Haemonetics
Annual Report 2013

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 30, 2013Commission file number 001-14041HAEMONETICS CORPORATION(Exact name of registrant as specified in its charter)Massachusetts 04-2882273(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 400 Wood Road,Braintree, Massachusetts 02184-9114 (Address of principal executive offices) (781) 848-7100 (Registrant’s telephone number)Securities registered pursuant to Section 12(b) of the Act:(Title of Each Class) (Name of Exchange on Which Registered)Common stock, $.01 par value per share New York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No oIndicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No Indicate by check mark whether the registrant (1.) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) (2.) has been subject to the filing requirementsfor at least the past 90 days. Yes  No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorterperiod that the registrant was required to submit and post such files). Yes  No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to thebest of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to thisform 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Seethe definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer  Accelerated filer o Non-accelerated filer o Smaller reporting company o (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.). Yes o No The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant (assuming for these purposes that allexecutive officers and directors are “affiliates” of the registrant) as of September 29, 2012, the last business day of the registrant’s most recently completedsecond fiscal quarter was $2,031,424,216 (based on the closing sale price of the registrant’s common stock on that date as reported on the New York StockExchange).The number of shares of $0.01 par value common stock outstanding as of April 27, 2013 was 51,076,655.Documents Incorporated By ReferencePortions of the definitive proxy statement for our Annual Meeting of Shareholders to be held on July 24, 2013 are incorporated by reference in Part III ofthis report.TABLE OF CONTENTS PageNumberItem 1.Business1 Company Overview1 Market and Products1 Description of the Business2 Financial Information about Foreign and Domestic Operations and Export Sales9Item 1A.Risk Factors10Item 1B.Unresolved Staff Comments15Item 2.Properties15Item 3.Legal Proceedings15Item 4.Mine Safety Disclosures16Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities18Item 6.Selected Consolidated Financial Data21Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations22Item 7A.Quantitative and Qualitative Disclosures about Market Risk39Item 8.Financial Statements and Supplementary Data40Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure77Item 9A.Control and Procedures79Item 9B.Other Information81Item 10.Directors and Executive Officers of the Registrant and Corporate Governance81Item 11.Executive Compensation81Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters81Item 13.Certain Relationships and Related Transactions and Director Independence82Item 14.Principal Accounting Fees and Services82Item 15.Exhibits, Financial Statement Schedules83 EX-21.1 EX-23.1 EX-31.1 EX-31.2 EX-32.1 EX-32.2 EX-101 INSTANCE DOCUMENT EX-101 SCHEMA DOCUMENT EX-101 CALCULATION LINKBASE DOCUMENT EX-101 LABELS LINKBASE DOCUMENT EX-101 PRESENTATION LINKBASE DOCUMENT EX-101 DEFINITION LINKBASE DOCUMENTTable of ContentsITEM 1. BUSINESSCompany OverviewHaemonetics is a global healthcare company dedicated to providing innovative blood management solutions to our customers. Our comprehensive portfolio ofintegrated devices, information management, and consulting services offers blood management solutions for each facet of the blood supply chain, helpingimprove clinical outcomes and reduce costs for blood and plasma collectors, hospitals, and patients around the world. Our products and services help preventa transfusion to a patient who does not need one and provide the right blood product, at the right time, in the right dose to the patient who does.Blood and its components (plasma, platelets, and red cells) have many vital - and frequently life-saving - clinical applications. Plasma is used for patientswith major blood loss and is manufactured into pharmaceuticals to treat a variety of illnesses and hereditary disorders such as hemophilia. Red cells treattrauma patients or patients undergoing surgery with high blood loss, such as open heart surgery or organ transplant. Platelets treat cancer patients undergoingchemotherapy. Blood is essential to a modern healthcare system.Haemonetics is committed to helping our customers create and maintain a safe and efficient blood supply chain. Specifically, we develop and market a widerange of systems used with plasma and blood donors that collect and process blood into its components using both manual and automated methods. We alsodevelop and market a variety of systems to hospitals that automate the cleaning and reinfusion of a surgical patient's blood during surgery, automate thetracking and distribution of blood in the hospital, and enhance blood diagnostics. We also sell information technology platforms to promote efficient andcompliant operations for all of our customer groups. Finally, we provide consulting services to reduce costs and improve operating efficiencies in bloodmanagement. By better understanding our customers' needs, we are creating comprehensive blood management solutions for blood collectors and healthcaresystems in more than 97 countries around the world.Haemonetics was founded in 1971 as a medical device company — a pioneer and market leader in developing and manufacturing automated blood componentcollection devices and surgical blood salvage devices. In May 1991, we completed an initial public offering and to this day remain an independent company.Several years ago, we embarked on a strategy to expand our markets and product portfolio to offer more comprehensive blood management solutions to ourcustomers. Through internal product development and external acquisitions, we have significantly expanded our product offerings.On August 1, 2012 we completed the acquisition of the business assets of the blood collection, filtration and processing product lines of Pall Corporation. Wepaid $535.2 million in cash consideration following resolution of post-closing adjustments for working capital and historical earnings levels. The acquisitionwas funded utilizing $475.0 million of loans and the remainder from cash on hand. The blood processing systems and equipment acquired are for use intransfusion medicine and include manufacturing facilities in Covina, California; Tijuana, Mexico; Ascoli, Italy and a portion of Pall's assets in Fajardo,Puerto Rico. Approximately 1,300 employees transferred to Haemonetics. We anticipate paying an additional $15.0 million upon the replication and delivery ofcertain manufacturing assets of Pall's filter media business to Haemonetics by 2016. Until that time, Pall will manufacture and sell filter media toHaemonetics under a supply agreement. We refer to this newly acquired business as the whole blood business. This acquisition provides access to the manualcollection and whole blood markets and has provided scope for introduction of automated solutions into those markets.On April 30, 2013 we completed the acquisition of certain assets of Hemerus LLC, a Minnesota based company that develops innovative technologies for thecollection of whole blood and processing and storage of blood components. Hemerus has received FDA approval for SOLX® whole blood collection system foreight hour storage of whole blood. Hemerus previously received CE Marking (Conformité Européenne) in the European Union to market SOLX as the world'sfirst 56-day red blood cell storage solution. We paid $23.0 million cash in addition to the $1.0 million paid early in fiscal 2013. We will pay an additional$3.0 million contingent upon a further FDA approval of the SOLX solution for 24 hour storage of whole blood prior to processing, and will pay up to $14.0million based on future sales of SOLX-based products achieved within the next 10 years.Markets and ProductsWe serve three markets: manufacturers of plasma derived pharmaceuticals, blood collectors, and hospitals. We report revenues for multiple product linesunder four global product categories: Plasma, Blood Center, Hospital, and Software Solutions. “Plasma” includes plasma collection devices andconsumables. “Blood Center” includes blood collection and processing devices and consumables. “Hospital” includes surgical blood salvage and blooddemand diagnostic devices and consumables. “Software Solutions” includes information technology platforms and consulting services provided to all threemarkets.1Table of ContentsAlthough we address our customers' needs through multiple product lines, we manage our business as one operating segment: the design, manufacture,implementation, support and marketing of blood management solutions. Our chief operating decision-maker uses consolidated financial results to makeoperating and strategic decisions. Design and manufacturing processes, as well as economic characteristics and the regulatory environment in which weoperate, are largely the same for all product lines.The financial information required for the operating segment is included herein in Note 15 of the financial statements, entitled Segment Information.•PlasmaThe Plasma Collection Market for Fractionation — Human plasma is collected and processed by bio-pharmaceutical companies into therapeuticand diagnostic products that aid in the treatment of immune diseases and coagulation disorders. While plasma is also used to aid patients withextreme blood loss, such as trauma victims, this portion of our business solely focuses on plasma's pharmaceutical uses. Automated plasmacollection technology allows for the safe and efficient collection of plasma. We manufacture and market plasma collection devices and respectivedisposables, but do not make plasma-derived pharmaceuticals.Many bio-pharmaceutical companies are vertically integrated in all components of their business and thus are now collecting and fractionating theplasma required to manufacture their pharmaceuticals. This vertical integration paved the way for highly efficient plasma supply chain managementand the plasma industry leverages information technology to manage operations from the point of plasma donation to fractionation to the productionof the final product.Haemonetics' Plasma Products — Our portfolio of products and services is designed to support multiple facets of plasma collector operations. Wehave a long-standing commitment to understanding our customers' collection and fractionation processes. As a result, we deliver product quality andreliability; design equipment that is durable, dependable, and easy to use; and provide comprehensive training support and strong businesscontinuity practices.Historically, plasma for fractionation was collected manually, which was time-consuming, labor-intensive, produced relatively poor yields, andposed risk to donors. Today, the vast majority of plasma collections worldwide are performed using automated collection technology because it issafer and more cost-effective. With our PCS® brand automated plasma collection technology, more plasma can be collected during any one donationevent because the other blood components are returned to the donor through the sterile disposable sets used for the plasma donation procedure.We offer “one stop shopping” to our plasma collection customers, enabling them to source from us the full range of products necessary for plasmacollection and storage, including PCS® brand plasma collection equipment and consumables, plasma collection containers, and intravenoussolutions. We also offer a robust portfolio of integrated information technology platforms for plasma customers to manage their donors, operations,and supply chain. Our products automate the donor interview and qualification process; streamline the workflow process in the plasma center;provide the controls necessary to evaluate donor suitability; determine the ability to release units collected; and manage unit distribution. With oursoftware solutions, plasma collectors can manage processes across the plasma supply chain, react quickly to business changes, and identifyopportunities to reduce costs.Our plasma disposables product line represented 30.1%, 35.5%, and 33.6% of our total revenue in fiscal 2013, 2012 and 2011, respectively.•Blood CenterThe Blood Collection Market for Transfusion — There are millions of blood donations throughout the world every year that produce bloodproducts for transfusion to surgical, trauma, or chronically ill patients. Patients typically receive only the blood components necessary to treat aparticular clinical condition: for example, red cells to surgical patients, platelets to cancer patients, and plasma to trauma victims.Platelet therapy is frequently used to alleviate the effects of chemotherapy and help patients with bleeding disorders. Red cells are often transfused topatients to replace blood lost during surgery. Red cells are also transfused to patients with blood disorders, such as sickle cell anemia or aplasticanemia. Plasma, in addition to its role in creating life-saving pharmaceuticals, is frequently transfused to trauma victims and to replace bloodvolume lost during surgery.Demand for blood has declined modestly in mature markets due to the development of less invasive, lower blood loss medical procedures and bloodmanagement. Highly populated emerging market countries are increasing their demand2Table of Contentsfor blood as they are advancing their healthcare coverage, and as greater numbers of people gain access to more advanced medical treatment, demandfor blood components, plasma-derived drugs, and surgical procedures increases directly.Most donations worldwide are manual whole blood donations. In this process, whole blood is collected from the donor and then transported to alaboratory where it is separated into its components: red cells, platelets and/or plasma.In addition to manual collections, there is a significant market for automated component blood collections. In this procedure, the blood separationprocess is automated and occurs in “real-time” while a person is donating blood. In this separation method, only the specific blood componenttargeted is collected, and the remaining components are returned to the blood donor. Automated blood component collection allows significantly moreof the targeted blood component to be collected during a donation event, especially red cells where our automated system supports collection of twounits from eligible donors.Haemonetics’ Blood Center Products — Today, Haemonetics offers automated blood component and manual whole blood collection systems toblood collection centers to collect blood products efficiently and cost effectively.We market the MCS® (Multicomponent Collection System) brand apheresis equipment which is designed to collect specific blood componentsintegrated from the donor. Utilizing the MCS® automated platelet collection protocols, blood centers collect one or more therapeutic “doses” of plateletsduring a single donation by a volunteer blood donor. The MCS® two-unit protocol or double red cell collection device helps blood collectors optimizethe collection of red cells by automating the blood separation function, eliminating the need for laboratory processing, and enabling the collection oftwo units of red cells from a single donor thus maximizing the amount of red cells collected per eligible donor and helping to mitigate red cellshortages in countries where this problem exists. Blood collectors can also use the MCS® system to collect one unit of red cells and a "jumbo"(double) unit of plasma, or one unit of red cells and one unit of platelets from a single donor. The MCS® plasma protocol providing the possibility tocollect 600-800ml of plasma for transfusion to patients or for pharmaceutical industry use completes the comprehensive portfolio of different bloodcomponent collection options on this device.With the whole blood acquisition, Haemonetics now also offers a portfolio of products for manual whole blood collection and processing. The assetsacquired from Pall Corporation provide us with filter technology and manufacturing capability as well as a broad portfolio of manual collection,filtration and processing products. Haemonetics' portfolio of disposable whole blood collection and component storage sets offer flexibility incollecting a unit of whole blood and the subsequent production and storage of the red blood cell, platelet, and/or plasma products, including optionsfor in-line or dockable filters for leukoreduction of any blood component. In addition, our innovative AcrodoseSM product line provides a closedsystem for the pooling, storage, and bacteria testing of leukoreduced whole blood derived platelet concentrates, an AcrodoseSM Platelet, that is“transfusion ready” for the hospital. Use of Acrodose platelets lowers hospital handling costs by eliminating the need for pooling and bacteria testingat the hospital.With the ACP® (Automated Cell Processor) brand, Haemonetics offers a small bench-top solution to automate the washing and freezing of red cellcomponents in the lab. The automated red cell washing procedure removes plasma proteins within the red cell units to provide a safer product fortransfusion to frequently transfused patients, neonates, or patients with a history of transfusion reactions. The automated glycerolization anddeglycerolization steps are required to prepare red cells for frozen storage. Freezing the red cell units can expand the shelf life of these products up to10 years. Customers utilize this technology to implement strategic red cell inventories for catastrophe cases, storage of rare blood types, or enhancedinventory management.With the whole blood acquisition, Haemonetics now offers filtration products for the hospital. These filters are used during the blood transfusionprocess for reduction of particulate debris, fat globules and leukocytes in the blood components.Our blood center disposables product line represented 40.1%, 29.7%, and 30.0% of our total revenue in fiscal 2013, 2012 and 2011, respectively.•HospitalThe Transfusion Market for Hospitals — Loss of blood is common in many surgical procedures, including open heart, trauma, transplant,vascular, and orthopedic procedures, and the need for transfusion of oxygen-carrying red cells to make up for lost blood volume is routine. Patientscommonly receive donor blood, referred to as “allogeneic blood,” which carries various risks including risk of transfusion with the wrong bloodtype; risk of transfusion3Table of Contentsreactions including death, but more commonly chills, fevers or other side effects that can prolong a patient’s recovery; and risk of transfusion ofblood with a blood-borne disease or infectious agent.An alternative to allogeneic blood is surgical cell salvage, also known as autotransfusion, which reduces or eliminates a patient’s need for blooddonated from others and ensures that the patient receives the freshest and safest blood possible — his or her own. Surgical cell salvage involves thecollection of a patient’s own blood during and after surgery, for reinfusion of red cells to that patient. Blood is suctioned from the surgical site orcollected from a wound or chest drain, processed and washed through a centrifuge-based system that yields concentrated red cells available fortransfusion back to the patient. This process occurs in a sterile, closed-circuit, single-use consumable set that is fitted into an electromechanicaldevice. We market our surgical blood salvage products to surgical specialists, primarily cardiovascular, orthopedic, and trauma surgeons, and tosurgical suite service providers.Haemonetics’ Hospital Products — Haemonetics offers a range of blood management solutions that significantly improve a hospital's systems foracquiring blood, storing it in the hospital, and dispensing it efficiently and correctly. Over the last few years, hospitals have become more aware oftheir need to control costs and improve patient safety by managing blood more effectively. Our products and integrated solution platforms helphospitals optimize performance of blood acquisition, storage, and distribution.Our TEG® Thrombelastograph Hemostasis Analyzer system is a blood diagnostic instrument that measures a patient's hemostasis or the ability toform and maintain blood clots. By understanding a patient’s clotting ability, clinicians can better plan for the patient’s care, deciding in advancewhether to start or discontinue use of certain drugs or, determine the likelihood of the patient's need for a transfusion and which blood componentswill be most effective in stopping bleeding. Such planning supports the best possible clinical outcome, which can lead to lower hospital costs througha reduction in unnecessary donor blood transfusions, reduced adverse transfusion reactions, shorter intensive care unit and hospital stays, andexploratory surgeries.The Cell Saver® system is a surgical blood salvage system targeted to procedures that involve rapid, high-volume blood loss, such as cardiovascularsurgeries. It has become the standard of care for high blood-loss surgeries. In fiscal 2012, we launched the Cell Saver® Elite® system, which is ourmost advanced autotransfusion option to minimize allogeneic blood use for surgeries with medium to high blood loss.The OrthoPAT® surgical blood salvage system is targeted to procedures, such as orthopedic, that involve slower, lower volume blood loss that oftenoccurs well after surgery. The cardioPAT® system is a surgical blood salvage system targeted to open heart surgeries when there is less blood lossduring surgery, but where the blood loss continues post-surgery. These systems are designed to remain with the patient following surgery, to recoverblood and produce a washed red cell product for autotransfusion. Their Quick-Connect feature permits customers to utilize the blood processing setselectively, depending on the patient's need.Our IMPACT® Online web-based software platform, which monitors and measures improvements in a hospital’s blood management practices,provides hospitals with a baseline view of their blood management metrics and helps monitor transfusion rates. Business consulting solutions areoffered to support process excellence and blood management efforts. We also provide blood management assessment tools to hospitals that enable ourcustomers to monitor their progress in order to continually improve their blood management performance.Our hospital disposables product line represented 14.7%, 16.6%, and 18.0% of our total revenue in fiscal 2013, 2012 and 2011, respectively.•Software SolutionsHaemonetics' Software Products and Services — We have a suite of integrated software solutions for improving efficiencies and helping ensuredonor and patient safety. This includes solutions for blood drive planning, donor recruitment and retention, blood collection, componentmanufacturing and distribution, transfusion management, and remote blood allocation. For our plasma customers, we also provide informationtechnology platforms for managing donors and information associated with the collection of plasma products within fractionation facilities. Whileeach Haemonetics information technology platform can be used independently, our mission to provide "Arm to Arm®" blood management solutionsmeans they can also work together through integration to further improve process workflows. Also, the ability to evaluate information based on theintegration of these systems allows customers to continually improve their business processes. Leveraging information to make more informeddecisions is a significant component of Haemonetics' overall commitment to improving blood management systems globally.4Table of ContentsIntegrated Blood Management Solutions —Combining software solutions with devices, we meet our goal of offering customers powerful tools forimproving blood management while driving growth of our consumables. For example, a hospital may use our consulting services to analyze its bloodmanagement practices and recommend changes in practice. Then, the hospital can leverage our systems and services to analyze blood utilization,manage blood inventory, and potentially reduce demand for donated blood. Finally, hospitals can use our IMPACT® Online blood managementbusiness intelligence portal to monitor the results of its new blood management practices. The positive patient impact and reduced costs from thisintegrated blood management approach can be significant. Likewise, by understanding best practices, blood demand, and discreet patient needs,hospitals can more frequently deploy our devices for hemostasis diagnosis and cell salvage to ensure best patient care.While each of our products, platforms, and services can be marketed individually, our blood management solutions vision is to offer integratedclosed-loop solutions for blood supply chain management. Our software solutions — information technology platforms and consulting services —can be combined with our devices and sold through our plasma, blood center, and hospital sales forces.Our software products help hospitals track and safely deliver stored blood products. SafeTrace Tx® is our software solution that helps manage bloodproduct inventory, perform patient cross-matching, and manage transfusions. In addition, our BloodTrack® suite of solutions manages tracking andcontrol of blood products from the hospital blood center through to transfusion to the patient. “Smart” refrigerators located in or near operating suites,emergency rooms, and other parts of the hospital dispense blood units with secure control and automated traceability for efficient documentation.With our more comprehensive offerings, hospitals are better able to manage processes across the blood supply chain and identify increasedopportunities to reduce costs and enhance processes.We believe a key example of our blood management solutions is the potential to balance blood demand with supply and mitigate shortages of bloodcomponents and reduce collection costs. Our software solutions, such as our SafeTrace® and El Dorado Donor® donation and blood unitmanagement systems, span blood center operations and automate and track operations from the recruitment of the blood donor to the disposition ofthe blood product. Our Hemasphere® software solution provides support for more efficient blood drive planning, and Donor Doc® and e-Donor®software help to improve recruitment and retention. Combined, our solutions help blood collectors improve the safety, regulatory compliance, andefficiency of blood collection and supply.Our software solutions product line represented 7.8%, 9.7%, and 9.9% of our total revenue in fiscal 2013, 2012 and 2011, respectively.Marketing/Sales/DistributionWe market and sell our products to commercial plasma collectors, blood collection groups and independent blood centers, hospitals and hospital serviceproviders, and national health organizations through our own direct sales force (including full-time sales representatives and clinical specialists) as well asindependent distributors. Sales representatives target the primary decision-makers within each of those organizations.United StatesIn fiscal 2013, 2012 and 2011 approximately 51.0%, 48.4%, and 46.9%, respectively, of consolidated net revenues were generated in the U.S., where weprimarily use a direct sales force to sell our products.Outside the United StatesIn fiscal 2013, 2012 and 2011 approximately 49.0%, 51.6%, and 53.1%, respectively, of consolidated net revenues were generated through sales to non-U.S. customers. Outside the United States, we use a combination of direct sales force and distributors.Research and DevelopmentOur research and development (“R&D”) centers in the United States and Switzerland ensure that protocol variations are incorporated to closely match localcustomer requirements. In addition, our Haemonetics Software Solutions also maintains development operations in Canada and France.Customer collaboration is also an important part of our technical strength and competitive advantage. These collaboration customers and transfusion expertsprovide us with ideas for new products and applications, enhanced protocols, and potential test sites as well as objective evaluations and expert opinionsregarding technical and performance issues.5Table of ContentsThe development of blood component separation products and extracorporeal blood typing and screening systems has required us to maintain technicalexpertise in various engineering disciplines, including mechanical, electrical, software, and biomedical engineering and material science. Innovations resultingfrom these various engineering efforts enable us to develop systems that are faster, smaller, and more user-friendly, or that incorporate additional featuresimportant to our customer base.Research and development expense was $44.4 million in fiscal 2013, $36.8 million in fiscal 2012 and $32.7 million in fiscal 2011, representingapproximately 5.0% of our net sales each year.In fiscal 2013, R&D resources were allocated to supporting a next generation orthopedic perioperative autotransfusion device, a series of elements comprisingan automated whole blood collection system, and several other projects to enhance our current product portfolio.ManufacturingOur principal manufacturing operations are located in the United States, Mexico, Scotland, Switzerland and Italy.In general, our production activities occur in controlled settings or “clean room” environments. Each step of the manufacturing and assembly process isquality checked, qualified, and validated. Critical process steps and materials are documented to ensure that every unit is produced consistently and meetsperformance requirements. All of our other equipment and disposable manufacturing sites are certified to the ISO 13485 standard and to the Medical DeviceDirective allowing placement of the CE mark of conformity.Plastics are the principal component of our disposable products. Contracts with our suppliers help mitigate some of the short-term effects of price volatility inthis market. However, increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials.Contractors manufacture some component-sets according to our specifications. We maintain important relationships with two Japanese manufacturers thatproduce finished consumables in Singapore, Japan, and Thailand. Certain parts and components are purchased from sole source vendors. We believe that ifnecessary, alternative sources of supply are available in most cases, and could be secured within a relatively short period of time. Nevertheless, an interruptionin supply could temporarily interfere with production schedules and affect our operations.Each blood processing machine is designed in-house and assembled from components that are either manufactured by us or to our specifications. Thecompleted instruments are programmed, calibrated, and tested to ensure compliance with our engineering and quality assurance specifications. Inspectionchecks are conducted throughout the manufacturing process to verify proper assembly and functionality. When mechanical and electronic components aresourced from outside vendors, those vendors must meet detailed qualification and process control requirements.Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission has issued final rules regarding thedisclosure of use of certain minerals, known as conflict minerals, which are mined from the Democratic Republic of the Congo and adjoining countries. Theserules could have an adverse effect on the sourcing, supply and pricing of materials used in our products.Intellectual PropertyWe consider our intellectual property rights to be important to our business. We rely on patent, trademark, copyright, and trade secret laws, as well asprovisions in our agreements with third parties to protect our intellectual property rights. We hold patents in the United States and many internationaljurisdictions on some of our machines, processes, disposables and related technologies. These patents cover certain elements of our systems, includingprotocols employed in our equipment and certain aspects of our processing chambers and disposables. Our patents may cover current products, products inmarkets we plan to enter, or products in markets we plan to license, or the patents may be defensive in that they are directed to technologies not currentlyembodied in our current products. We may also license patent rights from third parties that cover technologies that we plan to use in our business. To maintainour competitive position, we rely on the technical expertise and know-how of our personnel and on our patent rights. We pursue an active and formal programof invention disclosure and patent application in both the United States and foreign jurisdictions. We own various trademarks that have been registered in theUnited States and certain other countries.Our policy is to obtain patent and trademark rights in the U.S. and foreign countries where such rights are available and we believe it is commerciallyadvantageous to do so. However, the standards for international protection of intellectual property vary widely. We cannot assure that pending patent andtrademark applications will result in issued patents and registered trademarks, that patents issued to or licensed by us will not be challenged or circumventedby competitors, or that our patents will not be determined invalid.6Table of ContentsCompetitionWe have established a record of innovation and leadership in each of the areas in which we compete. To remain competitive, we must continue to develop andacquire new cost-effective products, information technology platforms, and business services. We believe that our ability to maintain a competitive advantagewill continue to depend on a combination of factors. Some factors are largely within our control such as reputation, regulatory approvals, patents, unpatentedproprietary know-how in several technological areas, product quality, safety and cost effectiveness and continual and rigorous documentation of clinicalperformance. Terumo BCT, Sorin Biomedica and Fresenius SE & Co. KGaA ("Fresenius") are large global competitors with product offerings similar toours.PlasmaIn the automated plasma collection market, we principally compete with Fresenius, who acquired Fenwal, Inc. in November 2012, on the basis of quality,reliability, ease of use, services and technical features of systems, and on the long-term cost-effectiveness of equipment and disposables. In China, the marketis populated by local producers of a product that is intended to be similar to ours. Recently, those competitors have expanded to markets beyond China, intoEuropean and South American countries.Blood CenterWe have several competitors in the Blood Center product lines, some of whom compete across all blood components and other are more specialized.Terumo BCT, a combination of Caridian BCT and Terumo Medical Corporation is one of our major competitors in automated platelet collection. Fresenius isanother major competitor in this area after their November 2012 acquisition of Fenwal. In the automated platelet collection business, competition is based oncontinual performance improvement, as measured by the time and efficiency of platelet collection and the quality of the platelets collected. Each of thesecompanies has taken a different technological approach in designing their systems for automated platelet collection. In the platelet collection market, as a resultof the Pall Corporation acquired business product lines, we now also compete in the pooled random donor platelet segment from whole blood collections fromwhich pooled platelets are derived with the Acrodose product or buffy coat pooling sets.Terumo BCT and Fresenius (following its acquisition of Fenwal in 2012) are also competitors in the automated red cell collection market. However, it isimportant to note that most double red cell collection is done in the US and less than 10% of the 14 million units of red cells collected in the U.S. annually arecollected via automation. Therefore, we also compete with the traditional method of collecting red cells from the manual collection of whole blood. As discussedin our Company Overview, we entered the whole blood collections market during fiscal 2013 through the acquisition of the whole blood business from Pall.We compete on the basis of total cost, type-specific collection, process control, product quality, and inventory management.Our whole blood business faces competition on the basis of quality and price. In North America, Europe and Asia-Pacific our main competitors are Fresenius,MacoPharma and Terumo BCT. Haemonetics and Fresenius are market co-leaders in the leukoreduced whole blood disposables segment in North America andAsia Pacific, whereas in Europe, Fresenius is the market leader. In Japan, Kawasumi is also a strong local competitor. We have a significant competitive costadvantage in the supply of filtration needed in whole blood collection because we are vertically integrated in the production of our own filters. This is uniqueamong our major competitors.In the cell processing market, competition is based on level of automation, labor-intensiveness, and system type (open versus closed). Open systems may beweaker in good manufacturing process compliance. Moreover, blood processed through open systems has a 24-hour shelf life. With the ACP® (automated cellprocessor) brand, Haemonetics offers a closed system cell processor which gives blood processed through it, a 14-day shelf life. We compete with TerumoBCT's open systems in this market.HospitalWithin our hospital business, in the diagnostics market, the TEG Thrombelastograph Hemostasis Analyzer is used primarily in surgical applications. Onedirect competitor, ROTEM, is a competitor in Europe and in the United States. Other competitive technologies include standard coagulation tests and plateletfunction testing. The TEG analyzer competes with other laboratory tests based on its ability to provide a complete picture of a patient's hemostasis at a singlepoint in time, and the ability to measure the clinically relevant platelet function for an individual patient.7Table of ContentsIn the intraoperative surgical blood salvage market, competition is based on reliability, ease of use, service, support, and price. For high-volume platforms,each manufacturer's technology is similar, and our Cell Saver technology competes principally with Medtronic, Fresenius, and Sorin Biomedica.In the “perioperative” surgical blood salvage market, our OrthoPAT and cardioPAT systems compete primarily against (i) non-automated processing systemswhose end product is an unwashed red blood cell unit for transfusion to the patient and (ii) transfusions of donated blood.In the software market, we compete with MAK Systems, Mediware, Sunquest Information Systems and applications developed internally by our customers.These companies provide software to blood and plasma collectors and to hospitals for managing donors, collections, and blood units. None of thesecompanies compete with Haemonetics' non-software products.Our technical staff is highly skilled, but certain competitors have substantially greater financial resources and larger technical staffing at their disposal. Therecan be no assurance that competitors will not direct substantial efforts and resources toward the development and marketing of products competitive with thoseof Haemonetics.Significant CustomersThe Japanese Red Cross Society (JRC) represented 10.1% and 13.7% of our net revenues in fiscal 2013 and 2012, respectively. Additionally, Grifols S.A., aglobal healthcare customer, represented approximately 11.0% of our net revenues in fiscal 2012. Revenue from Grifols S.A. was less than 10% of net revenuesin fiscal 2013 due to increases in net revenues associated with the August 1, 2012 acquisition of the whole blood transfusion medicine business.Government RegulationThe products we manufacture and market are subject to regulation by the Center of Biologics Evaluation and Research (“CBER”) and the Center of Devicesand Radiological Health (“CDRH”) of the United States Food and Drug Administration (“FDA”), and other non-United States regulatory bodies.All medical devices introduced to the United States market since 1976 are required by the FDA, as a condition of marketing, to secure either a 510(k) pre-market notification clearance or an approved premarket approval application (“PMA”). In the United States, software used to automate blood center operationsand blood collections and to track those components through the system are considered by FDA to be medical devices, subject to 510(k) pre-marketnotification. Intravenous solutions (blood anticoagulants and solutions for storage of red blood cells) marketed by us for use with our manual collection andautomated systems requires us to obtain an approved New Drug Application (“NDA”) or Abbreviated New Drug Application (“ANDA”) from CBER. A510(k) pre-market clearance indicates FDA’s agreement with an applicant’s determination that the product for which clearance is sought is substantiallyequivalent to another legally marketed medical device. The process of obtaining a 510(k) clearance may involve the submission of clinical data and supportinginformation. The process of obtaining NDA approval for solutions is likely to take much longer than 510(k) clearances because the FDA review process ismore complicated.The FDA’s Quality System regulations set forth standards for our product design and manufacturing processes, require the maintenance of certain recordsand provide for inspections of our facilities. There are also certain requirements of state, local and foreign governments that must be complied with in themanufacturing and marketing of our products. We maintain customer complaint files, record all lot numbers of disposable products, and conduct periodicaudits to assure compliance with FDA regulations. We place special emphasis on customer training and advise all customers that device operation should beundertaken only by qualified personnel.The FDA can ban certain medical devices; detain or seize adulterated or misbranded medical devices; order repair, replacement or refund of these devices; andrequire notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health.The FDA may also enjoin and restrain certain violations of the Food, Drug and Cosmetic Act and the Safe Medical Devices Act pertaining to medical devices,or initiate action for criminal prosecution of such violations.We are also subject to regulation in the countries outside the United States in which we market our products. The member states of the European Union (EU)have adopted the European Medical Device Directives, which create a single set of medical device regulations for all EU member countries. These regulationsrequire companies that wish to manufacture and distribute medical devices in EU member countries to obtain CE Marking for their products. Outside of theEU, many of the regulations applicable to our products are similar to those of the FDA. However, the national health or social security organizations of certaincountries require our products to be registered by those countries before they can be marketed in those countries.8Table of ContentsWe have complied with these regulations and have obtained such registrations where we market our products. Federal, state and foreign regulations regardingthe manufacture and sale of products such as ours are subject to change. We cannot predict what impact, if any, such changes might have on our business.We are also subject to various environmental, health and general safety laws, directives and regulations both in the U.S. and abroad. Our operations, likethose of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilizationprocesses. We believe that sound environmental, health and safety performance contributes to our competitive strength while benefiting our customers,shareholders and employees.Environmental MattersFailure to comply with international, federal and local environmental protection laws or regulations could have an adverse impact on our business or couldrequire material capital expenditures. We continue to monitor changes in U.S. and international environmental regulations that may present a significant risk tothe business, including laws or regulations relating to the manufacture or sale of products using plastics.EmployeesAs of March 30, 2013, we employed the full-time equivalent of 3,563 persons assigned to the following functional areas: manufacturing, 2,043; sales andmarketing, 432; general and administrative, 418; research and development, 318; and quality control and field service, 352. We consider our employeerelations to be satisfactory.Availability of Reports and Other InformationAll of our corporate governance materials, including the Principles of Corporate Governance, the Business Conduct Policy and the charters of the Audit,Compensation, and Nominating and Governance Committees are published on the Investor Relations section of our website at http://phx.corporate-ir.net/phoenix.zhtml?c=72118&p=irol-IRHome. On this website the public can also access, free of charge, our annual, quarterly and current reports and otherdocuments filed with or furnished to the Securities and Exchange Commission, or SEC, as soon as reasonably practicable after we electronically file suchmaterial with, or furnish it to, the SEC.Cautionary Statement Regarding Forward-Looking InformationStatements contained in this report, as well as oral statements we make which are prefaced with the words “may,” “will,” “expect,” “anticipate,” “continue,”“estimate,” “project,” “intend,” “designed,” and similar expressions, are intended to identify forward looking statements regarding events, conditions, andfinancial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. These statements are based onour current expectations and estimates as to prospective events and circumstances about which we can give no firm assurance. Further, any forward-lookingstatement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflectevents or circumstances after the date on which such statement is made. As it is not possible to predict every new factor that may emerge, forward-lookingstatements should not be relied upon as a prediction of our actual future financial condition or results. These forward-looking statements, like any forward-looking statements, involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks anduncertainties include the effects of disruption from the acquisition of the Pall whole blood business making it more difficult to maintain relationships withemployees, customers, vendors and other business partners, unexpected expenses incurred to integrate the Pall whole blood business, our ability tosuccessfully execute on the transformation of our manufacturing network and our other value capture and creation activities, technological advances in themedical field and standards for transfusion medicine and our ability to successfully implement products that incorporate such advances and standards,demand for blood components, product quality, market acceptance, regulatory uncertainties, the effect of economic and political conditions, the impact ofcompetitive products and pricing, blood product reimbursement policies and practices, foreign currency exchange rates, changes in customers' orderingpatterns, the effect of industry consolidation as seen in the plasma market, the effect of communicable diseases and the effect of uncertainties in marketsoutside the U.S. (including Europe and Asia) in which we operate and such other risks described under Item 1A. Risk Factors included in this report. Theforegoing list should not be construed as exhaustive.9Table of ContentsITEM 1A. RISK FACTORSSet forth below are the risks that we believe are material to our investors. This section contains forward-looking statements. You should refer to the explanationof the qualifications and limitations on forward-looking statements beginning on page 9 and 38.If we are unable to successfully expand our product lines through internal research & development and acquisitions, our business may bematerially and adversely affected. Continued growth of our business depends on our maintaining a pipeline of profitable new products and successful improvements to our existing products.This requires accurate market analysis and carefully targeted application of intellectual and financial resources toward technological innovation or acquisitionof new products. The creation and adoption of technological advances is only one step. We must also efficiently develop the technology into a product whichconfers a competitive advantage, represents a cost effective solution or provides improved clinical outcomes. The risks of missteps and set backs are aninherent part of the innovation and development processes in the medical device industry.If we are unable to successfully grow our business through marketing partnerships and acquisitions, our business may be materially andadversely affected. Promising partnerships and acquisitions may not be completed for reasons such as competition among prospective partners or buyers, our inability to reachsatisfactory terms, or the need for regulatory approvals. Any acquisition that we complete may be dilutive to earnings and require the investment of significantresources. The economic environment may constrain our ability to access the capital needed for acquisitions and other capital investments.Failure to integrate acquired businesses into our operations successfully could adversely affect our business.The integration of the operations of acquired businesses requires significant efforts, including the coordination of information technologies, research anddevelopment, sales and marketing, operations, manufacturing and finance. These efforts result in additional expenses and involve significant amounts ofmanagement's time. Factors that affect the success of acquisitions include the strength of the acquired company's underlying technology and ability to execute,our ability to retain employees, and our ability to achieve synergies, such as increasing sales and achieving cost savings. Our failure to manage successfullyand coordinate the growth of the combined acquired companies could have an adverse impact on our business and our future growth.Quality problems with our processes, goods, and services could harm our reputation for producing high-quality products and erode ourcompetitive advantage, sales, and market share.Quality is extremely important to us and our customers due to the serious and costly consequences of product failure. Our quality certifications are critical tothe marketing success of our products and services. If we fail to meet these standards or fail to adapt to evolving standards, our reputation could be damaged,we could lose customers, and our revenue and results of operations could decline.As approximately half of our revenue comes from outside the United States, we are subject to export and import restrictions, local regulatoryauthorities and the laws and medical practices in foreign jurisdictions. Our international operations are governed by the U.S. Foreign Corrupt Practices Act (FCPA) and other similar anti-corruption laws in other countries. Generally, these laws which prohibit companies and their business partners or other intermediaries from making improper payments to foreign governmentsand government officials in order to obtain or retain business. Global enforcement of such anti-corruption laws has increased in recent years, includingaggressive investigations and enforcement proceedings. While we have an active compliance program and various other safeguards to discourageimpermissible practices, our global operations carry some risk of unauthorized impermissible activity on the part of one of our distributors, employees, agentsor consultants. Any alleged or actual violation could subject us to government scrutiny, severe criminal or civil fines, or sanctions on our ability to exportproduct outside the U.S., which could adversely affect our reputation and financial condition.Export of U.S. technology or goods manufactured in the United States to some jurisdictions requires special U.S. export authorization or local market controlsthat may be influenced by factors, including political dynamics, outside our control.Finally, any other significant changes in the competitive, legal, regulatory, reimbursement or economic environments of the jurisdictions in which we conductour international business could have a material impact on our business.The implementation of healthcare reform in the United States may adversely affect us.10Table of ContentsThe Patient Protection and Affordable Health Care Act was enacted into law in the U.S. in March 2010. In addition to a medical device tax, effective as ofJanuary 2013, the effects of which are considered in our financial disclosures, certain other provisions of the Act will not be effective until 2014 and 2015,and there are many programs and requirements for which the details have not yet been fully established or consequences not fully understood. We are unableto predict what healthcare programs and regulations will be ultimately implemented at either the federal or state level, but any changes that may decreasereimbursement for our products, reduce medical procedure volumes or increase cost containment measures could adversely impact our business. An interruption in our ability to manufacture our products or an inability to obtain key components or raw materials may adversely affect ourbusiness.Certain key products are manufactured at single locations, with limited alternate facilities. If an event occurs that results in damage to one or more of ourfacilities, we may be unable to manufacture the relevant products at previous levels or at all. In addition, for reasons of quality assurance or cost effectiveness,we purchase certain components and raw materials from sole suppliers. Due to the stringent regulations and requirements of the FDA and other similar non-U.S. regulatory agencies regarding the manufacture of our products, we may not be able to quickly establish additional or replacement sources for certaincomponents or materials. A reduction or interruption in manufacturing, or an inability to secure alternative sources of raw materials or components, couldhave a material adverse effect on our business, results of operations, financial condition and cash flows.If we are unable to meet our debt obligations or experience a disruption in our cash flows, it could have an adverse effect on our financialcondition, results of operations or cost of borrowing.We incurred $475.0 million in debt to acquire the whole blood business. The obligations to pay interest and repay the borrowed amounts may restrict ourability to adjust to adverse economic conditions, our ability to fund working capital, capital expenditures, acquisition or other general corporate requirements.The interest rate on the loan is variable and subject to change based on market forces. Fluctuations in interest rates could adversely affect our profitability andcash flows.In addition, as a global corporation we have significant cash reserves held in foreign countries. These balances may not be immediately available to repay ourdebt or may only be available after paying significant taxes.Our credit facilities contain financial covenants that require us to maintain specified financial ratios and make interest and principal payments. If we areunable to satisfy these covenants, we may be required to obtain waivers from our lenders and no assurance can be made that our lenders would grant suchwaivers on favorable terms, or at all, and we could be required to repay any borrowed amounts on short notice.As a medical device manufacturer we are subject to a number of laws and regulations. Non-compliance with those laws or regulations couldadversely affect our financial condition and results of operations. The manufacture, distribution and marketing of our products are subject to regulation by the FDA and other non-United States regulatory bodies. We mustobtain specific regulatory clearance prior to