Systems
developed and  distributed  under this  Agreement  shall be consistent  with the
pricing for the Licensed  Systems (as defined in the CPSI  Agreement)  developed
and distributed under the CPSI Agreement.

         10.3 Font Program Royalties.  EFI shall also pay to Adobe the royalties
for the Roman Initial  Installation  Font Programs and Additional  Font Programs
distributed  with each Licensed  System as set forth in the applicable  Licensed
System  Appendix  hereto.  Adobe  agrees  that the  pricing  and any  applicable
discounts  for the Font  Programs  distributed  under  this  Agreement  shall be
consistent   with  the  pricing  and  discounts  for  the  Coded  Font  Programs
distributed under the CPSI Agreement.

         10.4  Upgrade  Payments.  EFI shall pay Adobe a royalty as set forth in
each  Licensed  System  Appendix for each Upgrade for which EFI charges a fee in
excess of the costs of the media and handling. EFI shall not be obligated to pay
Adobe a royalty for any  Upgrades  for which EFI charges a fee which covers only
the costs of the media and  handling.  To qualify  for the  pricing set forth in
this paragraph,  EFI will use commercially reasonable efforts to ensure that the
prior version of the Revised Object and Font Programs is destroyed.

         10.5 Other  Payments.  Certain  payments  to Adobe,  including  but not
limited to  advances  against  royalties,  will be  designated  in the  specific
Licensed System Appendix.  Advances against  royalties for a specified  Licensed
System are recoupable only against royalties for that Licensed System during the
eighteen (18) month period  following  Adobe's  delivery of the Final Release as
defined in the applicable Licensed System Appendix.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         10.6 Taxes. In addition to any other payments due under this Agreement,
EFI agrees to pay, and to indemnify  and hold Adobe  harmless  from,  any sales,
use, excise,  import or export,  value added or similar tax or duty not based on
Adobe's net income,  including any penalties and interest,  as well as any costs
associated  with the collection or  withholding  thereof,  and all  governmental
permit fees,  license fees and customs and similar fees levied upon the delivery
by Adobe of the Adobe  Deliverables  to EFI hereunder,  which Adobe may incur in
respect of this  Agreement.  If a resale  certificate  or other  certificate  or
document  of  exemption  is  required in order to exempt all or any of the Adobe
Software or other  deliverables  from any such tax liability,  EFI will promptly
furnish it to Adobe.

         10.7 Payment of Royalties.  All  royalties  due in accordance  with the
terms of the Agreement  shall be paid within  forty-five (45) days after the end
of each calendar quarter.  With each royalty payment EFI shall include a written
summary broken out by month of sale and country category (U.S., Canada,  Europe,
Far East, Rest of World), of (a) the number and type of Licensed Systems sold or
used  internally  by EFI  during  the  quarter;  and (b) the  number and type of
Additional Font Programs by Typeface  bundled as a part of such Licensed Systems
and licensed to End Users or used internally by EFI during the quarter;  and (c)
any other  information  which may be required to determine whether EFI is paying
the correct  royalty amount  hereunder.  Licensed  Systems that are returned for
which refunds are made by EFI shall be credited by EFI against  royalties due to
Adobe for such Licensed  Systems.  Notwithstanding  the foregoing,  in the event
that EFI provides a partial refund of the price of a returned  Licensed  System,
EFI shall be entitled to obtain a partial credit against  royalties due for such
Licensed System. At Adobe's request, EFI shall orally advise Adobe each month of
its estimate of the number of copies of the Licensed Systems and Additional Font
Programs  shipped by EFI during the  previous  month and the  royalties  accrued
thereby.  Such oral communication shall be subject to final adjustment by EFI at
the end of each accounting period.

         10.8 Right of Audit.  EFI shall  maintain a complete,  clear,  accurate
record  of:  (a)  the  number  and  type of  Licensed  Systems  shipped  or used
internally by EFI, (b) a designation of which of the  Additional  Font Programs,
if any,  were  bundled as a part of such  Licensed  System and whether they were
licensed to End Users or used internally by EFI during the quarter,  and (c) any
other  information  which may be required to determine whether EFI is paying the
correct royalty amount  hereunder.  To ensure  compliance with the terms of this
Agreement, Adobe shall have the right to have an inspection and audit of all the
relevant  accounting  and  sales  books  and  records  of  EFI  conducted  by an
independent  audit firm reasonably  acceptable to both parties whose fee is paid
by Adobe,  and shall be conducted during regular business hours at EFI's offices
and in such a manner as not to interfere with EFI's normal business  activities.
In no event shall audits be made hereunder more  frequently  than once per year.
If such inspections should disclose any  underreporting,  EFI shall promptly pay
Adobe  such  amount,  together  with  interest  thereon  at the  rate of one and
one-half percent (1 1/2%) per month or the highest interest rate allowed by law,
whichever is lower from the date on which such amount became due.

         10.9 When Royalties Earned. All royalties due hereunder shall be earned
on the date EFI ships a Licensed System to its customer, except for the shipment
of a Licensed System

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


between  EFI and  its  Subsidiary  or  between  Subsidiaries  for  resale.  Such
royalties  shall be  earned  when the  Licensed  System  is first  shipped  to a
customer other than EFI or any Subsidiary.

11. PERFORMANCE WARRANTY.

         11.1  Reference  Port  Warranties.  Adobe warrants that for a period of
ninety  (90)  days  from  the  date  of  delivery  of a  Reference  Port  to EFI
(hereinafter  the  "Warranty  Period"),  the Reference  Port Support  Source and
Unmodified Core contained in a Reference Port will compile,  assemble,  and link
as part of the Reference System to yield the  corresponding  object code version
of the Reference  Port.  Additionally,  subject to any  exceptions  specified by
Adobe at the time of  delivery,  the object code version of the  Reference  Port
will  execute   substantially   in  accordance  with  the  PostScript   Language
Specification  (excluding any portions of the PostScript Language  Specification
not  applicable  to the  specified  Reference  System)  when used as part of the
Reference  System  specified in the Reference Port  Appendix.  If EFI reports to
Adobe a failure of such  Reference  Port to conform to the foregoing  warranties
during the  applicable  Warranty  Period,  and provides such detail as Adobe may
require to permit Adobe to reproduce such failure,  Adobe, at its expense, shall
use reasonable  commercial  efforts to modify or replace the Reference Port in a
timely manner to correct such failure.

         11.2 Update  Warranties.  Adobe  warrants  that, for a period of ninety
(90) days from the date of  delivery of an Update to EFI  hereunder,  subject to
EFI's  purchase of support  services as described in Exhibit E ("Reference  Port
Training and Support")  (the  "Warranty  Period"),  the  Reference  Port Support
Source and  Unmodified  Core  contained  in an Update to a  Reference  Port will
compile,  assemble,  and  link as part of the  Reference  System  to  yield  the
corresponding  object code version of the Update.  Additionally,  subject to any
exceptions  specified by Adobe at the time of delivery,  the object code version
of the Update will  execute  substantially  in  accordance  with the  PostScript
Language  Specification  (excluding  any  portions  of the  PostScript  Language
Specification  not applicable to the specified  Reference System) as part of the
applicable Reference System. If EFI reports to Adobe a failure of such Update to
conform to the foregoing  warranties during the applicable  Warranty Period, and
provides  such detail as Adobe may  require to permit  Adobe to  reproduce  such
failure,  Adobe,  at its expense,  shall use  reasonable  commercial  efforts to
modify or replace the Update in a timely manner to correct such failure.

         11.3  Limitations on Warranties.  EFI  acknowledges  that the Reference
Ports  delivered by Adobe to EFI  hereunder  will require  adaptation  by EFI or
Adobe for compatibility with EFI platforms and  configurations,  which platforms
and configurations will generally be different from the development  environment
and  Reference  System  specified  by  Adobe.  EFI  acknowledges  that the Adobe
Software is of such  complexity  that it may have inherent  defects,  and agrees
that Adobe makes no other warranty,  either express or implied, as to any matter
whatsoever.  THE FOREGOING  STATES  ADOBE'S SOLE AND  EXCLUSIVE  WARRANTY TO EFI
CONCERNING THE ADOBE SOFTWARE AN]) EFI'S SOLE AND EXCLUSIVE REMEDY FOR BREACH OF
WARRANTY. EXCEPT AS EXPRESSLY SET FORTH

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


ABOVE,  THE ADOBE  SUPPORT  INFORMATION  AND ANY OTHER  ADOBE  DELIVERABLES  ARE
PROVIDED  STRICTLY  "AS IS."  EXCEPT FOR THE EXPRESS  WARRANTIES  STATED IN THIS
AGREEMENT, ADOBE MAKES NO ADDITIONAL WARRANTIES,  EXPRESS, IMPLIED, ARISING FROM
COURSE OF  DEALING  OR USAGE OF TRADE,  OR  STATUTORY,  AS TO THE ADOBE  SUPPORT
INFORMATION  OR ANY OTHER  ADOBE  DELIVERABLES,  OR ANY  MATTER  WHATSOEVER.  IN
PARTICULAR, ANY AND ALL WARRANTIES OF MERCHANTABILITY,  FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT  ARE EXPRESSLY EXCLUDED.  THIS IS A LIMITED WARRANTY
AND IS THE ONLY WARRANTY MADE BY ADOBE.  EFI SHALL NOT HAVE THE RIGHT TO MAKE OR
PASS ON, AN]) SHALL TAKE ALL  MEASURES  NECESSARY  TO ENSURE THAT NEITHER IT NOR
ANY OF ITS AGENTS OR  EMPLOYEES  SHALL  MAKE OR PASS ON, ANY  EXPRESS OR IMPLIED
WARRANTY OR REPRESENTATION ON BEHALF OF ADOBE TO ANY EFI CUSTOMER,  END USER, OR
THIRD PARTY.

12. TRAINING AND SUPPORT.

         12.1 Adobe Training. Adobe agrees to provide the training and technical
assistance  described in Exhibit E ("Reference Port Training and Support") or in
any Reference Port or Licensed System Appendix.

         12.2 EFI Support.  EFI will have the sole responsibility for supporting
its End Users and will provide End Users with reasonable End User documentation,
warranty service, and telephone support for the use of Licensed Systems and Font
Programs consistent with good industry practice.

13. PROPRIETARY RIGHTS INDEMNITY.

         13.1 By Adobe. Adobe agrees to indemnify and defend EFI from any costs,
damages,  and  reasonable  attorneys'  fees  resulting  from any claims by third
parties that the uses  permitted  hereunder of the Adobe  Software  infringe any
U.S. patents, U.S. copyrights, or U.S. trademarks or any patents,  copyrights or
trademarks  of Japan,  Germany,  France,  Italy,  The United  Kingdom,  Denmark,
Ireland,  Greece,  Spain,  Portugal,   Sweden,  Norway,  Finland,   Switzerland,
Australia, Austria, Belgium, Canada, Luxembourg or The Netherlands (the "Foreign
Jurisdictions"), provided that EFI gives Adobe prompt written notice of any such
claim,  tenders to Adobe the  defense or  settlement  of such a claim at Adobe's
expense, and cooperates with Adobe, at Adobe's expense, in defending or settling
such claim.  Adobe's aggregate cumulative liability for infringement of patents,
copyrights  or  trademarks  of each  Foreign  Jurisdiction  shall not exceed the
greater of (i) One Million Five Hundred  Thousand Dollars  ($1,500,000.00)  less
any amounts previously paid or then currently payable by Adobe to EFI under this
clause (i) of this PARAGRAPH 13.1 for  infringement of patents,  copyrights,  or
trademarks of any of the Foreign Jurisdictions,  or (ii) the aggregate amount of
royalty  payments  actually  received by Adobe from EFI for the Licensed Systems
distributed in such Foreign Jurisdiction up to a maximum of Five Million Dollars
($5,000,000.00).

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         If Adobe receives notice of an alleged  infringement or if EFI's use of
the Adobe Software shall be prevented by permanent injunction, Adobe may, at its
sole option and expense, procure for EFI the right to continued use of the Adobe
Software  as  provided  hereunder,  modify the Adobe  Software  so that it is no
longer infringing, or replace the Adobe Software with computer software of equal
or  superior  functional  capability.  THE  RIGHTS  GRANTED  TO EFI  UNDER  THIS
PARAGRAPH  SHALL BE EFI'S SOLE AND EXCLUSIVE  REMEDY AND ADOBE'S SOLE OBLIGATION
FOR ANY ALLEGED  INFRINGEMENT  OF ANY  PATENT,  COPYRIGHT,  TRADEMARK,  OR OTHER
PROPRIETARY  RIGHT.  ADOBE  WILL  HAVE  NO  LIABILITY  TO  EFI  IF  ANY  ALLEGED
INFRINGEMENT OR CLAIM OF INFRINGEMENT IS BASED UPON (A) THE  MODIFICATION OF THE
ADOBE  SOFTWARE  BY EFI OR ANY THIRD  PARTY,  (B) USE OF THE ADOBE  SOFTWARE  IN
CONNECTION OR IN COMBINATION WITH EQUIPMENT,  DEVICES, OR SOFTWARE NOT DELIVERED
BY ADOBE (IF SUCH  INFRINGEMENT  OR CLAIM COULD HAVE BEEN  AVOIDED BY THE USE OF
THE UNMODIFIED ADOBE SOFTWARE WITH OTHER EQUIPMENT, DEVICES OR SOFTWARE), OR (C)
THE USE OF ANY ADOBE SOFTWARE OTHER THAN AS PERMITTED UNDER THIS AGREEMENT OR IN
A MANNER FOR WHICH IT WAS NOT  INTENDED  OR USE OF OTHER  THAN THE MOST  CURRENT
RELEASE OF THE ADOBE  SOFTWARE  (IF SUCH CLAIM WOULD HAVE BEEN  PREVENTED BY THE
USE OF SUCH RELEASE).

         13.2 By EFI. EFI agrees to  indemnify  and defend Adobe from any costs,
damages,  and  reasonable  attorneys'  fees  resulting  from all claims by third
parties arising from the use, manufacture,  and distribution of Licensed Systems
by EFI and its direct and indirect customers in any country, worldwide, provided
that Adobe gives EFI prompt written notice of any such claim, tenders to EFI the
defense or settlement of any such claim at EFI's expense,  and  cooperates  with
EFI, at EFI's  expense,  in defending or settling  such claim.  EFI WILL HAVE NO
LIABILITY  TO ADOBE  WITH  RESPECT TO ANY CLAIM BY THIRD  PARTIES  THAT THE USES
PERMITTED  HEREUNDER OF THE ADOBE SOFTWARE  INFRINGE ANY PATENTS,  COPYRIGHTS OR
TRADEMARKS OF ANY COUNTRY SO LONG AS SUCH CLAIM OF  INFRINGEMENT  DOES NOT ARISE
FROM (A) THE  MODIFICATION OF THE ADOBE SOFTWARE BY EFI OR ANY THIRD PARTY,  (B)
USE OF THE ADOBE  SOFTWARE  IN  CONNECTION  OR IN  COMBINATION  WITH  EQUIPMENT,
DEVICES, OR SOFTWARE NOT DELIVERED BY ADOBE (IF SUCH INFRINGEMENT OR CLAIM COULD
HAVE  BEEN  AVOIDED  BY THE USE OF THE  UNMODIFIED  ADOBE  SOFTWARE  WITH  OTHER
EQUIPMENT, DEVICES OR SOFTWARE), OR (C) THE USE OF ANY ADOBE SOFTWARE OTHER THAN
AS PERME[TED  UNDER THIS  AGREEMENT OR IN A MANNER FOR WHICH IT WAS NOT INTENDED
OR USE OF OTHER THAN THE MOST  CURRENT  RELEASE OF THE ADOBE  SOFTWARE  (IF SUCH
CLAIM WOULD HAVE BEEN PREVENTED BY THE USE OF SUCH RELEASE).

14. TERM AND CANCELLATION.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         14.1 Term.  The initial  term of this  Agreement  is for five (5) years
from the Effective  Date,  unless this Agreement is terminated  for cause.  This
Agreement  may be  renewed  annually  on its  anniversary  date at the option of
either party (subject to the written consent of the other party),  provided that
(a) EFI has made all the payments required by this Agreement, (b) there has been
no uncured breach of this  Agreement,  or any Reference Port or Licensed  System
Appendix,  and (c) the Revised Object is still  supported by EFI for use as part
of Licensed Systems.

         14.2 Cancellation by Adobe for Cause. This Agreement shall terminate in
the event of any material  breach by EFI which  continues after thirty (30) days
written notice of said breach (which notice shall, in reasonable detail, specify
the nature of the breach) by Adobe to EFI.

         14.3  Cancellation  by EFI for Cause. If any material breach under this
Agreement  by Adobe  continues  after  thirty (30) days  written  notice of said
breach  (which notice shall,  in  reasonable  detail,  specify the nature of the
breach) by EFI to Adobe,  EFI may seek any damages arising under this Agreement,
and (a) continue this Agreement in full force and effect,  or (b) terminate this
Agreement on written notice to Adobe.

         14.4  Termination  by  EFI  for  Convenience.  This  Agreement  may  be
terminated by EFI for its convenience upon thirty (30) days prior written notice
to Adobe.

         14.5 Bankruptcy.  In addition to any material breach of this Agreement,
the application  for, or adjudication  in,  bankruptcy by EFI, the insolvency of
EFI, or the dissolution of EFI, shall terminate this Agreement.

         14.6  Obligations on  Cancellation,  Termination  or  Expiration.  Upon
cancellation, termination, or expiration of this Agreement:

                  14.6.1 Licenses  Terminated.  The licenses granted pursuant to
PARAGRAPH 2 ("Scope of EFI's Licenses") shall terminate immediately.

                  14.6.2  Safeguarding of Proprietary Rights. EFI shall continue
to be responsible for safeguarding  the proprietary  rights of Adobe and Adobe's
suppliers in accordance with PARAGRAPH 8 ("Proprietary  Rights and Legends") and
Exhibit J ("Secure  Procedures for Handling Adobe Support  Information") of this
Agreement after such cancellation, termination, or expiration.

                  14.6.3 Return or  Destruction of Adobe  Information.  EFI will
immediately  discontinue  use and  distribution  of, and  return or destroy  all
copies  of,  Adobe  Support  Information  and other  Adobe  Deliverables  in its
possession  (including copies placed in any storage device under EFI's control).
Upon  Adobe's  request,  EFI shall  warrant  in  writing  to Adobe its return or
destruction of all of Adobe's proprietary information within thirty (30) days of
cancellation, termination or expiration.

                  14.6.4 Payment. The payment date of all monies due Adobe shall

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


automatically  be  accelerated  so that they shall become due and payable on the
effective  date  of  termination,   even  if  longer  terms  had  been  provided
previously.

                  14.6.5  Continued  Use  by  End  Users.  End  Users  shall  be
permitted  the continued and  uninterrupted  use of the Revised  Object and Font
Programs for the balance of the term of their End User agreements,  as specified
in such  agreements,  provided  that  and so long  as the End  Users  are not in
default of their End User agreements.

                  14.6.6 Assignment on Default. EFI's rights upon default of the
End Users  relating to the Revised  Object and Font Programs as specified in the
End User agreement shall automatically be assigned to Adobe.

                  14.6.7  Support  and  Maintenance:  No  Right  to  Sublicense.
Notwithstanding  the  foregoing,  EFI shall  have the  right to retain  five (5)
copies of the Revised Object and use such Revised Object to the extent  required
for support and  maintenance  purposes but EFI shall have no right to sublicense
or otherwise  distribute the Revised Object or Font Programs or any other rights
with  respect  to  such  software  except  as  specifically  set  forth  in this
paragraph.

                  14.6.8   Right  to  Sell-Off   Inventory.   In  the  event  of
termination or expiration of this Agreement (except for termination by Adobe due
to a breach of this  Agreement  by EFI),  EFI shall have six (6) months from the
effective date of  termination  to distribute its inventory of Licensed  Systems
and  Upgrades in  existence at the time of such  termination  provided  that EFI
continues to make all  payments  and provide all reports to Adobe in  accordance
with  PARAGRAPH 10  ("Payments")  and to observe all other terms and  conditions
imposed on EFI hereunder with respect to distribution of the Revised Object.

15. LIMITATION OF LIABILITY.

         15.1 Adobe.  ADOBE WILL NOT BE LIABLE TO EFI OR ANY OTHER PARTY FOR ANY
INCIDENTAL,  SPECIAL OR  CONSEQUENTIAL  DAMAGES.  The  foregoing  limitation  of
liability is  independent  of any exclusive  remedies for breach of warranty set
forth in this Agreement.

         15.2 EFI.  EFI WILL NOT BE  LIABLE TO ADOBE OR ANY OTHER  PARTY FOR ANY
INCIDENTAL,  SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY BREACH OF THIS
AGREEMENT,  EXCEPT FOR ANY BREACH OF PARAGRAPHS 2 ("SCOPE OF EFI'S LICENSES"), 8
("PROPRIETARY  RIGHTS  AND  LEGENDS"),  AND 9  ("MARKETING  AND  LICENSE  TO USE
TRADEMARKS"). EFI'S LIABILITY TO ADOBE FOR DAMAGES CAUSED BY EFI'S BREACH OF THE
PROVISIONS  OF THIS  AGREEMENT  SHALL NOT EXCEED  TWENTY  FIVE  MILLION  DOLLARS
($25,000,000)  UNLESS SUCH BREACH RESULTS FROM INTENTIONAL OR GROSSLY  NEGLIGENT
CONDUCT  BY EFI,  IN WHICH  CASE  EFI'S  LIABIUTY  SHALL NOT BE  SUBJECT TO SUCH
LIMITATION.  To  establish  "intentional  conduct,"  Adobe  must show that EFI's
breach of this  Agreement was authorized by EFI management or reckless under the
circumstances. To establish "gross negligence," Adobe must show that there

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


was a substantial departure by EFI from the standard of conduct required by this
Agreement.

16. GENERAL.

         16.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the United  States of America  and the State of  California  as such
laws are applied to agreements  entered into and to be performed entirely within
California  between  California  residents.  The  parties  agree that the United
Nations  Convention  on  Contracts  for  the  International  Sale  of  Goods  is
specifically excluded from application to this Agreement.

         16.2 Attorneys' Fees. In the event any proceeding or lawsuit is brought
by Adobe, its suppliers or EFI in connection with this Agreement, the prevailing
party in such proceeding shall be entitled to receive its costs,  expert witness
fees and reasonable attorneys' fees, including costs and fees on appeal.

         16.3 Forum. All disputes arising under this Agreement may be brought in
Superior  Court of the State of  California in Santa Clara County or the Federal
District Court of San Jose, California,  as permitted by law. The Superior Court
of Santa Clara County and the Federal District Court of San Jose shall each have
non-exclusive  jurisdiction over disputes under this Agreement.  EFI consents to
the personal jurisdiction of the above courts.

         16.4 Notices.  All notices or reports  permitted or required under this
Agreement  shall be in writing  and shall be  delivered  by  personal  delivery,
telegram,  telex,  telecopier,   facsimile  transmission,  or  by  certified  or
registered  mail,  return  receipt  requested,  and shall be deemed  given  upon
personal   delivery,   five  (5)  days  after  deposit  in  the  mail,  or  upon
acknowledgment of receipt of electronic transmission.  Notices shall be sent to:
(i) the  contract  representative  designated  in the specific  Licensed  System
Appendix  if the  notice  or report  relates  to one or more  specific  Licensed
Systems and (ii) a copy to the  signatory  of this  Agreement at the address set
forth at the end of this  Agreement  or such other  address as either  party may
specify in writing.  If the notice is to Adobe, a copy shall also be sent to the
attention of its General Counsel.

         16.5   Injunctive   Relief.   It  is   understood   and  agreed   that,
notwithstanding any other provisions of this Agreement, breach of the provisions
of this Agreement by EFI may cause Adobe  irreparable  damage for which recovery
of money damages would be inadequate, and that Adobe shall therefore be entitled
to seek timely  injunctive relief to protect Adobe's rights under this Agreement
in addition to any and all remedies available at law.

         16.6 No Agency. Nothing contained herein shall be construed as creating
any agency, partnership, or other form of joint enterprise between the parties.

         16.7 Force Majeure.  Neither party shall be liable  hereunder by reason
of any failure or delay in the performance of its obligations  hereunder (except
for the payment of money) on account of strikes, shortages, riots, insurrection,
fires, flood, storm,  explosions,  acts of God, war,  governmental action, labor
conditions,  earthquakes,  material shortages or any other cause which

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


is beyond the reasonable control of such party.

         16.8 Waiver. The failure of either party to require  performance by the
other party of any  provision  hereof shall not affect the full right to require
such performance at any time thereafter; nor shall the waiver by either party of
a  breach  of any  provision  hereof  be  taken  or held to be a  waiver  of the
provision itself.

         16.9  Severability.  In the event that any provision of this  Agreement
shall be  unenforceable  or invalid  under any  applicable  law or be so held by
applicable court decision,  such unenforceability or invalidity shall not render
this Agreement  unenforceable  or invalid as a whole,  and, in such event,  such
provision  shall  be  changed  and  interpreted  so as to  best  accomplish  the
objectives  of such  unenforceable  or  invalid  provision  within the limits of
applicable law or applicable court decisions.

         16.10 Headings.  The paragraph headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit,  construe,
or  describe  the scope or extent of such  paragraph  or in any way affect  this
Agreement.

         16.11 No Patent License.

                  16.11.1  Definitions.  As used herein,  "Adobe  Patent  Right"
means any patent right  arising  under any United  States or foreign  patent now
owned by, or later issued or assigned to Adobe, applicable to the Adobe Software
or any other items licensed by Adobe to EFI hereunder.  "EFI Patent Right" means
any patent right  arising  under any United  States or foreign  patent issued or
assigned  to EFI and having a first  effective  filing  date  after an  inventor
listed on such patent had access to the Adobe Support  Information  and in which
an inventor  listed on such patent is (a) an employee or  contractor  of EFI who
has reviewed and used the Adobe  Support  Information  and (b) the Adobe Support
Information contributed to and is a substantial part of the claimed invention.

                  16.11.2 Adobe  Patents.  Adobe  covenants  that, to the extent
that EFI, EFI's End Users and EFI's Subsidiaries, sublicensees, and other direct
and indirect customers of Licensed Systems  (collectively  "Customers") exercise
the  rights  expressly  granted  to EFI or which EFI is  authorized  to grant to
Customers  herein,  Adobe will not (a) assert any Adobe Patent Right against EFI
or its  Customers,  or (b) require any additional fee or royalty from EFI or its
Customers based upon any Adobe Patent Right.

                  16.11.3  EFI  Patents.  EFI agrees that it will not (a) assert
any EFI  Patent  Right  against  Adobe or  against  any  Adobe  sublicensees  or
customers with respect to products  containing software sold or licensed to them
by Adobe,  or (b) require any fee or royalty from Adobe or such  sublicensees or
customers based upon any EFI Patent Right.

         This  PARAGRAPH  16.11 shall survive  termination or expiration of this
Agreement.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         16.12 Assignment.  Neither this Agreement nor any rights or obligations
of EFI  hereunder  may be assigned by EFI in whole or in part  without the prior
written  approval  of  Adobe;  provided  that  EFI may  assign  its  rights  and
obligations  under  this  Agreement  without  Adobe's  consent in the event of a
merger  in  which  EFI is not  the  surviving  corporation  or a sale  of all or
substantially  all of the assets of EFI to any company  that (i) is not an Adobe
competitor  and (ii) has its primary  place of business in a country in which at
least one other Adobe OEM has its principal place of business,  and such OEM has
a  license  agreement  with  Adobe for  support  source  code of the  PostScript
software.  Any  assignment  in breach of the  foregoing  shall be void and of no
effect.  Adobe's  rights  and  obligations,  in  whole or in  part,  under  this
Agreement  may be  assigned  by Adobe.  Adobe may  exercise  full  transfer  and
assignment rights in any manner at Adobe's discretion and specifically may sell,
pledge,  or  otherwise  transfer  its  right to  receive  royalties  under  this
Agreement.

         16.13 Export.  EFI  acknowledges  that the laws and  regulations of the
United  States  restrict the export and re-export of  commodities  and technical
data of United  States  origin,  including the Adobe  Support  Information.  EFI
agrees that it will not export or re-export the Adobe Support Information in any
form, without the appropriate United States and foreign  governmental  licenses.
EFI agrees that its  obligations  pursuant to this  paragraph  shall survive and
continue after any termination or expiration of rights under this Agreement.

         16.14 Full Power.  Each party  warrants that it has full power to enter
into and perform this  Agreement,  and the person signing this Agreement on each
party's  behalf  has been  duly  authorized  and  empowered  to enter  into this
Agreement. EFI further acknowledges that it has read this Agreement, understands
it and agrees to be bound by it.

         16.15 Confidential Agreement.  Neither party will disclose any terms or
the existence of this Agreement,  except pursuant to a mutually  agreeable press
release or as otherwise required by law.

         16.16  Counterparts.  This Agreement may be executed  simultaneously in
two or more counterparts,  each of which will be considered an original, but all
of which together will constitute one and the same instrument.

         16.17  Entire  Agreement.  This  Agreement  together  with the exhibits
completely  and  exclusively  states the agreement of the parties  regarding its
subject  matter.  It  supersedes,  and its terms  govern,  all prior  proposals,
agreements,  or other  communications  between  the  parties,  oral or  written,
regarding such subject matter.  This Agreement shall not be modified except by a
subsequently  dated written  amendment or appendix signed on behalf of Adobe and
EFI by their duly  authorized  representative  and any  provision  or a purchase
order  purporting  to supplement  or vary the  provisions  hereof shall be void.
Notwithstanding  the foregoing,  the  Confidentiality  Agreement shall remain in
full force and effect.

         IN WITNESS  WHEREOF,  the parties  hereto  have caused this  PostScript
Support Source and Object Code Distribution  License Agreement to be executed by
their duly authorized representatives.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


ADOBE:                                           EFI

ADOBE SYSTEMS INCORPORATED                       ELECTRONICS FOR IMAGING, INC.

By: /s/ Stephen A. MacDonald                     By: /s/ Dan Avida

Print                                            Print
Name: Stephen A. MacDonald                       Name:Dan Avida
Title: Senior Vice President                     Title: President and CEO
       and General Manager

Date: 09/12/95                                   Date: 09/08/95

Address for Notice:                              Address for Notice:

1585 Charleston Road                             2855 Campus Drive
P.O. Box 7900                                    San Mateo, CA 94403
Mountain View, CA 94039-7900


[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                    EXHIBIT A

                               ADOBE DELIVERABLES
                     (POSTSCRIPT SUPPORT SOURCE WITH OBJECT)

         The Adobe Deliverables for the initial or any subsequent Reference Port
shall consist of: one (1) master copy of the  Reference  Port,  Adobe  Screening
Test Suite and the documentation of the Adobe Screening Test Suite, as described
on the Reference  Port Appendix and one (1) master copy of the Reference Port in
object  code-form  suitable for execution on a Reference  System,  including the
appropriate  controller and printer engine  required to verify that the compiled
Object code  version of the  Reference  Port  executes as part of the  Reference
System in accordance  with the warranty  provisions  set forth in PARAGRAPH 11.1
("Reference Port Warranties") of the Agreement.

         The Adobe Deliverables may also include Example Source, which are those
portions of the Adobe  Software  which are provided in source code form by Adobe
to EFI for the sole purpose of demonstrating an example of software  development
that  implements  certain  functions  which EFI may wish to  emulate  in its own
implementation  of a  Licensed  System.  Example  Source  shall not be  included
within,  or as part of, the  definition of a Reference Port for purposes of this
Agreement.

         Adobe will provide the "page pipeline" portion of the Adobe Software in
source code form and any mutually agreeable changes to this code.

         Adobe will also supply whatever utility tools it may deem are needed by
EFI to facilitate EFI's use of the Reference Port to develop a Licensed System.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                   EXHIBIT B-I

                        EMPLOYEE NONDISCLOSURE AGREEMENT





[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                          ELECTRONICS FOR IMAGING, INC.

                    EMPLOYMENT, CONFIDENTIAL INFORMATION AND
                         INVENTION ASSIGNMENT AGREEMENT

         As a condition of my employment with Electronics for Imaging, Inc., its
subsidiaries, affiliates, successors or assigns (together the "Company"), and in
consideration  of  my  employment  with  the  Company  and  my  receipt  of  the
compensation  now and  hereafter  paid  to me by the  Company,  I  agree  to the
following:

         1. At-Will Employment.  I understand and acknowledge that my employment
with the Company is for an  unspecified  duration and  constitutes  an "at-will"
employment. I acknowledge that this employment relationship may be terminated at
any time,  with or without  cause at the option of either the Company or myself,
with or without notice.

         2. Confidential Information.

                (a)  Company and Third  Party  Information.  I agree that at all
times during the term of my employment and  thereafter,  to hold in strictest of
confidence,  and not to  use,  except  for the  benefit  of the  Company,  or to
disclose to any person, firm or corporation without written authorization of the
Board of Directors of the Company, any Confidential  Information of the Company.
I  understand  that  "Confidential  Information"  means any Company  proprietary
information,  technical  data,  trade  secrets or know-how,  including,  but not
limited to,  information  relating to products,  services,  software,  research,
developments,   technology,   hardware  configuration  information,   marketing,
finances or other  business  information  disclosed to me by the Company  either
directly or indirectly in writing, orally or by drawings or observation of parts
or equipment.  I recognize  that the Company has received and in the future will
receive from third parties their confidential or proprietary information subject
to a duty  on the  Company's  part  to  maintain  the  confidentiality  of  such
information  and to use it only for certain limited  purposes,  and I understand
that such information is also  Confidential  Information.  I further  understand
that  Confidential  Information does not include any of the foregoing items that
has become publicly known and made generally  available  through no wrongful act
of mine or of others who were under  confidentiality  obligations as to the item
or items involved.

                (b) Former Employer Information. I agree that I will not, during
my  employment  with the Company,  improperly  use or disclose  any  proprietary
information  or trade secrets of any former or concurrent  employer or any other
person or entity and that I will not bring onto the  premises of the Company any
unpublished document or proprietary  information belonging to any such employer,
person or entity  unless  consented  to in writing by such  employer,  person or
entity.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


          3. Inventions.

                  (a) Inventions Retained and Licensed.  I have attached hereto,
as Exhibit A, a list  describing all  inventions,  original works of authorship,
developments,  improvements,  and trade secrets that were made to me prior to my
employment with the Company  (collectively  referred to as "Prior  Inventions"),
that belong to me , that relate to the Company's proposed business,  products or
research and  development,  and that are not assigned to the Company  hereunder;
or,  if no such list is  attached,  I  represent  that  there are no such  Prior
Inventions.  If in the course of my employment  with the Company,  I incorporate
into the Company product, process or machine a Prior Invention owned by me or in
which I have an  interest,  the  Company  is  hereby  granted  and  will  have a
nonexclusive,  royalty-free, irrevocable, perpetual, worldwide license, with the
right to grant sublicenses,  to make, have made, modify, use and sell such Prior
Invention as part of or in connection with such product, process or machine.

                  (b)  Assignment  of  Inventions.  I agree that I will promptly
make full written disclosure to the Company, and will hold in trust for the sole
right and  benefit of the  Company,  and hereby  assign to the  Company,  or its
designee,  all my right,  title,  and interest in and to any and all inventions,
original  works of authorship,  developments.  concepts,  improvements  or trade
secrets,  whether or not  patentable or registrable  under patent,  copyright or
similar  laws,  that I may  solely or jointly  conceive  or develop or reduce to
practice, or cause to be conceived, developed or reduced to practice, during the
period of time I am in the employ of the  Company  (collectively  referred to as
"Inventions"),  except as provided in Section 3(e) below. I further  acknowledge
that all  original  works of  authorship  that are made by me (solely or jointly
with others) within the scope of and during the period of my employment with the
Company and that are protectable by copyright are "works made for hire," as that
term is defined in the United States Copyright Act."

                  (c)  Maintenance  of  Records.  I agree to keep  and  maintain
adequate and current  written  records of all  Inventions  made by me (solely or
jointly  with others)  during the term of my  employment  with the Company.  The
records will be in the form of notes,  sketches,  drawings. and any other format
that may be  specified  by the  Company.  The records  will be  available to and
remain the sole property of the Company at all times.

                  (d) Patent and Copyright Registrations.  I agree to assist the
Company,  or its designee,  at the Company's expense, in every way to secure the
Company's rights in the Inventions and any copyrights, patents, mask work rights
or  other  intellectual  property  rights  relating  thereto,  in  any  and  all
countries,  including  disclosing to the Company all pertinent  information  and
data with respect  thereto,  and  executing  all  applications,  specifications,
oaths,  assignments  and all  other  instruments  that the  Company  shall  deem
necessary  in order to apply for and obtain  such  rights and in order to assign
and convey to the  Company,  its  successors,  assigns and nominees the sole and
exclusive  rights,  title  and  interest  in and to  such  Inventions,  and  any
copyrights,  patents,  mask work rights or other  intellectual  property  rights
relating  thereto.  I further agree that my obligation to execute or cause to be
executed,  when it is in my power to do so, any such  instrument  or papers will
continue  after the  termination  of this  Agreement.  If the  Company is unable
because of my mental or physical incapacity or for any other reason to secure my
signature  to apply for or to pursue any  application  for any United  States or
foreign patents or copyright registrations covering Inventions or original works
of  authorship  assigned  to the  Company  as above,  then I hereby  irrevocably
designate and appoint to the Company and its duly

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


authorized  officers and agents as my agent and attorney in fact, to act for and
in my behalf and stead to execute and file any such  applications  and to do all
other lawfully permitted acts to further the prosecution and issuance of letters
patent or copyright  registrations  thereon with the same legal force and effect
as if executed by me.

                  (e) Exception to Assignments. I understand that the provisions
of this Agreement requiring assignment of Inventions to the Company do not apply
to any invention  that  qualifies  fully under the  provisions of the California
Labor  Code  Section  2870  (attached  hereto as Exhibit  B). I will  advise the
Company  promptly in writing of any inventions  that I believe meet the criteria
in California  Labor Code Section 2870 and that are not  otherwise  disclosed on
Exhibit A.

         4.  Conflicting  Employment.  I  agree  that,  during  the  term  of my
employment  with  the  Company,  I will  not  engage  in any  other  employment,
occupation,  consulting  or other  business  activity  directly  related  to the
business in which the Company is now  involved  or becomes  involved  during the
term of my employment,  nor will I engage in any other  activities that conflict
with my obligations to the Company.

         5. Returning  Company  Documents.  I agree that, at the time of leaving
the employ of the  Company,  I will deliver to the Company (and will not keep in
my possession, recreate or deliver to anyone else) any and all devices, records,
data,  notes,  reports.   proposals,  lists,   correspondence,   specifications,
drawings,  blueprints,   sketches,  materials,  equipment,  other  documents  or
property,  or reproductions of any aforementioned items developed by me pursuant
to my  employment  with the Company or otherwise  belonging to the Company,  its
successors or assigns.

         6. Solicitation of Employees.  I agree that for a period of twelve (12)
months immediately following the termination of my relationship with the Company
for any reason,  whether with or without  cause,  I will not either  directly or
indirectly solicit,  induce, recruit or encourage any of the Company's employees
to leave their employment,  or take away such employees,  or attempt to solicit,
induce,  recruit,  encourage or take away  employees of the Company,  either for
myself or for any other person or entity.

         7.  Representations.  I agree to execute  any proper oath or verify any
proper document  required to carry out the terms of this Agreement.  I represent
that my  performance  of all the terms of this  Agreement  will not  breach  any
agreement  to keep  in  confidence  proprietary  information  acquired  by me in
confidence or in trust prior to my employment by the Company. I have not entered
into,  and I agree I will not  enter  into,  any oral or  written  agreement  in
conflict herewith.

         8. Arbitration and Equitable Relief.

                (a)  Arbitration.  Except as provided in Section  8(b) below,  I
agree  that  any  dispute  or  controversy  arising  out of or  relating  to any
interpretation,  construction,  performance  or breach of this Agreement will be
settled  by  arbitration  to be held  in  Santa  Clara  County,  California,  in
accordance   with  the  rules  then  in  affect  of  the  American   Arbitration
Association.  The  arbitrator  may  grant  injunctions  or other  relief in such
dispute or controversy. The decision of the arbitrator will be final, conclusive
and binding on the parties to the  arbitration.  Judgement may be entered on the
arbitrator's  decision in any court

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


having  jurisdiction.  The  Company  and I will pay  one-half  of the  costs and
expenses of such  arbitration,  and each of us will  separately  pay our counsel
fees and expenses.

                  (b) Equitable Remedies. I agree that it would be impossible or
inadequate to measure and calculate the Company's damages from any breach of the
covenants set forth in Sections 2, 3, and 5 herein. Accordingly, I agree that if
I breach any such  Sections,  the  Company  will have,  in addition to any other
right or remedy  available,  the right to obtain an  injunction  from a court of
competent  jurisdiction  restraining  such  breach or  threatened  breach and to
specific  performance of any such provisions of this Agreement.  I further agree
that no bond or other  security  will be required in  obtaining  such  equitable
relief  and I hereby  consent  to the  issuance  of such  injunction  and to the
ordering of  specific  performance.  I hereby  further  consent to the  personal
jurisdiction  of the state and  federal  courts  located in  California  for any
lawsuit filed there  against me by the Company  arising from or relating to this
Agreement.

          9. General Provisions

                  (a) Governing Law. This Agreement will be governed by the laws
of the State of California.

                  (b) Entire  Agreement.  This  Agreement  sets forth the entire
agreement and  understanding  between the Company and me relating to the subject
matter hereof and merges all prior discussions between us. No modification of or
amendment to this  Agreement,  or any waiver of any rights under this Agreement,
will be effective  unless in writing and signed by the party to be charged.  Any
subsequent  change or  changes  in my duties,  salary or  compensation  will not
affect the validity or scope of this Agreement.

                  (c)  Severability.  If one or more of the  provisions  in this
Agreement are deemed void by law, then the remaining provisions will continue in
full force and effect.

                  (d)  Successors  and Assigns.  This  Agreement will be binding
upon my heirs,  executors,  administrators and other legal  representatives  and
will be for the benefit of the Company, its successors, and its assigns.


Date:                                  _________________________________________
                                                         Signature


                                       _________________________________________
                                          Name of Employee (typed or printed)


Witness

_________________________________________

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                    EXHIBIT A

                            LIST OF PRIOR INVENTIONS
                             AND WORKS OF AUTHORSHIP

                                                           Identifying Number
      Title                    Date                       or Brief Description











________ No Inventions or Improvements

________ Additional Sheets Attached

Signature of Employee:

Print Name of Employee:
Date:

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                    EXHIBIT B

                       CALIFORNIA LABOR CODE SECTION 2870

                   EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS

         "(a) Any provision in an employment  agreement  which  provides that an
employee  shall  assign,  or offer to  assign,  any of his or her  rights  in an
invention  to his or her  employer  shall  not  apply to an  invention  that the
employee  developed entirely on his or her own time without using the employer's
equipment,  supplies,  facilities,  or trade secret information except for those
inventions that either:

                  (1) Relate at the time of  conception or reduction to practice
of  the  invention  to  the  employer's  business,  or  actual  or  demonstrably
anticipated research or development of the employer.

