BORIS FELDMAN, State Bar No. 128838
DOUGLAS J. CLARK, State Bar No. 171499
MARK D. FLANAGAN, State Bar No. 130303
DAVID LANSKY, State Bar No. 199952
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
Telephone: (650) 493-9300
Facsimile: (650) 565-5100

Attorneys for Defendants
ELECTRONICS FOR IMAGING, INC., DAN
AVIDA and ERIC SALTZMAN

Defendants Electronics for Imaging, Inc. ("EFI"), Dan Avida and Eric Saltzman (the "Defendants"), hereby answer the allegations of Lead Plaintiffs' Class Action Complaint for Violations of the Securities Exchange Act of 1934 (the "Complaint").

1. Defendants deny the allegations in Paragraph 1 of the Complaint.

2. Defendants admit the allegations in Paragraph 2 of the Complaint.

3. Defendants admit the allegations in Paragraph 3 of the Complaint.

4. Defendants deny the allegations in Paragraph 4 of the Complaint.

5. Defendants admit that EFI is a developer, marketer and supplier of products and technologies that enable digital color printing over computer networks, and that the market for EFI's products is both highly competitive and volatile. Defendants deny the remaining allegations contained in paragraph 5 of the Complaint.

6. Defendants deny the allegations in Paragraph 6 of the Complaint.

7. Defendants deny the allegations in Paragraph 7 of the Complaint.

8. Defendants admit that on December 11, 1997, EFI announced that it expected its Q4 1997 revenues to be in the range of $60 million and its earnings per share to be around $0.06 (excluding charges associated with the Pipeline Acquisition). Defendants admit that EFI cited the principal reason for the lower than expected earnings to be delays in purchases associated with product transitions, aggressive reductions of inventory by its customer, and weakness in the Asian economies. Defendants admit that on the next day, the price of EFI common dropped. Defendants deny the remaining allegations of Paragraph 8 of the Complaint.

9. Defendants deny the allegations in Paragraph 9 of the Complaint, including its sub-parts (a) - (l).

10. Defendants admit that between April 10, 1997 and December 11, 1997, defendant Avida sold 65,000 shares of stock, defendant Lenches sold 90,008 shares of stock, defendant Rosenzweig sold 32,500 shares of stock and defendant Saltzman sold 33,500 shares of stock. The Defendants deny the remaining allegations contained in Paragraph 10 of the Complaint.

11. Defendants admit that from April 1, 1997 to December 15, 1997, EFI common stock was traded on the NASDAQ exchange under the symbol "EFII," and that there was a reported closing price for the stock on each day in that period. Defendants deny the remaining allegations contained in Paragraph 11 of the Complaint.

12. Defendants admit that this Court has jurisdiction over this action, and that it is asserted under the statutes and rules stated in Paragraph 12 of the Complaint.

13. Defendants admit that venue is proper in this District, but deny that any acts occurred which give rise to violation of the securities laws.

14. Defendants deny the allegations in Paragraph 14 of the Complaint.

15. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 15, and its subparts, of the Complaint and on that basis deny those allegations.

16. Defendants admit the allegations in Paragraph 16(a) of the Complaint. With respect to subparagraph (b), defendants admit that EFI maintained option plans for its employees and state that the terms of those plans speak for themselves and deny the remaining allegations in Paragraph 16(b) of the Complaint. Defendants deny the allegations in Paragraph 16(c) of the Complaint.

17. Defendants admit the allegations contained in the first four sentences of Paragraph 17(a) of the Complaint. Defendants admit that, from time to time during the purported Class Period, Defendant Avida possessed confidential or proprietary information about EFI and its operations, finances, financial condition and/or future prospects. Defendants admit that, during the Class Period, defendant Avida sold 65,000 shares of EFI stock. Defendants deny the remaining allegations contained in Paragraph 17(a) and 17(b) of the Complaint.

18. Defendants admit the allegations contained in the first three sentences of Paragraph 18(a) of the Complaint. Defendants admit that, from time to time during the purported Class Period, Defendant Lenches possessed confidential or proprietary information about EFI and its operations, finances, financial condition and/or future prospects. Defendants admit that, during the Class Period, defendant Lenches sold 90,008 shares of EFI stock. Defendants deny the remaining allegations contained in Paragraph 18(a) and 18(b) of the Complaint.