selling any new product or service, a process which is costly and time consuming. Our operations are also subjectto continuous review and monitoring by the FDA and other regulatory authorities. Failure to substantially comply with applicable regulations could subject ourproducts to recall or seizure by government authorities, or an order to suspend manufacturing activities. As well, if our products were determined to havedesign or manufacturing flaws, this could result in their recall or seizure. Either of these situations could also result in the imposition of fines.Many of our competitors have significantly greater financial means and resources, which may allow them to more rapidly develop newtechnologies and more quickly address changes in customer requirements. Our ability to remain competitive depends on a combination of factors. Certain factors are within our control such as reputation, regulatory approvals,patents, unpatented proprietary know-how in several technological areas, product quality, safety, cost effectiveness and continued rigorous documentation ofclinical performance. Other factors are outside of our control such as regulatory standards, medical standards, reimbursement policies and practices, and thepractice of medicine.Loss of a significant customer could adversely affect our business.In fiscal 2013, our ten largest customers accounted for approximately 44% of our revenue. If any of our largest customers materially reduce their purchasesfrom us or terminate their relationship with us for any reason, we could experience an adverse effect on our results of operations or financial condition.Our largest customer, the Japanese Red Cross Society (JRC), represented 10.1% of our revenues in fiscal 2013. Because of the size of this relationship wecould experience a significant reduction in revenue if the JRC decided to significantly reduce its purchases from us for any reason, including a desire torebalance its purchases between vendors, or if we are unable to obtain11Table of Contentsand maintain necessary regulatory approvals in Japan. We also have a concentration of credit risk due to our outstanding accounts receivable balances with theJRC.Current or worsening economic conditions may adversely affect our business and financial condition.A portion of our trade accounts receivable outside the United States include sales to government-owned or supported healthcare systems in several countries,which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of those countries’ national economies. We havenot incurred significant losses on government receivables. We continually evaluate all government receivables for potential collection risks associated with theavailability of government funding and reimbursement practices. If the financial condition of customers or the countries’ healthcare systems deteriorate suchthat their ability to make payments is uncertain, allowances may be required in future periods.Deteriorating credit and economic conditions in parts of Western Europe, particularly in Italy where our net accounts receivable is $23.4 million as ofMarch 30, 2013, may increase the average length of time it takes us to collect our accounts receivable in certain regions within these countries.We may not realize the expected benefits from our Manufacturing Network Optimization Program; our long-term plans will result in highershort-term expenses and require more cash expenditures.In May 2013, we announced a multi-year Manufacturing Network Optimization Program which is intended to reduce our manufacturing costs by changingour current manufacturing footprint and supply chain strategy. We expect the program will reduce manufacturing costs and improve supply chain efficiencywhen complete. However, there are no assurances these cost savings or supply chain efficiencies will be achieved, and implementation of the program couldintroduce risks such as management distraction, business disruption, and attrition beyond our planned reduction in workforce and reduced employeeproductivity which may reduce our revenue or increase our costs. Additionally, implementing the program will result in charges and expenses that impact ouroperating results and increase our level of capital expenditures.As a global corporation, we are exposed to fluctuations in currency exchange rates, which could adversely affect our cash flows and results ofoperations. International revenues and expenses account for a substantial portion of our operations and we intend to continue expanding our presence in internationalmarkets. In fiscal 2013, our international revenues accounted for 49.0% of our total revenues. The exposure to fluctuations in currency exchange rates takesdifferent forms. Reported revenues for sales, as well as manufacturing and operational costs denominated in foreign currencies by our internationalbusinesses, fluctuate due to exchange rate movement when translated into U.S. dollars for financial reporting purposes. Fluctuations in exchange rates couldadversely affect our profitability in U.S. dollars of products and services sold by us into international markets, where payment for our products and servicesand related manufacturing and operational costs is made in local currencies.We are subject to the risks associated with communicable diseases. A significant outbreak of a disease could reduce the demand for our productsand affect our ability to provide our customers with products and services. An eligible donor’s willingness to donate is affected by concerns about their personal health and safety. Concerns about communicable diseases (such aspandemic flu, SARS, or HIV) could reduce the number of donors, and accordingly reduce the demand for our products for a period of time. A significantoutbreak of a disease could also affect our employees’ ability to work, which could limit our ability to produce product and service our customers.There is a risk that the Company’s intellectual property may be subject to misappropriation in some countries. Certain countries, particularly China, do not enforce compliance with laws that protect intellectual property (“IP”) rights with the same degree of vigor as isavailable under the U.S. and European systems of justice. Further, certain of the Company’s IP rights are not registered in China, or if they were, have sinceexpired. This may permit others to produce copies of products in China that are not covered by currently valid patent registrations. There is also a risk thatsuch products may be exported from China to other countries.In order to aggressively protect our intellectual property throughout the world, we have a program of patent disclosures and filings in markets where weconduct significant business. While we believe this program is reasonable and adequate, the risk of loss is inherent in litigation as different legal systems offerdifferent levels of protection to intellectual property, and it is still possible that even patented technologies may not be protected absolutely from infringement.Pending and future intellectual property litigation could be costly and disruptive to us.We operate in an industry that is susceptible to significant intellectual property litigation. We are currently pursuing intellectual property infringement claimsdescribed in more detail under Item 3. Legal Proceedings and Note 10- Commitments and Contingencies to our fiscal 2013 consolidated financial statementsincluded in Item 8 of this Annual Report. Intellectual12Table of Contentsproperty litigation is expensive, complex and lengthy and its outcome is difficult to predict. Patent litigation may result in adverse outcomes and couldsignificantly divert the attention of our technical and management personnel.We sell our products in certain emerging economies. There are risks with doing business in emerging economies, such as Brazil, Russia, India and China. These economies tend to have less mature productregulatory systems, and more volatile financial markets. In addition, the government controlled health care system's ability to invest in our products andsystems may abruptly shift due to changing government priorities or funding capacity. Our ability to sell products in these economies is dependent upon ourability to hire qualified employees or agents to represent our products locally, and our ability to obtain and maintain the necessary regulatory approvals in aless mature regulatory environment. If we are unable to retain qualified representatives or maintain the necessary regulatory approvals, we will not be able tocontinue to sell products in these markets. We are exposed to a higher degree of financial risk, if we extend credit to customers in these economies.In many of the international markets in which we do business, including certain parts of Europe, South America, the Middle East, Russia andAsia, our employees, agents or distributors offer to sell our products in response to public tenders issued by various governmental agencies. There is additional risk in selling our products through agents or distributors, particularly in public tenders. If they misrepresent our products, do not provideappropriate service and delivery, or commit a violation of local or U.S. law, our reputation could be harmed, and we could be subject to fines, sanctions orboth.We have a complex international supply chain. Any disruption to one or more of our suppliers’ production or delivery of sufficient volumes of subcomponents conforming to our specifications could disruptor delay our ability to deliver finished products to our customers. For example, we purchase components in Asia for use in manufacturing in the United Statesand Scotland. We also regularly ship finished goods from Scotland to Europe and Asia.Plastics are the principal component of our disposables, which are the main source of our revenues. Increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials. Increases in the costs ofother commodities may affect our procurement costs to a lesser degree.The technologies that support our products are the subject of active patent prosecution. There is a risk that one or more of our products may be determined to infringe a patent held by another party. If this were to occur we may be subject to aninjunction or to payment of royalties, or both, which may adversely affect our ability to market the affected product(s). In addition, competitors may patenttechnological advances which may give them a competitive advantage or create barriers to entry.Our products are made with materials which are subject to regulation by governmental agencies. Environmental regulations may prohibit the use of certain compounds in products we market and sell in regulated markets. If we are unable to substitutesuitable materials into our processes, our manufacturing operations may be disrupted. In addition, we may be obligated to disclose the origin of certainmaterials used in our products, including but not limited to, metals mined from locations which have been the site of human rights violations.We are entrusted with sensitive personal information relating to surgical patients, blood donors, employees and other persons in the course ofoperating our business and serving our customers. Government agencies require that we implement measures to ensure the integrity and security of such personal data and, in the event of a breach of protocol,we inform affected individuals. If our systems are not properly designed or implemented, or should suffer a breach of security or an intrusion (e.g.,“hacking”) by unauthorized persons, the Company’s reputation could be harmed, and it could incur costs and liabilities to affected persons and enforcementagencies.We operate in an industry susceptible to significant product liability claims. Our products are relied upon by medical personnel in connection with the treatment of patients and the collection of blood from donors. In the event thatpatients or donors sustain injury or death in connection with their condition or treatment, we, along with others, may be sued, and whether or not we areultimately determined to be liable, we may incur significant legal expenses. These claims may be brought by individuals seeking relief on their own behalf orpurporting to represent a class. In addition, product liability claims may be asserted against us in the future based on events we are not aware of at the presenttime.13Table of ContentsIn addition, such litigation could damage our reputation and, therefore, impair our ability to market our products and obtain professional or product liabilityinsurance. This causes the premiums for such insurances to increase. As such, we carry product liability coverage. While we believe that current coverage issufficient, there is no assurance that such coverage will be adequate to cover incurred liabilities. Moreover, we may be unable to obtain acceptable product andprofessional liability coverage.Consolidation in the healthcare industry could lead to increased demand for price concessions or the exclusion of suppliers from significantmarket segments, which could have an adverse effect on our business, financial condition and results of operations.The costs of healthcare have risen significantly over the past decade. Numerous initiatives and reform by legislators, regulators and third-party payors to curbthese costs have resulted in a consolidation trend in the healthcare industry. This consolidation has resulted in greater pricing pressure, decreased averageselling prices and the exclusion of certain suppliers from important market segments. For example, group purchasing organizations, integrated deliverynetworks and large single accounts continue to consolidate purchasing decisions for some of our hospital customers. We expect market demand, governmentregulation, third-party reimbursement policies, government contracting requirements and societal pressures will continue to change the worldwide healthcareindustry, resulting in further business consolidations and alliances among our customers and competitors. This may exert further downward pressure on theprices of our products and adversely impact our business, financial condition or results of operations.14Table of ContentsITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESOur headquarters facility, which the Company owns, is located on 14 acres in Braintree, Massachusetts. This facility is located in a light industrial park andwas constructed in the 1970s. The building is approximately 180,000 square feet, of which 70,000 square feet are devoted to manufacturing and qualitycontrol operations, 35,000 square feet to warehousing, 72,000 square feet for administrative and research, development and engineering activities.The Company leases an 81,929 square foot facility in Leetsdale, Pennsylvania. This facility is used for warehousing, distribution and manufacturingoperations supporting our plasma business. Annual lease expense is $383,970 for this facility.The Company leases 99,931 square feet in Draper, Utah. This facility is used for the manufacturing and distribution of plasma disposable products.Annual lease expense is $495,498.The Company owns a facility in Union, South Carolina. This facility is used to manufacture sterile solutions that support our blood center and plasmabusinesses. The facility is approximately 69,300 square feet.The Company leases a facility in Niles, Illinois, which performs research and manufacturing for the Company. This facility is 16,478 square feet of officeand manufacturing space. Annual lease expense is $153,523.The Company owns a facility in Bothwell, Scotland used to manufacture disposable components for European customers. This facility is approximately40,200 square feet.The Company leases 26,264 square feet of office space in Signy, Switzerland. This facility is used for sales, marketing, finance and other administrativeservices, as well as supply chain and procurement management activities related to our manufacturing operations. Annual lease expense for this space is$900,000.The Company leases a facility in Fajardo, Puerto Rico that is approximately 114,860 square feet under an agreement with Pall Corporation executed inconnection with the Company's acquisition of Pall's transfusion medicine business on August 1, 2012. This facility is used for production of blood filters.We recorded a $2.1 million capital lease under purchase accounting for this property for which we are recording approximately $0.2 million of depreciationexpense annually.The Company owns a facility in Ascoli, Italy, used for the production of whole blood collection kits. This facility is 87,188 square feet.The Company leases 126,569 square feet of space in Tijuana, Mexico used for the production of blood collection sets used for collection, handling andstorage of whole blood. Annual lease expense is approximately $327,360.The Company owns two facilities in Covina, California that occupy 70,781 square feet, dedicated to manufacturing, R&D and engineering functions. Thefacilities also include general administration space. The Company also leases 40,400 square feet of space for warehousing and logistic operations. Annual leaseexpense is approximately $264,450. These facilities are used for the production of whole blood collection kits.The Company also leases administration, sales, marketing, service, and distribution facilities in locations around the world.ITEM 3. LEGAL PROCEEDINGSWe are presently engaged in various legal actions, and although our ultimate liability cannot be determined at the present time, we believe that any such liabilitywill not materially affect our consolidated financial position or our results of operations.Fenwal (Fresenius) Patent InfringementFor the past six years, we have pursued patent infringement lawsuits against Fenwal Inc. seeking an injunction and damages from their infringement of aHaemonetics patent, through the sale of the ALYX brand automated red cell collection system, a competitor of our automated red cell collection systems.Currently, we are pursuing a patent infringement action in Germany against Fenwal, and its European and German subsidiary. On September 20, 2010, wefiled a patent infringement action in Germany. In response, Fenwal filed an action to invalidate the Haemonetics patent which is the subject of this infringementaction on December 1, 2010.15Table of ContentsITEM 4. MINE SAFETY DISCLOSURESNoneITEM 4A. EXECUTIVE OFFICERSExecutive Officers of the RegistrantThe information concerning our Executive Officers is as follows. Executive officers are elected by and serve at the discretion of our Board of Directors. Thereare no family relationships between any director or executive officer and any other director or executive officer of Haemonetics Corporation.PETER ALLEN (age 54), President, Global Plasma joined Haemonetics in 2003 as President of the Donor Division. In March 2008, Mr. Allen was appointedChief Marketing Officer. In October 2011, he was promoted to President of Global Plasma. Prior to joining Haemonetics, Mr. Allen was Vice President of TheAethena Group, a private equity firm providing services to the global healthcare industry. From 1998 to 2001, he held various positions including VicePresident of Sales and the Oncology Business at Syncor International, a provider of radiopharmaceutical and comprehensive medical imagingservices. Previously, Mr. Allen held executive level positions in sales, marketing, and operations in DataMedic, Inc., Enterprise Systems, Inc./HBOC, andRobertson Lowstuter, Inc. Mr. Allen has also worked in sales and marketing at American Hospital Supply Corporation and Baxter International, Inc.BRIAN CONCANNON (age 55) , President and Chief Executive Officer joined Haemonetics in 2003 as President of the Patient Division. He was promoted toPresident of Global Markets in 2006 and then to Chief Operating Officer in 2007. In April 2009, he was promoted to President and Chief Executive Officer,and elected to the Haemonetics Board of Directors. Immediately prior to joining Haemonetics, Mr. Concannon was President of the Northeast Region atCardinal Health Medical Products and Services where he was employed since 1998. From 1985 to 1998, he was employed by American Hospital SupplyCorporation, Baxter Healthcare Corporation, and Allegiance Healthcare in a series of sales and operations management positions of increasing responsibility.SUSAN HANLON (age 45), Vice President Finance and Chief Accounting Officer joined our Company in 2002 as Vice President and Corporate Controller. In2004, she was promoted to Vice President Planning and Control, and in 2008, Ms. Hanlon was promoted to Vice President Finance. She presently hasresponsibility for Controllership, Financial Planning, Tax, and Treasury. Prior to joining Haemonetics, Ms. Hanlon was a partner with Arthur Andersen LLPin Boston.DAVID HELSEL (age 49) Executive Vice President, Global Manufacturing joined Haemonetics as Vice President of Global Manufacturing in March 2012,and is responsible for worldwide oversight of the Company’s manufacturing and supply chain organizations. Mr. Helsel was previously with Covidien, Ltd.for 16 years, where he most recently was Vice President of Operations for the Surgical Solutions global business unit. During his tenure with Covidien, hisprevious roles included Vice President of Operations for the Medical Supplies segment and Global Director of Operational Excellence – Manufacturing. Mr.Helsel holds a Bachelor of Science degree in Mechanical Engineering from LeTourneau University.SANDRA JESSE (age 60) Chief Legal Officer joined Haemonetics as Vice President, Chief Legal Officer in September 2011, and is responsible for thecompany’s world-wide Legal, Compliance and Corporate Audit and Controls groups. Ms. Jesse was previously the Executive Vice President and Chief LegalOfficer of Blue Cross Blue Shield of Massachusetts, a Partner in the Boston law firm of Choate, Hall and Stewart, and Press Secretary for United StatesCongressman, Lee Hamilton. She has served on a number of Boards of Directors, including the New England Legal Foundation, Longy School of Music,Boston Harbor Island Alliance and the Landmark School. Ms. Jesse is a former President of the Boston Bar Foundation.MICHAEL KELLY (age 49) President, Global Markets, joined Haemonetics in 2010 as President of North America and the Global Plasma business. In 2011,his responsibilities expanded to include the Software and Global Marketing functions and his title changed to President of North America. In June of 2012, Mr.Kelly was promoted to President of Global Markets in charge of overseeing all of the Sales and Marketing activities for our Donor, Patient, and Softwareproducts globally, as well as the Global Marketing function. Prior to joining Haemonetics, he was Senior Vice President and General Manager of InfectionPrevention for CareFusion Corporation. Mr. Kelly spent several years with Cardinal Health in a variety of general management, marketing, businessdevelopment, and sales positions. He began his career with Baxter Healthcare as a Sales Representative in 1991.CHRISTOPHER LINDOP (age 55) Executive Vice President, Business Development and Chief Financial Officer joined Haemonetics in January of 2007 asChief Financial Officer. In 2007, Mr. Lindop assumed responsibility for business development. Prior to joining Haemonetics, he was Chief Financial Officerat Inverness Medical Innovations, a rapidly growing global developer of advanced consumer and professional diagnostic products from 2003 to 2006. Prior tothis, Mr. Lindop was a Partner in the Boston offices of Ernst & Young LLP and Arthur Andersen LLP.16Table of ContentsKATHLEEN MCDANIEL (age 49) Executive Vice President, Global Human Resources joined Haemonetics in March 2013 as EVP, Global Human Resources.Ms. McDaniel most recently served as worldwide VP of Human Resources for DePuy Synthes, a Johnson & Johnson Company. Prior to Depuy, Ms.McDaniel was an Executive Vice President at Fleet Credit Card Services. She has over 25 years of broad global HR leadership experience having heldexecutive, senior human resources generalist and compensation positions at leading computer and financial services companies.WARREN NIGHAN (age 44) Executive Vice President, Quality Assurance and Regulatory Assurance joined Haemonetics in November of 2010 as VicePresident of Worldwide Quality & Regulatory Affairs. Mr. Nighan previously served as Vice President of Quality & Regulatory for St. Jude Medical inMinneapolis, Minnesota. Prior to that, he held numerous roles of increasing responsibility in quality and regulatory affairs at Covidien, Tyco Healthcare, andKendall Healthcare. Mr. Nighan holds a bachelor’s degree in nursing from Northeastern University.DR. JONATHAN WHITE (age 53) Chief Science and Technology Officer joined Haemonetics in 2008 as Vice President of Research and Development. Dr.White joined Haemonetics from Pfizer where he held a number of roles including Chief Information Officer. He previously worked at McKinsey and Companyin New York. Dr. White is a Fellow of the Royal College of Surgery in England.17Table of ContentsPART IIITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIESOur common stock is listed on the New York Stock Exchange under the symbol HAE. The following table sets forth for the periods indicated the high andlow sales prices of such common stock, which represent actual transactions as reported by the New York Stock Exchange. On November 30, 2012 theCompany completed a two-for-one split of its common stock in the form of a stock dividend. Unless otherwise indicated, all common stock shares and pershare information referenced below have been retroactively adjusted to reflect the stock split. The exercise price of each outstanding option has also beenproportionately and retroactively adjusted for all periods presented. Par value per share and authorized shares were however not affected by the stock split.FirstQuarter SecondQuarter ThirdQuarter FourthQuarterFiscal year ended March 30, 2013: Market price of Common Stock: High$37.06 $40.70 $41.38 $44.44Low$33.44 $34.32 $38.92 $40.78Fiscal year ended March 31, 2012: Market price of Common Stock: High$35.10 $34.59 $32.29 $35.16Low$31.21 $28.02 $27.50 $30.92There were approximately 272 holders of record of the Company’s common stock as of March 30, 2013. The Company has never paid cash dividends onshares of its common stock and does not expect to pay cash dividends in the foreseeable future.18Table of ContentsThe following graph compares the cumulative 5-year total return provided to shareholders on Haemonetics Corporation’s common stock relative to thecumulative total returns of the S&P 500 index and the S&P Health Care Equipment index. An investment of $100 (with reinvestment of all dividends) isassumed to have been made in our common stock and in each of the indexes on 3/29/2008 and its relative performance is tracked through 3/30/2013.___________________________________* $100 invested on 3/29/08 in stock or index, including reinvestment of dividends.Fiscal year ended March 30. 3/08 3/09 3/10 3/11 3/12 3/13Haemonetics Corporation 100.00 92.45 95.94 110.00 116.95 139.85S&P 500 100.00 60.32 88.41 100.24 106.48 118.64S&P Health Care Equipment 100.00 68.74 95.94 97.34 101.08 113.56The stock price performance included in this graph is not necessarily indicative of future stock price performance.Unregistered Sales of Equity Securities and Use of ProceedsIn the August 1, 2012 press release, the Company announced that its Board of Directors approved the repurchase of up to $50.0 million worth of Companyshares during fiscal year 2013. During the three months ended March 30, 2013, the Company repurchased 694,644 shares of its common stock for anaggregate purchase price of $28.8 million. We reflect stock repurchases19Table of Contentsin our financial statements on a trade date basis and as Authorized Unissued. Haemonetics is a Massachusetts company and under Massachusetts lawrepurchased shares are treated as authorized but unissued, rather than treasury shares.All of the purchases during the quarter were made under the publicly announced program. All purchases were made in the open market.Period Total Numberof SharesRepurchased Average PricePaid per ShareincludingCommissions Total Dollar Valueof Shares Purchasedas Part of PubliclyAnnounced Plansor Programs Maximum DollarValue of Shares thatMay Yet bePurchased Under thePlans or Programs12/30/2012-1/26/2013 160,365 $41.81 $6,704,229 $22,133,9531/27/2013-2/23/2013 291,650 $41.54 $12,114,521 $10,019,4322/24/2013-3/30/2013 242,629 $41.30 $10,019,432 $—Total 694,644 $41.52 $28,838,182 20Table of ContentsITEM 6. SELECTED FINANCIAL DATAHaemonetics Corporation and Subsidiaries Five-Year Review(In thousands, except per share and employee data)2013 2012 2011 2010 2009Summary of Operations Net revenues$891,990 $727,844 $676,694 $645,430 $597,879Cost of goods sold463,859 358,604 321,485 307,949 289,709Gross profit428,131 369,240 355,209 337,481 308,170Operating expenses: Research and development44,394 36,801 32,656 26,376 23,859Selling, general and administrative323,053 245,261 213,899 214,483 198,744Contingent consideration income— (1,580) (1,894) (2,345) —Asset write-down4,247 — — 15,686 —Total operating expenses371,694 280,482 244,661 254,200 222,603Operating income56,437 88,758 110,548 83,281 85,567Other income (expense), net(6,540) 740 (467) (2,010) (565)Income before provision for income taxes49,897 89,498 110,081 81,271 85,002Provision for income taxes11,097 22,612 30,101 22,901 25,698Net income38,800 66,886 79,980 58,370 59,304Income per share: Basic$0.76 $1.32 $1.59 $1.15 $1.17Diluted$0.74 $1.30 $1.56 $1.12 $1.13Weighted average number of shares51,349 50,727 50,154 50,902 50,778Common stock equivalents910 863 1,038 1,224 1,568Weighted average number of common and common equivalentshares52,259 51,590 51,192 52,126 52,3462013 2012 2011 2010 2009Financial and Statistical Data: Working capital$416,866 $396,385 $340,160 $250,888 $289,530Current ratio3.3 4.0 4.1 2.9 4.1Property, plant and equipment, net$256,953 $161,657 $155,528 $154,313 $137,807Capital expenditures$62,188 $53,198 $46,669 $56,304 $56,379Depreciation and amortization$65,481 $49,966 $48,145 $43,236 $36,462Total assets$1,461,917 $911,135 $833,264 $760,928 $649,693Total debt$480,094 $3,771 $4,879 $20,520 $6,038Stockholders’ equity$769,182 $732,631 $686,136 $593,124 $539,884Debt as a % of stockholders’ equity62.4% 0.5% 0.7% 3.5% 1.1%Employees3,563 2,337 2,201 2,327 2,01621Table of ContentsITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOur BusinessHaemonetics is a blood management solutions company. Anchored by our medical device systems and related consumables, we also provide informationtechnology platforms and value added services to provide customers with business solutions which support improved clinical outcomes for patients andefficiency in the blood supply chain.Our medical device systems provide both automated collection and processing of blood components, and manual collection and processing of donated blood,assess likelihood for blood loss, salvage and process blood from surgery patients, and dispense and track blood inventory in the hospital. These systemsinclude devices and single-use, proprietary disposable sets (“disposables”) some of which operate only with our specialized devices. Our plasma and bloodcenter systems allow users to collect and process only the blood component(s) they target - plasma, platelets, or red blood cells - increasing donor and patientsafety as well as collection efficiencies. Our manual blood collection and filtration systems enable the manual collection of all blood components and detectbacteria in whole blood derived platelets, thus reducing the risks of infection through transfusion. Our blood diagnostics system assesses hemostasis (apatient's clotting ability) to aid clinicians in assessing the cause of bleeding, resulting in overall reductions in blood product usage. Our surgical blood salvagesystems allow surgeons to collect the blood lost by a patient in surgery, cleanse the blood, and make it available for transfusion back to the patient. Our bloodtracking systems automate the distribution of blood products in the hospital.We either sell our devices to customers (resulting in equipment revenue) or place our devices with customers subject to certain conditions. When the deviceremains our property, the customer has the right to use it for a period of time as long as the customer meets certain conditions we have established, which,among other things, generally include one or more of the following:•Purchase and consumption of a minimum level of disposables products;•Payment of monthly rental fees; and•An asset utilization performance metric, such as performing a minimum level of procedures per month per device.Recent developmentsOn August 1, 2012 we completed the acquisition of the business assets of the blood collection, filtration and processing product lines of Pall Corporation. Wepaid a total of $535.2 million in cash consideration. The acquisition was funded utilizing $475.0 million of loans and the remainder from cash on hand. Theblood processing systems and equipment acquired are for use in transfusion medicine and include manufacturing facilities in Covina, California; Tijuana,Mexico; Ascoli, Italy and a portion of Pall's assets in Fajardo, Puerto Rico. Approximately 1,300 employees transferred to Haemonetics. We anticipate payingan additional $15.0 million upon the replication and delivery of certain manufacturing assets of Pall's filter media business to Haemonetics by 2016. Untilthat time, Pall will manufacture and sell filter media to Haemonetics under a supply agreement.On April 30, 2013, we completed the acquisition of the business assets of Hemerus Medical, LLC, a Minnesota-based company that develops innovativetechnologies for the collection of whole blood and processing and storage of blood components. We have paid $24.0 million for Hemerus as of May 2013 andhave committed to payment of an additional $3.0 million contingent upon receipt of an additional FDA approval. Additionally, up to $14.0 million will be paidbased on future sales of SOLX-based products achieved within the next 10 years.Market TrendsPlasma MarketChanges in demand for plasma-derived pharmaceuticals, particularly immunoglobulin (“IG”), are the key driver of plasma collection volumes in thecommercial plasma market. Various factors related to the supply of plasma and the production of plasma-derived pharmaceuticals also affect collectionvolume, including the following:•Industry consolidation continues among plasma collectors and fractionators. As customers become more vertically integrated, the number of centersserved, and collections at those centers, can change. Consolidation can also impact the choice in plasma collection system used to perform some orall of those collections.•Several blood collectors supply additional plasma to fractionators, and thus collection volumes can rise overall but not directly impact ourcommercial plasma business.22Table of Contents•The newer plasma fractionation facilities are more efficient in their production processes, helping companies meet growing demand forpharmaceuticals without requiring an equivalent increase in plasma supply.•Reimbursement guidelines affect the demand for end product pharmaceuticals, although off-label use of pharmaceuticals is growing, in particular forAlzheimer's treatment.•Newly approved indications for, and the growing understanding and thus diagnosis of auto-immune diseases treated with plasma derived therapiesincrease the demand for plasma, as do longer lifespans and a growing aging patient population.•Geographical expansion of biopharmaceuticals also increases demand for plasma.Demand for plasma in fiscal 2013 was particularly strong in North America where approximately two-thirds of commercial plasma is collected. Globalmarkets for plasmapheresis have been relatively flat, with U.S. produced plasma meeting an increasing percentage of plasma volume demand worldwide.Blood Center MarketIn the blood center market, we sell products used in the collection of platelets, red cells and whole blood. Whole blood is collected from the donor and thentransported to a laboratory where it is separated into its components: red cells, platelets and/or plasma. Despite modest increases in the demand for platelets in Europe and Japan, improved collection efficiencies that increase the yield of platelets per collection andmore efficient use of collected platelets have resulted in a flat market for automated collections and related disposables in these countries. With changes inhealthcare and social security systems in emerging markets, a larger number of people get access to state of the art medical treatments, which drives thedemand for platelet transfusions and represent a faster growing market.Demand for red cells has declined modestly in mature markets due to the development of less invasive, lower blood loss medical procedures and bloodmanagement. Highly populated emerging market countries are increasing their demand for blood as they are advancing their health care coverage, and asgreater numbers of people gain access to more advanced medical treatment, demand for blood components, including red cells increases directly.Hospital MarketIn the hospital market, we sell cardiovascular surgical blood salvage systems, orthopedic surgical blood salvage systems, and a blood diagnostics instrument.Our Cell Saver brand surgical blood salvage system was designed as a solution for rapid, high volume blood loss procedures, such as cardiovascularsurgeries. Since the 2012 introduction of the Cell Saver Elite, we have seen growth from emerging markets due to increased access to healthcare and we havealso had growth in mature markets.Our OrthoPAT technology is used to salvage red cells in high blood loss orthopedic procedures, including hip and knee replacement surgeries. The OrthoPATis the only system on the market designed to collect, separate and wash a patient’s shed blood both during and after surgery. While cell salvage is not yet astandard of care for U.S. orthopedic procedures, we position this device as an effective alternative to stored red cells (both autologous predonated andallogeneic) and non-washed autotransfusion systems. Particularly in the United States, hip and knee replacement surgeries are frequently elective surgeries andas a result are subject to change in economic conditions.Our TEG Thromobelastograph Hemostasis Analyzer is a diagnostic tool which provides a comprehensive assessment of a patient’s overall hemostasis. Thebenefit is that this information enables caregivers to decide the best blood-related clinical treatment for the individual patient in order to minimize blood lossand reduce incidence of "reoperations". The test is expanding beyond cardiac surgery into trauma, as well as helping manage surgical timing of patients onanti-platelet medications. TEG product line sales further strengthened in fiscal 2013. This product’s growth is dependent on hospitals adopting this technologyas a standard practice in their blood management programs.Software MarketOur software solutions portfolio addresses many of the critical data collection and data management needs within the plasma, blood center, and hospitalmarkets and is also a key component of our blood management solutions today. In fiscal 2013, the pressures to improve efficiencies, reduce cost, and improvepatient outcomes continued to be key drivers in all three markets.Demand for our plasma software solution declined in fiscal 2013 as a sub-segment of this market has or intends to migrate towards homegrown proprietarysoftware solutions in an effort to gain unique competitive advantages.23Table of ContentsIn the blood center market for software, we currently participate most actively in the United States, where expansion to new or emerging technology platformssuch as our El Dorado Software Solution Suite has been slow due to industry consolidation and the relatively high cost and management focus required tomigrate to new information technology platforms. This trend has limited revenue growth but the high switching costs noted and recurring maintenance revenuestreams from existing products has provided relative revenue stability in this segment.We currently participate in the hospital markets for software primarily in the United States and Europe. In the United States we have experienced growth in ourinstalled base for our blood banking solution, SafeTraceTX, due to demand for reliable, proven safety systems within blood banks. However, growth hasbeen constrained recently due to hospital IT organization focus on the electronic medical records mandate. Revenues from BloodTrack, a blood inventory andtransfusion management system, have increased in the United States and Europe recently as hospitals seek means to improve efficiencies and meet complianceguidelines for tracking and dispositioning blood components to patients.24Table of ContentsFinancial Summary(In thousands, except per share data)March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11Net revenues$891,990 $727,844 $676,694 22.6 % 7.6 %Gross profit$428,131 $369,240 $355,209 15.9 % 4.0 %% of net revenues48.0% 50.7% 52.5% Operating expenses$371,694 $280,482 $244,661 32.5 % 14.6 %Operating income$56,437 $88,758 $110,548 (36.4)% (19.7)%% of net revenues6.3% 12.2% 16.3% Other income (expense), net$(6,540) $740 $(467) Income before taxes$49,897 $89,498 $110,081 (44.2)% (18.7)%Provision for income tax$11,097 $22,612 $30,101 (50.9)% (24.9)%% of pre-tax income22.2% 25.3% 27.3% Net income$38,800 $66,886 $79,980 (42.0)% (16.4)%% of net revenues4.3% 9.2% 11.8% Earnings per share-diluted$0.74 $1.30 $1.56 (43.1)% (16.7)%Our fiscal year ends on the Saturday closest to the last day of March. Fiscal 2013, 2012 and 2011 each included 52 weeks with each quarter having13 weeks.Net revenue for fiscal 2013 increased 22.6% compared to fiscal 2012. Without the effects of foreign exchange, net revenue increased 22.2% compared to fiscal2012. This increase includes sales from the recently acquired whole blood business of $138.4 million for the fiscal year ended March 30, 2013. The remainingincrease for the fiscal year ended March 30, 2013 is primarily due to revenue growth from our plasma, surgical and diagnostics products. Fiscal 2012 revenuebenefited from purchases by the Japan Red Cross (“JRC”) in March 2012 to avoid future supply disruptions in anticipation of an internal business systemconversion, negatively impacting fiscal year ended March 30, 2013.Net revenue for fiscal 2012 increased 7.6% compared to fiscal 2011. Without the effects of foreign exchange, net revenue increased 5.6% over fiscal 2011.The increase reflects strong revenue growth from our plasma, blood center, diagnostics businesses and increased equipment and software sales, offset bydeclines due to a recall of certain OrthoPAT devices. As mentioned above, fiscal 2012 revenue growth also benefited from purchases by the Japanese RedCross in March 2012.During fiscal 2013, operating income decreased 36.4% compared to fiscal 2012. Without the effects of foreign currency, operating income decreased 43.7%compared to fiscal 2012 as increased gross profit due to revenue growth was more than offset by higher costs of goods sold due to acquisition-related step-upin the value of acquired inventory. Also contributing to the decrease in operating income was a $7.0 million inventory reserve for a quality matter involving acomponent of our whole blood disposable inventory which occurred in the third quarter of fiscal 2013 and higher operating expenses including significantacquisition and integration costs totaling $37.3 million.During fiscal 2012, operating income decreased 19.7% compared to fiscal 2011. Without the effects of foreign currency, operating income decreased 20.4%over fiscal 2011 as increases in operating expenses more than offset gross profit associated with revenue growth due to higher costs of quality, relatively highersales of our lower-margin products, expenses associated with European customer claims arising from a quality matter with HS Core, and transaction costs.Net income decreased 42.0% during fiscal 2013. Without the effects of foreign exchange, net income decreased 49.9% for fiscal 2013. The decrease in netincome was attributable to the decrease in operating income described above and additional interest expense.Net income decreased 16.4% during fiscal 2012. Without the effects of foreign exchange, net income decreased 18.1% for fiscal 2012. The decrease in netincome was attributable to the decline in operating income described above.25Table of ContentsRESULTS OF OPERATIONSNet Revenues by Geography(In thousands)March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11United States$454,874 $352,160 $317,355 29.2% 11.0%International437,116 375,684 359,339 16.4% 4.5%Net revenues$891,990 $727,844 $676,694 22.6% 7.6%International Operations and the Impact of Foreign ExchangeOur principal operations are in the U.S., Europe, Japan and other parts of Asia. Our products are marketed in more than 97 countries around the worldthrough a combination of our direct sales force and independent distributors and agents.Our revenue generated outside the U.S. approximated 49.0%, 51.6%, and 53.1% of net revenue during fiscal 2013, 2012, and 2011, respectively. Duringfiscal 2013, 2012, and 2011, revenue in Japan accounted for approximately 13.5%, 17.1%, and 16.3%, respectively, of our total revenue. Revenue fromEurope accounted for approximately 25.2%, 25.2%, and 27.6% of our total revenue for fiscal 2013, 2012, and 2011, respectively. International sales aregenerally conducted in local currencies, primarily the Japanese Yen and the Euro. Our results of operations are impacted by changes in foreign exchange rates,particularly in the value of the Yen and the Euro relative to the U.S. Dollar.For fiscal 2013 as compared to fiscal 2012, the effects of foreign exchange resulted in a 0.4% increase in sales. For fiscal 2012 as compared to fiscal 2011, theeffects of foreign exchange accounted for a 2.0% increase in sales.Please see section entitled “Foreign Exchange” in this discussion for a more complete explanation of how foreign currency affects our business and our strategyfor managing this exposure.Net Revenues by Product Type(In thousands)March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11Disposables$757,765 $594,933 $551,836 27.4 % 7.8%Software solutions69,952 70,557 66,876 (0.9)% 5.5%Equipment & other64,273 62,354 57,982 3.1 % 7.5%Net revenues$891,990 $727,844 $676,694 22.6 % 7.6%Disposables Revenues by Product Type(In thousands)March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11Plasma disposables$268,900 $258,061 $227,209 4.2 % 13.6 %Blood center disposables Platelet169,602 167,946 156,251 1.0 % 7.5 %Red cell49,733 48,034 46,828 3.5 % 2.6 %Whole blood138,436 — — 100.0 % — % 357,771 215,980 203,079 65.7 % 6.4 %Hospital disposables Surgical73,508 66,619 66,503 10.3 % 0.2 %OrthoPAT30,230 31,186 35,631 (3.1)% (12.5)%Diagnostics27,356 23,087 19,414 18.5 % 18.9 % 131,094 120,892 121,548 8.4 % (0.5)%Total disposables revenue$757,765 $594,933 $551,836 27.4 % 7.8 %26Table of ContentsDisposables RevenueDisposables include the Plasma, Blood Center, and Hospital product lines. Disposables revenue increased 27.4% during fiscal 2013 and 7.8% during fiscal2012. Without the effect of foreign exchange, disposables revenue increased 26.8% and 5.7% for fiscal 2013 and 2012, respectively.PlasmaPlasma disposables revenue increased 4.2% during fiscal 2013. Without the effects of foreign exchange, plasma disposables revenue increased 4.5% duringfiscal 2013 compared to fiscal 2012. Plasma revenue primarily increased due to higher revenue from commercial fractionation customers in the United States,with increased collections more than offsetting price reductions in contract renewals completed in fiscal 2012.Plasma disposables revenue increased 13.6% during fiscal 2012. Without the effects of foreign exchange, plasma disposables revenue increased 12.7% duringfiscal 2012 primarily due to increased plasma collections by our commercial fractionation customers in the United States.Blood CenterBlood Center consists of disposables used to collect platelets, red cells, whole blood and plasma for transfusion.PlateletPlatelet disposables revenue increased 1.0% during fiscal 2013. Without the effect of foreign exchange, platelet disposable revenue increased 1.0% during fiscal2013 resulting from continued growth in emerging markets which more than offset declines in mature markets, notably Japan. Revenue growth in Japan waslower due to increased sales resulting from quality issues experienced with a competitor's device in the prior year, and the negative impact of the JRC'spurchases in March 2012 to avoid future supply disruptions in anticipation of an internal system conversion.Platelet disposables revenue increased 7.5% during fiscal 2012. Without the effect of foreign exchange, platelet disposable revenue increased 2.5% duringfiscal 2012. The increase included the benefit of quality issues experienced with a competitor's device in Japan, increased sales in emerging markets, andpurchases by the Japanese Red Cross in March 2012 to avoid future supply disruptions in anticipation of an internal business system conversion.Red CellRed cell disposables revenue increased 3.5% during fiscal 2013. Without the effects of foreign exchange, red cell disposables revenue increased 3.8% duringfiscal 2013, due primarily to favorable order timing in North America in the fourth quarter of fiscal 2013. We do not expect material growth in red cell revenueas market trends indicate improved blood management procedures in hospitals are reducing demand for red cells in mature markets.Red cell disposables revenue increased 2.6% during fiscal 2012. Without the effects of foreign exchange, red cell disposables revenue increased 2.6% duringfiscal 2012, driven primarily by increased account penetration at existing customers for red cells in North America.Whole BloodWhole blood disposables revenue was $138.4 million for the fiscal year ended March 30, 2013, representing sales of products from the whole bloodacquisition completed on August 1, 2012. In March 2013, we failed to receive renewal of a European tender that will negatively impact fiscal 2014 revenue.Annual sales under this contract were $12.2 million. Gross margin on whole blood sales to this customer is substantially lower than our average gross marginon the whole blood or other disposable sales.HospitalHospital consists of Surgical, OrthoPAT, and Diagnostics products. The hospital product line includes the following brand platforms: the Cell Saver brand,the TEG brand, the OrthoPAT brand and the cardioPAT brand.SurgicalSurgical disposables revenue consists principally of the Cell Saver and cardioPAT products. Revenue from our surgical disposables increased 10.3% duringfiscal 2013. Without the effect of foreign exchange, surgical disposables revenue increased 8.4% during fiscal 2013, with revenue growth realized across allmarkets we serve. We achieved growth from market27Table of Contentsacceptance of Cell Saver Elite in the U.S., Europe and Japan, while emerging market growth was realized through increased commercial presence in emergingmarkets such as China. Surgical revenue also benefited from market share gains due to limited product availability from our primary competitor due to a nowresolved supply chain disruption following a natural disaster in Europe.Revenue from our surgical disposables increased 0.2% during fiscal 2012. Without the effect of foreign exchange, surgical disposables revenue decreased 2.2%for fiscal 2012, due to competitive pressures and a decrease in demand across our European and North American markets associated with lower surgicalvolumes. During fiscal 2012, we introduced the Cell Saver Elite, our next generation surgical device, first in North America and then across all geographies.OrthoPATRevenue from our OrthoPAT disposables decreased 3.1% during fiscal 2013. Without the effect of foreign exchange, OrthoPAT disposables revenue decreasedby 3.8% primarily due to lower sales in the United States as device utilization by smaller hospitals has declined following the voluntary recall of the OrthoPATdevice in fiscal 2012.Revenue from our OrthoPAT disposables decreased 12.5% during fiscal 2012. Without the effect of foreign exchange, OrthoPAT disposables revenuedecreased by 13.4%, also as a result of the voluntary recall of our OrthoPAT devices during the first quarter of fiscal 2012.DiagnosticsDiagnostics product revenue consists of the TEG products. Revenues from TEG consumers increased 18.5% during fiscal 2013. Without the effect of foreignexchange, diagnostic product revenue increased by 17.0%. The revenue increase is due to continued adoption of our TEG analyzer, principally in the UnitedStates and China.Revenue from our diagnostics products increased 18.9% during fiscal 2012. Without the effect of foreign exchange, diagnostic product revenue increased by19.2%. The revenue increase is due to continued adoption of our TEG analyzer, including expansion with North American hospitals and sales growth inChina.Other Revenues(In thousands)March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11Software solutions$69,952 $70,557 $66,876 (0.9)% 5.5%Equipment and other64,273 62,354 57,982 3.1 % 7.5%Net other revenues$134,225 $132,911 $124,858 1.0 % 6.4%Software SolutionsOur software solutions revenue includes sales of our information technology software platforms and consulting services.Software solutions revenue decreased 0.9% during fiscal 2013. Without the effects of foreign exchange, software solutions revenue increased 0.2% duringfiscal 2013. Installed base growth in hospital-based solutions SafeTraceTX and BloodTrack was offset by declines in plasma software revenue.Software solutions revenue increased 5.5% during fiscal 2012. Without the effects of foreign exchange, software solutions revenue increased 4.7% duringfiscal 2012. The increase is primarily due to installed base growth in our SafeTraceTX and BloodTrack products.Equipment & OtherOur equipment and other revenues include revenue from equipment sales, repairs performed under preventive maintenance contracts or emergency servicevisits, spare part sales, and various service and training programs. These revenues are primarily composed of equipment sales, which tend to vary fromperiod to period more than our disposable business due to the timing of order patterns, particularly in our distribution markets.Equipment and other revenue increased 3.1% during fiscal 2013. Without the effect of currency exchange, equipment and other revenue increased 3.2%. Theincrease is due primarily to higher TEG equipment sales in China and higher surgical equipment sales across multiple markets.28Table of ContentsEquipment and other revenue increased 7.5% during fiscal 2012. Without the effect of currency exchange, equipment and other revenue increased 5.2% drivenby higher equipment sales in Europe, Asia and Japan, and the launch of the Cell Saver Elite device.Gross Profit(In thousands)March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11Gross profit$428,131 $369,240 $355,209 15.9% 4.0%% of net revenues48.0% 50.7% 52.5% Our gross profit increased 15.9% during fiscal 2013. Without the effects of foreign exchange, gross profit increased 13.8% during fiscal 2013. Our grossprofit margin percentage decreased by 270 basis points for fiscal 2013 as compared to fiscal 2012. The decrease in gross profit margin for the fiscal yearended March 30, 2013 includes $11.9 million of costs of goods sold related to the increase in fair value of acquisition-related whole blood inventory acquiredfrom Pall as well as an approximately $7.0 million inventory reserve recorded related to a quality matter. This reserve related to the removal of affected wholeblood collection sets from inventory for destruction or rework based on a quality matter detected during the third quarter of fiscal 2013. We issued a fieldaction letter to blood center customers requesting visual inspection of a component of certain whole blood collection sets, due to the potential for a leak to occurat a very low frequency. The component, referred to as a Y connector, was supplied by a contract manufacturer. We will pursue all available means offinancial recovery related to this inventory loss. However, no salvage or recovery value from these efforts was recorded as we cannot currently concludewhether a favorable outcome will result.Additionally, the decrease in gross profit margin included the combined impact of whole blood disposable sales, as whole blood gross margins are lower thanaverage gross margins for our complete product line. This was partially offset by reduced equipment depreciation expense as a result of a change in estimateduseful lives implemented during the year ended March 30, 2013. The effect of this change in estimate was a reduction of depreciation expense in fiscal 2013 by$4.5 million, an increase in income net of tax of $3.3 million and an increase in basic and diluted earnings per share of $0.09.Our gross profit amount increased 4.0% during fiscal 2012. Without the effects of foreign exchange, gross profit increased 1.5%. Our gross profit marginpercentage decreased by 180 basis points for fiscal 2012 as compared to fiscal 2011. The decrease was primarily due to increased product quality costs, themix of sales among our various product lines, and higher freight costs. The increased product quality costs included the sale of a higher cost substituteproduct for certain European plasma customers affected by the HS Core quality matter. The relatively lower sales of our higher gross margin hospital productsand higher sales of our lower gross margin plasma disposables also reduced our overall gross profit.Operating Expenses(In thousands)March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11Research and development$44,394 $36,801 $32,656 20.6 % 12.7 %% of net revenues5.0% 5.1 % 4.8 % Selling, general and administrative$323,053 $245,261 $213,899 31.7 % 14.7 %% of net revenues36.2% 33.7 % 31.6 % Contingent consideration income$— $(1,580) $(1,894) (100.0)% (16.6)%% of net revenues—% (0.2)% (0.3)% Asset write-downs$4,247 $— $— — % — %% of net revenues0.5% — % — % Total operating expenses$371,694 $280,482 $244,661 32.5 % 14.6 %% of net revenues41.7% 38.5 % 36.2 % Research and DevelopmentResearch and development increased 20.6% during fiscal 2013. This increase is primarily due to additional staff and program spending related to the wholeblood acquisition and related product initiatives, as well as a general increase in development programs to support long-term product plans and increase ourcompetitiveness.29Table of ContentsResearch and development increased 12.7% during fiscal 2012, with an immaterial effect of foreign exchange. The increase was primarily related to the generalincrease in development programs in support of long-term product plans and near-term quality improvements.Selling, General and AdministrativeDuring fiscal 2013, selling, general and administrative expenses increased 31.7%. Without the effects of foreign exchange, selling, general and administrativeexpenses increased 30.6% during fiscal 2013. This increase includes acquisition and integration expenses associated with the whole blood acquisition of $37.3million compared to approximately $3.0 million of whole blood transaction costs incurred in fiscal 2012. We also incurred approximately $35.2 million ofexpenses from the whole blood business following the August 1, 2012 acquisition. The remainder of the growth is related to investments in the global salesorganization, particularly emerging markets, and information technology infrastructure to support increased revenue levels. We also incurred higher incentivecompensation this fiscal year as financial performance versus established financial targets improved as compared to fiscal 2012.During fiscal 2012, selling, general and administrative expenses increased 14.7%. Without the effects of foreign exchange, selling, general and administrativeexpenses increased 11.8% during fiscal 2012. The increase was attributable to $3.1 million of expenses, net of insurance recovery, associated with Europeancustomer claims arising from a quality matter with HS Core, $3.0 million of transaction costs related to the definitive purchase agreements with PallCorporation and Hemerus Medical, LLC, $2.2 million of higher restructuring charges, increased investment in our worldwide sales and marketingorganizations, and higher bonus expense.Contingent Consideration IncomeUnder the accounting rules for business combinations, we established a liability for payments that we might make in the future to former shareholders ofNeoteric that are tied to the performance of the BloodTrack business for the first three years post acquisition, beginning with fiscal 2010. During fiscal 2012and 2011, this business did not achieve the necessary revenue growth milestones for the former shareholders to receive additional performance payments. Assuch, we reduced the contingent liability by $1.6 million and $1.9 million during fiscal 2012 and 2011, respectively, and recorded the adjustments ascontingent consideration income in the consolidated statements of income.In September 2011, we entered into an agreement which released the Company from the contingent consideration due to the former shareholders of Neoteric.Under the terms of the agreement, the former shareholders of Neoteric received $0.7 million in exchange for releasing the Company from any future claims forcontingent consideration. The Company paid the $0.7 million settlement amount during September 2011 and recorded the associated expense in the selling,general and administrative line item in the accompanying consolidated statements of income.Asset Write-DownWe recorded an asset write-down of $4.2 million in the fourth quarter of fiscal 2013 associated with exiting activities related to technologies originally acquiredfrom Arryx, Inc.Other income (expense), netOther expense, net, increased during fiscal 2013 as compared to the same periods of fiscal 2012 primarily due to $6.4 million of incremental interest expensefrom the $475.0 million term loan borrowed in connection with the whole blood acquisition.We reported in other income in fiscal 2012 the reversal of interest on contingent consideration.Taxes March 30, 2013 March 31, 2012 April 2, 2011 % Increase/(Decrease) 13 vs. 12 % Increase/(Decrease) 12 vs. 11Reported income tax rate22.2% 25.3% 27.3% (3.1)% (2.0)%Reported Tax RateThe change in our reported tax rate for fiscal year 2013, as compared to 2012 and 2011 relates primarily to the geographic distribution of income as well as theimpact of the resolution of uncertain tax positions resulting from the expiration of the statute of limitations for assessing tax in certain jurisdictions. 