                  (2) Result from any work  performed  by the  employee  for the
employer.

         (b) To the extent a provision in an  employment  agreement  purports to
require  an  employee  to assign an  invention  otherwise  excluded  from  being
required to be assigned  under a  subdivision  (a), the provision is against the
public policy of this state and is unenforceable."

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                   EXHIBIT B-2

                              CONTRACTOR AGREEMENT












[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                          ELECTRONICS FOR IMAGING, INC.

                              CONSULTING AGREEMENT

         This Consulting Agreement  ("Agreement") is made and entered into as of
the   ________   day  of   _________________________,   19__   by  and   between
_______________________________      a       ___________________________________
Corporation,    (the   "Company"),    and    ___________________________________
("Consultant").  The  Company  desires to retain  Consultant  as an  independent
contractor  to perform  consulting  services for the Company and  Consultant  is
willing to perform  such  services,  on terms set forth  more  fully  below.  In
consideration  of the mutual  promises  contained  herein,  the parties agree as
follows:

         1. SERVICES AND COMPENSATION

                  (a) Consultant  agrees to perform for the Company the services
described in Exhibit A ("Services"),

                  (b) The Company agrees to pay Consultant the  compensation set
forth in Exhibit A for the performance of the Services.

         2. CONFIDENTIALITY

                  (a) "Confidential  Information" means any Company  proprietary
information,  technical  data,  trade  secrets or know-how,  including,  but not
limited to, research,  product plans, products,  services,  customers,  customer
lists,  markets,  software,  developments,   inventions;   processes,  formulas,
technology, designs, drawings, engineering,  hardware configuration information,
marketing Finances or other business information disclosed by the Company either
directly or indirectly in writing,  orally or by drawings or inspection of parts
or equipment.

                  (b) Consultant  will not,  during or subsequent to the term of
this  Agreement,  use the  Company's  Confidential  Information  for any purpose
whatsoever  other than the  performance of the Services on behalf of the Company
or disclose the Company's Confidential Information to any third party. and it is
understood that said Confidential  Information shall remain the sole property of
the Company.  Consultant  further agrees to take all  reasonable  precautions to
prevent any unauthorized disclosure of such Confidential  Information including,
but not limited to, having each employee of  Consultant,  if any, with access to
any  Confidential  Information.  execute a  nondisclosure  agreement  containing
provisions in the Company's favor  substantially  similar to Sections 2, 3 and 5
of this Agreement.  Confidential  Information does not include information which
(i) is know to Consultant at the time of disclosure to Consultant by the Company
as evidenced by written  records of Consultant,  (ii) has become  publicly known
and made generally available through no wrongful act of Consultant, or (iii) has
been  rightfully  received by Consultant from a third party who is authorized to
make such disclosure.  Without the Company's prior written approval,  Consultant
will not  directly  or  indirectly  disclose  to anyone

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


the existence of this Agreement or the fact that Consultant has this arrangement
with the Company.

                  (c) Consultant  agrees that  Consultant  will not,  during the
term of this Agreement,  improperly use or disclose any proprietary  information
or trade  secrets of any former or current  employer  or other  person or entity
with which Consultant has an agreement or duty to keep in confidence information
acquired by  Consultant  in  confidence,  if any,  and that Consul cant will not
bring onto the premises of the Company any  unpublished  document or proprietary
information belonging to such employer,  person or entity unless consented to in
writing  by such  employer,  person or entity.  Consultant  will  indemnify  the
Company and hold it harmless from and against all claims,  liabilities,  damages
and expenses, including reasonable attorneys fees and costs of suit, arising out
of or in connection  with any violation or claimed  violation of a third party's
rights  resulting in whole or in part from the Company's use of the work product
of Consultant under this Agreement.

                  (d) Consultant recognizes that the Company has received and in
the future will receive from third parties  their  confidential  or  proprietary
information   subject  to  a  duty  on  the  Company's   part  to  maintain  the
confidentiality  of such  information  and to use it only  for  certain  limited
purposes.  Consultant  agrees  that  Consultant  owes the Company and such third
parties,  during the term of this Agreement and  thereafter,  a duty to hold all
such confidential or proprietary information in the strictest confidence and nor
to  disclose  it to any  person,  firm or  corporation  or to use it  except  as
necessary  in carrying  out the  Services  for the Company  consistent  with the
Company's agreement with such third party.

                  (e) Upon the termination of this Agreement,  or upon Company's
earlier  request,  Consultant  will deliver to the Company all of the  Company's
property or Confidential  Information in tangible. form that Consultant may have
in Consultant's possession or control.

         3. OWNERSHIP

                  (a) Consultant agrees that all copyrightable material,  notes,
records, drawings, designs, inventions, improvements.  developments, discoveries
and trade secrets (collectively,  "Inventions") conceived, made or discovered by
Consultant,  solely or in collaboration  with others,  during the period of this
Agreement  which  relate  in any  manner to the  business  of the  Company  that
Consultant  may be directed to undertake,  investigate  or  experiment  with, or
which  Consultant  may  become   associated  with  in  work,   investigation  or
experimentation  in the line of business of Company in  performing  the Services
hereunder,  are the sole property of the Company.  Iii addition,  any Inventions
which constitute  copyrightable  subject matter shall be considered  "works made
for hire" as that term is defined in the United States Copyright Act. Consultant
Further  agrees to assign (or muse to be assigned)  and does hereby assign fully
to the Company all such Inventions and any copyrights, patents, mask work rights
or other intellectual property rights relating thereto.

                  (b) Consultant agrees to assist Company,  or its designee,  at
the Company's expense, in every proper way to secure the Company's rights in the
Inventions and any copyrights,  patents,  mask work rights or other intellectual
property  rights  relating  thereto  in any and  all  countries,  including  the
disclosure  to the Company- of all pertinent  information  and data with respect
thereto the execution of all applications,  specifications,  oaths,  assignments
and all

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


other  instruments  which the Company shall deem necessary in order to apply for
and obtain  such  rights and in order to assign and convey to the  Company,  its
successors,  assigns  and  nominees  the sole and  exclusive  rights,  title and
interest  in and to such  Inventions,  and any  copyrights,  patents,  mask work
rights  or other  intellectual  property  rights  relating  thereto.  Consultant
further agrees that Consultant's  obligation to execute or cause to be executed,
when it is in  Consultant's  power to do so, any such instrument or papers shall
continue after the termination of this Agreement.

                  (c) Consultant  agrees that if in the course of performing the
Services,  Consultant  incorporates into any Invention  developed  hereunder any
invention,  improvement,  development.  Concept,  discovery or other proprietary
information  owned by Consultant  or in which  Consultant  has an interest,  the
Company  is  hereby  granted  and  shall  have  a  non-exclusive,  royalty-free.
perpetual.  irrevocable,  worldwide license to make, have made,  modify, use and
sell such item as part of or in connection with such Invention.

                  (d) Consultant agrees that if the Company is unable because of
Consultant's unavailability,  dissolution, mental or physical incapacity, or for
any other reason, to secure Consultant's signature to apply for or to pursue any
application  for any United States or foreign  patents or mask work or copyright
registrations  covering  the  Inventions  assigned  to the Company  above,  then
Consultant hereby  irrevocably  designates and appoints the Company and its duly
authorized  officers and agents as  Consultant's  agent and attorney in fact, to
act for and in  Consultant's  behalf  and  stead  to  execute  and file any such
applications  and to do  all  other  lawfully  permitted  acts  to  further  the
prosecution  and  issuance of  patents,  copyright  and mask work  registrations
thereon with the same legal force and effect as if executed by Consultant.

         4. REPORTS

                  Consultant  agrees  that it will from time to time  during the
term of this Agreement or any execution  thereof keep the Company  advised as to
Consultant's  progress in performing the Services  hereunder and that Consultant
will, as requested by the Company, prepare written reports with respect thereto.
It is  understood  that the time  required in the  preparation  of such  written
reports  shall be considered  time devoted to the  performance  of  Consultant's
Services.

         5. CONFLICTING OBLIGATIONS

                  (a) Consultant  certifies  that  Consultant has no outstanding
agreement or obligation  that is in conflict with any of the  provisions of this
Agreement.  or that would preclude Consultant from complying with the provisions
hereof,  and  further  certifies  that  Consultant  will not enter into any such
conflicting Agreement during the term of this Agreement.

                  (b) In view of  Consultant's  access  to the  Company's  trade
secrets and proprietary know-how, Consultant further agrees that Consultant will
not, without Company's prior written consent,  design identical or substantially
similar  designs as those  developed  under this  Agreement  for any third party
during the term of this  Agreement  and for a period of twelve (12) months after
chic termination of this Agreement.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         6. TERM AND TERMINATION

                   (a) This  Agreement  will  commence on the date first written
above and will continue until final completion of the Services or termination as
provided below.

                  (b) The Company may terminate  this  Agreement upon giving two
(2) weeks prior written notice thereof to Consultant.  Ally such notice shall be
addressed  to  Consultant  at the address  shown below or such other  address as
either party may notify the other of and shall be deemed given upon  delivery if
personally  delivered,  or forty-eight  (48) hours after deposited in the United
States mail postage  prepaid.  registered  or  certified  mail,  return  receipt
requested.  The Company may terminate  this  Agreement  immediately  and without
prior notice if Consultant refuses to or is unable to perform the Services or is
in breach of any material provision of this Agreement.

                  (c) Upon  such  termination,  all  rights  and  duties  of the
parties toward each other shall cease except:

                           (i) that the Company shall be obliged to pay,  within
thirty (30) days of the  effective  date of  termination.  all amounts  owing to
Consultant for unpaid Services and related expenses,  if any, in accordance with
the provisions of Section 1 (Services and Compensation) hereof; and

                           (ii) Sections 2 (Confidentiality),  3 (Ownership) and
8 (Independent Contractors) shall survive termination of this Agreement.

         7. ASSIGNMENT

                  Neither  this  Agreement  nor any right  hereunder or interest
herein may be assigned or transferred by Consultant  without the express written
consent of the Company.

         8. INDEPENDENT CONTPACTOR

                  Nothing in this  Agreement  shall in any way be  construed  to
constitute  Consultant as an agent,  employee or  representative of the Company.
but  Consultant   shall  perform  the  Services   hereunder  as  an  independent
contractor.  Consultant  agrees to furnish (or  reimburse  the Company  for) all
tools and materials  necessary to accomplish this contract,  and shall incur all
expenses associated with performance.  except as expressly provided on Exhibit A
of this  Agreement.  Consultant  acknowledges  and  agrees  that  Consultant  is
obligated to report as income all compensation  received by Consultant  pursuant
to this Agreement.  and Consultant  agrees to and acknowledges the obligation to
pay all self-employment and other taxes thereon. Consultant further agrees to in
indemnify  the  Company  and hold it  harmless  to the extent of any  obligation
imposed  on Company  (i) to pay in  withholding  taxes or similar  items or (ii)
resulting  from   Consultant's   being  determined  not  to  be  an  independent
contractor.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         9. ARBITRATION AND EQUITABLE RELIEF

                  (a) Except as provided  iii  Section 9 (b) below,  the Company
and Consultant agree that any dispute or controversy  arising out of or relating
to any  interpretation,  construction,  performance or breach of this Agreement.
shall be settled by arbitration  to be held in  ________________________________
County.  California, in accordance with the rules then in effect of the American
Arbitration Association. The arbitrator may grant injunctions or other relief in
such  dispute or  controversy.  The decision of the  arbitrator  shall be final,
conclusive  and  binding on the  parties  to the  arbitration.  Judgment  may be
entered on the arbitrator's decision in any court of competent jurisdiction. The
Company and Consultant shall each pay one-half of the costs and expenses of such
arbitration,  and each shall  separately  pay its  respective  counsel  fees and
expenses.

                  (b)   Consultant   agrees  that  it  would  be  impossible  or
inadequate to measure and calculate the Company's damages from any breach of the
covenants set forth in Sections 2 or 3 herein.  Accordingly,  Consultant  agrees
that if Consultant breaches Section 2 or 3, the Company will have available,  in
addition  to any other right or remedy  available,  the right to obtain from any
court of  competent  jurisdiction,  an  injunction  restraining  such  breach or
threatened  breach and specific  performance of any such  provision.  Consultant
further  agrees that no bond or other  security  shall be required in  obtaining
such provision.  Consultant  further agrees that no bond or other security shall
be required in obtaining such equitable relief and Consultant hereby consents to
the  issuances  of  such  injunction  and  to  the  ordering  of  such  specific
performance.

         10. GOVERNING LAW

                  This  Agreement  shall be governed by the laws of the State of
California.

         11. ENTIRE AGREEMENT

                  This  Agreement  is the entire  Agreement  of the  parties and
supersedes any prior Agreements  between them with respect to the subject matter
hereof.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

CONSULTANT                                     (Name of Company)

By:                                            By:

Title:_________________________                Title: __________________________
Address: ______________________                Address: ________________________

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                    EXHIBIT A

                            SERVICES AND COMPENSATION

I.   Contact     Consultants principal Company contact:
                 Name:
                 Title:

2. Services      Consultant will render to the Company the following Services:

3. Compensation

         (a)      The Company shall pay Consultant $ _______________ per

         (b)      The Company  shall  reimburse  Consultant  for all  reasonable
                  travel  and  living   expenses   incurred  by   Consultant  in
                  performing  Services  pursuant  to  this  Agreement,  provided
                  Consultant  receives prior written  consent from an authorized
                  agent of the Company prior to incurring such expenses.

         (c)      Consultant  shall  submit  all  statements  for  services  and
                  expenses in prescribed by the Company and such statement shall
                  be  approved  by the  contact  listed  above  or by his or her
                  supervisor.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                    EXHIBIT C
                        Development and Reproduction Site

Electronics for Imaging, Inc.
2855 Campus Drive
San Mateo, CA 94403

Solectron Corporation
890 Yosemite Drive
Milpitas, CA 95035

Micron Custom Manufacturing Services, Inc.
8455 Westpark Street
Boise, ID 83704-8366

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                   EXHIBIT B-3

                        NOTICE REGARDING CONFIDENTIALITY
                           (POSTSCRIPT SUPPORT SOURCE)

         1.  Recipient has  previously  signed an agreement with EF[ pursuant to
which  Recipient  has agreed to maintain  the  confidentiality  of  confidential
information of EFI and its suppliers (the "Confidential Information") and to use
the  Confidential  Information  solely for EFI's  benefit.  The  purpose of this
notice  is to  apprise  Recipient  that  Recipient  will  be  receiving  certain
proprietary  information of Adobe,  including  internal  source code,  interface
specifications, and related source documentation for the PostScript software and
related Adobe  information,  all of which is of a confidential  nature and which
contains valuable trade secrets,  know-how, and proprietary information of Adobe
(the "Adobe Support Information") and which constitutes Confidential Information
under Recipient's agreement with EFI.

         2.  This is to inform  Recipient  that the  Adobe  Support  Information
cannot be used for any purpose  except for the  specific  purposes  which EFI or
Adobe  authorize in writing and that Recipient is not authorized to disclose the
Adobe Support Information to any person at any time except to employees of Adobe
and to those Authorized  Employees and Authorized  Contractors which EFI informs
Recipient are authorized to receive such Adobe Support Information.

         3. All materials  including,  without  limitation,  programs,  recorded
information,  documents,  drawings,  models, apparatus,  sketches,  designs, and
lists  furnished to Recipient by EFI or Adobe which are designated in writing to
be the  property of Adobe  remain the  property of Adobe and must be returned to
Adobe  promptly  at its  request,  together  with any  copies  or  modifications
thereof.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                    EXHIBIT C

                       DEVELOPMENT AND REPRODUCTION SITES
                     (POSTSCRIPT SUPPORT SOURCE WITH OBJECT)


         EFI's  use and  storage  of the  Adobe  Support  Information  shall  be
restricted to the Following Development Site:

Name of Development Site:                                  Address:
Electronics for Imaging, Inc                               2855 Campus Drive
                                                           San Mateo, CA 94403


EFI's  reproduction  of the Revised Object and Font Programs shall be restricted
to the following Reproduction Sites:

Name of Reproduction Sites:                                Address:
Solectron Corporation                                      890 Yosemite Drive
                                                           Milpitas, CA 95035

Micron Custom Manufacturing Services, Inc.                 8455 Westpark Street
                                                           Boise, ID 83704-8366

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                    EXHIBIT D

                                SAMPLE FORMAT FOR
                            LICENSED SYSTEM APPENDIX
                                     To THE
                           ADOBE SYSTEMS INCORPORATED
             POSTSCRIPT SUPPORT SOURCE AND OBJECT CODE DISTRLBTJTION
                                LICENSE AGREEMENT

                            Name of EFI:_____________

                            Name of Licensed System:

                        Effective Date:_________________

         This Appendix sets forth  additional and different terms and conditions
particular to the Licensed  System  described below and shall be incorporated by
reference  into the  PostScript  Support  Source  and Object  Code  Distribution
License  Agreement  ("Agreement")  between  ________________  and Adobe  Systems
Incorporated  effective as of _______________ Such different or additional terms
are applicable only to the Licensed  System  described below and in no way alter
the terms and conditions  applicable to other Licensed Systems incorporated into
the Agreement by addition of an appendix.

         All the terms used in this  Appendix  shall  retain the same meaning as
defined  in the  Agreement  and such  definitions  are  incorporated  herein  by
reference.

A.       Licensed System:

         1.       Software:   See  PARAGRAPH  1.3  ("Adobe   Software")  of  the
                  Agreement.

         2.       EFI Hardware:

B.       Media for the Software as distributed by EFI:

C.       Development Schedule and Testing Expectations:

         1.       Development Schedule: (This section should contain information
                  on Adobe hardware training  including the location,  number of
                  days, number of persons and scope of training.)

                  Milestone Description                       Schedule

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


D.       Definition of Development Schedule Terms:
         1.       Alpha Release:
         2.       Beta Release:
         3.       Final Report:
         4.       Final Release:
E.       Loaned Equipment:

F.       Applicable Royalties:

         1.       Licensed System.
             a.            Advance Against Royalties.
             b.            Licensed System Royalties.
             c.            Font Programs.

G.       Roman Initial Installation Font Programs:
         Identifying Trademark Typeface                       Trademark Owner

H.       Additional  Font Programs:  List all Additional Font Programs which are
         not set forth in the Roman Initial  Installation  Font Programs section
         (Section  G above)  which  will be  bundled  as a part of the  Licensed
         System, and describe the media for such Additional Font Programs.

         Media:
         Identifying Trademark            Typeface            Trademark Owner

I.       Software  Training:  (Include the location,  number of days,  number of
         persons and scope of training.

J.       Designated Persons:

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


1.       Technically   qualified   EFI   representative   who  will  respond  to
         information requests by Adobe:

                           (name and telephone number)

2.       Technically   qualified  Adobe   representative  who  will  respond  to
         infonnation requests by EFI:

                           (name and telephone number)

3.       EFI's designated representative for Continuing Support:

                           (name and telephone number)

4.       Adobe Contract Representative:

                           (name and telephone number)

5.       EFI Contract Representative:

                           (name and telephone number)

6.       EFI financial contact for invoicing and payment:

                     (name, telephone number and fax number)

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


         IN WITNESS WHEREOF,  the parties have caused this Appendix No. by their
duly authorized representative.


ADOBE:                                        EFI:

ADOBE SYSTEMS  INCORPORATED

By: SAMPLE FORMAT/NOT FOR SIGNATURE

Print

Name:

Title:

Date:

Address for Notice:

1585 Charleston Road
P.O. Box 7900
Mountain View, CA 94039-7900

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                    EXHIBIT E

                       REFERENCE PORT TRAINING AND SUPPORT
                     (POSTSCRIPT SUPPORT SOURCE WITH OBJECT)

         1. Training.

                  a.  Adobe  agrees to  permit a  mutually  agreeable  number of
Authorized  Employees and Authorized  Contractors  (as defined in PARAGRAPH 1 of
Exhibit J ("Secure  Procedures for Handling Adobe Support  Information")) of EFI
to attend an  Adobe-provided  Adobe Support Source  training class for up to two
(2) days during the term of this  Agreement at no additional  charge (other than
the travel and living expenses described below).

                  b. If EFI and  Adobe  agree  that  Adobe  should  provide  any
additional training,  technical, or development assistance, EFI shall pay Adobe,
at Adobe's  then  current  standard  hourly  rates,  for time  expended by Adobe
personnel in providing such training,  technical, or development assistance. EFI
shall also bear all reasonable travel and living expenses of Adobe personnel who
provide services or training at an EFI site outside of the greater San Francisco
Bay Area.

         2. Support.

                  a. Support Services. If EFI purchases the support services for
a particular  Reference  Port and pays the  applicable  Annual Fee, set forth in
Exhibit H  ("Payments"),  Adobe  shall  provide  EFI with the Adobe  Support (as
defined in  PARAGRAPH  2(D)  ("General  Description  of Adobe  Support")  below)
commencing  upon the date of this  Agreement or the  applicable  Reference  Port
Appendix.  Adobe  Support  shall  include  delivery  to EFI of  Updates  of that
Reference Port.

                  b.  Discontinuance.  Adobe Support may, at Adobe's option,  be
discontinued  if EFI fails to pay in a timely  manner any Annual Fee (as defined
in  PARAGRAPH  2  of  Exhibit  H  ("Payments")).   The  foregoing  services,  if
discontinued, may be reinstated by EFI, at any time during the term hereof, upon
EFI's  payment  to Adobe of an  Annual  Fee to be  mutually  agreed  upon by the
parties for each  intervening year for which such payment was not made. The same
provision for  reinstatement  shall apply in the event that EFI chooses to begin
purchasing Adobe Support in the second or any subsequent year following the year
in which EFI received the initial  delivery of that  particular  Reference  Port
from Adobe hereunder.

                  c. Modifications  Resulting from Updates. Any modifications to
the  Revised  Support  Software  necessitated  by the  release of an Update of a
Reference  Port to EFI hereunder  shall be the sole  responsibility  of EFI, and
Adobe shall have no  responsibility  to assist EFI in such effort except to test
the modified  Revised  Object in  accordance  with the  provisions  of Exhibit I
("Revised Software Test Procedures").

                  d. General Description of Adobe Support. "Adobe Support" means
(i) the delivery of Updates of a Reference Port and (ii) the problem  resolution
services  described  below with  respect to Problems  (as defined  below) in the
Reference Port.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                  e.  Description  of Problem  Resolution  Services  Provided by
Adobe.

                           (1) Product Problem Reports (PPRs).  EFI shall submit
to Adobe, by electronic mail, facsimile,  or personal delivery,  Product Problem
Reports  ("PPR")  in the form  attached  hereto  as  ATTACHMENT  1 TO  Exhibit E
("Product  Problem  Report") to identify  any  Problems (as defined in PARAGRAPH
(E)2  ("Classification  of Problems")  below).  Adobe may modify the form of PPR
from time to time and shall provide the new form to EFI.

                           (2)  Classification of Problems.  "Problem" means any
problem in the Reference  Port which causes the Reference  Port  (including  the
Unmodified  Core) not to execute as part of the designated  Reference  System or
otherwise  not to  operate  substantially  in  accordance  with  the  PostScript
Language  Specification or any other problem that EFI discovers in the Reference
Port or the Adobe  Support  Information.  EFI will use its  reasonable  business
judgment to classify Problems (in accordance with the  classifications set forth
below) in the PPR which EFI submits to Adobe.

                           (3) Level 4 Severity.  Level 4 is the  classification
used in any PPR that  demonstrates  that (i) there is a Problem  that causes the
Reference  Port  to  fail  to  operate  in  a  material  manner  or  to  produce
substantially incorrect results, and (ii) there is no workaround solution to the
Problem.

                           (4) Level 3 Severity.  Level 3 is the  classification
used in any PPR that  demonstrates  that (i) there is a Problem  that causes the
Reference  Port  to  fail  to  operate  in  a  material  manner  or  to  produce
substantially  incorrect results, and (ii) there is a difficult or no workaround
solution to the Problem.  Problems which are not demonstrable  with a PostScript
Software-supporting  application  or driver (i.e.,  are  reproducible  only with
hand-generated  PostScript software) are generally classified as Level 3 and not
Level 4 Severity Problems.

                           (5) Level 2 Severity.  Level 2 is the  classification
used in any PPR that exhibits a Problem which produces an inconvenient situation
in which the  Reference  Port is usable but does not  provide a function  in the
most  convenient or  expeditious  manner;  and the use or value of the Reference
Port suffers no significant impact. Level 2 Problems will generally be corrected
in a subsequent release of the Reference Port.

                           (6) Level 1 Severity.  Level 1 is the  classification
used in any PPR that  exhibits a Problem  which is minor or that is  cosmetic in
nature.  Generally,  a Level 1 Problem is reasonably correctable by a PostScript
Language Specification change or by a subsequent release of the Reference Port.

                           (7) Level 0 Severity. This level will be used for new
features in a Reference Port (including Unmodified Core) requested by EFI.

                  f. Adobe's  Response to PPRS.  Within five (5)  business  days
after  receipt by 

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


Adobe of a PPR involving a classification  of a Level 3 or 4 Severity Problem or
ten (10) days after receipt of a PPR involving a classification of a Level 2, 1,
or 0 Severity  Problem,  Adobe  shall  acknowledge  receipt  of the PPR.  If, in
Adobe's  judgment,  a PPR correctly  identifies a Level 3 or 4 Severity Problem,
Adobe shall use reasonable  commercial efforts to correct the identified Problem
and issue and deliver to EFI a release with such correction implemented, or take
such other  corrective  action as Adobe deems  necessary to correct the Problem.
Adobe acknowledges that it shall give priority to and take corrective actions as
expeditiously  as possible in  connection  with any Severity 3 or 4 Problem that
prevents  EFI from  shipping a Licensed  System.  Adobe may choose,  in its sole
discretion, to implement a Level 0 request, but it is not required to do so.

                  g.  Special  Services.  EFI may  request  that  Adobe  perform
special  support  services  with  respect to the  Reference  Port not covered by
services provided under Adobe Support as described herein. Adobe shall negotiate
in good faith with EFI with  respect to any such  request  for  special  support
services and Adobe shall use reasonable  commercial  efforts to accommodate  any
such request by EFI at Adobe's then current prices and upon terms and conditions
to be mutually agreed upon by the parties.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                  ATTACHMENT 1
                                       TO
                                    EXHIBIT E

                             PRODUCT PROBLEM REPORT

Title: (OEM internal tracking no.) - (short one line title of problem)

         A single  line,  short  description  of the  problem.  This line may be
         prefixed by an OEM's internal problem tracking code for cross reference
         purposes.

Severity: (4.0)

         OEM's  proposed  severity code. The severity code is based on a general
         understanding of the nature and effect of the reported  problem.  Adobe
         maintains  the right to alter the  severity  code  submitted by the OEM
         after  consulting  with  the  OEM.  The  severity  code is based on the
         following general considerations:

                  4-  most severe, no work-around, must be fixed

                  3-  fairly severe, difficult to work-around, must be fixed

                  2-  easy work-around, should be fixed in a subsequent release

                  1-  cosmetic or minor  problem 0-  enhancement  or request for
                      design change

Priority: (A-C)

         OEM' s requested  priority for resolving the report problem.  This will
         help  Adobe's   Codevelopment   engineering   support   personal   when
         prioritizing the OEM's support needs. The priority code is based on the
         following general considerations:

                  A-  move to the top of the  priority  queue  - may  result  in
                      priority B and C items being delayed

                  B-  respond to when not working on priority A issues

                  C-  as time permits

Date: (date report sent to Adobe)

Name: (OEM's project name)

         The  OEM's  project  name.  This is  most  applicable  if the OEM  has,
         multiple on-going projects with Adobe.

Version: (PostScript/documentation version, date)

         The  version  of  the   PostScript   interpreter   in   question.   For
         documentation, the document's date should also be included.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


Contact: (contact OEM company/e-mail/phone number)

         The primary  contact for  technical  communications  at the OEM's site.
         Include the person's name and appropriate method of contact.

Description: (multi-line detailed description of the issue/problem)

         A detailed  description of the problem or issue.  There is no set limit
         to the length of the description  which may include small sections of C
         language code [or PostScript] language code. If it becomes necessary to
         send multiple pages of C or PostScript  language code,  these should be
         transferred electronically by UNIX UUCP file transfer and referenced in
         the Files entry below.

         To  facilitate  replication  of the  reported  problem,  the  following
         additional information should also be supplied:

                           Host computer,
                           Operating  system,  application,   driver  and  their
                           respective version numbers,
                           Exact error message text,
                           Front panel configuration,
                           Communications  protocol in use (i.e.  serial,  baud,
                           rate, etc.)

Files. (list of files that have been UUCP'D to Adobe)

      List of files referenced in the above Description of problem section.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                    EXHIBIT F

                    SAMPLE FORMAT FOR REFERENCE PORT APPENDIX
                     (POSTSCRIPT SUPPORT SOURCE WITH OBJECT)

I.   Description of Reference Port.

II.  Description of Reference System.

m.   Schedule for Delivery of Adobe Deliverables.

IV.  Description of Adobe Screening Test Suite.

V.   Technical Support.

VI.  Font Programs.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                    EXHIBIT G

                           ADOBE SYSTEMS INCORPORATED
                      MINIMUM TERMS OF END USER AGREEMENTS

         (1) Licensor  grants  Licensee a  non-exclusive  sublicense  to use the
PostScript"' software  ("Software") and the  digitally-encoded  machine-readable
outline  data  ("Font  Programs")  encoded  in  the  special  format  and in the
encrypted form ("Coded Font  Programs")  provided by Adobe Systems  Incorporated
("Adobe") to Licensor to  reproduce  weights,  styles,  and versions of letters,
numerals, characters and symbols ("Typefaces") on a single output device; and to
use the  trademarks  used by Licensor to identify  the Coded Font  Programs  and
Typefaces  produced  therefrom  ("Trademarks").  Licensee  may assign its rights
under this  Agreement to a licensee of all of  Licensee's  right and interest to
such Software and Coded Font Programs  provided  Licensee  transfers to licensee
all copies of such  Software and Coded Font  Programs and licensee  agrees to be
bound by all of the terms and conditions of this Agreement.  Trademarks, if used
by Licensee,  shall be used in  accordance  with  accepted  trademark  practice,
including identification of the trademark owner's name.

         (2) Licensee agrees not to alter,  reverse  engineer or disassemble the
Software or Coded Font  Programs.  Licensee  will not copy the Software or Coded
Font  Programs  except as  necessary  to use them on the single  output  device.
Licensee  agrees  that any such copies of the  Software  or Coded Font  Programs
shall contain the same  proprietary  notices which appear on and in the Software
or Coded Font Programs.

         (3) Except as stated above,  this Agreement does not grant Licensee any
right  (whether  by  license,  ownership  or  otherwise)  in or to  intellectual
property with respect to the Software or Coded Font Programs.

         (4) Licensee  will not export or  re-export  the Software or Coded Font
Programs without the appropriate United States or foreign government licenses.

         (5) Title to and  ownership of the  Software,  Coded Font  Programs and
documentation

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


and any reproductions thereof shall remain with Licensor and its suppliers.

         (6) The Trademarks can only be used to identify printed output produced
by the Coded Font  Programs.  The  Trademarks  are the property of the Trademark
Owners identified herein.

         (7) NEITHER LICENSOR NOR ANY OF ITS REPRESENTATIVES  MAKES OR PASSES ON
TO LICENSEE OR OTHER THIRD PARTY,  ANY WARRANTY OR  REPRESENTATION  ON BEHALF OF
LICENSOR'S THIRD PARTY SUPPLIERS.

         (8) Licensee is hereby  notified  that Adobe  Systems  Incorporated,  a
California   corporation   located  at  1585  Charleston  Road,  Mountain  View,
California  94039-7900 ("Adobe") is a third-party  beneficiary to this agreement
to the extent that this agreement contains provisions which relate to Licensee's
use of the Software,  the Fonts, the Coded Font Programs,  the Typefaces and the
Trademarks  licensed hereby.  Such provisions are made expressly for the benefit
of Adobe and are enforceable by Adobe in addition to Licensor.


[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>

                                    EXHIBIT H

                                    PAYMENTS
                           (POSTSCRIPT SUPPORT SOURCE)

         1. Source License Fees. Adobe has waived the source license fee for the
Adobe Software provided  hereunder.  EFI shall pay Adobe a Reference Port fee of
[*]  for the  initial  delivery  of a  Reference  Port  and  accompanying  Adobe
Deliverables  due and payable upon execution of this Agreement.  EFI shall pay a
source  license fee of [*], or such other amount as  specified in an  applicable
Reference Port Appendix,  for each  additional  Reference Port and  accompanying
Adobe  Deliverables  from  Adobe's  then  currently   available  Reference  Port
offerings,  and specified in a Reference Port Appendix attached hereto,  due and
payable upon final execution of the Reference Port Appendix.

         2. Reference  Port Support Fees.  Adobe has waived the "Annual Fee" for
Adobe support services,  as described in Exhibit E ("Reference Port Training and
Support")  hereto,  for the initial  Reference  Port for the initial  year.  The
"Annual Fee" for subsequent  years and Other  Reference Ports during the term of
this  Agreement  shall be Adobe's then current annual fee per Reference Port and
shall be payable  within  thirty  (30) days after the  anniversary  date of this
Agreement or the applicable Reference Port Appendix.

         3. Per Copy License Fees for Use of Reference Port Support Source.  EFI
will not be required to pay Adobe an additional  per copy source license fee for
the right to use the Reference Port Support Source, provided that (i) use of the
Reference Port Support Source is limited to one (1) copy at one (1)  Development
Site,  (ii) EFI monitors the maximum  number of copies of Reference Port Support
Source being used  concurrently  on multiple CPUs at each  Development  Site and
reports that number to Adobe upon request,  and (iii) EFI maintains  appropriate
records to permit Adobe to verify the accuracy of the number of multiple  copies
in concurrent use at each  Development Site reported to Adobe by EFI as required
under subitem (ii) above. For purposes of this paragraph, multiple users sharing
the use of a single  copy of the  Reference  Port  Support  Source  located on a
server with download capability to workstations,  terminals,  etc. constitutes a
single user.  In the event that EFI's use of the Reference  Port Support  Source
exceeds the limitation,  as specified above in this Paragraph,  EFI shall report
such usage to Adobe hereunder and EFI shall pay Adobe a source license fee equal
to the actual  amount of the  license  fee,  payable by Adobe to its third party
supplier of software  directly  resulting  from EFI's use of the Reference  Port
Support Source.

         4. Fees for  Testing.  EFI shall pay Adobe a  retesting  fee of [*] for
each instance of such  resubmission  and retesting of Revised Object pursuant to
Exhibit I ("Revised  Software Test  Procedures").  This process  shall  continue
until Adobe accepts the EFI  Deliverables.  Adobe shall charge EFI a testing fee
of [*] for each initial instance of resubmission and testing of the modified EFI
Deliverables  pursuant to Exhibit I,  PARAGRAPH  3(D)  ("Revised  Software  Test
Procedures")  following Adobe's initial  acceptance of the final release version
of the Revised Object.  EFI shall pay to Adobe an additional [*] per instance of
resubmission  and  retesting  pursuant  to EXHIBIT  I,  PARAGRAPH  3D  ("Revised
Software Test Procedures").  Notwithstanding  the above-stated  requirements for
payment of testing fees,  EFI shall not be charged for any instance of retesting
(whether of the initial final release version or any subsequent modified version
of the Revised  Object) if retesting is made  necessary by Adobe's change to the
Unmodified Core or to the Adobe Screening Test Suite. In addition, there will be
no charge for retesting if EFI can show that the EFI Deliverables when initially
tested by EFI satisfied the specified tests in the Adobe Screening Test Suite.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                    EXHIBIT I

                        REVISED SOFTWARE TEST PROCEDURES
                     (POSTSCRIPT SUPPORT SOURCE WITH OBJECT)

         1. Adobe  Screening Test Suite.  Adobe shall provide EFI with a special
version,  if any,  of the Adobe  Screening  Test Suite to be  utilized by EFI in
testing each Licensed  System in accordance with the milestones set forth in the
applicable Licensed System Appendix.

         2. EFI Testing. Prior to submission of each Revised Object to Adobe for
testing in accordance  with the terms hereof,  EFI shall verify that the Revised
Object  satisfies all tests in the Adobe  Screening  Test Suite (or such subject
thereof as is specified in the applicable  Licensed System Appendix).  EFI shall
not make the First  Commercial  Shipment of a Licensed  System,  and any updated
version  thereof until  acceptance by Adobe of the EFI  Deliverables.  To permit
testing by Adobe of the final release version of the Revised Object,  EFI shall,
at Adobe's  option,  in  accordance  with a mutually  agreeable  schedule  to be
specified in the  applicable  Licensed  System  Appendix,  provide  Adobe with a
comprehensive  report of the test results of such EFI testing which will include
all printer out-put and test results of the Adobe  Screening Test Suite,  output
samples thereof, and a preproduction release of the EFI Deliverables.

         3. Adobe Testing.

                  a.  Adobe  shall  be  entitled  to test the  machine  readable
version of the Revised Object for each Licensed System prior to First Commercial
Shipment and prior to First Commercial  Shipment of a Licensed System containing
an engineering  change order (ECO) or prior to  effectiveness  of a field change
order (FCO)  affecting  such Revised  Object for a Licensed  Systems  previously
approved by Adobe.

                  b.  Unless  otherwise  specified  in the  applicable  Licensed
System Appendix, (i) EFI shall notify Adobe at least ninety (90) days in advance
of the estimated date of delivery of the EFI  Deliverables  to Adobe for testing
and (ii) EFI shall give Adobe at least  thirty (30) days  advance  notice of its
anticipated  delivery of the EFI Deliverables for testing,  and Adobe shall have
thirty (30) days,  or such other period as specified in an  applicable  Licensed
System Appendix,  following EFI's timely delivery of the EFI  Deliverables  (and
all necessary Loaned Equipment) to do the following:  (i) to test the quality of
the EFI Deliverables for conformity with

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


the Adobe Screening Test Suite  developed by Adobe and, at Adobe's option,  with
any other tests and procedures or any updated or enhanced  versions of the Adobe
Screening  Test Suite,  to verify that EFI has not modified  the Adobe  Software
beyond the scope of modifications  permitted by PARAGRAPH 2.1.  ("License to Use
Reference Port Support Source and Adobe Support  Information") of the Agreement,
and (ii) to verify that the  overall  quality of the EFI  Deliverables  complies
with the quality level for Adobe  products,  as  reasonably  determined by Adobe
from time to time.

                  c.  Adobe  shall  conduct  the  initial  testing  of the final
release version of the Revised Object free of charge.  Adobe shall inform EFI of
the  results of such  testing  and, if Adobe is unable to accept the EFI Revised
Object,  the basis for a finding of  nonconformity  or  failure  of the  Revised
Object to conform to the  criteria  specified  above.  In the event that the EFI
Deliverables  do not  conform to the above  criteria,  EFI shall use  reasonable
effort to promptly correct any nonconformity and resubmit the same for retesting
by Adobe. This process shall continue until Adobe accepts the EFI Deliverables.

                  d. Thereafter, if EFI modifies the EFI Deliverables, EFI shall
retest the EFI  Deliverables  pursuant to PARAGRAPH 2 ("EFI  Testing") above and
resubmit the same as modified to Adobe for testing  pursuant to this  paragraph.
Notwithstanding  the  foregoing,  Adobe  shall  not  have the  right to  require
retesting of EFI Deliverables if EFI has not modified the Adobe Software.

                  e. Should the modified EFI Deliverables not conform to Adobe's
acceptance  criteria,  as described above,  EFI shall use reasonable  efforts to
promptly correct any nonconformity and resubmit the same for retesting by Adobe.

                  f. EFI shall, within a commercially  reasonable time following
Adobe's acceptance of EFI Deliverables,  update pre-production units shipped for
beta or evaluation purposes prior to First Commercial Shipment.

                  g. The parties  intend that the Adobe  testing  procedure  set
forth in this  PARAGRAPH 3 be  applicable  to the  Revised  Object for the first
several  Licensed  Systems  distributed  by  EFI  under  this  Agreement.   With
successful  certification of these first several Licensed Systems, Adobe and EFI
will work together to develop QA test  procedures  that will  streamline  the QA
process.  The  goal  of  this  streamlined  QA  process  is for  EFI to  perform
self-testing  of Licensed  Systems,  with Adobe auditing the EFI QA results,  on
Licensed  Systems  that are  created  by  modifications  other than to the Adobe
Source.

         4. Adobe Retesting Waived.  Under certain  circumstances  such as, when
EFI  makes   modifications   to  the  EFI   Deliverables   to  correct  a  minor
non-conformance  or to implement a minor feature  enhancement for its customers,
Adobe may  request  and EFI shall  provide  Adobe  with the  comprehensive  test
results  from EFI's  testing of the modified  EFI  Deliverables  using the Adobe
Screening Test Suites.  If Adobe  determines from its review of the test results
that the modified EFI Deliverables  meet all of the tests in the Adobe Screening
Test  Suite  and if it is able to verify to its  satisfaction  that the  overall
quality of the modified EFI Deliverables complies

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


with Adobe's quality  standards,  Adobe may, in its sole  discretion,  waive the
requirement  for its retesting of the EFI  Deliverables.  If requested by Adobe,
EFI shall supply Adobe with a declaration signed by an authorized representative
of EFI  attesting  to the  accuracy  of such  test  results  supplied  to  Adobe
hereunder.


[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                    EXHIBIT J

                         SECURE PROCEDURES FOR HANDLING
                            ADOBE SUPPORT INFORMATION
              (POSTSCRIPT SUPPORT SOURCE WITH OBJECT DISTRIBUTION)

         1. Authorized  Employees and  Contractors.  EFI agrees that it will not
disclose all or any portion of the Adobe Support  Information  to third parties,
with  the  exception  of  authorized  employees  ("Authorized   Employees")  and
authorized  contractors  ("Authorized  Contractors")  (subject  to EFI's  having
obtained  authorization for use of such contractors in accordance with PARAGRAPH
2 ("Prior Approval of Contractors")  below) who (i) require access thereto for a
purpose authorized by this Agreement,  (ii) have signed the appropriate employee
or  contractor  agreement  substantially  in the form  attached  as Exhibit  B-1
("Employee Nondisclosure Agreement") or EXHIBIT B-2 ("Contractor Agreement"), as
applicable  and (iii) in the case of disclosure  of Adobe  Support  Information,
have  received  a notice of  confidentiality  prior to  access to Adobe  Support
Information,  and again upon any termination of such access, that contains, at a
minimum (a) provisions  substantially  in accordance with the provisions set out
in Exhibit B-3 ("Notice Regarding  Confidentiality") and (b) specific references
to  the  Employee  Nondisclosure  Agreement  (Exhibit  B-1)  or  the  Contractor
Agreement  (Exhibit B-2) as  appropriate.  EFI  guarantees the compliance of all
such  Authorized  Employees and Authorized  Contractors  with their  obligations
under such Confidentiality Agreements.

