1057709--5/2/2006--CARREKER

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Our performance depends on the banking industry, and any change in the banking industry's demand for our solutions could reduce our revenues and have a material adverse effect on our business. Our future success depends on our ability to develop and license new technologies and services to meet the changing needs of our current and future customers, and our inability to introduce new solutions could negatively impact our ability to do business and maintain our financial condition. Our inability to respond to a decline in check volumes and to respond to rapid technological change or changes in industry standards could reduce our revenues and have a material adverse effect on our business. Our quarterly operating results fluctuate and may not accurately predict our future performance. Additionally, our fixed costs may lead to operating results below analyst or investor expectations if our revenues are below anticipated levels, which could adversely affect the market price of our common stock. Our mix of products and services could have a significant effect on our results of operations and the market price of our common stock. Although a material portion of our revenue comes from annually renewable maintenance agreements, we do not typically enter into long-term agreements with our customers, which makes it more difficult to plan and efficiently allocate our resources, and any deferral, modification or cancellation of a customer project can adversely affect our operating results. Our future success significantly depends on the experience of our key personnel, and the loss of any one of them could impair our ability to do business. We may be unable to fully benefit from our strategic alliances and acquisitions, which could negatively affect our business and hinder our ability to realize expected benefits. Our focus on providing business process outsourcing, or BPO, with a significant offshore component subjects us to risks associated with new markets, new competition, cross border and geopolitical risks and a dependence on third party providers. There is competition in our industry for qualified banking professionals and technical and managerial personnel, and our failure to attract and retain these people could affect our ability to respond to banking and technological change and to increase our revenues. A small number of customers accounts for a substantial portion of our business, so the loss of any one of them could have an adverse impact on our business and financial condition. We face increased competition that could result in price reductions, fewer customer orders and loss of market share, any of which could materially and adversely affect our business. Our inability to protect adequately our proprietary technology or to prevent its unauthorized use could divert our financial resources and cause significant expenditures, which could materially harm our business. Infringement claims by third parties can subject us to substantial liability and expenses and can impair our ability to sell our solutions. We depend on third parties for some of our technology licenses, and if we cannot obtain satisfactory licenses our business could suffer. We may face liability claims related to the use of our solutions and the defense of these claims could have a negative effect on our business, results of operations or financial condition. Our software and solutions may contain defects or errors, which could adversely affect our business and subject us to liability claims. Information and data security requirements placed upon us by our customers necessitates investment and improvement in our information technology infrastructure and processes and a failure to adequately protect such information could adversely affect our business. We face risks in connection with the expansion of our international operations, which could have a negative impact on our business, financial condition and results of operations. Government regulation and legal uncertainties could force us to change our operations, which could have a material adverse effect on our ability to maintain our current business, and make our business more expensive to operate. Our intangible assets could become impaired and adversely affect our future results of operations and financial position. The ultimate realization of revenue from contracted sales, potential sales, backlog and deferred revenues cannot be predicted with a high degree of accuracy. The ultimate resolution of the class action lawsuit may have a material adverse effect on our business. Our stock price has fluctuated significantly, sometimes for reasons unrelated to our performance. Our governing documents and applicable Delaware law contain provisions that may have the effect of discouraging a potential takeover of us. We are subject to additional risks in light of the restatement of our prior period consolidated financial statements. We cannot predict every event and circumstance which may impact our business and, therefore, the risks and uncertainties discussed above may not be the only ones you should consider.

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1057709--5/2/2006--CARREKER_CORP