30Table of ContentsLiquidity and Capital ResourcesThe following table contains certain key performance indicators we believe depict our liquidity and cash flow position:(In thousands)March 30, 2013 March 31, 2012Cash & cash equivalents$179,120 $228,861Working capital$416,866 $396,385Current ratio3.3 4.0Net cash (debt) position(1)$(300,974) $225,090Days sales outstanding (DSO)62 66Disposables finished goods inventory turnover4.0 5.7_______________________________________(1)Net cash (debt) position is the sum of cash and cash equivalents less total debt.On August 1, 2012, in connection with the acquisition of the whole blood business, we entered into a credit agreement ("Credit Agreement") with certainlenders (together, “Lenders”) which provided for a $475.0 million term loan and a $50.0 million revolving loan (the “Revolving Credit Facility”), and togetherwith the Term Loan, (the “Credit Facilities”). The Credit Facilities have a term of five years and mature on August 1, 2017. As of March 30, 2013 all $50.0million of the Revolving Credit Facility was available. We also have lines of credit to fund our global operations.Our primary sources of liquidity are cash and cash equivalents, internally generated cash flow from operations and option exercises. We believe these sourcesare sufficient to fund our cash requirements over the next twelve months, which are primarily total payments of approximately $88.0 million associated withValue Creation and Capture opportunities and acquisition integration activities described below, capital expenditures, cash payments under the loan agreementand investments including the purchase of Hemerus described previously and other acquisitions.Value Creation and CaptureOn April 29, 2013, we committed to a plan to pursue identified Value Creation and Capture ("VCC") opportunities. These opportunities include investment inproduct line extensions and next generation products, enhancement of commercial capabilities and a transformation of our manufacturing network. Thetransformation of our manufacturing network will take place over the next three fiscal years and includes changes to the current manufacturing footprint andsupply chain structure (the "Network Plan").To implement the Network Plan, we will (i) discontinue manufacturing activities at our Braintree, Massachusetts location, (ii) create a technology center ofexcellence for product development, (iii) expand our current facility in Tijuana, Mexico and (iv) build a new manufacturing facility in Asia closer to ourcustomer base in that region.We estimate we will incur approximately $23.0 million of cash restructuring expenses during fiscal 2014 which will be recorded through cost of goods sold. Tocomplete the Network Plan we estimate that we will spend an additional $8.0 million for cash restructuring expenses in future years. These costs consistprincipally of employee related costs, product line transfer costs including relocation and validation, as well as redundant overhead and inefficiencies duringthe transfer period. The management and execution of this effort will require a dedicated team of program managers, engineers, regulatory and qualityprofessionals, the cost of which is included in these estimates. We also expect to incur non-cash costs of approximately $5.0 million consisting of accelerateddepreciation and asset write-downs.Activities under the Plan will be initiated in fiscal 2014 and are expected to be substantially completed in the next three years. Additionally, we expect todeploy approximately $36.0 million of cash in fiscal 2014 for capital expenditures to expand our existing Tijuana, Mexico facility and construct a new facilityin Asia.We also expect to incur cash costs totaling $29.0 million associated with our other VCC opportunities, completion of the integration of the whole bloodbusiness and the recent acquisition of Hemerus.31Table of Contents(In thousands)March 30, 2013 March 31, 2012 April 2, 2011 Increase/(Decrease) 13 vs. 12 Increase/(Decrease) 12 vs. 11Net cash provided by (used in): Operating activities$85,074 $115,318 $123,455 $(30,244) $(8,137)Investing activities(596,395) (52,196) (51,558) (544,199) (638)Financing activities461,853 (30,470) (18,084) 492,323 (12,386)Effect of exchange rate changes on cash and cashequivalents(1)(273) (498) 1,332 225 (1,830)Net increase/(decrease) in cash and cash equivalents$(49,741) $32,154 $55,145 $(81,895) $(22,991)_______________________________________(1)The balance sheet is affected by spot exchange rates used to translate local currency amounts into U.S. dollars. In accordance with GAAP, we haveremoved the effect of foreign currency throughout our cash flow statement, except for its effect on our cash and cash equivalents.Cash Flow Overview:In fiscal 2013, the Company repurchased approximately 1.2 million shares of its common stock for an aggregate purchase price of $50.0 million. Thiscompleted a $50.0 million share repurchase program that was announced in April 2012.In fiscal 2012, the Company repurchased approximately 1.8 million shares of its common stock for an aggregate purchase price of $50.0 million. Thiscompleted a $50.0 million share repurchase program that was announced in May 2011.In fiscal 2011, the Company repurchased approximately 1.8 million shares of its common stock for an aggregate purchase price of $50.0 million. Thiscompleted a $50.0 million share repurchase program that was announced in April 2010.Operating Activities:Net cash provided by operating activities was $85.1 million during fiscal 2013, a decrease of $30.2 million as compared to fiscal 2012 primarily due tohigher payments of acquisition and integration related costs and working capital investments related to sales from the whole blood business, as accountsreceivable were not included in the acquired assets.Net cash provided by operating activities was $115.3 million during fiscal 2012, a decrease of $8.1 million as compared to fiscal 2011. Cash provided byoperating was negatively impacted by higher accounts receivable, higher inventory levels to support plasma growth, the launch of our next generation surgicaldevice, the Cell Saver Elite, the replacement of OrthoPAT devices and lower net income, offset by lower bonus payments and lower tax payments.Investing Activities:Net cash used in investing activities increased by $544.2 million during fiscal 2013 as compared to fiscal 2012 due to the use of $535.2 million to acquire thewhole blood business, of which $475.0 million was funded by term loan borrowings discussed above. The increase in net cash used in investing activitiesalso included higher capital expenditures primarily related to the expansion of our installed equipment base with customers, particularly for plasma andhospital equipment.Net cash used in investing activities increased by $0.6 million during fiscal 2012 as compared to fiscal 2011 due to a $6.5 million increase in capitalexpenditures on property, plant and equipment, offset by the benefit of no acquisition-related payments. The increase in capital expenditures is the net effect ofhigher placements of company-owned equipment, primarily in support of increased plasma disposables demand, and the replacement of OrthoPAT devices,offset by lower manufacturing capital investments due to completion of construction of our Salt Lake City facility.Financing Activities:Net cash provided by financing activities increased by $492.3 million during the fiscal year ended March 30, 2013, as compared to the fiscal year endedMarch 31, 2012, due primarily to a $475.0 million term loan used to finance the whole blood acquisition, $15.1 million of incremental proceeds from theexercise of share-based compensation and $5.6 million of short term borrowings from the fluctuation of working capital in Japan. These were offset by $5.5million of debt issuance costs32Table of Contentspaid related to the term loan closing. Net cash used to fund share repurchases under common stock repurchase programs was $50.0 million during fiscal2013 and 2012.Net cash used in financing activities increased by $12.4 million during fiscal 2012 due primarily to a $25.4 million decrease in cash flow from the exerciseof stock options offset by a $14.9 million decrease in net payments under short-term credit arrangements. Net cash used to fund share repurchases undercommon stock repurchase programs was $50.0 million during fiscal 2012 and 2011.Contractual Obligations and ContingenciesA summary of our contractual and commercial commitments as of March 30, 2013, is as follows: Payments Due by Period(In thousands)Total Less than 1 year 1-3 years 4-5 years After 5 yearsDebt$480,094 $23,150 $118,969 $337,975 $—Operating leases23,985 7,742 9,766 3,788 2,689Purchase commitments*131,734 126,734 5,000 — —Expected retirement plan benefit payments10,611 1,200 2,635 2,062 4,714Total contractual obligations$646,424 $158,826 $136,370 $343,825 $7,403_______________________________________* Includes amounts we are committed to spend on purchase orders entered in the normal course of business for capital equipment and for the purpose ofmanufacturing our products including contract manufacturers, specifically JMS Co. Ltd., and Kawasumi Laboratories, for the manufacture ofcertain disposable products. The majority of our operating expense spending does not require any advance commitment.The above table does not reflect our long-term liabilities associated with unrecognized tax benefits of $7.4 million recorded in accordance with ASC Topic 740,Income Taxes. Due to the complexity associated with tax uncertainties related to these unrecognized benefits, we cannot reasonably make a reliable estimate ofthe period in which we expect to settle these long-term liabilities.At the closing of the whole blood acquisition, we paid a total of $535.2 million in cash consideration following resolution of post-closing adjustments forworking capital and historical earnings levels. We anticipate paying an additional $15.0 million upon replication and delivery of certain manufacturing assetsof Pall's filter media business to Haemonetics by 2016.Concentration of Credit RiskConcentrations of credit risk with respect to trade accounts receivable are generally limited due to our large number of customers and their diversity acrossmany geographic areas. A portion of our trade accounts receivable outside the United States, however, include sales to government-owned or supportedhealthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of thosecountries' national economies.We have not incurred significant losses on government receivables. We continually evaluate all government receivables for potential collection risks associatedwith the availability of government funding and reimbursement practices. If the financial condition of customers or the countries' healthcare systems deterioratesuch that their ability to make payments is uncertain, allowances may be required in future periods.Deteriorating credit and economic conditions in parts of Western Europe, particularly in Italy, where our net accounts receivable is $23.4 million as ofMarch 30, 2013, may increase the average length of time it takes us to collect accounts receivable in certain regions within these countries.Contingent CommitmentsLegal ProceedingsWe are presently engaged in various legal actions, and although our ultimate liability cannot be determined at the present time, we believe that any such liabilitywill not materially affect our consolidated financial position or our results of operations.33Table of ContentsFenwal (Fresenius) Patent InfringementFor the past six years, we have pursued patent infringement lawsuits against Fenwal Inc. seeking an injunction and damages from their infringement of aHaemonetics patent, through the sale of the ALYX brand automated red cell collection system, a competitor of our automated red cell collection systems.Currently, we are pursuing a patent infringement action in Germany against Fenwal, and its European and German subsidiary. On September 20, 2010, wefiled a patent infringement action in Germany. In response, Fenwal filed an action to invalidate the Haemonetics patent which is the subject of this infringementaction on December 1, 2010.InflationWe do not believe that inflation had a significant impact on our results of operations for the periods presented. Historically, we believe we have been able tomitigate the effects of inflation by improving our manufacturing and purchasing efficiencies, by increasing employee productivity, and by adjusting theselling prices of products. We continue to monitor inflation pressures generally and raw materials indices that may affect our procurement and productioncosts. Increases in the price of petroleum derivatives could result in corresponding increases in our costs to procure plastic raw materials.Foreign ExchangeDuring fiscal 2013, approximately 49.0% of our sales were generated outside the U.S., generally in foreign currencies, yet our reporting currency is the U.S.Dollar. Our primary foreign currency exposures relate to sales denominated in the Euro and the Japanese Yen. We also have foreign currency exposure related tomanufacturing and other operational costs denominated in the Swiss Franc, the British Pound, the Canadian Dollar and Mexican Peso. The Yen and Eurosales exposure is partially mitigated by costs and expenses for foreign operations and sourcing products denominated in these foreign currencies. Since ourforeign currency denominated Yen and Euro sales exceed the foreign currency denominated costs, whenever the U.S. Dollar strengthens relative to the Yen orEuro, there is an adverse effect on our results of operations and, conversely, whenever the U.S. Dollar weakens relative to the Yen or Euro, there is a positiveeffect on our results of operations. For the Swiss Franc, the British Pound, and the Canadian Dollar, our primary cash flows relate to product costs or costsand expenses of local operations. Whenever the U.S. Dollar strengthens relative to these foreign currencies, there is a positive effect on our results of operations.Conversely, whenever the U.S. Dollar weakens relative to these currencies, there is an adverse effect on our results of operations.We have a program in place that is designed to mitigate our exposure to changes in foreign currency exchange rates. That program includes the use of derivativefinancial instruments to minimize for a period of time, the unforeseen impact on our financial results from changes in foreign exchange rates. We utilizeforward foreign currency contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily the Japanese Yen andthe Euro, and to a lesser extent the Swiss Franc, British Pound, and the Canadian Dollar. This does not eliminate the volatility of foreign exchange rates, butbecause we generally enter into forward contracts one year out, to the extent hedged, rates are fixed for a one-year period, thereby facilitating financial planningand resource allocation.These contracts are designated as cash flow hedges and are intended to lock in the expected cash flows of forecasted foreign currency denominated sales andcosts at the available spot rate. Actual spot rate gains and losses on these contracts are recorded in sales and costs, at the same time the underlying transactionsbeing hedged are recorded. The final impact of currency fluctuations on the results of operations is dependent on the local currency amounts hedged and theactual local currency results.Presented below are the spot rates for our Euro, Japanese Yen, Canadian Dollar, British Pound, and Swiss Franc cash flow hedges that settled during fiscal2013 and 2012 or are presently outstanding. These hedges cover our long foreign currency positions that result from our sales designated in the Euro and theJapanese Yen. These hedges also include our short positions associated with costs incurred in Canadian Dollars, British Pounds, and Swiss Francs. The tablealso shows how the strengthening or weakening of the spot rates associated with those hedge contracts versus the spot rates in the contracts that settled in theprior comparable period affects our results favorably or unfavorably. The table assumes a consistent notional amount for hedge contracts in each periodpresented.34Table of ContentsFirstQuarter Favorable /(Unfavorable) SecondQuarter Favorable /(Unfavorable) ThirdQuarter Favorable /(Unfavorable) FourthQuarter Favorable /(Unfavorable)Euro - Hedge Spot Rate (US$ per Euro) FY111.36 (13)% 1.41 (5)% 1.43 8 % 1.35 5 %FY121.24 (9)% 1.30 (8)% 1.36 (5)% 1.37 1 %FY131.43 15 % 1.42 9 % 1.36 — % 1.32 (4)%FY141.27 (11)% 1.25 (12)% 1.29 (5)% 1.35 2 %Japanese Yen - Hedge Spot Rate (JPY per US$) FY1198.17 (7)% 94.91 (10)% 89.13 (8)% 89.78 (4)%FY1288.99 (9)% 85.65 (10)% 81.73 (8)% 82.45 (8)%FY1379.40 (11)% 76.65 (11)% 77.58 (5)% 78.69 (5)%FY1479.85 1 % 79.68 4 % 84.32 9 % 93.92 19 %Canadian Dollar - Hedge Spot Rate (CAD per US$) FY111.10 (4)% 1.09 (3)% 1.07 (4)% 1.03 (6)%FY121.05 (5)% 1.03 (6)% 1.00 (7)% 0.99 (4)%FY130.98 (7)% 0.99 (4)% 1.01 1 % 1.00 1 %FY141.01 3 % 1.00 1 % 1.00 (1)% 1.02 2 %British Pound - Hedge Spot Rate (US$ per GBP) FY111.47 1 % 1.65 15 % 1.63 15 % 1.59 14 %FY121.50 2 % 1.54 (7)% 1.57 (4)% 1.58 (1)%FY131.62 8 % 1.63 6 % 1.60 2 % 1.57 (1)%FY141.59 (2)% 1.57 (4)% Swiss Franc - Hedge Spot Rate (CHF per US$) FY11 1.05 1.04 1.05 FY121.05 1.01 (4)% 0.96 (8)% 0.92 (12)%FY130.82 (22)% 0.85 (16)% 0.92 (4)% 0.92 — %FY140.96 17 % 0.95 12 % 0.92 — % 0.94 2 %_______________________________________ We generally place our cash flow hedge contracts on a rolling twelve month basis.Recent Accounting PronouncementsNew pronouncements issued but not effective until after March 30, 2013 are not expected to have a material impact on financial position, results of operation orliquidity.Guidance to be ImplementedIn February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, ComprehensiveIncome (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This Update requires an entity to disclose theeffect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassifiedis required under U.S. GAAP to be reclassified in its entirety to net income. The objective of this disclosure is to improve the reporting of reclassifications outof accumulated other comprehensive income. The amended guidance is effective for reporting periods beginning after December 15, 2012, and interim periodswithin those annual periods. We are currently evaluating the impact, if any, that the adoption of this pronouncement may have on our financial disclosures.In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements. The amendments in this update cover a wide range of Topicsin the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification andconforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15,2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.35Table of ContentsIn December 2011, the FASB issued ASU No. 2011-11 Balance Sheet: Disclosures about Offsetting Assets and Liabilities. This Update requires an entityto disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on itsfinancial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S.GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginningon or after January 1, 2013, and interim periods within those annual periods. We are currently evaluating the impact, if any, that the adoption of thispronouncement may have on our financial disclosures.Standards ImplementedIn June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. Update No. 2011-05updates the disclosure requirements for comprehensive income to include total comprehensive income, the components of net income, and the components ofother comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The updatedguidance does not affect how earnings per share is calculated or presented. The updated guidance is effective for fiscal years, and interim periods within thoseyears, beginning after December 15, 2011, and should be applied retrospectively. We adopted this standard in the first quarter of fiscal 2013 using the twoseparate but consecutive statements approach. The adoption of ASU 2011-05 does not affect on our financial position or results of operations but changed ourpresentation of comprehensive income.In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment ("ASU 2011-08"), which changes the way a company completesits annual impairment review process. The provisions of this pronouncement provides an entity with the option to first assess qualitative factors to determinewhether the existence of events or circumstances leads to a determination that is more likely than not that the fair value of a reporting unit is less than itscarrying amount. ASU-2011-08 allows an entity the option to bypass the qualitative-assessment for any reporting unit in any period and proceed directly toperforming the first step of the two-step goodwill impairment test. The pronouncement does not change the current guidance for testing other indefinite-livedintangible assets for impairment. This standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning afterDecember 15, 2011. We adopted these provisions in 2012. The adoption of ASU 2011-08 did not have a material effect on our financial position or results ofoperations.Critical Accounting PoliciesOur significant accounting policies are summarized in Note 2 of our consolidated financial statements. While all of these significant accounting policiesimpact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies thathave the most significant impact on our financial statements and require management to use a greater degree of judgment and/or estimates. Actual results maydiffer from those estimates.The accounting policies identified as critical are as follows:Revenue RecognitionWe recognize revenue from product sales, software and services in accordance with ASC Topic 605, Revenue Recognition and ASC Topic 985-605,Software. These standards require that revenue is recognized when persuasive evidence of an arrangement exists, product delivery, including customeracceptance, has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. When more than oneelement such as equipment, disposables and services are contained in a single arrangement, we allocate revenue between the elements based on each element’srelative selling price, provided that each element meets the criteria for treatment as a separate unit of accounting. An item is considered a separate unit ofaccounting if it has value to the customer on a stand-alone basis. The selling price of the undelivered elements is determined by the price charged when theelement is sold separately, which constitutes vendor specific objective evidence as defined under ASC Topic 985-605, or in cases when the item is not soldseparately, by third-party evidence of selling price or by management's best estimate of selling price. For our software arrangements accounted for under theprovisions of ASC 985-605, Software, we establish fair value of undelivered elements based upon vendor specific objective evidence.We generally do not allow our customers to return products. We offer sales rebates and discounts to certain customers. We treat sales rebates and discounts asa reduction of revenue and classify the corresponding liability as current. We estimate rebates for products where there is sufficient historical informationavailable to predict the volume of expected future rebates. If we are unable to estimate the expected rebates reasonably, we record a liability for the maximumpotential rebate or discount that could be earned.We generally recognize revenue from the sale of perpetual licenses on a percentage-of-completion basis which requires us to make reasonable estimates of theextent of progress toward completion of the contract. These arrangements most often include36Table of Contentsproviding customized implementation services to our customer. We also provide other services, including in some instances hosting, technical support, andmaintenance, for the payment of periodic, monthly, or quarterly fees. We recognize these fees and charges as earned, typically as these services are providedduring the contract period.Goodwill and Other Intangible AssetsIntangible assets acquired in a business combination, including licensed technology, are recorded under the purchase method of accounting at their estimatedfair values at the date of acquisition. Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assetsacquired. We amortize our other intangible assets over their useful lives using the estimated economic benefit method, as applicable.Goodwill is not amortized. Instead goodwill is reviewed for impairment at least annually in accordance with ASC Topic 350, Intangibles — Goodwill andOther. We perform our annual impairment test on the first day of the fiscal fourth quarter for each of our reporting units. We first perform a qualitative testand if necessary, perform a quantitative test. The quantitative test is based on a discounted cash flow analysis for each reporting unit. The test showed noevidence of impairment to our goodwill for fiscal 2013, 2012 or 2011 and demonstrated that the fair value of each reporting unit significantly exceeded thereporting unit’s carrying value in each period.We review our intangible assets, subject to amortization, and their related useful lives periodically to determine if any adverse conditions exist that wouldindicate the carrying value of these assets may not be recoverable. Our review includes examination of whether certain conditions exist, including: a change inthe competitive landscape, any internal decisions to pursue new or different technology strategies, loss of a significant customer, or a significant change in themarket place including changes in the prices paid for our products or changes in the size of the market for our products.An impairment loss results if the carrying value of the asset exceeds the estimated fair value of the asset. Fair value is determined using different methodologiesdepending upon the nature of the underlying asset. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount ofthe intangible asset is amortized prospectively over the revised remaining useful life.Inventory ProvisionsWe base our provisions for excess, expired and obsolete inventory primarily on our estimates of forecasted net sales. A significant change in the timing or levelof demand for our products as compared to forecasted amounts may result in recording additional provisions for excess, expired and obsolete inventory in thefuture. Additionally, uncertain timing of next-generation product approvals, variability in product launch strategies, product recalls and variation in productutilization all affect our estimates related to excess, expired and obsolete inventory.Income TaxesThe income tax provision is calculated for all jurisdictions in which we operate. This process involves estimating actual current taxes due plus assessingtemporary differences arising from differing treatment for tax and accounting purposes that are recorded as deferred tax assets and liabilities. Deferred taxassets are periodically evaluated to determine their recoverability and a valuation allowance is established with a corresponding additional income tax provisionrecorded in our consolidated statements of income if their recovery is not considered likely. The provision for income taxes could also be materially impacted ifactual taxes due differ from our earlier estimates.We record a liability for uncertain tax positions taken or expected to be taken in income tax returns. Uncertain tax positions are unrecognized tax benefits forwhich reserves have been established. Our financial statements reflect expected future tax consequences of such positions presuming the taxing authorities' fullknowledge of the position and all relevant facts.We file income tax returns in all jurisdictions in which we operate. We establish a reserve to provide for additional income taxes that may be due in future yearsas these previously filed tax returns are audited. These reserves have been established based on management's assessment as to the potential exposureattributable to permanent differences and interest applicable to both permanent and temporary differences. All tax reserves are analyzed periodically andadjustments are made as events occur that warrant modification.37Table of ContentsValuation of AcquisitionsWe allocate the amounts we pay for each acquisition to the assets we acquire and liabilities we assume based on their estimated fair values at the dates ofacquisition, including acquired identifiable intangible assets, and purchased research and development. We base the estimated fair value of identifiableintangible assets on detailed valuations that use historical and forecasted information and market assumptions based upon the assumptions of a marketparticipant. We allocate any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill. The use of alternativevaluation assumptions, including estimated cash flows and discount rates, and alternative estimated useful life assumptions could result in different purchaseprice allocations and intangible asset amortization expense in current and future periods.In certain acquisitions, we have earn-out arrangements or contingent consideration to provide potential future payments to the seller for achieving certain agreed-upon financial targets. We record the contingent consideration at its fair value at the acquisition date. Generally, we have entered into arrangements withcontingent consideration that require payments in cash. As such, we periodically revalue the contingent consideration obligations associated with certainacquisitions to their then fair value and record the change in the fair value as contingent consideration income or expense. Increases or decreases in the fairvalue of the contingent consideration obligations can result from changes in assumed discount periods and rates, changes in the assumed timing and amountof revenue and expense estimates, and changes in assumed probability adjustments with respect to regulatory approval. Significant judgment is employed indetermining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economicconditions, as well as changes in any of the assumptions described above, can materially impact the amount of contingent consideration income or expense werecord in any given period.ContingenciesWe may become involved in various legal proceedings that arise in the ordinary course of business, including, without limitation, patent infringement, productliability and environmental matters. Accruals recorded for various contingencies including legal proceedings, self-insurance and other claims are based onjudgment, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuarially determinedestimates. When a range is established but a best estimate cannot be made, we record the minimum loss contingency amount. These estimates are often initiallydeveloped substantially earlier than the ultimate loss is known, and the estimates are reevaluated each accounting period, as additional information isavailable. When we are initially unable to develop a best estimate of loss, we record the minimum amount of loss, which could be zero. As informationbecomes known, additional loss provision is recorded when either a best estimate can be made or the minimum loss amount is increased. When events resultin an expectation of a more favorable outcome than previously expected, our best estimate is changed to a lower amount. We record receivables from third partyinsurers when we have determined that existing insurance policies will provide reimbursement. In making this determination, we consider applicabledeductibles, policy limits and the historical payment experience of the insurance carriers.Cautionary Statement Regarding Forward-Looking InformationStatements contained in this report, as well as oral statements we make which are prefaced with the words “may,” “will,” “expect,” “anticipate,” “continue,”“estimate,” “project,” “intend,” “designed,” and similar expressions, are intended to identify forward looking statements regarding events, conditions, andfinancial trends that may affect our future plans of operations, business strategy, results of operations, and financial position. These statements are based onour current expectations and estimates as to prospective events and circumstances about which we can give no firm assurance. Further, any forward-lookingstatement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflectevents or circumstances after the date on which such statement is made. As it is not possible to predict every new factor that may emerge, forward-lookingstatements should not be relied upon as a prediction of our actual future financial condition or results. These forward-looking statements, like any forward-looking statements, involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. Such risks anduncertainties include the effects of disruption from the acquisition of the Pall whole blood business making it more difficult to maintain relationships withemployees, customers, vendors and other business partners, unexpected expenses incurred to integrate the Pall whole blood business, our ability tosuccessfully execute on the transformation of our manufacturing network and our other value capture and creation activities, technological advances in themedical field and standards for transfusion medicine and our ability to successfully implement products that incorporate such advances and standards,demand for blood components, product quality, market acceptance, regulatory uncertainties, the effect of economic and political conditions, the impact ofcompetitive products and pricing, blood product reimbursement policies and practices, foreign currency exchange rates, changes in customers' orderingpatterns, the effect of industry consolidation as seen in the plasma market, the effect of communicable diseases and the effect of uncertainties in marketsoutside the U.S. (including Europe and Asia) in which we operate and such other risks described under Item 1A. Risk Factors included in this report. Theforegoing list should not be construed as exhaustive.38Table of ContentsITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe Company’s exposures relative to market risk are due to foreign exchange risk and interest rate risk.Foreign Exchange RiskSee the section above entitled Foreign Exchange for a discussion of how foreign currency affects our business. It is our policy to minimize, for a period of time,the unforeseen impact on our financial results of fluctuations in foreign exchange rates by using derivative financial instruments known as forward contractsto hedge anticipated cash flows from forecasted foreign currency denominated sales and costs. We do not use the financial instruments for speculative ortrading activities. At March 30, 2013, we had the following significant foreign exchange contracts to hedge the anticipated foreign currency cash flowsoutstanding. The contracts have been organized into maturity groups and the related quarter that we expect the hedge contract to affect our earnings.Hedged Currency (BUY)/SELLLocal Currency WeightedSpotContract Rate WeightedForwardContract Rate Fair ValueGain/(Loss) Maturity QuarterExpectedto AffectEarningsEUR 7,609,000 1.266 1.272 $(113,172) Mar 2013 - May 2013 Q1 FY14EUR 8,474,000 1.248 1.253 $(289,142) Jun 2013 - Aug 2013 Q2 FY14EUR 8,549,000 1.293 1.297 $64,875 Sep 2013 - Nov 2013 Q3 FY14EUR 6,539,000 1.353 1.355 $403,373 Dec 2013 -Feb 2014 Q4 FY14YEN 895,856,000 79.61 per US$ 79.13 per US$ $1,795,161 Mar 2013 - May 2013 Q1 FY14YEN 1,415,955,000 79.68 per US$ 79.35 per US$ $2,739,127 Jun 2013 - Aug 2013 Q2 FY14YEN 1,473,623,000 84.32 per US$ 84.03 per US$ $1,798,356 Sep 2013 - Nov 2013 Q3 FY14YEN 1,415,536,000 93.92 per US$ 93.57 per US$ $53,287 Dec 2013 -Feb 2014 Q4 FY14GBP (777,000) 1.593 1.590 $(58,703) Feb 2012- Apr 2013 Q1 FY14GBP (777,000) 1.568 1.567 $(40,758) May 2012- Jul 2013 Q2 FY14CAD (1,868,000) 1.01 per US$ 1.02 per US$ $2,483 Mar 2013 - May 2013 Q1 FY14CAD (1,587,000) 1.00 per US$ 1.01 per US$ $(22,283) Jun 2013 - Aug 2013 Q2 FY14CAD (1,853,000) 1.00 per US$ 1.01 per US$ $(29,503) Sep 2013 - Nov 2013 Q3 FY14CAD (436,000) 1.02 per US$ 1.03 per US$ $2,102 Dec 2013 - Feb 2014 Q4 FY14CHF (5,527,000) 0.96 per US$ 0.95 per US$ $10,666 Apr 2013 - Jun 2013 Q1 FY14CHF (6,083,000) 0.95 per US$ 0.95 per US$ $8,425 Jul 2013 - Sep 2013 Q2 FY14CHF (7,070,000) 0.92 per US$ 0.91 per US$ $(236,730) Jul 2013 - Sep 2013 Q3 FY14CHF (1,604,800) 0.94 per US$ 0.94 per US$ $(11,474) Oct 2013 - Dec 2013 Q4 FY14MXN (8,629,000) 12.34 per US$ 12.36 per US$ $(891) Feb 2013 - Apr 2013 Q1 FY14MXN (8,629,000) 12.39 per US$ 12.45 per US$ $2,275 May 2013- Jul 2013 Q2 FY14 $6,077,474 We estimate the change in the fair value of all forward contracts assuming both a 10% strengthening and weakening of the U.S. dollar relative to all other majorcurrencies. In the event of a 10% strengthening of the U.S. dollar, the change in fair value of all forward contracts would result in a $11.1 million increase inthe fair value of the forward contracts; whereas a 10% weakening of the US dollar would result in a $11.8 million decrease in the fair value of the forwardcontracts.Interest Rate RiskOur exposure to changes in interest rates is associated with borrowings on our Credit Agreement, all of which is variable rate debt. All other long-term debt is atfixed rates. Total outstanding debt under our Credit Facilities for the fiscal year ended March 30, 2013 was $475.0 million with an interest rate of 1.625%based on prevailing Adjusted LIBOR rates. An increase of 100 basis points in Adjusted LIBOR rates would result in additional annual interest expense of $4.8million. On December 21, 2012, we entered into interest rate swap agreements to effectively convert $250.0 million of borrowings from a variable rate to afixed rate. The interest rate swaps qualify for hedge accounting treatment as cash flow hedges.39Table of ContentsITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share data) Year Ended March 30, 2013 March 31, 2012 April 2, 2011 Net revenues$891,990 $727,844 $676,694Cost of goods sold463,859 358,604 321,485Gross profit428,131 369,240 355,209Operating expenses: Research and development44,394 36,801 32,656Selling, general and administrative323,053 245,261 213,899Contingent consideration income— (1,580) (1,894)Asset write-down4,247 — —Total operating expenses371,694 280,482 244,661Operating income56,437 88,758 110,548Other income (expense), net(6,540) 740 (467)Income before provision for income taxes49,897 89,498 110,081Provision for income taxes11,097 22,612 30,101Net income$38,800 $66,886 $79,980 Net income per share - basic$0.76 $1.32 $1.59Net income per share - diluted$0.74 $1.30 $1.56 Weighted average shares outstanding Basic51,349 50,727 50,154Diluted52,259 51,590 51,192The accompanying notes are an integral part of these consolidated financial statements.40Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands) Year Ended March 30, 2013 March 31, 2012 April 2, 2011 Net income$38,800 $66,886 $79,980 Other comprehensive (loss)/income: Impact of defined benefit plans, net of tax(820) (3,988) 555Foreign currency translation adjustment(4,705) (2,813) 6,380Unrealized (loss)/gain on cash flow hedges, net of tax4,594 3,140 (4,068)Reclassifications into earnings of cash flow hedge losses/(gains), net of tax(2,746) 3,230 769Other comprehensive (loss)/income(3,677) (431) 3,636Comprehensive income$35,123 $66,455 $83,616 The accompanying notes are an integral part of these consolidated financial statements.41Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except per share data) March 30, 2013 March 31, 2012ASSETSCurrent assets: Cash and cash equivalents$179,120 $228,861Accounts receivable, less allowance of $1,727 at March 30, 2013 and $1,480 at March 31, 2012170,111 135,464Inventories, net183,784 117,163Deferred tax asset, net13,782 9,665Prepaid expenses and other current assets50,213 35,976Total current assets597,010 527,129Property, plant and equipment: Land, building and building improvements82,898 59,816Plant equipment and machinery205,698 136,057Office equipment and information technology103,235 88,185Haemonetics equipment240,889 226,476Total property, plant and equipment632,720 510,534Less: accumulated depreciation(375,767) (348,877)Net property, plant and equipment256,953 161,657Other assets: Intangible assets264,388 96,549Goodwill330,474 115,058Deferred tax asset, long term1,751 23Other long-term assets11,341 10,719Total other assets607,954 222,349Total assets$1,461,917 $911,135LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities: Notes payable and current maturities of long-term debt$23,150 $894Accounts payable49,893 35,425Accrued payroll and related costs45,697 29,451Accrued income taxes4,053 8,075Other liabilities57,351 56,899Total current liabilities180,144 130,744Long-term debt, net of current maturities456,944 2,877Long-term deferred tax liability29,552 23,332Other long-term liabilities26,095 21,551Commitments and contingencies (Note 12) Stockholders’ equity: Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 51,031,563 shares atMarch 30, 2013 and 50,603,798 shares at March 31, 2012510 506Additional paid-in capital365,040 322,232Retained earnings398,199 400,783Accumulated other comprehensive income5,433 9,110Total stockholders’ equity769,182 732,631Total liabilities and stockholders’ equity$1,461,917 $911,135The accompanying notes are an integral part of these consolidated financial statements.42Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY(In thousands, except per share data) Common Stock AdditionalPaid-in Retained AccumulatedOtherComprehensive TotalStockholders’ Shares $’s Capital Earnings Income/(Loss) EquityBalance, April 3, 201050,882 $508 $252,070 $334,641 $5,905 $593,124Employee stock purchase plan156 2 3,679 — — 3,681Exercise of stock options and related tax benefit2,024 20 44,885 — — 44,905Shares repurchased(1,814) (18) (8,991) (40,991) — (50,000)Issuance of restricted stock, net of cancellations72 1 (1) — — —Stock compensation expense— — 10,810 — — 10,810Net income— — — 79,980 — 79,980Other comprehensive income/(loss)— — — — 3,636 3,636Balance, April 2, 201151,320 $513 $302,452 $373,630 $9,541 $686,136Employee stock purchase plan154 2 3,721 — — 3,723Exercise of stock options and related tax benefit738 7 17,021 — — 17,028Shares repurchased(1,704) (17) (10,248) (39,733) — (49,998)Issuance of restricted stock, net of cancellations96 1 — — — 1Stock compensation expense— — 9,286 — — 9,286Net income— — — 66,886 — 66,886Other comprehensive income/(loss)— — — — (431) (431)Balance, March 31, 201250,604 $506 $322,232 $400,783 $9,110 $732,631Employee stock purchase plan151 1 4,141 — — 4,142Exercise of stock options and related tax benefit1,398 14 35,801 — — 35,815Stock-based compensation adjustment related to acquisition— — 504 — — 504Shares repurchased(1,236) (12) (8,607) (41,384) — (50,003)Issuance of restricted stock, net of cancellations115 1 — — — 1Stock compensation expense— — 10,969 — — 10,969Net income— — — 38,800 — 38,800Other comprehensive income/(loss)— — — — (3,677) (3,677)Balance, March 30, 201351,032 $510 $365,040 $398,199 $5,433 $769,182The accompanying notes are an integral part of these consolidated financial statements.43Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Year Ended March 30, 2013 March 31, 2012 April 2, 2011Cash Flows from Operating Activities: Net income$38,800 $66,886 $79,980Adjustments to reconcile net income to net cash provided by operating activities: Non cash items: Depreciation and amortization65,481 49,966 48,145Amortization of financing costs1,139 — —Stock compensation expense10,969 9,286 10,810Deferred tax expense589 5,878 5,782Loss on sale of property, plant and equipment351 772 674Unrealized loss from hedging activities700 166 (614)Contingent consideration income— (1,580) (1,894)Reversal of interest expense on contingent consideration— (574) (416)Asset write-down4,247 — —Change in operating assets and liabilities: Increase in accounts receivable, net(38,080) (10,539) (3,920)Increase in inventories(18,685) (32,528) (2,560)(Increase)/decrease in prepaid income taxes(4,025) 3,058 1,680(Increase)/decrease in other assets and other long-term liabilities(6,187) 3,156 (470)Tax benefit of exercise of stock options4,194 1,958 4,941(Decrease)/increase in accounts payable and accrued expenses25,581 19,413 (18,683)Net cash provided by operating activities85,074 115,318 123,455Cash Flows from Investing Activities: Capital expenditures on property, plant and equipment(62,188) (53,198) (46,669)Proceeds from sale of property, plant and equipment1,968 1,002 1,468 Acquisition of Whole Blood Business(535,175) — —Acquisition of Global Med Technologies— — (128)Acquisition of ACCS— — (6,229)Investment in Hemerus(1,000) — —Net cash used in investing activities(596,395) (52,196) (51,558)Cash Flows from Financing Activities: Payments on long-term real estate mortgage(886) (815) (632)Net (decrease)/increase in short-term loans7,446 (288) (15,153)Term loan borrowings475,000 — —Debt issuance costs(5,467) — —Proceeds from employee stock purchase plan4,142 3,723 3,681Proceeds from exercise of stock options27,517 15,475 40,896Excess tax benefit on exercise of stock options4,101 1,433 3,124Share repurchase(50,000) (49,998) (50,000)Net cash provided by (used in) financing activities461,853 (30,470) (18,084)Effect of exchange rates on cash and cash equivalents(273) (498) 1,332Net (Decrease)/Increase in Cash and Cash Equivalents(49,741) 32,154 55,145Cash and Cash Equivalents at Beginning of Year228,861 196,707 141,562Cash and Cash Equivalents at End of Period$179,120 $228,861 $196,707Non-cash Investing and Financing Activities: Transfers from inventory to fixed assets for placement of Haemonetics equipment21,677 18,333 5,069Supplemental Disclosures of Cash Flow Information: Interest paid$5,910 $414 $487Income taxes paid$13,178 $10,764 $16,669The accompanying notes are an integral part of these consolidated financial statements44Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1.DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATIONHaemonetics is a global healthcare company dedicated to providing innovative blood management solutions for our customers — plasma collectors, bloodcollectors, and hospitals. Anchored by our strong brand name in medical device systems for the transfusion industry, we also provide information technologyplatforms and value added services to provide customers with business solutions which support improved clinical outcomes for patients and efficiency in theblood supply chain.Our systems automate the collection and processing of donated blood; perform blood diagnostics; salvage and process surgical patient blood; and dispenseblood within the hospital. These systems include devices and single-use, proprietary disposable sets that operate only on our specialized equipment. Ourmanual blood collection and filtration systems enable the manual collection of all blood components while detecting bacteria, thus reducing the risks ofinfection through transfusion. Our blood processing systems allow users to collect and process only the blood component(s) they target — plasma, platelets,or red blood cells — increasing donor and patient safety as well as collection efficiencies. Our blood diagnostics system assesses the likelihood of a patient’sblood loss allowing clinicians to make informed decisions about a patient’s treatment as it relates to blood loss in surgery. Our surgical blood salvage systemscollect blood lost by a patient in surgery, clean the blood, and make it available for reinfusion to the patient, in this way giving the patient the safest bloodpossible — his or her own. Our blood distribution systems are “smart” refrigerators located throughout hospitals which automate the storage, inventorytracking, and dispositioning of blood in key blood use areas.Our information technology platforms are used by blood and plasma collectors to improve the safety and efficiency of blood collection logistics by eliminatingpreviously manual functions at not-for-profit blood centers and commercial plasma centers. Our platforms are also used by hospitals to enable hospitaladministrators to monitor and measure blood management practices and to manage processes within transfusion services. Our information technologyplatforms allow all customers to better manage processes across the blood supply chain, comply with regulatory requirements, and identify increasedopportunities to reduce costs.On November 30, 2012 the Company completed a two-for-one split of the Company's common stock in the form of a stock dividend. Unless otherwiseindicated, all common stock shares and per share information referenced within the Consolidated Financial Statements have been retroactively adjusted toreflect the stock split. The exercise price of each outstanding option has also been proportionately and retroactively adjusted for all periods presented. Par valueper share and authorized shares were however not affected by the stock split.The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).The accompanying consolidated financial statements present separately our financial position, results of operations, cash flows, and changes in shareholders’equity. All amounts presented, except per share amounts, are stated in thousands of U.S. dollars, unless otherwise indicated.The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additionalevidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated, and these financialstatements reflect those material items that arose after the balance sheet date but prior to the issuance of the financial statements that would be consideredrecognized subsequent events. Refer to Note 19 - Subsequent Events for further information.2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESFiscal YearOur fiscal year ends on the Saturday closest to the last day of March. Fiscal years 2013, 2012 and 2011each includes 