         2. Prior  Approval of  Contractors.  Notwithstanding  the provisions in
this Exhibit J permitting Authorized Contractors to have access to Adobe Support
Information,  EFI may not permit a  contractor  to come into  contact with Adobe
Support  Information,  or engage in the  development of Licensed System products
hereunder  unless EFI has first  obtained  such  authorization  in writing  from
Adobe.  Adobe, in its sole  discretion,  may withhold such approval in the event
that a  contractor  (or  contractor's  employer) to whom EFI intends to disclose
Adobe Support  Information is engaged in Clone Product  development,  either for
its own benefit or for the benefit of a third party,  or if Adobe  believes that
the contractor  may be engaged in similar  product  development,  and EFI cannot
assure Adobe to its satisfaction  that  contractor,  while engaged in supporting
such development activities, will be able to refrain from commingling or sharing
any  portion  of the  Adobe  Support  Information  with any such  Clone  Product
development.  Notwithstanding  the  foregoing,  Adobe  shall be  deemed  to have
approved  any  contractor  if it does not  notify EFI of its  rejection  of such
contractor  within  seven (7) days  after EFI  notifies  Adobe of its  intent to
permit such contractor to obtain access to the Adobe Support Information.

         3. Adobe Support Information.

                  a.  EFI  shall  ensure  that  all  Adobe  Support  Information
received  from  Adobe,  and

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


copies  made  thereof,  will  be  properly  marked  or  otherwise  appropriately
identified  as  Adobe  Support   Information  before  being  made  available  to
Authorized Employees and Authorized Contractors hereunder.

                  b. EFI shall  ensure  that the same  degree of care is used to
prevent the unauthorized use, dissemination, or publication of the Adobe Support
Information  as EFI uses to protect its own  confidential  information of a like
nature,  but in no event shall the safeguards for protecting  such Adobe Support
Information  be less than a reasonably  prudent  business  would  exercise under
similar  circumstances.  EFI shall take prompt and appropriate action to prevent
unauthorized use or disclosure of Adobe Support Information.

                  c. Authorized  Employees and Authorized  Contractors  shall be
instructed  not to copy  Adobe  Support  Information  on their  own,  and not to
disclose Adobe Confidential Information to anyone not authorized to receive it.

                  d. Adobe  Support  Information  shall be  handled,  used,  and
stored solely at the Development Site.

         4. Trade Secrets. Adobe Support Information in object code, source code
and  hard  copy  printout  form,  the  PostScript  Screening  Test  Suites,  the
techniques, ,algorithms, and processes contained in the Adobe Software, and Font
Programs  which have been  developed,  acquired,  or licensed  by Adobe,  or any
modification or extraction thereof, constitute trade secrets of Adobe and/or its
suppliers,  and will be used by EFI only in  accordance  with the  terms of this
Agreement.  EFI will  take all  measures  reasonably  required  to  protect  the
proprietary  rights of Adobe and its suppliers in the Adobe Support  Information
and  will  promptly  notify  Adobe  of any lost or  missing  items  and take all
reasonable steps to recover such items.

         5. Marketing of Clone Products.  If at any time during the term of this
Agreement EFI chooses to market a Clone Product, it may do so, provided however,
that Adobe may in its sole discretion,  and without liability to EFI,  terminate
its license grant  pursuant to PARAGRAPH  2.1  ("License to Use  Reference  Port
Support  Source  and  Adobe  Support  Information")  of the  Agreement  and  any
obligation to provide  updates to such Reference Port Support Source pursuant to
Exhibit E ("Reference  Port  Training and  Support") of the Agreement  effective
sixty (60) days after notice of termination.  In the event of such  termination,
EFI shall  return all copies and  portions of copies of  Reference  Port Support
Source  and all other  Adobe  Support  Information,  and an  officer of EFI will
certify in writing to Adobe that it has no further right to use any such code or
information.

         6. Clone Product Development.

                  a. The terms of PARAGRAPH 5  ("Marketing  of Clone  Products")
above do not  preclude  EFI from  developing a Clone  Product;  however,  if EFI
engages in such Clone Product development during the term of this Agreement,  it
shall ensure that there is no sharing with such Clone Product development any of
the  following:  (i) design  documents  or  schematics  supplied by Adobe;  (ii)
Reference  Port Support Source or other  information  based upon or derived from

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


the Reference  Port Support  Source;  (iii) any other  portions of Adobe Support
Information;  or (iv) any  facilities  (including,  but not limited  to,  disks,
computer systems,  workstations and networks) or personnel with access to any of
(i)-(iii) above.

                  b. EFI shall ensure that,  except as set forth in subparagraph
(c) below,  all  Authorized  Employees and Authorized  Contractors  who have had
previous access to Adobe Support  Information  will be precluded for a period of
twelve (12) months after their latest access to such Adobe Support  Information,
including  Reference  Port  Support  Source,  from being  employed  in any Clone
Product development (either internal or external) by or for EFI.  "Employment in
any Clone Product  Development"  shall be defined as having direct access to, or
producing any specifications, documentation, or source code for, components of a
Clone  Product.  EFI shall further  ensure that each such employee or contractor
shall,   concurrent  with  the  commencement  of  work  on  such  Clone  Product
development  within EN, sign a written  affirmation to EFI on a form provided by
EFI which states that each such employee or contractor (a) has neither  retained
nor had access for a minimum  period of twelve (12) months to any Adobe  Support
Information,  and (b) will not utilize,  or facilitate use of, any Adobe Support
Information in such Clone Product development.

                  c.  Adobe  agrees  that EFI will  continue  to  engage  in the
development of its own controller technology and the underlying  environment for
the controller. In the event that EFI wishes to integrate a portion of the Adobe
Software into EFI's controller  technology  without subjecting the EFI employees
and  contractors  working  on EFI's  controller  technology  to the  restriction
against  Employment in any Clone Product  Development  set forth in subparagraph
(b) above,  EFI may request Adobe to provide EFI with an opaque  interface which
does not  disclose any Adobe  Support  Information  or, if the  foregoing is not
possible,  to provide EFI with a portion of the Adobe Support  Information which
would enable EFI to accomplish the integration  (such information will hereafter
be  referred  to as the "Adobe  Interfaces").  In the event that  Adobe,  in its
discretion,  provides one or more Adobe Interfaces to EFI, EFI's only obligation
with  respect to the Adobe  Interfaces  shall be not to disclose it outside EFI.
The interfaces  ("EFI  Interfaces")  developed by EN prior to the Effective Date
that do not contain any Adobe Support  Information  are listed on Attachment J-1
to  this  Exhibit  J  ("EFI  Interfaces"),  as may be  amended  pursuant  to the
procedure  set  forth  below.  Upon  request  of EFI,  the  parties  will  amend
Attachment  J-1  to  include  additional  interfaces  or  new  versions  of  EFI
Interfaces  developed by EFI after the Effective date (which may be based on the
Adobe Interfaces);  provided that Adobe shall have thirty (30) days from receipt
of EFI's request to approve such  interfaces  for  inclusion on Attachment  J-1,
which approval shall not be unreasonably withheld.  Adobe agrees that Authorized
Employees or  Authorized  Contractors  who had access  solely to EFI  Interfaces
shall not be subject to the restriction  against Employment in any Clone Product
Development set forth in subparagraph (b) above.

                  d. The prohibition  relating to Clone Product  development set
forth in this PARAGRAPH 6 ("Clone Product  Development")  shall apply equally to
raster-output  devices,  to display or screen  output  devices,  or to any other
peripheral devices.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


         7.  Certification.  At Adobe's  request,  EFI will  provide  Adobe with
written  certification  by an  officer  of  EFI of  EFI's  compliance  with  its
obligations  under  PARAGRAPH 1  ("Authorized  Employees and  Contractors")  and
PARAGRAPH 6 ("Clone Product Development") above.

         8. Proprietary Notices. In order to protect Adobe's copyright and other
ownership  interests,  EFI agrees that as a condition  of its rights  hereunder,
each  copy  of  the  Adobe  Support  Information,  or  any  portion  thereof  or
documentation  therefor,  shall contain a valid  copyright  notice and any other
proprietary notices, including the copyright notices of Adobe's suppliers, which
appear on or in the Adobe Support Information and documentation  delivered to EN
hereunder  or as Adobe may  require  from time to time.  Presence of a copyright
notice does not constitute an acknowledgment of publication.

         9.  Font  Programs.   EFI  agrees  to  hold  any  unencrypted   outline
information  relating  to the  Font  Programs  in  confidence,  disclosing  such
information  only to Authorized  Employees and Authorized  Contractors  having a
need to use such  information  as permitted by this  Agreement,  and to take all
reasonable  precautions  to  prevent  disclosure  of such  information  to other
parties.

         10. Proprietary Rights Audit.  During the term of the Agreement and for
a period of eighteen (18) months thereafter,  an independent auditor selected by
Adobe shall have access to such  portion of EFI's  records and premises to allow
Adobe to determine  whether EFI is substantially in compliance with this Exhibit
J, and PARAGRAPH 8  ("Proprietary  Rights and Legends") of the Agreement.  In no
event shall audits be made hereunder more  frequently  than once per year.  Such
access shall be (a) during EFI's regular  business hours,  (b) arranged so that,
to  the  extent  possible,  EFI's  regular  business  activities  are  minimally
disrupted and (c) under the terms of an  appropriate  confidentiality  agreement
executed by the individual(s) conducting such audit. If Adobe determines,  after
conducting  such audit,  that EFI is not  substantially  in compliance  with its
obligations to protect Adobe's  proprietary  rights,  EFI shall pay the costs of
such audit.  Otherwise,  Adobe shall pay the costs of such audit.  Such  payment
will not preclude  Adobe from  exercising  any right which it may have under the
Agreement.  EFI shall  immediately  correct any  deficiencies  discovered in the
course of the audit.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.


<PAGE>


                                 ATTACHMENT J-1

                                 EFI INTERFACES

The  purpose  of  this  Attachment  J-1  is to  specify  an API  for  PostScript
interpreter  setup,  execution  and  page  delivery  mechanisms.  The idea is to
clearly  define the  "current"  interface  used by EN in the Fiery SW. This will
allow EFI to  continue  to develop  front-end  SW  (Communications,  Networking,
Spooling,  Job  Dispatch) & Back-end  (Page  Delivery)  without  triggering  the
application  of  the  restriction   against  Employment  in  any  Clone  Product
Development set forth in PARAGRAPH 6(B) of EXHIBIT J.

Interpreter Setup & Execution

For simplicity EFI would like to maintain a "CPSI like" wrapper  external to the
clean room. EN would leave the CPSI computational model as is:

      CPSIlnitialize(init)
      CPSStartlnterpreter( configuration record, &interpreter)

      foreach (job) {
        foreach(buffer in job)
             CPSlExecutePostScript{ interpreter, Buffer, Length);
        }
        CPSIEndOfFile(Interpreter);

      }
      CPSlStoplnterpreter(Interpreter);
      CPSIFinalizeO;

Data  required  for  initialization  of  the  Interpreter  is  available  in the
configuration  record and includes all machine  attributes (such as resolutions,
Color Spaces, Engine capabilities etc.).

Additional calls supported are:

o CPSIInterrupt(Lnterpreter) - Invoking the Interrupt Error.
o CPSlTimeout(Interpreter) - Invoking the Timeout Error.
o CPSIGetParameter (Interpreter, +setname, +parameter)

         Retrieves  current  value of the specified  parameter  from "system" or
"user" parameter sets.

The  CPSI  model  of  call-back   functions  would  be  maintained  as  well:

o  CPSIOutput(Interpreter,  *Buffer,  Length, *handle) - to transfer output from
   %stdout
o  CPSIErrorlnterpreter,  *Buffer,  Length,  *handle) - to transfer  output from
   %stderr
o  CPSISetPageDevice
o  CPSIGetTrayDetails

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


o  CPSIGetConfirmation
o  CPSIInitRaster
o  CPSIExtemalCommand
o  CPSIProgress
o  CPSIRender

For  a  complete  description  of  the  CPSI  interfaces  please  refer  to  the
"Configurable PostScript Interpreter Functional Specifications" Version 2013.

Page Delivery Interface

The main interface for the page delivery  mechanism is the CPSIRender  callback.
The  purpose  of this call in EFI's  setup is to deliver a page (or a band) to a
pipeline mechanism which will send the data to the marking head. Upon completing
the  rendering of a band (or frame) the  PostScript  co-development  integration
team will accompany each page with a "Page Dictionary".

The page dictionary is read only for the video  interface.  This dictionary will
be used by the video driver to set-up various engine  parameter and complete the
print job.

A dictionary  is defined as  keyword/value  pair.  All  keyword/value  pairs are
stored as ASCII text or Strings.  A partial list of keys in the page  dictionary
includes:

         ManualFeed            Yes/No
         ColorModel            DeviceGray/DeviceRGB/DeviceCMYK
         BitesPerPixel         1/8
         BufferSize            Unsigned long
         BufferAddress         Unsigned long

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


                                    EXHIBIT K

                             USE OF ADOBE TRADEMARKS

         1. Ownership of Trademarks. EFI acknowledges the ownership of the Adobe
Trademarks in Adobe and the ownership of the Typeface Trademarks in the entities
identified as "Trademark  Owner" in a Reference Port or Licensed System Appendix
hereto.  Adobe  and  such  Typeface  Trademark  owners  are  referred  to as the
"Trademark  Owners".  EFI agrees that it will do nothing  inconsistent with such
ownership  and that all use of the Adobe  Trademarks  by EFI shall  inure to the
benefit of and be on behalf of Adobe. EFI acknowledges that EFI's utilization of
the  Trademarks  will not  create  any right,  title or  interest  in or to such
trademarks.  EFI acknowledges  Trademark  Owners'  exclusive right to use of the
Trademarks  and agrees not to do anything  contesting or impairing the trademark
rights of the  Trademark  Owners.  Any use of the  Trademarks  must identify the
applicable "Trademark Owner" as the owner of such Trademarks. EFI agrees that it
will notify or require  notification of  sublicensees  who receive Font Programs
that  (i)  Typeface  Trademarks  can  only be used to  identify  printed  output
produced by the Font Programs, and (ii) the Typeface Trademarks are the property
of the Trademark Owners.  EFI will maintain a high quality standard in producing
copies of Font Programs and Typefaces.  At the request of Adobe, EFI must supply
samples of any Typeface identified by a Typeface Trademark.

         2. Quality  Standards.  Adobe shall review and approve or disapprove in
writing  the  quality  of  the  Revised   Object,   Font  Programs,   and  EFI's
documentation  relating to the Revised Object and Font Program  packages and the
use of the  Trademarks  on such  products  and  authorize  the  commencement  of
demonstration,  commercial  distribution  and marketing of the Revised Object or
Font Programs.  At least thirty (30) days prior to the date scheduled by EFI for
commencing such demonstration,  commercial distribution and marketing,  directly
or  indirectly  to End  Users,  EFI  shall  submit  to Adobe  for its  approval,
sufficient  samples of the Revised Object,  EN's documentation and Font Programs
together with or including the containers,  packages,  cartons, wrappers and the
like. Unless otherwise agreed in writing by Adobe, EFI shall not make any change
in such products or their containers,  packages,  cartons,  wrappers or the like
from that  approved by Adobe.  EFI agrees,  at any time as requested by Adobe to
provide  Adobe with a  reasonable  number of the samples of the packages of such
products and use of the Trademarks to allow Adobe to review the quality thereof.
Where  Trademarks are used in connection with the execution of any software on a
computer  system,  EFI agrees to provide  Adobe with access to such software and
computer  system,  and  reasonable  assistance  in the  operation  of  same,  to
facilitate  Adobe's review. If, at any time, any sample is disapproved by Adobe,
Adobe shall so advise EFI and,  upon EFI's  receipt of such notice by any means,
EFI shall have sixty (60) days to improve the quality to the standard previously
approved by Adobe. EFI shall comply with all applicable laws and regulations and
obtain all  appropriate  government  approvals  pertaining to the  sublicensing,
transfer and advertising of the Revised Object and Font Programs.

         3.  Infringement  Proceeding.   EFI  agrees  to  notify  Adobe  of  any
unauthorized  use or

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



<PAGE>


the Trademarks by others  promptly as it comes to EFI's  attention.  Adobe shall
have the sole right and discretion to bring  infringement or unfair  competition
proceedings involving the Trademarks.

         4. EFI's Use of Trademarks. EFI agrees that it will permanently include
the Adobe  Trademarks on all copies of the Revised Object and in any advertising
or printed  materials  concerning  the  Revised  Object and that it will use the
applicable  Trademarks  on all copies,  advertisements,  brochures,  manuals and
other appropriate uses made in the promotion, distribution or use of the Revised
Object,  Font Programs and PostScript Language  Specification  including any EFI
translated  version.  EFI shall make specific reference to the Revised Object or
Font Programs in any  advertisement  concerning the Licensed  Systems which also
contains  specific names of other software  products.  All such uses shall be in
accordance with Adobe's then current trademark manual.

         5. Trademark Registrations.  EFI, at Adobe's request and expense, shall
(i) promptly provide Adobe with any specimens, (ii) execute all applications for
trademark  -registrations,  assignments or other applicable  documents and (iii)
perform any other act reasonably  necessary for any Trademark Owner to secure or
maintain  any and all  Trademark  rights in any  country,  provided  that EFI is
marketing the Revised Object,  Font Programs and Licensed Systems in association
with a Trademark and in such country.

         6. No  Unitary  or  Composite  Marks.  EFI  agrees not to use any other
trademark or service mark in close  proximity to any of the Adobe  Trademarks or
combine the marks so as to effectively  create a unitary  composite mark without
the prior written approval of Adobe.

[*] CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED  IN THIS  DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION  PURSUANT TO RULE 24B-2 OF THE  SECURITIES  EXCHANGE ACT OF 1934,  AS
AMENDED.



                            MANAGEMENT GRAPHICS, INC.

                         NONQUALIFIED STOCK OPTION PLAN
                                FOR KEY EMPLOYEES

                  1. Purpose. The purpose of this Nonqualified Stock Option Plan
(the  "Plan") is to promote the  interests of  Management  Graphics,  Inc.  (the
"Corporation"),  and its  shareholders  by providing a method to  encourage  key
employees  of the  Corporation  and its  subsidiaries  (if any) to invest in the
Corporation's  common  stock on  reasonable  terms and  thereby  increase  their
proprietary  interest  in the  Corporation's  business,  to  encourage  such key
employees to remain in the employment of the  Corporation  and to increase their
personal interest in its continued success and progress.

                  2.   Administration.

                  (a)  The Plan shall be  administered by the Board of Directors
                       who  may  from  time  to  time  issue   orders  or  adopt
                       resolutions,  not inconsistent with the provisions of the
                       Plan,  to interpret  the  provisions  and  supervise  the
                       administration of the Plan. All  determinations  shall be
                       made by the Board of  Directors  in  accordance  with the
                       Minnesota   Business   Corporation  Act  (the  "Act").  A
                       majority of the Directors  acting on any matter involving
                       the  interpretation  or  administration of the Plan shall
                       not be eligible to  participate  in the Plan.  Subject to
                       the   foregoing,
   the   Corporation's   Bylaws  and  any
                       applicable  provisions of the Act, all decisions  made by
                       the directors in selecting  optionees,  establishing  the
                       number of shares and terms applicable to each option, and
                       in construing  the provisions of the Plan shall be final,
                       conclusive  and  binding on all  persons,  including  the
                       Corporation, shareholders, employees and optionees.

                  (b)  The Board of  Directors  may from time to time  appoint a
                       Stock Option Plan Committee (the "Committee"), consisting
                       of not less than three (3) directors,  none of whom shall
                       be eligible to  participate in the Plan while a member of
                       the Committee. The Board of Directors may delegate to the
                       Committee  power to select the  particular  employees who
                       are to receive  options  and to  determine  the number of
                       shares to be optioned to each such employee.

                  (c)  Each option  shall be  evidenced  by an option  agreement
                       substantially  in the form of the option  agreement which
                       is attached  to the Plan as an Exhibit.  The day on which
                       the Board of  Directors  or the  Committee  approves  the
                       granting  of an option  shall be  considered  the date on
                       which such option is granted.



<PAGE>




                     (d)    If the laws relating to  nonqualified  stock options
                            are changed  during the term of the Plan,  the Board
                            of Directors  shall have the power to alter the Plan
                            in accordance with section 13 hereof,  to conform to
                            such changes in the law.

                     3.  Eligibility.  Options  shall  be  granted  only  to key
employees, in the judgement of the Board of Directors (or the Committee) who, at
the time of the grant,  are employees of the Corporation or any subsidiary.  The
term  "employees"  means  employees  of  the  Corporation,  or  any  subsidiary,
including salaried officers of the Corporation.

                     4. Shares  Subject to Plan.  The Board of Directors (or the
Committee)  may  from  time  to time  provide  for the  option  and  sale in the
aggregate of up to 350,000  shares of the  Corporation's  Class A common  stock,
$0.01 par value, under the Plan subject to adjustments required by section 10 of
the Plan.  Shares may be  authorized  unissued  or  reacquired  shares of common
stock. The Corporation  shall not be required,  upon the exercise of any option,
to  issue or  deliver  any  shares  of stock  prior  to the  completion  of such
registration  or other  qualification  of such shares under any state or federal
law, rule or regulation as the  Corporation  shall  determine to be necessary or
desirable.

                     5. Price. The purchase price of the stock under each option
shall be determined by the Board of Directors.  The purchase price of each share
on the  exercise  of any  option  shall  be paid in full in cash at the  time of
exercise or, at the  discretion of the Board of Directors or the  Committee,  by
the surrender of other shares of stock of the  Corporation  having a fair market
value equal to the purchase  price,  and a  certificate  representing  shares so
purchased shall be delivered to the person entitled thereto.

                     6. Duration of Option.  The option period shall not be more
than fifteen (15) years from the date the option is granted.

                     7.  Exercise of Option.  The Board of Directors  shall have
full and complete authority to determine, at the time of granting of any option,
whether the option will be  exercisable in full at any time or from time to time
during the term of the option,  or to provide for the  exercise  thereof in such
installments  and at such  times  during  the  term of the  option,  or upon the
satisfaction of such conditions, as the Board of Directors may determine.



<PAGE>


                     8.  Nontransferability of Option. Each option granted under
the Plan shall by its terms be  nontransferable  by the  optionee  other than by
will or the laws of descent and distribution and shall be exercisable during his
lifetime only by the optionee.

                     9. Other Terms and Conditions. The Board of Directors shall
have power,  subject to the limitations  contained  herein, to fix any terms and
conditions  for the granting or exercise of any option  under the Plan.  Nothing
contained  in the Plan,  or in any option  granted  pursuant to the Plan,  shall
confer upon any optionee any right to continued  employment by the  Corporation,
nor limit in any way the right of the  Corporation  to terminate the  optionee's
employment at any time.

                     10.  Adjustment of Shares  Subject to Option.  In the event
there  is any  change  in  the  common  stock  of the  Corporation  through  the
declaration of stock dividends, or through  recapitalization  resulting in stock
split-ups,  or combinations or exchanges of shares, or otherwise,  the number of
shares  available  for option and the shares  subject to any option and exercise
price thereof shall be appropriately adjusted. The Corporation shall give notice
of such  adjustment  to each  holder  of an  option  under  the  Plan,  and such
adjustment  shall be effective and binding on the optionee.  In the event of the
proposed  dissolution or liquidation  of the  Corporation,  or in the event of a
proposed sale of substantially  all of the assets of the Corporation,  the Board
of Directors may declare that each option granted under the Plan shall terminate
as of a date to be fixed by the Board of Directors;  provided that not less than
thirty  (30) days'  written  notice of the date so fixed  shall be given to each
optionee,  and each optionee  shall have the right,  during the period of thirty
(30) days  preceding  such  termination,  to exercise any options  owned by such
optionee as to all or any part of the shares covered  thereby,  including shares
as to which such option would not otherwise be exercisable.

                     11.  Death  of  Optionee.  If an  optionee  dies  while  an
employee of the  Corporation  or of any  subsidiary  or within  ninety (90) days
after the termination of such  employment,  any option may be exercised  without
regard to the restrictions on exercise set forth in section 7 within twelve (12)
months after the optionee's death by the optionee's  personal  representative or
the person or persons to whom the optionee's  rights under the option shall pass
by the optionee's  will or by the applicable  laws of descent and  distribution;
provided,  however,  that no such option may be exercised  after the  expiration
date specified therein.

                     12.  Termination of Employment;  Retirement and Disability.
If an optionee  shall cease to be  employed  by the  Corporation  for any reason
(including  retirement and disability  and, with respect to an optionee under an
option,  death) after the optionee has continuously been so employed for one (1)
year from the date of granting of the option,  the optionee,  or the  oprionee's
personal  representative  or legatees,  as the case may be, may, but only within
the three (3) month

                                       -3-



<PAGE>

period  immediately  following  such  termination  of employment and in no event
later than the expiration date specified in the option,  exercise the optionee's
option to the extent the  optionee  was  entitled  to exercise it at the date of
such termination.

                     13. Modification of Plan. The Board of Directors may amend,
suspend  or  discontinue  the  Plan,  at any  time,  by the act of the  Board of
Directors.  No such action may prejudice the right of any employee who has prior
thereto been granted an option or options of the Plan.

                     14.  Termination  of Plan.  The  Plan  shall  terminate  on
December  31, 1990.  Options may be granted  under the Plan at any time and from
time to time prior to its termination. Any option outstanding under the Plan, at
the time of its termination,  shall remain in effect until the option shall have
been exercised or shall have expired.

                     14.  Effective Date of Plan. The effective date of the Plan
is  November  26,  1985,  the date on which the Plan was adopted by the Board of
Directors of the Corporation.

                                       -4-





                                                                   Exhibit 10.14

January 11, 2000

Dan Avida
2312 Casa Bona Avenue
Belmont, Ca 94002

Dear Dan:

This letter  agreement (the  "Agreement")  will  memorialize  and constitute the
agreement  between  you  and  Electronics  for  Imaging,  Inc.  (the  "Company")
concerning your employment status with the Company.

         1. Employment As a Part-Time  Employee:  Effective January 1, 2000, you
will  transition  your  employment  from your current  position as the Company's
Chairman  and Chief  Executive  Officer to a  part-time  employee.  Unless  this
Agreement  is earlier  terminated  as  provided  in Section 2, for the period of
January 1, 2000 through December 31, 2001 (the "Part-Time  Employment  Period"),
you will  continue  to  remain  employed  by the  Company,  in the  position  of
Part-Time Employee.  As a Part-Time Employee to the Company,  you will undertake
such  duties  commensurate  with this  position as set forth below and as agreed
between you and the Board.  Your duties will include making  yourself  available
for  consultation  with the Board, the Chief Executive  Officer,  and such other
officers of the Company as reasonably  necessary to facilitate in the transition
of your former  responsibilities.  Your duties as a Part-Time Employee also will
entail acting in an advisory
  capacity  regarding the  organizations  and people
representing new technology  sources and the Company's  clients and competitors.
To that end you will, at your reasonable discretion,  network, travel, and liase
as appropriate so that you may convey to the Company's management and Board your
insights and  recommendations  on the Company's  operations  and  business.  The
timing of your  performance of these duties,  which are expected to be performed
on a part-time  basis,  will be  coordinated  between  the Company and you.  The
Company shall provide  reasonable  advance notice of specific  requests for your
services. For your services rendered during the Part-Time Employment Period, the
Company will pay you an annual base salary of four hundred  twenty five thousand
dollars ($425,000),  subject to standard payroll deductions and withholdings and
paid on the Company's normal payroll  schedule ("Base Salary").  You will not be
eligible to receive any bonus or to participate in any Company bonus plan during
the Part-Time Employment Period, with the sole exception that you will receive a
bonus for 1999  pursuant  to the  Company's  executive  bonus  plan.  During the
Part-Time Employment Period, you will be entitled to the following benefits:

                  (i) reimbursement for all reasonable travel and other expenses
(including  internet access charges,  telephone,  telex and telecopier  service)
incurred by you in connection  with the  performances  of your duties under this
Agreement,  provided  that  you  comply  with  the  Company's  business  expense
reimbursement  policy,   including  the  requirement  of  providing  appropriate
documentation of such expenses;

                                       1.


<PAGE>


                  (ii) an annual  automobile  allowance of four  thousand  eight
hundred dollars ($4,800) per year, paid on a monthly basis;

                  (iii)   participation   in  any  employee  benefit  and  group
insurance programs including life insurance,  long-term disability insurance and
comprehensive  health  insurance  programs,  developed  by the  Company  for its
officers or employees  generally (but in any event not less than those in effect
immediately  prior to  commencement  of the  Part-Time  Employment  Period) (the
"Company's Benefit Plans");

                  (iv)  accrual of  vacation  pay at an annual  rate of four (4)
weeks per year; and

                  (v) you will be eligible to receive  counsel on tax matters as
offered to the Company's executive officers by Price Waterhouse Coopers LLP.

         2. Termination:  Your employment during the Part-Time Employment Period
is at-will, and either you or the Company can terminate your employment and this
Agreement for any reason whatsoever,  either with or without cause, by providing
thirty (30) days advance written notice of such termination to the other.

                  (a) Unless  earlier  terminated  by either  party as  provided
above,  this  Agreement and your  employment  by the Company will  automatically
terminate  upon the earliest of the  following:  (i) expiration of the Part-Time
Employment  Period;  (ii) your  Incapacity  (as defined  herein);  or (iii) your
death.

                  (b) In the event this  Agreement  terminates due to your death
or  Incapacity,  or if the  Company  terminates  your  employment  prior  to the
expiration of the Part-Time  Employment  Period, the Company shall pay to either
you or your estate,  as  appropriate,  a lump sum  payment,  subject to standard
payroll  deductions and withholdings,  equal to the total Base Salary that would
have been paid to you if the Agreement and your  employment  had continued  from
the  Agreement   termination  date  through  the  expiration  of  the  Part-Time
Employment Period.  Notwithstanding  the preceding  sentence,  as a condition of
your  receiving the lump sum payment  referred to in this paragraph in the event
this Agreement  terminates at the Company's  request or due to your  Incapacity,
you must first execute a full release of any and all claims you may have against
the Company, which release shall be in a form acceptable to the Company.

                  (c) For the  purposes  of this  Agreement,  your  "Incapacity"
shall mean that you are physically or mentally unable to regularly  perform your
essential duties hereunder with or without reasonable accommodation for a period
in excess of four (4)  consecutive  months,  or for more than one hundred eighty
(180) days in any consecutive twelve (12) month period.

                  (d) Subject to Section 6 of this Agreement,  in the event this
Agreement  terminates  due to  your  death  or  Incapacity,  or if  the  Company
terminates your employment  prior to the expiration of the Part-Time  Employment
Period,  all unvested stock options you hold will accelerate  immediately,  such
that all shares in such options will be fully vested and exercisable.

                  (e) Except as provided in this  Agreement,  the Company  shall
have no  obligation  to  continue  to pay your  Base  Salary or to  provide  any
compensation or benefits upon termination of this Agreement for any reason.

                                       2.


<PAGE>


         3. Benefits After Part-Time  Employment  Period:  To the fullest extent
permitted by law, you will be entitled to participate  in the Company's  Benefit
Plans for a period of up to ten (10) years  following  the  termination  of this
Agreement for any reason;  provided,  however,  that the Company's obligation to
allow your continued  participation in the Benefit Plans shall immediately cease
if you secure comparable  benefits from another employer.  If the Company cannot
provide  coverage for you through its employee  benefits plans, the Company will
reimburse you the actual and direct costs of your benefits premiums for benefits
coverage you obtain  elsewhere,  at a coverage  level that is  equivalent to the
coverage that had been  provided to you as a full-time  employee of the Company.
The  Company's  payments on your and your  dependents'  behalf under the Benefit
Plans or as  reimbursement  for other  coverage  after the  termination  of this
Agreement will be considered taxable income to you.

         4. Confidential Information, Company Property and Change in Control:

                  (a)  Confidential  Information:   You  agree  to  continue  to
maintain the confidentiality of all confidential and proprietary  information of
the Company.  Your  continuing  obligations  do not apply to  information  that,
without any breach of your  obligations  to the  Company,  has entered  into the
public domain.  In addition,  you acknowledge your continuing  obligations under
your  Agreement  Not To Reexport  Technology  dated  February 2, 1990, a copy of
which is attached hereto as Exhibit A.

                  (b) Company Property:  As part of this Agreement,  the Company
will  transfer to you ownership of the laptop  computer and cellular  telephones
that were provided by the Company for your use. This property  shall be given to
you without warranty of any kind.

                  (c) Change in Control: Subject to Section 6 of this Agreement,
in the event of a Change of Control (as defined herein) prior to the termination
of this  Agreement,  any  unvested  shares in stock  options that you hold shall
automatically  accelerate and become fully  exercisable on the effective date of
the Change of Control (the  "Acceleration"),  provided  that you first execute a
full  release of any and all  claims you may have  against  the  Company,  which
release shall be in a form acceptable to the Company. Upon the Acceleration, you
shall  have  the  right  to  exercise  all or any  portion  of such  options  in
accordance with your stock option agreements.  Notwithstanding the foregoing, if
any unvested shares of the options are not subject to the Acceleration by reason
of Section 6 and this  Agreement has been  terminated,  you shall continue to be
employed as a Part-Time  Employee of the  successor  of the Company at an hourly
rate of two  hundred  dollars  ($200)  for the  period  necessary  to allow  the
remaining  unvested shares to vest in full, but in no event shall such Part-Time
employment  extend  beyond  the  Part-Time  Employment  Period.  As a  Part-Time
Employee of the Company's successor, you agree to make yourself available for up
to ten (10) hours per month to provide advice in any area of your expertise,  as
reasonably  requested by the successor.  For the purposes of this  Agreement,  a
"Change in Control" shall mean any of the following:  (i) if any person (as this
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934)
becomes the beneficial owner, directly or indirectly,  of fifty percent (50%) or
more  of  the  total  voting  power  represented  by the  Company's  outstanding
securities;  (ii) if the individuals  who, at the beginning of any period of two
(2)  consecutive  years,  constitute  the Board of Directors of the Company (the
"Incumbent  Directors") cease for any reason during such period to constitute at
least a majority of the Board

                                       3.


<PAGE>


of  Directors  (unless  the  election  or the  nomination  for  election  by the
Company's  stockholders  of a Director  first  elected  during  such  period was
approved by the vote of a majority of the Incumbent  Directors,  whereupon  such
Director shall also be classified as an Incumbent  Director);  or (iii) a merger
or  consolidation of the Company with another  corporation  (other than a merger
which would result in the Company's stockholders before the merger continuing to
hold more than fifty  percent  (50%) of the total voting power of the Company or
the entity controlling the Company after the merger).

         5. Stock Options:  Except as otherwise provided herein, vesting of your
current stock options or any other stock compensation award will continue during
the Part-Time Employment Period pursuant to the terms of your grant agreements.

         6. Limitation on Payments:

                  (a) To the extent that any  payments  or  benefits  (including
shares that vest as a result of  accelerated  vesting under Sections 2(d) and/or
4(c))  provided for in this  Agreement or  otherwise  payable to you  constitute
"parachute  payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986,  as amended  (the  "Code"),  and, but for this  section,  would be
subject to the excise tax  imposed by Section  4999 of the Code,  the  aggregate
amount of such  payments  and  benefits  shall be reduced  such that the present
value thereof (as determined under the Code and the applicable regulations),  is
equal to 2.99 times your "base amount" (as defined in Section  28OG(b)(3) of the
Code).

                  (b) Within  sixty (60) days after the Change of  Control,  the
Company  shall  notify you in writing if it believes  that any  reduction in the
payments and benefits that would  otherwise be paid or provided to you under the
terms of this  Agreement is required to comply with the provisions of Subsection
6(a). If the Company  determines  that any such  reduction is required,  it will
provide you with copies of the  information  used and  calculations  made by the
Company to  determine  the amount of such  reduction.  If the  Company  gives no
notice to you of a required  reduction as provided in this Subsection  6(b), you
may unilaterally  determine the amount of reduction required,  if any, and, upon
written  notice to the Company,  that amount will be  conclusive  and binding on
both parties.

                  (c)  Within  thirty  (30)  days  after  your  receipt  of  the
Company's  notice  pursuant to Subsection  6(b), you shall notify the Company in
writing if you disagree with the amount of reduction  determined by the Company.
As part of such  notice,  you shall  also  advise  the  Company of the amount of
reduction,  if any, that you have determined,  in good faith, to be necessary to
comply with the  provisions of Subsection  6(a).  Failure by you to provide this
notice  within the time  allowed  will be treated  as  acceptance  by you of the
amount of reduction determined by the Company. If any differences  regarding the
amount of the reduction have not been resolved by mutual  agreement within sixty
(60) days after your  receipt of the  Company's  notice  pursuant to  Subsection
6(b),  the amount of reduction  determined by you will be conclusive and binding
on both parties  unless,  prior to the  expiration of the sixty (60) day period,
the  Company  notifies  you in writing of the  Company's  intention  to have the
matter submitted to arbitration for final and binding  resolution,  and proceeds
to do so promptly. If the Company gives no notice to you of a required reduction
as provided in Subsection  6(b),  you may

                                       4.


<PAGE>


unilaterally  determine  the amount of required  reduction,  if any,  and,  upon
written  notice to the Company,  that amount will be  conclusive  and binding on
both parties.

                  (d) If a reduction in the  payments  and  benefits  that would
otherwise  be paid or  provided  to you  under the  terms of this  Agreement  is
necessary  to comply with the  provisions  of  Subsection  6(a),  so long as the
requirements  of Subsection  6(a) are met, you shall be entitled to select which
payments or benefits will be reduced including, without limitation,  determining
the number of shares  subject to  accelerated  vesting.  To the greatest  extent
permissible under the applicable stock option plan, your grant agreement(s), and
applicable  law, you will continue to vest all shares not subject to accelerated
vesting by virtue of  application of this Section 6, according to their original
vesting  schedule(s).  Within  thirty (30) days after the amount of any required
reduction in payments and benefits is finally  determined in accordance with the
provisions of Subsection 6(c), you will notify the Company in writing  regarding
which  payments or benefits are to be reduced.  If no  notification  is given by
you, the Company will determine which amounts to reduce.  If, as a result of the
reductions  required by  Subsection  6(a),  any amounts  previously  paid to you
exceed the amount to which you are entitled, you will promptly return the excess
amount to the Company.

         7.  Administrative  Assistance:  While this Agreement is in effect, the
Company  will provide you with an office and shared  administrative  assistance,
including secretarial  assistance,  to aid you in the performance of your duties
hereunder; such secretarial services will be provided by Gina Farrugia while she
remains employed by the Company.

         8. Non-Competition, Non-Interference and Non-Disclosure:

                  (a)  You  covenant   and  agree  that  during  the   Part-Time
Employment Period,  unless you first obtain the advance written authorization of
the Company:

                           (i) neither you nor any Executive  Entity (as defined
herein)  will,  anywhere in the Market,  either  directly  or  indirectly,  own,
manage,  operate,  control,  or participate,  whether as a proprietor,  partner,
stockholder,  director,  officer,  "Key Employee" (defined herein to include any
person who is employed in a  management,  executive,  supervisory,  marketing or
sales capacity),  joint venturer,  investor or other participant  (except as the
holder of not more than one percent (1%) of the outstanding  stock of a publicly
held company),  in any business  which competes with the Business  ("Competitive
Business"). For the purposes of this Agreement, "Executive Entity" is defined as
any entity in which you and/or any of your immediate  family members  (including
your spouse,  parents,  siblings or  children) at any time during the  Part-Time
Employment Period: (a) own five percent (5%) or more of the beneficial interest;
or (b) hold five percent (5%) or more of a controlling interest;

                           (ii)  neither  you  nor  any  Executive  Entity  will
directly  or  indirectly  solicit,  or  induce  any  person  who is a  customer,
supplier,  lender, or lessor of the Company, or any other person with a business
relationship  with the  Company,  at any time  during the  Part-Time  Employment
Period,  to  discontinue  or reduce  the  extent of such  relationship  with the
Company; and

                                       5.


<PAGE>


                           (iii) neither you nor any  Executive  Entity will (a)
directly or indirectly recruit,  solicit or otherwise induce any employee of the
Company  to  discontinue  such  employment  with the  Company,  or (b) cause any
Competitive Business to recruit, solicit or induce any person who is employed by
the  Company  during  the  Part-Time   Employment  Period  to  discontinue  such
employment relationship with the Company.

                  (b) For the  purposes of this  Agreement,  (i) the  "Business"
refers to the  business  conducted  by the Company and its  subsidiaries  in the
design and  manufacture of printer  controllers as of the Effective Date hereof,
and (ii) the "Market"  refers to the State of California  and any other State of
the United  States in which a material  amount of Business is  conducted at such
time. For purposes  hereof,  "a material amount of Business" shall mean that ten
percent (10%) or more of the Company's gross sales for the last completed fiscal
year were made from, to or in such State.

         9. Company's Successors:

                  (a) Any successor to the Company  (whether  direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or  substantially  all of the Company's  business and assets shall assume
the  obligations  under this  Agreement and the Company shall take all necessary
steps to  ensure  that any  successor  shall  agree  expressly  to  perform  the
obligations  under this  Agreement  in the same manner and to the same extent as
the Company  would be required to perform such  obligations  in the absence of a
succession.  As used throughout this Agreement, the term "Company" shall include
any successor to the Company's  business and assets which  executes and delivers
the assumption agreement described in this subsection (a) or which becomes bound
to the terms of this Agreement by operation of law.

                  (b)  Executive's  Successors:  The terms of this Agreement and
all of your rights  hereunder  shall inure to the benefit of, and be enforceable
by,  your  personal  or  legal   representatives,   executors,   administrators,
successors,  heirs, devisees and legatees, except that your duties hereunder may
not be assigned without the written consent of the Company.

         10. Release by Dan Avida:  You acknowledge that you have carefully read
and understand  this Agreement and have been offered the opportunity to consider
this Agreement before signing it. In exchange for the consideration  provided to
you  under  this  Agreement,   including  but  not  limited  to  your  continued
employment,  and except as otherwise set forth in this  Agreement,  you release,
acquit and forever discharge the Company, and its officers,  directors,  agents,
employees, shareholders, successors, assigns and affiliates, of and from any and
all claims, liabilities,  demands, causes of action, costs, expenses,  attorneys
fees,  damages,  obligations  of  every  kind  and  nature,  in law,  equity  or
otherwise,   known  or  unknown,   suspected  or   unsuspected,   disclosed  and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct at any time  prior to and  including  the date you sign this  Agreement,
including but not limited to all such claims and demands  directly or indirectly
arising out of or in any way connected with or related to your  employment  with
the Company. Notwithstanding anything to the contrary stated herein, you are not
releasing  any rights under the  Indemnification  Agreement  between you and the
Company dated July 30, 1992 (the "Indemnification  Agreement"),  a copy of which
is  attached  hereto as  Exhibit B and which  shall  continue  in full force and
effect in accordance with its terms.

                                       6.


