8. Commitments and Contingencies:

Litigation: The Company is subject to various claims, legal actions, and complaints arising in the ordinary course of business. The Company believes the final outcome of these matters will not have a material adverse effect on its consolidated financial position or results of operations. The Company expenses legal costs as incurred.

Leases: Total lease expense associated with continuing operations was $5.4 million, $5.4 million, and $5.1 million for fiscal years 2008, 2007, and 2006, respectively. The Company has operating lease commitments for equipment, land, and facilities that expire on various dates through 2052. Minimum annual rental commitments for the next five fiscal years and thereafter are as follows:

8. Commitments and Contingencies:

Litigation:
The Company is subject to various claims, legal actions, and complaints arising
in the ordinary course of business. The Company believes the final outcome of
these matters will not have a material adverse effect on its consolidated
financial position or results of operations. The Company expenses legal costs
as incurred.

Leases: Total
lease expense associated with continuing operations was $5.4 million, $5.4
million, and $5.1 million for fiscal years 2008, 2007, and 2006, respectively.
The Company has operating lease commitments for equipment, land, and facilities
that expire on various dates through 2052. Minimum annual rental commitments
for the next five fiscal years and thereafter are as follows:

9. Commitments and Contingencies:

Litigation: The Company has been subject to investigations conducted by the U.S. Department of Commerce and the U.S. Attorney for the District of Minnesota since 2000 concerning the Company’s compliance with U.S. export control regulations. In fiscal year 2006, the Company entered into a civil settlement with the U.S. Department of Commerce, pursuant to which the Company paid a civil fine of less than $0.1 million, while denying any violation of law. The separate criminal inquiry by the U.S. Attorney’s office has been ongoing and, during fiscal year 2007, the Company and the U.S. Attorney’s office began discussing terms to terminate the criminal inquiry. No formal litigation has been commenced against the Company.

The Company and its Audit Committee have independently investigated the matter and believe no willful or material violation of applicable law has been committed. The Company believes that its maximum exposure to any fine related to these matters is an additional $1.0 million, plus the cost of its defense. The Company does not believe the final outcome of these proceedings will have a material adverse effect on its consolidated financial position or results of operations.

In addition to the above legal matter, the Company is also party to various claims, legal actions, and complaints arising in the ordinary course of business. In the opinion of management, final resolution of these matters will not have a material adverse effect on the consolidated financial position or results of operations of the Company. The Company expenses legal costs associated with these matters as incurred.

Leases: Total lease expense associated with continuing operations was $5.7 million, $5.3 million, and $4.7 million for fiscal years 2007, 2006, and 2005, respectively. The Company has operating lease commitments for equipment, land, and facilities that expire on various dates through 2052. Minimum annual rental commitments for the next five fiscal years and thereafter are as follows:

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9. Commitments and Contingencies:

Litigation: The Company is a party to various claims, legal actions, and complaints arising in the ordinary course of business. In the opinion of management, final resolution of these matters will not have a material adverse effect on the consolidated financial position or results of operations of the Company. The Company expenses legal costs associated with these matters as incurred.

Leases: Total lease expense associated with continuing operations was $5.3 million, $4.7 million, and $4.9 million for fiscal years 2006, 2005, and 2004, respectively. The Company has operating lease commitments for equipment, land, and facilities that expire on various dates through 2052. Minimum annual rental commitments for the next five fiscal years and thereafter are as follows:

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9.   Commitments and Contingencies:

Litigation: The Company is a party to various claims, legal actions, and complaints arising in the ordinary course of business. In the opinion of management, final resolution of these matters will not have a material adverse effect on the consolidated financial position or results of operations of the Company.

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Leases: Total lease expense associated with continuing operations was $4.7 million, $4.9 million, and $5.6 million for fiscal years 2005, 2004, and 2003, respectively. The Company has non-cancelable operating lease commitments for equipment, land, and facilities that expire on various dates through 2052. Minimum annual rental commitments for the next five fiscal years and thereafter are as follows:

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MTS SYSTEMS CORPORATION AND SUBSIDIARIES

SCHEDULE II — SUMMARY OF CONSOLIDATED ALLOWANCES

FOR DOUBTFUL ACCOUNTS AND RESTRUCTURING RESERVES

FOR THE YEARS ENDED OCTOBER 1, 2005, OCTOBER 2, 2004,

AND SEPTEMBER 27, 2003

(expressed in thousands)

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