52 weeks with each quarter having13 weeks.Principles of ConsolidationThe accompanying consolidated financial statements include all accounts including those of our subsidiaries. All significant intercompany accounts andtransactions have been eliminated in consolidation.45Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Use of EstimatesThe preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assetsand liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. Actual results could vary from the amounts derived from our estimates and assumptions.Revenue RecognitionOur revenue recognition policy is to recognize revenues from product sales, software and services in accordance with ASC Topic 605, Revenue Recognition,and ASC Topic 985-605, Software. These standards require that revenues are recognized when persuasive evidence of an arrangement exists, productdelivery, including customer acceptance, has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonablyassured. When more than one element such as equipment, disposables, and services are contained in a single arrangement, we allocate revenue between theelements based on each element’s relative selling price, provided that each element meets the criteria for treatment as a separate unit of accounting. An item isconsidered a separate unit of accounting if it has value to the customer on a stand-alone basis. The selling price of the undelivered elements is determined bythe price charged when the element is sold separately, or in cases when the item is not sold separately, by third-party evidence of selling price or bymanagement's best estimate of selling price. For our software arrangements accounted for under the provisions of ASC 985-605, Software, we establish fairvalue of undelivered elements based upon vendor specific objective evidence.Product RevenuesProduct sales consist of the sale of our disposable whole blood and blood component collection sets, equipment devices and the related disposables used withthese devices. On product sales to end customers, revenue is recognized when both the title and risk of loss have transferred to the customer as determined bythe shipping terms and all obligations have been completed. For product sales to distributors, we recognize revenue for both equipment and disposables uponshipment of these products to our distributors. Our standard contracts with our distributors state that title to the equipment passes to the distributors at pointof shipment to a distributor’s location. The distributors are responsible for shipment to the end customer along with installation, training and acceptance of theequipment by the end customer. Shipments to distributors are not contingent upon resale of the product.Non-Income TaxesWe are required to collect sales or valued added taxes in connection with the sale of certain of our products. We report revenues net of these amounts as they arepromptly remitted to the relevant taxing authority.We are also required to pay a medical device excise tax relating to U.S. sales of Class I, II and III medical devices. This new excise tax went into effect January1, 2013, established as part of the March 2010 U.S. healthcare reform legislation, and has been included in selling, general and administrative expenses.Software RevenuesOur software solutions business provides support to our plasma and blood collection customers and hospitals. We provide information technology platformsand technical support for donor recruitment, blood and plasma testing laboratories, and for efficient and compliant operations of blood and plasma collectioncenters. For plasma customers, we also provide information technology platforms for managing distribution of plasma from collection centers to plasmafractionation facilities.Our software solutions revenues also include revenue from software sales which includes per collection or monthly subscription fees for the license andsupport of the software as well as hosting services. A significant portion of our software sales are perpetual licenses typically accompanied with significantimplementation service fees related to software customization as well as other professional and technical service fees.We generally recognize revenue from the sale of perpetual licenses on a percentage-of-completion basis which requires us to make reasonable estimates of theextent of progress toward completion of the contract. These arrangements most often include providing customized implementation services to our customer. Wealso provide other services, including in some instances46Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)hosting, technical support, and maintenance, for the payment of periodic, monthly, or quarterly fees. We recognize these fees and charges as earned, typicallyas these services are provided during the contract period.Translation of Foreign CurrenciesAll assets and liabilities of foreign subsidiaries are translated at the rate of exchange at year-end while sales and expenses are translated at an average rate ineffect during the year. The net effect of these translation adjustments is shown in the accompanying financial statements as a component of stockholders'equity. Foreign currency transaction gains and losses, including those resulting from inter-company transactions, are included in other income, net on theconsolidated statements of income. The impact of foreign exchange on long-term intercompany loans are recorded in accumulated other comprehensive incomeon the consolidated balance sheet.Cash and Cash EquivalentsCash equivalents include various instruments such as money market funds, U.S. government obligations and commercial paper with maturities of threemonths or less at date of acquisition. Cash and cash equivalents are recorded at cost, which approximates fair market value. As of March 30, 2013, our cashand cash equivalents consisted of investments in United States Government Agency and Institutional Money Market Funds.Allowance for Doubtful AccountsWe establish a specific allowance for customers when it is probable that they will not be able to meet their financial obligation. Customer accounts are reviewedindividually on a regular basis and appropriate reserves are established as deemed appropriate. We also maintain a general reserve using a percentage that isestablished based upon the age of our receivables. We establish allowances for balances not yet due and past due accounts based on past experience.Property, Plant and EquipmentProperty, plant and equipment is recorded at historical cost. We provide for depreciation and amortization by charges to operations using the straight-linemethod in amounts estimated to recover the cost of the building and improvements, equipment, and furniture and fixtures over their estimated useful lives asfollows:Asset Classification EstimatedUseful LivesBuilding 30 yearsBuilding improvements 5-20 YearsPlant equipment and machinery 3-10 YearsOffice equipment and information technology 3-10 YearsHaemonetics equipment 3-7 YearsWe evaluate the depreciation periods of property, plant and equipment to determine whether events or circumstances warrant revised estimates of useful lives.All property, plant and equipment are also tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not berecoverable.Our installed base of devices includes devices owned by us and devices sold to the customer. The asset on our balance sheet entitled Haemonetics equipmentconsists of medical devices installed at customer sites but owned by Haemonetics. Generally the customer has the right to use it for a period of time as long asthey meet the conditions we have established, which among other things, generally include one or more of the following:•Purchase and consumption of a certain level of disposable product•Payment of monthly rental fees•An asset utilization performance metric, such as performing a minimum level of procedures per month per deviceConsistent with the impairment tests noted below for other intangible assets subject to amortization, we review Haemonetics equipment and their related usefullives at least once a year, or more frequently if certain conditions arise, to determine if any adverse conditions exist that would indicate the carrying value ofthese assets may not be recoverable. To conduct these reviews we estimate the future amount and timing of demand for these devices. Changes in expecteddemand can result in additional47Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)depreciation expense, which is classified as cost of goods sold. Any significant unanticipated changes in demand could impact the value of our devices andour reported operating results.Leasehold improvements are amortized over the lesser of their useful lives or the term of the lease. Maintenance and repairs are expensed to operations asincurred. When equipment and improvements are sold or otherwise disposed of, the asset cost and accumulated depreciation are removed from the accounts,and the resulting gain or loss, if any, is included in the statements of income.Goodwill and Intangible AssetsIntangible assets acquired in a business combination are recorded under the purchase method of accounting at their estimated fair values at the date ofacquisition. Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assets acquired. We amortizeour other intangible assets over their estimated useful lives.Goodwill is not amortized. Instead goodwill is reviewed for impairment at least annually in accordance with ASC Topic 350, Intangibles — Goodwill andOther. We perform our annual impairment test on the first day of the fiscal fourth quarter for each of our reporting units. We first perform a qualitative testand if necessary, perform a quantitative test. The quantitative test is based on a discounted cash flow analysis for each reporting unit. Discounted cash flowanalysis is an income approach to determining fair value of a reporting unit utilizing estimated after-tax cash flows attributable to the reporting unit which arethen discounted to present value based on a risk-adjusted discount rate. The amount and timing of future cash flows for this analysis are determined primarilybased on revenue growth rates, operating margins and other projections from our most recent operational budgets and long range strategic plans. The testshowed no evidence of impairment to our goodwill for fiscal 2013, 2012 or 2011 and demonstrated that the fair value of each reporting unit significantlyexceeded the reporting unit’s carrying value in each period.We review intangible assets subject to amortization at least annually or more frequently if certain conditions arise to determine if any adverse conditions existthat would indicate that the carrying value of an asset or asset group may not be recoverable, or that a change in the remaining useful life is required.Conditions indicating that an impairment exists include but are not limited to a change in the competitive landscape, internal decisions to pursue new ordifferent technology strategies, a loss of a significant customer or a significant change in the marketplace including prices paid for our products or the size ofthe market for our products. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangibleassets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of otherassets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventualdisposition of the intangible asset (asset group), we will write the carrying value down to the fair value in the period identified.We generally calculate fair value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and assumptions about futurerevenue contributions, cost structures and remaining useful lives of the asset (asset group).If we determine the estimate of an intangible asset's remaining useful life should be reduced based on our expected use of the asset, the remaining carryingamount of the asset is amortized prospectively over the revised estimated useful life.Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise MarketedASC Topic 985-20, Software, specifies that costs incurred internally in researching and developing a computer software product should be charged toexpense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs should be capitalizeduntil the product is available for general release to customers, at which point capitalized costs are amortized over their estimated useful life. Technologicalfeasibility is established when we have a detailed design of the software and when research and development activities on the underlying device, if applicable,are completed.We review the net realizable value of capitalized assets periodically to assess the recoverability of amounts capitalized. In the future, the net realizable valuemay be adversely affected by the loss of a significant customer or a significant change in the market place, which could result in an impairment beingrecorded.48Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Other LiabilitiesOther liabilities represent items payable within the next twelve months.The items included in the fiscal year end balances were:(In thousands)March 30, 2013 March 31, 2012VAT Liabilities$5,121 $6,875Forward Contracts1,786 1,185Deferred Revenue23,737 24,132HS Core Liability (a)156 3,654All Other26,551 21,053Total$57,351 $56,899(a)See Note 10, Commitments and Contingencies, for details of the HS Core quality issue that occurred during the first quarter of 2012.Research and Development ExpensesAll research and development costs are expensed as incurred.Advertising CostsAll advertising costs are expensed as incurred and are included in selling, general and administrative expenses in the consolidated statement of income.Advertising expenses were $4.6 million, $4.5 million, and $2.8 million for 2013, 2012 and 2011, respectively.Accounting for Shipping and Handling CostsShipping and handling costs are included in selling, general and administrative expenses. Freight is classified in cost of goods sold when the customer ischarged for freight and in selling, general and administration when the customer is not explicitly charged for freight.Income TaxesThe income tax provision is calculated for all jurisdictions in which we operate. This process involves estimating actual current taxes due plus assessingtemporary differences arising from differing treatment for tax and accounting purposes that are recorded as deferred tax assets and liabilities. Deferred taxassets are periodically evaluated to determine their recoverability and a valuation allowance is established with a corresponding additional income tax provisionrecorded in our consolidated statements of income if their recovery is not considered more likely than not. The provision for income taxes could also bematerially impacted if actual taxes due differ from our earlier estimates.We record a liability for uncertain tax positions taken or expected to be taken in income tax returns. Uncertain tax positions are unrecognized tax benefits forwhich reserves have been established. Our financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ fullknowledge of the position and all relevant facts.We file income tax returns in all jurisdictions in which we operate. We establish reserves to provide for additional income taxes that may be due in future yearsas these previously filed tax returns are audited. These reserves have been established based on management’s assessment as to the potential exposureattributable to permanent differences and interest applicable to both permanent and temporary differences. All tax reserves are analyzed periodically andadjustments are made as events occur that warrant modification.Derivative InstrumentsWe account for our derivative financial instruments in accordance with ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) and withASC Topic 815,Derivatives and Hedging (“ASC 815”). In accordance with ASC 815, we49Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)record all derivatives on the balance sheet at fair value. The accounting for the change in the fair value of derivatives depends on the intended use of thederivative, whether we have elected to designate a derivative as a hedging instrument for accounting purposes, and whether the hedging relationship hassatisfied the criteria necessary to apply hedge accounting. In addition, ASC 815 provides that, for derivative instruments that qualify for hedge accounting,changes in the fair value are either (a) offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or(b) recognized in equity until the hedged item is recognized in earnings, depending on whether the derivative is being used to hedge changes in fair value orcash flows. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. We do not use derivative financial instrumentsfor trading or speculation purposes.The gains or losses on the forward foreign exchange rate contracts designated as hedges are recorded in net revenues, cost of goods sold, operating expenses andother income in our consolidated statements of income when the underlying hedged transaction affects earnings. The cash flows related to the gains and lossesare classified in the consolidated statements of cash flows as part of cash flows from operating activities. For those derivative instruments that are notdesignated as part of a hedging relationship we record the gains or losses in earnings currently. These gains and losses are intended to offset the gains andlosses recorded on net monetary assets or liabilities that are denominated in foreign currencies. We recorded foreign currency losses on designated and non-designated hedges of $0.8 million, $0.4 million, and $1.4 million in fiscal 2013, 2012 and 2011, respectively.On a quarterly basis, we assess whether the cash flow hedges are highly effective in offsetting changes in the cash flow of the hedged item. We manage thecredit risk of the counterparties by dealing only with institutions that we consider financially sound and consider the risk of non-performance to be remote.Our derivative instruments do not subject our earnings or cash flows to material risk, as gains and losses on these derivatives are intended to offset losses andgains on the item being hedged. We do not enter into derivative transactions for speculative purposes and we do not have any non-derivative instruments thatare designated as hedging instruments pursuant to ASC Topic 815.Stock-Based CompensationWe use the Black-Scholes option-pricing model to calculate the grant-date fair value of our stock options. The following assumptions, which involve the use ofjudgment by management, are used in the computation of the grant-date fair value of our stock options:Expected Volatility — We have principally used our historical volatility as a basis to estimate expected volatility in our valuation of stockoptions.Expected Term — We estimate the expected term of our options using historical exercise and forfeiture data to determine the amount of stockbased compensation to record each period. We believe that this historical data is currently the best estimate of the expected term of our new option grants.Estimated Forfeiture Rate — Based on an analysis of our historical forfeitures, we have applied an annual forfeiture rate which represents theportion that we expect will be forfeited each year over the vesting period. We reevaluate this analysis periodically and adjust the forfeiture rate as necessary.Ultimately, we will only recognize expense for those shares that vest.Valuation of AcquisitionsWe allocate the amounts we pay for each acquisition to the assets acquired and liabilities assumed based on their estimated fair values at the dates ofacquisition, including acquired identifiable intangible assets. We base the estimated fair value of identifiable intangible assets on detailed valuations that usehistorical information and market assumptions based upon the assumptions of a market participant. We allocate any excess purchase price over the fair valueof the net tangible and intangible assets acquired to goodwill. The use of alternative valuation assumptions, including estimated cash flows and discount rates,and alternative estimated useful life assumptions could result in different purchase price allocations and intangible asset amortization expense in current andfuture periods.In certain acquisitions, we have earn-out arrangements or contingent consideration to provide potential future payments to the seller for achieving certain agreed-upon financial targets. We record the contingent consideration at its fair value at the acquisition date. Generally, we have entered into arrangements withcontingent consideration that require payments in cash. As such, each quarter, we revalue the contingent consideration obligations associated with certainacquisitions to their then fair value and record the change in the fair value as contingent consideration income or expense. Increases or decreases in the fair50Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)value of the contingent consideration obligations can result from changes in assumed discount periods and rates, changes in the assumed timing and amountof revenue and expense estimates, and changes in assumed probability adjustments with respect to regulatory approval. Significant judgment is employed indetermining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, future business and economicconditions, as well as changes in any of the assumptions described above, can materially impact the amount of contingent consideration income or expense werecord in any given period.Concentration of Credit Risk and Significant CustomersFinancial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents and accounts receivable.Sales to one unaffiliated Japanese customer, the Japanese Red Cross Society, amounted to $90.1 million, $99.5 million, and $95.9 million for 2013, 2012,and 2011, respectively. Accounts receivable balances attributable to this customer accounted for 9.0%, 15.3%, and 13.7% of our consolidated accountsreceivable at fiscal year ended 2013, 2012, and 2011. While the accounts receivable related to the Japanese Red Cross Society may be significant, we do notbelieve the credit loss risk to be significant given the consistent payment history by this customer.Certain other markets and industries can expose us to concentrations of credit risk. For example, in our commercial plasma business, our sales areconcentrated with several large customers. As a result, our accounts receivable extended to any one of these commercial plasma customers can be somewhatsignificant at any point in time. Also, a portion of our trade accounts receivable outside the United States include sales to government-owned or supportedhealthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of thosecountries’ national economies. We have not incurred significant losses on government receivables. We continually evaluate all government receivables forpotential collection risks associated with the availability of government funding and reimbursement practices. If the financial condition of customers or thecountries’ healthcare systems deteriorate such that their ability to make payments is uncertain, allowances may be required in future periods.Deteriorating credit and economic conditions in parts of Western Europe, particularly in Italy, where our net accounts receivable was $23.4 million and $21.0million for the fiscal years ended March 30, 2013 and March 31, 2012, may increase the average length of time it takes us to collect accounts receivable incertain regions within these countries.Recent Accounting PronouncementsIn February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, ComprehensiveIncome (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This Update requires an entity to disclose theeffect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassifiedis required under U.S. GAAP to be reclassified in its entirety to net income. The objective of this disclosure is to improve the reporting of reclassifications outof accumulated other comprehensive income. The amended guidance is effective for annual reporting periods beginning after December 15, 2012, and interimperiods within those annual periods. We are currently evaluating the impact, if any, that the adoption of this pronouncement may have on our financialdisclosures.In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements. The amendments in this update cover a wide range of Topicsin the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification andconforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15,2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.In December 2011, the FASB issued ASU No. 2011-11 Balance Sheet: Disclosures about Offsetting Assets and Liabilities. This Update requires an entityto disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on itsfinancial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S.GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginningon or after January 1, 2013, and interim periods within those annual periods. We are currently evaluating the impact, if any, that the adoption of thispronouncement may have on our financial disclosures.Standards ImplementedIn June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. Update No. 2011-05updates the disclosure requirements for comprehensive income to include total comprehensive income, the51Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in twoseparate but consecutive statements. The updated guidance does not affect how earnings per share is calculated or presented. The updated guidance is effectivefor fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. We adopted this standardin the first quarter of fiscal 2013 using the two separate but consecutive statements approach. The adoption of ASU 2011-05 does not have an effect on ourfinancial position or results of operations but changed our presentation of comprehensive income.In September 2011, the FASB issued ASU No. 2011-08,Testing Goodwill for Impairment ("ASU 2011-08"), which changes the way a company completes itsannual impairment review process. The provisions of this pronouncement provides an entity with the option to first assess qualitative factors to determinewhether the existence of events or circumstances leads to a determination that is more likely than not that the fair value of a reporting unit is less than itscarrying amount. ASU-2011-08 allows an entity the option to bypass the qualitative-assessment for any reporting unit in any period and proceed directly toperforming the first step of the two-step goodwill impairment test. The pronouncement does not change the current guidance for testing other indefinite-livedintangible assets for impairment. This standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning afterDecember 15, 2011. We adopted these provisions in 2012. The adoption of ASU 2011-08 did not have a material effect on our financial position or results ofoperations.3.ACQUISITIONSAcquisitions were completed in fiscal 2013 and fiscal 2011 as part of our growth initiatives. We did not complete any acquisitions during fiscal 2012.Fiscal Year 2013 AcquisitionWhole Blood AcquisitionOn August 1, 2012, we completed the acquisition from Pall Corporation (“Pall”) of substantially all of the assets relating to its blood collection, filtration,processing, storage, and re-infusion product lines, and all of the outstanding equity interest in Pall Mexico Manufacturing, S. de R.L. de C.V., a subsidiary ofPall based in Mexico pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) with Pall. We refer to the acquired business as the “whole bloodbusiness.”At the closing of the transaction, we paid a total consideration of $535.2 million in cash and $0.5 million in shares following resolution of post-closingadjustments for working capital and historical earnings levels. We anticipate paying an additional $15.0 million upon replication and delivery of certainmanufacturing assets of Pall's filter media business to Haemonetics by 2016. Until that time, Pall will manufacture and sell filter media to Haemonetics undera supply agreement.We entered into a credit agreement on August 1, 2012 in connection with the transaction which includes a $475.0 million term loan to fund the majority of thecash paid to Pall. See Note 8 for a detailed description of the key terms and provisions of the credit agreement.We acquired the whole blood business to provide access to the manual collection and whole blood markets and provide scope for introduction of automatedsolutions in those markets. The whole blood business manufactures and sells manual blood collection systems and filters and has operations in NorthAmerica, Europe and Asia Pacific countries. Revenue from the sale of whole blood disposables has been reported within the blood center disposables productline since the date of acquisition.The assets and liabilities acquired from Pall were recorded at fair value at the date of acquisition. During the current period, we updated the fair value of assetsand liabilities recorded as of the date of acquisition with a corresponding adjustment to goodwill to reflect such updates to the allocation of purchase price.There were no significant changes to the consolidated statement of income during fiscal 2013 as a result of the changes to fair value.The allocation of purchase price is preliminary, and subject to change based primarily on finalization of the assessment of the value of deferred taxes andassumed liabilities. We expect to complete these valuations by June 30, 2013.52Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The preliminary allocation of the purchase price to the estimated fair value of the acquired assets and liabilities is summarized as follows:Asset class Amounts Recognized as ofMarch 30, 2013 (Provisional)(In thousands) Inventories $49,917Property, plant and equipment 85,984Intangible assets 188,500Other assets/liabilities, net (6,166)Goodwill 216,940Fair value of net assets acquired $535,175The adjusted fair value of the acquired assets and liabilities are reflected in the Consolidated Balance Sheets.The provisional allocation of purchase price changed as compared to the initial allocation as of September 29, 2012 as follows: inventory was reduced by$2.5 million, property, plant and equipment increased $15.3 million, intangible assets decreased $18.3 million, assumed liabilities increased $4.4 millionand goodwill increased by $9.9 million.The $188.5 million of acquired intangible assets was allocated to acquired technology and customer relationships at fair values of $61.0 million and $127.5million, respectively. The acquired assets are amortized over the estimate of their useful lives of 12 years on a straight-line basis. We adopted the straight-lineamortization and shortened the useful lives to 12 years as it best reflects the pattern of benefits. We recorded $10.5 million in amortization expense relating tothe acquired intangible assets for the fiscal year ended March 30, 2013.Goodwill represents the excess of the purchase price over the fair value of the net assets. Goodwill of $216.9 million represents future economic benefitsexpected to arise from work force at the various plants and locations and significant technological know-how in filter manufacturing. All of the domesticgoodwill is deductible for tax purposes.Revenue for the whole blood business from acquisition was $138.4 million.We recognized $3.2 million and $3.0 million of transaction costs related to the whole blood acquisition in the selling, general and administrative line item in theaccompanying consolidated statements of income for the fiscal years ended March 30, 2013 and March 31, 2012, respectively.The following represents the pro forma consolidated statements of income as if the acquisition of the whole blood business had been included in ourconsolidated results beginning on April 3, 2011.(In thousands) March 30, 2013 March 31, 2012Net sales $963,923 $963,643Net income 56,540 77,984Basic earnings per share $1.10 $1.54Diluted earnings per share $1.08 $1.51The unaudited consolidated pro-forma financial information above includes the following significant adjustments made to account for certain costs whichwould have been incurred if the acquisition had been completed on April 3, 2011, as adjusted for the applicable tax impact. As our acquisition of the wholeblood business was completed on August 1, 2012, the pro-forma adjustments for the fiscal year ended March 30, 2013 in the table below only include therequired adjustments through August 1, 2012.53Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands) March 30, 2013 March 31, 2012Transaction costs (1) $3,184 $3,000Amortization of inventory fair value adjustment (2) 11,948 (11,948)Amortization of acquired intangible assets (3) (5,236) (15,708)Interest expense incurred on acquisition financing (4) (3,173) (9,520)Selling, general and administrative expenses (5) (3,513) (10,540)(1)Eliminated transactions costs as these non-recurring costs were incurred in fiscal 2013.(2)Added additional expense in the period ended March 31, 2012 to reflect the inventory fair value adjustments which would have been amortized hadthe transaction been consummated on April 3, 2011 as the corresponding inventory would have been completely sold during the first two quarters of2011. Also, deducted the actual inventory fair value adjustment recorded in the fiscal year ended March 30, 2013 to reflect the pro-formaconsumption of inventory in 2011.(3)Added additional amortization of the acquired whole blood intangible assets recognized at fair value in purchase accounting.(4)Added additional interest expense for the debt used to finance the acquisition.(5)Additional investments in infrastructure costs to replicate certain support functions performed by division or corporate organizations of Pall that didnot transfer in the acquisition. These costs are primarily related to information technology infrastructure and application costs, and personnelcosts required to expand regional and corporate administrative and sales support functions. These costs are not intended to be representative ofactual costs incurred by Pall Corporation, and represent Haemonetics' best estimate of future incremental costs on an annualized basis. Actualincremental investments may differ from these estimates.Prior to the acquisition, we had purchased filters from the whole blood business for inclusion in some of our devices. The transactional value between bothparties approximated $10.0 million which was recorded by Pall as revenue and by us as a cost of sale. At the acquisition date, we owed Pall $1.4 millionwhich has been settled as of March 30, 2013.Fiscal Year 2011 AcquisitionACCS AcquisitionOn December 28, 2010, Haemonetics acquired certain assets of Applied Critical Care Services, Inc. (ACCS) for $6.4 million. ACCS was a manufacturer’srepresentative for Haemonetics engaged in the selling and servicing of the TEG analyzer product line. The purchase price was allocated to customerrelationships of $4.5 million, other liabilities of $0.8 million, and goodwill of $2.7 million. Pro forma information is not provided as it is immaterial.4.PRODUCT WARRANTIESWe generally provide a warranty on parts and labor for one year after the sale and installation of each device. We also warrant our disposables productsthrough their use or expiration. We estimate our potential warranty expense based on our historical warranty experience, and we periodically assess theadequacy of our warranty accrual and make adjustments as necessary.(In thousands)March 30, 2013 March 31, 2012Warranty accrual as of the beginning of the period$796 $1,273Warranty provision1,180 2,430Warranty spending(1,303) (2,907)Warranty accrual as of the end of the period$673 $7965.INVENTORIESInventories are stated at the lower of cost or market and include the cost of material, labor and manufacturing overhead. Cost is determined on the first-in,first-out method.54Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)March 30, 2013 March 31, 2012Raw materials$70,716 $41,219Work-in-process7,829 4,640Finished goods105,239 71,304 $183,784 $117,1636.GOODWILL AND INTANGIBLE ASSETSThe changes in the carrying amount of goodwill for fiscal 2013 and 2012 are as follows:(In thousands) Carrying amount as of April 2, 2011$115,367Effect of change in foreign currency exchange rates(309)Carrying amount as of March 31, 2012$115,058Whole blood business (a)216,940Effect of change in foreign currency exchange rates(1,524)Carrying amount as of March 30, 2013$330,474(a)See Note 3, Acquisitions, for a full description of the acquisition of the whole blood assets, which occurred on August 1, 2012.Intangible AssetsIntangible assets include the value assigned to license rights and other developed technology, patents, customer contracts and relationships and a trade name.The estimated useful lives for all of these intangible assets are 2 to 19 years.Aggregate amortization expense for amortized intangible assets for fiscal year 2013, 2012, and 2011 was $22.1 million, $11.4 million, and $11.1 million,respectively. Future annual amortization expense on intangible assets is expected to approximate $26.2 million for fiscal year 2014, $24.9 million for fiscalyear 2015, $24.6 million for fiscal year 2016, $24.5 million for fiscal year 2017 and $23.7 million for fiscal year 2018. Gross CarryingAmount AccumulatedAmortization Net Weighted AverageUseful Life (In thousands) (In thousands) (In thousands) (In years)As of March 30, 2013 Patents$8,706 $6,397 $2,309 10Capitalized software26,841 2,333 24,508 6Other developed technology99,486 24,843 74,643 12Customer contracts and related relationships196,365 36,552 159,813 12Trade names5,383 2,268 3,115 10Total intangibles$336,781 $72,393 $264,388 11 Gross CarryingAmount AccumulatedAmortization Net Weighted AverageUseful Life (In thousands) (In thousands) (In thousands) (In years)As of March 31, 2012 Patents$13,463 $7,843 $5,620 11Capitalized software20,597 1,394 19,203 6Other developed technology42,693 20,120 22,573 11Customer contracts and related relationships69,361 23,639 45,722 12Trade names5,408 1,977 3,431 10Total intangibles$151,522 $54,973 $96,549 1155Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The changes to the net carrying value of our intangible assets from March 31, 2012 to March 30, 2013 reflect acquisition of the whole blood intangible assets,amortization expense and the effect of exchange rate changes in the translation of our intangible assets held by our international subsidiaries. Also contributingto the change was an asset write-off recorded in the fourth quarter of fiscal 2013 associated with exiting activities related to technologies originally acquiredfrom Arryx, Inc. The total asset write-off related to abandoning Arryx-related assets was $4.2 million, net of $0.9 million of proceeds from the sale of certainintellectual property.7.DERIVATIVES AND FAIR VALUE MEASUREMENTSWe manufacture, market and sell our products globally. For the fiscal year ended March 30, 2013, approximately 49.0% of our sales were generated outside theU.S. in local currencies. We also incur certain manufacturing, marketing and selling costs in international markets in local currency.Accordingly, our earnings and cash flows are exposed to market risk from changes in foreign currency exchange rates relative to the U.S. Dollar, our reportingcurrency. We have a program in place that is designed to mitigate our exposure to changes in foreign currency exchange rates. That program includes the use ofderivative financial instruments to minimize for a period of time, the unforeseen impact on our financial results from changes in foreign exchange rates. Weutilize foreign currency forward contracts to hedge the anticipated cash flows from transactions denominated in foreign currencies, primarily the Japanese Yenand the Euro, and to a lesser extent the Swiss Franc, British Pound Sterling, Canadian Dollar and the Mexican Peso. This does not eliminate the volatility offoreign exchange rates, but because we generally enter into forward contracts one year out, rates are fixed for a one-year period, thereby facilitating financialplanning and resource allocation.Designated Foreign Currency Hedge ContractsAll of our designated foreign currency hedge contracts as of March 30, 2013 and March 31, 2012 were cash flow hedges under ASC Topic 815, Derivativesand Hedging. We record the effective portion of any change in the fair value of designated foreign currency hedge contracts in Other Comprehensive Income inthe Statement of Stockholders’ Equity until the related third-party transaction occurs. Once the related third-party transaction occurs, we reclassify theeffective portion of any related gain or loss on the designated foreign currency hedge contracts to earnings. In the event the hedged forecasted transaction doesnot occur, or it becomes probable that it will not occur, we would reclassify the amount of any gain or loss on the related cash flow hedge to earnings at thattime. We had designated foreign currency hedge contracts outstanding in the contract amount of $133.3 million as of March 30, 2013 and $162.1 million as ofMarch 31, 2012.During fiscal 2013, we recognized net gains of $2.5 million in earnings on our cash flow hedges, compared to recognized net losses of $3.2 million and $0.8million during fiscal 2012 and 2011, respectively. For the fiscal year ended March 30, 2013, $5.1 million of gains, net of tax, were recorded in OtherComprehensive Income to recognize the effective portion of the fair value of any designated foreign currency hedge contracts that are, or previously were,designated as foreign currency cash flow hedges, as compared to net gains of $3.1 million, net of tax, for the fiscal year ended March 31, 2012 and net lossesof $4.1 million, net of tax, for the fiscal year ended April 2, 2011. At March 30, 2013, gains of $5.1 million, net of tax, may be reclassified to earningswithin the next twelve months. All currency cash flow hedges outstanding as of March 30, 2013 mature within twelve months.Non-designated Foreign Currency ContractsWe manage our exposure to changes in foreign currency on a consolidated basis to take advantage of offsetting transactions and balances. We use foreigncurrency forward contracts as a part of our strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These foreigncurrency forward contracts are entered into for periods consistent with currency transaction exposures, generally one month. They are not designated as cashflow or fair value hedges under ASC Topic 815. These forward contracts are marked-to-market with changes in fair value recorded to earnings. We had non-designated foreign currency hedge contracts under ASC Topic 815 outstanding in the contract amount of $65.6 million as of March 30, 2013 and $45.5million as of March 31, 2012.Interest Rate SwapsOn August 1, 2012, we entered into a Credit Agreement which provided for a $475.0 million term loan (“Term Loan”). Under the terms of this CreditAgreement, the Company may borrow at a spread to an index, including the LIBOR index of 1-month, 3-months, 6-months, etc. From the date of the CreditAgreement, the Company has chosen to borrow against the 1-month USD-LIBOR-BBA rounded up, if necessary, to the nearest 1/16th of 1% (“AdjustedLIBOR”). The terms of the Credit56Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Agreement also allow us to borrow in multiple tranches. While we currently borrow in a single tranche, in the future, we may choose to borrow in multipletranches.Accordingly, our earnings and cash flows are exposed to interest rate risk from changes in Adjusted LIBOR. Part of our interest rate risk management strategyincludes the use of interest rate swaps to mitigate our exposure to changes in variable interest rates. Our objective in using interest rate swaps is to add stabilityto interest expense and to manage and reduce the risk inherent in interest rate fluctuations.On December 21, 2012, we entered into two interest rate swap agreements ("the swaps"), whereby we receive Adjusted LIBOR and pay an average fixed rate of0.68% on a total notional value of $250.0 million of debt. The interest rate swaps mature on August 1, 2017. The Company designated the interest rate swapsas a cash flow hedge of variable interest rate risk associated with $250.0 million of indebtedness. For the fiscal year ended March 30, 2013, $0.8 million oflosses, net of tax, were recorded in Accumulated Other Comprehensive Income to recognize the effective portion of the fair value of interest rate swaps thatqualify as cash flow hedges. At March 30, 2013, losses of $0.1 million may be reclassified to earnings within the next twelve months.Fair Value of Derivative InstrumentsThe following table presents the effect of our derivative instruments designated as cash flow hedges and those not designated as hedging instruments underASC Topic 815 in our consolidated statements of income for the fiscal year ended March 30, 2013.Derivative Instruments Amount ofGain/(Loss)Recognizedin OCI(Effective Portion) Amount ofGain/(Loss)Reclassifiedfrom OCI intoEarnings(Effective Portion) Location inStatement of Operations Amount ofGain/(Loss)Excluded fromEffectivenessTesting (*) Location inStatement ofOperations(In thousands) Designated foreign currency hedge contracts, netof tax $5,104 $2,746 Net revenues, COGS,and SG&A $(337) Other income(expense), netNon-designated foreign currency hedge contracts — — $1,214 Other income(expense)Designated interest rate swaps, net of tax $(779) $(269) Interest income(expense), net $— (*) We exclude the difference between the spot rate and hedge forward rate from our effectiveness testing.We did not have fair value hedges or net investment hedges outstanding as of March 30, 2013 or March 31, 2012. Amounts recognized as deferred tax benefitsin fiscal 2013 for designated foreign currency and interest rate swap hedges were $1.7 million and $0.3 million, respectively.ASC Topic 815 requires all derivative instruments to be recognized at their fair values as either assets or liabilities on the balance sheet. We determine the fairvalue of our derivative instruments using the framework prescribed by ASC Topic 820, Fair Value Measurements and Disclosures, by considering theestimated amount we would receive or pay to sell or transfer these instruments at the reporting date and by taking into account current interest rates, currencyexchange rates, current interest rate curves, interest rate volatilities, the creditworthiness of the counterparty for assets, and our creditworthiness for liabilities.In certain instances, we may utilize financial models to measure fair value. Generally, we use inputs that include quoted prices for similar assets or liabilitiesin active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; other observable inputs for the asset or liability; andinputs derived principally from, or corroborated by, observable market data by correlation or other means. As of March 30, 2013, we have classified ourderivative assets and liabilities within Level 2 of the fair value hierarchy prescribed by ASC Topic 815, as discussed below, because these observable inputsare available for substantially the full term of our derivative instruments.The following tables present the fair value of our derivative instruments as they appear in our consolidated balance sheets as of March 30, 2013 andMarch 31, 2012 by type of contract and whether it is a qualifying hedge under ASC Topic 815.57Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)Location inBalance Sheet Balance as of March30, 2013 Balance as of March31, 2012Derivative Assets: Designated foreign currency hedge contractsOther current assets $7,030 $6,186 $7,030 $6,186Derivative Liabilities: Designated foreign currency hedge contractsOther current liabilities $954 $1,185Designated interest rate swapsOther current liabilities 671 — $1,625 $1,185For the fiscal years ended March 30, 2013 and March 31, 2012, non-designated foreign currency hedge contracts were not significant and are not disclosedseparately in the above table.Other Fair Value MeasurementsASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in accordance withU.S. GAAP, and expands disclosures about fair value measurements. ASC Topic 820 does not require any new fair value measurements; rather, it applies toother accounting pronouncements that require or permit fair value measurements. In accordance with ASC Topic 820, for the fiscal years ended March 30,2013 and March 31, 2012, we applied the requirements under ASC Topic 820 to our non-financial assets and non-financial liabilities. As we did not have animpairment of any non-financial assets or non-financial liabilities, there was no disclosure required relating to our non-financial assets or non-financialliabilities.On a recurring basis, we measure certain financial assets and financial liabilities at fair value, including our money market funds, foreign currency hedgecontracts, and contingent consideration. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined basedon assumptions that market participants would use in pricing an asset or liability. We base fair value upon quoted market prices, where available. Wherequoted market prices or other observable inputs are not available, we apply valuation techniques to estimate fair value.ASC Topic 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization of assets and liabilities within thevaluation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined asfollows:•Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.•Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities andmarket-corroborated inputs.