<PAGE>


                  (a) You acknowledge  that the above waiver and release extends
to any and all claims you may have  under  Title VII of the Civil  Rights Act of
1964,   the  federal   Americans  with   Disabilities   Act  of  1990,  the  Age
Discrimination  in Employment Act of 1967, as amended,  and the California  Fair
Employment  and Housing  Act.  You  acknowledge  that this waiver and release is
knowing and voluntary.  You agree that this waiver and release does not apply to
any rights or claims that may arise after the date you sign this Agreement.  You
acknowledge  that the  consideration  given for this  waiver  and  release is in
addition to anything of value to which you were  already  entitled.  You further
acknowledge  that you have been advised by this  Agreement  that: (i) you should
consult with an attorney  prior to  executing  this  agreement;  (ii) you had at
least twenty-one (21) days within which to consider this Agreement (although you
may choose to execute it earlier);  (iii) you have seven (7) days following your
execution  of this  Agreement in which to revoke this  Agreement;  and (iv) this
Agreement shall not be effective until the revocation period has expired,  which
will be the eighth day after  this  Agreement  is  executed  by you  ("Effective
Date").

         11.  Release  by The  Company:  Except as  otherwise  set forth in this
Agreement, the Company hereby releases,  acquits, and forever discharges you and
your heirs, assigns,  agents,  representatives and attorneys of and from any and
all claims, liabilities,  demands, causes of action, costs, expenses,  attorneys
fees,  damages,  indemnities and  obligations of every kind and nature,  in law,
equity or otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct at any time prior to and  including  the date the Company  executes this
Agreement, with the exception of any claim arising out of your obligations under
this Agreement,  your proprietary information obligations,  criminal misconduct,
regulatory violations, or fraud.

         12. Section 1542 Waiver: In granting the releases herein, which include
claims that may be unknown to you or the  Company at  present,  both you and the
Company acknowledge that each has read and understands section 1542 of the Civil
Code of the State of California, which reads as follows:

                  A general release does not extend to claims which the creditor
                  does not know or  suspect to exist in his favor at the time of
                  executing  the  release,  which  if  known  by him  must  have
                  materially affected his settlement with the debtor.

Both you and the Company  hereby  expressly  waive and relinquish all rights and
benefits under that section and any law or legal  principle of similar effect in
any jurisdiction  with respect to the release of unknown and unsuspected  claims
granted in this Agreement.  Both you and the Company  acknowledge  that each has
been advised by their counsel of the meaning and  consequences  of Section 1542,
and their waiver of said section is knowing and voluntary.

         11. Binding Arbitration To Resolve Disputes:  In the event of a dispute
concerning application, interpretation or enforcement of any provision or aspect
of this Agreement,  the parties agree that any such dispute shall be resolved by
final and binding confidential  arbitration in lieu of proceeding before a state
or  federal  agency  or court  to the  fullest  extent  permitted  by law.  Such
arbitration will take place in the City and County of San Francisco, California,
and shall be conducted by an arbitrator mutually agreed upon between the parties
from a  panel  of

                                       7.


<PAGE>


arbitrators from JAMS/Endispute. The arbitration will be conducted in accordance
with the JAMS/Endispute rules regarding arbitration for employment disputes then
in effect.  The  parties  further  agree that,  notwithstanding  any rule to the
contrary,  the  Company  shall  pay  the  costs  and  fees  of  the  arbitration
proceeding, including the arbitrator's fees.

         12. Miscellaneous:  This Agreement, including its exhibits, constitutes
the complete, final and exclusive embodiment of the entire agreement between you
and the Company  regarding your employment with the Company.  It is entered into
without reliance on any agreement,  promise or representation,  written or oral,
express  or  implied,  other  than as  expressly  contained  herein.  Except  as
otherwise provided herein, this Agreement wholly replaces and supersedes any and
all agreements,  whether written, oral, express or implied, with respect to your
employment  with  the  Company,  including  but  not  limited  to  that  certain
Employment  Agreement  dated July 17, 1995, and that certain  Amendment No. 1 To
Employment  Agreement  dated October 15, 1995 (both of which are attached hereto
as Exhibit C), which,  as of the  Effective  Date,  shall  terminate and have no
further  force  or  effect.  Notwithstanding  the  preceding  sentence,  nothing
contained in this  Agreement  shall in any way amend,  modify or  supersede  the
provisions of the Indemnification Agreement (Exhibit B) and the Agreement Not To
Reexport  Technology  (Exhibit A), which shall continue in full force and effect
in accordance  with their terms.  This  Agreement may not be modified or amended
except in a  writing  signed by both you and a duly  authorized  officer  of the
Company.  If any  provision  of this  Agreement is  determined  to be invalid or
unenforceable, in whole or in part, this determination will not affect any other
provision of this  Agreement and the provision in question  shall be modified so
as to be rendered enforceable  consistent with the general intent of the parties
insofar as possible. This Agreement will be deemed to have been entered into and
will be  construed  and  enforced  in  accordance  with the laws of the State of
California  as applied to  contracts  made and to be performed  entirely  within
California.

If this letter  correctly sets forth the parties'  agreement,  please sign below
and return a copy to me.

Sincerely,

ELECTRONICS FOR IMAGING, INC.

/s/ Guy Gecht
-------------------------
[Name] Guy Gecht
[Title] Chief Executive Officer


UNDERSTOOD AND AGREED:


/s/ Dan Avida
-------------------------
Dan Avida

Date:  01/11/00
     ---------------------

Exhibit A - Agreement Not To Reexport Technology

                                       8.


<PAGE>


Exhibit B - Indemnification Agreement
Exhibit C - Employment Agreement and Amendment No. 1

                                       9.


<PAGE>


                                    Exhibit A

                      Agreement Not To Reexport Technology

                                      10.


<PAGE>


                                    Exhibit B

                            Indemnification Agreement

                                      11.


<PAGE>


                                    Exhibit C

                    Employment Agreement and Amendment No. 1


                                      12.



                                                                   Exhibit 10.15

                              EMPLOYMENT AGREEMENT


         This  Employment  Agreement (the  "Agreement") is made and entered into
effective as of March 8, 2000 by and between Fred Rosenzweig  (the  "Executive")
and Electronics for Imaging, Inc., a Delaware corporation (the "Company").

                                    RECITALS

         A. It is expected  that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board  of  Directors  of  the  Company  (the  "Board")   recognizes   that  such
consideration  can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities.  The Board has determined that
it is in the best interests of the Company and its  stockholders  to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.

         B. The Board  believes that it is in the best  interests of the Company
and its  stockholders to provide the Executive with an incentive to continue his
employment  and to motivate  the  Executive to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

         C. The Board  believes
  that it is  imperative to provide the Executive
with certain benefits upon a Change of Control and, under certain circumstances,
upon  termination of the Executive's  full-time  employment in connection with a
Change of Control,  which  benefits are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possibility of a Change
of Control.

         D. Further,  the Board  believes that it is in the best interest of the
Company and its stockholders to provide additional  benefits to the Executive in
the event the  Executive's  employment  terminates  for any reason  other than a
Change in Control.  Such  benefits  are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possible termination of
employment.

         E. To accomplish the foregoing  objectives,  the Board of Directors has
directed the Company,  upon  execution of this  Agreement by the  Executive,  to
agree to the terms provided herein.

         F.  Certain  capitalized  terms used in the  Agreement  are  defined in
Section 6 below.

         In  consideration  of the mutual  covenants  herein  contained,  and in
consideration of the continuing  employment of the Executive by the Company, the
parties agree as follows:


<PAGE>

         1. Duties and Scope of Employment.

                  (a)  Position.  The Company  shall employ the Executive in the
position of President and Chief Operating  Officer,  as such position is defined
in terms of  responsibilities  and compensation as of the effective date of this
Agreement;  provided,  however,  that the Board of Directors by mutual agreement
with the Executive  shall have the right, at any time prior to the occurrence of
a Change of  Control,  to revise such  responsibilities  and  compensation.  The
Executive  shall  continue to devote his full  business  efforts and time to the
Company and its  subsidiaries.  The Executive  shall comply with and be bound by
the Company's operating policies,  procedures and practices from time to time in
effect during his employment. During the term of the Executive's employment with
the Company,  the Executive  shall devote his full-time,  skill and attention to
his duties and responsibilities,  and shall perform them faithfully,  diligently
and  competently,  and the  Executive  shall use his best efforts to further the
business of the Company and its affiliated entities.  Subject to the Executive's
fiduciary duties to the Company, this Agreement shall not prohibit the Executive
from serving on the board of directors or any advisory board of other companies.

         2. Base Compensation.

                  (a) Annual  Salary.  The Company  shall pay the  Executive  as
compensation  for his services a base salary at an  annualized  rate that is not
less  than his base  salary  as of the  effective  date of this  Agreement  (the
"Annual  Salary").  The Annual Salary may be subject to annual  increases as the
Board may authorize  from time to time in  connection  with  Executive's  annual
review.  The Annual Salary shall be paid  periodically in accordance with normal
Company payroll  procedures.  The Annual Salary  (together with bonus amounts as
specified in Section 2), and any increases in such  compensation  that the Board
of Directors  may grant from time to time,  is referred to in this  Agreement as
"Base Compensation."

                  (b) Bonus.  In addition to the Annual  Salary,  the  Executive
will be eligible to receive an annual bonus under the Company's  Executive Bonus
Plan as determined by the Board in its discretion.

         3. Executive  Benefits.  The Executive shall be eligible to participate
in the employee benefit plans and executive  compensation programs maintained by
the  Company  applicable  to other  key  executives  of the  Company,  including
(without limitation)  retirement plans,  savings or profit-sharing  plans, stock
option,  incentive or other bonus plans, life, disability,  health, accident and
other insurance programs, paid vacations, and similar plans or programs, subject
in each case to the generally  applicable terms and conditions of the applicable
plan  or  program  in  question  and  to  the  determination  of  any  committee
administering such plan or program. In addition, the Executive shall continue to
be entitled to receive any other  benefits  currently  received by the Executive
such as automobile and car phone allowance benefits.

         4. At-Will Employment.  The Company and the Executive  acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable  law.  If the  Executive's  employment  terminates  for  any  reason,
including,  without  limitation,  any termination prior to and not in connection
with a Change of Control,  the Executive  shall not be entitled to any

                                      -2-


<PAGE>


payments,  benefits,  damages,  awards or compensation other than as provided by
this  Agreement,  or as may  otherwise  be  available  in  accordance  with  the
Company's  established  employee plans and policies at the time of  termination.
The terms of this  Agreement  shall  terminate  upon the earlier of (i) the date
that all obligations of the parties hereunder have been satisfied, or (ii) March
8, 2003,  or (iii)  eighteen  (18) months  after a Change of Control  unless the
Executive's  employment  terminates as a result of Involuntary  or  Constructive
Termination.  A  termination  of the  terms of this  Agreement  pursuant  to the
preceding  sentence  shall be  effective  for all  purposes,  except  that  such
termination  shall not  affect the  payment  or  provision  of  compensation  or
benefits  on account  of a  termination  of  employment  occurring  prior to the
termination of the terms of this Agreement.

         5. Severance Benefits.

                  (a)  Termination  in  Connection  with a  Change  of  Control.
Subject to Section 7 below, if the Company terminates the Executive's employment
at any time  during the period  beginning  upon the  earlier to occur of (i) the
execution of a binding letter of intent regarding a Change of Control,  and (ii)
ninety  (90) days before a Change of Control,  and ending  eighteen  (18) months
after a Change  of  Control,  and the  Executive  signs  and  does not  revoke a
standard  release of claims with the Company  attached hereto as Exhibit A, then
the Executive shall be entitled to receive severance benefits as follows:

                           (i) Involuntary or Constructive  Termination.  If the
Executive's  employment  terminates as a result of Involuntary  or  Constructive
Termination  other than for  Cause,  then the  Executive  shall be  entitled  to
receive  severance pay in an amount equal to two (2) times the Executive's  Base
Compensation  for the year  coinciding  with the  year of  termination,  plus an
amount equal to the bonus the  Executive  would have earned had he been employed
by the  Company  at the  end of  such  year  multiplied  by a  fraction  (x) the
numerator of which is the number of completed  months in that year,  and (y) the
denominator  of which is  twelve  (12)  (the  "Current  Bonus").  Any  severance
payments  except  for the  Current  Bonus to which  the  Executive  is  entitled
pursuant to this Section  shall be paid in a lump sum within thirty (30) days of
the  Executive's  termination.  The  Current  Bonus to which  the  Executive  is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.

                           (ii) Voluntary Resignation; Termination For Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or Constructive  Termination described in subsection 5(a)(i)), or if the Company
terminates the Executive's employment for Cause, then the Executive shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established  under the Company's then existing benefit plans at the time
of such termination.

                           (iii)  Disability;  Death. If the Company  terminates
the Executive's  employment as a result of the Executive's  Disability,  or such
Executive's employment is terminated due to the death of the Executive, then the
Executive or the  Executive's  estate,  as the case may be, shall be entitled to
receive  (i)  severance  pay  in an  amount  equal  to  one-half  (1/2)  of  the
Executive's  Base  Compensation  for  the  year  coinciding  with  the  year  of
termination  plus his Current Bonus,  (ii) in addition to the Executive's  stock
options that were exercisable immediately prior to such

                                      -3-


<PAGE>

termination,  the vesting of  additional  options  shall  accelerate  and become
exercisable  as to that number of shares that would have vested if the Executive
had remained continuously employed for a period of six (6) months following such
termination (and if any of such options vest on an annual basis, the appropriate
credit shall be given as if the vesting accrued monthly), and such options shall
remain  exercisable  for the  period  prescribed  in  Executive's  stock  option
agreements,  and (iii) such other  benefits (if any) as may then be  established
under the Company's then existing  benefit plans at the time of such  Disability
or death.  Any  severance  payments  except for the  Current  Bonus to which the
Executive  is  entitled  pursuant  to this  Section  shall be paid in a lump sum
within  thirty (30) days of the  Executive's  termination.  The Current Bonus to
which the Executive is entitled pursuant to this Section shall be paid in a lump
sum within thirty (30) days of the date that the Company's audit is complete for
such year.

                  (b)  Termination  Apart  from  Change of  Control.  Subject to
Section 7 below,  if the Company  terminates the  Executive's  employment at any
time,  either  before  the  earlier to occur of (i) the  execution  of a binding
letter of intent regarding a Change of Control, and (ii) ninety (90) days before
a Change of Control, or after the 18-month period following a Change of Control,
and the  Executive  signs and does not revoke a standard  release of claims with
the Company  attached  hereto as Exhibit A, then the Executive shall be entitled
to receive severance benefits as follows:

                           (i) Voluntary Resignation;  Termination for Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or  Constructive  Termination),  or if the Company  terminates  the  Executive's
employment for Cause,  then the Executive shall be entitled to receive severance
and any other benefits only as may then be established  under the Company's then
exiting benefit plans at the time of such termination.

                           (ii) Termination other than Voluntary  Resignation or
Termination for Cause. In the event the Executive's employment is terminated for
any reason  (including as a result of the  Executive's  Disability or due to the
death of the Executive)  except for  termination as described in Section 5(b)(i)
above,  then the Executive or the Executive's  estate, as the case may be, shall
be entitled to receive (i) severance pay in an amount equal to one-half (1/2) of
the  Executive's  Base  Compensation  for the year  coinciding  with the year of
termination  plus his  Current  Bonus,  (ii) in addition  to  Executive's  stock
options that were exercisable immediately prior to such termination, the vesting
of additional  options shall accelerate and become  exercisable by the Executive
or the Executive's  estate, as the case may be, as to that number of shares that
would have vested if the  Executive  had  remained  continuously  employed for a
period of six (6) months  following such termination (and if any of such options
vest on an annual basis, the appropriate credit shall be given as if the vesting
accrued  monthly),  and such  options  shall remain  exercisable  for the period
prescribed in Executive's stock option  agreements,  and (iii) the same level of
health (i.e., medical, vision and dental) coverage and benefits as in effect for
the  Executive  on  the  day  immediately   preceding  the  day  of  Executive's
termination of employment; provided, however, that (i) the Executive constitutes
a  qualified  beneficiary,  as defined in Section  4980B(g)(1)  of the  Internal
Revenue  Code of 1986,  as  amended  (the  "Code");  and (ii)  Executive  elects
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), within the time period prescribed pursuant to
COBRA.  The Company shall  continue to provide  Executive  with health  coverage
until the earlier to occur of (i) the date  Executive  is no longer

                                      -4-


<PAGE>

eligible to receive  continuation  coverage  pursuant to COBRA, or (ii) eighteen
(18) months from the termination  date. In addition to the foregoing,  Executive
shall also be paid such other benefits (if any) as may then be established under
the Company's then existing benefit plans at the time of such  termination.  Any
severance  payments  except  for the  Current  Bonus to which the  Executive  is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the Executive's termination. The Current Bonus to which the Executive is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.

                  (c)  Options.  Subject to  Section 7 hereof,  upon a Change of
Control,  the unvested  portion of any stock option held by the Executive  shall
automatically   be   accelerated   and   the   Executive   or  the   Executive's
representative,  as the case may be, shall have the right to exercise all or any
portion  of  such  stock  option,  in  addition  to any  portion  of the  option
exercisable  prior  to  the  Change  of  Control  and  in  accordance  with  the
Executive's stock option agreement.

         6.  Definition  of  Terms.  The  following  terms  referred  to in this
Agreement shall have the following meanings:

                  (a)  Cause.  "Cause"  shall  mean  (i)  any  act  of  personal
dishonesty taken by the Executive in connection with his  responsibilities as an
employee  and  intended  to result in  substantial  personal  enrichment  of the
Executive,  (ii)  committing a felony or an act of fraud  against the Company or
its  affiliates,  and  (iii)  acts  by  the  Executive  which  constitute  gross
misconduct, are injurious to the Company, and which are demonstrably willful and
deliberate  on the  Executive's  part  after  there  has been  delivered  to the
Executive a written  demand of  cessation  of such acts from the  Company  which
describes the basis for the  Company's  belief that the Executive has engaged or
committed such acts.

                  (b)  Change of  Control.  "Change of  Control"  shall mean the
occurrence of any of the following events:

                           (i) Any  "person"  (as such term is used in  Sections
13(d) and 14(d) of the Securities  Exchange Act of 1934, as amended) becomes the
"beneficial  owner"  (as  defined in Rule 13d-3  under  said Act),  directly  or
indirectly,  of  securities of the Company  representing  fifty percent (50%) or
more of the total voting power  represented  by the Company's  then  outstanding
voting securities; or

                           (ii) A  change  in the  composition  of the  Board of
Directors  of the Company  occurring  within a two-year  period,  as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors"  shall mean  directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election,  to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent  Directors at the time of such  election or nomination  (but shall
not include an individual  whose election or nomination is in connection with an
actual or threatened  proxy contest relating to the election of directors to the
Company); or

                                      -5-


<PAGE>

                           (iii) A merger or  consolidation  of the Company with
any other corporation,  other than a merger or consolidation  which would result
in the voting  securities of the Company  outstanding  immediately prior thereto
continuing to represent  (either by remaining  outstanding or by being converted
into voting  securities of the surviving entity) at least sixty percent (60%) of
the total voting power  represented  by the voting  securities of the Company or
such   surviving   entity   outstanding   immediately   after  such   merger  or
consolidation.

                  (c) Involuntary or Constructive  Termination.  "Involuntary or
Constructive Termination" shall mean (i) without the Executive's express written
consent,  the  assignment  to the  Executive  of any  duties or the  significant
reduction of the Executive's  duties,  either of which is inconsistent  with the
Executive's position with the Company and responsibilities in effect immediately
prior to such assignment, or the removal of the Executive from such position and
responsibilities;  (ii)  without the  Executive's  express  written  consent,  a
substantial  reduction,  without good business  reasons,  of the  facilities and
perquisites  (including  office space and  location)  available to the Executive
immediately  prior to such  reduction;  (iii) a reduction  by the Company in the
Base  Compensation  of the  Executive  as in  effect  immediately  prior to such
reduction;  (iv) a  material  reduction  by the  Company in the kind or level of
employee  benefits to which the Executive is entitled  immediately prior to such
reduction  with the result  that the  Executive's  overall  benefits  package is
significantly  reduced;  (v) the  relocation of the Executive to a facility or a
location more than 30 miles from the Executive's then present location,  without
the Executive's express written consent;  (vi) any purported  termination of the
Executive by the Company which is not effected for  Disability or for Cause,  or
any purported  termination  for which the grounds relied upon are not valid;  or
(vii) the failure of the Company to obtain the  assumption of this  agreement by
any successors contemplated in Section 8 below.

                  (d) Disability. "Disability" shall mean that the Executive has
been  unable to perform  his duties  under this  Agreement  as the result of his
incapacity due to physical or mental illness,  and such  inability,  at least 26
weeks after its  commencement,  is  determined  to be total and  permanent  by a
physician  selected  by  the  Company  or its  insurers  and  acceptable  to the
Executive  or  the  Executive's  legal  representative  (such  agreement  as  to
acceptability  not to be  unreasonably  withheld).  Termination  resulting  from
Disability  may only be effected  after at least 30 days' written  notice by the
Company of its intention to terminate the Executive's  employment.  In the event
that the Executive  resumes the performance of  substantially  all of his duties
hereunder before the termination of his employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.

         7.  Limitation  on Payments.  In the event that the severance and other
benefits  provided for in this  Agreement or otherwise  payable to the Executive
(i) constitute  "parachute  payments"  within the meaning of Section 280G of the
Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive's benefits under this Agreement shall be
either:

                  (i) delivered in full, or

                                      -6-


<PAGE>

                  (ii)  delivered as to such lesser extent which would result in
no portion of such benefits being subject to the Excise Tax,

                  whichever of the  foregoing  amounts,  taking into account the
applicable federal,  state and local income taxes and the Excise Tax, results in
the receipt by  Executive  on an  after-tax  basis,  of the  greatest  amount of
benefits,  notwithstanding  that all or some  portion  of such  benefits  may be
taxable under Section 4999 of the Code.

         Unless the Company and the Executive  otherwise  agree in writing,  any
determination  required under this Section 7(a) shall be made in writing in good
faith  by the  accounting  firm  serving  as the  Company's  independent  public
accountants  immediately prior to the Change of Control (the "Accountants").  In
the event of a reduction in benefits hereunder, the Executive shall be given the
choice of which  benefits to reduce.  For  purposes  of making the  calculations
required by this Section 7(a), the Accountants  may make reasonable  assumptions
and approximations concerning applicable taxes and may rely on reasonable,  good
faith  interpretations  concerning the  application of the Code. The Company and
the Executive shall furnish to the Accountants such information and documents as
the  Accountants may reasonably  request in order to make a determination  under
this Section.  The Company shall bear all costs the  Accountants  may reasonably
incur in connection with any calculations contemplated by this Section 7(a).

         8. Successors.

                  (a)  Company's  Successors.   Any  successor  to  the  Company
(whether   direct  or  indirect   and  whether  by  purchase,   lease,   merger,
consolidation,  liquidation  or  otherwise) to all or  substantially  all of the
Company's  business and assets shall assume the obligations under this Agreement
and agree expressly to perform the obligations  under this Agreement in the same
manner and to the same extent as the Company  would be required to perform  such
obligations  in the  absence  of a  succession.  For  all  purposes  under  this
Agreement,  the term  "Company"  shall  include any  successor to the  Company's
business  and assets  which  executes  and  delivers  the  assumption  agreement
described in this  subsection  (a) or which  becomes  bound by the terms of this
Agreement by operation of law.

                  (b)  Executive's  Successors.  The terms of this Agreement and
ail rights of the  Executive  hereunder  shall  inure to the  benefit of, and be
enforceable by, the Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, devisees and legatees.

         9. Notice.

                  (a) General. Notices and all other communications contemplated
by this  Agreement  shall be in  writing  and  shall be deemed to have been duly
given when personally  delivered or when mailed by U.S.  registered or certified
mail,  return  receipt  requested  and  postage  prepaid.  In  the  case  of the
Executive, mailed notices shall be addressed to him at the home address which he
most  recently  communicated  to the  Company  in  writing.  In the  case of the
Company,  mailed notices shall be addressed to its corporate  headquarters,  and
ail notices shall be directed to the attention of its Secretary.

                                      -7-


<PAGE>

                  (b) Notice of  Termination.  Any  termination  by the  Company
shall be communicated by a notice of termination to the other party hereto given
in accordance with Section 9 of this  Agreement.  Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable  detail  the facts and  circumstances  claimed to provide a basis for
termination under the provision so indicated,  and shall specify the termination
date (which shall be not more than 15 days after the giving of such notice). The
failure by the Executive to include in the notice any fact or circumstance which
contributes to a showing of Involuntary or  Constructive  Termination  shall not
waive any right of the  Executive  hereunder  or  preclude  the  Executive  from
asserting such fact or circumstance in enforcing his rights hereunder.

         10. Arbitration.

                  (a) Any dispute or controversy arising out of, relating to, or
in  connection   with  this   Agreement,   or  the   interpretation,   validity,
construction,  performance,  breach, or termination thereof, shall be settled by
binding  arbitration to be held in California,  in accordance  with the National
Rules for the  Resolution of Employment  Disputes then in effect of the American
Arbitration  Association (the "Rules").  The arbitrator may grant injunctions or
other relief in such  dispute or  controversy.  The  decision of the  arbitrator
shall be final,  conclusive  and  binding  on the  parties  to the  arbitration.
Judgment  may be  entered  on the  arbitrator's  decision  in any  court  having
jurisdiction.

                  (b) The arbitrator(s) shall apply California law to the merits
of any  dispute or claim,  without  reference  to  conflicts  of law rules.  The
arbitration  proceedings shall be governed by federal arbitration law and by the
Rules,  without reference to state arbitration law. Executive hereby consents to
the personal  jurisdiction of the state and federal courts located in California
for any action or  proceeding  arising  from or  relating to this  Agreement  or
relating to any arbitration in which the parties are participants.

                  (c)  Executive   understands  that  nothing  in  this  Section
modifies Executive's at-will employment status.  Either Executive or the Company
can terminate the employment relationship at any time, with or without Cause.

                  (d) EXECUTIVE  HAS READ AND  UNDERSTANDS  THIS SECTION,  WHICH
DISCUSSES ARBITRATION.  EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING
OUT  OF,   RELATING  TO,  OR  IN  CONNECTION   WITH  THIS   AGREEMENT,   OR  THE
INTERPRETATION,  VALIDITY,  CONSTRUCTION,  PERFORMANCE,  BREACH  OR  TERMINATION
THEREOF TO BINDING  ARBITRATION,  CONSTITUTES A WAIVER OF EMPLOYEE'S  RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS
OF THE  EMPLOYER/EMPLOYEE  RELATIONSHIP,  INCLUDING  BUT  NOT  LIMITED  TO,  THE
FOLLOWING CLAIMS:

                           (i) ANY AND ALL  CLAIMS  FOR  WRONGFUL  DISCHARGE  OF
EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT
OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED;

                                      -8-


<PAGE>

NEGLIGENT  OR  INTENTIONAL  INFLICTION  OF  EMOTIONAL  DISTRESS;   NEGLIGENT  OR
INTENTIONAL  MISREPRESENTATION;   NEGLIGENT  OR  INTENTIONAL  INTERFERENCE  WITH
CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;

                           (ii) ANY AND ALL CLAIMS FOR  VIOLATION OF ANY FEDERAL
STATE OR  MUNICIPAL  STATUTE,  INCLUDING,  BUT NOT LIMITED TO,  TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991,  THE AGE  DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR  STANDARDS ACT, THE CALIFORNIA  FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR
CODE SECTION 201, et seq;

                           (iii)  ANY AND ALL  CLAIMS  ARISING  OUT OF ANY OTHER
LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

         11. Miscellaneous Provisions.

                  (a) No Duty to Mitigate.  The Executive  shall not be required
to mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new  employment or in any other  manner),  nor shall any such payment be
reduced by any earnings that the Executive may receive from any other source.

                  (b) Waiver.  No provision of this Agreement shall be modified,
waived or discharged unless the  modification,  waiver or discharge is agreed to
in  writing  and signed by the  Executive  and by an  authorized  officer of the
Company (other than the Executive).  No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

                  (c)  Whole  Agreement.   No  agreements,   representations  or
understandings  (whether oral or written and whether  express or implied)  which
are not expressly set forth in this  Agreement have been made or entered into by
either party with respect to the subject matter hereof.

                  (d) Choice of Law. The validity, interpretation,  construction
and  performance of this Agreement shall be governed by the laws of the State of
California.

                  (e) Severability.  The invalidity or  unenforceability  of any
provision  or  provisions  of this  Agreement  shall not affect the  validity or
enforceability of any other provision  hereof,  which shall remain in full force
and effect.

                  (f) No  Assignment  of  Benefits.  The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment,  either by voluntary or  involuntary  assignment  or by operation of
taw, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process,  and any action in violation of this subsection (f) shall be
void.

                                      -9-


<PAGE>

                  (g)  Employment  Taxes.  All  payments  made  pursuant to this
Agreement  will be subject to  withholding  of applicable  income and employment
taxes.

                  (h)  Assignment by Company.  The Company may assign its rights
under this  Agreement to an  affiliate,  and an affiliate  may assign its rights
under this  Agreement  to another  affiliate  of the Company or to the  Company;
provided,  however,  that no  assignment  shall be made if the net  worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such  assignment,  the term  "Company" when used in a Section of
this Agreement shall mean the corporation that actually employs the Executive.

                  (i)   Counterparts.   This   Agreement   may  be  executed  in
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together will constitute one and the same instrument.

                  IN WITNESS  WHEREOF,  each of the  parties has  executed  this
Agreement,  in the case of the Company by its duly authorized officer, as of the
day and year first above written.


ELECTRONICS FOR IMAGING, INC.                        EXECUTIVE:


/s/ Guy Gecht                                        /s/ Fred Rosenzweig
----------------------------------                   ---------------------------
Chief Executive Officer                              Fred Rosenzweig

                                      -10-



                                                                   Exhibit 10.16

                              EMPLOYMENT AGREEMENT


         This  Employment  Agreement (the  "Agreement") is made and entered into
effective as of March 8, 2000, by and between Eric  Saltzman  (the  "Executive")
and Electronics for Imaging, Inc., a Delaware corporation (the "Company").

                                    RECITALS

         A. It is expected  that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board  of  Directors  of  the  Company  (the  "Board")   recognizes   that  such
consideration  can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities.  The Board has determined that
it is in the best interests of the Company and its  stockholders  to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.

         B. The Board  believes that it is in the best  interests of the Company
and its  stockholders to provide the Executive with an incentive to continue his
employment  and to motivate  the  Executive to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

         C. The Board  believes  that
 it is  imperative to provide the Executive
with certain benefits upon a Change of Control and, under certain circumstances,
upon  termination of the Executive's  full-time  employment in connection with a
Change of Control,  which  benefits are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possibility of a Change
of Control.

         D. Further,  the Board  believes that it is in the best interest of the
Company and its stockholders to provide additional  benefits to the Executive in
the event the  Executive's  employment  terminates  for any reason  other than a
Change in Control.  Such  benefits  are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possible termination of
employment.

         E. To accomplish the foregoing  objectives,  the Board of Directors has
directed the Company,  upon  execution of this  Agreement by the  Executive,  to
agree to the terms provided herein.

         F.  Certain  capitalized  terms used in the  Agreement  are  defined in
Section 6 below.

         In  consideration  of the mutual  covenants  herein  contained,  and in
consideration of the continuing  employment of the Executive by the Company, the
parties agree as follows:


<PAGE>

         1. Duties and Scope of Employment.

                  (a)  Position.  The Company  shall employ the Executive in the
position of Chief  Financial  Officer,  as such  position is defined in terms of
responsibilities  and  compensation  as of the effective date of this Agreement;
provided,  however,  that the Board of  Directors by mutual  agreement  with the
Executive  shall have the right, at any time prior to the occurrence of a Change
of Control,  to revise such  responsibilities  and  compensation.  The Executive
shall  continue to devote his full business  efforts and time to the Company and
its subsidiaries.  The Executive shall comply with and be bound by the Company's
operating policies,  procedures and practices from time to time in effect during
his employment.  During the term of the Executive's employment with the Company,
the Executive shall devote his full-time,  skill and attention to his duties and
responsibilities, and shall perform them faithfully, diligently and competently,
and the  Executive  shall use his best  efforts to further  the  business of the
Company and its affiliated entities. Subject to the Executive's fiduciary duties
to the Company,  this Agreement shall not prohibit the Executive from serving on
the board of directors or any advisory board of other companies.

         2. Base Compensation.

                  (a) Annual  Salary.  The Company  shall pay the  Executive  as
compensation  for his services a base salary at an  annualized  rate that is not
less  than his base  salary  as of the  effective  date of this  Agreement  (the
"Annual  Salary").  The Annual Salary may be subject to annual  increases as the
Board may authorize  from time to time in  connection  with  Executive's  annual
review.  The Annual Salary shall be paid  periodically in accordance with normal
Company payroll  procedures.  The Annual Salary  (together with bonus amounts as
specified in Section 2), and any increases in such  compensation  that the Board
of Directors  may grant from time to time,  is referred to in this  Agreement as
"Base Compensation."

                  (b) Bonus.  In addition to the Annual  Salary,  the  Executive
will be eligible to receive an annual bonus under the Company's  Executive Bonus
Plan as determined by the Board in its discretion.

         3. Executive  Benefits.  The Executive shall be eligible to participate
in the employee benefit plans and executive  compensation programs maintained by
the  Company  applicable  to other  key  executives  of the  Company,  including
(without limitation)  retirement plans,  savings or profit-sharing  plans, stock
option,  incentive or other bonus plans, life, disability,  health, accident and
other insurance programs, paid vacations, and similar plans or programs, subject
in each case to the generally  applicable terms and conditions of the applicable
plan  or  program  in  question  and  to  the  determination  of  any  committee
administering such plan or program. In addition, the Executive shall continue to
be entitled to receive any other  benefits  currently  received by the Executive
such as automobile and car phone allowance benefits.

         4. At-Will Employment.  The Company and the Executive  acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable  law.  If the  Executive's  employment  terminates  for  any  reason,
including,  without  limitation,  any termination prior to and not in connection
with a Change of Control,  the Executive  shall not be entitled to any

                                      -2-


<PAGE>

payments,  benefits,  damages,  awards or compensation other than as provided by
this  Agreement,  or as may  otherwise  be  available  in  accordance  with  the
Company's  established  employee plans and policies at the time of  termination.
The terms of this  Agreement  shall  terminate  upon the earlier of (i) the date
that all obligations of the parties hereunder have been satisfied, or (ii) March
8, 2003,  or (iii)  eighteen  (18) months  after a Change of Control  unless the
Executive's  employment  terminates as a result of Involuntary  or  Constructive
Termination.  A  termination  of the  terms of this  Agreement  pursuant  to the
preceding  sentence  shall be  effective  for all  purposes,  except  that  such
termination  shall not  affect the  payment  or  provision  of  compensation  or
benefits  on account  of a  termination  of  employment  occurring  prior to the
termination of the terms of this Agreement.

         5. Severance Benefits.

                  (a)  Termination  in  Connection  with a  Change  of  Control.
Subject to Section 7 below, if the Company terminates the Executive's employment
at any time  during the period  beginning  upon the  earlier to occur of (i) the
execution of a binding letter of intent regarding a Change of Control,  and (ii)
ninety  (90) days before a Change of Control,  and ending  eighteen  (18) months
after a Change  of  Control,  and the  Executive  signs  and  does not  revoke a
standard  release of claims with the Company  attached hereto as Exhibit A, then
the Executive shall be entitled to receive severance benefits as follows:

                           (i) Involuntary or Constructive  Termination.  If the
Executive's  employment  terminates as a result of Involuntary  or  Constructive
Termination  other than for  Cause,  then the  Executive  shall be  entitled  to
receive  severance pay in an amount equal to two (2) times the Executive's  Base
Compensation  for the year  coinciding  with the  year of  termination,  plus an
amount equal to the bonus the  Executive  would have earned had he been employed
by the  Company  at the  end of  such  year  multiplied  by a  fraction  (x) the
numerator of which is the number of completed  months in that year,  and (y) the
denominator  of which is  twelve  (12)  (the  "Current  Bonus").  Any  severance
payments  except  for the  Current  Bonus to which  the  Executive  is  entitled
pursuant to this Section  shall be paid in a lump sum within thirty (30) days of
the  Executive's  termination.  The  Current  Bonus to which  the  Executive  is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.

                           (ii) Voluntary Resignation; Termination For Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or Constructive  Termination described in subsection 5(a)(i)), or if the Company
terminates the Executive's employment for Cause, then the Executive shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established  under the Company's then existing benefit plans at the time
of such termination.

                           (iii)  Disability;  Death. If the Company  terminates
the Executive's  employment as a result of the Executive's  Disability,  or such
Executive's employment is terminated due to the death of the Executive, then the
Executive or the  Executive's  estate,  as the case may be, shall be entitled to
receive  (i)  severance  pay  in an  amount  equal  to  one-half  (1/2)  of  the
Executive's  Base  Compensation  for  the  year  coinciding  with  the  year  of
termination  plus his Current Bonus,  (ii) in addition to the Executive's  stock
options that were exercisable immediately prior to such

                                      -3-


<PAGE>

termination,  the vesting of  additional  options  shall  accelerate  and become
exercisable  as to that number of shares that would have vested if the Executive
had remained continuously employed for a period of six (6) months following such
termination (and if any of such options vest on an annual basis, the appropriate
credit shall be given as if the vesting accrued monthly), and such options shall
remain  exercisable  for the  period  prescribed  in  Executive's  stock  option
agreements,  and (iii) such other  benefits (if any) as may then be  established
under the Company's then existing  benefit plans at the time of such  Disability
or death.  Any  severance  payments  except for the  Current  Bonus to which the
Executive  is  entitled  pursuant  to this  Section  shall be paid in a lump sum
within  thirty (30) days of the  Executive's  termination.  The Current Bonus to
which the Executive is entitled pursuant to this Section shall be paid in a lump
sum within thirty (30) days of the date that the Company's audit is complete for
such year.

                  (b)  Termination  Apart  from  Change of  Control.  Subject to
Section 7 below,  if the Company  terminates the  Executive's  employment at any
time,  either  before  the  earlier to occur of (i) the  execution  of a binding
letter of intent regarding a Change of Control, and (ii) ninety (90) days before
a Change of Control, or after the 18-month period following a Change of Control,
and the  Executive  signs and does not revoke a standard  release of claims with
the Company  attached  hereto as Exhibit A, then the Executive shall be entitled
to receive severance benefits as follows:

                           (i) Voluntary Resignation;  Termination for Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or  Constructive  Termination),  or if the Company  terminates  the  Executive's
employment for Cause,  then the Executive shall be entitled to receive severance
and any other benefits only as may then be established  under the Company's then
exiting benefit plans at the time of such termination.

                           (ii) Termination other than Voluntary  Resignation or
Termination for Cause. In the event the Executive's employment is terminated for
any reason  (including as a result of the  Executive's  Disability or due to the
death of the Executive)  except for  termination as described in Section 5(b)(i)
above,  then the Executive or the Executive's  estate, as the case may be, shall
be entitled to receive (i) severance pay in an amount equal to one-half (1/2) of
the  Executive's  Base  Compensation  for the year  coinciding  with the year of
termination  plus his  Current  Bonus,  (ii) in addition  to  Executive's  stock
options that were exercisable immediately prior to such termination, the vesting
of additional  options shall accelerate and become  exercisable by the Executive
or the Executive's  estate, as the case may be, as to that number of shares that
would have vested if the  Executive  had  remained  continuously  employed for a
period of six (6) months  following such termination (and if any of such options
vest on an annual basis, the appropriate credit shall be given as if the vesting
accrued  monthly),  and such  options  shall remain  exercisable  for the period
prescribed in Executive's stock option  agreements,  and (iii) the same level of
health (i.e., medical, vision and dental) coverage and benefits as in effect for
the  Executive  on  the  day  immediately   preceding  the  day  of  Executive's
termination of employment; provided, however, that (i) the Executive constitutes
a  qualified  beneficiary,  as defined in Section  4980B(g)(1)  of the  Internal
Revenue  Code of 1986,  as  amended  (the  "Code");  and (ii)  Executive  elects
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), within the time period prescribed pursuant to
COBRA.  The Company shall  continue to provide  Executive  with health  coverage
until the earlier to occur of (i) the date  Executive  is no longer

                                      -4-


<PAGE>

eligible to receive  continuation  coverage  pursuant to COBRA, or (ii) eighteen
(18) months from the termination  date. In addition to the foregoing,  Executive
shall also be paid such other benefits (if any) as may then be established under
the Company's then existing benefit plans at the time of such  termination.  Any
severance  payments  except  for the  Current  Bonus to which the  Executive  is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the Executive's termination. The Current Bonus to which the Executive is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.

                  (c)  Options.  Subject to  Section 7 hereof,  upon a Change of
Control,  the unvested  portion of any stock option held by the Executive  shall
automatically   be   accelerated   and   the   Executive   or  the   Executive's
representative,  as the case may be, shall have the right to exercise all or any
portion  of  such  stock  option,  in  addition  to any  portion  of the  option
exercisable  prior  to  the  Change  of  Control  and  in  accordance  with  the
Executive's stock option agreement.

         6.  Definition  of  Terms.  The  following  terms  referred  to in this
Agreement shall have the following meanings:

                  (a)  Cause.  "Cause"  shall  mean  (i)  any  act  of  personal
dishonesty taken by the Executive in connection with his  responsibilities as an
employee  and  intended  to result in  substantial  personal  enrichment  of the
Executive,  (ii)  committing a felony or an act of fraud  against the Company or
its  affiliates,  and  (iii)  acts  by  the  Executive  which  constitute  gross
misconduct, are injurious to the Company, and which are demonstrably willful and
deliberate  on the  Executive's  part  after  there  has been  delivered  to the
Executive a written  demand of  cessation  of such acts from the  Company  which
describes the basis for the  Company's  belief that the Executive has engaged or
committed such acts.

                  (b)  Change of  Control.  "Change of  Control"  shall mean the
occurrence of any of the following events:

                           (i) Any  "person"  (as such term is used in  Sections
13(d) and 14(d) of the Securities  Exchange Act of 1934, as amended) becomes the
"beneficial  owner"  (as  defined in Rule 13d-3  under  said Act),  directly  or
indirectly,  of  securities of the Company  representing  fifty percent (50%) or
more of the total voting power  represented  by the Company's  then  outstanding
voting securities; or

                           (ii) A  change  in the  composition  of the  Board of
Directors  of the Company  occurring  within a two-year  period,  as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors"  shall mean  directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election,  to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent  Directors at the time of such  election or nomination  (but shall
not include an individual  whose election or nomination is in connection with an
actual or threatened  proxy contest relating to the election of directors to the
Company); or

                                      -5-


<PAGE>

                           (iii) A merger or  consolidation  of the Company with
any other corporation,  other than a merger or consolidation  which would result
in the voting  securities of the Company  outstanding  immediately prior thereto
continuing to represent  (either by remaining  outstanding or by being converted
into voting  securities of the surviving entity) at least sixty percent (60%) of
the total voting power  represented  by the voting  securities of the Company or
such   surviving   entity   outstanding   immediately   after  such   merger  or
consolidation.