19. Defendants admit the allegations contained in the first two sentences of Paragraph 19(a) of the Complaint. Defendants admit that, from time to time during the purported Class Period, Defendant Rosenzweig possessed confidential or proprietary information about EFI and its operations, finances, financial condition and/or future prospects. Defendants admit that, during the Class Period, defendant Rosenzweig sold 32,500 shares of EFI stock. Defendants deny the remaining allegations contained in Paragraph 19(a) and 19(b) of the Complaint.

20. Defendants admit the allegations contained in the first three sentences of Paragraph 20(a) of the Complaint. Defendants admit that, from time to time during the purported Class Period, Defendant Saltzman possessed confidential or proprietary information about EFI and its operations, finances, financial condition and/or future prospects. Defendants admit that, during the Class Period, defendant Saltzman sold 33,500 shares of EFI stock. Defendants deny the remaining allegations contained in Paragraph 20(a) and 20(b) of the Complaint.

21. As used herein, "individual defendants" refers to defendants Dan Avida and Eric Saltzman.

22. Defendants admit that due to their positions, they are subject to certain duties and obligations imposed by the provisions of the federal securities laws and deny the remaining allegations of Paragraph 22 of the Complaint.

23. Defendants deny the allegations in Paragraph 23 of the Complaint.

24. Defendants deny the allegations in Paragraph 24 of the Complaint.

25. Defendants deny the allegations in Paragraph 25 of the Complaint.

26. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 26 of the Complaint and on that basis deny those allegations.

27. Defendants admit that, during the Class Period, EFI had over 50 million shares of stock outstanding, owned by numerous shareholders. Defendants are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in contained Paragraph 27 of the Complaint and on that basis deny those allegations.

28. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 28, and its subparts, of the Complaint and on that basis deny those allegations.

29. Defendants deny the allegations in Paragraph 29 of the Complaint.

30. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 30 of the Complaint and on that basis deny those allegations.

31. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 31 of the Complaint and on that basis deny those allegations.

32. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 32 of the Complaint and on that basis deny those allegations.

33. Defendants deny the allegations in Paragraph 33 of the Complaint.

34. Defendants deny the allegations in Paragraph 34 of the Complaint.

35. Defendants deny the allegations in Paragraph 35 of the Complaint.

36. Defendants deny the allegations in Paragraph 36 of the Complaint.

37. Defendants admit the allegations contained in the first sentence of Paragraph 37, and deny the remaining allegations.

38. Defendants deny the allegations in Paragraph 38 of the Complaint.

39. Defendants deny the allegations in Paragraph 39 of the Complaint.

40. Defendants deny the allegations in Paragraph 40 of the Complaint.

41. Defendants deny the allegations in Paragraph 41 of the Complaint.

42. Defendants deny the allegations in Paragraph 42 of the Complaint.

43. Defendants deny the allegations in Paragraph 43 of the Complaint.

44. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 44 of the Complaint and on that basis deny those allegations, except EFI admits that analysts employed by various investment firms, including Prudential Securities, BancAmerica Robertson Stephens & Co., Unterberg Harris and Lehman Brothers, occasionally published reports discussing EFI.

45. Defendants deny the allegations in Paragraph 45 of the Complaint.

46. Defendants deny the allegations in Paragraph 46 of the Complaint.

47. Defendants deny the allegations in Paragraph 47 of the Complaint.

48. Defendants deny the allegations in Paragraph 48 of the Complaint.

49. Defendants deny the allegations in Paragraph 49 of the Complaint.

50. Defendants deny the allegations in Paragraph 50 of the Complaint.

51. Defendants admit that on April 10, 1997, EFI issued a press release, and state that the press release speaks for itself. Defendants deny allegations contained in Paragraph 51 that are inconsistent with the language of the press release.

52. Defendants admit that on April 10, 1997, EFI held a conference call to discuss its quarterly results. Defendants are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 52 of the Complaint.

53. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 53 of the Complaint and on that basis deny those allegations.

54. Defendants admit that Unterberg Harris issued a report regarding EFI dated April 17, 1997. Defendants refer to the report for a complete statement of its contents. Defendants deny any remaining factual allegations contained in Paragraph 54.

55. Defendants admit that on May 7, 1997, EFI filed its Report on Form 10-Q for the first quarter ended March 31, 1997, and state that the Form 10-Q speaks for itself. Defendants deny any allegations contained in Paragraph 55 that are inconsistent with the language of the Form 10-Q. Defendants deny any remaining factual allegations contained in Paragraph 55.