•Level 3 — Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants woulduse in pricing the asset or liability at the measurement date, including assumptions about risk.Our money market funds carried at fair value are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.Fair Value Measured on a Recurring BasisFinancial assets and financial liabilities measured at fair value on a recurring basis consist of the following as of March 30, 2013 and March 31, 2012:58Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)As of March 30, 2013Quoted Market Pricesfor Identical Assets(Level 1) Significant OtherObservable Inputs(Level 2) Significant UnobservableInputs(Level 3) Total (In thousands) (In thousands) (In thousands) (In thousands)Assets Money market funds$141,120 $— $— $141,120Foreign currency hedge contracts— 7,030 — 7,030 $141,120 $7,030 $— $148,150Liabilities Foreign currency hedge contracts$— $954 $— $954Interest rate swap— 671 — 671 $— $1,625 $— $1,625As of March 31, 2012Quoted Market Pricesfor Identical Assets(Level 1) Significant OtherObservable Inputs(Level 2) Significant UnobservableInputs(Level 3) Total (In thousands) (In thousands) (In thousands) (In thousands)Assets Money market funds$194,574 $— $— $194,574Forward currency hedge contracts— 6,186 — 6,186 $194,574 $6,186 $— $200,760Liabilities Forward currency hedge contracts$— $1,185 $— $1,185 $— $1,185 $— $1,185For the fiscal years ended March 30, 2013 and March 31, 2012, non-designated foreign currency hedge contracts were not significant and are not disclosedseparately in the above tables.Release of Neoteric Contingent ConsiderationUnder ASC Topic 805, Business Combinations, we established a liability for payments to former shareholders of Neoteric which were contingent on theperformance of the Blood Track business in the first three years post-acquisition, beginning with fiscal 2010. We have reviewed the expected performanceversus the performance thresholds for payment. Because the expected performance thresholds will not be achieved, we recorded an adjustment to the fair valueof the contingent consideration liability. This appears as contingent consideration income of $1.6 million in the accompanying consolidated statements ofincome for the fiscal year ended March 31, 2012.In September 2011, we entered into an agreement to release the Company from the contingent consideration due to the former shareholders of Neoteric. Underthe terms of the agreement, the former shareholders of Neoteric received $0.7 million in exchange for releasing the Company from any future claims forcontingent consideration. The Company paid the $0.7 million settlement amount during September 2011 and has recorded the associated expense in theselling, general and administrative line item in the accompanying consolidated statements of income.Other Fair Value DisclosuresThe Term Loan is carried at amortized cost and accounts receivable and accounts payable are also reported at their cost which approximates fair value.59Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)8.NOTES PAYABLE AND LONG-TERM DEBTNotes payable and long-term debt consisted of the following:(In thousands)March 30, 2013 March 31, 2012Term loan, net of financing fees$471,016 $—Real estate mortgage2,877 3,771Bank loan6,201 —Less current portion(23,150) (894) Long term debt$456,944 $2,877On August 1, 2012 in connection with the acquisition of the whole blood business, we entered into a credit agreement ("Credit Agreement") with the bankslisted below (together, “Lenders”) which provided for a $475.0 million term loan and a $50.0 million revolving loan (the “Revolving Credit Facility,” andtogether with the Term Loan, (the “Credit Facilities”). The Credit Facilities have a term of five years and mature on August 1, 2017.Under the terms of this Credit Agreement, the Company may borrow at a spread to an index, including the LIBOR index of 1-month, 3-months, 6-months,etc. From the date of the Credit Agreement, the Company has chosen to borrow against the 1-month USD-LIBOR-BBA rounded up, if necessary, to the nearest1/16th of 1%. The terms of the Credit Agreement also allow the Company to borrow in multiple tranches. While the Company currently borrows in a singletranche, in the future, it may choose to borrow in multiple tranches.At closing, we borrowed the Term Loan and used the proceeds to pay Pall for the acquisition of the assets described in Note 3. The $475.0 million Term Loanbears interest at variable rates determined by Adjusted LIBOR plus a range of 1.125% to 1.500% depending on the achievement of certain leverage ratios. TheRevolving Credit Facility bears interest at variable rates similar to the Term Loan. The current margin of the Term Loan is 1.375% over Adjusted LIBOR andour effective interest rate inclusive of prepaid financing costs and other fees was 2.00% as of March 30, 2013.Revolving loans may be borrowed, repaid and re-borrowed to fund our working capital needs and for other general corporate purposes. No amounts wereoutstanding under the Revolving Credit Facility at March 30, 2013. The Term Loan or portions thereof may be prepaid at any time, or from time to timewithout penalty. Once repaid, such amount may not be re-borrowed. The principal amount of the term loan is repayable quarterly over five years andamortizes as follows:Fiscal YearTerm LoanAmortization Schedule (In thousands)2014$17,8132015$47,5002016$71,2502017$190,0002018$148,438Under the Credit Facilities, we are required to maintain a Consolidated Total Leverage Ratio not to exceed 3.0:1.0 and a Consolidated Interest Coverage Ratio notto be less than 4.0:1.0 during periods when the Credit Facilities are outstanding. In addition, we are required to satisfy these covenants, on a pro forma basis,in connection with any new borrowings (including any letter of credit issuances) on the Revolving Credit Facility as of the time of such borrowings. TheConsolidated Interest Coverage Ratio is calculated as the Consolidated EBITDA divided by Consolidated Interest Expense while the Consolidated TotalLeverage Ratio is calculated as Consolidated Total Debt divided by Consolidated EBITDA. Consolidated EBITDA includes EBITDA adjusted by non-recurring and unusual transactions specifically as defined in the Credit Facilities.The Credit Facilities also contain usual and customary non-financial affirmative and negative covenants which include certain restrictions with respect tosubsequent indebtedness, liens, loans and investments (including acquisitions), financial reporting60Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)obligations, mergers, consolidations, dissolutions or liquidation, asset sales, affiliate transactions, change of our business, capital expenditures, sharerepurchase and other restricted payments. These covenants are subject to important exceptions and qualifications set forth in the Credit Agreement.Any failure to comply with the financial and operating covenants of the Credit Facilities would prevent us from being able to borrow additional funds andwould constitute a default, which could result in, among other things, the amounts outstanding including all accrued interest and unpaid fees, becomingimmediately due and payable. In addition, the Credit Facilities include customary events of default, in certain cases subject to customary cure periods. As ofMarch 30, 2013, we were in compliance with the covenants.Commitment feePursuant to the Credit Agreement we are required to pay the Lenders, on the last day of each calendar quarter, a commitment fee on the unused portion of theRevolving Credit Facility. The commitment fee is subject to a pricing grid based on our Consolidated Total Leverage Ratio. The commitment fee ranges from0.175% to 0.300%. The current commitment fee on the undrawn portion of the Revolving Credit Facility is 0.250%.We may elect to increase the size of the Revolving Credit Facility from $50.0 million to $100.0 million. Alternatively, we may elect to enter into additional termloans up to a $100.0 million combined limit with the Revolving Credit Facility. These elections are subject to the approval of the Administrative Agent and theidentification of additional Lenders or current Lenders willing to increase their loan amounts per the terms and conditions contained in the Credit Agreement.Debt issuance costs and interestExpenses associated with the issuance of the Term Loan were capitalized and are amortized over the five years using the effective interest method. In connectionwith the Term Loan, we recorded deferred financing costs of $5.5 million, of which $4.0 million remains as a debt discount. The debt discount is nettedagainst the $475.0 million Term Loan, resulting in a net note payable of $471.0 million. The debt discount will also be amortized over the life of the notes.Interest expense was $5.9 million and $0.4 million for the fiscal years ended March 30, 2013 and March 31, 2012, respectively. Accrued interest associatedwith our outstanding debt is included as a component of accrued expenses and other current liabilities in the accompanying condensed consolidated balancesheets. As of March 30, 2013, accrued interest totaled $0.1 million.Parties to the credit facilitiesThe Lenders party to the Credit Agreement are JP Morgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A. as Syndication Agent, J P MorganSecurities LLC and Citibank, N.A. as Joint Lead Arrangers and Joint Bookrunners, Bank of America, N.A., RBS Citizens, N.A., HSBC Bank USA,N.A., Wells Fargo Bank, N.A., Sumitomo Mitsui Banking Corporation, TD Bank, N.A. and US Bank, N.A. as Co-Documentation Agents, Union Bank,N.A., PNC Bank, National Association and Sovereign Bank, N.A. as Senior Managing Agents and the syndicate lenders that are parties thereto.Other Credit FacilitiesThe other debt as of March 30, 2013 includes the real estate mortgage loan of $2.9 million and short term bank borrowings of $6.2 million under operatinglines of credit.In December 2000, we entered into a $10.0 million real estate mortgage agreement (the “Mortgage Agreement”) with an investment firm. The Mortgage Agreementrequires principal and interest payments of $0.1 million per month for a period of 180 months, commencing February 1, 2001. The entire balance of the loanmay be repaid at any time after February 1, 2006, subject to a prepayment premium, which is calculated based upon the change in the current weekly averageyield of Ten (10)-year U.S. Treasury Constant Maturities, the principal balance due and the remaining loan term. The Mortgage Agreement provides forinterest to accrue on the unpaid principal balance at a rate of 8.41% per annum. Borrowings under the Mortgage Agreement, with a carrying value ofapproximately $2.9 million and $3.8 million as of March 30, 2013 and March 31, 2012, respectively, are secured by the land, building and buildingimprovements at our headquarters and manufacturing facility in the U.S.. There are no financial covenants in the terms and conditions of this agreement.There are short term borrowings of $5.6 million in Japan resulting from fluctuation in their working capital.61Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Maturity ProfileThe maturity profile of long-term debt as of March 30, 2013, after deducting prepaid financing costs is presented below.Fiscal Year Ending (In thousands) 2014$23,150201547,553201671,4162017189,5562018148,419 $480,0949.INCOME TAXESDomestic and foreign income before provision for income tax is as follows:(In thousands)March 30, 2013 March 31, 2012 April 2, 2011Domestic$17,360 $40,666 $58,040Foreign32,537 48,832 52,041Total$49,897 $89,498 $110,081The income tax provision contains the following components:(In thousands)March 30, 2013 March 31, 2012 April 2, 2011Current Federal$3,795 $8,505 $14,982State1,324 2,275 2,111Foreign5,389 5,954 7,226Total current$10,508 $16,734 $24,319Deferred Federal1,644 7,522 4,931State(229) (597) 438Foreign(826) (1,047) 413Total deferred$589 $5,878 $5,782Total$11,097 $22,612 $30,101Included in the federal income tax provisions for fiscal 2013, 2012 and 2011 are approximately $1.6 million, $2.2 million and $10.8 million, respectively,provided on foreign source income of approximately $4.5 million, $6.2 million and $31.0 million for fiscal years 2013, 2012 and 2011, respectively, fortaxes which are payable in the United States.Tax affected, significant temporary differences comprising the net deferred tax liability are as follows:62Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)March 30, 2013 March 31, 2012Depreciation$(25,186) $(17,208)Amortization(14,776) (19,249)Inventory7,884 4,224Hedging(162) (589)Accruals and reserves7,208 6,352Net operating loss carry-forward1,877 3,354Stock based compensation7,834 8,649Tax credit carry-forward, net2,243 2,328Gross deferred taxes$(13,078) $(12,139)Less valuation allowance(1,009) (1,569)Net deferred tax liability$(14,087) $(13,708)As of March 30, 2013, we have approximately $1.9 million in U.S. acquisition and $0.6 million in foreign related net operating loss carry forwards that itbelieves are more likely than not that they will be realized. We also have $2.6 million in gross federal and state tax credits available to offset future tax. Wehave established valuation allowances to reduce the value of tax assets to amounts that it deems to be realizable. The valuation allowance is made up of $0.4million acquisition related R&D credits and $0.6 million acquisition related net operating losses for fiscal 2013 and $0.4 million and $1.2 million respectivelyfor fiscal 2012. The net operating loss carry forwards are subject to separate limitations and will expire beginning in 2020.Approximately $200.0 million of our foreign subsidiary undistributed earnings are deemed to be permanently reinvested outside the U.S. Accordingly, we havenot provided U.S. income taxes on these earnings. The income tax provision from operations differs from tax provision computed at the 35% U.S. federalstatutory income tax rate due to the following:(In thousands)March 30, 2013 March 31, 2012 April 2, 2011Tax at federal statutory rate$17,464 35.0 % $31,324 35.0 % $38,528 35.0 %Domestic manufacturing deduction(504) (1.0)% (700) (0.8)% (1,120) (1.0)%Difference between U.S. and foreign tax(5,584) (11.2)% (8,539) (9.5)% (8,610) (7.9)%State income taxes net of federal benefit718 1.4 % 1,136 1.3 % 1,741 1.6 %Repatriation of earnings— — % — — % (506) (0.5)%Research credit(799) (1.6)% (752) (0.9)% (209) (0.2)%Other, net(198) (0.4)% 143 0.2 % 277 0.3 %Income tax provision$11,097 22.2 % $22,612 25.3 % $30,101 27.3 %Unrecognized Tax BenefitsUnrecognized tax benefits represent uncertain tax positions for which reserves have been established. As of March 30, 2013, we had $6.9 million ofunrecognized tax benefits, of which $6.7 million will impact the effective tax rate, if recognized. As of March 31, 2012, we had $6.9 million of unrecognizedtax benefits, of which $6.6 million will impact the effective tax rate, if recognized.During the fiscal year ended March 30, 2013 our unrecognized tax benefits were increased by $0.5 million as a result of additional tax benefits arising in theprior year return and current year.The following table summarizes the activity related to our gross unrecognized tax benefits for the fiscal years ended March 30, 2013, March 31, 2012 andApril 2, 2011:63Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)(In thousands)March 30, 2013 March 31, 2012 April 2, 2011Beginning Balance$6,885 $4,669 $4,620Additions based upon positions related to the current year1,192 1,124 20Additions for tax positions of prior years18 1,216 1,641Reductions of tax positions— (124) (1,042)Settlements with taxing authorities(80) — —Closure of statute of limitations(1,085) — (570)Ending Balance$6,930 $6,885 $4,669As of March 30, 2013 we anticipate that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $0.4 million in the nexttwelve months, as a result of closure of various foreign statutes of limitations.Our historic practice has been and continues to be to recognize interest and penalties related to Federal, state and foreign income tax matters in income taxexpense. Approximately $0.8 million and $1.0 million is accrued for interest at March 30, 2013 and March 31, 2012, respectively and is not included in theamounts above.We conduct business globally and, as a result, file consolidated and separate Federal, state and foreign income tax returns in multiple jurisdictions. In thenormal course of business, we are subject to examination by taxing authorities throughout the world. With a few exceptions overseas, we are no longer subjectto U.S. federal, state and local, or foreign income tax examinations for years before 2009.10.COMMITMENTS AND CONTINGENCIESWe lease facilities and certain equipment under operating leases expiring at various dates through fiscal 2020. Facility leases require us to pay certain insuranceexpenses, maintenance costs and real estate taxes.Approximate future basic rental commitments under operating leases as of March 30, 2013 are as follows (in thousands):Fiscal Year Ending (In thousands) 2014$7,74220156,32120163,44520172,10320181,685Thereafter2,689 $23,985Rent expense in fiscal 2013, 2012, and 2011 was $7.0 million, $6.1 million, and $6.6 million, respectively. Some of the Company's operating leases includerenewal provisions, escalation clauses and options to purchase the facilities that we lease.We are presently engaged in various legal actions, and although our ultimate liability cannot be determined at the present time, we believe that any such liabilitywill not materially affect our consolidated financial position or our results of operations.During the third quarter of fiscal 2013, we issued a field action letter to blood center customers requesting visual inspection of a component of certain wholeblood collection sets, due to the potential for a leak to occur at a very low frequency. The component, referred to as a Y connector, was supplied by a contractmanufacturer. We have recorded inventory reserves of $7.0 million in cost of goods sold within the consolidated statement of income for the fiscal year endedMarch 30, 2013 for removal of affected whole blood collection sets from inventory for destruction or rework. We will pursue all available means of financialrecovery related to this inventory loss. However, no salvage or recovery value from these efforts was recorded as we cannot currently conclude whether afavorable outcome will result.64Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)During the first quarter of fiscal 2012, we received customer complaints in Europe regarding a quality issue with our High Separation Core Bowl (“HSCore”), a plasma disposable product used primarily to collect plasma for transfusion. Certain of these customers also made subsequent claims regardingfinancial losses alleged to have been incurred as a result of this matter. Certain of these claims were recoverable under our product liability insurance policy. Todate, we have recognized a $10.3 million liability offset by insurance receivables of $8.2 million and an expense of $2.1 million. We collected $4.4 million ofinsurance receivables during fiscal 2013, which has been classified as an operating cash flow. For the fiscal year ended March 30, 2013, only $0.2 million ofthe liability remains outstanding. We do not expect to record additional material claims or insurance recoveries related to this matter.For the past six years, we have pursued patent infringement lawsuits against Fenwal Inc. seeking an injunction and damages from their infringement of aHaemonetics patent, through the sale of the ALYX brand automated red cell collection system, a competitor of our automated red cell collection systems.Currently, we are pursuing a patent infringement action in Germany against Fenwal (Fresenius), and its European and German subsidiary. On September 20,2010, we filed a patent infringement action in Germany. In response, Fenwal filed an action to invalidate the Haemonetics patent which is the subject of thisinfringement action on December 1, 2010.In April 2008, our subsidiary Haemonetics Italia, Srl. and two of its employees were found guilty by a court in Milan, Italy of charges arising from allegedlyimproper payments made under a consulting contract with a local physician and in pricing products under a tender from a public hospital. The two employeesfound guilty in this matter are no longer employed by the Company. On June 14, 2011, the final level appeals court affirmed these verdicts. There are nofurther appeals available and the convictions are now final. In connection with this conviction, our Italian subsidiary is liable to pay a fine of €147,500 and aproportionate share of the cost of the proceedings. The final amount has not yet been determined.When this matter first arose, our Board of Directors commissioned independent legal counsel to conduct investigations on its behalf. Based upon its evaluationof counsel's report, the Board concluded that no disciplinary action was warranted in either case. Neither the original ruling nor its final affirmation hasimpacted the Company's business in Italy to date.11.CAPITAL STOCKStock PlansThe Company has an incentive compensation plan, (the “2005 Incentive Compensation Plan”). The 2005 Incentive Compensation Plan permits the award ofnon-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, deferred stock/restricted stock units, other stock units andperformance shares to the Company’s key employees, officers and directors. The 2005 Incentive Compensation Plan is administered by the CompensationCommittee of the Board of Directors (the “Committee”) consisting of three independent members of our Board of Directors. The maximum number of sharesavailable for award under the 2005 Incentive Compensation Plan is 15,024,920. The maximum number of shares that may be issued pursuant to incentivestock options may not exceed 500,000. Any shares that are subject to the award of stock options shall be counted against this limit as one (1) share for everyone (1) share issued. Any shares that are subject to awards other than stock options shall be counted against this limit as 3.26 shares for every one (1) sharegranted. The exercise price for the non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, deferred stock/restrictedstock units, other stock units and performance shares granted under the 2005 Incentive Compensation Plan is determined by the Committee, but in no eventshall such exercise price be less than the fair market value of the common stock at the time of the grant. Options, Restricted Stock Awards and RestrictedStock Units become exercisable, or in the case of restricted stock, the resale restrictions are released in a manner determined by the Committee, generally over afour year period for employees and one year from grant for non-employee directors, and all options expire not more than 7 years from the date of the grant. AtMarch 30, 2013, there were 3,876,780 shares subject to options, 354,589 shares of restricted stock outstanding and no shares subject to restricted stockunits outstanding under this plan and 6,596,195 shares available for future grant.The Company had a long-term incentive stock option plan and a non-qualified stock option plan, (the “2000 Long-term Incentive Plan”) which permitted theissuance of a maximum of 7,000,000 shares of our common stock pursuant to incentive and non-qualified stock options granted to key employees, officersand directors. The plan was terminated in connection with the adoption of the 2005 Incentive Compensation Plan. At March 30, 2013, there were 192,978options outstanding under this plan and no further options will be granted under this plan.65Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The Company has an Employee Stock Purchase Plan (the “Purchase Plan”) under which a maximum of 1,400,000 shares (subject to adjustment for stocksplits and similar changes) of common stock may be purchased by eligible employees. Substantially all of our full-time employees are eligible to participate inthe Purchase Plan.The Purchase Plan provides for two “purchase periods” within each of our fiscal years, the first commencing on November 1 of each year and continuingthrough April 30 of the next calendar year, and the second commencing on May 1 of each year and continuing through October 31 of such year. Shares arepurchased through an accumulation of payroll deductions (of not less than 2% nor more than 15% of compensation, as defined) for the number of wholeshares determined by dividing the balance in the employee’s account on the last day of the purchase period by the purchase price per share for the stockdetermined under the Purchase Plan. The purchase price for shares is the lower of 85% of the fair market value of the common stock at the beginning of thepurchase period, or 85% of such value at the end of the purchase period.Stock-based compensation expense of $11.0 million, $9.3 million, and $10.8 million was recognized under ASC Topic 718, Compensation — StockCompensation, for the fiscal year ended March 30, 2013, March 31, 2012, and April 2, 2011, respectively. The related income tax benefit recognized was$3.5 million, $2.7 million, and $3.7 million for the fiscal year ended March 30, 2013, March 31, 2012, and April 2, 2011, respectively. We recognize stock-based compensation on a straight line basis.ASC Topic 718 requires that cash flows relating to the benefits of tax deductions in excess of stock compensation cost recognized be reported as a financingcash flow, rather than as an operating cash flow. This excess tax benefit was $4.1 million, $1.4 million, and $3.1 million for the fiscal year ended March 30,2013, March 31, 2012, and April 2, 2011, respectively.A summary of stock option activity for the fiscal year ended March 30, 2013 is as follows: OptionsOutstanding(shares) WeightedAverageExercise Priceper Share WeightedAverageRemainingLife (years) AggregateIntrinsicValue($000’s)Outstanding at March 31, 20124,847,134 $26.15 3.87 $42,134Granted904,998 38.60 Exercised(1,402,298) 22.86 Forfeited(280,076) 29.05 Outstanding at March 30, 20134,069,758 $29.85 4.31 $48,061 Exercisable at March 30, 20132,052,602 $26.42 4.22 $31,287 Vested or expected to vest at March 30, 20133,838,353 $29.56 3.09 $46,433The total intrinsic value of options exercised was $20.9 million, $8.5 million, and $26.5 million during fiscal 2013, 2012, and 2011, respectively.As of March 30, 2013, there was $12.1 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to berecognized over a weighted average period of 2.5 years.The fair value was estimated using the Black-Scholes option-pricing model based on the weighted average of the high and low stock prices at the grant dateand the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of our commonstock. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued. Theexpected life of the option was estimated with reference to historical exercise patterns, the contractual term of the option and the vesting period. Theassumptions utilized for option grants during the periods presented are as follows: March 30, 2013 March 31, 2012 April 2, 2011Volatility26.4% 27.5% 28.2%Expected life (years)4.9 4.9 4.9Risk-free interest rate0.8% 1.1% 1.8%Dividend yield0.0% 0.0% 0.0%66Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The weighted average grant date fair value of options to purchase one share granted during 2013, 2012, and 2011 was approximately $9.76, $8.16, and$7.92, respectively.We have applied, based on an analysis of our historical forfeitures, an annual forfeiture rate of 8% to all unvested stock options as of March 30, 2013 andMarch 31, 2012, which represents the portion that we expect will be forfeited each year over the vesting period.The fair values of shares purchased under the Employee Stock Purchase Plan are estimated using the Black-Scholes single option-pricing model with thefollowing weighted average assumptions: March 30, 2013 March 31, 2012 April 2, 2011Volatility24.9% 26.3% 21.1%Expected life (months)6 6 6Risk-free interest rate0.2% 0.1% 0.2%Dividend Yield0.0% 0.0% 0.0%The weighted average grant date fair value of the six-month option inherent in the Purchase Plan was approximately $8.50, $7.10, and $5.87 during fiscal2013, 2012, and 2011, respectively.Restricted Stock AwardsAs of March 30, 2013, there was no unrecognized compensation cost related to non-vested restricted stock awards.Restricted Stock UnitsAs of March 30, 2013, there was $8.3 million of total unrecognized compensation cost related to non-vested restricted stock units. This cost is expected to berecognized over a weighted average period of 2.6 years.A summary of restricted stock units activity for the fiscal year ended March 30, 2013 is as follows: Shares WeightedAverageMarket Valueat Grant DateNonvested at March 31, 2012321,526 $25.86Awarded178,322 32.85Released(112,986) 27.47Forfeited(30,443) 31.23Nonvested at March 30, 2013356,419 $34.06Accumulated Other Comprehensive IncomeA summary of the components of accumulated other comprehensive income is as follows:(In thousands) ForeignCurrencyTranslation UnrealizedGain/(Loss) onDerivatives,Net of Tax Impact ofDefined BenefitPlans,Net of Tax Accumulated OtherComprehensive IncomeBalance, April 3, 2010 $5,271 $1,454 $(820) $5,905Changes during the year 6,380 (3,299) 555 3,636Balance, April 2, 2011 $11,651 $(1,845) $(265) $9,541Changes during the year (2,813) 6,370 (3,988) (431)Balance, March 31, 2012 $8,838 $4,525 $(4,253) $9,110Changes during the year (4,705) 1,848 (820) (3,677)Balance, March 30, 2013 $4,133 $6,373 $(5,073) $5,43367Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)12.EARNINGS PER SHARE (“EPS”)The following table provides a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations. Basic EPS iscomputed by dividing net income by weighted average shares outstanding. Diluted EPS includes the effect of potentially dilutive common shares. The commonstock weighted average number of shares has been retroactively adjusted for the stock split.(In thousands, except per share amounts)March 30, 2013 March 31, 2012 April 2, 2011Basic EPS Net income$38,800 $66,886 $79,980Weighted average shares51,349 50,727 50,154Basic income per share$0.76 $1.32 $1.59Diluted EPS Net income$38,800 $66,886 $79,980Basic weighted average shares51,349 50,727 50,154Net effect of common stock equivalents910 863 1,038Diluted weighted average shares52,259 51,590 51,192Diluted income per share$0.74 $1.30 $1.56Weighted average shares outstanding, assuming dilution, excludes the impact of 0.5 million, 1.4 million and 2.4 million stock options for fiscal years 2013,2012 and 2011, respectively, because these securities were anti-dilutive during the noted periods.13.PROPERTY, PLANT AND EQUIPMENTProperty and equipment consisted of the following:(In thousands) March 30, 2013 March 31, 2012Land $4,216 $1,136Building and building improvements 78,682 58,680Plant equipment and machinery 205,698 136,057Office equipment and information technology 103,235 88,185Haemonetics equipment 240,889 226,476 Total 632,720 510,534Less: accumulated depreciation and amortization (375,767) (348,877)Property, plant and equipment, net $256,953 $161,657Depreciation expense was $43.4 million, $38.6 million, and $36.8 million for fiscal 2013, 2012, and 2011, respectively.During fiscal 2013, there was a change in the estimated useful lives of Haemonetics equipment which resulted in a decrease in depreciation expense of $4.5million, an increase of $3.3 million in net income, and an increase in basic and diluted earnings per share of $0.09.14.RETIREMENT PLANSDefined Contribution PlansWe have a Savings Plus Plan that is a 401(k) plan that allows our U.S. employees to accumulate savings on a pre-tax basis. In addition, matchingcontributions are made to the Plan based upon pre-established rates. Our matching contributions amounted to approximately $4.9 million in 2013, $4.0million in 2012, and $3.3 million in 2011. Upon Board approval, additional68Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)discretionary contributions can also be made. No discretionary contributions were made for the Savings Plan in fiscal 2013, 2012, or 2011.Some of our subsidiaries also have defined contribution plans, to which plan both the employee and the employer make contributions. The employercontributions to these plans totaled $2.4 million, $0.8 million, and $1.8 million in fiscal 2013, 2012, and 2011, respectively, of which $1.5 million in fiscal2011 was contributed for our employees in Switzerland.Defined Benefit PlansASC Topic 715, Compensation — Retirement Benefits, requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of theemployer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which thechanges occur. Accordingly, the Company is required to report changes in its funded status in comprehensive income on its Statement of Stockholders’ Equityand Comprehensive Income.Benefits under these plans are generally based on either career average or final average salaries and creditable years of service as defined in the plans. Theannual cost for these plans is determined using the projected unit credit actuarial cost method that includes actuarial assumptions and estimates which aresubject to change.Some of the our foreign subsidiaries have defined benefit pension plans covering substantially all full time employees at those subsidiaries. Net periodicbenefit costs for the plans in the aggregate include the following components:(In thousands)March 30, 2013 March 31, 2012 April 2, 2011Service cost$2,759 $2,545 $667Interest cost on benefit obligation639 601 283Expected (return)/loss on plan assets(413) 2 (467)Actuarial (gain)/loss196 (385) (48)Amortization of unrecognized prior service cost(14) (31) 381Amortization of unrecognized transition obligation48 221 30Totals$3,215 $2,953 $846The net periodic benefit costs shown above for fiscal 2013 and fiscal 2012 include the associated costs for the Switzerland defined benefit plan. The netperiodic benefit costs for fiscal 2011 shown above have not been updated to reflect the Switzerland plan costs; these costs were approximately $1.5 million.During fiscal 2011, the Switzerland plan was accounted for as a defined contribution plan and Company contributions to the plan were expensed.69Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The activity under those defined benefit plans are as follows:(In thousands)March 30, 2013 March 31, 2012Change in Benefit Obligation: Benefit Obligation, beginning of year$(27,150) $(22,707)Service cost(2,759) (2,545)Interest cost(639) (601)Benefits paid3,210 1,952Actuarial (loss)/gain(1,364) (1,244)Employee and plan participants contribution(2,926) (1,728)Plan Amendments— (193)Foreign currency changes1,502 (84)Benefit obligation, end of year$(30,126) $(27,150)Change in Plan Assets: Fair value of plan assets, beginning of year$18,185 $15,798Company contributions2,381 2,156Benefits paid(3,210) (1,873)Gain/(Loss) on plan assets397 124Employee and plan participants contributions2,926 1,728Foreign currency changes(1,102) 252Fair value of Plan Assets, end of year$19,577 $18,185Funded Status$(10,549) $(8,965)Unrecognized net actuarial loss/(gain)5,418 4,513Unrecognized initial obligation184 141Unrecognized prior service cost138 254Net amount recognized$(4,809) $(4,057)One of the benefit plans is funded by benefit payments made by the Company. Accordingly that plan has no assets included in the information presentedabove. The total liability for this plan was $5.4 million and $4.9 million as of March 30, 2013 and March 31, 2012, respectively.The accumulated benefit obligation for all plans was $22.2 million and $22.5 million for the fiscal year ended March 30, 2013 and March 31, 2012,respectively.70Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The components of the change recorded in our accumulated other comprehensive income related to our defined benefit plans, net of tax, are as follows (inthousands):Balance, April 3, 2010$(820)Obligation at transition574Actuarial loss(50)Prior service cost31Balance as of April 2, 2011$(265)Obligation at transition30Actuarial loss(3,701)Prior service cost(317)Balance as of March 31, 2012$(4,253)Obligation at transition556Actuarial loss(1,237)Prior service cost(139)Balance as of March 30, 2013$(5,073)We expect to amortize $0.6 million from accumulated other comprehensive loss during 2014.The weighted average rates used to determine the net periodic benefit costs were as follows: March 30, 2013 March 31, 2012 April 2, 2011Discount rate1.97% 2.40% 5.30%Rate of increased salary levels1.42% 1.50% 2.60%Expected long-term rate of return on assets1.92% 2.10% 1.60%Assumptions for expected long-term rate of return on plan assets are based upon actual historical returns, future expectations of returns for each asset classand the effect of periodic target asset allocation rebalancing. The results are adjusted for the payment of reasonable expenses of the plan from plan assets. Werecognized $0.1 million of deferred taxes in fiscal 2013 .We have no other material obligation for post-retirement or post-employment benefits.Our investment policy for pension plans is to balance risk and return through a diversified portfolio to reduce interest rate and market risk. Maturities aremanaged so that sufficient liquidity exists to meet immediate and future benefit payment requirements.ASC Topic 820, Fair Value Measurements and Disclosures, provides guidance for reporting and measuring the plan assets of our defined benefit pensionplan at fair value as of March 30, 2013. Using the same three-level valuation hierarchy for disclosure of fair value measurements as described in Note 7, all ofthe assets of the Company’s plan are classified within Level 2 of the fair value hierarchy because the plan assets are primarily insurance contracts.Expected benefit payments for both plans are estimated using the same assumptions used in determining the company’s benefit obligation at March 30, 2013.Benefit payments will depend on future employment and compensation levels, average years employed and average life spans, among other factors, andchanges in any of these factors could significantly affect these estimated future benefit payments.71Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Estimated future benefit payments during the next five years and in the aggregate for the five fiscal years thereafter, are as follows (in thousands):Expected Benefit Payments Fiscal Year 2014$1,200Fiscal Year 2015$1,327Fiscal Year 2016$1,308Fiscal Year 2017$1,217Fiscal Year 2018$844Fiscal Year 2019-2023$4,714The Company contributions for fiscal 2014 are expected to be consistent with current year.15.SEGMENT INFORMATIONSegment Definition CriteriaWe manage our business on the basis of one operating segment: the design, manufacture, and marketing of blood management solutions. Our chief operatingdecision-maker uses consolidated results to make operating and strategic decisions. Manufacturing processes, as well as the regulatory environment in whichwe operate, are largely the same for all product categories.Enterprise Wide Disclosures About Product and ServicesWe have four global product families: plasma, blood center, hospital, and software solutions.Our products include whole blood disposables, equipment devices and the related disposables used with these devices. Disposables include part of plasma,blood center, and hospital product families. Plasma consists of the disposables used to perform apheresis for the separation of whole blood components andsubsequent collection of plasma to be used as a raw material for biologically derived pharmaceuticals. Blood center consists of disposables which separatewhole blood for the subsequent collection of platelets, plasma, red cells, or a combination of these components for transfusion to patients as well asdisposables for manual whole blood collection. Hospital consists of surgical disposables (principally the Cell Saver® autologous blood recovery systemtargeted to procedures that involve rapid, high volume blood loss such as cardiovascular surgeries and the cardioPAT® cardiovascular perioperativeautotransfusion system designed to remain with the patient following surgery to recover blood and the patient’s red cells to prepare them for reinfusion), theOrthoPAT® orthopedic perioperative autotransfusion system designed to operate both during and after surgery to recover and wash the patient’s red cells toprepare them for reinfusion, and diagnostics products (principally the TEG® Thrombelastograph® hemostasis analyzer used to help assess a surgical patient’shemostasis during and after surgery).Software solutions include information technology platforms that assist blood centers, plasma centers, and hospitals to more effectively manage regulatorycompliance and operational efficiency.72Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)Revenues from External Customers:(In thousands)March 30, 2013 March 31, 2012 April 2, 2011Disposable revenues Plasma disposables$268,900 $258,061 $227,209Blood center disposables Platelet169,602 167,946 156,251Red cell49,733 48,034 46,828Whole blood138,436 — — 357,771 215,980 203,079Hospital disposables Surgical73,508 66,619 66,503OrthoPAT30,230 31,186 35,631Diagnostics27,356 23,087 19,414 131,094 120,892 121,548Disposables revenue757,765 594,933 551,836Software solutions69,952 70,557 66,876Equipment & other64,273 62,354 57,982Total revenues$891,990 $727,844 $676,694Enterprise Wide Disclosures About Product and ServicesYear Ended (in thousands)March 30, 2013UnitedStates OtherNorthAmerica TotalNorthAmerica Japan OtherAsia TotalEurope TotalConsolidatedSales$454,874 $6,851 $461,725 $120,726 $84,860 $224,679 $891,990Total Assets$830,754 $225,849 $1,056,603 $44,189 $41,037 $320,088 $1,461,917Long-Lived Assets$503,606 $209,439 $713,045 $12,977 $8,076 $117,717 $851,815March 31, 2012UnitedStates OtherNorthAmerica TotalNorthAmerica Japan OtherAsia TotalEurope TotalConsolidatedSales$352,160 $512 $352,672 $124,381 $67,223 $183,568 $727,844Total Assets$634,171 $15,365 $649,536 $50,509 $27,353 $183,737 $911,135Long-Lived Assets$305,370 $12,796 $318,166 $13,128 $3,961 $38,009 $373,264April 2, 2011UnitedStates OtherNorthAmerica TotalNorthAmerica Japan OtherAsia TotalEurope TotalConsolidatedSales$316,447 $908 $317,355 $110,263 $61,594 $187,482 $676,694Total Assets$582,733 $15,903 $598,636 $47,156 $18,164 $169,308 $833,264Long-Lived Assets$305,305 $12,715 $318,020 $12,391 $4,181 $38,092 $372,684The Long-Lived Assets reported above include Goodwill, Intangibles and Net Property, Plant and Equipment.73Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)16.RESTRUCTURINGDuring fiscal 2012, our restructuring activities primarily consisted of reorganization within our research and development, manufacturing and softwareoperations. Employee-related costs primarily consist of employee severance and benefits. Facility-related costs primarily consist of charges associated withclosing facilities, related lease obligations, and other related costs.For fiscal 2013, we incurred $6.6 million of restructuring charges and a $4.2 million asset write-down. The asset write-down is associated with exitingactivities related to technologies originally acquired from Arryx, Inc. Restructuring expenses have been primarily included as a component of selling, generaland administrative expense in the accompanying statements of income.On April 1, 2010, our Board of Directors approved transformation and restructuring plans, which include the integration of Global Med Technologies, Inc.During fiscal 2011, in addition to the costs in the below table and as part of our approved transformation and restructuring plans, we incurred the followingexpenses:•Stock compensation expense of $1.7 million resulting from the acceleration of unvested stock options in accordance to terms of an employmentcontract for an employee. This expense is included as part of our restructuring charges and reflected in our consolidated statements of income asselling, general and administrative expense for the fiscal year ended April 2, 2011.•$2.1 million of integration costs related to the Global Med acquisition.The following summarizes the restructuring activity for the fiscal year ended March 30, 2013, March 31, 2012, and April 2, 2011, respectively:(In thousands)Balance at March 31,2012 CostIncurred Payments AssetWrite down Restructuring AccrualBalance at March 30,2013Employee-related costs$1,461 $6,214 $(4,586) $— $3,089Facility related costs533 431 (791) — 173Asset write-down— 4,247 — (4,247) — $1,994 $10,892 $(5,377) $(4,247) $3,262(In thousands)Balance at April 2,2011 CostIncurred Payments AssetWrite down Restructuring AccrualBalance at March 31,2012Employee-related costs$2,782 $4,112 $(5,433) $— $1,461Facility related costs889 1,746 (2,102) — 533 $3,671 $5,858 $(7,535) $— $1,994(In thousands)Balance at April 3,2010 CostIncurred Payments AssetWrite down Restructuring AccrualBalance at April 2, 2011Employee-related costs$9,761 $3,595 $(10,574) $— $2,782Facility related costs— 889 — — 889 $9,761 $4,484 $(10,574) $— $3,67174Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)17.CAPITALIZATION OF SOFTWARE DEVELOPMENT COSTSThe cost of software that is developed or obtained for internal use is accounted for pursuant to ASC Topic 350, Intangibles — Goodwill and Other.Pursuant to ASC Topic 350, the Company capitalizes costs incurred during the application development stage of software developed for internal use, andexpenses costs incurred during the preliminary project and the post-implementation operation stages of development. The Company capitalized $7.5 millionand $3.6 million in costs incurred for acquisition of the software license and related software development costs for new internal software that was in theapplication development stage during the fiscal years ended March 30, 2013 and March 31, 2012, respectively. The capitalized costs are included as acomponent of property, plant and equipment in the consolidated financial statements.For costs incurred related to the development of software to be sold, leased, or otherwise marketed, the Company applies the provisions of ASC Topic 985-20,Software, which specifies that costs incurred internally in researching and developing a computer software product should be charged to expense untiltechnological feasibility has been established for the product. Once technological feasibility is established, all software costs should be capitalized until theproduct is available for general release to customers.We capitalized $6.2 million and $6.1 million in software development costs for ongoing initiatives during the fiscal years ended March 30, 2013 andMarch 31, 2012, respectively. At March 30, 2013 and March 31, 2012, we have a total of $25.7 million and $19.5 million, respectively, of software costscapitalized, of which $20.0 million and $15.4 million, respectively, related to in process software development initiatives. In connection with thesedevelopment activities, we capitalized interest of $0.3 million and $0.2 million in fiscal 2013 and 2012, respectively. We amortize capitalized costs when theproducts are released for sale. During the first quarter of fiscal 2013, $1.7 million of capitalized costs related to one project were placed into service, comparedto $4.1 million of capitalized costs placed into service during fiscal 2012. Amortization of capitalized software development cost expense was $0.9 million,$0.7 million and $0.2 million for fiscal 2013, 2012 and 2011 respectively. The costs capitalized for each project are included in intangible assets in theconsolidated financial statements.18.SUMMARY OF QUARTERLY DATA (UNAUDITED)(In thousands)Three months ended2013June 30, September 29, December 29, March 30,Net revenues$176,475 $218,178 $247,395 $249,942Gross profit$90,113 $101,762 $113,115 $123,141Operating income$13,079 $9,901 $15,747 $17,710Net income$9,787 $6,547 $9,904 $12,562Per share data: Net Income: Basic$0.19 $0.13 $0.19 $0.24Diluted$0.19 $0.13 $0.19 $0.24 Three months ended2012July 2, October 1, December 31, March 31,Net revenues$170,569 $179,445 $191,160 $186,670Gross profit$88,748 $89,949 $95,931 $94,612Operating income$23,908 $18,566 $25,324 $20,960Net income$16,947 $13,880 $18,254 $17,805Per share data: Net Income: Basic$0.33 $0.27 $0.36 $0.35Diluted$0.32 $0.27 $0.36 $0.3575Table of ContentsHAEMONETICS CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)19.SUBSEQUENT EVENTSValue Creation and CaptureOn April 29, 2013, we committed to a plan to pursue identified Value Creation and Capture ("VCC") opportunities. These opportunities include investment inproduct line extensions and next generation products, enhancement of commercial capabilities and a transformation of our manufacturing network. Thetransformation of our manufacturing network will take place over the next three fiscal years and includes changes to the current manufacturing footprint andsupply chain structure (the "Network Plan").To implement the Network Plan, we will (i) discontinue manufacturing activities at our Braintree, Massachusetts location, (ii) create a technology center ofexcellence for product development, (iii) expand our current facility in Tijuana, Mexico and (iv) build a new manufacturing facility in Asia closer to ourcustomer base in that region.We estimate we will incur approximately $23.0 million of cash restructuring expenses during fiscal 2014 which will be recorded through cost of goods sold. Tocomplete the Network Plan we estimate that we will spend an additional $8.0 million for cash restructuring expenses in future years. These costs consistprincipally of employee related costs, product line transfer costs including relocation and validation, as well as redundant overhead and inefficiencies duringthe transfer period. The management and execution of this effort will require a dedicated team of program managers, engineers, regulatory and qualityprofessionals, the cost of which is included in these estimates. We also expect to incur non-cash costs of approximately $5.0 million consisting of accelerateddepreciation and asset write-downs.Activities under the Plan will be initiated in fiscal 2014 and are expected to be substantially completed in the next three years. Additionally, we expect todeploy approximately $36.0 million of cash in fiscal 2014 for capital expenditures to expand our existing Tijuana, Mexico facility and construct a new facilityin Asia.We also expect to incur cash costs totaling $29.0 million associated with our other VCC opportunities, completion of the integration of the whole bloodbusiness and the recent acquisition of Hemerus.Acquisition of HemerusOn April 30, 2013 we completed the acquisition of certain assets of Hemerus LLC, a Minnesota based company that develops innovative technologies for thecollection of whole blood and processing and storage of blood components. Hemerus has received FDA approval for SOLX® whole blood collection system foreight hour storage of whole blood. Hemerus previously received CE Marking (Conformité Européenne) in the European Union to market SOLX as the world'sfirst 56-day red blood cell storage solution. We paid $23.0 million cash in addition to the $1.0 million paid early in fiscal 2013. We will pay an additional$3.0 million upon a further FDA approval of the SOLX solution for 24 hour storage of whole blood prior to processing, and will pay up to $14.0 million onfuture sales of SOLX-based products.76Table of ContentsITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.77Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and Stockholders of Haemonetics Corporation:We have audited the accompanying consolidated balance sheets of Haemonetics Corporation and subsidiaries as of March 30, 2013 and March 31, 2012 andthe related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period endedMarch 30, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are theresponsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Haemonetics Corporationand subsidiaries at March 30, 2013 and March 31, 2012, and the consolidated results of their operations and their cash flows for each of the three years in theperiod ended March 30, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule,when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Haemonetics Corporation andsubsidiaries’ internal control over financial reporting as of March 30, 2013, based on criteria established in Internal Control — Integrated Framework issuedby the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 20, 2013 expressed an unqualified opinion thereon./s/ Ernst & Young LLPBoston, MassachusettsMay 20, 201378Table of ContentsITEM 9A. CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and ProceduresAs of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our management, includingour Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively) regarding the effectivenessof the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”).Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report, ourdisclosure controls and procedures are effective. There has been no change in our internal control over financial reporting during the fiscal year ended March30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.We acquired Pall Corporation's transfusion medicine business on August 1, 2012. We have extended our oversight and monitoring processes that support ourinternal control over financial reporting to include the acquired operations. We are continuing to integrate the acquired operations into our overall internal controlover financial reporting process. We will assess the effectiveness of internal control over financial reporting for the acquired whole blood business in fiscal2014. Management's assessment of and conclusion on the effectiveness of internal control over financial reporting for fiscal 2013 did not include the internalcontrols of the whole blood business.Reports on Internal ControlManagement’s Annual Report on Internal Control over Financial ReportingThe management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined inExchange Act Rules 13a-15(f) and 15d-a5(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’smanagement and Board of Directors regarding the preparation and fair presentation of published financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.The Company’s management assessed the effectiveness of its internal control over financial reporting as of March 30, 2013. In making this assessment, themanagement used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-IntegratedFramework. The Company's assessment did not include an assessment of the internal controls over financial reporting of the whole blood business acquiredin August 2013, which is included in our fiscal 2013 consolidated financial statements and which constituted $138.0 million of revenues for this period.Based on our assessment we believe that, as of March 30, 2013, the Company’s internal control over financial reporting is effective based on those criteria.Ernst & Young, LLP, an independent registered public accounting firm, has issued an attestation report on the effectiveness of our internal control overfinancial reporting. This report, in which they expressed an unqualified opinion, is included below.79Table of ContentsReport of Independent Registered Public Accounting FirmThe Board of Directors and Stockholders of Haemonetics Corporation:We have audited Haemonetics Corporation and subsidiaries’ internal control over financial reporting as of March 30, 2013, based on criteria established inInternal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). TheCompany's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internalcontrol over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility isto express an opinion on the Company’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testingand evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting andthe preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control overfinancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.As indicated in the accompanying Management's Annual Report on Internal Control over Financial Reporting, management's assessment of and conclusion onthe effectiveness of its internal control over financial reporting did not include an assessment of the internal controls of the whole blood business, which isincluded in the fiscal 2013 consolidated financial statements of Haemonetics Corporation and subsidiaries and constituted $138 million of revenue for thisperiod. Our audit of internal control over financial reporting of Haemonetics Corporation and subsidiaries also did not include an evaluation of the internalcontrol over financial reporting of the whole blood business.In our opinion, Haemonetics Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as ofMarch 30, 2013, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsof Haemonetics Corporation and subsidiaries as of March 30, 2013 and March 31, 2012, and the related consolidated statements of income, comprehensiveincome, stockholders’ equity and cash flows for each of the three years in the period ended March 30, 2013 of Haemonetics Corporation and subsidiaries andour report dated May 20, 2013 expressed an unqualified opinion thereon./s/ Ernst & Young LLPBoston, MassachusettsMay 20, 201380Table of ContentsChanges in Internal ControlsThere were no changes in the Company’s internal control over financial reporting that occurred during the fourth quarter of the Company’s most recentlycompleted fiscal year that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.We acquired Pall Corporation's transfusion medicine business on August 1, 2012. We have extended our oversight and monitoring processes that support ourinternal control over financial reporting to include the acquired operations. We are continuing to integrate the acquired operations into our overall internal controlover financial reporting process. We will assess the effectiveness of internal control over financial reporting for the acquired whole blood business in fiscal2014.ITEM 9B. OTHER INFORMATIONNonePART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE1. The information called for by Item 401 of Regulations S-K concerning our directors and the information called for by Item 405 of Regulation S-Kconcerning compliance with Section 16(a) of the Securities Exchange Act of 1934 required by this Item is incorporated by reference from our Proxy Statementfor the Annual Meeting to be held July 24, 2013.2. The information concerning our Executive Officers is set forth at the end of Part I hereof.3. The balance of the information required by this item, including information concerning our Audit Committee and the Audit Committee FinancialExpert and compliance with Item 407(c)(3) of S-K, is incorporated by reference from the Company’s Proxy Statement for the Annual Meeting to be held July24, 2013. We have adopted a Code of Ethics that applies to our chief executive officer, chief financial officer and senior financial officers. The Code of Ethicsis incorporated into the Company’s Code of Business Conduct located on the Company’s internet web site at http://phx.corporate-ir.net/phoenix.zhtml?c=72118&p=irol-IRHome and it is available in print to any shareholder who requests it. Such requests should be directed to our Company’s Secretary.We intend to disclose any amendment to, or waiver from, a provision of the Code of Ethics that applies to our chief executive officer, chief financialofficer or senior financial officers and that relates to any element of the Code of Ethics definition enumerated in Item 406 of Regulation S-K by posting suchinformation on our website. Pursuant to NYSE Rule 303A.10, as amended, any waiver of the code of ethics for any executive officer or director must bedisclosed within four business days by a press release, SEC Form 8-K, or internet posting.ITEM 11. EXECUTIVE COMPENSATIONThe information required by this Item is incorporated by reference from our Proxy Statement for the Annual Meeting to be held July 24, 2013. Notwithstandingthe foregoing, the Compensation Committee Report included within the Proxy Statement is only being “furnished” hereunder and shall not be deemed “filed”for purposes of Section 18 of the Securities and Exchange Act of 1934.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERSThe information required by this Item concerning security ownership of certain beneficial owners and management is incorporated by reference from theCompany’s Proxy Statement for the Annual Meeting to be held July 24, 2013.Stock PlansThe following table below sets forth information as of March 30, 2013 with respect to compensation plans under which equity securities of the Company areauthorized for issuance.81Table of Contents (a) (b) (c)Plan Category Number of Securities to beIssued upon Exerciseof Outstanding Options,Warrants and Rights Weighted AverageExercise Price ofOutstanding Options,Warrants and Rights Number of SecuritiesAvailable for FutureIssuance Under EquityCompensation Plans(Excluding SecuritiesReflected in Column(a)*Equity compensation plans approved by security holders 4,426,177 $30.19 7,283,971Equity compensation plans not approved by security holders — — —Total 4,426,177 $30.19 7,283,971_______________________________________* Includes 687,776 shares available for purchase under the Employee Stock Purchase Plan in future purchase periods.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPEDENCEThe information required by this Item is incorporated by reference from our Proxy Statement for the Annual Meeting to be held July 24, 2013.