                  (c) Involuntary or Constructive  Termination.  "Involuntary or
Constructive Termination" shall mean (i) without the Executive's express written
consent,  the  assignment  to the  Executive  of any  duties or the  significant
reduction of the Executive's  duties,  either of which is inconsistent  with the
Executive's position with the Company and responsibilities in effect immediately
prior to such assignment, or the removal of the Executive from such position and
responsibilities;  (ii)  without the  Executive's  express  written  consent,  a
substantial  reduction,  without good business  reasons,  of the  facilities and
perquisites  (including  office space and  location)  available to the Executive
immediately  prior to such  reduction;  (iii) a reduction  by the Company in the
Base  Compensation  of the  Executive  as in  effect  immediately  prior to such
reduction;  (iv) a  material  reduction  by the  Company in the kind or level of
employee  benefits to which the Executive is entitled  immediately prior to such
reduction  with the result  that the  Executive's  overall  benefits  package is
significantly  reduced;  (v) the  relocation of the Executive to a facility or a
location more than 30 miles from the Executive's then present location,  without
the Executive's express written consent;  (vi) any purported  termination of the
Executive by the Company which is not effected for  Disability or for Cause,  or
any purported  termination  for which the grounds relied upon are not valid;  or
(vii) the failure of the Company to obtain the  assumption of this  agreement by
any successors contemplated in Section 8 below.

                  (d) Disability. "Disability" shall mean that the Executive has
been  unable to perform  his duties  under this  Agreement  as the result of his
incapacity due to physical or mental illness,  and such  inability,  at least 26
weeks after its  commencement,  is  determined  to be total and  permanent  by a
physician  selected  by  the  Company  or its  insurers  and  acceptable  to the
Executive  or  the  Executive's  legal  representative  (such  agreement  as  to
acceptability  not to be  unreasonably  withheld).  Termination  resulting  from
Disability  may only be effected  after at least 30 days' written  notice by the
Company of its intention to terminate the Executive's  employment.  In the event
that the Executive  resumes the performance of  substantially  all of his duties
hereunder before the termination of his employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.

         7.  Limitation  on Payments.  In the event that the severance and other
benefits  provided for in this  Agreement or otherwise  payable to the Executive
(i) constitute  "parachute  payments"  within the meaning of Section 280G of the
Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive's benefits under this Agreement shall be
either:

                  (i) delivered in full, or

                                      -6-


<PAGE>

                  (ii)  delivered as to such lesser extent which would result in
no portion of such benefits being subject to the Excise Tax,

                  whichever of the  foregoing  amounts,  taking into account the
applicable federal,  state and local income taxes and the Excise Tax, results in
the receipt by  Executive  on an  after-tax  basis,  of the  greatest  amount of
benefits,  notwithstanding  that all or some  portion  of such  benefits  may be
taxable under Section 4999 of the Code.

         Unless the Company and the Executive  otherwise  agree in writing,  any
determination  required under this Section 7(a) shall be made in writing in good
faith  by the  accounting  firm  serving  as the  Company's  independent  public
accountants  immediately prior to the Change of Control (the "Accountants").  In
the event of a reduction in benefits hereunder, the Executive shall be given the
choice of which  benefits to reduce.  For  purposes  of making the  calculations
required by this Section 7(a), the Accountants  may make reasonable  assumptions
and approximations concerning applicable taxes and may rely on reasonable,  good
faith  interpretations  concerning the  application of the Code. The Company and
the Executive shall furnish to the Accountants such information and documents as
the  Accountants may reasonably  request in order to make a determination  under
this Section.  The Company shall bear all costs the  Accountants  may reasonably
incur in connection with any calculations contemplated by this Section 7(a).

         8. Successors.

                  (a)  Company's  Successors.   Any  successor  to  the  Company
(whether   direct  or  indirect   and  whether  by  purchase,   lease,   merger,
consolidation,  liquidation  or  otherwise) to all or  substantially  all of the
Company's  business and assets shall assume the obligations under this Agreement
and agree expressly to perform the obligations  under this Agreement in the same
manner and to the same extent as the Company  would be required to perform  such
obligations  in the  absence  of a  succession.  For  all  purposes  under  this
Agreement,  the term  "Company"  shall  include any  successor to the  Company's
business  and assets  which  executes  and  delivers  the  assumption  agreement
described in this  subsection  (a) or which  becomes  bound by the terms of this
Agreement by operation of law.

                  (b)  Executive's  Successors.  The terms of this Agreement and
ail rights of the  Executive  hereunder  shall  inure to the  benefit of, and be
enforceable by, the Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, devisees and legatees.

         9. Notice.

                  (a) General. Notices and all other communications contemplated
by this  Agreement  shall be in  writing  and  shall be deemed to have been duly
given when personally  delivered or when mailed by U.S.  registered or certified
mail,  return  receipt  requested  and  postage  prepaid.  In  the  case  of the
Executive, mailed notices shall be addressed to him at the home address which he
most  recently  communicated  to the  Company  in  writing.  In the  case of the
Company,  mailed notices shall be addressed to its corporate  headquarters,  and
ail notices shall be directed to the attention of its Secretary.

                                      -7-


<PAGE>

                  (b) Notice of  Termination.  Any  termination  by the  Company
shall be communicated by a notice of termination to the other party hereto given
in accordance with Section 9 of this  Agreement.  Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable  detail  the facts and  circumstances  claimed to provide a basis for
termination under the provision so indicated,  and shall specify the termination
date (which shall be not more than 15 days after the giving of such notice). The
failure by the Executive to include in the notice any fact or circumstance which
contributes to a showing of Involuntary or  Constructive  Termination  shall not
waive any right of the  Executive  hereunder  or  preclude  the  Executive  from
asserting such fact or circumstance in enforcing his rights hereunder.

         10. Arbitration.

                  (a) Any dispute or controversy arising out of, relating to, or
in  connection   with  this   Agreement,   or  the   interpretation,   validity,
construction,  performance,  breach, or termination thereof, shall be settled by
binding  arbitration to be held in California,  in accordance  with the National
Rules for the  Resolution of Employment  Disputes then in effect of the American
Arbitration  Association (the "Rules").  The arbitrator may grant injunctions or
other relief in such  dispute or  controversy.  The  decision of the  arbitrator
shall be final,  conclusive  and  binding  on the  parties  to the  arbitration.
Judgment  may be  entered  on the  arbitrator's  decision  in any  court  having
jurisdiction.

                  (b) The arbitrator(s) shall apply California law to the merits
of any  dispute or claim,  without  reference  to  conflicts  of law rules.  The
arbitration  proceedings shall be governed by federal arbitration law and by the
Rules,  without reference to state arbitration law. Executive hereby consents to
the personal  jurisdiction of the state and federal courts located in California
for any action or  proceeding  arising  from or  relating to this  Agreement  or
relating to any arbitration in which the parties are participants.

                  (c)  Executive   understands  that  nothing  in  this  Section
modifies Executive's at-will employment status.  Either Executive or the Company
can terminate the employment relationship at any time, with or without Cause.

                  (d) EXECUTIVE  HAS READ AND  UNDERSTANDS  THIS SECTION,  WHICH
DISCUSSES ARBITRATION.  EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING
OUT  OF,   RELATING  TO,  OR  IN  CONNECTION   WITH  THIS   AGREEMENT,   OR  THE
INTERPRETATION,  VALIDITY,  CONSTRUCTION,  PERFORMANCE,  BREACH  OR  TERMINATION
THEREOF TO BINDING  ARBITRATION,  CONSTITUTES A WAIVER OF EMPLOYEE'S  RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS
OF THE  EMPLOYER/EMPLOYEE  RELATIONSHIP,  INCLUDING  BUT  NOT  LIMITED  TO,  THE
FOLLOWING CLAIMS:

                           (i) ANY AND ALL  CLAIMS  FOR  WRONGFUL  DISCHARGE  OF
EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT
OF GOOD  FAITH  AND  FAIR  DEALING,  BOTH  EXPRESS  AND  IMPLIED;

                                      -8-


<PAGE>

NEGLIGENT  OR  INTENTIONAL  INFLICTION  OF  EMOTIONAL  DISTRESS;   NEGLIGENT  OR
INTENTIONAL  MISREPRESENTATION;   NEGLIGENT  OR  INTENTIONAL  INTERFERENCE  WITH
CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;

                           (ii) ANY AND ALL CLAIMS FOR  VIOLATION OF ANY FEDERAL
STATE OR  MUNICIPAL  STATUTE,  INCLUDING,  BUT NOT LIMITED TO,  TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991,  THE AGE  DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR  STANDARDS ACT, THE CALIFORNIA  FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR
CODE SECTION 201, et seq;

                           (iii)  ANY AND ALL  CLAIMS  ARISING  OUT OF ANY OTHER
LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

         11. Miscellaneous Provisions.

                  (a) No Duty to Mitigate.  The Executive  shall not be required
to mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new  employment or in any other  manner),  nor shall any such payment be
reduced by any earnings that the Executive may receive from any other source.

                  (b) Waiver.  No provision of this Agreement shall be modified,
waived or discharged unless the  modification,  waiver or discharge is agreed to
in  writing  and signed by the  Executive  and by an  authorized  officer of the
Company (other than the Executive).  No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

                  (c)  Whole  Agreement.   No  agreements,   representations  or
understandings  (whether oral or written and whether  express or implied)  which
are not expressly set forth in this  Agreement have been made or entered into by
either party with respect to the subject matter hereof.

                  (d) Choice of Law. The validity, interpretation,  construction
and  performance of this Agreement shall be governed by the laws of the State of
California.

                  (e) Severability.  The invalidity or  unenforceability  of any
provision  or  provisions  of this  Agreement  shall not affect the  validity or
enforceability of any other provision  hereof,  which shall remain in full force
and effect.

                  (f) No  Assignment  of  Benefits.  The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment,  either by voluntary or  involuntary  assignment  or by operation of
taw, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process,  and any action in violation of this subsection (f) shall be
void.

                                      -9-


<PAGE>

                  (g)  Employment  Taxes.  All  payments  made  pursuant to this
Agreement  will be subject to  withholding  of applicable  income and employment
taxes.

                  (h)  Assignment by Company.  The Company may assign its rights
under this  Agreement to an  affiliate,  and an affiliate  may assign its rights
under this  Agreement  to another  affiliate  of the Company or to the  Company;
provided,  however,  that no  assignment  shall be made if the net  worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such  assignment,  the term  "Company" when used in a Section of
this Agreement shall mean the corporation that actually employs the Executive.

                  (i)   Counterparts.   This   Agreement   may  be  executed  in
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together will constitute one and the same instrument.

                  IN WITNESS  WHEREOF,  each of the  parties has  executed  this
Agreement,  in the case of the Company by its duly authorized officer, as of the
day and year first above written.


ELECTRONICS FOR IMAGING, INC.                        EXECUTIVE:


/s/ Guy Gecht                                        /s/ Eric Saltzman
-----------------------------------                  ---------------------------
Chief Executive Officer                              Eric Saltzman

                                      -10-




                                                                   Exhibit 10.17

                              EMPLOYMENT AGREEMENT


         This  Employment  Agreement (the  "Agreement") is made and entered into
effective as of March 8, 2000,  by and between Jan Smith (the  "Executive")  and
Electronics for Imaging, Inc., a Delaware corporation (the "Company").

                                    RECITALS

         A. It is expected  that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board  of  Directors  of  the  Company  (the  "Board")   recognizes   that  such
consideration  can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities.  The Board has determined that
it is in the best interests of the Company and its  stockholders  to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.

         B. The Board  believes that it is in the best  interests of the Company
and its  stockholders to provide the Executive with an incentive to continue her
employment  and to motivate  the  Executive to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

         C. The Board  believes  that it
 is  imperative to provide the Executive
with certain benefits upon a Change of Control and, under certain circumstances,
upon  termination of the Executive's  full-time  employment in connection with a
Change of Control,  which  benefits are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possibility of a Change
of Control.

         D. Further,  the Board  believes that it is in the best interest of the
Company and its stockholders to provide additional  benefits to the Executive in
the event the  Executive's  employment  terminates  for any reason  other than a
Change in Control.  Such  benefits  are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possible termination of
employment.

         E. To accomplish the foregoing  objectives,  the Board of Directors has
directed the Company,  upon  execution of this  Agreement by the  Executive,  to
agree to the terms provided herein.

         F.  Certain  capitalized  terms used in the  Agreement  are  defined in
Section 6 below.

         In  consideration  of the mutual  covenants  herein  contained,  and in
consideration of the continuing  employment of the Executive by the Company, the
parties agree as follows:


<PAGE>

         1. Duties and Scope of Employment.

                  (a)  Position.  The Company  shall employ the Executive in the
position of Vice President of Human Resources and Corporate  Communications,  as
such position is defined in terms of responsibilities and compensation as of the
effective date of this Agreement; provided, however, that the Board of Directors
by mutual  agreement with the Executive  shall have the right, at any time prior
to the occurrence of a Change of Control,  to revise such  responsibilities  and
compensation.  The Executive shall continue to devote her full business  efforts
and time to the Company and its  subsidiaries.  The Executive  shall comply with
and be bound by the Company's operating policies,  procedures and practices from
time to time in effect during her employment. During the term of the Executive's
employment with the Company, the Executive shall devote her full-time, skill and
attention to her duties and responsibilities, and shall perform them faithfully,
diligently  and  competently,  and the  Executive  shall use her best efforts to
further the business of the Company and its affiliated entities.  Subject to the
Executive's  fiduciary duties to the Company,  this Agreement shall not prohibit
the  Executive  from serving on the board of directors or any advisory  board of
other companies.

         2. Base Compensation.

                  (a) Annual  Salary.  The Company  shall pay the  Executive  as
compensation  for her services a base salary at an  annualized  rate that is not
less  than her base  salary  as of the  effective  date of this  Agreement  (the
"Annual  Salary").  The Annual Salary may be subject to annual  increases as the
Board may authorize  from time to time in  connection  with  Executive's  annual
review.  The Annual Salary shall be paid  periodically in accordance with normal
Company payroll  procedures.  The Annual Salary  (together with bonus amounts as
specified in Section 2), and any increases in such  compensation  that the Board
of Directors  may grant from time to time,  is referred to in this  Agreement as
"Base Compensation."

                  (b) Bonus.  In addition to the Annual  Salary,  the  Executive
will be eligible to receive an annual bonus under the Company's  Executive Bonus
Plan as determined by the Board in its discretion.

         3. Executive  Benefits.  The Executive shall be eligible to participate
in the employee benefit plans and executive  compensation programs maintained by
the  Company  applicable  to other  key  executives  of the  Company,  including
(without limitation)  retirement plans,  savings or profit-sharing  plans, stock
option,  incentive or other bonus plans, life, disability,  health, accident and
other insurance programs, paid vacations, and similar plans or programs, subject
in each case to the generally  applicable terms and conditions of the applicable
plan  or  program  in  question  and  to  the  determination  of  any  committee
administering such plan or program. In addition, the Executive shall continue to
be entitled to receive any other  benefits  currently  received by the Executive
such as automobile and car phone allowance benefits.

         4. At-Will Employment.  The Company and the Executive  acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable  law.  If the  Executive's  employment  terminates  for  any  reason,
including,  without  limitation,  any termination

                                      -2-


<PAGE>

prior to and not in connection with a Change of Control, the Executive shall not
be entitled to any payments,  benefits,  damages,  awards or compensation  other
than  as  provided  by this  Agreement,  or as may  otherwise  be  available  in
accordance  with the Company's  established  employee  plans and policies at the
time of  termination.  The  terms of this  Agreement  shall  terminate  upon the
earlier of (i) the date that all obligations of the parties  hereunder have been
satisfied,  or (ii) March 8, 2003, or (iii)  eighteen (18) months after a Change
of  Control  unless  the  Executive's  employment  terminates  as  a  result  of
Involuntary  or  Constructive  Termination.  A termination  of the terms of this
Agreement  pursuant  to the  preceding  sentence  shall  be  effective  for  all
purposes, except that such termination shall not affect the payment or provision
of compensation or benefits on account of a termination of employment  occurring
prior to the termination of the terms of this Agreement.

         5. Severance Benefits.

                  (a)  Termination  in  Connection  with a  Change  of  Control.
Subject to Section 7 below, if the Company terminates the Executive's employment
at any time  during the period  beginning  upon the  earlier to occur of (i) the
execution of a binding letter of intent regarding a Change of Control,  and (ii)
ninety  (90) days before a Change of Control,  and ending  eighteen  (18) months
after a Change  of  Control,  and the  Executive  signs  and  does not  revoke a
standard  release of claims with the Company  attached hereto as Exhibit A, then
the Executive shall be entitled to receive severance benefits as follows:

                           (i) Involuntary or Constructive  Termination.  If the
Executive's  employment  terminates as a result of Involuntary  or  Constructive
Termination  other than for  Cause,  then the  Executive  shall be  entitled  to
receive  severance pay in an amount equal to two (2) times the Executive's  Base
Compensation  for the year  coinciding  with the  year of  termination,  plus an
amount equal to the bonus the  Executive  would have earned had he been employed
by the  Company  at the  end of  such  year  multiplied  by a  fraction  (x) the
numerator of which is the number of completed  months in that year,  and (y) the
denominator  of which is  twelve  (12)  (the  "Current  Bonus").  Any  severance
payments  except  for the  Current  Bonus to which  the  Executive  is  entitled
pursuant to this Section  shall be paid in a lump sum within thirty (30) days of
the  Executive's  termination.  The  Current  Bonus to which  the  Executive  is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.

                           (ii) Voluntary Resignation; Termination For Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or Constructive  Termination described in subsection 5(a)(i)), or if the Company
terminates the Executive's employment for Cause, then the Executive shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established  under the Company's then existing benefit plans at the time
of such termination.

                           (iii)  Disability;  Death. If the Company  terminates
the Executive's  employment as a result of the Executive's  Disability,  or such
Executive's employment is terminated due to the death of the Executive, then the
Executive or the  Executive's  estate,  as the case may be, shall be entitled to
receive  (i)  severance  pay  in an  amount  equal  to  one-half  (1/2)  of  the
Executive's  Base  Compensation  for  the  year  coinciding  with  the  year  of
termination  plus her Current Bonus,  (ii)

                                      -3-


<PAGE>

in addition to the Executive's  stock options that were exercisable  immediately
prior to such  termination,  the vesting of additional  options shall accelerate
and become exercisable as to that number of shares that would have vested if the
Executive  had  remained  continuously  employed  for a period of six (6) months
following such  termination (and if any of such options vest on an annual basis,
the appropriate  credit shall be given as if the vesting accrued  monthly),  and
such options shall remain  exercisable for the period  prescribed in Executive's
stock option  agreements,  and (iii) such other benefits (if any) as may then be
established  under the Company's then existing benefit plans at the time of such
Disability  or death.  Any  severance  payments  except for the Current Bonus to
which the Executive is entitled pursuant to this Section shall be paid in a lump
sum within thirty (30) days of the Executive's termination. The Current Bonus to
which the Executive is entitled pursuant to this Section shall be paid in a lump
sum within thirty (30) days of the date that the Company's audit is complete for
such year.

                  (b)  Termination  Apart  from  Change of  Control.  Subject to
Section 7 below,  if the Company  terminates the  Executive's  employment at any
time,  either  before  the  earlier to occur of (i) the  execution  of a binding
letter of intent regarding a Change of Control, and (ii) ninety (90) days before
a Change of Control, or after the 18-month period following a Change of Control,
and the  Executive  signs and does not revoke a standard  release of claims with
the Company  attached  hereto as Exhibit A, then the Executive shall be entitled
to receive severance benefits as follows:

                           (i) Voluntary Resignation;  Termination for Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or  Constructive  Termination),  or if the Company  terminates  the  Executive's
employment for Cause,  then the Executive shall be entitled to receive severance
and any other benefits only as may then be established  under the Company's then
exiting benefit plans at the time of such termination.

                           (ii) Termination other than Voluntary  Resignation or
Termination for Cause. In the event the Executive's employment is terminated for
any reason  (including as a result of the  Executive's  Disability or due to the
death of the Executive)  except for  termination as described in Section 5(b)(i)
above,  then the Executive or the Executive's  estate, as the case may be, shall
be entitled to receive (i) severance pay in an amount equal to one-half (1/2) of
the  Executive's  Base  Compensation  for the year  coinciding  with the year of
termination  plus her  Current  Bonus,  (ii) in addition  to  Executive's  stock
options that were exercisable immediately prior to such termination, the vesting
of additional  options shall accelerate and become  exercisable by the Executive
or the Executive's  estate, as the case may be, as to that number of shares that
would have vested if the  Executive  had  remained  continuously  employed for a
period of six (6) months  following such termination (and if any of such options
vest on an annual basis, the appropriate credit shall be given as if the vesting
accrued  monthly),  and such  options  shall remain  exercisable  for the period
prescribed in Executive's stock option  agreements,  and (iii) the same level of
health (i.e., medical, vision and dental) coverage and benefits as in effect for
the  Executive  on  the  day  immediately   preceding  the  day  of  Executive's
termination of employment; provided, however, that (i) the Executive constitutes
a  qualified  beneficiary,  as defined in Section  4980B(g)(1)  of the  Internal
Revenue  Code of 1986,  as  amended  (the  "Code");  and (ii)  Executive  elects
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), within the time period prescribed pursuant to
COBRA.  The Company shall  continue to provide

                                      -4-


<PAGE>

Executive  with  health  coverage  until  the  earlier  to occur of (i) the date
Executive is no longer  eligible to receive  continuation  coverage  pursuant to
COBRA,  or (ii) eighteen (18) months from the  termination  date. In addition to
the foregoing,  Executive shall also be paid such other benefits (if any) as may
then be established  under the Company's then existing benefit plans at the time
of such  termination.  Any  severance  payments  except for the Current Bonus to
which the Executive is entitled pursuant to this Section shall be paid in a lump
sum within thirty (30) days of the Executive's termination. The Current Bonus to
which the Executive is entitled pursuant to this Section shall be paid in a lump
sum within thirty (30) days of the date that the Company's audit is complete for
such year.

                  (c)  Options.  Subject to  Section 7 hereof,  upon a Change of
Control,  the unvested  portion of any stock option held by the Executive  shall
automatically   be   accelerated   and   the   Executive   or  the   Executive's
representative,  as the case may be, shall have the right to exercise all or any
portion  of  such  stock  option,  in  addition  to any  portion  of the  option
exercisable  prior  to  the  Change  of  Control  and  in  accordance  with  the
Executive's stock option agreement.

         6.  Definition  of  Terms.  The  following  terms  referred  to in this
Agreement shall have the following meanings:

                  (a)  Cause.  "Cause"  shall  mean  (i)  any  act  of  personal
dishonesty taken by the Executive in connection with her  responsibilities as an
employee  and  intended  to result in  substantial  personal  enrichment  of the
Executive,  (ii)  committing a felony or an act of fraud  against the Company or
its  affiliates,  and  (iii)  acts  by  the  Executive  which  constitute  gross
misconduct, are injurious to the Company, and which are demonstrably willful and
deliberate  on the  Executive's  part  after  there  has been  delivered  to the
Executive a written  demand of  cessation  of such acts from the  Company  which
describes the basis for the  Company's  belief that the Executive has engaged or
committed such acts.

                  (b)  Change of  Control.  "Change of  Control"  shall mean the
occurrence of any of the following events:

                           (i) Any  "person"  (as such term is used in  Sections
13(d) and 14(d) of the Securities  Exchange Act of 1934, as amended) becomes the
"beneficial  owner"  (as  defined in Rule 13d-3  under  said Act),  directly  or
indirectly,  of  securities of the Company  representing  fifty percent (50%) or
more of the total voting power  represented  by the Company's  then  outstanding
voting securities; or

                           (ii) A  change  in the  composition  of the  Board of
Directors  of the Company  occurring  within a two-year  period,  as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors"  shall mean  directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election,  to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent  Directors at the time of such  election or nomination  (but shall
not include an individual  whose election or nomination is in connection with an
actual or threatened  proxy contest relating to the election of directors to the
Company); or

                                      -5-


<PAGE>

                           (iii) A merger or  consolidation  of the Company with
any other corporation,  other than a merger or consolidation  which would result
in the voting  securities of the Company  outstanding  immediately prior thereto
continuing to represent  (either by remaining  outstanding or by being converted
into voting  securities of the surviving entity) at least sixty percent (60%) of
the total voting power  represented  by the voting  securities of the Company or
such   surviving   entity   outstanding   immediately   after  such   merger  or
consolidation.

                  (c) Involuntary or Constructive  Termination.  "Involuntary or
Constructive Termination" shall mean (i) without the Executive's express written
consent,  the  assignment  to the  Executive  of any  duties or the  significant
reduction of the Executive's  duties,  either of which is inconsistent  with the
Executive's position with the Company and responsibilities in effect immediately
prior to such assignment, or the removal of the Executive from such position and
responsibilities;  (ii)  without the  Executive's  express  written  consent,  a
substantial  reduction,  without good business  reasons,  of the  facilities and
perquisites  (including  office space and  location)  available to the Executive
immediately  prior to such  reduction;  (iii) a reduction  by the Company in the
Base  Compensation  of the  Executive  as in  effect  immediately  prior to such
reduction;  (iv) a  material  reduction  by the  Company in the kind or level of
employee  benefits to which the Executive is entitled  immediately prior to such
reduction  with the result  that the  Executive's  overall  benefits  package is
significantly  reduced;  (v) the  relocation of the Executive to a facility or a
location more than 30 miles from the Executive's then present location,  without
the Executive's express written consent;  (vi) any purported  termination of the
Executive by the Company which is not effected for  Disability or for Cause,  or
any purported  termination  for which the grounds relied upon are not valid;  or
(vii) the failure of the Company to obtain the  assumption of this  agreement by
any successors contemplated in Section 8 below.

                  (d) Disability. "Disability" shall mean that the Executive has
been  unable to perform  her duties  under this  Agreement  as the result of her
incapacity due to physical or mental illness,  and such  inability,  at least 26
weeks after its  commencement,  is  determined  to be total and  permanent  by a
physician  selected  by  the  Company  or its  insurers  and  acceptable  to the
Executive  or  the  Executive's  legal  representative  (such  agreement  as  to
acceptability  not to be  unreasonably  withheld).  Termination  resulting  from
Disability  may only be effected  after at least 30 days' written  notice by the
Company of its intention to terminate the Executive's  employment.  In the event
that the Executive  resumes the performance of  substantially  all of her duties
hereunder before the termination of her employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.

         7.  Limitation  on Payments.  In the event that the severance and other
benefits  provided for in this  Agreement or otherwise  payable to the Executive
(i) constitute  "parachute  payments"  within the meaning of Section 280G of the
Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive's benefits under this Agreement shall be
either:

                  (i) delivered in full, or

                                      -6-


<PAGE>

                  (ii)  delivered as to such lesser extent which would result in
no portion of such benefits being subject to the Excise Tax,

                  whichever of the  foregoing  amounts,  taking into account the
applicable federal,  state and local income taxes and the Excise Tax, results in
the receipt by  Executive  on an  after-tax  basis,  of the  greatest  amount of
benefits,  notwithstanding  that all or some  portion  of such  benefits  may be
taxable under Section 4999 of the Code.

         Unless the Company and the Executive  otherwise  agree in writing,  any
determination  required under this Section 7(a) shall be made in writing in good
faith  by the  accounting  firm  serving  as the  Company's  independent  public
accountants  immediately prior to the Change of Control (the "Accountants").  In
the event of a reduction in benefits hereunder, the Executive shall be given the
choice of which  benefits to reduce.  For  purposes  of making the  calculations
required by this Section 7(a), the Accountants  may make reasonable  assumptions
and approximations concerning applicable taxes and may rely on reasonable,  good
faith  interpretations  concerning the  application of the Code. The Company and
the Executive shall furnish to the Accountants such information and documents as
the  Accountants may reasonably  request in order to make a determination  under
this Section.  The Company shall bear all costs the  Accountants  may reasonably
incur in connection with any calculations contemplated by this Section 7(a).

         8. Successors.

                  (a)  Company's  Successors.   Any  successor  to  the  Company
(whether   direct  or  indirect   and  whether  by  purchase,   lease,   merger,
consolidation,  liquidation  or  otherwise) to all or  substantially  all of the
Company's  business and assets shall assume the obligations under this Agreement
and agree expressly to perform the obligations  under this Agreement in the same
manner and to the same extent as the Company  would be required to perform  such
obligations  in the  absence  of a  succession.  For  all  purposes  under  this
Agreement,  the term  "Company"  shall  include any  successor to the  Company's
business  and assets  which  executes  and  delivers  the  assumption  agreement
described in this  subsection  (a) or which  becomes  bound by the terms of this
Agreement by operation of law.

                  (b)  Executive's  Successors.  The terms of this Agreement and
ail rights of the  Executive  hereunder  shall  inure to the  benefit of, and be
enforceable by, the Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, devisees and legatees.

         9. Notice.

                  (a) General. Notices and all other communications contemplated
by this  Agreement  shall be in  writing  and  shall be deemed to have been duly
given when personally  delivered or when mailed by U.S.  registered or certified
mail,  return  receipt  requested  and  postage  prepaid.  In  the  case  of the
Executive, mailed notices shall be addressed to her at the home address which he
most  recently  communicated  to the  Company  in  writing.  In the  case of the
Company,  mailed notices shall be addressed to its corporate  headquarters,  and
ail notices shall be directed to the attention of its Secretary.

                                      -7-


<PAGE>

                  (b) Notice of  Termination.  Any  termination  by the  Company
shall be communicated by a notice of termination to the other party hereto given
in accordance with Section 9 of this  Agreement.  Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable  detail  the facts and  circumstances  claimed to provide a basis for
termination under the provision so indicated,  and shall specify the termination
date (which shall be not more than 15 days after the giving of such notice). The
failure by the Executive to include in the notice any fact or circumstance which
contributes to a showing of Involuntary or  Constructive  Termination  shall not
waive any right of the  Executive  hereunder  or  preclude  the  Executive  from
asserting such fact or circumstance in enforcing her rights hereunder.

         10. Arbitration.

                  (a) Any dispute or controversy arising out of, relating to, or
in  connection   with  this   Agreement,   or  the   interpretation,   validity,
construction,  performance,  breach, or termination thereof, shall be settled by
binding  arbitration to be held in California,  in accordance  with the National
Rules for the  Resolution of Employment  Disputes then in effect of the American
Arbitration  Association (the "Rules").  The arbitrator may grant injunctions or
other relief in such  dispute or  controversy.  The  decision of the  arbitrator
shall be final,  conclusive  and  binding  on the  parties  to the  arbitration.
Judgment  may be  entered  on the  arbitrator's  decision  in any  court  having
jurisdiction.

                  (b) The arbitrator(s) shall apply California law to the merits
of any  dispute or claim,  without  reference  to  conflicts  of law rules.  The
arbitration  proceedings shall be governed by federal arbitration law and by the
Rules,  without reference to state arbitration law. Executive hereby consents to
the personal  jurisdiction of the state and federal courts located in California
for any action or  proceeding  arising  from or  relating to this  Agreement  or
relating to any arbitration in which the parties are participants.

                  (c)  Executive   understands  that  nothing  in  this  Section
modifies Executive's at-will employment status.  Either Executive or the Company
can terminate the employment relationship at any time, with or without Cause.

                  (d) EXECUTIVE  HAS READ AND  UNDERSTANDS  THIS SECTION,  WHICH
DISCUSSES ARBITRATION.  EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING
OUT  OF,   RELATING  TO,  OR  IN  CONNECTION   WITH  THIS   AGREEMENT,   OR  THE
INTERPRETATION,  VALIDITY,  CONSTRUCTION,  PERFORMANCE,  BREACH  OR  TERMINATION
THEREOF TO BINDING  ARBITRATION,  CONSTITUTES A WAIVER OF EMPLOYEE'S  RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS
OF THE  EMPLOYER/EMPLOYEE  RELATIONSHIP,  INCLUDING  BUT  NOT  LIMITED  TO,  THE
FOLLOWING CLAIMS:

                           (i) ANY AND ALL  CLAIMS  FOR  WRONGFUL  DISCHARGE  OF
EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT
OF GOOD  FAITH  AND  FAIR  DEALING,  BOTH  EXPRESS  AND  IMPLIED;

                                      -8-


<PAGE>

NEGLIGENT  OR  INTENTIONAL  INFLICTION  OF  EMOTIONAL  DISTRESS;   NEGLIGENT  OR
INTENTIONAL  MISREPRESENTATION;   NEGLIGENT  OR  INTENTIONAL  INTERFERENCE  WITH
CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;

                           (ii) ANY AND ALL CLAIMS FOR  VIOLATION OF ANY FEDERAL
STATE OR  MUNICIPAL  STATUTE,  INCLUDING,  BUT NOT LIMITED TO,  TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991,  THE AGE  DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR  STANDARDS ACT, THE CALIFORNIA  FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR
CODE SECTION 201, et seq;

                           (iii)  ANY AND ALL  CLAIMS  ARISING  OUT OF ANY OTHER
LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

         11. Miscellaneous Provisions.

                  (a) No Duty to Mitigate.  The Executive  shall not be required
to mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new  employment or in any other  manner),  nor shall any such payment be
reduced by any earnings that the Executive may receive from any other source.

                  (b) Waiver.  No provision of this Agreement shall be modified,
waived or discharged unless the  modification,  waiver or discharge is agreed to
in  writing  and signed by the  Executive  and by an  authorized  officer of the
Company (other than the Executive).  No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

                  (c)  Whole  Agreement.   No  agreements,   representations  or
understandings  (whether oral or written and whether  express or implied)  which
are not expressly set forth in this  Agreement have been made or entered into by
either party with respect to the subject matter hereof.

                  (d) Choice of Law. The validity, interpretation,  construction
and  performance of this Agreement shall be governed by the laws of the State of
California.

                  (e) Severability.  The invalidity or  unenforceability  of any
provision  or  provisions  of this  Agreement  shall not affect the  validity or
enforceability of any other provision  hereof,  which shall remain in full force
and effect.

                  (f) No  Assignment  of  Benefits.  The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment,  either by voluntary or  involuntary  assignment  or by operation of
taw, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process,  and any action in violation of this subsection (f) shall be
void.

                                      -9-


<PAGE>

                  (g)  Employment  Taxes.  All  payments  made  pursuant to this
Agreement  will be subject to  withholding  of applicable  income and employment
taxes.

                  (h)  Assignment by Company.  The Company may assign its rights
under this  Agreement to an  affiliate,  and an affiliate  may assign its rights
under this  Agreement  to another  affiliate  of the Company or to the  Company;
provided,  however,  that no  assignment  shall be made if the net  worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such  assignment,  the term  "Company" when used in a Section of
this Agreement shall mean the corporation that actually employs the Executive.

                  (i)   Counterparts.   This   Agreement   may  be  executed  in
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together will constitute one and the same instrument.

                  IN WITNESS  WHEREOF,  each of the  parties has  executed  this
Agreement,  in the case of the Company by its duly authorized officer, as of the
day and year first above written.


ELECTRONICS FOR IMAGING, INC.                        EXECUTIVE:


/s/ Guy Gecht                                        /s/ Jan Smith
------------------------------------                 ---------------------------
Chief Executive Officer                              Jan Smith

                                      -10-




                                                                   Exhibit 10.18

                              EMPLOYMENT AGREEMENT


         This  Employment  Agreement (the  "Agreement") is made and entered into
effective as of March 8, 2000,  by and between Guy Gecht (the  "Executive")  and
Electronics for Imaging, Inc., a Delaware corporation (the "Company").

                                    RECITALS

         A. It is expected  that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board  of  Directors  of  the  Company  (the  "Board")   recognizes   that  such
consideration  can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities.  The Board has determined that
it is in the best interests of the Company and its  stockholders  to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below) of the Company.

         B. The Board  believes that it is in the best  interests of the Company
and its  stockholders to provide the Executive with an incentive to continue his
employment  and to motivate  the  Executive to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

         C. The Board  believes  that it
 is  imperative to provide the Executive
with certain benefits upon a Change of Control and, under certain circumstances,
upon  termination of the Executive's  full-time  employment in connection with a
Change of Control,  which  benefits are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possibility of a Change
of Control.

         D. Further,  the Board  believes that it is in the best interest of the
Company and its stockholders to provide additional  benefits to the Executive in
the event the  Executive's  employment  terminates  for any reason  other than a
Change in Control.  Such  benefits  are intended to provide the  Executive  with
financial  security and provide  sufficient  incentive and  encouragement to the
Executive to remain with the Company notwithstanding the possible termination of
employment.

         E. To accomplish the foregoing  objectives,  the Board of Directors has
directed the Company,  upon  execution of this  Agreement by the  Executive,  to
agree to the terms provided herein.

         F.  Certain  capitalized  terms used in the  Agreement  are  defined in
Section 6 below.

         In  consideration  of the mutual  covenants  herein  contained,  and in
consideration of the continuing  employment of the Executive by the Company, the
parties agree as follows:


<PAGE>

         1. Duties and Scope of Employment.

                  (a)  Position.  The Company  shall employ the Executive in the
position of Chief  Executive  Officer,  as such  position is defined in terms of
responsibilities  and  compensation  as of the effective date of this Agreement;
provided,  however,  that the Board of  Directors by mutual  agreement  with the
Executive  shall have the right, at any time prior to the occurrence of a Change
of Control,  to revise such  responsibilities  and  compensation.  The Executive
shall  continue to devote his full business  efforts and time to the Company and
its subsidiaries.  The Executive shall comply with and be bound by the Company's
operating policies,  procedures and practices from time to time in effect during
his employment.  During the term of the Executive's employment with the Company,
the Executive shall devote his full-time,  skill and attention to his duties and
responsibilities, and shall perform them faithfully, diligently and competently,
and the  Executive  shall use his best  efforts to further  the  business of the
Company and its affiliated entities. Subject to the Executive's fiduciary duties
to the Company,  this Agreement shall not prohibit the Executive from serving on
the board of directors or any advisory board of other companies.

         2. Base Compensation.

                  (a) Annual  Salary.  The Company  shall pay the  Executive  as
compensation  for his services a base salary at an  annualized  rate that is not
less  than his base  salary  as of the  effective  date of this  Agreement  (the
"Annual  Salary").  The Annual Salary may be subject to annual  increases as the
Board may authorize  from time to time in  connection  with  Executive's  annual
review.  The Annual Salary shall be paid  periodically in accordance with normal
Company payroll  procedures.  The Annual Salary  (together with bonus amounts as
specified in Section 2), and any increases in such  compensation  that the Board
of Directors  may grant from time to time,  is referred to in this  Agreement as
"Base Compensation."

                  (b) Bonus.  In addition to the Annual  Salary,  the  Executive
will be eligible to receive an annual bonus under the Company's  Executive Bonus
Plan as determined by the Board in its discretion.

         3. Executive  Benefits.  The Executive shall be eligible to participate
in the employee benefit plans and executive  compensation programs maintained by
the  Company  applicable  to other  key  executives  of the  Company,  including
(without limitation)  retirement plans,  savings or profit-sharing  plans, stock
option,  incentive or other bonus plans, life, disability,  health, accident and
other insurance programs, paid vacations, and similar plans or programs, subject
in each case to the generally  applicable terms and conditions of the applicable
plan  or  program  in  question  and  to  the  determination  of  any  committee
administering such plan or program. In addition, the Executive shall continue to
be entitled to receive any other  benefits  currently  received by the Executive
such as automobile and car phone allowance benefits.

         4. At-Will Employment.  The Company and the Executive  acknowledge that
the Executive's employment is and shall continue to be at-will, as defined under
applicable  law.  If the  Executive's  employment  terminates  for  any  reason,
including,  without  limitation,  any termination prior to and not in connection
with a Change of Control,  the Executive  shall not be entitled to any

                                      -2-


<PAGE>


payments,  benefits,  damages,  awards or compensation other than as provided by
this  Agreement,  or as may  otherwise  be  available  in  accordance  with  the
Company's  established  employee plans and policies at the time of  termination.
The terms of this  Agreement  shall  terminate  upon the earlier of (i) the date
that all obligations of the parties hereunder have been satisfied, or (ii) March
8, 2003,  or (iii)  eighteen  (18) months  after a Change of Control  unless the
Executive's  employment  terminates as a result of Involuntary  or  Constructive
Termination.  A  termination  of the  terms of this  Agreement  pursuant  to the
preceding  sentence  shall be  effective  for all  purposes,  except  that  such
termination  shall not  affect the  payment  or  provision  of  compensation  or
benefits  on account  of a  termination  of  employment  occurring  prior to the
termination of the terms of this Agreement.

         5. Severance Benefits.

                  (a)  Termination  in  Connection  with a  Change  of  Control.
Subject to Section 7 below, if the Company terminates the Executive's employment
at any time  during the period  beginning  upon the  earlier to occur of (i) the
execution of a binding letter of intent regarding a Change of Control,  and (ii)
ninety  (90) days before a Change of Control,  and ending  eighteen  (18) months
after a Change  of  Control,  and the  Executive  signs  and  does not  revoke a
standard  release of claims with the Company  attached hereto as Exhibit A, then
the Executive shall be entitled to receive severance benefits as follows:

                           (i) Involuntary or Constructive  Termination.  If the
Executive's  employment  terminates as a result of Involuntary  or  Constructive
Termination  other than for  Cause,  then the  Executive  shall be  entitled  to
receive  severance pay in an amount equal to two (2) times the Executive's  Base
Compensation  for the year  coinciding  with the  year of  termination,  plus an
amount equal to the bonus the  Executive  would have earned had he been employed
by the  Company  at the  end of  such  year  multiplied  by a  fraction  (x) the
numerator of which is the number of completed  months in that year,  and (y) the
denominator  of which is  twelve  (12)  (the  "Current  Bonus").  Any  severance
payments  except  for the  Current  Bonus to which  the  Executive  is  entitled
pursuant to this Section  shall be paid in a lump sum within thirty (30) days of
the  Executive's  termination.  The  Current  Bonus to which  the  Executive  is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.

                           (ii) Voluntary Resignation; Termination For Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or Constructive  Termination described in subsection 5(a)(i)), or if the Company
terminates the Executive's employment for Cause, then the Executive shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established  under the Company's then existing benefit plans at the time
of such termination.