56. Defendants deny the allegations in Paragraph 56 of the Complaint, including all of its subparts.

57. Defendants admit that, on July 10, 1997, EFI issued a press release, and that the press release speaks for itself. Defendants deny any allegations contained in Paragraph 57 that are inconsistent with the language of the press release.

58. Defendants admit that on July 10, 1997, EFI held a conference call to discuss its quarterly results. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 58 of the Complaint and on that basis deny those allegations.

59. Defendants admit that on July 11, 1997, Unterburg Harris issued a report regarding EFI. Defendants refer to that report for a complete statement of its contents. Defendants deny any remaining factual allegations in Paragraph 59.

60. Defendants admit that on July 11, 1997, Robertson Stephens & Co. issued a report regarding EFI. Defendants refer to that report for a complete statement of its contents. Defendants deny any remaining factual allegations in Paragraph 60.

61. Defendants admit that, on August 7, 1997, EFI filed its Report on Form 10-Q for the second quarter ended June 30, 1997, and that the Form 10-Q speaks for itself. Defendants deny any allegations contained in Paragraph 61 that are inconsistent with the language of the Form 10-Q. Defendants deny any remaining factual allegations in Paragraph 61.

62. Defendants admit that, on August 21, 1997, EFI issued a press release, and that the press release speaks for itself. Defendants deny any allegations contained in Paragraph 62 that are inconsistent with the language of the press release.

63. Defendants deny that allegations in Paragraph 63 of the Complaint, including its subparts.

64. Defendants admit that, on October 9, 1997, EFI issued a press release, and that the press release speaks for itself. Defendants deny any allegations contained in Paragraph 64 that are inconsistent with the language of the press release.

65. Defendants admit that EFI held an investor conference call on October 9, 1997. As to the balance of the allegations in Paragraph 65, defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 65 of the Complaint.

66. Defendants admit that on October 10, 1997, Robertson Stephens issued a report regarding EFI. Defendants refer to that report for a complete statement of its contents. Defendants deny any remaining factual allegations in Paragraph 66.

67. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 67 of the Complaint and on that basis deny those allegations.

68. Defendants admit that, on November 3, 1997, EFI issued a press release, and that the press release speaks for itself. Defendants deny any allegations contained in Paragraph 68 that are inconsistent with the language of the press release.

69. Defendants deny the allegations in Paragraph 69 of the Complaint.

70. Defendants admit that, on November 13, 1997, EFI filed its Report on Form 10-Q for the third quarter ended September 30, 1997, and that the Form 10-Q speaks for itself. Defendants deny any allegations contained in Paragraph 70 that are inconsistent with the language of the Form 10-Q. Defendants deny any remaining factual allegations in Paragraph 70.

71. Defendants admit that on or about December 4, 1997, defendant Saltzman met with an analyst and several investors. Defendants deny the remaining factual allegations in Paragraph 71.

72. Defendants deny the allegations in Paragraph 72 of the Complaint, and its sub-parts.

73. Defendants admit that on December 11, 1997, EFI announced that it expected its Q4 1997 revenues to be in the range of $60 million and its earnings per share to be around $0.06 (excluding charges associated with the Pipeline Acquisition). Defendants admit that EFI cited the principal reason for the lower than expected earnings to be delays in purchases associated with product transitions, aggressive reductions of inventory by its customers, and weakness in the Asian economies. Defendants admit that on the next day, the price of EFI common stock dropped. Defendants deny the remaining allegations of Paragraph 73 of the Complaint.

74. Defendants admit that EFI held a conference call with analysts immediately following the December 11, 1997 press release. Defendants admit that, during the call, EFI cited the principal reason for the lower than expected earnings to be delays in purchases associated with product transitions, aggressive reductions of inventory by its customers, and weakness in the Asian economies. Defendants deny the remaining allegations of Paragraph 74 of the Complaint.

75. Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 75 of the Complaint and on that basis deny those allegations.

76. Defendants admit the allegations contained in the first sentence of Paragraph 76 of the Complaint and deny the remaining allegations of Paragraph 76.

77. Defendants admit that EFI filed Reports on Form 10-Q for the quarters ending March 31, 1997 and June 30, 1997, and that the Form 10-Qs speak for themselves. Defendants deny any allegations contained in Paragraph 77 that are inconsistent with the language of the Form 10-Qs. Defendants further deny that the warnings contained in any 10-Qs issued by EFI were boilerplate or generic. Defendants deny the remaining allegations contained in Paragraph 77 of the Complaint.