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESThe information required by this Item is incorporated by reference from our Proxy Statement for the Annual Meeting to be held July 24, 2013.82Table of ContentsPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESThe following documents are filed as a part of this report:A)Financial Statements are included in Part II of this reportFinancial Statements required by Item 8 of this Form Consolidated Statements of Income40Consolidated Statements of Comprehensive Income40Consolidated Balance Sheets42Consolidated Statements of Stockholders’ Equity43Consolidated Statements of Cash Flows44Notes to Consolidated Financial Statements45Report of Independent Registered Public Accounting Firm78Schedules required by Article 12 of Regulation S-X II Valuation and Qualifying Accounts88All other schedules have been omitted because they are not applicable or not required.B)Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index at page 86, which is incorporated herein by reference.83Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. HAEMONETICS CORPORATION By: /s/ Brian Concannon Brian Concannon, President and Chief Executive OfficerDate : May 20, 2013Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theRegistrant and in the capacities and on the dates indicated.Signature Title Date /s/ Brian Concannon President, Chief Executive Officer and Director May 20, 2013Brian Concannon (Principal Executive Officer) /s/ Christopher Lindop Chief Financial Officer and Executive Vice President BusinessDevelopment May 20, 2013Christopher Lindop (Principal Financial Officer) /s/ Susan Hanlon Vice President Finance May 20, 2013Susan Hanlon (Principal Accounting Officer) /s/ Lawrence Best Director May 20, 2013Lawrence Best /s/ Paul Black Director May 20, 2013Paul Black /s/ Susan Bartlett Foote Director May 20, 2013Susan Bartlett Foote /s/ Ronald Gelbman Director May 20, 2013Ronald Gelbman /s/ Pedro Granadillo Director May 20, 2013Pedro Granadillo /s/ Mark Kroll, Ph.D. Director May 20, 2013Mark Kroll /s/ Richard Meelia Director May 20, 2013Richard Meelia /s/ Ronald Merriman Director May 20, 2013Ronald Merriman 84Table of ContentsEXHIBITS FILED WITH SECURITIES AND EXCHANGE COMMISSIONNumber and Description of Exhibit1. Articles of Organization3A* Pro forma Amended and Restated Articles of Organization of the Company reflecting Articles of Amendment dated August 23, 1993 andAugust 21, 2006 (filed as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the Quarter ended December 29, 2012 andincorporated herein by reference).3B* Articles of Amendment to the Articles of Organization of the Company filed August 21, 2006 with the Secretary of the Commonwealth ofMassachusetts.3C* By-Laws of the Company, as amended through July 27, 2012 (filed as Exhibit 5.03 to the Company's Form 8-K filed August 2, 2012 andincorporated herein by reference).2. Instruments defining the rights of security holders4A* Specimen certificate for shares of common stock (filed as Exhibit 4B to the Company's Amendment No. 1 to Form S-1 No. 33-39490 andincorporated herein by reference).3. Material Contracts10A* Lease dated July 17, 1990 between the Buncher Company and the Company of property in Pittsburgh, Pennsylvania (filed as Exhibit 10K tothe Company's Form S-1 No. 33-39490 and incorporated herein by reference).10B* First Amendment to lease dated July 17, 1990, made as of July 17, 1996 between Buncher Company and the Company of property inPittsburgh, Pennsylvania (filed as Exhibit 10AI to the Company's Form 10-Q No. 1-10730 for the quarter ended December 28, 1996 andincorporated herein by reference).10C* Second Amendment to lease dated July 17, 1990, made as of October 18, 2000 between Buncher Company and the Company for theproperty in Pittsburgh, Pennsylvania (filed as Exhibit 10AG to the Company's Form 10-K No. 1-10730 for the year ended March 29, 2003and incorporated herein by reference).10D Third Amendment to lease dated July 17, 1990, made as of March 23, 2004 between Buncher Company and the Company for the propertyin Pittsburgh, Pennsylvania (filed herewith as Exhibit 10D to the Company's Form 10-K No. 1-14041 for the year ended March 30, 2013).10E Fourth Amendment to lease dated July 17, 1990, made as of March 12, 2008 between Buncher Company and the Company for the propertyin Pittsburgh, Pennsylvania (filed herewith as Exhibit 10E to the Company's Form 10-K No. 1-14041 for the year ended March 30, 2013).10F Fifth Amendment to lease dated July 17, 1990, made as of October 1, 2008 between Buncher Company and the Company for the property inPittsburgh, Pennsylvania (filed herewith as Exhibit 10F to the Company's Form 10-K No. 1-14041 for the year ended March 30, 2013).10G Sixth Amendment to lease dated July 17, 1990 made as of January 8, 2010 between Buncher Company and the Company for the property inPittsburgh, Pennsylvania (filed herewith as Exhibit 10G to the Company's Form 10-K No. 1-14041 for the year ended March 30, 2013).10H Seventh Amendment to lease dated July 17, 1990, made as of March 31, 2011 between Buncher Company and the Company for the propertyin Pittsburgh, Pennsylvania (filed herewith as Exhibit 10H to the Company's Form 10-K No. 1-14041 for the year ended March 30, 2013).10I Eighth Amendment to lease dated July 17, 1990, made as of February 26, 2013 between Buncher Company and the Company for theproperty in Pittsburgh, Pennsylvania (filed herewith as Exhibit 10I to the Company's Form 10-K No. 1-14041 for the year ended March 30,2013).10J Lease dated February 21, 2000 between BBVA Bancomer Servicios, S.A., as Trustee of the “Submetropoli de Tijuana” Trust andHaemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A. de C.V. with authorization of El FloridoCalifornia, S.A. de C.V., for property located in Tijuana, Mexico (filed herewith as Exhibit 10J to the Company's Form 10-K No. 1-14041 forthe year ended March 30, 2013).10K Amendment to Lease dated February 21, 2000 made as of July 25, 2008 between BBVA Bancomer Servicios, S.A., as Trustee of the“Submetropoli de Tijuana” Trust Haemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A. de C.V.,for property located in Tijuana, Mexico (filed herewith as Exhibit 10K to the Company's Form 10-K No 1-14041 for the year ended March 30,2013).85Table of Contents10L Extension to Lease dated February 21, 2000, made as of August 14, 2011 between PROCADEF 1, S.A.P.I. de C.V. and HaemoneticsMexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A. de C.V., for property located in Tijuana,Mexico (Spanish to English translation filed herewith as Exhibit 10L to the Company's Form 10-K No 1-14041 for the year endedMarch 30, 2013).10M Amendment Letter to Lease dated February 21, 2000, made as of August 14, 2011 between BBVA Bancomer Servicios, S.A., as Trustee ofthe “Submetropoli de Tijuana” Trust and Haemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec, S.A.de C.V., for property located in Tijuana, Mexico (filed herewith as Exhibit 10M to the Company's Form 10-K No 1-14041 for the year endedMarch 30, 2013).10N Notice of Assignment to Lease dated February 21, 2000, made as of February 23, 2012 between BBVA Bancomer Servicios, S.A., as Trusteeof the “Submetropoli de Tijuana” Trust and Haemonetics Mexico Manufacturing, S. de R.L. de C.V., as successor in interest to Ensatec,S.A. de C.V. for property located in Tijuana, Mexico (Spanish to English translation filed herewith as Exhibit 10N to the Company's Form10-K No 1-14041 for the year ended March 30, 2013).10O* Note and Mortgage dated December 12, 2000 between the Company and General Electric Capital Business Asset Funding Corporation relatingto the Braintree facility (filed as Exhibit 10B to the Company's Form 10-Q No. 1-10730 for the quarter ended December 30, 2000 andincorporated herein by reference).10P Real Estate Lease Agreement dated November 2, 2002 between Haemonetics Produzione Italia S.r.l. as successor in interest to Pall Italia S.r.land Tempera Infissi S.r.l for premises located in Ascoli, Italy (Italian to English translation filed herewith as Exhibit 10P to the Company'sForm 10-K No.1-14041 for the year ended March 30, 2013).10Q Lease effective July 15, 2004 between Howard Commons Associates, LLC and Haemoscope Corporation for the property located in Niles,Illinois (filed herewith as Exhibit 10Q to the Company's Form 10-K No.1-14041 for the year ended March 30, 2013).10R First Amendment to Lease dated July 15, 2004, made as of June 10, 2004 between Howard Commons Associates, LLC and HaemoscopeCorporation for the property located in Niles, Illinois (filed herewith as Exhibit 10R to the Company's10-K No.1-14041 for the year endedMarch 30, 2013).10S Second Amendment to Lease dated July 15, 2004, made as of June 5, 2007 between Cabot II - ILI W02-W03, LLC, predecessor-in interest toHoward Commons Associates, LLC and Haemoscope Corporation for the property located in Niles, Illinois (filed herewith as Exhibit 10S tothe Company's Form 10-K No.1-14041 for the year ended March 30, 2013).10T Third Amendment to Lease dated July 15, 2004, made as of November 19, 2007 between Cabot II - ILI W02-W03, LLC, HaemoscopeCorporation and Huron Acquisition Corporation, a wholly-owned subsidiary of the Company, as successor in interest to HaemoscopeCorporation for the property located in Niles, Illinois (filed herewith as Exhibit 10T to the Company's Form 10-K No.1-14041 for the yearended March 30, 2013).10U Fourth Amendment to Lease dated July 15, 2004, made as of December 22, 2010 between Cabot II - ILI W02-W03, LLC, HaemoscopeCorporation and the Company as assignee and New Tenant of the property located in Niles, Illinois (filed herewith as Exhibit 10U to theCompany's Form 10-K No.1-14041 for the year ended March 30, 2013).10V Fifth Amendment to Lease dated July 15, 2004, made as of July 24, 2012 between Cabot II - ILI W02-W03, LLC and the Company of theproperty located in Niles, Illinois (filed herewith as Exhibit 10V to the Company's10-K No.1-14041 for the year ended March 30, 2013).10W Lease Agreement effective December 3, 2007 between Mrs. Blanca Estela Colunga Santelices, by her own right, and Pall Life SciencesMexico, S.de R.L. de C.V., for the property located in Tijuana, Mexico (Spanish to English translation filed herewith as Exhibit 10W to theCompany's Form 10-K No.1-14041 for the year ended March 30, 2013).10X Assignment to Lease Agreement effective December 3, 2007, made as of December 2, 2011 between Mrs. Blanca Estela Colunga Santelices,by her own right, Pall Life Sciences Mexico, S.de R.L. de C.V., (“Assignor”) and Haemonetics Mexico Manufacturing, S. de R.L. de C.V.assuccessor in interest to Pall Mexico Manufacturing S. de R.L. de C.V., (“Assignee”) assigned in favor of the property located in Tijuana,Mexico (filed herewith as Exhibit 10X to the Company's Form 10-K No.1-14041 for the year ended March 30, 2013).10Y Sublease Contract to Lease Agreement effective December 3, 2007, made as of December 3, 2011 between Haemonetics MexicoManufacturing, S. de R.L. de C.V. as successor in interest to Pall Mexico Manufacturing, S.de R.L. de C.V., and Pall Life Sciences Mexico,S. de R.L. de C.V., for the property located in Tijuana, Mexico (filed herewith as Exhibit 10Y to the Company's Form 10-K No.1-14041 forthe year ended March 30, 2013).10ZSublease Contract to Lease Agreement effective December 3, 2007, made as of February 23, 2012 between Haemonetics MexicoManufacturing, S. de R.L. de C.V. as successor in interest to Pall Mexico Manufacturing S. de R.L. de C.V. and Ensatec, S.A. de C.V., forthe property located in Tijuana, Mexico (filed herewith as Exhibit 10Z to the Company's Form 10-K No.1-14041 for the year ended March 30, 2013).10AA Lease dated August 20, 2009 between Price Logistics Center Draper One, LLC and the Company for property located in Draper, Utah. (filedherewith as Exhibit 10AA to the Company's Form 10-K No. 1-14041 for the year ended March 30, 2013).86Table of Contents10AB*† Haemonetics Corporation 2000 Long-term Incentive Plan (filed as Exhibit 10A to the Company's Form 10-Q No. 1-10730 for the quarter endedDecember 30, 2000 and incorporated herein by reference).10AC*† Form of Option Agreement for Non-Qualified stock options for the 2000 Long Term-Incentive Plan for Employees (filed as Exhibit 10AJ to theCompany's Form 10-K No. 1-10730 for the year ended March 29, 2003 and incorporated herein by reference).10AD*† Form of Option Agreements for Non-Qualified stock options for the 2000 Long- Term Incentive Plan for Non-Employee Directors (filed asExhibit 10AK to the Company's Form 10-K No. 1-10730 for the year ended March 29, 2003).10AE† Pro Forma 2005 Long Term Incentive Compensation Plan, reflecting amendments dated July 31, 2008, July 29, 2009, July 21, 2011 andNovember 30, 2012 (filed herewith).10AF*† Form of Option Agreement for Non-Qualified stock options for the 2005 Long Term-Incentive Compensation Plan for Non-employee Directors(filed as Exhibit 10.1 to the Company's Form 10-Q No. 1-10730 for the quarter ended October 1, 2005).10AG* Form of Option Agreement for Non-Qualified stock options for the 2005 Long Term Incentive Compensation Plan for Employees.10AH*† Form of Option Agreement for Non-Qualified stock options for the 2005 Long Term-Incentive Compensation Plan for the Chief ExecutiveOfficer (filed as Exhibit 10.3 to the Company's Form 10-Q No. 1-10730 for the quarter ended October 1, 2005).10AI* Form of Restricted Stock Agreement with Employees under 2005 Long Term Incentive Compensation Plan.10AJ*† Form of Amended and Restated Change in Control Agreement made effective on April 2, 2009 between the Company and Brian Concannon(filed as Exhibit 10Y to the Company's Form 10-Q No. 1-10730 for the quarter ended June 27, 2009).10AK† Form of Amended and Restated Change in Control Agreement (filed herewith).10AL*† 2007 Employee Stock Purchase Plan (filed as Exhibit 10AS to the Company's Form 10-K No. 1-14041 for the year ended March 29, 2008and incorporated herein by reference).10AM† Non-Qualified Deferred Compensation Plan made effective on July 27, 2012 (filed herewith).10AN* Asset Purchase Agreement, dated as of April 28, 2012, by and between Haemonetics Corporation and Pall Corporation (filed as Exhibit 10Zto the Company's Form 10-K No. 1-14041 for the fiscal year ended March 31, 2012).21.1 Subsidiaries of the Company.23.1 Consent of the Independent Registered Public Accounting Firm.31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002, of Brian Concannon, President and Chief Executive Officer of theCompany.31.2 Certification pursuant to Section 302 of Sarbanes-Oxley of 2002, of Christopher Lindop, Executive Vice President and Chief FinancialOfficer of the Company.32.1 Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, ofBrian Concannon, President and Chief Executive Officer of the Company32.2 Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, ofChristopher Lindop, Chief Financial Officer and Executive Vice President Business Development of the Company101ˆ The following materials from Haemonetics Corporation on Form 10-K for the year ended March 30, 2013, formatted in Extensive BusinessReporting Language (XBRL): (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income (iii) ConsolidatedBalance Sheets, (iv) Consolidated Statement of Stockholders' Equity and Other Comprehensive Income, (v) Consolidated Statements of CashFlows, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text._______________________________________*Incorporated by reference†Agreement, plan, or arrangement related to the compensation of officers or directorsˆIn accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Form 10-K is deemed not filed or part of aregistration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of section 18 of theExchange Act, and otherwise is not subject to liability under these sections.87Table of ContentsSCHEDULE IIHAEMONETICS CORPORATIONVALUATION AND QUALIFYING ACCOUNTS(In thousands)Balance atBeginning ofFiscal Year Charged toCosts andExpenses Write-Offs(Net of Recoveries) Balance at Endof Fiscal YearFor Year Ended March 30, 2013 Allowance for Doubtful Accounts$1,480 $446 $(199) $1,727For Year Ended March 31, 2012 Allowance for Doubtful Accounts$1,799 $(39) $(280) $1,480For Year Ended April 2, 2011 Allowance for Doubtful Accounts$2,554 $343 $(1,098) $1,79988LEASEPRICE LOGISTICS CENTER DRAPER ONE, LLCDRAPER CITY, UTAHTABLE OF CONTENTSSUBJECTARTICLEFUNDAMENTAL LEASE PROVISIONSARTICLE 1PREMISESARTICLE 2PURPOSEARTICLE 3TERMARTICLE 4POSSESSIONARTICLE 5RENTARTICLE 6USE OF PREMISESARTICLE 7ALTERATIONSARTICLE 8MAINTENANCE AND REPAIRSARTICLE 9RIGHTS RESERVED TO LANDLORDARTICLE 10ABANDONMENTARTICLE 11LIENSARTICLE 12ASSIGNMENT AND SUBLETTINGARTICLE 13PARKING AND ACCESS PROPERTYARTICLE 14INDEMNITY AND WAIVERARTICLE 15INSURANCEARTICLE 16UTILITIES; JANITORIAL SERVICEARTICLE 17PERSONAL PROPERTY TAXESARTICLE 18DEFAULTARTICLE 19 1DESTRUCTIONARTICLE 20EMINENT DOMAINARTICLE 21MORTGAGE REQUIREMENTSARTICLE 22RULES, REGULATIONS & RESTRICTIVE COVENANTSARTICLE 23HOLDING OVERARTICLE 24NOTICESARTICLE 25LANDLORD’S RIGHT TO CURE DEFAULTSARTICLE 26FORCE MAJEUREARTICLE 27SECURITY DEPOSITARTICLE 28QUIET ENJOYMENTARTICLE 29SIGNSARTICLE 30SURRENDER OF LEASEARTICLE 31ESTOPPEL CERTIFICATES AND FINANCINGARTICLE 32MISCELLANEOUSARTICLE 33LANDLORD’S ACCEPTANCEARTICLE 34LIMITATATION ON DAMAGESARTICLE 35WAIVER OF DISTRAINT AND LIENS; TENANT FINANCINGARTICLE 36GOVERNMENTAL INCENTIVESARTICLE 37PERMITTED CONTESTSARTICLE 38CONSENT OF LANDLORDARTICLE 39EXHIBITS: EXHIBIT “A” - SITE PLAN - LEASED PREMISES EXHIBIT “A-1” - SITE PLAN - OPTION TO PURCHASE EXHIBIT “A-2” - SITE PLAN -COMMON AREA EXHIBIT “B” – LANDLORD’S WORK AND TENANT’S WORK 2EHIBIT “B-1” - TENANT ALLOWANCEEXHIBIT “C”- RULES, REGULATIONS AND RESTRICTIVE COVENANTSEXHIBIT “D”- SIGN CRITERIAEXHIBIT “E”- CC&Rs3PRICE LOGISTICS CENTER DRAPER ONE, LLCLEASE AGREEMENTTHIS LEASE AGREEMENT made and entered into this 20th day of August, 2009, by and between PRICE LOGISTICS CENTER DRAPERONE, LLC, as Landlord, and HAEMONETICS CORPORATION, as Tenant.ARTICLE 1. FUNDAMENTAL LEASE PROVISIONS. Each reference in this Lease to the “Fundamental Lease Provisions” shall mean and refer to thefollowing terms:1.1 Landlord’s Notice Address:230 East South TempleSalt Lake City, Utah 84111 With a copy to:David J. CastletonBlackburn & Stoll, LC257 East 200 South, #800Salt Lake City, Utah 841111.2 Tenant’s Notice Address:Haemonetics Corporation400 Wood RoadBraintree, Massachusetts 02184-9114 USAAttention: General Counsel With a copy to:Haemonetics Corporation400 Wood RoadBraintree, Massachusetts 02184-9114 USAAttention: Mark Shafranich.1.3 Tenant’s Trade Name: HAEMONETICS CORPORATION.1.4 Lease Terms:A.Estimated Possession Date: Upon the Lease Commencement Date.B. Lease Commencement Date: The term of the Lease shall commence upon the full execution and delivery of the Lease Agreement.-4-C. Rent Commencement Date: The commencement date for the payment of Basic Rent (the “Rent Commencement Date”) shall be onehundred and twenty days after the Lease Commencement Date. The commencement date for all Net charges (Additional Rent), as referencedin Section 6.2, are payable as set forth in Section 6.5.D. Lease Term: One Hundred Twenty (120) months from the Rent Commencement Date.1.5Basic Rent:Lease MonthsRent/ Sq. Ft./MonthMonthly RentAnnual Rent1-12$0.3900$38,973.09$467,677.0813-24$0.3998$39,952.41$479,428.9625-36$0.4098$40,951.72$491,420.6437-48$0.4200$41,971.02$503,652.2449-60$0.4305$43,020.30$516,243.6061-72$0.4413$44,099.55$529,194.6073-84$0.4523$45,198.79$542,385.4885-96$0.4636$46,328.01$555,936.1297-108$0.4752$47,487.21$569,846.52109-120$0.4871$48,676.39$584,116.681.6Use: Manufacturing, receiving, shipping, distribution and storing of blood management products and uses incidental thereto (includingoffice uses), and for no other purpose, except as otherwise provided in this Lease.1.7Security Deposit:1.8Guarantors: None.ARTICLE 2. PREMISES.2.1 The Park. Landlord is the owner of a commercial business park situated in the City of Draper, Salt Lake County, State of Utah, known asLONE PEAK BUSINESS PARK (hereinafter the “Park”), which real property is shown on Exhibit “A” and attached hereto and by this referenceincorporated herein.2.2 The Premises.(a) Landlord hereby leases to Tenant and Tenant hereby leases from Landlord-5-that certain Building commonly referred to as Logistics Center Draper One − Warehouse Building, located at___________________, Draper, Utah,containing a total of approximately 99,931 +/- square feet of floor space (hereinafter the “Building”) and the underlying and surrounding land which consistsof approximately 5.55 +/- acres located in the Park (hereinafter referred to as the “Land”) as depicted on the site plan of the Building attached hereto as Exhibit“A-1.” The Building and the Land are hereinafter referred to as the “Premises.”(b) The northerly line of the Land as shown on Exhibit A-1 is slightly north of the northerly boundary line of the 5.45 acre tax parcel used forassessment and property description purposes. Therefore, in the event Tenant shall exercise any of its options to purchase the Premises, Landlord shall takesuch action as is necessary to lawfully adjust the lot line to be as shown on Exhibit “A-1”, so that all of the parking and other improvements exclusivelyserving the Building (and any required setback and similar areas) shall be located on the Land and the Land shall constitute a separate and distinct tax parcel,approved by Draper City and in compliance with the restrictions of record relating to the division (or subdivision) of the land. To insure that the purchase ofthe Premises is not delayed should Tenant exercise one of its options to purchase hereunder, Landlord agrees to begin the process to adjust the boundary lineupon the full execution and delivery of this Lease, and to use its best efforts to consummate the boundary line adjustment within six (6) months thereafter. Ifdespite its good faith efforts, Landlord is unable to complete the boundary line adjustment as described above within nine (9) months from the date of thisLease, and in any event prior to the conveyance by Landlord of either the Premises or the parcel from which the additional land will be conveyed for theboundary adjustment, Landlord will convey an easement for the portion of the Land not currently part of the existing tax parcel which easement will grant theexclusive use of that land for the parking and other improvements exclusively serving the Building.(c) Tenant shall access the Premises by means of a north south roadway and cul-de-sac to be constructed by Landlord in substantially the designset forth in Exhibits “A” and “B” (hereinafter referred to as the “Access Property”). Landlord represents and warrants that it (or an affiliate of Landlord) ownsall of the land necessary to construct the Access Property and will obtain all of the necessary permits and approval necessary to commence and complete theconstruction thereof in the time period set forth in Exhibit “B”. In addition, to the extent there are any easements, shared access agreements or similardocuments, instruments or agreements necessary or appropriate to fully provide for Tenant’s use of the Access Property as provided herein, Landlord shall, atits own cost, obtain and record same and provide Tenant with true and accurate copies thereof. Upon completion of the Access Property (and all documentationrelating thereto), Tenant shall have the unimpaired right to use the Access Property as the means of access and egress for all trucks and other vehicles to andfrom the Premises and parking areas serving same.(d) Tenant shall also be entitled to nonexclusive access for all street-legal trucks and other vehicles to and from the Premises and parking areasserving same by means of the driveway to the east of the Land, as depicted on the site plan of the Premises attached hereto as-6-Exhibit “A-2” (hereinafter referred to as the “Common Area’).(e) Tenant and Landlord acknowledge that all or substantially all of the roads and cul-de-sac making up the Access Property may be dedicated toDraper City and become public roads. In the event of and at the time of such occurrence, Landlord shall advise Tenant of same (providing copies of relevantdocumentation relating thereto) and the term “Access Property” shall automatically be amended to be the remaining portion of the original Access Property thatis not dedicated to Draper City.(f) Tenant and Landlord acknowledge that Covenants, Conditions and Restrictions in substantially the form set forth in Exhibit “E” (the“CC&Rs”) will be recorded against the Land prior to the sale of the Land by Landlord. Landlord agrees not to make any changes to the CC&Rs that willunreasonably modify Tenant’s rights under this Lease.2.3 Tenant’s Rights to Use in Common. Tenant shall have the nonexclusive right to use in common with other tenants and occupants of thePark so entitled for access, subject to reasonable rules of general applicability to tenants of the Park from time to time made by Landlord and of which Tenantis given notice, the Access Property and the Common Area. Tenant hereby agrees that Landlord shall have the right, for the purposes of accommodating theother tenants of the Park, to change the configuration and dimensions or to otherwise alter the Access Property and Common Area so long as Tenant’s accessto, vehicular traffic flow or maneuverability or use of the Premises is not unreasonably interfered with, altered or restricted thereby. The parking areas (andnumber of spaces) on the Premises shall not, except by takings by eminent domain, be reduced below the size (and number of spaces) shown on Exhibit “A”.Notwithstanding anything to the contrary contained in this Lease, the Premises shall at all times have commercially reasonable, adequate and direct access tothe Common Areas and, upon completion, the Access Property, and through them to the streets adjacent to the Park.2.4 No Warranty. Tenant agrees that neither Landlord nor any agent of Landlord has made any representation or warranty as to the suitabilityof the Premises for the conduct of Tenant’s business, nor has Landlord agreed to undertake any modification, alteration or improvement to the Premises or thePark, except as provided in this Lease. Tenant acknowledges and agrees that neither Landlord nor any agent of Landlord has made any representation orwarranty whatsoever or at all concerning (a) the safety of the Premises, the Building, the Access Property, the Common Area, the Park or of any part thereof,whether for the use of Tenant or any other person, including Tenant’s employees, agents, invitees, or customers, or (b) the existence or adequacy of anysecurity, fire alarm or sprinkler systems which may be installed or used by Landlord. Any diminution or shutting off of light or view by any structure erectedin the Park or on adjacent properties shall in no way affect this Lease or impose any liability on Landlord. All understandings and agreements heretofore madebetween the parties hereto are merged in this Lease.-7-ARTICLE 3. PURPOSE.3.1 Permitted Use. The Premises are to be used only for the use described in the Fundamental Lease Provisions or for any use allowed pursuantto the CC&Rs upon prior notice to Landlord.3.2 Restrictions. The parties agree that this Lease is subject to the effect of any covenants, conditions, restrictions, easements, mortgages or deedsof trust, ground leases, rights of way and any other matters or documents of record. Landlord represents that the terms of this Lease do not violate thecovenants, conditions, restrictions, easements and right-of-way of record. The Landlord will obtain approval of this Lease by the lender holding a securedinterest in the Premises. Tenant has obtained a letter from Draper City acknowledging that Tenant’s use of the Premises for the Use described in Section 1.6above complies with the Conditional Use Permit formerly granted and which runs with the Land. Landlord represents and acknowledges that said use is inconformance with the CC&Rs Tenant agrees that as to Tenant’s leasehold estate Tenant and all persons in possession or holding under Tenant, will conform toand will not violate the terms of any covenants, conditions or restrictions of record which now encumber the Park, or which may in the future encumber thePark provided they do not unreasonably restrain the use of the Premises by Tenant or unreasonably modify the rights of Tenant under this Lease (the“Restrictions”); and this Lease is subordinate to the Restrictions and any amendments or modifications thereto. The Premises is currently zoned by DraperCity as “CBP” for Commercial Business Park. Landlord represents Premises in its current “as-is” condition, is, to the best of Landlord’s knowledge, incompliance with all applicable codes, conditions and regulations governing occupancy of the Premises as contemplated by Tenant. Landlord further representsthat to the best of Landlord’s knowledge, the Building is in compliance with the ADA standards in effect at the time the building permit was issued, finalinspection was conducted and occupancy was granted.ARTICLE 4. TERM. The term of this Lease (herein referred to as the “term of this Lease” or “the term hereof”), shall begin as of the date hereof, and,unless sooner terminated as provided in this Lease, shall continue until one hundred twenty (120) months from the Rent Commencement Date, as defined inthe Fundamental Lease Provisions. The estimated possession date is set forth in the Fundamental Lease Provisions (the “Estimated Possession Date”).ARTICLE 5. POSSESSION. Landlord agrees to deliver to the Tenant and Tenant agrees to accept from Landlord, possession of the Premises forthwithon the Lease Commencement Date in the condition required hereunder. If Landlord, for any reason whatsoever, cannot deliver possession of the Premises toTenant on or prior to the Estimated Possession Date, this Lease shall not be void or voidable (except as may be expressly provided herein or in any exhibitshereto), nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom.-8-ARTICLE 6. RENT.6.1 Basic Rent.(a) Tenant shall pay to Landlord, as rent for the Premises beginning on the Rent Commencement Date and continuing throughout the termof this Lease, the Basic Annual Rent (sometimes referred to as “Basic Rent”) set forth in the Fundamental Lease Provisions hereof. The Basic Rent shall bepayable monthly in advance on or before the first day of each calendar month during the term hereof. Basic Rent for any partial month shall be prorated on aper diem basis based on a 365-day year.(b) Landlord and Tenant stipulate and agree for all purposes under this Lease that the floor area of the Premises is 99,931 +/- square feet,notwithstanding any different measurement thereof that may be made hereafter by or on behalf of either party.6.2 Net Lease; Additional Rent. It is the intent of both parties that the Basic Rent shall be absolutely net to Landlord throughout the term of thisLease, that all costs, expenses, and obligations of every kind relating to the Premises which may arise or become due during the term hereof shall be paid byTenant, except for those which are specifically imposed upon Landlord pursuant to the terms of this Lease or at law, except as otherwise expressly provided inthis Lease. In furtherance thereof, Tenant specifically agrees to pay to Landlord as additional rent, without demand therefor and without offset or deduction,except as expressly provided in this Lease, the expenses and charges set forth below (hereinafter referred to as the “Operating Costs”):(a) Except as otherwise expressly provided in this Lease, Tenant shall pay to Landlord for any period occurring during the term of thisLease the total reasonable and actual cost and expense reasonably incurred by Landlord in connection with the ownership, maintenance, repair, replacementand operation of the Premises, and Tenant’s pro rata share of the costs and expenses relating to the Common Area and Access Property, specifically including,without limitation, the costs and expenses for: utilities for lighting and cleaning the exterior of the Premises, the Common Area and the Access Property;watering vegetation; real property taxes and assessments on the Premises, Common Area and Access Property; greenbelt roll-back taxes for the portion of theLand currently under greenbelt status; commercially reasonable premiums for Landlord’s insurance covering the Premises, Common Area and AccessProperty, including fire and extended coverage on the Building, all risk public liability and property damage, rental abatement insurance, earthquakeinsurance and such other commercially reasonable insurance as may otherwise be required by the first mortgagee of the Premises or by the Landlord in theexercise of its commercially reasonable discretion; maintenance, repair and replacement (including capital charges as and to the extent provided in this Lease)of pavement, sidewalks, fences, curbs and bumpers, and all exterior directional signs; general maintenance and repair of walls and roofs; such as paintingand drain cleaning, as opposed to capital repairs or replacements of these items which are not to be included in Operating Costs: gardening and themaintenance and replacement of landscaping and-9-irrigation systems; striping and line painting; sweeping; sanitary and flood control; removal of snow, ice, trash, rubbish, garbage, and other refuse fromexterior; cleaning, repair and replacement of exterior lighting fixtures including bulbs and ballasts; rentals for, machinery and equipment used in suchmaintenance; management fee (not to exceed two and one-half percent (2 ½%) of Basic Rent and Operating Costs); the cost of supplies and personnel (andsalaries, uniforms, workmen’s compensation insurance, group insurance, fidelity bonds and other fringe benefits) directly related on a full time basis toimplement such service (or otherwise prorated to reflect the level of service directed thereto); repair of all utility lines; all cost required by a governmental entityfor energy conservation, life safety or other purposes or made by Landlord to reduce operating expenses; and, fees required for licenses, permits or otherrequirements relating to the operation of parking areas. Any of the services which may be included in the computation of the Operating Costs may beperformed by subsidiaries or affiliates of Landlord, provided that the contracts for the performance of such services shall be competitive with similarcontracts and transactions with unaffiliated entities for the performance of such services in comparable projects in Salt Lake County. Landlord agrees thatLandlord will not collect or be entitled to collect Operating Costs from all of the tenants of the Park in an amount which is in excess of one hundred percent(100%) of the costs actually incurred by Landlord in connection with the operation of the Park.(b) Tenant shall pay to Landlord the commercially reasonable premium cost of Landlord’s property damage insurance described inSection 16.2 below for any period occurring during the term of this Lease, as and to the extent provided in this Lease.(c) Tenant shall pay to Landlord all Real Estate Taxes (as defined below) levied against the Premises, and Tenant’s full and prorata shareof the of the Real Estate Taxes relating to the Common Area and Access Property for any period occurring during the term of this Lease, as and to the extentprovided in this Lease.(d) “Real Estate Taxes” or “Taxes” shall mean and include all general and special taxes, assessments, duties and levies, charged andlevied upon or assessed by any governmental authority against the Premises, Common Area and Access Property, including the Land, the Building, any otherimprovements situated on the Land other than the building, any leasehold improvements, fixtures, installations additions and equipment whether owned byLandlord or Tenant. Real Estate Taxes shall also include the reasonable cost to Landlord contesting the amount, validity, or the applicability of any Taxesmentioned in this Article. Further included in the definition of Taxes herein shall be general and special assessments, fees of every kind and nature,commercial rental tax, levy, penalty or tax (other than franchise, transfer, income or profit tax, gift, succession, inheritance or estate taxes) imposed by anyauthority having the direct or indirect power to tax, as against any legal or equitable interest of Landlord in the Premises, Common Area or the Access Propertyor on the act of entering into this Lease or as against Landlord’s right to rent or other income therefrom, or as against Landlord’s business of leasing thePremises, any tax, fee, or charge with respect to the possession, leasing, transfer of interest, operation, management, maintenance alteration, repair, use, oroccupancy by Tenant of the-10-Premises, Common Area or the Access Property, or any tax imposed in substitution, partially or totally, for any tax previously included within the definitionof Taxes herein, or any additional tax, the nature of which may or may not have been previously included within the definition of Taxes. Further, if at anytime during the term of this Lease the method of taxation or assessment of real estate or the income therefrom prevailing at the time of execution hereof shall be,or has been altered so as to cause the whole or any part of the Taxes now or hereafter levied, assessed or imposed on real estate to be levied, assessed orimposed upon Landlord, wholly or partially, as a capital levy, business tax, permit or other charge, or on or measured by the rents received therefrom, thensuch new or altered Taxes, regardless of their nature, which are attributable to the land, the buildings or to other improvements within the Park, shall bedeemed to be included within the term “Real Estate Taxes” for purposes of this Article, whether in substitution for, or in addition to any other Real EstateTaxes, save and except that such shall not be deemed to include any enhancement of said tax attributable to other income of Landlord. With respect to anygeneral or special assessments which may be levied upon or against the Premises, the Common Area, the Access Property, the underlying realty or which maybe evidenced by improvement or other bonds, or may be paid in annual or semi-annual installments, only the amount of such installment, pro rated for anypartial year, and statutory interest, shall be included within the computation of Taxes for which Tenant is responsible hereunder. When possible, Tenant shallcause its trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Landlord. If anyof Tenant’s said personal property shall be assessed with Landlord’s real property, Tenant shall pay to Landlord the Taxes attributable to Tenant within thirty(30) days after receipt of a written statement setting forth the Taxes applicable to Tenant’s property. Notwithstanding anything to the contrary contained in thisLease, if any Real Estate Tax (including, without limitation, betterments and special assessments) imposed on the Premises, Common Areas or the AccessProperty may be paid in installments, Tenant’s liability to pay all or any share of such Real Estate Taxes under this Section 6.2 shall be determined on theassumption that Landlord has elected to pay that Tax in equal installments over the longest time permitted (regardless of whether Landlord has in fact madesuch an election), and only those installments (or partial installments) attributable to installment periods (or partial periods) falling within the term of thisLease shall be taken into account in determining Tenant’s obligations under this Lease. In the event Landlord elects to accelerate the payments to the taxingauthority but allocates the payments to Tenant under the installment method hereunder, the Tenant shall not be entitled to the benefit of any discount receivedby Landlord for such early payment.(e) Landlord and Tenant acknowledge that initially the Common Area and/or the Access Property may be used by Tenant and no othertenants in the Park. In the event other tenants or occupants of the Park use or begin use of the Common Area and/or the Access Property, the costs and expensesherein described which are incurred with respect to the Common Area or Access Property, as the case may be, shall be prorated on an equitable basisreasonably determined by Landlord. Furthermore, any cost or expenses that may be incurred on a Park-wide basis, such as liability insurance, and taxes andassessments (if separate tax bills are not available), shall be equitably prorated among the various users.-11-(f) The Operating Costs shall be reasonably estimated by Landlord for each twelve (12) month period, as Landlord may reasonablydetermine and shall, where possible, be based upon previous costs and expenses increased by a commercially reasonable inflation factor and anticipatedforthcoming extraordinary expenditures relating to Operating Costs allowed to be charged to Tenant hereunder, all of which shall be provided to Tenant withreasonable specificity with Landlord’s initial billing therefor. Tenant shall pay in equal installments in advance on the first day of each calendar month one-twelfth (1/12th) of the Operating Costs for such period and any adjustments to be made as a result of any difference between the amount paid by Tenant andthe actual Operating Costs. In the case of a deficiency, Tenant shall remit the amount of such deficiency to Landlord within thirty (30) days of invoice therefor.In the case of a surplus, Landlord shall apply such surplus to the Operating Cost payments next falling due from Tenant hereunder.(g) Notwithstanding anything to the contrary contained in this Lease, in no event shall “Operating Costs” include any costs or expensesrelating to the following:1) leasing commissions, fees and costs, advertising and promotional expenses and other costs incurred in procuring tenants orin selling, syndication or financing the Building or the Park (or any portion thereof);2) legal fees or other expenses incurred in connection with enforcing or negotiating leases or resolving disputes with tenants inthe Building or the Park;3) costs or expenses incurred by Landlord to construct, prepare, renovate, improve, fixture, repaint, redecorate or perform anyother work in any premises leased to an existing tenant or occupant or prospective tenant or occupant of the Building or in the Park, including Tenant, orrelocating any tenant or occupant;4) expenses for the replacement of any item actually covered by and to the extent of an enforceable warranty;5) interest, principal, points and fees, amortization or other costs associated with any debt and rent payable under any lease towhich this Lease is subject and all costs and expenses associated with any such debt or lease and any ground lease rent, irrespective of whether this Lease issubject or subordinate thereto6) any liabilities, costs or expenses associated with or incurred in connection with the removal, enclosure, encapsulation orother handling of Hazardous Materials (as defined in Section 7.3 below) and the cost of defending against claims in regard to the existence or release ofHazardous Materials at the Building or the Park (except with respect to those costs for which Tenant is otherwise responsible pursuant to the express terms ofthis-12-Lease);7) costs or expenses (excluding commercially reasonable deductibles as provided in this Lease) incurred by or on behalf ofLandlord for repairs or other work occasioned by fire, windstorm, or other insurable casualty or condemnation;8) increased insurance or Real Estate Taxes assessed specifically to any tenant of the Building or the Park for which Landlordis or should be entitled to reimbursement from any other tenant;9) charges for electricity, water, or other utilities, services or goods and applicable taxes for which Tenant or any other tenant,occupant, person or other party is obligated to reimburse Landlord or to pay to third parties;10) costs of any HVAC, janitorial or other services provided to tenants on an extra cost basis after regular business hours;11) costs of any work or service performed on an extra cost basis for any tenant in the Building or the Park to a materiallygreater extent or in a materially more favorable manner than furnished generally to the tenants and other occupants;12) costs of any work or services performed for any facility other than the Building or Park;13) fees or costs paid to a person, firm, corporation or other entity related to or affiliated with Landlord to the extent that suchfees exceed the customary range of such fees typically charged for the service;14) costs of initial cleaning and rubbish removal from the Building or the Park to be performed before final completion of theBuilding or tenant space;15) costs of initial construction or landscaping of any elements of the Building or the Park;16) any capital repairs, improvements or replacements made to the Park or the Premises, by or on behalf of Landlord, exceptfor the amortized portion of the cost of those capital items, properly attributable to the operating year in question, based on generally accepted accountingprinciples, consistently applied (GAAP), which, in Landlord’s reasonable belief, (a) with respect to capital improvements, are anticipated to result in areduction in (or minimize increases in) Operating Costs, (b) that are required under any governmental law or regulation enacted after or coming intoapplicability after the date of this Lease, or (c) are necessary to enhance Building or Park systems, life safety or improve security measures at the-13-Park;17) lease payments for rental equipment (other than equipment for which depreciation is properly charged as an expense) thatwould constitute a capital expenditure if the equipment were purchased;18) late fees or charges incurred by Landlord due to late payment of expenses;19) real estate taxes or taxes on Landlord’s business (such as income, excess profits, franchise, capital stock, estate,inheritance, etc.);20) direct costs or allocable costs (such as real estate taxes) associated with parking operations if there is a separate charge toTenant, other than tenants or the public for parking;21) charitable or political contributions or artwork;22) all other items for which another party compensates or pays so that Landlord shall not recover any item of cost more thanonce;23) any cost associated with operating as an in or out-of-Park management office for the Building, except to the extent includedin the management fee permitted hereby;24) Landlord’s general overhead, administrative expenses, fees or costs relating to maintaining the existence of the Landlordentity (or related entities, such as, without limitation, annual filing fees) and any other expenses not directly attributable to the operation and management of theBuilding and the Park (e.g. the activities of Landlord’s officers and executives or professional development expenditures), except to the extent included in themanagement fee permitted hereby;25) salaries of (i) employees above the grade of General Manager (and/or such other title(s) performing property managementfunctions), and (ii) employees whose time is not spent directly in the operation of the Park;26) costs of mitigation or impact fees or subsidies (however characterized), imposed or incurred prior to the date of the Lease orimposed or incurred solely as a result of another tenant’s or tenants’ use of the Park or their respective premises;27) costs related to public transportation, transit or vanpools;-14-28) any property management fee for the Building in excess of two and ½ percent (2.5%) of the gross Basic Rent and OperatingCosts of the Building (exclusive of capital expenditures, mark-ups, separate reimbursements by tenants security deposits and interest thereon, etc.) applicableto the Building for the relevant calendar year;29) costs or expenses relating to the Structural Elements as defined in Section 9.2(a) below;30) fees and costs of repair necessitated by Landlord’s gross negligence or willful misconduct; or31) cost to correct any penalty or fine incurred by Landlord due to Landlord’s violation of any federal, state or local law orregulation, or any Restriction.(h) Landlord's books and records pertaining to the calculation of Operating Costs for any calendar year within the term of this Lease maybe audited by an authorized representative of Tenant at Tenant's expense, at any time within six (6) months after the end of each such calendar year; providedthat Tenant shall give Landlord not less than fifteen (15) days’ prior written notice of any such audit. For purposes hereof, an authorized representative ofTenant shall mean a bona fide employee of Tenant, a reputable accounting firm, or any other party reasonably approved in writing by Landlord. Prior to thecommencement of such audit, Tenant shall cause its authorized representative to agree in writing for the benefit of Landlord that such representative will keepthe results of the audit confidential and that such representative will not disclose or divulge the results of such audit except to Tenant and Landlord and exceptin connection with any dispute between Landlord and Tenant relating to Operating Expenses. Such audit shall be conducted during reasonable business hoursat Landlord's office where Landlord's books and records are maintained. If the amount paid by Tenant is determined to be incorrect, Tenant shall cause awritten audit report to be prepared by its authorized representative following any such audit and shall provide Landlord with a copy of such report promptlyafter receipt thereof by Tenant. If Landlord's calculation of Tenant’s pro rata share of Operating Expenses for the audited calendar year was incorrect, thenTenant shall be entitled to a prompt refund of any overpayment or Tenant shall promptly pay to Landlord the amount of any underpayment, as the case maybe. Tenant shall not be liable for any Operating Costs not reported to it by Landlord within one (1) year after the end of the operating year in which suchOperating Costs were incurred.6.3 Taxes on Rent. Tenant shall pay and be liable for all rental, sales and use taxes or other similar taxes, if any, levied or imposed on Rent or anypart thereof by any city, county, state or other governmental body having authority.6.4 Payment; Late Charges. Except as otherwise specifically provided herein, any-15-sum, amount, item or charge designated or considered as additional rent in this Lease or any other sum, amount, item or charge payable by Tenant toLandlord pursuant to this Lease (all of which sums together with Basic Rent are sometimes referred to in this Lease as “Rent”) shall be paid to Landlordwithout deduction or offset, in lawful money of the United States of America and shall be paid at the office of Landlord, or to such other place as Landlordmay from time to time designate by written notice to Tenant. Any installment of Rent, other sums or any portion of such installment or other sums requiredunder this Lease to be paid by Tenant which has not been paid within five (5) business days after Landlord’s written notice to Tenant of Tenant’s failure topay same when due, then Tenant shall pay to Landlord a late charge equal to the lesser of (a) the maximum rate permitted by applicable law or (b) the greater of$250.00 or 3 cents per each dollar overdue. Acceptance of the late charge will not constitute a waiver of Tenant’s default relating to such nonpayment by Tenantnor will it prevent Landlord from exercising all other rights and remedies available to landlord under this Lease or at law. In addition, all past due sums willbear interest at the Default Rate; provided Tenant shall have no obligation to pay interest at the Default Rate as provided in this Section 6.4 unless Tenant failsto pay any such overdue amounts within five (5) business days of written notice from Landlord to Tenant notifying Tenant of its failure to pay any suchsum. The “Default Rate” means the rate of 4 percentage points over the Prime Rate. “Prime Rate” means the Prime Rate of interest published in the “MoneyRates” column of The Wall Street Journal on the first business day of each month, or a reasonably comparable substitute identified by Landlord. If any checktendered by Tenant to Landlord is not honored on initial presentation, Tenant shall pay Landlord the greater of $50.00 or the amount Landlord’s bank chargesLandlord for processing such returned check, and thereafter Landlord shall have the right to require Tenant to make subsequent rent payments in cash,money order or cashier’s check.6.5 Commencement Date for Additional Rent. Tenant’s obligation to pay the Additional Rent shall begin on the Rent Commencement Date,with the exception of (a) all utilities used on the Premises which shall be payable by Tenant beginning on the Lease Commencement Date, and (b) the greenbeltroll-back taxes which shall be payable by Tenant within 30 days of assessment.ARTICLE 7. USE OF PREMISES.7.1 Prohibited Uses. Tenant shall not do or permit anything to be done in or about the Premises, nor bring or keep anything therein which will inany way increase the existing rate or affect any policy of fire or other insurance upon the Premises or any of its contents. Tenant shall not do or permitanything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other lessees or occupants of the Park, injure orannoy them or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permitany nuisance in, on or about the Premises. Notwithstanding any provision herein to the contrary, Tenant shall not bring into the Premises any heavyequipment or articles which would exceed the load bearing capacity of the floor of the Premises; provided-16-Landlord acknowledges that Tenant shall have the right, in accordance with Article 8 below, to remove and replace, or reinforce, as the case may be, a portionor portions of the floor and slab in order to install Tenant’s manufacturing equipment and fixtures. Without limiting the generality of the foregoing, Tenantshall not overload the floors or damage or deface or otherwise commit or suffer to be committed any waste, abuse, deterioration or destructive use in or uponthe Premises. Tenant shall hot place any sign or advertisement (excluding reasonable identification signage in accordance with Section 30 below) upon anyexterior wall, door or window without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.7.2 Compliance With Law. Tenant shall not use the Premises or permit anything to be done in or about the Premises which will in any wayconflict with any law, statute, ordinance or government rule or regulation now in force or which may hereafter be enacted or promulgated. Tenant shall at itssole cost and expense promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which mayhereafter be in force and with the requirements of any board of fire underwriters or other similar body now or hereafter constituted related to or affecting thecondition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant’s improvements or acts which shall be effectedby Landlord at its sole cost and expense. The final judgment of any court of competent jurisdiction or the admission of Tenant in an action against Tenant,whether Landlord is a party thereto or not, that Tenant has violated any such law, statute, ordinance or governmental rule, regulation or requirement, shall beconclusive of that fact as between Landlord and Tenant. Subject to all of the terms and conditions of this Lease, including, without limitation, Sections 3.2,9.2 and Exhibit B, Tenant hereby accepts the Premises in the condition existing as the date of occupancy, subject to all applicable zoning, municipal, countyand state laws, ordinances, rules, regulations, orders, restrictions of record, and requirements in effect during the term or any part of the term hereof regulatingthe Premises.7.3 Hazardous Materials.(a) For purposes hereof, “Hazardous Materials” shall mean any and all flammable explosives, radioactive material, hazardous waste,toxic substance or related material, including but not limited to, those materials and substances defined as “hazardous substances,” “hazardous materials,”“hazardous wastes” or “toxic substances” in the Environmental Laws. For purposes hereof, “Environmental Laws” shall mean all local, state and federallaws, statues, rules and regulations relating to industrial hygiene, environmental protection, or the use analysis, generation, manufacture, storage, disposal, ortransportation of any Hazardous Material, including but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of1980, 42 U.S.C. Section 9601 et seq.; the Hazardous Materials Transportation Act, 39 U.S.C. Section 1801, et seq.; the Solid Waste Disposal Act, asamended by the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; the Federal Clean Water Act 33 U.S.C. Section 1251 et seq.; theClean Air Act 42 U.S.C. Section 7401 et seq.; including all amendments thereto,-17-replacements thereof, and regulations adopted and publications promulgated pursuant thereto.(b) Tenant agrees that during the term of this Lease Tenant shall not be in violation of any federal, state or local law, ordinance orregulation relating to industrial hygiene, soil, water, or environmental conditions on, under or about the Premises or the Park including, but not limited to, theEnvironmental Laws, relating to or arising from Tenant’s use or occupancy of the Premises or the Park. Tenant further agrees that during the term of thisLease, there shall be no use, presence, disposal, storage, generation, release, or threatened release of Hazardous Materials on, from or under the Premises or thePark in violation of Environmental Laws by Tenant or any party for which Tenant is responsible. Tenant further covenants that it will immediately notifyLandlord of any environmental concern raised to it by a private party or governmental agency as it relates to the Premises or Tenant’s use of the Park; andimmediately notify Landlord of any hazardous waste spill of which Tenant becomes aware. In the event of a violation hereof relating to Tenant’s obligationshereunder, Tenant shall immediately proceed, at Tenant’s expense, to remedy same in accordance with all Environmental Laws. Failure of Tenant to commenceclean up activities within ten (10) business days after receipt of notice to so do shall result in a default under this Lease. Landlord shall, thereafter, have theright, but not the obligation, upon the applicable notice and opportunity to cure, to remedy any environmental violation upon the Premises or anyenvironmental violation upon the Park, in either case caused by Tenant or any party for which Tenant is responsible, and Tenant shall promptly reimburseLandlord for all costs relating thereto. Landlord further retains the right, in its sole, but reasonable discretion, to conduct any environmental tests shouldLandlord suspect a violation hereunder to exist, subject to the terms and conditions of this Lease.