                           (iii)  Disability;  Death. If the Company  terminates
the Executive's  employment as a result of the Executive's  Disability,  or such
Executive's employment is terminated due to the death of the Executive, then the
Executive or the  Executive's  estate,  as the case may be, shall be entitled to
receive  (i)  severance  pay  in an  amount  equal  to  one-half  (1/2)  of  the
Executive's  Base  Compensation  for  the  year  coinciding  with  the  year  of
termination  plus his Current Bonus,  (ii) in addition to the Executive's  stock
options that were exercisable immediately prior to such

                                      -3-


<PAGE>

termination,  the vesting of  additional  options  shall  accelerate  and become
exercisable  as to that number of shares that would have vested if the Executive
had remained continuously employed for a period of six (6) months following such
termination (and if any of such options vest on an annual basis, the appropriate
credit shall be given as if the vesting accrued monthly), and such options shall
remain  exercisable  for the  period  prescribed  in  Executive's  stock  option
agreements,  and (iii) such other  benefits (if any) as may then be  established
under the Company's then existing  benefit plans at the time of such  Disability
or death.  Any  severance  payments  except for the  Current  Bonus to which the
Executive  is  entitled  pursuant  to this  Section  shall be paid in a lump sum
within  thirty (30) days of the  Executive's  termination.  The Current Bonus to
which the Executive is entitled pursuant to this Section shall be paid in a lump
sum within thirty (30) days of the date that the Company's audit is complete for
such year.

                  (b)  Termination  Apart  from  Change of  Control.  Subject to
Section 7 below,  if the Company  terminates the  Executive's  employment at any
time,  either  before  the  earlier to occur of (i) the  execution  of a binding
letter of intent regarding a Change of Control, and (ii) ninety (90) days before
a Change of Control, or after the 18-month period following a Change of Control,
and the  Executive  signs and does not revoke a standard  release of claims with
the Company  attached  hereto as Exhibit A, then the Executive shall be entitled
to receive severance benefits as follows:

                           (i) Voluntary Resignation;  Termination for Cause. If
the Executive voluntarily resigns from the Company (other than as an Involuntary
or  Constructive  Termination),  or if the Company  terminates  the  Executive's
employment for Cause,  then the Executive shall be entitled to receive severance
and any other benefits only as may then be established  under the Company's then
exiting benefit plans at the time of such termination.

                           (ii) Termination other than Voluntary  Resignation or
Termination for Cause. In the event the Executive's employment is terminated for
any reason  (including as a result of the  Executive's  Disability or due to the
death of the Executive)  except for  termination as described in Section 5(b)(i)
above,  then the Executive or the Executive's  estate, as the case may be, shall
be entitled to receive (i) severance pay in an amount equal to one-half (1/2) of
the  Executive's  Base  Compensation  for the year  coinciding  with the year of
termination  plus his  Current  Bonus,  (ii) in addition  to  Executive's  stock
options that were exercisable immediately prior to such termination, the vesting
of additional  options shall accelerate and become  exercisable by the Executive
or the Executive's  estate, as the case may be, as to that number of shares that
would have vested if the  Executive  had  remained  continuously  employed for a
period of six (6) months  following such termination (and if any of such options
vest on an annual basis, the appropriate credit shall be given as if the vesting
accrued  monthly),  and such  options  shall remain  exercisable  for the period
prescribed in Executive's stock option  agreements,  and (iii) the same level of
health (i.e., medical, vision and dental) coverage and benefits as in effect for
the  Executive  on  the  day  immediately   preceding  the  day  of  Executive's
termination of employment; provided, however, that (i) the Executive constitutes
a  qualified  beneficiary,  as defined in Section  4980B(g)(1)  of the  Internal
Revenue  Code of 1986,  as  amended  (the  "Code");  and (ii)  Executive  elects
continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), within the time period prescribed pursuant to
COBRA.  The Company shall  continue to provide  Executive  with health  coverage
until the earlier to occur of (i) the date  Executive  is no longer

                                      -4-


<PAGE>

eligible to receive  continuation  coverage  pursuant to COBRA, or (ii) eighteen
(18) months from the termination  date. In addition to the foregoing,  Executive
shall also be paid such other benefits (if any) as may then be established under
the Company's then existing benefit plans at the time of such  termination.  Any
severance  payments  except  for the  Current  Bonus to which the  Executive  is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the Executive's termination. The Current Bonus to which the Executive is
entitled pursuant to this Section shall be paid in a lump sum within thirty (30)
days of the date that the Company's audit is complete for such year.

                  (c)  Options.  Subject to  Section 7 hereof,  upon a Change of
Control,  the unvested  portion of any stock option held by the Executive  shall
automatically   be   accelerated   and   the   Executive   or  the   Executive's
representative,  as the case may be, shall have the right to exercise all or any
portion  of  such  stock  option,  in  addition  to any  portion  of the  option
exercisable  prior  to  the  Change  of  Control  and  in  accordance  with  the
Executive's stock option agreement.

         6.  Definition  of  Terms.  The  following  terms  referred  to in this
Agreement shall have the following meanings:

                  (a)  Cause.  "Cause"  shall  mean  (i)  any  act  of  personal
dishonesty taken by the Executive in connection with his  responsibilities as an
employee  and  intended  to result in  substantial  personal  enrichment  of the
Executive,  (ii)  committing a felony or an act of fraud  against the Company or
its  affiliates,  and  (iii)  acts  by  the  Executive  which  constitute  gross
misconduct, are injurious to the Company, and which are demonstrably willful and
deliberate  on the  Executive's  part  after  there  has been  delivered  to the
Executive a written  demand of  cessation  of such acts from the  Company  which
describes the basis for the  Company's  belief that the Executive has engaged or
committed such acts.

                  (b)  Change of  Control.  "Change of  Control"  shall mean the
occurrence of any of the following events:

                           (i) Any  "person"  (as such term is used in  Sections
13(d) and 14(d) of the Securities  Exchange Act of 1934, as amended) becomes the
"beneficial  owner"  (as  defined in Rule 13d-3  under  said Act),  directly  or
indirectly,  of  securities of the Company  representing  fifty percent (50%) or
more of the total voting power  represented  by the Company's  then  outstanding
voting securities; or

                           (ii) A  change  in the  composition  of the  Board of
Directors  of the Company  occurring  within a two-year  period,  as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors"  shall mean  directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election,  to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent  Directors at the time of such  election or nomination  (but shall
not include an individual  whose election or nomination is in connection with an
actual or threatened  proxy contest relating to the election of directors to the
Company); or

                                      -5-


<PAGE>

                           (iii) A merger or  consolidation  of the Company with
any other corporation,  other than a merger or consolidation  which would result
in the voting  securities of the Company  outstanding  immediately prior thereto
continuing to represent  (either by remaining  outstanding or by being converted
into voting  securities of the surviving entity) at least sixty percent (60%) of
the total voting power  represented  by the voting  securities of the Company or
such   surviving   entity   outstanding   immediately   after  such   merger  or
consolidation.

                  (c) Involuntary or Constructive  Termination.  "Involuntary or
Constructive Termination" shall mean (i) without the Executive's express written
consent,  the  assignment  to the  Executive  of any  duties or the  significant
reduction of the Executive's  duties,  either of which is inconsistent  with the
Executive's position with the Company and responsibilities in effect immediately
prior to such assignment, or the removal of the Executive from such position and
responsibilities;  (ii)  without the  Executive's  express  written  consent,  a
substantial  reduction,  without good business  reasons,  of the  facilities and
perquisites  (including  office space and  location)  available to the Executive
immediately  prior to such  reduction;  (iii) a reduction  by the Company in the
Base  Compensation  of the  Executive  as in  effect  immediately  prior to such
reduction;  (iv) a  material  reduction  by the  Company in the kind or level of
employee  benefits to which the Executive is entitled  immediately prior to such
reduction  with the result  that the  Executive's  overall  benefits  package is
significantly  reduced;  (v) the  relocation of the Executive to a facility or a
location more than 30 miles from the Executive's then present location,  without
the Executive's express written consent;  (vi) any purported  termination of the
Executive by the Company which is not effected for  Disability or for Cause,  or
any purported  termination  for which the grounds relied upon are not valid;  or
(vii) the failure of the Company to obtain the  assumption of this  agreement by
any successors contemplated in Section 8 below.

                  (d) Disability. "Disability" shall mean that the Executive has
been  unable to perform  his duties  under this  Agreement  as the result of his
incapacity due to physical or mental illness,  and such  inability,  at least 26
weeks after its  commencement,  is  determined  to be total and  permanent  by a
physician  selected  by  the  Company  or its  insurers  and  acceptable  to the
Executive  or  the  Executive's  legal  representative  (such  agreement  as  to
acceptability  not to be  unreasonably  withheld).  Termination  resulting  from
Disability  may only be effected  after at least 30 days' written  notice by the
Company of its intention to terminate the Executive's  employment.  In the event
that the Executive  resumes the performance of  substantially  all of his duties
hereunder before the termination of his employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.

         7.  Limitation  on Payments.  In the event that the severance and other
benefits  provided for in this  Agreement or otherwise  payable to the Executive
(i) constitute  "parachute  payments"  within the meaning of Section 280G of the
Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive's benefits under this Agreement shall be
either:

                  (i) delivered in full, or

                                      -6-


<PAGE>

                  (ii)  delivered as to such lesser extent which would result in
no portion of such benefits being subject to the Excise Tax,

                  whichever of the  foregoing  amounts,  taking into account the
applicable federal,  state and local income taxes and the Excise Tax, results in
the receipt by  Executive  on an  after-tax  basis,  of the  greatest  amount of
benefits,  notwithstanding  that all or some  portion  of such  benefits  may be
taxable under Section 4999 of the Code.

         Unless the Company and the Executive  otherwise  agree in writing,  any
determination  required under this Section 7(a) shall be made in writing in good
faith  by the  accounting  firm  serving  as the  Company's  independent  public
accountants  immediately prior to the Change of Control (the "Accountants").  In
the event of a reduction in benefits hereunder, the Executive shall be given the
choice of which  benefits to reduce.  For  purposes  of making the  calculations
required by this Section 7(a), the Accountants  may make reasonable  assumptions
and approximations concerning applicable taxes and may rely on reasonable,  good
faith  interpretations  concerning the  application of the Code. The Company and
the Executive shall furnish to the Accountants such information and documents as
the  Accountants may reasonably  request in order to make a determination  under
this Section.  The Company shall bear all costs the  Accountants  may reasonably
incur in connection with any calculations contemplated by this Section 7(a).

         8. Successors.

                  (a)  Company's  Successors.   Any  successor  to  the  Company
(whether   direct  or  indirect   and  whether  by  purchase,   lease,   merger,
consolidation,  liquidation  or  otherwise) to all or  substantially  all of the
Company's  business and assets shall assume the obligations under this Agreement
and agree expressly to perform the obligations  under this Agreement in the same
manner and to the same extent as the Company  would be required to perform  such
obligations  in the  absence  of a  succession.  For  all  purposes  under  this
Agreement,  the term  "Company"  shall  include any  successor to the  Company's
business  and assets  which  executes  and  delivers  the  assumption  agreement
described in this  subsection  (a) or which  becomes  bound by the terms of this
Agreement by operation of law.

                  (b)  Executive's  Successors.  The terms of this Agreement and
ail rights of the  Executive  hereunder  shall  inure to the  benefit of, and be
enforceable by, the Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, devisees and legatees.

         9. Notice.

                  (a) General. Notices and all other communications contemplated
by this  Agreement  shall be in  writing  and  shall be deemed to have been duly
given when personally  delivered or when mailed by U.S.  registered or certified
mail,  return  receipt  requested  and  postage  prepaid.  In  the  case  of the
Executive, mailed notices shall be addressed to him at the home address which he
most  recently  communicated  to the  Company  in  writing.  In the  case of the
Company,  mailed notices shall be addressed to its corporate  headquarters,  and
ail notices shall be directed to the attention of its Secretary.

                                      -7-


<PAGE>

                  (b) Notice of  Termination.  Any  termination  by the  Company
shall be communicated by a notice of termination to the other party hereto given
in accordance with Section 9 of this  Agreement.  Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable  detail  the facts and  circumstances  claimed to provide a basis for
termination under the provision so indicated,  and shall specify the termination
date (which shall be not more than 15 days after the giving of such notice). The
failure by the Executive to include in the notice any fact or circumstance which
contributes to a showing of Involuntary or  Constructive  Termination  shall not
waive any right of the  Executive  hereunder  or  preclude  the  Executive  from
asserting such fact or circumstance in enforcing his rights hereunder.

         10. Arbitration.

                  (a) Any dispute or controversy arising out of, relating to, or
in  connection   with  this   Agreement,   or  the   interpretation,   validity,
construction,  performance,  breach, or termination thereof, shall be settled by
binding  arbitration to be held in California,  in accordance  with the National
Rules for the  Resolution of Employment  Disputes then in effect of the American
Arbitration  Association (the "Rules").  The arbitrator may grant injunctions or
other relief in such  dispute or  controversy.  The  decision of the  arbitrator
shall be final,  conclusive  and  binding  on the  parties  to the  arbitration.
Judgment  may be  entered  on the  arbitrator's  decision  in any  court  having
jurisdiction.

                  (b) The arbitrator(s) shall apply California law to the merits
of any  dispute or claim,  without  reference  to  conflicts  of law rules.  The
arbitration  proceedings shall be governed by federal arbitration law and by the
Rules,  without reference to state arbitration law. Executive hereby consents to
the personal  jurisdiction of the state and federal courts located in California
for any action or  proceeding  arising  from or  relating to this  Agreement  or
relating to any arbitration in which the parties are participants.

                  (c)  Executive   understands  that  nothing  in  this  Section
modifies Executive's at-will employment status.  Either Executive or the Company
can terminate the employment relationship at any time, with or without Cause.

                  (d) EXECUTIVE  HAS READ AND  UNDERSTANDS  THIS SECTION,  WHICH
DISCUSSES ARBITRATION.  EXECUTIVE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING
OUT  OF,   RELATING  TO,  OR  IN  CONNECTION   WITH  THIS   AGREEMENT,   OR  THE
INTERPRETATION,  VALIDITY,  CONSTRUCTION,  PERFORMANCE,  BREACH  OR  TERMINATION
THEREOF TO BINDING  ARBITRATION,  CONSTITUTES A WAIVER OF EMPLOYEE'S  RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS
OF THE  EMPLOYER/EMPLOYEE  RELATIONSHIP,  INCLUDING  BUT  NOT  LIMITED  TO,  THE
FOLLOWING CLAIMS:

                           (i) ANY AND ALL  CLAIMS  FOR  WRONGFUL  DISCHARGE  OF
EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT
OF GOOD  FAITH  AND  FAIR  DEALING,  BOTH  EXPRESS  AND  IMPLIED;

                                      -8-


<PAGE>

NEGLIGENT  OR  INTENTIONAL  INFLICTION  OF  EMOTIONAL  DISTRESS;   NEGLIGENT  OR
INTENTIONAL  MISREPRESENTATION;   NEGLIGENT  OR  INTENTIONAL  INTERFERENCE  WITH
CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;

                           (ii) ANY AND ALL CLAIMS FOR  VIOLATION OF ANY FEDERAL
STATE OR  MUNICIPAL  STATUTE,  INCLUDING,  BUT NOT LIMITED TO,  TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991,  THE AGE  DISCRIMINATION
IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR
LABOR  STANDARDS ACT, THE CALIFORNIA  FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR
CODE SECTION 201, et seq;

                           (iii)  ANY AND ALL  CLAIMS  ARISING  OUT OF ANY OTHER
LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

         11. Miscellaneous Provisions.

                  (a) No Duty to Mitigate.  The Executive  shall not be required
to mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new  employment or in any other  manner),  nor shall any such payment be
reduced by any earnings that the Executive may receive from any other source.

                  (b) Waiver.  No provision of this Agreement shall be modified,
waived or discharged unless the  modification,  waiver or discharge is agreed to
in  writing  and signed by the  Executive  and by an  authorized  officer of the
Company (other than the Executive).  No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

                  (c)  Whole  Agreement.   No  agreements,   representations  or
understandings  (whether oral or written and whether  express or implied)  which
are not expressly set forth in this  Agreement have been made or entered into by
either party with respect to the subject matter hereof.

                  (d) Choice of Law. The validity, interpretation,  construction
and  performance of this Agreement shall be governed by the laws of the State of
California.

                  (e) Severability.  The invalidity or  unenforceability  of any
provision  or  provisions  of this  Agreement  shall not affect the  validity or
enforceability of any other provision  hereof,  which shall remain in full force
and effect.

                  (f) No  Assignment  of  Benefits.  The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment,  either by voluntary or  involuntary  assignment  or by operation of
taw, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process,  and any action in violation of this subsection (f) shall be
void.

                                      -9-


<PAGE>

                  (g)  Employment  Taxes.  All  payments  made  pursuant to this
Agreement  will be subject to  withholding  of applicable  income and employment
taxes.

                  (h)  Assignment by Company.  The Company may assign its rights
under this  Agreement to an  affiliate,  and an affiliate  may assign its rights
under this  Agreement  to another  affiliate  of the Company or to the  Company;
provided,  however,  that no  assignment  shall be made if the net  worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such  assignment,  the term  "Company" when used in a Section of
this Agreement shall mean the corporation that actually employs the Executive.

                  (i)   Counterparts.   This   Agreement   may  be  executed  in
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together will constitute one and the same instrument.

                  IN WITNESS  WHEREOF,  each of the  parties has  executed  this
Agreement,  in the case of the Company by its duly authorized officer, as of the
day and year first above written.


ELECTRONICS FOR IMAGING, INC.                        EXECUTIVE:


/s/ Dan Avida                                        /s/ Guy Gecht
-------------------------------                      ---------------------------
Chairman of the Board                                Guy Gecht

                                      -10-




                                                                   Exhibit 10.20


                                 EXECUTION COPY


                                  MASTER LEASE


                      THIS DOCUMENT SECURES FUTURE ADVANCES

                          Dated as of December 29, 1999



                                     between



                         ELECTRONICS FOR IMAGING, INC.,
                                 as the Lessee,


                                       and


                     SOCIETE GENERALE FINANCIAL CORPORATION,
                                 as the Lessor.


         This Master Lease is subject to a lien in favor of the Lender under the
Loan Agreement. This Master Lease has been executed in several counterparts.  To
the extent,  if any, that this Master Lease  constitutes  chattel paper (as such
term is defined in the Uniform  Commercial  Code as in effect in any  applicable
jurisdiction),  no lien on this Master Lease may be created through the transfer
or possession of any counterpart other than the original counterpart  containing
the receipt therefor executed by SOCIETE  GENERALE,  acting through its New York
Branch, as the Lender, on or following the signature page hereof.

This counterpart is not the original counterpart.


<PAGE>


<TABLE>
                                              TABLE OF CONTENTS


                                                  ARTICLE I
                                                 DEFINITIONS

<CAPTION>
<S>    <C>                                                                                                <C>
1.1    Definitions; Interpretation.........................................................................1


                                                  ARTICLE II
                                                MASTER LEASE

2.1    Acceptance and Lease of Property....................................................................2
2.2    Acceptance Procedure................................................................................2
2.3    Lease Term..........................................................................................2
2.4    Title...............................................................................................2


                                                 ARTICLE III
                                               PAYMENT OF RENT

3.1    Rent................................................................................................3
3.2    Payment of Rent.....................................................................................3
3.3    Supplemental Rent...................................................................................3
3.4    Method of Payment...................................................................................3
3.5    Certain Payments....................................................................................4



                                                  ARTICLE IV
                                      QUIET ENJOYMENT; RIGHT TO INSPECT

4.1    Quiet Enjoyment.....................................................................................4
4.2    Right to Inspect....................................................................................4


                                                  ARTICLE V
                                               NET LEASE, ETC.

5.1    Net Lease...........................................................................................4
5.2    No Termination or Abatement.........................................................................5


                                                  ARTICLE VI
                                                  SUBLEASES

6.1    Subletting..........................................................................................6

                                                      i


<PAGE>


                                                 ARTICLE VII
                                           LESSEE ACKNOWLEDGMENTS

7.1    Condition of the Properties.........................................................................7
7.2    Risk of Loss........................................................................................7


                                                 ARTICLE VIII
                                  POSSESSION AND USE OF THE PROPERTIES, ETC.

8.1    Utility Charges.....................................................................................8
8.2    Possession and Use of the Property..................................................................8
8.3    Compliance with Requirements of Laws and Insurance Requirements.....................................8
8.4    Assignment by Lessee................................................................................8


                                                  ARTICLE IX
                                       MAINTENANCE AND REPAIR; RETURN

9.1     Maintenance and Repair; Return.....................................................................9


                                                  ARTICLE X
                                             MODIFICATIONS, ETC.

10.1   Modifications, Substitutions and Replacements......................................................10


                                                  ARTICLE XI
                                         WARRANT OF TITLE; EASEMENTS

11.1   Warrant of Title...................................................................................11
11.2   Grants and Releases of Easements; Lessor's Waivers.................................................11


                                                 ARTICLE XII
                                              PERMITTED CONTESTS

12.1   Permitted Contests in Respect of Applicable Law Other Than Impositions.............................13


                                                 ARTICLE XIII
                                                  INSURANCE

13.1   Public Liability and Workers' Compensation Insurance...............................................13


                                                 ARTICLE XIV
                              CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS



                                                     ii


<PAGE>


14.1   Casualty and Condemnation..........................................................................14
14.2   Environmental Matters..............................................................................16
14.3   Notice of Environmental Matters....................................................................17


                                                  ARTICLE XV
                                            TERMINATION OF LEASE

15.1   Partial Termination upon Certain Events............................................................17
15.2   Termination Procedures.............................................................................18


                                                 ARTICLE XVI
                                              EVENTS OF DEFAULT

16.1   Lease Events of Default............................................................................18
16.2   Remedies...........................................................................................21
16.3   Waiver of Certain Rights...........................................................................26


                                                 ARTICLE XVII
                                           LESSOR'S RIGHT TO CURE

17.1   The Lessor's Right to Cure the Lessee's Lease Defaults.............................................26


                                                ARTICLE XVIII
                                             PURCHASE PROVISIONS

18.1   Purchase of the Properties.........................................................................27


                                                 ARTICLE XIX
                                        EXTENSION OF EXPIRATION DATE

19.1   Extension of Expiration Date.......................................................................28


                                                  ARTICLE XX
                                             REMARKETING OPTION

20.1   Option to Remarket.................................................................................28
20.2   Certain Obligations Continue.......................................................................31


                                                 ARTICLE XXI
                               PROCEDURES RELATING TO PURCHASE OR REMARKETING


                                                     iii


<PAGE>

21.1   Provisions Relating to the Exercise of Purchase Option or Obligation and
         Conveyance Upon Remarketing and Conveyance Upon Certain Other
         Events...........................................................................................31


                                                 ARTICLE XXII
                                            ESTOPPEL CERTIFICATES

22.1   Estoppel Certificates..............................................................................32


                                                ARTICLE XXIII
                                           ACCEPTANCE OF SURRENDER

23.1   Acceptance of Surrender............................................................................32


                                                 ARTICLE XXIV
                                             NO MERGER OF TITLE

24.1   No Merger of Title.................................................................................33


                                                 ARTICLE XXV
                                            INTENT OF THE PARTIES

25.1   Nature of Transaction..............................................................................33


                                                 ARTICLE XXVI
                                                MISCELLANEOUS

26.1   Survival; Severability; Etc........................................................................34
26.2   Amendments and Modifications.......................................................................34
26.3   No Waiver..........................................................................................34
26.4   Notices............................................................................................35
26.5   Successors and Assigns.............................................................................35
26.6   Headings and Table of Contents.....................................................................35
26.7   Counterparts.......................................................................................35
26.8   GOVERNING LAW......................................................................................35
26.9   Liability Limited..................................................................................35
26.10  Original Lease.....................................................................................36
</TABLE>


                                                     iv


<PAGE>

                                  MASTER LEASE

                      THIS DOCUMENT SECURES FUTURE ADVANCES

         THIS MASTER LEASE (this "Master Lease"), dated as of December 29, 1999,
between SOCIETE  GENERALE  FINANCIAL  CORPORATION,  a Delaware  corporation,  as
Lessor (in such capacity,  the "Lessor") and  ELECTRONICS  FOR IMAGING,  INC., a
Delaware corporation, as Lessee (in such capacity, the "Lessee").


                              W I T N E S S E T H:

         WHEREAS,  pursuant to the Participation  Agreement dated as of the date
hereof (as amended,  modified,  restated or supplemented  from time to time, the
"Participation Agreement"),  among the Lessee, as Lessee and Construction Agent,
the Lessor and Societe  Generale,  acting through its New York Branch, as Lender
(the "Lender") under the Loan  Agreement,  the Lender and the Lessor have agreed
to finance the Construction of Improvements on the Properties;

         WHEREAS,   the  Lessor,   on  each  Funding  Date,   will  finance  the
Construction of Improvements on the Properties;

         WHEREAS,  the Lessee, as Construction Agent for the Lessor,  will cause
the Construction of said Improvements to be effected on the Properties;

         WHEREAS,  the  Lessor  desires to lease to the  Lessee,  and the Lessee
desires to lease from the  Lessor,  the  Lessor's  interest  in the Land and the
Improvements constructed thereon; and

         WHEREAS,  each  Property  will be subject  to the terms of this  Master
Lease;

         NOW,  THEREFORE,  in consideration of the foregoing,  and of other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

          I.1  Definitions;  Interpretation.  Capitalized  terms  used  but  not
otherwise defined in this Master Lease have the respective meanings specified in
Appendix  A to this  Master  Lease  (as the same may be  amended,  supplemented,
amended and restated or  otherwise  modified  from time to

                                       1


<PAGE>

time,  "Appendix A to this Master Lease");  and the rules of interpretation  set
forth in Appendix A to this Master Lease shall apply to this Master Lease.


                                   ARTICLE II

                                  MASTER LEASE

         II.1  Acceptance  and Lease of Property.  Subject to the conditions set
forth  in  the  Participation   Agreement,   including  without  limitation  the
satisfaction  or waiver of the conditions  set forth in Article VI thereof,  the
Lessor  hereby  covenants  and agrees to  acquire a  leasehold  interest  in and
simultaneously  to lease to the Lessee hereunder and under the Lease Supplements
for the  Lease  Term,  the  Lessor's  interest  in the  Land  together  with any
Improvements  which  thereafter  may be constructed on such Land pursuant to the
Construction  Agency  Agreement  or this  Master  Lease,  and the Lessee  hereby
agrees, expressly for the direct benefit of the Lessor, to lease from the Lessor
for the Lease Term,  the  Lessor's  interest in such Parcels of Land and in such
Improvements  together  with any  Improvements  so  acquired  by  Lessor,  which
thereafter may be constructed on such Land pursuant to the  Construction  Agency
Agreement and this Master Lease.

         II.2 Acceptance Procedure.  The Lessee hereby agrees that the execution
and delivery by the Lessee on each applicable  Funding Date of an  appropriately
completed  Lease  Supplement  in the form of  Exhibit  A-1 hereto  covering  any
Property shall,  without further act, constitute the acceptance by the Lessee of
the Property  which is the subject of such Lease  Supplement for all purposes of
this  Master  Lease and the  other  Operative  Documents  on the terms set forth
therein and herein.

         II.3 Lease Term.  Unless otherwise  specified in the Lease  Supplement,
the Basic Lease Term (the "Basic  Lease Term") of this Master Lease with respect
to any Property shall begin on the  Completion  Date for such Property and shall
end on the  Expiration  Date. In the event the Basic Lease Term commences on any
day other than the day  following  the last day of the then  effective  Interest
Period,  the  Lessee  shall  pay any  Break  Costs  associated  with  the  early
termination of the Interest Period.

         II.4  Title.  Each  Property  is  leased  to  the  Lessee  without  any
representation or warranty, express or implied, by the Lessor and subject to the
rights of parties in possession, the existing state of title (including, without
limitation,  all Liens other than Lessor Liens) and all applicable  Requirements
of Law. The Lessee  shall in no event have any  recourse  against the Lessor for
any defect in or exception to title to any Property  other than  resulting  from
Lessor Liens.

                                       2


<PAGE>

                                   ARTICLE III

                                 PAYMENT OF RENT

         III.1  Rent.

                  (a) During the Basic  Lease  Term for a  Property,  the Lessee
         shall pay Basic Rent for such Property to the Lessor on each Basic Rent
         Payment Date, on the date required under Section  20.1(g) in connection
         with the Lessee's exercise of the Remarketing Option and on any date on
         which this Master Lease shall  terminate with respect to such Property.
         At least 10 days  prior to each  Basic Rent  Payment  Date,  the Lessor
         shall  deliver  to the  Lessee a notice of the amount of the Basic Rent
         due on such date (the "Invoice"). For the purposes of this Section 3.1,
         delivery of the Invoice by facsimile  transmission,  receipt confirmed,
         will be sufficient.

                  (b) The Lessee's  inability or failure to take  possession  of
         all or any portion of any Property upon  Completion  shall not delay or
         otherwise affect the Lessee's  obligation to pay Rent for such Property
         in accordance with the terms of this Master Lease.

         III.2 Payment of Rent. Rent shall be paid absolutely net to each Person
entitled thereto,  so that this Master Lease shall yield to such Person the full
amount thereof, without setoff, deduction or reduction.

         III.3  Supplemental  Rent.  The  Lessee  shall pay to the Lessor or any
other Person entitled thereto any and all Supplemental Rent promptly as the same
shall  become due and payable,  and if the Lessee fails to pay any  Supplemental
Rent, the Lessor and such other Persons  entitled to the receipt of such payment
shall have all  rights,  powers and  remedies  provided  for herein or by law or
equity or otherwise.  The Lessee shall pay to the Lessor, as Supplemental  Rent,
among  other  things,   on  demand,   to  the  extent  permitted  by  applicable
Requirements of Law, interest at the applicable  Overdue Rate on any installment
of Basic  Rent not paid when due for the  period  for  which  the same  shall be
overdue and on any payment of Supplemental Rent not paid when due or demanded by
the Lessor for the period from the due date or the date of any such  demand,  as
the case  may be,  until  the  same  shall  be  paid.  The  expiration  or other
termination of the Lessee's  obligations  to pay Basic Rent hereunder  shall not
limit or modify the obligations of the Lessee with respect to Supplemental Rent.
Unless  expressly  provided  otherwise in this Master Lease, in the event of any
failure on the part of the Lessee to pay and discharge any Supplemental  Rent as
and when due,  the  Lessee  shall  also  promptly  pay and  discharge  any fine,
penalty,  interest or cost which may be assessed or added under any agreement to
which Lessee is a party or which is  authorized  in writing by the Lessee with a
third party for  nonpayment or late payment of such  Supplemental  Rent,  all of
which shall also constitute Supplemental Rent.

                                       3


<PAGE>


         III.4 Method of Payment.  Each payment of Rent payable by the Lessee to
the Lessor under this Lease or any other Operative Document shall be made by the
Lessee to the Lender as assignee  of the Lessor  under the  Assignment  of Lease
(or,  if all Loans  and all other  amounts  owing to the  Lender  under the Loan
Agreement  and the  other  Operative  Documents  have  been paid in full and all
Commitments of the Lender have been permanently terminated, to the Lessor) prior
to 2:00 p.m., New York City time, to the Account in immediately  available funds
consisting  of lawful  currency of the United States of America on the date when
such payment  shall be due.  Payments  received  after 2:00 p.m.,  New York City
time,  on the date due shall for the  purpose of Section  16.1  hereof be deemed
received on such day;  provided,  however,  that for the  purposes of the second
sentence of Section 3.3 hereof,  such payments  shall be deemed  received on the
next  succeeding  Business  Day  and,  unless  the  Lender  (or the  Lessor,  as
applicable)  is  otherwise  able to  invest  or  employ  such  funds on the date
received,  subject to interest at the Overdue  Rate as provided in such  Section
3.3.

         III.5 Certain Payments.  Payments of Basic Rent,  Supplemental Rent and
other amounts  hereunder  are, as  applicable,  subject to netting and offset as
provided pursuant to Section 7.12 of the Participation Agreement.


                                   ARTICLE IV

                        QUIET ENJOYMENT; RIGHT TO INSPECT

         IV.1 Quiet  Enjoyment.  Subject to Sections 2.4 and 4.2, and subject to
the rights of the  Lessor  contained  in  Article XV and the other  terms of the
Operative  Documents to which the Lessee is a party,  the Lessee shall peaceably
and quietly  have,  hold and enjoy the Property for the Lease Term,  free of any
claim or other action by the Lessor or anyone  claiming by, through or under the
Lessor  (other than the Lessee)  with  respect to any matters  arising  from and
after  the  applicable  Completion  Date.  Such  right  of  quiet  enjoyment  is
independent of, and shall not affect the Lessor's  rights  otherwise to initiate
legal action to enforce the obligations of the Lessee under this Master Lease.

         IV.2 Right to  Inspect.  During the Lease Term,  the Lessee  shall upon
reasonable  notice from the Lessor,  permit the  Lessor,  the Lender,  and their
respective  authorized  representatives  to inspect any Property subject to this
Master Lease during normal business hours,  provided that such inspections shall
not  unreasonably  interfere  with  the  Lessee's  business  operations  at such
Property.


                                    ARTICLE V

                                 NET LEASE, ETC.

                                       4


<PAGE>


         V.1 Net Lease.  This Master  Lease shall  constitute  a net lease.  Any
present or future law to the contrary  notwithstanding,  this Master Lease shall
not terminate,  nor shall the Lessee be entitled to any  abatement,  suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the Rent,
nor shall the  obligations  of the  Lessee  hereunder  be  affected  (except  as
expressly  herein  permitted and by performance of the obligations in connection
therewith)  by reason  of:  (i) any  defect in the  condition,  merchantability,
design,  construction,  quality or fitness  for use of any  Property or any part
thereof,  or the failure of any Property to comply with all Requirements of Law,
including  any  inability  to  occupy  or use such  Property  by  reason of such
non-compliance;  (ii)  any  damage  to,  removal,  abandonment,  salvage,  loss,
contamination of or Release from, scrapping or destruction of or any requisition
or taking of any Property or any part thereof; (iii) any restriction, prevention
or curtailment of or  interference  with the  construction  on or any use of any
Property or any part thereof including eviction;  (iv) any defect in title to or
rights to any  Property  or any Lien on such title or rights or on any  Property
(other than Lessor  Liens);  (v) any change,  waiver,  extension,  indulgence or
other action or omission or breach in respect of any  obligation or liability of
or by the Lessor or the Lender;  (vi) to the extent permitted by Applicable Law,
any   bankruptcy,   insolvency,    reorganization,    composition,   adjustment,
dissolution,  liquidation or other like proceedings  relating to the Lessee, the
Lessor, the Lender or any other Person, or any action taken with respect to this
Master Lease by any trustee or receiver of the Lessee, the Lessor, the Lender or
any other Person, or by any court, in any such proceeding;  (vii) any claim that
the Lessee has or might have against any Person,  including  without  limitation
the Lessor,  the Lender, or any vendor,  manufacturer,  contractor of or for any
Property; (viii) any failure on the part of the Lessor to perform or comply with
any of the terms of this Master Lease (other than  performance  by the Lessor of
its  obligations  set forth in  Section  2.1  hereof),  of any  other  Operative
Document or of any other agreement;  (ix) any invalidity or  unenforceability or
illegality or disaffirmance of this Master Lease against or by the Lessee or any
provision hereof or any of the other Operative Documents or any provision of any
thereof;  (x) the impossibility or illegality of performance by the Lessee,  the
Lessor or both;  (xi) any  action by any court,  administrative  agency or other
Governmental  Authority;  or (xii)  any  other  cause or  circumstances  whether
similar or  dissimilar to the foregoing and whether or not the Lessee shall have
notice or  knowledge  of any of the  foregoing.  The  Lessee's  agreement in the
preceding  sentence  shall not affect any claim,  action or right the Lessee may
have  against  the  Lessor or any other  Participant,  and  notwithstanding  the
foregoing provisions, nothing contained in this Section 5.1 shall provide Lessor
with any right to payment by the Lessee with  respect to any  Property  prior to
the Completion Date for such Property which is contrary to Lessor's rights under
the Construction Agency Agreement including the limitations set forth in Section
5.4 thereof;  it being the express intention of the parties to this Master Lease
that Lessee shall have no liability  hereunder with respect to any  Construction
Period Property. The parties intend that the obligations of the Lessee hereunder
shall be covenants and  agreements  that are separate and  independent  from any
obligations of the Lessor  hereunder or under any other Operative  Documents and
the obligations of the Lessee shall continue  unaffected unless such obligations

                                       5


<PAGE>

shall have been modified or terminated in accordance  with an express  provision
of this Master Lease.

         V.2 No  Termination  or  Abatement.  The Lessee shall remain  obligated
under  this  Master  Lease in  accordance  with its terms and shall not take any
action to  terminate,  rescind or avoid this  Master  Lease  (except as provided
herein), notwithstanding any action for bankruptcy, insolvency,  reorganization,
liquidation,  dissolution,  or other  proceeding  affecting  the  Lessor  or any
Participant,  or any action with respect to this Master Lease which may be taken
by any trustee,  receiver or liquidator of the Lessor or any  Participant  or by
any court  with  respect  to the Lessor or any  Participant.  The Lessee  hereby
waives all right to terminate or surrender this Master Lease (except as provided
herein) or except as a  consequence  of a  reduction  in the Lease  Balance as a
result of Casualty  or  Condemnation  proceeds  pursuant to the terms of Section
14.1 of this  Master  Lease,  or as a result of a purchase  of any or all of the
Properties pursuant to Section 18.1 of this Master Lease, to avail itself of any
abatement,  suspension,  deferment,  reduction,  setoff, counterclaim or defense
with respect to the Lease Balance.  The Lessee shall remain obligated under this
Master Lease in  accordance  with its terms and the Lessee hereby waives any and
all rights now or  hereafter  conferred  by statute or otherwise to modify or to
avoid strict  compliance  with its  obligations  under this Master Lease and the
Operative Documents.  Notwithstanding any such statute or otherwise,  the Lessee
shall be bound by all of the  terms  and  conditions  contained  in this  Master
Lease.


                                   ARTICLE VI

                                    SUBLEASES

         VI.1  Subletting.  (a) The Lessee may from time to time,  sublease  any
Property  or any portion  thereof to any Person and extend,  modify or renew any
sublease without the approval of Lessor or Lender; provided,  however, that: (i)
no sublease or other  relinquishment  of possession of any Property shall in any
way  discharge  or  diminish  any  of the  Lessee's  obligations  to the  Lessor
hereunder,  and the Lessee shall remain directly and primarily liable under this
Master Lease as to the Properties,  or portion thereof,  so sublet and (ii) each
sublease to an Affiliate of the Lessee shall be made subject and  subordinate to
this Master Lease and to the rights of the Lessor hereunder.

         (b) Lessor hereby agrees,  that, in the event of the early  termination
of this Master  Lease from any cause  whatsoever,  and while any  sublease is in
full force and effect,  such termination of this Master Lease shall not act as a
merger or other termination of such sublease, and Lessee's interest as sublessor
in such  sublease  shall be  deemed  automatically  assigned,  transferred,  and
conveyed to Lessor; and, from and after such termination,  Lessor shall be bound
by the  provisions  of the sublease then in full force and effect on the part of
the Lessee,  as sublessor;  and that the sublessee shall be deemed thereupon and
without  further act to have attorned to Lessor.

                                       6


<PAGE>

It is the intention  hereof to provide that the  termination of this Lease while
such  sublease  is in full force and effect  shall  not,  in any way,  by reason
thereof,  terminate  such sublease or affect the rights of such  sublessee.  The
foregoing is subject to the right of Lessee (or Lessor, if this Master Lease has
terminated) to terminate any sublease which is in default  (notice  thereof,  if
any  required,  having  been given and the time for curing such  default  having
expired) and any other rights and remedies  reserved to Lessee in such sublease,
and any other rights and remedies  afforded to a lessor of real property against
a defaulting lessee.


                                   ARTICLE VII

                             LESSEE ACKNOWLEDGMENTS

         VII.1 Condition of the Properties.  THE LESSEE  ACKNOWLEDGES AND AGREES
THAT  ALTHOUGH  THE  LESSOR  WILL OWN AND HOLD  TITLE TO THE  IMPROVEMENTS,  THE
LESSEE,  ACTING AS CONSTRUCTION  AGENT, IS SOLELY RESPONSIBLE UNDER THE TERMS OF
THE  CONSTRUCTION  AGENCY AGREEMENT FOR THE DESIGN,  DEVELOPMENT,  BUDGETING AND
CONSTRUCTION  OF THE  IMPROVEMENTS  AND ANY  ALTERATIONS OR  MODIFICATIONS.  THE
LESSEE FURTHER ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY AND EACH
OF THE IMPROVEMENTS CONSTRUCTED THEREON "AS IS" WITHOUT REPRESENTATION, WARRANTY
OR  COVENANT  (EXPRESS  OR IMPLIED) BY THE LESSOR OR THE LENDER AND IN EACH CASE
SUBJECT TO (A) THE EXISTING STATE OF TITLE  (EXCLUDING  LESSOR  LIENS),  (B) THE
RIGHTS OF ANY  PARTIES IN  POSSESSION  THEREOF,  (C) ANY STATE OF FACTS WHICH AN
ACCURATE  SURVEY OR  PHYSICAL  INSPECTION  MIGHT  SHOW,  AND (D)  VIOLATIONS  OF
REQUIREMENTS  OF LAW WHICH MAY EXIST ON THE DATE HEREOF.  NEITHER THE LESSOR NOR
THE LENDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY
OR  COVENANT  (EXPRESS  OR  IMPLIED)  OR SHALL BE DEEMED  TO HAVE ANY  LIABILITY
WHATSOEVER AS TO THE TITLE (OTHER THAN FOR LESSOR LIENS),  VALUE,  HABITABILITY,
USE, CONDITION,  DESIGN,  OPERATION,  OR FITNESS FOR USE OF ANY PROPERTY (OR ANY
PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT (EXCEPT SECTION
4.1 HEREOF) WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY
PART  THEREOF)  AND  NEITHER  THE LESSOR NOR THE LENDER  SHALL BE LIABLE FOR ANY
LATENT,  HIDDEN,  OR PATENT DEFECT  THEREIN (OTHER THAN FOR LESSOR LIENS) OR THE
FAILURE OF ANY PROPERTY,  OR ANY PART THEREOF, TO COMPLY WITH ANY REQUIREMENT OF
LAW.

         VII.2 Risk of Loss. Subject to the terms of Section 14.1 of this Master
Lease,  during the Lease Term the risk of loss of or decrease  in the  enjoyment
and  beneficial  use of the  Properties

                                       7


<PAGE>

as a result of the  damage  or  destruction  thereof  by fire,  earthquake,  the
elements, casualties, thefts, riots, wars or otherwise is assumed by the Lessee,
and except  for loss or damages  arising  from the gross  negligence  or willful
misconduct  of  Lessor  or  Lender  or their  respective  agents,  employees  or
contractors,  neither the Lessor nor the Lender shall in any event be answerable
or accountable to Lessee therefor.


                                  ARTICLE VIII

                   POSSESSION AND USE OF THE PROPERTIES, ETC.

         VIII.1  Utility  Charges.  The Lessee shall pay or cause to be paid all
charges for  electricity,  power,  gas, oil,  water,  telephone,  sanitary sewer
service and all other rents and utilities  used in or on the  Properties  during
the Lease  Term.  The Lessee  shall be  entitled to receive any credit or refund
with  respect  to any  utility  charge  paid by the Lessee and the amount of any
credit or refund  received by the Lessor on account of any utility  charges paid
by the Lessee, net of the costs and expenses  reasonably  incurred by the Lessor
in obtaining such credit or refund, shall be promptly paid over to the Lessee.

