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   &lt;div style="font-family: 'Times New Roman',Times,serif"&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 12pt"&gt;&lt;b&gt;Note 10 &amp;#8212; Commitments and Contingencies&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&lt;b&gt;&lt;i&gt;Indemnities, Commitments, Contingencies and Guarantees&lt;/i&gt;&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;In the normal course of our business, we make certain indemnities, commitments and guarantees
   under which we may be required to make payments in relation to certain transactions. These
   indemnities, commitments and guarantees include, among others, intellectual property indemnities to
   our customers in connection with the sale of our products and licensing of our technology,
   indemnities for liabilities associated with the infringement of other parties&amp;#8217; technology based
   upon our products and technology, guarantees of timely performance of our obligations, guarantees
   and indemnities related to the reliability and performance of our equipment, and indemnities to our
   directors and officers to the maximum extent permitted by law. The duration of these indemnities,
   commitments and guarantees varies, and, in certain cases, is indefinite. Many of these indemnities,
   commitments and guarantees do not provide for any limitation of the maximum potential future
   payments that we could be obligated to make. We have not recorded a liability for these
   indemnities, commitments or guarantees in the accompanying balance sheets because future payment is
   not probable.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;From time to time, various claims and litigation are asserted or commenced against us arising
   from or related to contractual matters, intellectual property matters, product warranties and
   personnel and employment disputes. As to such claims and litigation, we can give no assurance that
   we will prevail. However, we currently do not believe that the ultimate outcome of any pending
   matters will have a material adverse effect on our consolidated financial position, results of
   operations or cash flows.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;On January&amp;#160;6, 2011, a purported class action complaint was filed against us and certain of our
   current and former officers in the U.S. District Court for the Eastern District of North Carolina
   alleging claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended,
   and Rule&amp;#160;10b-5 promulgated thereunder. The case purports to be brought on behalf of a class of
   purchasers of our stock during the period February&amp;#160;11, 2010 to August&amp;#160;5, 2010. The complaint
   generally alleges violations of federal securities laws based on, among other things, claimed
   misstatements or omissions regarding our business and prospects in emerging markets. The complaint
   seeks unspecified damages, interest, attorneys&amp;#8217; fees, costs, and expenses. As we are in the very
   early stages of this potential litigation, we are unable to predict the outcome of this case or
   estimate a range of potential loss related to this matter. Although the Company denies the
   allegations in the complaint and intends to vigorously pursue its defense, we are unable to predict
   the outcome of this case. An adverse court determination in the purported class action lawsuit
   against us could result in significant liability and could have a material adverse effect on our
   business, results of operations and financial condition.
   &lt;/div&gt;
   &lt;div align="left" style="font-size: 10pt; margin-top: 6pt"&gt;&amp;#160;&amp;#160;&amp;#160;&amp;#160;&amp;#160;On February&amp;#160;7, 2011, a shareholder derivative complaint was filed in the California Superior
   Court of Santa Clara County against certain current and former officers and directors. The suit
   alleges that named parties breached their fiduciary duties to the Company by, among other things,
   making statements between February, 2010 and August, 2010 which plaintiffs claim were false and
   misleading and by allegedly failing to implement adequate
   internal controls and means of supervision at the Company. On March&amp;#160;3, 2011, a nearly
   identical shareholder derivative complaint was filed in the U.S. District Court for the Central
   District of California. These suits seek an unspecified amount of damages from the named parties
   and modifications to the Company&amp;#8217;s corporate governance policies. The allegations in the
   complaints are similar to the purported class action complaint discussed above. The
   individual defendants intend to vigorously defend the suits and the Company, on whose behalf
   these claims purport to be brought, intends to move to dismiss the shareholder derivative
   complaints on the grounds that the derivative plaintiffs did not file the claims in accordance with
   applicable laws governing the filing of derivative suits. As we are in the very early stages of
   these litigations, we are unable to predict the outcome of these cases or estimate a range of
   potential costs related to these matters.
   &lt;/div&gt;
   &lt;/div&gt;
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