(c) Tenant agrees to indemnify, defend, protect and hold harmless Landlord, its directors, officers, employees, partners, and agents fromand against any and all losses, claims, demands actions, damages, penalties, liabilities, costs and expenses, including all attorney’s fees and legal expenses,arising out of any violation or alleged violation by Tenant of any of the laws or regulations referred to in this Article, or breach by Tenant (or any party takingby or through Tenant) of any of the provisions of this Article. Tenant’s obligations under this Article shall survive the expiration or earlier termination of theterm of this Lease.(d) Tenant acknowledges that Landlord purchased the Premises in 2007. Landlord represents that to the best of Landlord’s knowledge, asof the Lease Commencement Date the Premises are not in violation, nor have they been in violation of any applicable federal, state or local law, ordinance orregulation relating to the environmental conditions, on, under or about the Premises, except as otherwise provided in the environmental report provided byLandlord to Tenant. If, at any time during the terms of this Lease, the Premises or the Park is found to be contaminated as a result of Hazardous Materialsexisting on the Premises or the Park prior to the date of this Lease, or as a result of any acts or omissions of Landlord or any other party, other than Tenant orany party for whom Tenant is responsible, Landlord agrees to remedy same in accordance with all Environmental Laws (or pursue action against theapplicable responsible party(ies) for such-18-remediation). In the event: (i) Tenant’s business operations at the Premises or in the Park shall be significantly and adversely affected as a result of thepresence of any Hazardous Materials in, on or under the Premises or the Park which are pre-existing, or present as a result of any acts or omission of Landlordor any other party, other than Tenant or any party for whom Tenant is responsible; or (ii) Tenant’s business operations at the Premises or any portion thereofshall be significantly and adversely affected by any governmental authority as a result of the presence therein of any Hazardous Materials in, on or under thePremises or the Park which are pre-existing or present as a result of any acts or omissions of Landlord or any other party, other than Tenant or any party forwhom Tenant is responsible; or (iii) Tenant’s business operations shall be significantly and adversely affected at the Premises or vehicular access shall besignificantly and adversely affected to and from the Premises as a result of any work of removal, repair, restoration or other construction work performed inconnection with the removal of any such Hazardous Materials which are pre-existing or present as a result of any acts or omissions of Landlord or any otherparty, other than Tenant or any party for whom Tenant is responsible, or any combination thereof, then and in any such event, the Basic Rent, AdditionalRent and other charges payable under this Lease shall be proportionately abated during such time as any such interference or prohibition remains in effect. Inthe event only a portion of the Premises is not operational as a result of the restoration work, the abatement shall reflect only a pro rata share of the Basic Rent,Additional Rent and other charges. If such interference or prohibition shall continue in effect for a period of six (6) months, Tenant shall have the right toterminate this Lease by written notice sent to Landlord at any time after the expiration of such six (6) month period, but before the interference or prohibition isended. Landlord shall promptly initiate and diligently prosecute to completion any action which may be necessary to abate the condition(s) which gave rise tothe interference or prohibition.ARTICLE 8. ALTERATIONS.8.1 Consent. Tenant shall not make or permit to be made any alterations, additions or improvements to or of the Premises or any part thereofwithout the written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Tenant, atits own cost and expense and without Landlord’s prior consent, may from time to time erect, replace, remove and relocate such racking systems, shelves, bins(in which event Tenant shall have the right to relocate and/or install additional ceiling hung light fixtures), shelves, bins, material handling equipment,manufacturing equipment and machinery, battery charging systems, emergency generator or UPS, security apparatus to secure Tenant’s parking area(s),clean room equipment and appurtenances, communication equipment and data and communication lines, warehouse identification inventory signage,identification signage at each loading door, and such other machinery, furnishings, equipment and trade fixtures used in the ordinary course of its businessprovided that such items do not materially and adversely alter the basic character of the Premises, do not overload or damage the Premises, and may beremoved without material injury to the Premises, and the construction, erection, and installation thereof complies with all applicable laws. Landlordacknowledges and agrees that Tenant’s use of the Premises may involve the installation and operation of a clean room (or rooms) and ancillary-19-equipment relating thereto and removing and replacing, or reinforcing, as the case may be, a portion or portions the floor and slab in order to install Tenant’smanufacturing equipment and fixtures. Tenant acknowledges that Landlord shall have no responsibility for the repair or replacement of any of Tenant’sspecialized improvements, including those improvements made to the slab, walls or structure of the Building.8.2 Plans. If required in order to obtain the necessary permits and approvals, Tenant shall submit working drawings, prepared or stamped by anarchitect licensed in the state in which the Park is located, for any such alterations, additions or improvements, to Landlord for Landlord’s prior writtenapproval and in accordance with Exhibit “B” attached hereto.8.3 Performance. In the event Landlord consents to the making of any alterations, additions or improvements to the Premises by Tenant, the sameshall be made by Tenant at Tenant’s sole cost and expense and selection by Tenant of any contractor or person to construct or install the same shall be subjectto the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Such work shall be performed in agood and workmanlike manner, in accordance with the terms set forth in Exhibit “B,” and Tenant shall diligently prosecute such construction to completion.Tenant shall have the work performed in such a manner so as not to (a) materially obstruct the access of any other tenant in the Park, (b) interfere with therights of quiet enjoyment of the premises of the other tenants in the park, or (c) damage any portion of the Building, Park, Common Area or Access Property.8.4 Liens Not Permitted. Tenant shall keep the Premises, Common Area, Access Property and the Park free from any liens arising out of anywork performed by, materials furnished to or obligations incurred by Tenant. In the event a mechanic’s or other lien is filed against the Premises, CommonArea, Access Property or the Park as a result of a claim arising through Tenant, Landlord may demand that Tenant furnish to Landlord a surety bondsatisfactory to Landlord in an amount equal to at least one hundred fifty percent (150%) of the amount of the contested lien, claim or demand, indemnifyingLandlord against liability for the same and holding the Premises free from the effect of such lien notice from Landlord. If Tenant fails to so bond or otherwiseobtain a discharge of release of any such lien, Landlord may, upon applicable notice and cure period, pay the claim prior to the enforcement thereof, in whichevent Tenant shall reimburse Landlord in full, including reasonable attorney’s fees, for any such expense, as additional rent, within thirty (30) days of invoicetherefor.8.5 Action Upon Expiration. Tenant shall deliver the Premises to Landlord at the expiration or earlier termination of this Lease in the condition ofthe Premises following any demolition of the office space existing on the date of this Lease and prior to any Tenant specialized improvements upon the dateTenant received possession from the Landlord reasonable wear and tear and damage by casualty and taking excepted, provided, however, Tenant shall not berequired to remove or restore any office improvements constructed by or on behalf of Tenant in the Premises or any improvements to the power or fibersupplied to the building, but Tenant will be required to-20-make safe and patch and repair work to all access points, and provided further that Landlord shall advise Tenant at the time of Landlord’s consent theretowhether Tenant’s specialized improvements will need to be removed at or prior to the expiration or earlier termination of this Lease. The Tenant shall alsodeliver the Premises in good and sanitary order, condition and repair, free of rubble and debris, and shall repair all damage to the floors of the Premises arisingout of Tenant’s use or exiting and vacating the Premises, reasonable wear and tear, damage by casualty and condemnation excepted. Landlord may, not morethan sixty (60) business days prior to the expiration of this Lease, assemble a detailed punch list (the “Punch List”) setting forth Landlord’s expectation of the“scope of work” for the Premises, or any part thereof, to restore the Premises to its required condition hereunder, and shall promptly provide a copy of same toTenant. Tenant further agrees to participate with Landlord in a final inspection of the Premises within five (5) business days after Tenant has vacated thePremises, at which time the Punch List shall be updated, reviewed and confirmed. Landlord and Tenant shall work in good faith to resolve any disagreementon any of the Punch List items. Tenant shall, prior to the termination or expiration of the Lease, complete the repairs and restore said Premises or the designatedportions thereof as the case may be, to the required condition, entirely at Tenant’s own expense. All items identified in the original Punch List (absentdisagreement among the parties) shall be completed prior to the termination or expiration of the Lease. All items discovered in the final inspection (absentdisagreement) shall be completed within five (5) business days after the final inspection. Tenant may negotiate a cash settlement from Tenant based upon theagreed to value of the items involved in the scope of work set forth in the Punch List, or any portion thereof and the cost of such work. In the event the partiesagree to a cash settlement option, Tenant shall not be required to perform the remedial work for which the cash settlement relates. Prior to termination of thisLease, Tenant will provide, at Tenant’s sole cost and expense a certification of the HVAC system by a contractor reasonably acceptable to Landlord. In theevent said certification indicates any deferred maintenance or other conditions other than normal wear and tear, Tenant shall promptly cause any suchconditions to be remedied prior to the termination of the Lease at Tenant’s sole cost and expense, by a contractor acceptable to Landlord. All damage to thePremises caused by the removal of trade fixtures and other personal property that Tenant is permitted to remove under the terms of this Lease and/or suchrestoration shall be repaired by Tenant at its sole cost and expense prior to termination, unless otherwise agreed between the parties as a result of the cashsettlement. In the event Tenant fails to restore the Premises prior to the termination or expiration date of this Lease, Landlord may (but shall not be obligated to)give Tenant notice to do such acts as are reasonably required to so restore and maintain the Premises. In the event Tenant shall fail to comply with its removaland restoration requirements hereunder prior to the termination or expiration date of this Lease, then upon notice to Tenant, Landlord shall have the right to dosuch acts and expend such funds, at the expense of Tenant, as are reasonably required to perform such work, and Tenant shall reimburse Landlord for suchcosts and expenses, together with a supervision and administrative charge of fifteen percent (15%) of all costs and expenses, within thirty (30) days afterLandlord’s delivery to Tenant of a detailed invoice setting forth the associated charges.8.6 Roof Rights. Subject to review and approval by Landlord’s structural engineers,-21-Tenant shall have the exclusive right, from time to time, to install, operate and maintain various equipment, including but not limited to, supplemental HVACand clean room equipment, and antenna and communication equipment, on the roof of the Building (“Roof’) in compliance with all of the terms andconditions of this Lease. Any such equipment shall be installed at a location on the Roof reasonably approved by Landlord. Prior to installing such equipment,Tenant shall submit to Landlord plans and specifications for the installation thereof (the “Plans”) for approval by Landlord and Landlord’s structuralengineers, not to be unreasonably withheld, conditioned or delayed. The Plans shall show the location of the equipment on the Roof, the location and type of allcabling and lines, the way the equipment will be placed on the Roof and any other information reasonably requested by Landlord. Prior to installing theequipment, Tenant shall obtain and provide to Landlord any required governmental and quasi-governmental permits, licenses, which Tenant shall obtain at itsown cost and expense. Tenant shall repair and restore any damage caused by the installation or maintenance of the equipment.ARTICLE 9. MAINTENANCE AND REPAIRS. 9.1 Tenant’s Obligations.(a) Tenant shall, at all times during the term hereof, and at Tenant’s sole cost and expense, keep, maintain and repair the Premises ingood and sanitary order and condition and repair, including, without limitation, interior surfaces of the ceilings, walls and floors located within the Premises,replacement of all broken or damaged glass, replacement of light globes or tubes, doors, window casements, heating, air conditioning and ventilating systemsservicing the Premises, plumbing, pipes, electrical wiring conduit, interior partitions, fixtures, leasehold improvements and alterations. With respect to theHVAC systems servicing the Premises, Tenant shall enter into a maintenance service contract for the quarterly inspection, and the ongoing maintenance andrepair of the HVAC system at the cost and expense of Tenant.(b) Tenant agrees to enter into a maintenance service contract with a contractor approved by Landlord, for the quarterly inspection andmaintenance of the gas and electrical systems servicing the Premises. Tenant shall cause said contractor to provide Landlord with copies of the quarterlyinspection and maintenance reports and invoices.(c) Except for Landlord’s repair and maintenance obligations set forth in Section 9.2 below and subject to Section 15.3, Tenant agrees torepair any damage to the Premises, the Building, the Common Area, the Access Property or the Park, caused by Tenant or any party taking by or throughTenant in connection with (i) the use of the Premises, Common Area, Access Property, or other portions of the Park, (ii) the moving by Tenant or its employeesor agents into the Premises, or (iii) the removal of any articles of personal property, business or trade fixtures, machinery, equipment, cabinet work, furniture,movable partition or permanent improvements or additions, including without limitation thereto, repairing the floor and patching and painting the walls whererequired by Landlord to Landlord’s reasonable satisfaction, all at the Tenant’s sole cost-22-and expense.(d) In the event Tenant fails to maintain the Premises in good order, condition and repair, or to repair damage as provided above,Landlord may (but shall not be obligated to) give Tenant notice to do such acts as are reasonably required to so maintain the Premises. In the event that aftersuch notice Tenant shall fail to promptly commence such work and diligently prosecute it to completion, then Landlord shall have the right to do such actsand expend such funds at the expense of Tenant as are reasonably required to perform such work. Any amount so expended by Landlord shall be paid byTenant within thirty (30) days after demand.9.2 Landlord’s Obligations.(a) Landlord shall, at its sole cost and expense (except as expressly set forth in Subsection (b) below), keep and maintain in goodcondition and repair, the exterior walls, steel columns, structural girders, bar joists, foundation, slab (except for general floor maintenance such as sealing andcaulking floor joints and repairing spalling), and roof (including roof coverings and structural components thereof) of the Building (collectively referred toherein as the “Structural Elements”) which obligation(s) shall include repairs and replacements, as reasonably needed. To the best of Landlord’s knowledge,as of the date the Tenant receives possession of the Premises, the Structural Elements and all existing building systems, are in good working order conditionand have complied with the reasonable requirements of Tenant’s insurance carrier. Subject to the terms and conditions of this Lease, by entering into thePremises, Tenant shall be deemed to have accepted the Premises in “as-is” condition and as being in good and sanitary order, condition and repair, and Tenantagrees that on the last day of said term or sooner termination of this Lease to surrender the Premises with appurtenance in the same condition as when received,reasonable use and wear thereof and damage by fire, act of God or by the elements is excepted. Tenant shall be responsible for maintaining in good conditionand repair any portion of any of the Structural Elements and building systems which are installed, materially altered or replaced by or under the direction ofTenant.(b) Landlord shall pay (subject to the right of reimbursement for Operating Costs as provided in this Lease relating to only generalmaintenance and repair of walls and roofs, such as painting and drain cleaning, as opposed to capital repairs and replacements of these items which are not tobe included in Operating Costs, except as expressly provided otherwise in Section 6.2(g)(16)) for maintenance, repair and replacement of the StructuralElements of the Building so long as the need for same does not result from any wrongful or negligent act or omission of Tenant or its employees, invitees orlicensees. The cost of any such service which becomes necessary as a result of any such act or omission shall be borne by Tenant. Apart from routinemaintenance and inspection, Landlord shall not be required to make any repairs unless and until Tenant has notified Landlord in writing of the need for suchrepairs and Landlord shall have a reasonable period of time thereafter within which to commence and complete said repairs. Landlord shall act within seventy-two (72) hours after receipt of written notice and shall pursue to completion with due-23-diligence; provided however, Landlord shall not be liable for any damages, direct, indirect or consequential, or for damages for personal discomfort, illness orinconvenience of Tenant by reason of failure of such equipment facilities or systems or reasonable delays in the performance of such repairs, replacements andmaintenance, unless caused by the deliberate act or omission of Landlord, its servants, agents, or employees or anyone permitted by it to be in the Park, orthrough it in any way, the cost of the necessary repairs, replacements or alterations shall be borne by Tenant who shall pay the same to Landlord on demand.Tenant waives all rights it may have under law to make repairs at Landlord’s expense.(c) Landlord shall also keep and maintain in good order and condition and repair (including replacements as necessary) the Common Areas and AccessProperty, the retention/detention ponds, the non-public utility lines and conduits, the non-public storm and sanitary sewer systems, asphalt parking areas,alleys, driveways and roadways, lighting facilities and fixtures, serving the Park and Premises, the cost for which shall be included in Operating Costs asand to the extent provided herein.(d) Landlord acknowledges that as a result of the medical devices and blood management products that may be stored and/or manufactured by Tenant at thePremises, there may be certain quality control and maintenance related requirements imposed by the U.S. Food and Drug Administration and other applicablegovernmental, quasi-governmental and industry or trade agencies or monitoring organizations. Accordingly, in the event Tenant has provided Landlord writtennotice of a specific deficiency in the Landlord’s maintenance or repair obligations for the Premises and Landlord has failed to remedy the deficiency within 30days of the date of written notice by Tenant of the specific nature of the deficiency, or in the event the deficiency cannot reasonably be remedied within 30 daysand Landlord fails to take action to remedy the deficiency within such 30 days and diligently prosecute it to completion, Tenant may, at its option and its cost,upon not less than sixty (60) days written notice, take over and be responsible for all of the maintenance and repairs of the Premises as provided in thisSection 9.2 above in which event Tenant shall no longer be responsible for reimbursing Landlord for the Operating Costs relating thereto. Tenant shall have theright, upon not less than ninety (90) days prior written notice to Landlord, to require Landlord to assume again its obligations under this Section 9.2 withrespect to the maintenance and repair of the Premises, and thereafter the applicable provisions of Paragraph 4.1 shall again be in full force and effect. Tenant’soption to take over the maintenance and repairs, as provided herein, shall not be assignable and shall not be available to any successor, assign or subtenant ofTenant hereunder except in connection with a transfer under Section 13.1 (b) herein.(e) Notwithstanding anything in this Lease to the contrary, Tenant shall be entitled to a proportionate abatement of Basic Rent in the event of a LandlordService Interruption (as defined below). For the purposes hereof, a “Landlord Service Interruption” shall occur in the event (i) the Premises shall lack anyservice, benefit or utility or there shall be an interruption of same which Landlord is required to provide hereunder thereby rendering the Premises untenantablefor the entirety of the Landlord Service Interruption Cure Period (as defined below), (ii) such lack of-24-service, benefit or utility or interruption was not caused by Tenant, its employees, contractors, invitees or agents; (iii) Tenant in fact ceases to use the entirePremises for the entirety of the Landlord Service Interruption Cure Period; and (iv) such interruption of service was the result of causes, events orcircumstances within the Landlord’s reasonable control and the cure of such interruption is within the Landlord’s reasonable control. For the purposes hereof,the “Landlord Service Interruption Cure Period” shall be defined as fifteen (15) consecutive days after Landlord’s receipt of written notice from Tenant of theLandlord Service Interruption. In such case, Tenant shall be entitled to a proportionate abatement of rent as aforesaid. Without limiting the foregoing, if anyLandlord Service Interruption continues for a period in excess of one hundred twenty (120) consecutive days, Tenant shall have the option to terminate thisLease upon written notice to Landlord.ARTICLE 10. RIGHTS RESERVED TO LANDLORD10.1 Entry. Tenant shall permit Landlord and its agents to enter into and upon the Premises at all reasonable times upon reasonable notice to inspect thesame or to perform any obligation of Tenant hereunder which Tenant has failed to perform satisfactorily (subject to applicable notice and cure periods), toexhibit the Premises to prospective purchasers or, in the last nine (9) months prior to the expiration of the Lease Term, tenants, to place upon the Premises anyusual or ordinary signs advertising the availability of the property for sale or, in the last nine (9) months prior to the expiration of the Lease Term, lease, topost and maintain notices of nonresponsibility, or any other notice, deemed necessary by Landlord for the protection of its interest, to maintain or repair thePremises or to alter, improve, maintain or repair any other portion of the Building, specifically including its mechanical, electrical and telephone systems, allwithout being deemed guilty of any eviction of Tenant and without abatement of Rent, and may, in order to carry out such purposes, upon reasonable notice toTenant, erect scaffolding and other necessary structures on the exterior of the Building where reasonably required by the character of the work to be performedas well as keep and store upon the exterior of the Premises all tools, materials and equipment necessary for such purposes, provided that Landlord shallcoordinate its efforts with Tenant and use commercially reasonable efforts to minimize such work so that the business, use or operations of Tenant at or aboutthe Premises shall not be unreasonably interfered with or disrupted. For each of the aforesaid purposes, Landlord shall at all times have and retain a key withwhich to unlock all of the doors in, upon and about the Premises, excluding Tenant’s vaults, safes, secure rooms, clean rooms and areas and facilities as maybe from time to time designated by Tenant, or as otherwise prohibited or restricted due to US FDA or client requirements, and Landlord shall have the right touse any and all means which Landlord may deem proper to open such doors in an emergency in order to obtain entry to the Premises.10.2 Relocation. [Intentionally deleted]10.3 Transfer of Landlord’s Interest. In the event Landlord transfers its interest in the-25-Premises, Landlord shall be relieved of all obligations accruing hereunder after the effective date of such transfer, including any obligations arising out of anyact, occurrence or omission relating to the Premises or this Lease which occur after the consummation of such transfer, it being understood and agreed in suchevent that the person succeeding to Landlord’s ownership of said interest shall thereupon and thereafter assume, perform and observe, any and all of suchcovenants and obligations of Landlord..10.4 Right to Obtain Estoppel Certificate. The parties hereto each agree at any time and from time to time upon not less than twenty (20) days priorrequest by the other, to (a) execute, acknowledge and deliver to the requesting party a statement in writing certifying that (i) this Lease is unmodified and in fullforce and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), (ii) the dates to whichthe Rent and other charges have been paid in advance, if any, (it being intended that any such statement delivered pursuant to this subparagraph may be reliedupon by a prospective purchaser, mortgagee or assignee of any mortgage of the Premises), and (iii) acknowledging that to such party’s knowledge there are notany uncured defaults on the part of Landlord and/or Tenant hereunder, or specifying such defaults if they are claimed, and/or (b) execute any mutuallysatisfactory document or provide any statement as reasonably required by such party or its lender provided such document shall not affect the rental, term,benefits, obligations or liabilities of or under this Lease. Either party’s failure to deliver such statement within such time shall be a binding agreement of suchparty (i) that this Lease is in full force and effect, without modification except as may be accurately represented by the requesting party, (ii) that there are nouncured defaults in such party’s performance hereunder, and (iii) that not more than one monthly installment of the Basic Rent has been paid in advance.10.5 Building Name Change. Landlord reserves to itself and shall at any and all times have the right to change the name or street address of thePremises or the Building. In the eventLandlord changes the street address of the Premises or Building, Landlord agrees to give Tenant reasonable advance notice and to assist Tenant in the cost ofpreparing new letterhead, business card, shipping labels, etc. (not to exceed $500.00).10.6 Signs. Landlord reserves to itself and shall at any and all times have the right to install and maintain signs on the Land and the exterior of theBuilding, subject to Tenant’s prior approval, not to be unreasonably withheld, delayed or conditioned. Landlord agrees to include Tenant’s name in any wayfinding signage system that Landlord installs and directories for the portion of the Park in which the Building is located.10.7 Other Tenancies. Landlord reserves to itself and shall at any and all times have the right to effect such other tenancies in the Park as Landlord inthe exercise of its sole business judgment shall determine to best promote the interest of the Park. Tenant does not rely on the fact nor does Landlord representthat any specific tenant or number of tenants shall during the term of this Lease occupy any space in the Park.-26-10.8 Work in or Near Premises. Landlord reserves to itself and shall at any and all times have the right to do or permit to be done any work in orabout the exterior of the Building; provided Landlord shall provide reasonable advance notice of same (where practical) and Landlord shall coordinate itsefforts with Tenant and use commercially reasonable efforts to minimize such work so that the business, use or operations of Tenant at or about the Premisesshall not be unreasonably interfered with or disrupted. Landlord shall also have the right to access the Building for purposes of meeting its obligationspursuant to Section 9.2 above, provided Landlord shall provide reasonable advance notice of same (where practical) and Landlord shall coordinate its effortswith Tenant and use commercially reasonable efforts to minimize such work so that the business, use or operations of Tenant in or about the Building shallnot be unreasonably interfered with or disrupted10.9 Landlord’s Use of Ceiling Space. Landlord, Tenant or a utility company shall have the right, subject to Landlord’s and Tenant’s writtenapproval (not to be unreasonably withheld, conditioned or delayed), to run utility lines, pipes, roof drainage pipes, conduit, wire, duct work and other relatedfacilities where necessary, above ceiling space or in other non-public parts of the Premises, and to maintain same in a manner which does not interfere withTenant’s use thereof.10.10 Directories. Tenant hereby agrees that Landlord and its affiliates may include the name and logo of Tenant on any directory or listing of tenantsand Landlord may include, same in Landlord’s marketing and public communications about Landlord’s properties or the financing thereof. Landlord agreesto include Tenant in the directories described in Exhibit D attached hereto.10.11 Non-Recourse. The obligations of Landlord under this Lease do not constitute personal obligations of the individual entities which compriseLandlord nor their respective partners, members, directors, officers or shareholders, and Tenant shall look solely to the real estate that is the subject of thisLease (or the income or proceeds therefrom) and to no other assets of the entities comprising Landlord for satisfaction of any liability in respect of this Leaseand will not seek recourse against the individual entities which comprise Landlord nor against their respective partners, members, directors, officers orshareholders nor against any of their personal assets for such satisfaction other than the Park or the Building or any interest they may have in or to the Park orthe Building or any portion thereof.ARTICLE 11. ABANDONMENT. In the event Tenant shall (i) be in default under the terms of this Lease, and abandon, vacate or surrender thePremises, or (ii) be dispossessed by process of law, any personal property belonging to Tenant and left on the Premises thereafter shall be deemed to have beenabandoned.ARTICLE 12. LIENS. Should any mechanic’s or other liens be filed against the Premises by reason of Tenant’s acts or omissions or because of a claimagainst Tenant or against Tenant’s agents or contractors, Tenant shall cause the same to be canceled and discharged of record and shall-27-indemnify, defend and hold Landlord harmless from any such lien and shall deal with any such lien in accordance with the terms of Article 8 above.ARTICLE 13. ASSIGNMENT AND SUBLETTING.13.1 When Landlord’s Consent is Required. (a) Except as otherwise provided in Section 13.1(b) below, Tenant acknowledges and agrees that it has entered into this Lease in order toacquire the Premises for its own current use and not for the purpose of obtaining the right to convey the leasehold to others. Tenant shall not assign, license,transfer, mortgage, hypothecate, or otherwise encumber all or any part of this Lease or any interest therein, or sublet the Premises or any part thereof to occupyor use the Premises or any portion thereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned ordelayed. Landlord’s consent shall not be deemed unreasonably withheld if the proposed new tenant is anyone with whom Landlord has actively negotiated fora direct lease within the preceding nine (9) months, anyone with whom Landlord is actively negotiating a direct lease at the time of such proposed assignmentof sublease, or any current occupant or tenant of the Park, provided Landlord has available space to accommodate such party; or if in Landlord’s reasonableopinion the business operation conducted on the Premises, if different from the Use set forth in Section 1.6 above or a use not approved pursuant to theCC&Rs, will materially adversely affect the Premises, the Park or other tenants during the term of the Lease by such proposed assignment, license, transfer,mortgage, encumbrance or subletting. Acceptance of rent by Landlord of Tenant or Assignee shall not be deemed approval or acceptance of assignment orsubletting. Tenant shall remain liable for all terms and conditions of this Lease Agreement at all times even upon Lease assignment or subletting. Anyassignment or subletting by Tenant without Landlord’s consent shall be a default by Tenant hereunder.(b) Tenant shall have the right to assign this Lease or sublet all or any portion of the Premises, without the consent of Landlord, to (i) anyentity resulting from a merger or consolidation, (ii) any entity succeeding in the business and assets of Tenant; (iii) any subsidiary or affiliate of Tenant, or(iv) any entity which controls, is controlled by or is under common control with Haemonetics Corporation, provided that the involvement by Tenant in any ofthe foregoing will not result in a material reduction of the “Net Worth” of Tenant, as hereinafter defined, from the Net Worth of Tenant at the time of theexecution of this Lease, or as it exists immediately prior to said transaction or transactions constituting such reduction, at whichever time said net Worth ofTenant was or is less. “Net Worth” of Tenant for purposes of this section shall be the net worth of Tenant established under generally accepted accountingprinciples consistently applied at the time of Tenant’s most recent audited financial statement. Any transaction related to this Subsection 13.1(b) shall not besubject to recapture as provided in Section 13.3 or profit sharing as provided in Section 13.4.(c) Tenant shall continue to be liable for all obligations of Tenant hereunder,-28-notwithstanding any assignment by Tenant.13.2 Tenant’s Application. In the event that Tenant desires at any time to assign this Lease or to sublet the Premises or any portion thereof except asprovided in Section 13.1(b) above, Tenant shall submit to Landlord at least fifteen (15) business days prior to the proposed effective date of the assignment ofsublease (“Proposed Effective Date”), in writing: (a) a request for permission to assign or sublease, setting forth the Proposed Effective Date, which shall be noless than 15 business days nor more than 90 days after the sending of such notice; (b) the name of the proposed subtenant or assignee; (c) the nature of theproposed subtenant’s or assignee’s business to be carried on in the Premises; (d) the name of the guarantor, if any, of the proposed subtenant or assignee; (e)the terms and provisions of the proposed sublease or assignment; (f) current financial statements of the proposed subtenant or assignee and the guarantor, ifany, audited, if available, otherwise certified by an officer or member thereof, and (g) the fee for review pursuant to Section 13.5 below. Landlord shallrespond to such request for consent within fifteen (15) business days following Landlord’s receipt of all information required with respect to such proposedsublease or assignment.13.3 Recapture. If Tenant proposes to assign this Lease, Landlord may, at its option, exercisable upon written notice to Tenant within 15 businessdays after Landlord’s receipt of the notice from Tenant, elect to recapture the Premises and terminate this Lease. If Tenant proposes to sublease all orsubstantially all of the Premises for all or substantially all of the remaining Lease term, Landlord may, at its option, exercisable upon written notice to Tenantwithin 15 business days after Landlord’s receipt of the notice from Tenant, elect to recapture such portion of the Premises as Tenant proposes to sublease and,upon such election by Landlord, this Lease shall terminate as to the portion of the Premises recaptured. Notwithstanding the foregoing, if Tenant notifiesLandlord of its intent to assign this Lease or sublet (or otherwise grant occupancy rights in and to) all or a portion of the Premises prior to marketing thePremises, Landlord shall have the option as aforesaid exercisable by written notice to Tenant given within fifteen (15) business days after Landlord’s receipt ofTenant’s notice of intent. If Landlord elects not to exercise said option, then Landlord will be deemed to have waived the option with respect to Tenant’s requestfor consent to assign the Lease or sublet the Premises that is the subject of Tenant’s notice of intent, but not with respect to subsequent assignments orsubleases.13.4 Payments to Landlord. If Landlord does not elect to recapture the Premises pursuant to Section 13.3 above, and if Tenant effects an assignmentor sublease pursuant to this Article 13, then Landlord will have the right to require Tenant to pay to Landlord a sum equal to fifty percent (50%) of: (a) anyrent or other consideration paid directly or indirectly to Tenant by any proposed transferee, which, after deducting the costs of Tenant, if any, in effecting theassignment or sublease, including reasonable alteration costs, commissions and legal fees, is in excess of the rent allocable to the transferred space which isthen being paid by Tenant to Landlord pursuant to this Lease; and (b) any other profit or gain (after deducting any necessary expenses incurred) realized byTenant from any such sublease or assignment. Any such sums payable will be-29-payable to Landlord at the time the next rental payment is due.13.5 Fee for Review. In the event Tenant shall request to assign, transfer, mortgage, pledge, hypothecate, encumber this Lease or any interest therein,sublet the Premises or any part thereof, or review or consent to any requests by Tenant’s lenders, Tenant shall pay to Landlord a non-refundable fee of up to$1,500.00 for Landlord’s time and processing efforts, and for reasonable expenses incurred by Landlord in reviewing such transaction. Tenant shall pay suchexpenses to Landlord within thirty (30) days after written request therefor and such payment shall be a condition to any approval by Landlord.13.6 [Intentionally Deleted]ARTICLE 14. PARKING, COMMON AREA AND ACCESS PROPERTY.14.1 Parking. Tenant shall have the exclusive right to use parking spaces in the parking area provided by Landlord on the Land at no additional costthroughout the Lease Term, subject to such reasonable written rules and regulations as Landlord may impose from time to time. Nothing contained herein shallbe deemed to create any liability or responsibility upon Landlord for any damage to motor vehicles of Tenant, its customers, invitees and employees or for lossof property from within such motor vehicles, unless caused by the gross negligence or willful misconduct of Landlord, its agents or employees. Tenant shallhave no right to use any parking spaces in the Park other than on the Land. Notwithstanding anything to the contrary contained in this Lease, the Premisesshall always be served, at no additional cost to Tenant, by not less than One Hundred Thirty-Five (135) automobile spaces, as depicted on Exhibit A-1.Tractor trailer parking will be limited to the truck dock area located on the south side of the Building which Tenant has exclusive use thereof.14.2 Rules and Regulations. Landlord shall have the right, through reasonable rules, regulations and/or restrictive covenants promulgated ormodified by it from time to time, to control use and operation of the parking on the Land and the use of the Common Area and Access Property in order thatthe same may occur in a proper and orderly fashion; provided, however, that any such promulgated or modified rules, regulations and/or restrictive covenantsshall not discriminate against Tenant in favor of other tenants or portions of the Park and shall be provided to Tenant in writing; and provided further, thatLandlord’s rules and regulations shall not materially adversely affect Tenant’s use and enjoyment of the Premises pursuant to the Lease or be inconsistent withany provision of this Lease, and that in the event and to the extent of any such inconsistency, the Lease shall control.14.3 Changes. Landlord reserves the right to change from time to time the dimensions and location of the Common Area and Access Property and toconstruct additional buildings, modify existing buildings or make other improvements in the Park so long as Tenant’s access to, vehicular traffic flow, or useof the Premises is not unreasonably interfered with, altered or restricted-30-thereby.ARTICLE 15. INDEMNITY AND WAIVER.15.1 Assignment of Risk. This Article 15 is written and agreed to in respect of the intent of the parties to assign the risk of loss whether resulting fromnegligence of the parties or otherwise, to the party who is obligated hereunder to cover the risk of such loss with insurance, except as otherwise expresslyprovided.15.2 Release and Waiver. Landlord and Tenant release each other, and their respective authorized representatives, from, and each hereby waives as tothe other, any claims for damage to the Premises, the Building, the Park, and to the fixtures, personal property, improvements and alterations of eitherLandlord or Tenant, in, on or about the Premises, the Building, and the Park, including loss of income, that are caused by or result from risks insured orrequired under the terms of this Lease to be insured against under any property insurance policies carried or to be carried by either of the parties.15.3 Waiver of Subrogation. Each party shall cause each such property insurance policy obtained by it (including any self insurance) to provide thatthe insurance company (or self insured) waives all rights of recovery by way of subrogation against either party in connection with any damage covered bysuch policy. Neither party shall be liable to the other for any damage caused by fire or any other risks insured against or required to be insured against underany property insurance policy carried or required to be carried under the terms of this Lease. If any such insurance policy cannot be obtained with a waiver ofsubrogation without payment of an additional premium charge above that charged by the insurance companies issuing such policies without waiver ofsubrogation, the party obtaining such insurance shall pay such additional premium to its insurance carrier requiring such additional premium. It isunderstood that subrogation waivers may be operative only as long as such waivers are available in the State of Utah. In the event subrogation waivers areallegedly not operative in such State, notice of such fact shall be promptly given by party obtaining the insurance in question to the other party and the partiesshall reasonably cooperate to obtain the comparable benefit of such a waiver.15.4 Indemnification. Tenant, as a material part of the consideration to be rendered to Landlord, shall indemnify, defend, protect and hold harmlessLandlord (together with its officers, directors, stockholders, partners, beneficial owners, trustees, managers, members, employees, agents, contractors,attorneys, and mortgagees) from and against all claims of whatever nature arising from: (a) any accident, injury, damage or loss whatsoever caused to anyperson or property during the Term, and thereafter, so long as Tenant is in occupancy of any part of the Premises, and occurring in the Premises, or arisingout of the use and occupancy of the Premises by Tenant and Tenant’s contractors, licensees, invitees, agents, servants or employees (“Tenant’s Agents”); or(b) any accident, injury, damage or loss occurring outside of the Premises (i.e., on the Common Areas or Access Property), where such accident, injury,damage or loss results or is claimed to have-31-resulted from the negligent act or omission of or willful misconduct of Tenant or Tenant’s Agents. Landlord, as a material part of the consideration to berendered to Tenant, shall indemnify, defend, protect and hold harmless Tenant (together with its officers, directors, stockholders, partners, beneficial owners,trustees, managers, members, employees, agents, contractors, attorneys, and mortgagees) from and against all claims of whatever nature arising from: (x) anyaccident, injury, damage or loss whatsoever caused to any person or property during the Term, and thereafter, so long as Tenant is in occupancy of any partof the Premises, and occurring on or about the Premises, and arising out the negligent act or omission of or willful misconduct of Landlord or Landlord’scontractors, licensees, invitees, agents, servants or employees (“Landlord’s Agents”); or (y) any accident, injury, damage or loss occurring outside of thePremises, where such accident, injury, damage or loss results or is claimed to have resulted from the negligent act or omission of or willful misconduct ofLandlord or Landlord’s Agents. Nothing contained herein shall obligate Tenant to indemnify Landlord against the negligence or willful acts of Landlord orLandlord’s Agents and nothing contained herein shall obligate Landlord to indemnify Tenant against the negligence or willful acts of Tenant or Tenant’sAgents. In the event any action, suit or proceeding is brought against an indemnified party by reason of an indemnified occurrence hereunder, theindemnifying party, upon the indemnified party’s request will at the indemnifying party’s expense resist and defend such action, suit or proceeding, or causethe same to be resisted and defended by counsel designated either by the indemnifying party, and reasonably approved by the indemnified party, or by theinsurer whose policy covers the occurrence. Any indemnified party shall provide the indemnifying party with prompt notice of any claim for an indemnifiedmatter, but the omission of such notice shall not relieve the indemnifying party from any liability hereunder, except to the extent the indemnifying party shallhave been actually and materially prejudiced as a result of such omission. Such notice shall state the information then available regarding the amount andnature of such indemnified matters. Notwithstanding anything to the contrary contained herein, the indemnified party shall at all times have the right to fullyparticipate in such defense directly at its own expense or through its own counsel. The obligations of the parties under this Article arising by reason of anyoccurrence taking place during the Lease term shall survive any termination of this Lease.15.5 Intentionally Omitted.15.6 Construction. Wherever in this Article the term Landlord or Tenant is used and such party is to receive the benefit of a provision contained in thisArticle, such term shall refer not only to that party but also to its officers, directors, employees, partners and agents.ARTICLE 16. INSURANCE.16.1 Tenant’s Insurance.(a) Tenant agrees to secure and keep in force from and after the date Landlord shall deliver possession of the Premises to Tenant andthroughout the term of this Lease, at Tenant’s-32-sole cost and expense commercial general liability insurance on the Premises, Common Area and Access Property, and all areas appurtenant thereto, on anoccurrence basis with a minimum limit of liability in an amount of Five Million Dollars ($5,000,000.00) per occurrence, Five Million Dollars ($5,000,000.00)aggregate. The commercial general liability policy shall name Landlord as an additional insured; shall not contain the cross liability exclusion; shall containcontractual liability coverage; shall be primary, not contributing with, and not in excess of coverage which Landlord may carry; shall provide for severabilityof interest; and shall afford coverage after the term of this Lease (by separate policy or extension if necessary) for all claims based on acts, omissions injury ordamage which occurred or arose (or the onset of which occurred or arose) in whole or in part during the term of this Lease. The limits of said insurance shallnot limit any liability of Tenant hereunder. Notwithstanding the amounts of insurance provided for in this Section 16, the original named Tenant hereunder, orany transferee pursuant to Section 13.1(b) above, shall have the right to self- insure its insurance coverages required under this Lease so long as Tenant meetsthe requirements for self-insurance set forth in Section 16.1(c) below. Any such coverages may be effected directly and/or through the use of commerciallyreasonable blanket insurance coverage covering more than one location controlled by Tenant and the specified limits of Tenant’s insurance may be satisfied byany combination of primary or excess/umbrella liability insurance policies.(b) At all times during the term hereof, Tenant shall keep in force at its sole cost and expense, fire and extended coverage insurance, andagainst sprinkler leakage or malfunction and water damage and against vandalism and malicious mischief, Tenant’s leasehold improvements, trade fixtures,furnishings, equipment and contents upon the Premises in a commercially reasonable amount as determined by Tenant in connection with its nationalrisk/insurance program. Tenant shall also obtain broad form boiler and machinery insurance on all air-conditioning equipment, boilers and other pressurevessels or systems, whether fired or unfired, which are installed by Tenant or which exclusively serve the Premises. Such boiler and machinery insuranceshall cover the replacement value of such items. Tenant shall self-insure plate glass upon the Premises. Landlord shall have no interest in the insurance uponTenant’s furniture, equipment, fixtures of personalty.(c) Tenant’s right to self-insure is subject to the following terms and conditions:(i) For purposes of this Section 16.1 the term “Self-insure” shall mean that Tenant is itself, or through a captive insurance company,acting as the insurer providing the insurance required under the provisions hereof and Tenant shall pay any amounts due in lieu of insurance proceeds whichwould have been payable if the insurance policies had been carried, which amounts shall be treated as insurance proceeds for all purposes under this Lease.(ii) All amounts that Tenant pays or is required to pay and all loss or damages resulting from risks for which Tenant has elected to self-insure shall be subject to the waiver of subrogation provisions of Section 15.3 hereof and shall not limit Tenant’s indemnification obligations set forth inSection 15.4 hereof.-33-(iii) Tenant’s right to self-insure and to continue to self-insure is conditioned upon and subject to:(1) Tenant now having and hereafter having a tangible net worth of at least $100,000,000; and(2) Unless Tenant is a public company whose financial statements are available to the public, Tenant providing an auditedfinancial statement for each fiscal year of Tenant (or of the guarantor of Tenant’s obligations hereunder), prepared in accordance with generally acceptedaccounting principles, to Landlord within 90 days of the end of the respective fiscal year, which establishes and confirms that Tenant has the required networth.(iv) In the event Tenant fails to fulfill the requirements of Subsection (iii) above, then Tenant shall immediately lose the right to self-insure and shall be required to provide the insurance specified herein as issued by a qualifying insurance company.(d) In the event that Tenant elects to self insure and an event or claim occurs for which a defense and/or coverage would have been availablehad Tenant not elected to self-insure and carried the required coverage(s), Tenant shall:(i) undertake the defense of any such claim, including a defense of Landlord, at Tenant’s sole cost and expense, which would havebeen covered but for such election by Tenant to self-insure, and(ii) use its own funds to pay any claim or replace property or otherwiseprovide the funding which would have been available from insurance proceeds but for such election by Tenant to self-insure.(e) The obligations of Tenant under this Section 16.1 are independent and shall remain in full force and effect notwithstanding any breach ofany provision of this Lease by Landlord.16.2 Landlord’s Insurance. During the term of this Lease Landlord shall obtain and keep in force (a) a policy of commercial general liabilityinsurance providing coverage to Landlord with respect to liability arising out of ownership, operation and management of the Building in an amount of not lessthan the amount required of Tenant set forth in Section 16.1(a) above combined single limit; (b) a policy or policies of insurance covering loss or damage tothe Building, including Landlord’s Work and Tenant’s Work (in the nature of leasehold improvements rather than furniture, fixtures and equipment), causedby any peril covered under fire, extended coverage and “Special Form” insurance in an amount of not less than the replacement cost value above the foundationwalls, as reasonably determined by Landlord from-34-time to time; the insurance policies evidencing such coverage shall contain appropriate endorsements waving the insurer’s right of subrogation against Tenant;and (c) Workers’ Compensation in amounts required by the State in which the Premises are located. Any such coverages may be effected directly and/orthrough the use of commercially reasonable blanket insurance coverage covering more than one location. The cost of such insurance shall be included inOperating Costs as and to the extent provided in Section 16.2. Landlord shall deliver to Tenant an original certificate of insurance evidencing the insurancerequired of Tenant hereunder on or prior to the Lease Commencement Date.16.3 Violations. No use shall be made or permitted to be made on the Premises, nor acts done, which will increase the existing rate of insurance uponthe Premises, or cause the cancellation of any insurance policy are located, or cause the cancellation of any insurance policy covering the Premises, CommonArea, Access Property, the Park, or any part thereof, nor shall Tenant sell, or permit to be kept, used or sold, in or about the Premises, any article which maybe prohibited by the standard form of fire insurance policies. Tenant shall at its sole cost and expense, comply with any and all requirements pertaining to thePremises, of any insurance organization or company, necessary for the maintenance of reasonable property damage and public liability insurance, covering thePremises, Common Area, Access Property or the Park.16.4 Certificate of Insurance. On or before Tenant enters the Premises for any reason, and again before any insurance policy expires, Tenant shalldeliver to Landlord an original certificate of insurance evidencing the insurance required of Tenant hereunder. All insurance policies required to be carriedunder this Lease by or on behalf of Tenant shall provide (and any certificate evidencing the existence of any insurance policies, shall certify) that the insuranceshall not be canceled prior to the expiration date thereof unless the insurer endeavors to provide thirty (30) days written notice to Landlord. If Tenant fails tocomply with any of the insurance requirements stated in this Lease, Landlord may obtain such insurance and keep the same in effect and Tenant shall pay toLandlord the premium cost thereof within thirty (30) days.ARTICLE 17. UTILITIES; JANITORIAL SERVICE.17.1 Utilities.