         VIII.2  Possession and Use of the Property.  After the Completion  Date
for each Property,  each Property shall be used in a manner consistent with this
Master Lease for any lawful  purpose in accordance  with  Applicable  Law now or
hereafter in effect; provided, that such use does not (i) result in a diminution
in the value of the  Property  from that  projected  in the  original  Appraisal
delivered  with respect to such  Property or (ii) violate any  restriction  with
respect to Hazardous  Materials as they relate to such Property  pursuant to the
Operative Documents.  The Lessee shall pay, or cause to be paid, all charges and
costs required in connection  with the use of the Properties as  contemplated by
this  Master  Lease.  The  Lessee  shall not  commit or permit  any waste of the
Properties or any part thereof.

         VIII.3 Compliance with Requirements of Laws and Insurance Requirements.
Subject to the terms of Article XII relating to permitted contests,  the Lessee,
at its sole cost and expense, shall (a) comply in all material respects with all
Requirements  of Law  (including  all  Hazardous  Materials  Laws) and Insurance
Requirements  relating  to the  Properties,  including  the  use,  construction,
operation,  maintenance,  repair and  restoration  thereof  and the  remarketing
thereof  pursuant  to Article  XX,  whether or not  compliance  therewith  shall
require  structural or  extraordinary  changes in the  Improvements or interfere
with the use and  enjoyment of the  Properties,  and (b)  procure,  maintain and
comply  with all  licenses,  permits,  orders,  approvals,  consents  and  other
authorizations required for the construction,  use, maintenance and operation of
the Properties and for the use, operation,  maintenance,  repair and restoration
of the Improvements. Notwithstanding the preceding sentence, the Lessee shall be
deemed to be in  compliance  with all Hazardous  Materials  Laws for purposes of
this Master Lease notwithstanding any Environmental Violation if the severity of
such  Environmental  Violation is less

                                       8


<PAGE>

than Federal,  state or local standards requiring  remediation or removal or, if
such standards are exceeded,  remediation or removal is proceeding in accordance
with all applicable Hazardous Materials Laws.

         VIII.4  Assignment  by Lessee.  The Lessee may not assign  this  Master
Lease or any of its rights or  obligations  hereunder in whole or in part to any
Person.  Notwithstanding the foregoing  sentence,  the Lessee may, so long as no
Event of Default has occurred and is continuing or would result therefrom,  upon
prior  written  notice to each of the Lessor and the Lender,  assign this Master
Lease and all of the Lessee's rights and  obligations  hereunder to an Affiliate
of the Lessee pursuant to an assignment and assumption  agreement and such other
documentation,  including  opinions  of  counsel,  all  in  form  and  substance
reasonably  satisfactory  to the Lessor and the Lender;  provided,  that, in any
event  of  such  assignment,  the  Lessee  shall  deliver  a  guaranty  of  such
Affiliate's  obligation  hereunder  in form and  substance  and in all  respects
satisfactory to the Lessor and the Lender.


                                   ARTICLE IX

                         MAINTENANCE AND REPAIR; RETURN


         IX.1 Maintenance and Repair; Return.

                  (a) From and after the  Completion  Date for a  Property,  the
         Lessee,  at its sole cost and expense,  shall maintain such Property in
         good condition (ordinary wear and tear excepted) and make all necessary
         repairs thereto, of every kind and nature whatsoever,  whether interior
         or exterior, ordinary or extraordinary,  structural or nonstructural or
         foreseen or unforeseen, in each case as required by all Requirements of
         Law and Insurance  Requirements and in no event less than the standards
         applied  by the  Lessee  in the  operation  and  maintenance  of  other
         comparable properties owned or leased by the Lessee or its Affiliates.

                  (b) The Lessor  shall  under no  circumstances  be required to
         build any improvements on any Property, make any repairs, replacements,
         alterations  or renewals of any nature or  description to any Property,
         make any  expenditure  whatsoever in connection  with this Master Lease
         (other than for Advances  made in  accordance  with and pursuant to the
         terms  of the  Participation  Agreement  and  the  Construction  Agency
         Agreement)  or maintain any Property in any way. The Lessee  waives any
         right to (i) require the Lessor to maintain,  repair, or rebuild all or
         any part of any  Property  or (ii) make  repairs at the  expense of the
         Lessor  pursuant  to any  Requirement  of Law,  Insurance  Requirement,
         contract, agreement, or covenant, condition or restriction in effect at
         any time during the Lease Term.

                                       9


<PAGE>


                   (c)  The  Lessee  shall,   upon  the  expiration  or  earlier
         termination  of this Master Lease with  respect to any Property  (other
         than as a result of the  Lessee's  purchase of such  Property  from the
         Lessor as provided  herein),  vacate and surrender such Property to the
         Lessor in its then-current,  "AS IS" condition,  without any express or
         implied  warranty  subject to the Lessee's  obligations  under Sections
         8.3,   9.1(a),   10.1,   11.1,  14.1,  14.2  and  20.1.  Title  to  all
         improvements,   furnishings,   furniture,  fixtures  and  any  personal
         property  of the  Lessee  which  were not  funded by the Lessor and the
         Lender pursuant to the Participation  Agreement,  located on or about a
         Property  whether or not affixed to the realty,  shall,  subject to the
         following sentence, be and remain the property of the Lessee throughout
         the Lease  Term,  and at any time  during  the Lease  Term,  and within
         thirty (30) days following the expiration or earlier  termination date,
         may be removed by the Lessee or, at the Lessee's  election  surrendered
         with the Property,  in which event title to such  surrendered  property
         shall,  if the Lessor so elects,  be deemed  transferred to the Lessor.
         Notwithstanding  the foregoing,  any fixture  constituting  part of the
         Property which is required by Applicable Law or which cannot be removed
         without causing Material damage to or the diminution in the Fair Market
         Sales Value of the  applicable  Property shall at all times remain part
         of the Property.


                                    ARTICLE X

                               MODIFICATIONS, ETC.

         X.1  Modifications,  Substitutions and  Replacements.  During the Lease
Term, the Lessee, at its sole cost and expense, may at any time and from time to
time make alterations,  renovations,  improvements and additions to any Property
or any part thereof and substitutions and replacements  therefor  (collectively,
"Modifications"); provided, however, that:

                           (i) except for any  Modification  required to be made
                  pursuant to a Requirement of Law (a "Required  Modification"),
                  no Modification  shall adversely  affect the Fair Market Sales
                  Value of such  Property  below the  Property  Balance  of such
                  Property  as  a  whole   following  the   completion  of  such
                  Modification;

                           (ii) such  Modifications  shall be (and shall be done
                  in a manner)  consistent with the Plans and Specifications for
                  such Property;

                           (iii) such  Modifications  shall comply with Sections
                  8.3 and 9.1(a); and

                           (iv) the  Lessee  shall have  provided  notice to the
                  Lessor  of any  structural  Modification  the  cost  of  which
                  exceeds 10% of the Improvements Budget for such Property.

                                       10


<PAGE>


         All Modifications  shall remain part of the realty and shall be subject
to this Master Lease;  provided,  however,  that  Modifications that (x) are not
Required Modifications, (y) were not financed by the Participants and (z) can be
removed  without  causing  material  damage to or  diminution in the Fair Market
Sales Value of the Property below the Property  Balance shall be the property of
the Lessee or other  third  party and may be removed by Lessee  during the Lease
Term and up to 30 days following the expiration or earlier  termination  thereof
and shall not be subject  to this  Master  Lease.  The Lessee may place upon the
Properties any trade fixtures, machinery, equipment, inventory or other property
belonging  to the Lessee or third  parties  and may  remove  the same,  subject,
however,  to the terms of Section  9.1(a);  provided,  however,  that such trade
fixtures,  machinery,  equipment,  inventory  or other  property  can be removed
without causing  material damage to or diminution in the Fair Market Sales Value
of the Property below the Property Balance; provided, further, however, that the
Lessee shall keep and maintain at the  Properties  and shall not remove from the
Properties  any  Equipment  financed or otherwise  paid for by the  Participants
pursuant to the Participation Agreement.


                                   ARTICLE XI

                           WARRANT OF TITLE; EASEMENTS

         XI.1 Warrant of Title.

                  (a) The Lessee agrees that except as otherwise provided herein
         and subject to the terms of Article 12 relating to permitted  contests,
         the Lessee shall not directly or indirectly  create or allow to remain,
         and  shall   (subject  to  the   limitations  of  Section  5.4  of  the
         Construction  Agency Agreement which shall apply to Lessee's  liability
         under  this  Section  11.1  prior  to  the  Completion  Date)  promptly
         discharge at its sole cost and expense, any Lien (other than any Lessor
         Lien or any Permitted Property Lien), defect,  attachment,  levy, title
         retention agreement or claim upon any Property or any Lien, attachment,
         levy or claim with  respect to the Rent or with  respect to any amounts
         held by the Lessor or the Lender  pursuant to the Loan Agreement or the
         other  Operative  Documents,  other than  Permitted  Property Liens and
         Liens on machinery,  equipment,  general intangibles and other personal
         property  not  financed  by the  proceeds  of the  Loans or the  Lessor
         Amounts.

                  (b) Nothing  contained in this Master Lease shall be construed
         as  constituting  the  consent  or  request  of the Lessor or any other
         Participant,  expressed or implied,  to or for the  performance  by any
         contractor,  mechanic, laborer, materialman,  supplier or vendor of any
         labor  or  services  or for the  furnishing  of any  materials  for any
         construction,  alteration,  addition, repair or demolition of or to any
         Property or any part  thereof.  NOTICE IS HEREBY GIVEN THAT NEITHER THE
         LESSOR NOR THE LENDER IS

                                       11


<PAGE>

         OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO
         BE FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING A PROPERTY OR ANY PART
         THEREOF  THROUGH OR UNDER THE LESSEE,  AND THAT NO  MECHANIC'S OR OTHER
         LIENS FOR ANY SUCH LABOR,  SERVICES  OR  MATERIALS  SHALL  ATTACH TO OR
         AFFECT THE INTEREST OF THE LESSOR OR THE LENDER IN AND TO ANY PROPERTY.

         XI.2  Grants and Releases of Easements; Lessor's Waivers.

                  (a)  Provided  that no  Lease  Event  of  Default  shall  have
         occurred and be  continuing,  and subject to the provisions of Articles
         VII,  IX and X and  Section  8.3,  the Lessor  hereby  consents in each
         instance to the following  actions by the Lessee as the Lessor's agent,
         and   the   Lessor   hereby    appoints   the   Lessee   the   Lessor's
         attorney-in-fact,  with  full  authority  in the place and stead of the
         Lessor to take such  action or  actions  from time to time  during  the
         Lease Term, but at the Lessee's sole cost and expense: (i) the granting
         of easements,  licenses,  rights-of-way and other rights and privileges
         in the nature of easements  reasonably  necessary or desirable  for the
         use, repair,  or maintenance of any Property as herein  provided;  (ii)
         the  release of  existing  easements  or other  rights in the nature of
         easements which are for the benefit of any Property;  (iii) if required
         by   applicable   Governmental   Authority  in   connection   with  the
         Construction,  the dedication or transfer of unimproved portions of any
         Property  for  road,  highway  or  other  public  purposes;   (iv)  the
         imposition  of and the  execution of  amendments  to any  covenants and
         restrictions;  (v) the filing and processing of Site Development Permit
         Amendments, Parcel Maps, Tentative Maps, Development Agreements and any
         and  all  other  permit  applications,   authorizations,   entitlement,
         agreements  with any  government  or  regulatory  agency or  amendments
         thereof,  or other  documents  reasonably  required or  beneficial  for
         construction  or  Modification  of the  Improvements,  or amendments to
         Permitted Property Liens or governmental permits or approvals affecting
         any Property; and (vi) the execution and filing of tract or parcel maps
         subdividing  the Land into lots or  parcels or  reconfiguring  existing
         lots or parcels;  provided,  however, that in each case (A) such grant,
         release, dedication,  transfer, imposition or amendment does not reduce
         the Fair Market Sales Value of the applicable Property, (B) such grant,
         release,  dedication,  transfer  or  amendment  that  in  the  Lessee's
         judgment is reasonably  necessary or beneficial in connection  with the
         use, maintenance, alteration or improvement of the applicable Property,
         (C) such grant, release, dedication,  transfer, imposition or amendment
         will not cause the applicable  Property or any portion  thereof to fail
         to  comply  with the  provisions  of this  Master  Lease  or any  other
         Operative  Documents and all  Requirements of Law  (including,  without
         limitation,  all applicable zoning, planning,  building and subdivision
         ordinances,  all  applicable  restrictive  covenants and all applicable
         architectural  approval  requirements);  (D) any  and all  governmental
         consents  or  approvals   required   prior  to  such  grant,   release,
         dedication,  transfer,  imposition,  annexation or amendment  have been
         obtained,  and any and all filings  required  prior to

                                       12


<PAGE>

         such action have been made; (E) the Lessee shall remain obligated under
         this  Master  Lease and under any  instrument  executed  by the  Lessee
         consenting to the  assignment of the Lessor's  interests in this Master
         Lease as security  for  indebtedness,  in each such case in  accordance
         with  their  terms,   substantially  as  though  such  grant,  release,
         dedication,  transfer or  amendment  had not been  effected and (F) the
         Lessee shall pay and perform any  obligations  of the Lessor under such
         grant, release, dedication,  transfer, imposition or amendment. Without
         limiting the effectiveness of the foregoing, the Lessor shall, upon the
         request  of the  Lessee,  and at the  Lessee's  sole cost and  expense,
         execute and deliver any instruments necessary or appropriate to confirm
         any such grant, release, dedication,  transfer, imposition or amendment
         to any Person permitted under this Section 11.2(a)  including  landlord
         waivers with respect to any of the foregoing.

                  (b) The Lessor  acknowledges  the Lessee's  (and any permitted
         sublessee's)   right  to  finance  and  to  secure  under  the  Uniform
         Commercial  Code,   inventory,   furnishings,   furniture,   equipment,
         machinery,  leasehold  improvements and other personal property located
         at the  Properties  other  than  Equipment,  and the  Lessor  agrees to
         execute Lessor waiver forms and release of Lessor Liens in favor of any
         purchase  money  seller,  lessor or lender  which has  financed  or may
         finance in the future such items.


                                   ARTICLE XII

                               PERMITTED CONTESTS

         XII.1  Permitted  Contests  in  Respect  of  Applicable  Law Other Than
Impositions.  Except to the extent otherwise  provided in Section 13.5(b) of the
Participation Agreement regarding Taxes and other Impositions, if, to the extent
and for so long as (a) a test, challenge, appeal or proceeding for review of any
Applicable  Law relating to any Property  shall be prosecuted  diligently and in
good faith in appropriate  proceedings by the Lessee or (b) compliance with such
Applicable Law shall have been excused or exempted by a valid nonconforming use,
variance  permit,  waiver,  extension  or  forbearance,  the Lessee shall not be
required to comply with such  Applicable Law but only if and so long as any such
test,  challenge,   appeal,  proceeding,   waiver,  extension,   forbearance  or
noncompliance shall not, in the reasonable opinion of the Lessor and the Lender,
involve (A) any risk of criminal  liability  being  imposed on the Lessor or the
Lender or (B) any risk of (1) foreclosure,  forfeiture or loss of such Property,
or any  material  part  thereof,  or (2)  the  nonpayment  of  Rent  or (C)  any
substantial  risk of (1) the sale of, or the  creation of any Lien (other than a
Permitted  Property  Lien) on, any part of such  Property,  (2) civil  liability
being imposed on the Lessor, the Lender, or such Property, or (3) enjoinment of,
or interference with, the use, possession or disposition of such Property in any
material respect.  Lessor, at Lessee's sole cost and expense,  shall execute and
deliver to Lessee such  authorizations  and other documents as may reasonably be
required in connection with any such permitted contest.

                                       13


<PAGE>

         The Lessor will not be required to join in any proceedings  pursuant to
this Section 12.1 unless a provision of any  Applicable  Law requires  that such
proceedings  be brought by or in the name of the  Lessor;  and in that event the
Lessor will join in the  proceedings  or permit  them or any part  thereof to be
brought  in its  name  if and so  long as (i) the  Lessee  has not  elected  the
Remarketing Option and (ii) the Lessee pays all related expenses and indemnifies
the Lessor and the Lender with respect to such proceedings.


                                  ARTICLE XIII

                                    INSURANCE

         XIII.1 Public Liability and Workers' Compensation Insurance.

          (a) During the Lease Term, the Lessee shall procure and carry,  at the
Lessee's  sole cost and expense,  commercial  general  liability  insurance  for
claims for injuries or death sustained by persons or damage to property while on
the  Properties  and such other public  liability  coverages  as are  ordinarily
procured by the Lessee or its Affiliates who own or operate similar  properties,
but in any case shall  provide  liability  coverage of at least  $2,000,000  per
person and $1,000,000 for property damage per  occurrence.  Such insurance shall
be on terms and in amounts that are no less favorable than insurance  maintained
by the Lessee or such  Affiliates  with respect to similar  properties that they
own and that are in accordance with normal industry  practice.  The policy shall
be  endorsed to include the Lessor and the Lender as  additional  insureds.  The
policy  shall also  specifically  provide  that the policy  shall be  considered
primary insurance which shall apply to any loss or claim before any contribution
by any insurance which the Lessor or the Lender may have in force.

         (b) During the Basic  Lease  Term,  the Lessee  shall have the right to
self-insure  with  respect to any of the  insurance  required  under this Master
Lease so long as (i) the Lessee is a publicly traded domestic  corporation whose
stock is traded on a  nationally  recognized  exchange;  (ii) the Lessee has not
assigned this Master Lease;  (iii) the Lessee maintains a consolidated net worth
(determined as provided in Section 10.2.1 of the Participation  Agreement) of at
least $400 million according to its most recent audited financial statement; and
(iv) the Lessee  governs  and  manages  its  self-insurance  program in a manner
consistent with programs  managed by prudent  businesses whose stock is publicly
traded on nationally recognized exchanges. Upon request, the Lessee shall supply
the Lessor from time to time with evidence reasonably satisfactory to the Lessor
of the Lessee's net worth and the satisfaction of the condition set forth above.
If the Lessee elects to self-insure,  the Lessee shall be responsible for losses
or liabilities  which would have been assumed by the insurance  companies  which
would have issued the  insurance  required of the Lessee under the Master Lease.
The Lessee  will notify the Lessor in advance of any period for which it intends
to  self-insure  and shall  provide  Lessor with  satisfactory  evidence that it
complies with these  requirements  in order to give the Lessor an opportunity to
confirm the

                                       14


<PAGE>

satisfaction  of the  conditions  set  forth  above.  For so long as the  Lessee
self-insures,  the  Lessee,  for  applicable  periods,  shall  and  does  hereby
indemnify  and hold  harmless  the  Lessor,  its  officers,  directors,  agents,
employees and representatives  from and against all costs,  damages, or expenses
(including  reasonable  attorneys'  fees)  incurred  or paid by the  Lessor as a
result of any claim  customarily  covered by a broad-form  policy of  commercial
general liability insurance, including a contractual liability endorsement.


                                   ARTICLE XIV

                CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS

         XIV.1 Casualty and Condemnation.

                   (a) Subject to the  provisions of this Article XIV, if all or
         a portion of any  Property is damaged or  destroyed in whole or in part
         by a Casualty  or if the use,  access,  occupancy,  easement  rights or
         title  to any  Property  or any  part  thereof,  is  the  subject  of a
         Condemnation, then

                           (i) any  insurance  proceeds  payable with respect to
                  such  Casualty  shall be paid  directly  to the  Lessee (or if
                  received by the Lessor,  shall be paid over to the Lessee) for
                  the sole purpose of  reconstruction,  refurbishment and repair
                  of  such  Property;   provided,   that  such   reconstruction,
                  refurbishment  or repair can be completed  prior to the end of
                  the Lease  Term;  provided,  further,  that in the event  that
                  either (i) such reconstruction, refurbishment or repair cannot
                  be  completed  prior to the end of the Lease  Term or (ii) the
                  Lessee   shall  elect  not  to  use  such   proceeds  for  the
                  reconstruction, refurbishment or repair of such Property, then
                  all such  insurance  proceeds  payable  with  respect  to such
                  Casualty shall be paid to the Lessor to be applied towards the
                  payment of the Lease Balance in accordance with Section 7.2 of
                  the Participation Agreement, and

                           (ii) (x) in the case of a Condemnation (that is not a
                  Significant  Condemnation)  of  any  part  of  any  Land  (not
                  including   the   applicable   Improvements),   any  award  or
                  compensation  relating thereto shall be paid to the Lessee for
                  the sole purpose of  restoration  of such Property  (provided,
                  that such restoration can be completed prior to the end of the
                  Lease  Term) or else shall be paid to the Lessor to be applied
                  in the Lessor's and the Lender's reasonable  discretion to the
                  partial restoration of such Property or towards the payment of
                  the  applicable  Lease  Balance,  and  (y)  in the  case  of a
                  Significant Condemnation,  such award or compensation shall be
                  paid to the  Lessor  to be  applied  in the  Lessor's  and the
                  Lender's  reasonable  discretion  to the  restoration  of such
                  Property or

                                       15


<PAGE>

                  toward  the  payment  of  the  applicable   Lease  Balance  in
                  accordance with Article VII of the Participation Agreement;

         provided,  however,  that,  in each case,  if a Lease  Event of Default
         shall have  occurred and be  continuing,  such award,  compensation  or
         insurance proceeds shall be paid directly to the Lessor or, if received
         by the  Lessee,  shall be held in trust for the Lessor and the  Lender,
         and shall be paid by the  Lessee to the  Account to be  distributed  in
         accordance with Article VII of the Participation Agreement. All amounts
         held by the Lessor or the Lender when a Lease  Event of Default  exists
         hereunder on account of any award,  compensation or insurance  proceeds
         either paid  directly to the Lessor or the Lender or turned over to the
         Lessor or the Lender  shall at the  option of the Lessor  either be (i)
         paid to the Lessee for the repair of damage  caused by such Casualty or
         Condemnation  in  accordance  with clause (d) of this Section  14.1, or
         (ii) applied to the  repayment of the Lease Balance of such Property on
         the  Termination  Date with respect to such Property in accordance with
         Article XV.

                   (b) The  Lessee  may  appear in any  proceeding  or action to
         negotiate,  prosecute,  adjust  or  appeal  any  claim  for any  award,
         compensation  or insurance  payment on account of any such  Casualty or
         Condemnation  and  shall  pay all  expenses  thereof.  At the  Lessee's
         reasonable  request,  and at the Lessee's  sole cost and  expense,  the
         Lessor and the Lender shall participate in any such proceeding, action,
         negotiation, prosecution or adjustment. The Lessor and the Lessee agree
         that this Master  Lease shall  control the rights of the Lessor and the
         Lessee in and to any such award, compensation or insurance payment.

                  (c) If the  Lessor or the  Lessee  shall  receive  notice of a
         Casualty or of an actual,  pending or  threatened  Condemnation  of any
         Property or any interest therein, the Lessor or the Lessee, as the case
         may be,  shall  give  notice  thereof  to the other  and to the  Lender
         promptly after the receipt of such notice.

                  (d) If pursuant  to this  Section  14.1 and Section  15.1 this
         Master  Lease  shall  continue  in full  force and effect  following  a
         Casualty  or  Condemnation  with  respect to any  Property,  the Lessee
         shall, at its sole cost and expense (and,  without  limitation,  if any
         award,  compensation or insurance  payment is not sufficient to restore
         such Property in accordance  with this clause (d), the Lessee shall pay
         the  shortfall),  promptly  and  diligently  repair  any damage to such
         Property caused by such Casualty or Condemnation in conformity with the
         requirements  of Sections 8.3 and 9.1, to restore  such  Property to at
         least the same  condition,  operative  value and useful life as existed
         immediately prior to such Casualty or Condemnation.  Upon completion of
         such  restoration,  the Lessee shall furnish to the Lessor  (which,  in
         turn,  shall  furnish to the  Lender)  an  architect's  certificate  of
         substantial   completion  and  a  Responsible   Officer's   Certificate
         confirming that such  restoration  has been completed  pursuant to this
         Master Lease.

                                       16


<PAGE>

                  (e) In no event  shall a Casualty or  Condemnation  affect the
         Lessee's  obligations to pay Rent pursuant to Section 3.1 or to perform
         its  obligations  and pay any  amounts  due on the  Expiration  Date or
         pursuant to Articles XVIII and XXI.

                  (f) Any Excess Casualty/Condemnation  Proceeds received by the
         Lessor or the Lender in respect of a Casualty or Condemnation  shall be
         turned over to the Lessee.

         XIV.2  Environmental  Matters.  Promptly upon the Lessee's knowledge of
the existence of an  Environmental  Violation with respect to any Property,  the
Lessee shall notify the Lessor in writing of such  Environmental  Violation.  If
the Lessor  elects  not to  terminate  this  Master  Lease with  respect to such
Property  pursuant to Section 15.1,  at the Lessee's sole cost and expense,  the
Lessee shall promptly and diligently  commence any response,  clean up, remedial
or other action  necessary to remove,  clean up or remediate  the  Environmental
Violation  in  accordance  with the terms of  Section  8.3  (including  the last
sentence  thereof).  The Lessee shall, upon completion of remedial action by the
Lessee,  cause  to  be  prepared  by  an  environmental   consultant  reasonably
acceptable to the Lessor a report describing the Environmental Violation and the
actions  taken by the Lessee (or its agents) in  response to such  Environmental
Violation,  and a statement by the consultant that the  Environmental  Violation
has been  remedied  in  compliance  in all  material  respects  with  applicable
Hazardous  Materials Laws. Each such  Environmental  Violation shall be remedied
prior to the  Expiration  Date unless  each  Property  with  respect to which an
Environmental  Violation  has  occurred  but  has not  been  remedied  has  been
purchased by the Lessee in accordance with Section 18.1. Nothing in this Article
XIV shall reduce or limit the Lessee's  obligations under Sections 13.1, 13.2 or
13.3 of the Participation Agreement.

         XIV.3  Notice  of  Environmental  Matters.  Promptly,  but in any event
within thirty (30)  Business Days from the date the Lessee has actual  knowledge
thereof pursuant to written notice from any Governmental  Authority,  the Lessee
shall provide to the Lessor written  notice of any pending or threatened  claim,
action or proceeding involving any Hazardous Materials Laws or any Release on or
in connection  with any Property.  All such notices shall describe in reasonable
detail the nature of the claim,  action or proceeding and the Lessee's  proposed
response thereto.  In addition,  the Lessee shall provide to the Lessor,  within
thirty (30) Business Days of receipt,  copies of all written communications with
any Governmental Authority relating to any Environmental Violation in connection
with any Property.  The Lessee shall also promptly provide such detailed reports
of any such material environmental claims. In the event that the Lessor receives
written  notice  of any  pending  or  threatened  claim,  action  or  proceeding
involving any Hazardous  Materials Laws or any Release on or in connection  with
the Property,  the Lessor shall promptly give notice thereof to the Lessee.  For
purposes of this  paragraph,  "actual  knowledge"  of the Lessee  shall mean the
actual  knowledge of the Lessee's Senior Director of Facilities and Real Estate,
who is responsible for the day to day operations of the Properties.

                                       17


<PAGE>

                                   ARTICLE XV

                              TERMINATION OF LEASE

         XV.1 Partial  Termination upon Certain Events.  If any of the following
occurs during the Basic Lease Term with respect to any Parcel of Land or related
Improvements:

                           (i) a Significant Casualty occurs;

                           (ii) a Significant Condemnation occurs; or

                           (iii)  an   Environmental   Violation  occurs  or  is
                  discovered  the  cost of  remediation  of which  would  exceed
                  $5,000,000  (x) and such  violation  has not  been  remediated
                  within 180 days after the  occurrence  or discovery or (y) the
                  Lessee has notified the Lessor prior to the expiration of such
                  180 day  period  that the  violation  will  not be  remediated
                  within such period;

                           and the Lessor  shall have  given  written  notice (a
                  "Termination  Notice") to the Lessee that, as a consequence of
                  such event (x) the Lease Supplement relating to such Parcel of
                  Land and related Improvements is to be terminated and (y) this
                  Master Lease is to be  terminated  with respect to such Parcel
                  of Land and  related  Improvements,  then the Lessee  shall be
                  obligated to purchase the Lessor's  interest in such  affected
                  Parcel of Land and related  Improvements  within 30 days after
                  Lessee's receipt of the Termination  Notice,  by paying to the
                  Lessor an amount equal to the Lease Balance  allocable to such
                  affected Parcel of Land and related Improvements.

         XV.2 Termination  Procedures.  On the date of the payment by the Lessee
of the portion of the Lease Balance allocable to the affected Parcel of Land and
related   Improvements   in  accordance   with  Section  15.1  (such  date,  the
"Termination  Date"), the Lease Supplement relating to each such affected Parcel
of Land and related  Improvements  shall  terminate  and this Master Lease shall
terminate with respect to each such Parcel of Land and related Improvements and,
concurrent with the Lessor's receipt of such payment,

                  (a) each such Parcel of Land and related Improvements shall be
         conveyed to the Lessee (or to the Lessee's designee) "AS IS" and in its
         then  present  physical  condition  free of Lessor Liens and the Lessor
         shall  execute  and  deliver  a  termination  of  Ground  Lease  and an
         assignment  of the Lessor's  entire  interest in the Parcel of Land and
         the Improvements  thereon with respect to such Land in recordable form;
         and

                  (b) in the case of a  termination  pursuant  to clause  (i) or
         (ii) of Section  15.1,  the Lessor  shall  convey to the Lessee any Net
         Proceeds  with  respect  to the  Significant

                                       18


<PAGE>

         Casualty or Significant  Condemnation giving rise to the termination of
         this  Master  Lease  with  respect to such  Parcel of Land and  related
         Improvements  theretofore  received by the Lessor or, at the request of
         the Lessee,  such amounts shall be applied towards payment of the Lease
         Balance   allocable  to  the  affected   Parcel  of  Land  and  related
         Improvements.


                                   ARTICLE XVI

                                EVENTS OF DEFAULT

         XVI.1 Lease Events of Default. The occurrence of any one or more of the
following  events  (whether such event shall be voluntary or involuntary or come
about or be effected by  operation of law or pursuant to or in  compliance  with
any judgment,  decree or order of any court or any order,  rule or regulation of
any  administrative  or  governmental  body) shall  constitute a "Lease Event of
Default":

                  (a) the  Lessee  shall  fail to make  payment of (i) any Basic
         Rent  within  three (3)  Business  Days after the same shall be due and
         payable,  (ii) any  Supplemental  Rent due and payable  within five (5)
         Business Days after  receipt of written  notice  thereof,  or (iii) any
         Property  Balance,  Lease  Balance,  Purchase  Option  Price or Maximum
         Recourse Amount on the date due therefor; or

                  (b) the  Lessee  shall  fail to  deposit  with the  Collateral
         Agent,  on  the  Business  Day  next  succeeding  the  occurrence  of a
         Deficiency Date, the Deficiency Collateral;

                  (c) the Lessee shall not be in compliance with Section 10.2 of
         the Participation  Agreement (which breach shall constitute an Event of
         Default  hereunder  even if the Basic Lease Term has not commenced with
         respect to any Property);

                  (d) the Lessee  shall  fail to  observe  or perform  any term,
         covenant or  condition  of the Lessee  under this  Master  Lease or the
         other  Operative  Documents  to  which  it is party  other  than  those
         described  in the  foregoing  clauses  (a),  (b) or (c) of this Section
         16.1,  and,  in each such  case,  such  failure  shall  have  continued
         unremedied for thirty (30) days after written  notice;  provided,  that
         such cure period shall be extended from thirty (30) days to one-hundred
         and twenty (120) days if such term,  covenant or condition is,  without
         prejudice to the Lessor and/or the Lender,  curable or  remediable  and
         the  Lessee is at all times  during  such  extended  period  diligently
         taking action  reasonably  satisfactory to the Lessor and the Lender to
         so cure or remedy  default;  provided,  further,  that  failure  by the
         Lessee to fully  comply with the  requirements  of Section  20.1 hereof
         shall not be subject to any cure period;  provided,  further, that, for
         purposes of clarification, the failure by the Lessee to comply with the
         foregoing  clauses  (a),  (b) or (c) of this  Section 16.1 shall not be
         subject  to any cure  period  except  as  expressly  set  forth in such
         clauses (a), (b) or (c);

                                       19


<PAGE>

                   (e) any representation or warranty made or deemed made by the
         Lessee herein or in any Operative Document or which is contained in any
         certificate,  document or financial or other statement furnished at any
         time under or in connection with any Operative  Document shall prove to
         have been incorrect,  false or misleading in any material respect on or
         as of the date made or deemed made,  unless the fact or condition which
         made such representation of warranty incorrect, false or misleading is,
         without  prejudice  to  the  Lessor  and/or  the  Lender,   curable  or
         remediable  and the  Lessee is at all times  diligently  taking  action
         reasonably  satisfactory  to the  Lessor  and the  Lender to so cure or
         remedy  such fact or  condition  in order to make  such  representation
         and/or  warranty  true and correct in all material  respects,  in which
         event the Lessee shall have  one-hundred and eighty (180) days from the
         date such representation or warranty was made or deemed made to cure or
         remedy such default;

                  (f) a Construction Agency Agreement Event of Default for which
         the Lessor shall have full recourse  against the Lessee in its capacity
         as Construction Agent shall have occurred and be continuing:

                  (g) any  Operative  Document  or any Lien  granted  under  any
         Operative  Document  shall,  taken as a whole,  terminate,  cease to be
         effective  against,  or  cease  to be the  legal,  valid,  binding  and
         enforceable obligation of the Lessee;

                  (h) the  Lessee  shall  directly  or  indirectly  contest  the
         effectiveness,  validity,  binding  nature  of  enforceability  of  any
         Operative Document or any Lien granted under any Operative Document;

                   (i) any member of the ERISA  Group shall fail to pay when due
         an amount or amounts aggregating in excess of $5,000,000 which it shall
         have become liable to pay under Title IV of ERISA;  or notice of intent
         to terminate a Material  plan shall be filed under Title IV of ERISA by
         any  member  of  the  ERISA  Group,  any  plan   administrator  or  any
         combination of the foregoing;  or the PBGC shall institute  proceedings
         under Title IV of ERISA to terminate,  to impose  liability (other than
         for premiums  under Section 4007 of ERISA) in respect of, or to cause a
         trustee to be appointed to administer any Material Plan; or a condition
         shall  exist by reason of which the PBGC would be  entitled to obtain a
         decree adjudicating that any Material Plan must be terminated; or there
         shall occur a complete or partial withdrawal from, or a default, within
         the meaning of Section  4219(c)(5)  of ERISA,  with  respect to, one or
         more  Multiemployer  plans which could cause one or more members of the
         ERISA  Group  to  incur a  current  payment  obligation  in  excess  of
         $5,000,000;

                  (j) any judgements or orders for the payment of money,  in any
         case not covered by  insurance,  individually  or in the  aggregate  in
         excess of  $10,000,000  shall be  rendered

                                       20


<PAGE>

         against  the  Lessee  and  such   judgment  or  order  shall   continue
         unsatisfied and unstayed  (pursuant to laws, rules or court orders) for
         a period of thirty (30) days;

                  (k) a default  shall occur in the payment when due (subject to
         any applicable grace period),  whether by acceleration or otherwise, of
         any Indebtedness of the Lessee or any of its Consolidated  Subsidiaries
         having a principal amount,  individually or in the aggregate, in excess
         of  $10,000,000,  or a  default  shall  occur  in  the  performance  or
         observance  of  any  obligation  or  condition  with  respect  to  such
         Indebtedness  if the  effect  of  such  default  is to  accelerate  the
         maturity  of any  such  Indebtedness  or such  default  shall  continue
         unremedied for any applicable  period of time  sufficient to permit the
         holder or holders  of such  Indebtedness,  or any  trustee or agent for
         such  holders,  to cause such  Indebtedness  to become due and  payable
         prior to its expressed maturity;

                  (l) [Intentionally Omitted]

                  (m) the Lessee shall fail to maintain the  insurance  required
         under Article XIII hereof or shall fail to observe or perform any term,
         covenant on condition to be performed by it under  Section 20.1 of this
         Master Lease;

                  (n) the Lessee shall (i) admit in writing its inability to pay
         its debts  generally as they become due, (ii) file a petition under the
         United States bankruptcy laws or any other applicable insolvency law or
         statute  of the United  States of America or any State or  Commonwealth
         thereof,  (iii)  make a  general  assignment  for  the  benefit  of its
         creditors,  (iv) consent to the  appointment of a receiver of itself or
         the whole or any  substantial  part of its property,  (v) fail to cause
         the discharge of any custodian,  trustee or receiver  appointed for the
         Lessee or the whole or a substantial  part of its property within sixty
         (60) days after  such  appointment,  or (vi) file a petition  or answer
         seeking  or  consenting  to  reorganization  under  the  United  States
         bankruptcy  laws or any other  applicable  insolvency law or statute of
         the United States of America or any State or Commonwealth thereof; or

                  (o)  insolvency  proceedings  or a  petition  under the United
         States  bankruptcy  laws  or any  other  applicable  insolvency  law or
         statute  of the United  States of America or any State or  Commonwealth
         thereof  shall be filed  against  the Lessee and not  dismissed  within
         sixty (60) days from the date of its filing (provided, that the Lessee,
         hereby expressly authorizes the Lessor and each Lender to appear in any
         court conducting any such proceeding  during such sixty (60) day period
         to  preserve,  protect and defend  their  respective  rights  under the
         Operative Documents),  or a court of competent jurisdiction shall enter
         an order or decree  appointing,  without the  consent of the Lessee,  a
         receiver of the Lessee or the whole or a substantial part of any of its
         property,  and such  order or decree  shall not be vacated or set aside
         within sixty (60) days from the date of the entry thereof.

                                       21


<PAGE>

         XVI.2  Remedies.  Upon the occurrence of any Lease Event of Default and
the  declaration  thereof,  the Lease Balance due hereunder  without further act
shall be accelerated and be deemed to be due and payable  hereunder,  and at any
time  thereafter,  the Lessor may,  subject to the last three paragraphs of this
Section 16.2 and so long as such Lease Event of Default is continuing, do one or
more of the  following  as the Lessor in its sole  discretion  shall  determine,
without  limiting  any other  right or remedy  the Lessor may have on account of
such Lease Event of Default.

