350917--8/20/2008--EMULEX_CORP

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{property, intellectual, protect}

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A significant portion of our business depends upon the continued growth of the storage networking market, and our business will be adversely affected if such growth does not occur or occurs more slowly than we anticipate. Because a significant portion of our revenues is generated from sales to a limited number of customers, none of which are the subject of exclusive or long-term contracts, the loss of one or more of these customers, or our customers failure to make timely payments to us, could adversely affect our business. Our operating results are difficult to forecast and could be adversely affected by many factors, and our stock price may decline if our results fail to meet expectations. Our relatively small backlog of unfilled orders, possible customer delays or deferrals and our tendency to generate a large percentage of our quarterly sales near the end of the quarter contribute to possible fluctuations in our operating results that could have an adverse impact on our results of operations and stock price. Our industry is subject to rapid technological change and we must keep pace with the changes to successfully compete. The migration of our customers toward newer product platforms may have a significant adverse effect. The migration of our customers from purchasing our products through the distribution channel and toward OEM server manufacturers may have a significant adverse effect. Any failure of our OEM customers to keep up with rapid technological change and successfully market and sell systems that incorporate new technologies could adversely affect our business. Rapid changes in the evolution of technology, including the unexpected extent or timing of the transition from HBA solutions or embedded switch box solutions to lower priced ASIC solutions, could adversely affect our business. If customers elect to utilize lower end HBAs in higher-end environments or applications, our business and financial condition could be negatively affected. Advancement of storage device capacity technology may not allow for additional revenue growth. A decrease in the average unit selling prices and/or an increase in the manufactured cost of our products due to inflation or other factors could adversely affect our revenue, gross margins and financial performance. Delays in product development could adversely affect our business. Our joint development activities may result in products that are not commercially successful or that are not available in a timely fashion. A change in our business relationships with our third party suppliers or our electronics manufacturing service providers could adversely affect our business. If our intellectual property protections are inadequate, it could adversely affect our business. Third party claims of intellectual property infringement could adversely affect our business. The inability or increased cost of attracting, motivating, or retaining key managerial and technical personnel could adversely affect our business. Our international business activities subject us to risks that could adversely affect our business. Potential acquisitions or strategic investments may be more costly or less profitable than anticipated and may adversely affect the price of our common stock. Our stock price is volatile, which has and may result in lawsuits against us and our officers and directors. Terrorist activities and resulting military and other actions could adversely affect our business. Our corporate offices and principal product development facilities are located in regions that are subject to earthquakes and other natural disasters. Our shareholder rights plan, certificate of incorporation and Delaware law could adversely affect the performance of our stock. Our system of internal controls may be inadequate. Changes in laws, regulations, and financial accounting standards may affect our reported results of operations. The final determination of our income tax liability may be materially different from our income tax provisions and accruals. We may need additional capital in the future and such additional financing may not be available on favorable terms.

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350917--8/20/2008--EMULEX_CORP_/DE/