78. Defendants deny the allegations in Paragraph 78 of the Complaint.

79. Defendants admit that the Individual Defendants sold shares of EFI stock during the Class Period. Defendants deny the remaining allegations contained in Paragraph 79 of the Complaint.

80. Defendants deny the allegations in Paragraph 80 of the Complaint.

81. Defendants hereby incorporate by reference their responses to Paragraphs 1-80 of the Complaint.

82. Defendants deny the allegations in Paragraph 82 of the Complaint.

83. Defendants deny the allegations in Paragraph 83 of the Complaint.

84. Defendants deny the allegations in Paragraph 84 of the Complaint.

85. Defendants deny the allegations in Paragraph 85 of the Complaint.

85(a). Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 85(a) of the Complaint and on that basis deny those allegations.

85(b). Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 85(b) of the Complaint and on that basis deny those allegations.

86. Defendants deny the allegations in Paragraph 86 of the Complaint.

87. Defendants hereby incorporate by reference their responses to Paragraphs 1-86 of the Complaint.

88. Defendants deny the allegations in Paragraph 88 of the Complaint.

89. Defendants deny the allegations in Paragraph 89 of the Complaint.

To the extent any response is required to Plaintiffs' Prayer for Relief, Defendants deny each and every allegation contained therein.

The Complaint and each cause of action alleged therein against Defendants fails to state a claim upon which relief can be granted.

Plaintiffs' claims are barred, in whole or in part, because Defendants acted in good faith and in conformity with all applicable federal statutes, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Private Securities Litigation Reform Act of 1995, and all applicable rules and regulations promulgated thereunder.

The named plaintiffs and members of the purported plaintiff class were negligent and did not exercise due care to discover the existence of some or all of the facts alleged in the Complaint upon which they assert liability against defendants. Thus, the actual and proximate cause of the damage to plaintiffs, if any, in whole or in part, is plaintiffs' negligence and their failure to exercise reasonable care.

In deciding to acquire EFI's common stock, the named plaintiffs and some or all of the members of plaintiff class did not justifiably rely upon the public filings, press releases, or other communications which they contend contained untrue statements of material fact, omissions of material fact or misleading statements.

The named plaintiffs and members of the purported plaintiff class and each of them are barred from claiming injury or damage, if any, because they failed to make reasonable efforts to mitigate such injury or damage, which would have prevented their injury or damages.

Defendants are not liable for the damages suffered by the named plaintiffs and members of the purported plaintiff class, if any, because the negligent, reckless and/or willful acts of others constituted independent intervening and superseding causes, relieving defendants of any liability.

The named plaintiffs and members of the purported plaintiff class were expressly advised in EFI's public filings and otherwise regarding the material facts concerning their investments. Plaintiffs therefore assumed the risk of any loss and are estopped from recovering any relief.

Many of the matters now claimed by the Complaint to be the subject of misrepresentations and omissions were publicly disclosed or were in the public domain and, as such, were available to the named plaintiffs and other members of the purported plaintiff class and were at all times reflected in the price of EFI's common stock, therefore the purchasers of EFI securities did not pay an artificially inflated price for these securities.

The claims of the named plaintiffs and the purported plaintiff class are barred in whole or in part by the doctrines of waiver, estoppel, ratification, and/or unclean hands.

The named plaintiffs and members of the purported plaintiff class failed to undertake a prompt and reasonable investigation of EFI's business, financial, sales, managerial and product development condition, and such a prompt and reasonable investigation would have prevented plaintiffs' damages, if any.

Each and every one of the defendants acted in good faith and did not materially assist in any violation of law nor directly or indirectly induce the act or acts constituting the alleged violations and causes of action.

The named plaintiff and members of the purported plaintiff class have failed to plead fraud or its predicate acts with sufficient particularity.

Each and every one of Defendants agree to be a control person under Section 20(a) of the Securities Act of 1934 acted in good faith and did not directly or indirectly induce the act or acts constituting the alleged violations and causes of action.

Defendants allege that every act or omission alleged in the Complaint was done or omitted in good faith conformity with the rules and regulations of the Securities and Exchange Commission and, therefore, pursuant to Section 19(a) of the Securities Act of 1933, there is no liability for any act or omission so alleged.

WHEREFORE, defendants pray that this Court enter judgment as follows:

1. That plaintiffs take nothing from defendants by their Complaint;

2. For costs and attorneys' fees and expert witness fees and court hearing costs;

3. For judgment in favor of defendants; and

4. For such other and further relief as this Court deems just and proper.