                  (a) The  Lessor  may,  by notice  to the  Lessee,  rescind  or
         terminate this Master Lease as to any Property or all of the Properties
         as of the date  specified  in such  notice;  provided,  however  (i) no
         reletting,  reentry or taking of  possession  of any  Property  (or any
         portion  thereof) by the Lessor will be construed as an election on the
         Lessor's part to terminate this Master Lease unless a written notice of
         such  intention  is  given  to the  Lessee,  (ii)  notwithstanding  any
         reletting,  reentry or taking of possession, the Lessor may at any time
         thereafter  elect to terminate this Master Lease for a continuing Lease
         Event of Default and (iii) no act or thing done by the Lessor or any of
         its agents,  representatives or employees and no agreement  accepting a
         surrender of the  Properties  shall be valid unless the same be made in
         writing and executed by the Lessor;

                  (b) The Lessor may (i) demand that the Lessee,  and the Lessee
         shall  upon the  written  demand of the  Lessor,  return  any  Property
         promptly  to the Lessor in the manner and  condition  required  by, and
         otherwise in accordance with all of the provisions of, Articles VII and
         IX and Section 8.3 hereof as if such  Property  were being  returned at
         the end of the Lease Term,  and the Lessor  shall not be liable for the
         reimbursement of the Lessee for any costs and expenses  incurred by the
         Lessee in connection  therewith and (ii) without prejudice to any other
         remedy which the Lessor may have for possession of any Property, and to
         the extent and in the manner  permitted by Applicable  Law,  enter upon
         such Property and take immediate possession of (to the exclusion of the
         Lessee)  such  Property  or any part  thereof  and expel or remove  the
         Lessee and any other  Person who may be  occupying  such  Property,  by
         summary  proceedings or otherwise,  all without liability to the Lessee
         for or by reason of such entry or taking of possession, whether for the
         restoration  of damage to property  caused by such taking or  otherwise
         and, in addition to the  Lessor's  other  damages,  the Lessee shall be
         responsible  for all costs and expenses  incurred by the Lessor  and/or
         the  Lender  in  connection  with  any  reletting,  including,  without
         limitation,  reasonable  brokers' fees and all costs of any alterations
         or repairs made by the Lessor or the Lender;

                  (c) As more  fully set  forth in each  Lease  Supplement,  the
         Lessor may sell all or any part of any one or more Properties,  subject
         in each case to the Ground  Lease,  at public or private  sale,  as the
         Lessor may determine and upon any such sale the Lessee's  obligation to
         pay Basic Rent with respect to the Property sold shall terminate;

                                       22


<PAGE>

                  (d) The Lessor may, at its option, elect not to terminate this
         Master Lease with respect to any Property or all of the  Properties and
         continue to collect all Basic Rent,  Supplemental  Rent,  and all other
         amounts due to the Lessor  (together with all costs of collection)  and
         enforce the  Lessee's  obligations  under this Master Lease as and when
         the same become due, or are to be  performed,  and at the option of the
         Lessor,  upon any abandonment of any Property by the Lessee or re-entry
         of same by the Lessor,  the Lessor may enforce,  by suit or  otherwise,
         all other  covenants and conditions  hereof to be performed or complied
         with  by the  Lessee  hereunder  and to  exercise  all  other  remedies
         permitted  by  Section  1951.4  of the  California  Civil  Code  or any
         amendments  thereof or any  successor  laws which  replace such Section
         1951.4;

                  (e)  Unless  all of the  Properties  have  been  sold in their
         entirety,  the  Lessor  may,  whether  or not  the  Lessor  shall  have
         exercised or shall  thereafter  at any time  exercise any of its rights
         under  clause (b),  (c) or (d) of this Section 16.2 with respect to the
         Properties or any portions  thereof,  demand,  by written notice to the
         Lessee  specifying a date (a "Termination  Date") not earlier than five
         (5) days after the date of such notice,  that the Lessee  purchase,  on
         such  Termination  Date for a price  equal  to the  Lease  Balance  the
         Properties  subject  to  the  Master  Lease,  in  accordance  with  the
         provisions of Article XXI;

                  (f) The Lessor may exercise any other right or remedy that may
         be available to it under  Applicable Law,  including any and all rights
         or remedies under the Pledge Agreement, or proceed by appropriate court
         action  (legal or  equitable) to enforce the terms hereof or to recover
         damages for the breach hereof. Separate suits may be brought to collect
         any such  damages  for any  period(s),  and such suits shall not in any
         manner prejudice the Lessor's right to collect any such damages for any
         subsequent period(s), or the Lessor may defer any such suit until after
         the  expiration  of the Lease  Term,  in which event such suit shall be
         deemed not to have accrued until the expiration of the Lease Term;

                  (g) The Lessor may retain and apply  against the Lease Balance
         all sums which the Lessor would, absent such Lease Event of Default, be
         required  to pay to, or turn over to, the Lessee  pursuant to the terms
         of this Master Lease and upon payment in full of the Lease Balance from
         such sums,  the  Properties  shall be conveyed to Lessee in  accordance
         with Section 21.1 of the Master Lease;

                  (h) If a Lease  Event of Default  shall have  occurred  and be
         continuing, the Lessor, to the extent permitted by Applicable Law, as a
         matter of right and with notice to the Lessee,  shall have the right to
         apply to any  court  having  jurisdiction  to  appoint  a  receiver  or
         receivers of any Property,  and the Lessee hereby irrevocably  consents
         to any such  appointment.  Any such  receiver(s)  shall have all of the
         usual powers and duties of  receivers in like or similar  cases and all
         of the  powers  and  duties of the  Lessor in case of

                                       23


<PAGE>

         entry,  and shall  continue as such and exercise  such powers until the
         date  of  confirmation  of  the  sale  of  such  Property  unless  such
         receivership is sooner terminated;

                  (i) To the maximum extent  permitted by law, the Lessee hereby
         waives the benefit of any  appraisement,  valuation,  stay,  extension,
         reinstatement  and  redemption  laws now or  hereafter in force and all
         rights of  marshalling  in the event of any sale of any Property or any
         interest therein;

                   (j) The Lessor  shall be entitled  to enforce  payment of the
         indebtedness  and performance of the obligations  secured hereby and to
         exercise  all rights and powers under this  instrument  or under any of
         the other  Operative  Documents  or other  agreement or any laws now or
         hereafter  in  force,  notwithstanding  some or all of the  obligations
         secured  hereby may now or hereafter be otherwise  secured,  whether by
         mortgage,  security agreement,  pledge, lien,  assignment or otherwise.
         Neither the acceptance of this  instrument nor its  enforcement,  shall
         prejudice or in any manner affect the Lessor's right to realize upon or
         enforce any other  security  now or  hereafter  held by the Lessor,  it
         being  agreed  that  the  Lessor  shall be  entitled  to  enforce  this
         instrument  and any other  security now or hereafter held by the Lessor
         in such order and manner as the Lessor may  determine  in its  absolute
         discretion.  No remedy herein  conferred upon or reserved to the Lessor
         is  intended  to be  exclusive  of any  other  remedy  herein or by law
         provided or  permitted,  but each shall be  cumulative  and shall be in
         addition to every other  remedy  given  hereunder  or now or  hereafter
         existing at law or in equity or by statute. Every power or remedy given
         by any of the  Operative  Documents  to the  Lessor  or to which it may
         otherwise be entitled, may be exercised, concurrently or independently,
         from  time to time  and as  often  as may be  deemed  expedient  by the
         Lessor.  In no event shall the Lessor,  in the exercise of the remedies
         provided  in  this  instrument  (including,   without  limitation,   in
         connection  with the assignment of rents to Lessor,  or the appointment
         of a receiver  and the entry of such  receiver  onto all or any part of
         the Properties), be deemed a "mortgagee in possession",  and the Lessor
         shall not in any way be made liable for any act,  either of  commission
         or omission,  in connection with the exercise of such remedies,  except
         for the  exercise of the  remedies set forth in clauses (c), (j) or (k)
         of this Section 16.2 within thirty (30) days after the  declaration  of
         the  occurrence  of an Event of Default in  contravention  of  Lessee's
         purchase right set forth in the last paragraph of this Section 16.2;

                  (k)  Foreclosure;  Power of Sale.  The Lessee hereby grants to
         Chicago  Title  Insurance  Company,   as  trustee  (together  with  all
         successor trustees,  the "Trustee"),  IN TRUST, WITH POWER OF SALE, all
         of the Lessee's right, title and interest in and to the Properties and,
         upon  the  occurrence  of  a  Lease  Event  of  Default  and  following
         termination  of this Master Lease by the Lessor,  the Lessor shall have
         the power and authority,  after proper notice and lapse of such time as
         may be required by law and by the 

                                       24


<PAGE>

         Master  Lease,  to  cause  the  Trustee  to sell  any  Property  or the
         Properties  by notifying  the Trustee of that  election and  depositing
         with  the  Trustee  this   instrument  and  receipts  and  evidence  of
         expenditures  made and secured  hereby as the  Trustee  may  reasonably
         require.  Upon receipt of any such notice from the Lessor,  the Trustee
         shall cause to be  recorded,  published  and  delivered  to Lessee such
         Notice  of  Default  and  Election  to  Sell  as is  then  required  by
         applicable  statutory  authority and by this  instrument,  which notice
         shall set forth,  among other things,  the nature of the  breach(es) or
         default(s),  the  action(s)  required to effect a cure  thereof and the
         time  period  within  which  that cure may be  effected.  If no cure is
         effected within the statutory time limits following  recordation of the
         Notice of Default  and  Election  to Sell and after  Notice of Sale has
         been given as required by the  above-referenced  statutes,  the Trustee
         may without  further  notice or demand sell and convey any  Property or
         the Properties in accordance with the above-referenced  statutes.  Each
         Property may be sold as a whole or in separate  lots,  parcels or items
         and in such order as the Lessor may  direct,  at public  auction to the
         highest bidder for cash in lawful money of the United States payable at
         the time of sale. The Trustee shall deliver to such purchaser(s) a good
         and  sufficient  deed or deeds  conveying  the  property  so sold,  but
         without any  covenant or warranty  express or implied.  The recitals in
         such  deed of any  matter  or fact  shall  be  conclusive  proof of the
         truthfulness thereof. Any Person,  including the Lessee, the Trustee or
         the Lessor,  may purchase at any sale. After deducting all costs,  fees
         and expenses of the Lessor and the Trustee, including costs of evidence
         of title in  connection  with any  sale,  the  Lessor  shall  apply the
         proceeds of sale, in the following order of priority, to payment of the
         following (collectively referred to herein as the "Obligated Amounts"):
         (i) first,  all  amounts  expended  by or for the account of the Lessor
         under the terms  hereof and not then repaid,  with accrued  interest at
         the Overdue Rate; and (ii) second, all other amounts then due and owing
         hereunder including,  without limitation,  all Basic Rent, Supplemental
         Rent, the full amount of the Lease Balance as of the date of sale as if
         this Lease had been  terminated  with respect to all of the  Properties
         then subject to this Lease under  Section  18.1,  and all other amounts
         then  payable  by the Lessee  under this Lease and the other  Operative
         Documents,  with the Lessor  having the right to apply the  proceeds of
         sale to the amounts  described above in this clause (ii) in such order,
         proportion  and  priority  as the  Lessor  may  elect  in its  sole and
         absolute  discretion.  To the extent permitted by applicable  statutes,
         the Trustee may postpone the sale of all or any portion of any Property
         or the Properties by public announcement at the time and place of sale,
         and from time to time thereafter may again postpone that sale by public
         announcement or  subsequently  noticed sale, and without further notice
         may make such sale at the time fixed at the last  postponement  or may,
         in its  discretion,  give a new notice of sale. A sale of less than all
         of any Property or the  Properties or any  defective or irregular  sale
         made hereunder shall not exhaust the power of sale provided for herein,
         and subsequent  sales may be made hereunder  until all of the Obligated
         Amounts  have been  satisfied  or all the  Properties  have been  sold,
         without defect or irregularity.  No action of the Lessor or the Trustee
         based  upon  the  provisions  contained  herein  or  contained  in  the
         applicable statutes,  including,  without limitation, the giving of the
         Notice of Default  and

                                       25


<PAGE>

         Election to Sell or the Notice of Sale, shall constitute an election of
         remedies  which  would  preclude  the  Lessor  from  pursuing  judicial
         foreclosure  before a  completed  sale  pursuant  to the  power of sale
         contained herein. The Lessor shall have the right, with the irrevocable
         consent of the Lessee  hereby given and  evidenced by the  execution of
         this  instrument,  to obtain  appointment of a receiver by any court of
         competent  jurisdiction  without  further  notice to the Lessee,  which
         receiver  shall be  authorized  and  empowered  to enter  upon and take
         possession  of any Property or the  Properties,  including all personal
         property  used  upon or in  connection  with the real  property  herein
         conveyed,  to let any  Property or the  Properties,  to receive all the
         rents,  issues and profits,  if any,  which may be due or become due in
         respect to the  leasing of any  Property or the  Properties  to another
         party (herein,  "Property  Rents"),  and apply the Property Rents after
         payment of all  necessary  charges  and  expenses to  reduction  of the
         Obligated Amounts in such order,  proportion and priority as the Lessor
         may elect. At the option of the Lessor,  the receiver shall  accomplish
         entry and taking possession of any Property or the Properties by actual
         entry and  possession  or by  notice to the  Lessee.  The  receiver  so
         appointed  by a court of competent  jurisdiction  shall be empowered to
         issue receiver's  certificates for funds advanced by the Lessor for the
         purpose of  protecting  the value of any Property or the  Properties as
         security for the Obligated Amounts. The amounts evidenced by receiver's
         certificates  shall bear  interest at the Overdue Rate and may be added
         to the Obligated Amounts if the Lessee or a junior lienholder purchases
         any Property or the  Properties at the trustee's  sale.  The Trustee or
         any successor  acting  hereunder may resign and thereupon be discharged
         of the trusts  hereunder upon thirty (30) days' prior written notice to
         the Lessor.  Regardless of whether the Trustee resigns, the Lessor may,
         from time to time,  substitute a successor or successors to any Trustee
         named  herein or acting  hereunder  in  accordance  with any  statutory
         procedure for such substitution; or if Lessor, in its sole and absolute
         discretion,  so  elects,  and if  permitted  by  law,  the  Lessor  may
         substitute such successors or successors by recording, in the office of
         the recorder of the county or counties  where such Property is located,
         a  document  executed  by the  Lessor  and  containing  the name of the
         original  Lessee  and  Lessor  hereunder,  the book and page where this
         instrument  (or a  memorandum  hereof) is recorded  (and/or  instrument
         number,  as  applicable)  and  the  name  of  the  new  Trustee,  which
         instrument  shall be conclusive  proof of proper  substitution  of such
         successor Trustee or Trustees,  who shall,  without conveyance from the
         predecessor  Trustee,   succeed  to  the  rights,   powers  and  duties
         hereunder.  It is acknowledged that A POWER OF SALE HAS BEEN GRANTED IN
         THIS  INSTRUMENT;  A POWER  OF  SALE  MAY  ALLOW  LESSOR  TO  TAKE  THE
         PROPERTIES AND SELL THEM WITHOUT GOING TO COURT IN A FORECLOSURE ACTION
         UPON DEFAULT BY THE LESSEE UNDER THIS INSTRUMENT.

         The Lessor  acknowledges  and agrees  that upon the  declaration  of an
Event of Default,  to the maximum extent permitted by law, the Lessee waives any
right to  contest  the sum of the

                                       26


<PAGE>

Lessor Balance and the Loan Balance as the liquidated sum due upon  acceleration
of this instrument.

         If, pursuant to the exercise by the Lessor of its remedies  pursuant to
this Section  16.2,  the Lease  Balance and all other amounts due and owing from
the Lessee under this Master Lease and the other  Operative  Documents have been
paid in full,  then the Lessor  shall  remit to the  Lessee  any excess  amounts
received  by the Lessor.  The  obligation  to deliver  such excess to the Lessee
shall survive this Master Lease.

         The Lessor  agrees that for thirty (30) days after the  declaration  of
the occurrence of an Event of Default, Lessor shall forebear from exercising the
remedies  set forth in clauses (c), (j) or (k) of this Section 16.2 during which
time Lessee may tender to the Lessor in  immediately  available  funds the Lease
Balance  and all past due and  accrued and unpaid Rent upon the receipt of which
Lessor shall transfer all Parcels of Land and related Improvements to the Lessee
or its designee in accordance with Article XXI hereof.

         XVI.3  Waiver of  Certain  Rights.  Subject to the  foregoing,  if this
Master Lease shall be terminated pursuant to Section 16.2, the Lessee waives, to
the  fullest  extent  permitted  by  law,  (a) any  notice  of  re-entry  or the
institution of legal proceedings to obtain re-entry or possession; (b) any right
of redemption, re-entry or repossession except as expressly provided herein; (c)
the  benefit  of any laws now or  hereafter  in force  exempting  property  from
liability  for rent or for debt or  limiting  the  Lessor  with  respect  to the
election of remedies;  and (d) any other rights which might  otherwise  limit or
modify any of the Lessor's rights or remedies under this Article XVI.


                                  ARTICLE XVII

                             LESSOR'S RIGHT TO CURE

         XVII.1 The Lessor's  Right to Cure the  Lessee's  Lease  Defaults.  The
Lessor,  without  waiving or releasing any obligation or Lease Event of Default,
may (but shall be under no obligation  to) remedy any Lease Event of Default for
the  account  and at the sole cost and  expense  of the  Lessee,  including  the
failure by the Lessee to maintain the insurance  required by Article  XIII,  and
may, to the fullest extent  permitted by law, and  notwithstanding  any right of
quiet enjoyment in favor of the Lessee, enter upon any Property for such purpose
and take all such action thereon as may be necessary or appropriate therefor. No
such  entry  shall  be  deemed  an  eviction  of  the  Lessee.   All  reasonable
out-of-pocket  costs and  expenses so incurred  (including  fees and expenses of
counsel),  together with  interest  thereon at the Overdue Rate from the date on
which such sums or expenses are paid by the Lessor,  shall be paid by the Lessee
to the Lessor as Supplemental Rent.

                                       27


<PAGE>

                                  ARTICLE XVIII

                               PURCHASE PROVISIONS

         XVIII.1 Purchase of the Properties.

                  (a) Subject to the  conditions  contained  herein,  the Lessee
         shall have the  irrevocable  option on any Business Day to purchase all
         or subject, however, to clause (b) of this Section 18.1, certain of the
         Properties  subject  to this  Master  Lease at a price  (the  "Purchase
         Price")  equal to that  portion of the Lease  Balance  allocable to the
         applicable  Property or Properties on the date of such  purchase,  plus
         Break Costs (if any). The Lessee's  exercise of its option  pursuant to
         this Section 18.1 shall be subject to the following conditions:

                           (i) the Lessee shall have delivered a Purchase Notice
                  to the  Lessor  not less than  thirty  (30) days prior to such
                  purchase, specifying the date of such purchase;

                           (ii) the Lessee  shall not have  given  notice of its
                  intention to exercise the Remarketing Option;

                           (iii)  notwithstanding  any other provision contained
                  herein, if any  Environmental  Violation shall not be remedied
                  by the Lessee with respect to any Property in accordance  with
                  Section 14.2, the Lessee shall be deemed to have made a timely
                  election of its option to purchase such Property in accordance
                  with this Section 18.1.

                  (b) If the  Lessee  elects  to  purchase  less than all of the
         Properties,  it may do so  provided  that if  only  two  buildings  are
         subject to separate Lease Supplements, the Lessee may purchase only one
         such building together with the parking garage, if any, then subject to
         a separate Lease  Supplement.  If three buildings have been constructed
         and are subject to separate Lease Supplements,  the Lessee may purchase
         one  building  with or without the parking  garage or any two  building
         together with the parking garage; provided,  however, that in each case
         the Lessee  must  demonstrate  to the  reasonable  satisfaction  of the
         Lessor that adequate  adjacent  parking  complying with  Applicable Law
         remains  available for the building(s)  retained by the Lessor and that
         such partial  purchase has not  materially  diminished  the Fair Market
         Sales Value of such retained building(s).

                  (c) If the  Lessee  exercises  its  option  pursuant  to  this
         Section  18.1 then,  upon the  Lessor's  receipt of all  amounts due in
         connection  therewith,  the Lessor shall  transfer to the Lessee or its
         designee  all of the Lessor's  right,  title and interest in and to the
         applicable  Properties in accordance  with the  procedures set forth in
         Section 21.1(a), such transfer to be effective as of the date specified
         in the Purchase Notice. The Lessee may

                                       28


<PAGE>

         designate,  in a notice  given  to the  Lessor  not less  than ten (10)
         Business Days prior to the closing of such purchase  (time being of the
         essence), the transferee or transferees to whom the conveyance shall be
         made (if other than to the Lessee), in which case such conveyance shall
         (subject to the terms and  conditions set forth herein) be made to such
         designee;  provided,  however, that such designation of a transferee or
         transferees  shall  not  cause  the  Lessee  to be  released,  fully or
         partially,  from  any of  its  obligations  under  this  Master  Lease,
         including, without limitation, the obligation to pay to the Lessor that
         portion of the Lease Balance allocable to the applicable  Properties on
         the date specified in the applicable  Purchase Notice. The Lessee shall
         have the right to elect by written  notice to the Lessor and the Lender
         to have all or part of any such Purchase  Price paid by  liquidation of
         the  Collateral  so long as, in the case of a purchase of less than all
         the  Properties,  Sufficient  Collateral  remains subject to the Pledge
         Agreement.

                                   ARTICLE XIX

                          EXTENSION OF EXPIRATION DATE

         XIX.1  Extension  of  Expiration   Date.  The  Lessee  may  extend  the
Expiration Date subject to, and in accordance  with, the terms and conditions of
Section 11.2 of the Participation Agreement.


                                   ARTICLE XX

                               REMARKETING OPTION

         XX.1  Option to  Remarket.  Subject to the  fulfillment  of each of the
conditions set forth in this Section 20.1, the Lessee shall have the option (the
"Remarketing Option") to market all of the Property on behalf of the Lessor.

         The Lessee's  effective  exercise and  consummation  of the Remarketing
Option  shall  be  subject  to the due  and  timely  fulfillment  of each of the
following provisions as to the Property as of the dates set forth below:

                  (a) No  earlier  than  twelve  months  and not later  than six
         months prior to the Scheduled  Basic Lease Term  Termination  Date, the
         Lessee shall give to the Lessor written notice of the Lessee's exercise
         of the Remarketing Option, which exercise shall be irrevocable. Failure
         by the Lessee to give timely  notice  shall be deemed to be an election
         by the Lessee,  without further act thereby, of its Purchase Option for
         all of the Properties.

                                       29


<PAGE>

                  (b) Not later than  ninety  (90) days  prior to the  Scheduled
         Basic Lease Term  Termination  Date,  the Lessee  shall  deliver to the
         Lessor an Environmental  Audit for the Properties.  Such  Environmental
         Audit shall be prepared by an environmental  consultant selected by the
         Lessor  in  the  Lessor's  reasonable   discretion  and  shall  contain
         conclusions   reasonably   satisfactory   to  the   Lessor  as  to  the
         environmental status of the Properties. If any such Environmental Audit
         indicates any exceptions, the Lessee shall have also delivered prior to
         the  Scheduled  Basic  Lease  Term   Termination   Date,  a  Phase  Two
         environmental assessment by such environmental consultant and a written
         statement by such  environmental  consultant  indicating  that all such
         exceptions  have been remedied in compliance with Applicable Law. As of
         the Scheduled Basic Lease Term Termination Date, any Permitted Property
         Liens  (other than (x) Liens of the type  described  in clause (iii) of
         the definition of "Permitted Property Liens" to the extent, but only to
         the extent,  the Lessor is in its opinion fully indemnified  therefrom,
         and (y) Liens of the type  described in clause (vii) of the  definition
         of "Permitted  Property  Liens") on any Property that were contested by
         the Lessee shall have been removed.

                  (c) No Event of Default  shall have occurred and be continuing
         that shall not have been cured on or prior to the Expiration Date.

                  (d)  During  the  Marketing  Period,   the  Lessee  shall,  as
         nonexclusive agent for the Lessor, use reasonable commercial efforts to
         sell the Lessor's interest in the Properties on or before the Scheduled
         Basic  Lease  Term  Termination  Date and will  attempt  to obtain  the
         highest  purchase  price therefor and for not less than the Fair Market
         Sales Value.

                  (e) The Lessee shall have  obtained,  at its cost and expense,
         all required  governmental  and  regulatory  consents and approvals and
         shall have made all filings as required by  Applicable  Law in order to
         carry out and complete the  transfer of each of the  Properties.  As to
         the Lessor,  any such sale shall be made on an "as is, with all faults"
         basis without  representation  or warranty by the Lessor other than the
         absence of Lessor Liens.

                  (f) The  Lessee  shall  pay  directly,  and not  from the sale
         proceeds, all prorations and credits, whether incurred by the Lessor or
         the Lessee, including without limitation, the cost of all environmental
         reports,  appraisals  required under Section 13.2 of the  Participation
         Agreement and the Lessee's attorneys' fees.

                  (g) The  Lessee  shall  pay to the  Lessor  on or prior to the
         Scheduled  Basic  Lease  Term  Termination  Date  (or  in the  case  of
         Supplemental  Rent, to the Person entitled  thereto) an amount equal to
         the  Maximum  Recourse  Amount plus all accrued and unpaid Rent and all
         other amounts  hereunder  which have accrued or will accrue prior to or
         as of the Scheduled Basic Lease Term  Termination  Date, in the type of
         funds specified in Section 3.1(b) hereof;

                                       30


<PAGE>

                  (h) The gross proceeds (the "Gross  Remarketing  Proceeds") of
         the sale of the Properties (less any marketing, closing or other costs,
         prorations or commissions  related to the marketing of the Properties),
         shall be paid directly to the Lessor;  provided,  however,  that if the
         sum of (x) the Gross  Remarketing  Proceeds from such sale plus (y) the
         Maximum  Recourse  Amount  received  by the Lessor  pursuant to Section
         20.1(g) creates an excess over the Lease Balance, then the excess shall
         be paid to the Lessee promptly after receipt thereof by the Lessor. The
         obligations  of the  Lessor  under this  paragraph  shall  survive  the
         expiration or termination of this Master Lease.

                  (i) No subleases  affecting any Property shall be in effect on
         the Scheduled Basic Lease Term Termination Date.

         If the Lessee effectively elects the Remarketing Option and the sale of
         any  Property  is not  consummated  prior  to the end of the  Marketing
         Period,  the Lessee shall,  in addition to making the payment  required
         pursuant to Section 20.1(g) above, at its own cost and expense, do each
         of the following:

                           (i)  execute  and  deliver  to  the  Lessor  and  the
                  Lessor's  title  insurance  company  an  affidavit  as to  the
                  absence of any Liens (other than  Permitted  Property Liens of
                  the type described in clause (i), (vii),  (viii),  (ix) or (x)
                  Liens  for  taxes  not yet due and  Lessor  Liens),  and shall
                  execute and deliver to the Lessor a statement  of  termination
                  of this Master Lease to the extent relating to such Property;

                           (ii) on the Expiration Date,  transfer  possession of
                  such  Property to the Lessor or any Person  designated  by the
                  Lessor,  by  surrendering  the same into the possession of the
                  Lessor or such  Person,  as the case may be, in the  condition
                  required  by  this  Section  20.1  and  in   compliance   with
                  Applicable Law; and

                           (iii)  for a  period  of up to  one  year  after  the
                  Expiration Date,  cooperate  reasonably with the Lessor and/or
                  any Person  designated by the Lessor to receive such Property,
                  which  cooperation  shall  include   reasonable  efforts  with
                  respect to the following,  all of which the Lessee shall do on
                  or before the  Expiration  Date for such  Property  or as soon
                  thereafter as is reasonably  practicable:  providing copies of
                  all books and records  regarding the maintenance and ownership
                  of  such  Property  and  all  know-how,   data  and  technical
                  information relating thereto,  providing a current copy of the
                  applicable Plans and Specifications, granting or assigning all
                  assignable   licenses   necessary   for  the   operation   and
                  maintenance  of such  Property and  cooperating  reasonably in
                  seeking and obtaining all necessary  Governmental  Action. The
                  obligations of the Lessee under this  paragraph  shall survive
                  the expiration or termination of this Master Lease.

                                       31


<PAGE>

         Lessor shall have no obligation  to approve any bid for the  Properties
except for bona fide all-cash bids which,  together with amounts  payable by the
Lessee under clause (g) hereof,  in the aggregate is at least equal to the Lease
Balance  and the  acceptance  of  which  will  not  subject  the  Lessor  to any
additional  liability.  Except as expressly set forth  herein,  the Lessee shall
have no right,  power or  authority  to bind the  Lessor or any  Participant  in
connection with any proposed sale of any Property.

          If one or more of the foregoing  provisions  (a) through (i) shall not
be fulfilled as of the  Expiration  Date with respect to any Property,  then the
Remarketing  Option  shall  be  null  and  void  (whether  or not  it  has  been
theretofore exercised by the Lessee) as to all of the Properties, in which event
all of the Lessee's rights under this Section 20.1 shall  immediately  terminate
and the Lessee shall  purchase  from the Lessor,  and the Lessor shall convey to
the Lessee,  on the Expiration  Date all of the Lessor's  interest in all of the
Properties for an amount equal to the Lease Balance.

         XX.2 Certain  Obligations  Continue.  During the Marketing Period,  the
obligation  of the Lessee to pay Rent with respect to each  Property  (including
the installment of Rent due on the Expiration Date) shall continue  undiminished
until payment in full of the Loan Balance plus any unpaid  Supplemental Rent due
to the Lessor with respect to the  Properties  under the Operative  Documents to
which the Lessee is a party. The Lessor shall have the right, but shall be under
no duty,  to solicit  bids,  to inquire into the efforts of the Lessee to obtain
bids or otherwise to take action in connection with any such sale.


                                   ARTICLE XXI

                 PROCEDURES RELATING TO PURCHASE OR REMARKETING

         XXI.1  Provisions  Relating  to the  Exercise  of  Purchase  Option  or
Obligation and Conveyance  Upon  Remarketing  and Conveyance  Upon Certain Other
Events.

                  (a) In connection  with any  termination  of this Master Lease
         with  respect to any  Property  pursuant to the terms of Article XV, in
         connection  with  any  purchase  or in  connection  with  the  Lessee's
         purchase  of  any  Property  in  accordance  with  Section  18.1  or in
         connection  with the  Lessee's  exercise  of the  purchase  right under
         Section  16.2,  then,  upon the date on which this  Master  Lease is to
         terminate with respect to the applicable  Property and upon the payment
         of all  amounts  due  under  Section  5.1 of  the  Construction  Agency
         Agreement, as applicable,  and upon tender by the Lessee of the amounts
         set forth in Article XV, Sections 16.2 or 18.1, as applicable:

                           (i) the  Lessor  shall  execute  and  deliver  to the
                  Lessee (or to the Lessee's  designee) at the Lessee's cost and
                  expense an  instrument  of transfer  relating to the  Lessor's
                  entire  interest in such Property or  Properties  (which shall
                  include a

                                       32


<PAGE>

                  termination  of the Ground Lease and an  assignment  of all of
                  the  Lessor's  right,  title  and  interest  in and to any Net
                  Proceeds  with  respect to such  Property  or  Properties  not
                  previously  received by the Lessor and an assignment of leases
                  of the  Properties),  in each  case  in  recordable  form  and
                  otherwise in  conformity  with local custom and free and clear
                  of the Lien of the Lessor Mortgage and any Lessor Liens;

                           (ii) such Property or Properties shall be conveyed to
                  the Lessee "AS IS" and in its then present physical condition;
                  and

                           (iii) the Lessor shall  execute and deliver to Lessee
                  and the Lessee's  title  insurance  company an affidavit as to
                  the  Lessor's  title and release  Lessor  Liens and the Lessor
                  Mortgage  and shall  execute and deliver to Lessee a statement
                  of  termination of this Master Lease to the extent this Master
                  Lease relates to such Property or Properties.

                  (b) If the Lessee properly  exercises the  Remarketing  Option
         and the Properties are sold,  then the Lessee shall,  on the Expiration
         Date, and at its own cost, transfer possession of all of the Properties
         to the independent  purchaser(s)  thereof, in each case by surrendering
         the same into the possession of the Lessor or such purchaser(s), as the
         case  may be,  free and  clear  of all  Liens,  in good  condition  (as
         modified by  Modifications  permitted by this Master  Lease),  ordinary
         wear and tear excepted, and in compliance with Applicable Law.


                                  ARTICLE XXII

                              ESTOPPEL CERTIFICATES

         XXII.1  Estoppel  Certificates.  At any time and from time to time upon
not less than thirty  (30)  Business  Days'  prior  request by the Lessor or the
Lessee (the  "Requesting  Party"),  the other party  (whichever party shall have
received such request,  the "Certifying  Party") shall furnish to the Requesting
Party a certificate  signed by an individual having the office of vice president
or higher in the Certifying  Party  certifying that this Master Lease is in full
force and  effect  (or that this  Master  Lease is in full  force and  effect as
modified and setting forth the modifications); the dates to which the Basic Rent
and  Supplemental  Rent have been paid;  to the best  knowledge of the signer of
such certificate, whether or not the Requesting Party is in default under any of
its obligations hereunder (and, if so, the nature of such alleged default);  and
such  other  matters  under  this  Master  Lease  as the  Requesting  Party  may
reasonably request. Any such certificate furnished pursuant to this Article XXII
may be relied upon by the  Requesting  Party,  and any  existing or  prospective
mortgagee,  purchaser or lender,  and any accountant or auditor,  of, from or to
the Requesting Party (or any Affiliate thereof).

                                       33


<PAGE>

                                  ARTICLE XXIII

                             ACCEPTANCE OF SURRENDER

         XXIII.1  Acceptance  of  Surrender.  No surrender to the Lessor of this
Master Lease or of all or any of the Properties or of any part of any thereof or
of any  interest  therein  shall be  valid or  effective  unless  agreed  to and
accepted in writing by the Lessor and,  prior to the payment or  performance  of
all obligations under the Loan Agreement and termination of the Commitments, the
Lender, and no act by the Lessor or the Lender or any representative or agent of
the Lessor or the Lender,  other than a written acceptance,  shall constitute an
acceptance of any such surrender.


                                  ARTICLE XXIV

                               NO MERGER OF TITLE

         XXIV.1  No Merger of  Title.  There  shall be no merger of this  Master
Lease or of the leasehold  estate  created hereby by reason of the fact that the
same Person may acquire,  own or hold,  directly or  indirectly,  in whole or in
part,  (a) this  Master  Lease or the  leasehold  estate  created  hereby or any
interest in this Master Lease or such  leasehold  estate,  (b) the fee or ground
leasehold estate in any Property, except as may expressly be stated in a written
instrument  duly  executed  and  delivered  by the  appropriate  Person or (c) a
beneficial interest in the Lessor.

                                       34


<PAGE>

                                   ARTICLE XXV

                              INTENT OF THE PARTIES

         XXV.1 Nature of Transaction.

                  (a) It is the  intent  of the  parties  that:  (i)  the  Lease
         constitutes  an operating  lease from Lessor to the Lessee for purposes
         of  the  Lessee's  financial  reporting,   (ii)  the  Lease  and  other
         transactions contemplated will result in the Lessee being recognized as
         the  owner of the  Properties  for  Federal  and state  income  tax and
         bankruptcy  purposes,  (iii) each Lease  Supplement  grants to Lessor a
         Lien on the Lessee's  interest in the Property  (exclusive  of Lessee's
         fee interest in the Land) covered thereby,  and (iv) the obligations of
         the Lessee to pay Basic Rent and any part of the Lease Balance shall be
         treated as  payments  of  interest  and  principal,  respectively,  for
         Federal and state income tax and bankruptcy purposes.  The Lessor shall
         be deemed to have a valid and binding security  interest in and Lien on
         the Lessee's  interest in the  Properties,  free and clear of all Liens
         other than Permitted Property Liens, as security for the obligations of
         the Lessee  under the  Operative  Documents  (it being  understood  and
         agreed that the Lessee does hereby grant a Lien, and convey,  transfer,
         assign, mortgage and warrant to Lessor and its successors,  transferees
         and  assigns,  for  the  benefit  of the  Lessor  and  its  successors,
         transferees  and assigns,  the  Properties and any proceeds or products
         thereof,  to have  and hold the  same as  collateral  security  for the
         payment and  performance  of the  obligations  of the Lessee  under the
         Operative  Documents),  each of the parties  hereto agrees that it will
         not, nor will it permit any  Affiliate to at any time,  take any action
         or fail to take any action with respect to the preparation or filing of
         any income tax return,  including an amended income tax return,  to the
         extent  that  such  action  or such  failure  to take  action  would be
         inconsistent  with  the  intention  of the  parties  expressed  in this
         Section 25.1.

                  (b)  Specifically,  without  limiting the generality of clause
         (a) of this Section 25.1,  the parties  hereto intend and agree that in
         the event of any insolvency or  receivership  proceedings or a petition
         under  the  United  States  bankruptcy  laws  or any  other  applicable
         insolvency laws or statute of the United States of America or any State
         or Commonwealth  thereof affecting Lessee,  Lessor,  any Participant or
         any collection  actions,  the  transactions  evidenced by the Operative
         Documents  shall be regarded as loans made by the  Participants  to the
         Lessee.

                                       35


<PAGE>

                                  ARTICLE XXVI

                                  MISCELLANEOUS

         XXVI.1 Survival;  Severability;  Etc. Anything contained in this Master
Lease to the contrary notwithstanding, all claims against and liabilities of the
Lessee or the Lessor arising from events  commencing  prior to the expiration or
earlier  termination  of this Master  Lease shall  survive  such  expiration  or
earlier termination for a period of one year except as to indemnification  which
shall continue to survive.  If any term or provision of this Master Lease or any
application thereof shall be declared invalid or unenforceable, the remainder of
this Master Lease and any other  application of such term or provision shall not
be  affected  thereby.  If any right or option of the  Lessee  provided  in this
Master Lease,  including any right or option described in Article XIV, XV, XVIII
or XX, would,  in the absence of the  limitation  imposed by this  sentence,  be
invalid or unenforceable as being in violation of the rule against  perpetuities
or any other  rule of law  relating  to the  vesting  of an  interest  in or the
suspension  of the power of  alienation  of property,  then such right or option
shall be  exercisable  only during the period  which shall end  twenty-one  (21)
years  after  the  date of  death of the last  survivor  of the  descendants  of
Franklin D. Roosevelt,  the former  President of the United States,  Henry Ford,
the deceased automobile  manufacturer,  and John D. Rockefeller,  the founder of
the  Standard  Oil  Company,  known to be  alive  on the date of the  execution,
acknowledgment and delivery of this Master Lease.

         XXVI.2  Amendments  and  Modifications.  Subject  to the  requirements,
restrictions and conditions set forth in the  Participation  Agreement,  neither
this Master Lease nor any provision hereof may be amended, waived, discharged or
terminated  except by an instrument in writing in recordable  form signed by the
Lessor and the Lessee.

         XXVI.3 No Waiver.  No failure by the  Lessor,  any  Participant  or the
Lessee to insist upon the strict  performance  of any term hereof or to exercise
any right, power or remedy upon a default  hereunder,  and no acceptance of full
or partial  payment of Rent during the  continuance  of any such default,  shall
constitute  a waiver of any such  default  or of any such term.  To the  fullest
extent  permitted  by law, no waiver of any default  shall  affect or alter this
Master Lease, and this Master Lease shall continue in full force and effect with
respect to any other then existing or subsequent default.

         XXVI.4 Notices. All notices, demands, requests, consents, approvals and
other  communications  hereunder shall be in writing and directed to the address
described in, and deemed  received in accordance with the provisions of, Section
15.3 of the Participation Agreement.

         XXVI.5  Successors  and Assigns.  All the terms and  provisions of this
Master  Lease  shall  inure to the  benefit  of the  parties  hereto  and  their
respective successors and permitted assigns.

                                       36


<PAGE>

         XXVI.6  Headings  and  Table of  Contents.  The  headings  and table of
contents in this Master Lease are for  convenience  of reference  only and shall
not limit or otherwise affect the meaning hereof.

         XXVI.7 Counterparts. This Master Lease may be executed in any number of
counterparts,  each of  which  shall  be an  original,  but all of  which  shall
together constitute one and the same instrument.

         XXVI.8  GOVERNING  LAW.  THIS MASTER  LEASE  SHALL BE GOVERNED  BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES,  EXCEPT AS TO MATTERS RELATING TO
THE CREATION OF THE LEASEHOLD  ESTATES  HEREUNDER AND THE EXERCISE OF RIGHTS AND
REMEDIES  WITH  RESPECT  THERETO,  WHICH SHALL BE GOVERNED BY AND  CONSTRUED  IN
ACCORDANCE  WITH  THE LAW OF THE  STATE  OF  CALIFORNIA.  WITHOUT  LIMITING  THE
FOREGOING,  IN THE EVENT  THAT THIS  MASTER  LEASE IS  DEEMED  TO  CONSTITUTE  A
FINANCING  WHICH IS THE  INTENTION OF THE PARTIES,  THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, SHALL GOVERN THE CREATION,
TERMS AND PROVISIONS OF THE INDEBTEDNESS  EVIDENCED HEREBY, BUT THE LIEN CREATED
HEREBY AND THE  CREATION AND THE  ENFORCEMENT  OF SAID LIEN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE
LOCATED.

         XXVI.9  Liability  Limited.  The  parties  hereto  agree that except as
specifically set forth in this Master Lease or in any other Operative  Document,
the Lessor  shall have no  personal  liability  whatsoever  to the Lessee or the
Lender or their  respective  successors and assigns for any claim based on or in
respect of this Master Lease or any of the other Operative  Documents or arising
in any way from the transactions contemplated hereby or thereby and the recourse
shall be solely had against the Lessor's  interest in the Properties;  provided,
however,  that Lessor shall be liable in its individual capacity (a) for its own
willful   misconduct   or  gross   negligence,   (b)   breach   of  any  of  its
representations,  warranties or covenants under the Operative Documents,  or (c)
for any Tax  based  on or  measured  by any  fees,  commission  or  compensation
received  by it for  acting  as the  Lessor  as  contemplated  by the  Operative
Documents; and further provided nothing therein shall impair or limit the rights
of Lessee against the Lender or Lessor relating to any Collateral held by either
of them from time to time under the Operative Documents.

         XXVI.10  Original Lease.  The single  executed  original of this Master
Lease marked "THIS  COUNTERPART  IS THE ORIGINAL  EXECUTED  COUNTERPART"  on the
signature page thereof and containing the receipt  thereof of Societe  Generale,
New York Branch,  as the Lender  therefor on or  following  the  signature  page
thereof  shall be the Original  Executed

                                       37


<PAGE>

Counterpart of this Master Lease (the "Original Executed  Counterpart").  To the
extent that this Master Lease constitutes chattel paper, as such term is defined
in the Uniform Commercial Code as in effect in any applicable  jurisdiction,  no
security  interest in this Master  Lease may be created  through the transfer or
possession of any counterpart other than the Original Executed Counterpart.

                                       38


<PAGE>


IN WITNESS  WHEREOF,  the parties have caused this Master Lease be duly executed
and delivered as of the date first above written.

                                   ELECTRONICS FOR IMAGING, INC.,
                                    as Lessee



                                   By /s/ Eric Saltzman
                                      ---------------------------------
                                     Name: Eric Saltzman
                                     Title: CFO

                                       39


<PAGE>



                                   SOCIETE GENERALE FINANCIAL
                                   CORPORATION, as Lessor



                                   By /s/ Powell Robinson III
                                      ---------------------------------
                                     Name: Powell Robinson III
                                     Title: First Vice President

                                       40


<PAGE>


THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.

Receipt  of  this  original   counterpart  of  the  foregoing  Lease  is  hereby
acknowledged as of the date hereof.


SOCIETE GENERALE, acting through its New York Branch,
  as Lender



By /s/ Jay Sands
   ---------------------------------
   Name: Jay Sands
   Title: Managing Director

                                       41





<TABLE>
                                              EFI Subsidaries
                                          As of December 31, 1999

<CAPTION>
Name                                                 Jurisdiction of Organization        Doing Business As*

<S>                                                  <C>                                 <C>
Electronics for Imaging Australia Pty Ltd            Australia

EFI Brazil LTDA                                      Brazil                              Electronics for
                                                                                         Imaging do Brazil

EFI (Canada), Inc.                                   Canada

Electronics for Imaging, International               Cayman Islands

Electronics for Imaging France SARL                  France                              EPLI

Electronics for Imaging GmbH                         Germany                             EFI Deutschland

Electronics for Imaging Italia SRL                   Italy

EFI KK                                               Japan                               Electronics for
                                                                                         Imaging KK

Electronics for Imaging, B.V.                        Netherlands

Electronics for Imaging Singapore Pte Ltd            Singapore

Electronics for Imaging AB                           Sweden                              Electronics for
                                                                                         Imaging Sweden

Electronics for Imaging (Europe) Limited             UK                                  Electronics for
                                                                                         Imaging UK

EFI Foreign Sales Corporation, Inc.                  US Virgin Islands

Electronics for Imaging (Israel) Ltd                 Israel

<FN>
* "Doing Business As" names have been listed only where they differ from the name of the subsidiary.
</FN>
</TABLE>









                                                                    EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statements on Forms S-8 (Nos. 33-56422,  33-80523, 33-85762, 33-93602, 333-11685
and 33-88135) of Electronics  for Imaging,  Inc. of our report dated January 18,
2000  appearing  in this Form  10-K.  We also  consent to the  incorporation  by
reference  of our report  dated  January 18, 2000  relating to the  consolidated
financial statement schedules, which appears in this Annual Report on Form 10-K.

PRICEWATERHOUSECOOPERS LLP

San Jose, California
March 16, 2000






<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
This  schedule  contains  summary  financial   information  extracted  from  the
condensed  balance  sheet,  condensed  statement  of  operations  and  condensed
statement of cash flows  included in the Company's  Form 10-K for the year ended
December  31,  1999  and is  qualified  in its  entirety  by  reference  to such
financial statements and the notes thereto.
</LEGEND>
<MULTIPLIER>                                              1,000
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                                   DEC-31-1999
<PERIOD-START>                                      JAN-01-1999
<PERIOD-END>                                        DEC-31-1999
<CASH>                                                  163,824
<SECURITIES>                                            306,504
<RECEIVABLES>                                            83,170
<ALLOWANCES>                                              1,266
<INVENTORY>                                              11,878
<CURRENT-ASSETS>                                        589,012
<PP&E>                                                  100,441
<DEPRECIATION>                                           50,665
<TOTAL-ASSETS>                                          656,075
<CURRENT-LIABILITIES>                                   101,421
<BONDS>                                                   3,467
<PREFERRED-MANDATORY>                                         0
<PREFERRED>                                                   0
<COMMON>                                                    557
<OTHER-SE>                                              550,630
<TOTAL-LIABILITY-AND-EQUITY>                            656,075
<SALES>                                                 570,752
<TOTAL-REVENUES>                                        570,752
<CGS>                                                   290,636
<TOTAL-COSTS>                                           290,636
<OTHER-EXPENSES>                                        154,169
<LOSS-PROVISION>                                              0
<INTEREST-EXPENSE>                                            0
<INCOME-PRETAX>                                         142,197
<INCOME-TAX>                                             46,914
<INCOME-CONTINUING>                                      95,283
<DISCONTINUED>                                                0
<EXTRAORDINARY>                                               0
<CHANGES>                                                     0
<NET-INCOME>                                             95,283
<EPS-BASIC>                                                1.74
<EPS-DILUTED>                                              1.67
        


</TABLE>