(a) Tenant shall be solely responsible for, and shall promptly pay before delinquency, all charges for use or consumption of heat, sewer,water, gas, electricity, telephone or any other utility services supplied to Tenant or to the Premises beginning on the Lease Commencement Date and continuingthroughout the term hereof. Tenant shall also be responsible for any fees and charges of South Valley Reclamation Facility for sewer services to the Premises.Should Landlord elect to supply any utility service, Tenant agrees to purchase and pay for the same at the applicable rates then prevailing in the communitywithout mark-up (except to the extent including in the Landlord’s management fee). Tenant acknowledges that water servicing the landscaping is drawn from awell and Landlord shall have the right to charge Tenant a pro rata share-35-of the costs to run the pump, maintain the ditches, maintain the water rights, and operate the system, provided Tenant’s pro rata share does not exceed the costto Tenant if it were to use culinary water for such landscaping purposes.(b) Except as otherwise expressly provided in this Lease, Landlord shall not be liable in the event of any interruption in the supply ofany utility service to the Premises. Tenant agrees that it will not install any equipment which will exceed or overload the capacity of any utility facilities andthat if any equipment installed by Tenant shall require additional utility facilities, the same shall be installed at Tenant’s expense in accordance with plans andspecifications first approved in writing by Landlord.(c) In the event any governmental authority promulgates or revises any statute, ordinance or building, fire or other code, or imposesmandatory controls or guidelines on Landlord or the Premises or any part thereof, relating to the use or conservation of energy, water, gas, light or electricity orthe provision of any other utility or service provided with respect to this Lease, Landlord may, in its commercially reasonable discretion, take any actionnecessary to comply with such mandatory controls or guidelines, including making alterations to the Premises. So long as such compliance does notmaterially interfere with Tenant’s use and occupancy of the Premises as provided in this Lease, such compliance and the making of such alterations shall inno event entitle Tenant to any damages, relieve Tenant of the obligation to pay the full Rent or to perform each of its other covenants hereunder or constitute orbe construed as a constructive or other eviction of Tenant.17.2 Janitorial. Beginning on the Lease Commencement Date and continuing throughout the term hereof, Tenant shall provide, at its soleexpense, (a) regular janitorial service for the Premises, which shall include at least ordinary dusting, and (b) cleaning, emptying of waste baskets andvacuuming. In addition, Tenant shall provide an adequate sized dumpster for the storage of refuse in the location reasonably acceptable to Landlord. Tenantshall arrange for the removal of such refuse and periodic cleaning of such dumpster and the areas immediately adjacent thereto.ARTICLE 18. PERSONAL PROPERTY TAXES. During the term hereof Tenant shall pay prior to delinquency all taxes assessed against and levied uponfixtures, furnishings, equipment and all other personal property of Tenant as well as any alterations or leasehold improvements contained in the Premises andwhen possible Tenant shall cause said fixtures, furnishings and equipment to be assessed and billed separately from the real property of Landlord.ARTICLE 19. DEFAULT.19.1 Action Upon Default. In the event of any failure of Tenant to pay any Rent due hereunder within five (5) business days after the writtennotice of such delinquency shall have been given to Tenant, or any failure to perform any other of the terms, conditions or covenants of this Lease to beobserved or performed by Tenant for more than thirty (30) days after written notice of-36-such default shall have been given to Tenant or if Tenant or any guarantor of the Lease shall become bankrupt or insolvent or file any debtor proceedings ortake or have taken against Tenant or any guarantor of this Lease in any court pursuant to any statute either of the United States or of any state a petition inbankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of Tenant’s or any such guarantor’s property orif Tenant or any such guarantor makes an assignment for the benefit of creditors or petitions for or enters into an arrangement or if Tenant shall suffer thisLease to be taken under any writ of execution, Landlord, besides other rights or remedies it may have, shall have, upon due process of law, the immediateright of re-entry and may remove all persons and property from the Premises and such property may be removed and stored in a public warehouse or elsewhereat the cost of and for the account of Tenant, all without further service of notice or resort to further legal process and without being deemed guilty of trespass orbecoming liable for any loss or damage which may be occasioned thereby.19.2 Landlord Options; Reletting. Should Landlord elect to re-enter, as herein provided, or should it take possession, all pursuant to legalproceedings and pursuant to any notice provided for by law, it may either terminate this Lease or it may from time to time without terminating this Lease,make such alterations and repairs as may be necessary in order to relet the Premises and relet said Premises or any part thereof for such term or terms (whichmay be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as Landlord in itscommercially reasonable discretion may deem advisable, upon such reletting, all rentals received by Landlord from such reletting shall be applied, first, to thepayment of any indebtedness other than rent due hereunder from Tenant to Landlord, second, to the payment of any costs and expenses of such alterationsand repairs, third, to the payment of rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied toward payment of futurerent as the same may become due and payable hereunder If such rentals received from such reletting during any month be less than that to be paid during thatmonth by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No such re-entry ortaking possession of said Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention begiven to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, inaddition to any other remedies it may have, it may recover from Tenant all damages it may actually incur by reason of such breach, including the worth at thetime of such termination of the discounted present value of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease for theremainder of the stated term over the then reasonable rental value of the Premises for the remainder of the stated term, all of which amounts shall beimmediately due and payable from Tenant to Landlord.19.3 Use of Property. In the event of default (beyond any applicable notice and cure period), all of those Tenant’s improvements, additions, andother alterations to be left at the Premises upon Lease expiration or termination shall remain on the subject Premises and in that event and continuing during thelength of said default and Landlord’s re-entry or termination of this-37-Lease, Landlord shall have the right to take the exclusive possession of the same and to use the same, rent or charge free, until all defaults are cured, or, at itsoption, at any time during the term of this Lease, to require Tenant to forthwith remove the same as and to the extent provided in this Lease, and Tenant herebywaives all rights to notice and all common law and statutory claims and causes of actions which it may have against Landlord subsequent to such date asregards to storage, distribution, damage, loss of use and ownership of the property affected by the terms of this Article. Tenant acknowledges Landlord’s needto relet the Premises upon termination of this Lease for repossession of the Premises and understands that the forfeitures and waivers provided herein arenecessary to said reletting and to prevent Landlord incurring a loss for inability to deliver the Premises to a prospective Tenant. Notwithstanding anything tothe contrary contained herein, Landlord shall use commercially reasonable efforts to mitigate its damages and to relet the Premises in the event of an event ofdefault hereunder.19.4 Additional Rights. If either Tenant or Landlord defaults in making any payment (other than the payment of Basic Rent) to or for the benefitof the other (whether required by this Lease or otherwise) or in the performance of any other obligation imposed on it by this Lease, and shall not cure suchdefault within thirty (30) days after written notice thereof (or, if the default requires more than thirty (30) days to be cured, if the defaulting party does notbegin to cure the default within that period and then diligently prosecute the cure to completion), then the aggrieved party (without waiving any claim of breachor for damages) at any time thereafter may make such payment or cure such other default for the account of the defaulting party. Either party may cure adefault by the other prior to the expiration of the thirty (30) day period but after a cure period as is reasonable under the circumstances and after such notice tothe other party under any of the following circumstances: (a) if necessary to protect the interest of such curing party in the Premises; (b if necessary to preventcivil or criminal liability of such curing party; (c) if necessary to prevent an imminent and material interruption of the conduct of business in the Premises, or(d) if necessary to prevent injury to persons or damage to property. Any amount paid or contractual liability incurred by a party in the exercise of its rightsunder this Section shall be reimbursed by the other party, together with interest at the Reference Rate. Tenant’s payments hereunder shall be made as a part ofthe next installment of Basic Rent coming due after Tenant’s receipt of Landlord’s bill for such payment and the amount due to Tenant hereunder may be offsetagainst Basic Rent payments due to Landlord under this Lease until Tenant has been fully reimbursed, provided, however, in no event shall any monthlypayment of Basic Rent be so reduced by more than fifteen percent (15%). Landlord agrees that Tenant’s good faith exercise of rights under this Section,including the withholding of payments to reimburse itself for the cost of such exercise, shall never be deemed to be an event of default by Tenant in any of itsobligations under this Lease.19.5 Remedies Cumulative. The remedies given to either party in this section shall be in addition and supplemental to all other rights orremedies which the parties may have under the laws then in force.-38-ARTICLE 20. DESTRUCTION.20.1 Damage/Restoration. If the Building (or all or a material portion of the Common Area or Access Property) shall be partially damaged byfire or other casualty insured against under Landlord’s property damage insurance policies, Landlord shall, upon receipt of the insurance proceeds, repair theBuilding to a condition which is substantially similar to the condition in existence prior to such casualty.20.2 Exceptions to Obligation to Rebuild. Notwithstanding the foregoing, however, if the Building (or other Common Area or Access Property)is damaged as a result of flood, earthquake, nuclear radiation or contamination, act of war or other risk which is not covered by the insurance Landlord isrequired to carry hereunder, or if the Premises or the Building are damaged to the extent of thirty-three and one third percent (33-1/3%) or more of their thenreplacement value, or if the repair of the Premises, or the Building, would require more than one hundred eighty (180) days, Landlord shall promptly notifyTenant of any such event, and Landlord or Tenant may terminate this Lease upon written notice given to other within forty-five (45) days following suchcasualty or notification from Landlord, as the case may be. If neither party terminates as provided herein, Landlord shall commence as soon as is reasonablypossible the restoration of the Building. In addition, if neither party terminates this Lease but the Premises is not restored within one hundred eighty (180) daysafter the occurrence of the casualty, or within such longer period as may be permitted pursuant to Article 27 below, Tenant may at its option terminate thisLease upon thirty (30) days written notice to Landlord whereupon this Lease shall terminate upon such thirtieth (30th) day unless Landlord shall complete suchrestoration prior to the end of such thirty (30) day period in which event Tenant’s termination right shall be void.20.3 Extent of Landlords Obligations to Repair. Landlords obligations to restore shall in no way include any construction originally performedby Tenant or subsequently undertaken by Tenant, but shall include solely that property constructed by Landlord prior to commencement of the term hereof.The cost of any repairs to be made by Landlord, pursuant to this Article 20 of this Lease, shall be paid by Landlord utilizing available insurance proceeds.Tenant shall reimburse Landlord upon completion of the repairs for any deductible for which no insurance proceeds will be obtained under Landlord’sinsurance policy, or if other premises are also repaired, a pro rata share based on total costs of the repair equitably apportioned to the Premises. Tenant shall,however, not be responsible to pay any deductible or its share of any deductibles to the extent that Tenant’s payment would be in excess of $10,000.00 ifTenant’s consent has not been received by Landlord, unless such denial of consent by Tenant is unreasonable.20.4 [Intentionally Deleted]20.5 Abatement of Rent. In the event this Lease is not terminated and Landlord undertakes to repair any portion of the Premises, until suchrepair is complete, Basic Rent shall abate proportionately as to the portion of the Premises rendered untenable.-39-20.6 Last Year of Term. Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoeverto repair, reconstruct or restore the Building or the Premises when the damage resulting from any casualty covered under this Article occurs during the last 12months of the term of this Lease (unless Tenant timely exercises its renewal option provided below) or any extension or renewal hereof.ARTICLE 21. EMINENT DOMAIN. If all or more than 33-1/3% of the Premises or all or a material portion of the Common Area or Access Propertyshall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, or transfer in lieu thereof, either party hereto shallhave the right, at its option, to terminate this Lease as of the date title vests in the condemning entity. Landlord shall be entitled to any award, or other paymentmade in connection with such condemnation. Tenant, however, shall have the right to pursue a claim in any condemnation proceeding against the condemningauthority (but not against Landlord) for compensation for any resulting damages to Tenant’s business, trade fixtures and personal property, alterations madeby and at Tenant’s expense, good will and similar allowed expenses (but not for any diminution or loss of Tenant’s leasehold estate). If a part of the Premisesor a materially portion of the Common Area or Access Property shall be so taken or appropriated and this Lease is not thereafter terminated, the rental thereafterto be paid shall be reduced in the proportion that the area of the Premises so taken bears to the entire Premises. Notwithstanding the foregoing, however, beforeTenant may terminate this Lease by reason of a taking or appropriation as described above, such taking or appropriation shall be of such an extent and natureas to substantially handicap, impede or impair Tenant’s use of the Premises for a period in excess of ninety (90) days (assuming Landlord shall promptlycommence any repairs necessary to restore the remaining Premises to a complete architectural unit). If any material part of the Building shall be so taken orappropriated, either party shall have the right, at its option, to terminate this Lease. Landlord shall be entitled to the entire condemnation award or paymentattributable to any such taking of the Building or to any taking of any portion of the Common Area or Access Property, subject to the terms and conditions ofthis Article 21.ARTICLE 22. MORTGAGE REQUIREMENTS.22.1 Tenant’s Right Subordinate. This Lease and all rights of Tenant under this Lease are hereby subordinate hereunder to any lien of anymortgage or mortgages or lien or other security interest resulting from any other method of financing or refinancing, now or hereafter in force against the landand/or buildings hereafter placed upon the land of which the Premises are a part and to all advances made or thereafter to be made upon the security thereof;provided that so long as Tenant is not in default hereunder (beyond any applicable notice or cure period), this Lease shall remain in full force and effect for thefull term hereof and shall not be terminated as a result of any foreclosure or sale or transfer in lieu of such proceedings pursuant to a mortgage or otherinstrument to which Tenant has subordinated its rights pursuant hereto.-40-(a) Building Owner/Mortgagee/Non-Disturbance Agreement. Landlord shall cause its mortgagee to execute a non-disturbance andattornment agreement (“SNDA”). Landlord and Tenant shall mutually agree to a form SNDA. Upon either party’s written request to the other party, therequested party shall execute the SNDA and return such to the requesting party within a reasonable time period.22.2Attornment. In the event of the sale or assignment of Landlord’s interest in the Premises, or in the event of any proceeding, broughtfor the foreclosure of, or in the event of exercise of the power of sale under any mortgage or other security instrument made by Landlord covering the Premises,Tenant shall attorn to the assignee or purchaser and recognize such purchaser as Landlord under this Lease and such purchaser shall recognize Tenant,pursuant to the terms and conditions of this Lease.22.3Notice and Cure. Tenant agrees to give any mortgagees (as defined below), by registered mail, a copy of any notice of default servedby Tenant upon Landlord, provided that prior to such notice, Tenant has been notified, in writing (by way of a Notice of Assignment of Rents and Leases orotherwise) of the addresses of any such mortgagees. Tenant further agrees that if Landlord shall have failed to cure such default within the time set forth inthis Lease, then any such mortgagees shall have an additional thirty (30) days within which to cure such default or if such default cannot be cured within thattime, then such additional time as may be necessary, if within such thirty (30) days, any such mortgagee has commenced and is diligently pursuing theremedies necessary, to cure such default (including but not limited to commencement of foreclosure proceedings, if necessary to effect such cure), in whichevent this Lease shall not be terminated. For purposes of this Lease, “mortgagee” shall mean the holder of any mortgage, the beneficiary under any deed oftrust, or the holder of any other security interest which encumbers the Premises, Common Area, Access Property, or any part thereof.ARTICLE 23. RULES, REGULATIONS AND RESTRICTIVE COVENANTS. Tenant shall faithfully observe and comply with the Rules,Regulations and Restrictive Covenants attached hereto as Exhibit “C” and all reasonable modifications of and additions thereto from time to time put into effectby Landlord and provided in writing to Tenant, provided however, that any such promulgated or modified Rules, Regulations and/or Restrictive Covenantsshall not discriminate against Tenant in favor of other lessees of portions of the Park. Landlord shall not be responsible to Tenant for the nonperformance byany other lessee or occupant of the Park of any such Rules, Regulations and Restrictive Covenants, but shall take reasonable steps to secure such otherTenant’s compliance. Notwithstanding anything in this Lease to the contrary, Landlord’s Rules, Regulations and Restrictive Covenants shall not materiallyadversely affect Tenant’s use and enjoyment of the Premises pursuant to this Lease or be inconsistent with any provision of Lease, and that in the event and tothe extent of any such inconsistency, the Lease shall control.ARTICLE 24. HOLDING OVER. If Tenant holds possession of the Premises after the term of this Lease with Landlord’s consent, and Landlord acceptsRent in the amounts hereinafter provided,-41-Tenant shall become a lessee from month-to-month upon terms equal to the then existing terms hereunder, except that the Basic Rent shall be the then existingBasic Rent then payable hereunder at the end of the term (on a monthly basis) multiplied by one hundred fifty percent (150%). Rent shall be paid in advanceon or before the first day of each month and Tenant shall continue in possession until such tenancy shall be terminated by Landlord or until Tenant shall havegiven to Landlord a written notice at least thirty (30) days prior to the date of termination of such tenancy of its intention to terminate such tenancy.ARTICLE 25. NOTICES. All notices and demands which may or are required to be given by either party to the other hereunder shall be sent by overnightcourier or United States certified or registered mail, postage prepaid, addressed to the parties at the addresses set forth in the Fundamental Lease Provisions, orat such other address as may have been specified by a party giving prior written notice to the other party.ARTICLE 26. LANDLORD’S RIGHT TO CURE DEFAULTS. All covenants and agreements to be performed by Tenant under any of the terms of thisLease shall be at its sole cost and expense and, except as otherwise specifically provided herein, without any abatement of Rent. If Tenant shall fail to pay anysum of money, other than Rent, required to be paid by it hereunder or shall fail to perform any other act on its part to be performed hereunder, and suchfailure shall continue for five (5) business days after Tenant has received notice thereof by Landlord, Landlord may, but shall not be obligated to do so, andwithout waiving any rights of Landlord or releasing Tenant from any obligations of Tenant hereunder, make such payment or perform such other act. Allsums to be paid by Landlord and all necessary incidental costs together with interest thereon at the rate of one and one-half percent (1-1/2%) per month fromthe date of such payment by Landlord in connection with the performance of any such act by Landlord shall be considered additional rent hereunder and,except as otherwise in this Lease expressly provided, shall be payable to Landlord on demand or, at the option of Landlord, in such installments as Landlordmay elect and may be added to any rent then due or thereafter becoming due under this Lease.ARTICLE 27. FORCE MAJEURE. Neither Landlord nor Tenant shall be responsible or liable for any delay in the observance or performance of any termor condition of this Lease to be observed or performed thereby to the extent such delay results from action of governmental authorities, civil commotions,strikes, fires, acts of God, whether or not similar to the matters herein specifically enumerated and any such delay shall extend by like time any period ofperformance by the performing party and shall not be deemed a breach of or failure to perform this Lease or any provision hereof. The foregoing isinapplicable to the payment of Rent and Additional Rent or any other amounts due hereunder.ARTICLE 28. SECURITY DEPOSIT. Tenant will deposit with Landlord or its agent the amount set forth in the Fundamental Lease Provisions hereof, assecurity (and not as rent) for the full and faithful performance by Tenant of all of Tenant’s obligations hereunder. In the event Tenant defaults in theperformance of any of the terms hereof or abandons the Premises, Landlord-42-may use, apply or retain the whole or any part of such security for the payment of any Rent or any other payment to be made by Tenant hereunder which is indefault or of any other cost, expense or liability which Landlord may incur by reason of Tenant’s default. If all or any portion of the security deposit is soused or applied, Tenant shall, no later than five (5) days after written demand is made therefor, deposit cash with the Landlord in an amount sufficient torestore the security deposit to its original amount. In the event of bankruptcy or other debtor creditor proceedings, either voluntarily or involuntarily institutedby or against Tenant, the security deposit shall be deemed to be applied in the following order: to actual damages, obligations and other charges, including anydamages sustained by Landlord, other than unpaid Rent, due to Landlord for all periods prior to the filing of such proceedings; to accrued and unpaid Rentprior to the filing of such proceeding; and thereafter to actual damages, obligations, other charges and damages sustained by Landlord and Rent due theLandlord for all periods subsequent to such filing. If Tenant shall, at the end of the term hereof, including extensions and holdover periods, have fully andfaithfully complied with all of the terms and provisions of this Lease (but not otherwise) the security deposit, or any balance thereof shall then be returned toTenant. Tenant shall not be entitled to interest on any such security deposit, and Landlord shall not be required to maintain the deposit in a segregated account,unless required by applicable law. Tenant shall not assign or encumber the funds deposited by it as security hereunder and neither Landlord nor itssuccessors or assigns shall be bound by any such assignment or encumbrance. In the event of a sale of the Premises or all or a portion of the Building,Landlord shall have the right to transfer the security deposit to the buyer, and Landlord shall thereupon be relieved of all obligations to return the securitydeposit to Tenant, and Tenant agrees to look solely to the buyer for the return of the security deposit.ARTICLE 29. QUIET ENJOYMENT. Landlord covenants that so long as Tenant performs all of its obligations hereunder it shall peacefully and quietlyhave, hold and enjoy the Premises for the term hereof.ARTICLE 30. SIGNS. Tenant shall not place on the Premises, Access Property or in the Park, any exterior signs or advertisements, nor any interior signs oradvertisements that are visible from the exterior of the Premises, without Landlord’s prior written consent, which Landlord shall not unreasonably withhold,condition or delay. Tenant shall be entitled to place on and about the Premises or Tenant’s parking area directional, way-finding, parking, identification andsimilar signs relating to Tenant’s operations at the Premises without Landlord’s consent so long as same comply with all applicable legal requirements andExhibit “D”. All signing by Tenant shall be in accordance with the sign criteria set forth in Exhibit “D” attached hereto. The cost of installation and regularmaintenance of any such signs approved by Landlord shall be at the sole expense of Tenant. At the termination of this Lease, or any extensions thereof, Tenantshall remove all its signs, and all damage caused by such removal shall be repaired at Tenant’s expense.ARTICLE 31. SURRENDER OF LEASE. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work as amerger, and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of Landlord,-43-operate as an assignment to it of any or all such subleases or subtenancies.ARTICLE 32. [Intentionally Deleted]ARTICLE 33. MISCELLANEOUS.33.1Successors and Assigns. The covenants and conditions herein contained shall, subject to the provisions as to assignment, apply toand bind the heirs successors, executors, administrators and assigns of all of the parties hereto; and all of the parties hereto shall be jointly and severally liablehereunder.33.2Arbitration. The parties agree that in the event a dispute arises with respect to this Lease, and the parties, after good faith efforts,have failed to resolve the dispute among themselves, that such dispute will be submitted to arbitration pursuant to the rules then in force of the AmericanArbitration Association, or a mutually acceptable alternative organization. If reasonably necessary, judgment upon an arbitration award may be entered in anycourt having jurisdiction.33.3Attorneys’ Fees. In the event that at any time during the term of this Lease either Landlord or Tenant institutes any action orproceeding against the other relating to the provisions of this Lease or any default hereunder, then the unsuccessful party in such action or proceeding agrees toreimburse the prevailing party therein for the reasonable expense of attorneys’ fees and disbursements incurred therein by the prevailing party.33.4Time. Time is of the essence of this Lease with respect to each and every Article, Section and Subsection hereof, subject to the expresstime frames, if any, set forth herein.33.5Waiver. The waiver by either party of any term, covenant or condition herein contained shall not be deemed to be a waiver of the sameor any other term, covenant or condition or any subsequent breach of the same of any other term, covenant or condition herein contained. The subsequentacceptance of rent hereunder by Landlord shall not constitute a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease,other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance ofsuch rent.33.6Applicable Law. This Lease shall be governed by and construed in accordance with Utah law.33.7Separability. The invalidity or enforceability of any provision hereof shall not affect or impair any other provision hereof.33.8Entire Agreement. This Lease and the Exhibits, Riders and Addenda, if any, attached hereto and the rules and regulations adoptedpursuant to Article 23 above constitute the-44-entire agreement between the parties. All Exhibits, Riders or Addenda mentioned in this Lease are incorporated herein by reference. No subsequent amendmentto this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed. Submission of this Lease for examination does not constitute anoption for the Premises and becomes effective as a Lease only upon execution and delivery thereof by Landlord to Tenant. If any provision contained in a Rideror Addendum is inconsistent with a provision in the body of this Lease, the provision contained in said Rider or Addendum shall control. It is hereby agreedthat this Lease contains no restrictive covenants binding on other lessees or exclusive use provisions in favor of Tenant. There are no representations orpromises by either party to the other except as are specifically set forth herein. This Lease supersedes and revokes all previous conversations, negotiations,arrangements, letters of intent, writings, brochures, understandings, and information conveyed, whether oral or in writing, between the parties hereto or theirrespective representatives or any agents of any of them. The captions and section numbers appearing herein are inserted only as a matter of convenience andare not intended to define, limit, construe or describe the scope or intent of any Section or Article.33.9Terminology. The term “Landlord” as used herein shall include the agent or agents of Landlord. The term “Tenant” as used hereinshall include the plural as well as the singular and shall include the masculine, feminine and neuter. If there is more than one Tenant, the obligations of Tenanthereunder shall be joint and several.33.10No Recording by Tenant. Tenant shall not record this Lease without the prior written consent of Landlord. Tenant may record withthe Salt Lake County Recorder a Memorandum of Lease in a format approved by Landlord and Tenant, provided Tenant escrows a release of theMemorandum to insure that upon termination of the Lease no lien will remain on the Premises with respect to such Lease. Landlord may file this Lease forrecord with the Salt Lake County Recorder.33.11Authority of Signatories. Each person executing this Lease individually and personally represents and warrants that he is dulyauthorized to execute and deliver the same on behalf of the entity for which he is signing (whether it be a corporation, general or limited partnership orotherwise) and that this Lease is binding upon said entity in accordance with its terms.33.12Accord and Satisfaction. No payment by Tenant or receipt by Landlord of an amount less than is due hereunder shall be deemed tobe other than payment towards or on account of the earliest portion of the amount then due, nor shall any endorsement or statement on any check or payment(or any letter accompanying any check or payment) be deemed an “accord and satisfaction” (or payment in full), and Landlord may accept such check orpayment without prejudice to Landlord’s right to recover the balance of such amount or pursue any other remedy provided herein. Any statement on any checkor instrument or any accompanying written communication tendered by Tenant to Landlord, claiming full satisfaction of a claim, shall be sent to the followingdesignated person and address:-45-J. Steven PricePrice Logistics Center Draper One, LLC230 East South TempleSalt Lake City, Utah 8411133.13Financial Information. Upon written request by Landlord, but not more often than annually, Tenant shall submit to Landlord acopy of its most recent financial statement evidencing Tenant’s financial condition. In the event Tenant (or Tenant’s parent) is not a public company with itsshares traded on a nationally recognized public stock exchange, any such financial statements shall be certified by an officer of Tenant to be correct andcomplete and that they present fairly the financial condition of Tenant. Landlord agrees to maintain the confidentiality of such financial information and willnot disclose it to third parties except to Landlord’s lender and advisors, or as required by law.33.14Renewal Option. Provided Tenant is not in default under any term, condition, or covenant under this Lease (beyond any applicablenotice or cure period), Tenant shall have four (4) five (5) year options to renew the term of the Lease upon one hundred eighty (180) days prior written notice toLandlord. During the first year of any renewal option period, Tenant’s Basic Rent shall be ninety-five percent (95%) of the then current market rent with twoand one half percent (2 ½%) annual increases thereafter. However, in no event shall Tenant’s Basic Rent in the first year of any renewal option period be lessthan two and one half percent (2 ½%) above the Basic Rent paid in the last year of the previous term. All other terms and conditions of this Lease shall remainas set forth herein.33.15Option to Purchase. Provided the Tenant is not in default under any term, condition, or covenant under this Lease (beyond anyapplicable notice and cure period), Tenant shall have three (3) options to purchase the Premises with not less than thirty (30) days prior written notice toLandlord under the terms and conditions set forth herein below and upon not less than one hundred eighty (180) days to close, subject to extension as set forthbelow. Upon Landlords receipt of Tenant’s written notice to exercise an option to purchase, Landlord and Tenant shall use their best efforts to enter into aformal Purchase and Sale Agreement. Landlord shall proceed to prepare and have delivered to Tenant, within ten (10) business days after receipt of notice fromTenant, a Purchase and Sale Agreement and Tenant and Landlord shall use their best efforts to negotiate and execute such Purchase and Sale Agreement withintwenty (20) business days after receipt of the Purchase and Sale Agreement. Landlord and Tenant shall mutually cooperate should either party elect to enterinto any like kind exchange governed under United States Internal Revenue Code Section 1031. In the event Tenant has not used all of the Four HundredThousand Dollar ($400,000.00) Tenant Allowance, as set forth in Exhibit B-l and attached hereto and by reference made a part hereof, and provided Tenanthas not taken its unused Tenant Allowance as a credit towards Rent, the purchase price shall be adjusted downward dollar for dollar, including an eightpercent (8%) amortized interest rate, for the unused Tenant Allowance. In the event Tenant fails to-46-timely exercise any of its options to purchase and Landlord, in its sole and absolute discretion, decides to sell the property after the Tenant’s third option topurchase has expired, and provided Tenant is not in default under any term, condition, or covenant under this Lease (beyond any applicable notice and cureperiod), Landlord shall offer to sell the Premises to Tenant at Landlord’s designated offering price and Tenant shall have ten (10) business days in which torespond to Landlord’s offer. If Tenant fails to timely exercise its option to purchase at the designated offering price, Landlord shall be free to market and sellthe Premises for (or above) the designated offering price, at any time within nine (9) months following the expiration of the ten (10) business day period. In theevent that Landlord shall not consummate such sale within such nine (9) month period, or if Landlord intends to enter into an agreement to sell the Premisesfor a reduced purchase price or on terms and conditions more favorable than the designated offer price, then the provisions of this Section 39.15 shallcontinue in force and effect and Landlord shall thereafter be required to re-offer the Premises upon such different terms and conditions or such new designatedoffering price. The purchase option obligations of the Landlord hereunder shall run with the Land throughout the term of this Lease provided that upontermination of this Lease, all options to purchase hereunder shall terminate and shall be of no further force or effect. However, Tenant’s purchase option rightshereunder are not assignable or transferable.(a) First Option. Upon thirty (30) days prior written notice, Tenant shall have the right to purchase the Premises during the twelfth (12th)month of the Lease Term. Such purchase shall be closed, and legally recorded, as provided herein. In the event Tenant exercises its first option to purchase,Landlord and Tenant agree that the purchase price shall be Six Million Two Hundred fifty Thousand Dollars ($6,250,000.00).(b) Second Option. Upon thirty (30) days prior written notice, Tenant shall have the right to purchase the Premises during the twenty-fourth (24th) month of the Lease Term. Such purchase shall be closed, and legally recorded, as provided herein. In the event Tenant exercises its second optionto purchase, Landlord and Tenant agree that the purchase price shall be Six Million Four Hundred Thirty-Seven Thousand Five Hundred Eighty Dollars($6,437,500.00).(c) Third Option. Upon thirty (30) days prior written notice, Tenant shall have the right to purchase the Premises during the thirty-sixth(36th) month of the Lease Term. Such purchase shall be closed, and legally recorded, as provided herein. In the event Tenant exercises its third option topurchase, Landlord and Tenant agree that the purchase price shall be Six Million Six Hundred Thirty Thousand Six Hundred Twenty-five dollars($6,630,625.00)(d) Closing. The closing for the first, second or third options shall take place at a mutually agreeable closing date not less than onehundred eighty (180) following the execution of the Purchase and Sale Agreement. Landlord shall have the right to extend the closing up to ninety days, uponnot less than thirty (30) days written notice to Tenant; provided that the Basic Rent applicable to the Premises during the ninety (90) day period shall beapplicable to the purchase price.-47-(e) Roof Replacement. Notwithstanding any other provision herein to the contrary, in the event Landlord replaces the roof on the Buildingprior to the exercise by Tenant of any of its options to purchase the Premises within in the first thirty-six (36) months of this Lease, the purchase price for thePremises shall be increased by the cost of the new roof multiplied by a fraction, the numerator being the number of years of remaining life of the roof warrantyand the denominator being the life of the roof warranty.33.16“As-Is”. In the event Tenant exercises any of its options to purchase the Premises hereunder, Tenant shall accept the Premises in its“as-is” condition and “state-of-repair”, except as otherwise provided herein and subject to Landlord’s maintenance, repair and restoration obligations underthis Lease prior to the closing. Landlord makes no representations, warranties, promises or guarantees (whether express, implied, statutory or otherwise) withrespect to the Premises, except as otherwise provided herein. Notwithstanding the foregoing, if Tenant exercises any of its options to purchase the Premiseshereunder, the conveyance shall be made to Tenant or to a nominee designated by Tenant by written notice to Landlord sent not less than four (4) days prior tothe specified date for the delivery of the deed. The deed shall be at least the equivalent of a so called “Special Warranty Deed”, and shall convey a good andclear record and marketable title to the Premises, free from all encumbrances and restrictions except (a) this Lease and any subleases of any portions of thedemised premises entered into by Tenant or other liens or encumbrances incurred by or on behalf of Tenant; (b) provisions of local building and zoning laws;(c) such real estate taxes for the current tax year as are not yet due and payable on the date of the delivery of the deed; (d) liens for municipal bettermentsassessed after this Lease; (e) restrictions, reservations, easements, covenants, and rights-of-way of record as of the date hereof; and (f) as set forth in Section33.18 below.33.17Termination Option. Tenant shall have a one (1) time right to terminate this Lease at the end of the seventh (7) year after the RentCommencement Date, provided (a) Tenant is not in default hereunder (beyond any applicable notice and cure period), (b) Tenant gives nine (9) months priorwritten notice to Landlord, and (c) Tenant pays Landlord, at the time the written notice is delivered, a termination penalty equal to the sum of (i) the total of allunamortized transaction costs, including Tenant Allowances, leasing commissions, and legal fees, and (ii) an amount equal to four (4) months of Rent.Easements and Restrictive Covenants. Tenant acknowledges that the Premises is part of the Park and in the event Tenant exercises its option topurchase the Premises, title transfer will be subject to various cross access, utility, drainage, monument, and shared access easements benefiting the propertiesadjacent to the Premises. The Premises will also be subject to reasonable covenants, conditions and restrictions adopted by the Landlord for the benefit of thePark and recorded on or prior to the closing of the sale of the Premises to Tenant. Notwithstanding the foregoing, Landlord shall provide copies of all suchdocuments, instruments and agreements prior to recording and same shall be commercially reasonable and shall not-48-materially adversely affect Tenant’s use and enjoyment of the Premises either pursuant to this Lease or as purchase, or be inconsistent with any provision ofLease.ARTICLE 34. LANDLORD’S ACCEPTANCE. Landlord’s execution of this Lease is contingent upon Tenant providing current consolidated financialstatements of the Tenant and/or Guarantor(s) which are acceptable to the Landlord and Landlord receiving a financing commitment from an institution underterms and conditions acceptable to Landlord.ARTICLE 35. LIMITATION ON DAMAGES. Other than losses for which the other party is entitled to recover under the policy or policies of insurancerequired by this Lease (but only to the extent actual recovery is made thereon), neither party shall be liable to the other party under this Lease for any loss ofprofit(s) or special, indirect, punitive, incidental or consequential damages of any kind.ARTICLE 36. WAIVER OF DISTRAINT AND LIENS; TENANT FINANCING. Landlord hereby waives any and all right of distraint, landlord’sliens, or any other right or remedy it may have at law or equity that would allow Landlord to attaché, lien, seize, impound and/or sell any inventory located inthe Premises owned by Tenant or which is owned by a third party (not affiliated with Tenant) and which is being stored by Tenant on behalf of any suchthird party and Landlord acknowledges that it has no security interest in such property. Landlord covenants and agrees to execute and deliver to Tenant (orTenant’s lender) (at no cost to Landlord) a commercially reasonable document or instrument reasonably requested by Tenant or its lender evidencing suchwaiver with respect hereto.ARTICLE 37. GOVERNMENTAL INCENTIVES. Notwithstanding anything to the contrary contained in this Lease. Tenant shall have the right toapply and/or lobby for, obtain, retain, investigate and prosecute any governmental, quasi-governmental or other incentives, subsidies, seed-money, credits,grants or similar benefits relating to Tenant’s use and occupancy of, or operations at, the Premises, but not with respect to Landlord’s ownership of thePremises or the Park.ARTICLE 38. PERMITTED CONTESTS. Tenant, at its expense, may contest, by appropriate legal proceedings conducted in good faith and with duediligence, any laws, ordinances and regulations and other governmental rules, orders and determinations (“Legal Requirements”) presently in effect or hereafterenacted, made or issued, whether or not presently contemplated with which Tenant is required to comply pursuant to this Lease or any Environmental Law, orthe amount or validity or application, in whole or in part, of any tax, assessment, payment or charge which Tenant is obligated to pay (or valuation, appraisalor assessment on which same is based) pursuant to this Lease or any lien, encumbrance or charge by any thirty party, provided that unless Tenant hasalready paid such tax, assessment or charge (a) the commencement of such proceedings shall suspend the enforcement or collection thereof against or fromLandlord and against or from the Premises, (b) neither the Premises nor any rent-49-therefrom nor any part thereof or interest therein would be in any danger of being sold, forfeited, attached or lost and the failure to promptly comply with anyapplicable Legal Requirements or Environmental Laws does not present a risk to human health or safety of the Premises or the Park, (iii) Tenant shall havefurnished such security, if any, as may be required in the proceedings and as may be reasonably required by Landlord, and (iv) if such contest be finallyresolved against Tenant, Tenant shall promptly pay the amount required to be paid, together with all interest and penalties accrued thereon. Landlord, atTenant’s expense, shall execute and deliver to Tenant such authorizations and other documents as reasonably may be required in any such contest. Tenantshall indemnify and save the Landlord harmless against any cost or expense of any kind that may be imposed upon the Landlord in connection with anysuch contest and any loss resulting therefrom. Landlord agrees to reasonably cooperate with Tenant in connection with such contest of any tax, assessment orcharge which Tenant is obligated to pay. Notwithstanding the foregoing appointment, if Tenant determines it to be preferable in prosecution of a contest of atax, assessment or charge, upon Tenant’s prior request, and Landlord agrees with Tenant’s determination, Landlord shall execute the real estate tax complaintand/or other documents approved by Landlord and reasonably needed by Tenant to prosecute the complaint as to such tax, assessment or charge and returnsame to Tenant within ten (10) days and shall otherwise reasonably cooperate with Tenant in connection therewith. In such event, Tenant shall pay all ofLandlord’s actual and reasonable costs and expenses in connection therewith, including, without limitation, reasonable attorneys’ fees and Tenant shallarrange for preparation of such documentation at Tenant’s sole cost and expense.ARTICLE 39.CONSENT OF LENDER. This Lease is subject to the consent of Landlord’s lender.ARTICLE 35. GUARANTEE. FOR VALUE RECEIVED, the undersigned hereby unconditionally and irrevocably guarantees the prompt and faithful-performance by Tenant of all of the obligations of the Tenant as set forth in the aforesaid Lease. Dated this day of , 2008. Address SS# -50-Signature IN WITNESS WHEREOF, Landlord and Tenant executed this Lease as of the date first above written.Landlord:PRICE LOGISTICSCENTER DRAPER ONE,LLC[SIGNATURE APPEARSHERE]J. Steven Price, ManagerTenant:HAEMONETICSCORPORATIONAttest: [SIGNATURE APPEARSHERE] By: [SIGNATURE APPEARS HERE] Its:CFO-51-MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. does hereby consent to the foregoing Lease this day of , 2009.MORTGAGEELECTRONICREGISTRATIONSYSTEMS, INC.By Its SEE ATTACHED-52-[GRAPHICS APPEARS HERE]Commercial Mortgage ServicingMAC A0357-030P.O.Box 4036, Concord, CA 94524 1320 Willow Pass Road, Suite 300 Concord, CA 94520800 986-9711September 23, 2009Price Logistics Center Draper One, LLC230 East South TempleSalt Lake City, UT 84111Attn: J. Stevens PriceRe: Borrower: Price Logistics Center Draper One, LLCLoan No. 31-0905810Property: Kimberly Clark Industrial, 12050 S. Lone Peak PKWY, Draper, UTInv. No. 586Lender:Bank of America, National Association, as successor by merger to LaSalle Bank, NationalAssociation, as Trustee for the registered holders of Bear Steams Commercial MortgageSecurities Inc., Commercial Mortgage Pass-Through Certificates, 2007-PWR16.Dear Mr. price:Wells Fargo Bank, N.A. (“Wells Fargo”), as Master Servicer for the above-referenced lender (“Lender”), with respect to the above-referenced loan(“Loan”), has received your request for Lender’s consent to a Lease Agreement dated August 20, 2009, between Price Logistics Center DraperOne, LLC (“Landlord”) and Haemonetics Corporation. (“Tenant”). Wells Fargo Bank has reviewed your request and hereby consents, on behalfof the Lender.This consent is strictly limited to its terms and Wells Fargo has no obligation to consent to any similar requests in the future. This consent issolely for the benefit of the above-referenced Borrower and should not be relied upon by any other person or entity.If you have any questions or comments, please call me at (925) 677-5361.Sincerely,Wells Fargo Bank, N.A.,as Master Servicer[SIGNATURE APPEARS HERE]Felipe SanchezAsset Administrator[GRAPHICS APPEARS HERE][GRAPHICS APPEARS HERE][GRAPHICS APPEARS HERE]EXHIBIT “B”LANDLORD’S WORK AND TENANT’S WORKLONE PEAK BUSINESS PARKExcept as expressly provided herein and in the Lease, Tenant accepts the Premises in its “as-is” condition and state of repair. Tenant, at its sole cost andexpense, but subject to the Tenant Allowance provided in Exhibit B-l, shall complete any improvements that may be required for Tenant’s use of the Premises.All such work shall be in accordance with this Exhibit “B” and other information contained within the Tenant Package referenced in Section II, Paragraph Bbelow. All work to be performed by Landlord in delivering the Premises to Tenant shall be limited to those items expressly set forth below under Section I(“Landlord’s Work”)(or as otherwise expressly provided in the Lease), some of which may be performed by Landlord on behalf of, and for the account ofTenant as is more fully described herein. Some of the items identified as Landlord’s Work may have already been accomplished. Landlord shall promptlyperform those construction items identified under Landlord’s Work which have not yet been completed. All other items of work, including the purchase andinstallation of all materials and equipment necessary for Tenant’s use and enjoyment of the Premises shall be provided by Tenant at Tenant’s sole cost andexpense and shall include, but shall not be limited to, those items set forth below under Section II (“Tenant’s Work”). Tenant’s Work shall be performed inaccordance with the requirements of this Exhibit “B”.I.LANDLORD’S WORKLandlord, at Landlord’s sole cost and expense, shall extend the existing Draper City Street (11950 South), by constructing a road located along the northboundary of the Park. Such road shall be extended west approximately 550 feet and south approximately 440 feet to the center of the cul-de-sac to beconstructed by Landlord and brought to the parking area serving the Premises, as shown on the attached Exhibit “A”. Landlord, at Landlord’s sole cost andexpense, shall construct an additional Tenant employee parking area (consisting of 95 regular and 5 handicap passenger vehicle parking spaces) to be locatedon the north side of the Building along with a paved pedestrian access to the east side of the Building and appropriate handicap ramps, striping and lighting,as shown on the attached Exhibit “A”. The existing garage on the east side of the Building is to be demolished to facilitate Tenant access to the property duringand after Tenant’s construction. Other than as specifically set forth herein and in the Lease, Tenant shall lease the premises in its “as-is” condition and “state-of-repair”. Inasmuch as the northerly boundary line of the Land as shown on Exhibit A is slightly north of the northerly boundary line of the 5.45 acre taxparcel used for assessment and property description purposes, Landlord has also agreed to adjust the lot line, in the event Tenant shall exercise any of itsoptions to purchase the Premises. Landlord shall take such action as is necessary to lawfully adjust the lot line to be as shown on Exhibit “A-1”, so that all ofthe parking and other improvements exclusively serving the Building (and any required setback and similar areas) shall be located on the Land and the Landshall constitute a separate and distinct tax parcel approved by Draper City and in compliance with the restrictions of record relating to the division (orsubdivision) of the land. To insure that the purchase of the Premises is not delayed should Tenant exercise one of its options to purchase hereunder, Landlordagrees to begin the process to adjust the boundary line upon the full execution and delivery of this Lease, and to use its best efforts to consummate theboundary line adjustment within six (6) months thereafter.Landlord’s Work shall be performed at Landlord’s sole cost and expense in a first-class workmanlike manner, free from defects, using new, first-qualitymaterials and in a way so as to minimize any material interference with Tenant’s use or occupancy of, and access to, the Premises, if Tenant is thenoccupying or operating in any portion thereof. Landlord shall perform Landlord’s Work substantially in accordance with original plans and specificationsthat are provided to Tenant for Tenant’s prior review. Landlord shall not be required to submit any minor changes to the plans and specifications unless theywill have a materially adverse effect on Tenant’s access to the Premises. Landlord shall provide Tenant with copies of all of the plans and specificationsapproved by theB-1applicable municipal authorities. Landlord represents and warrants to Tenant that, upon completion of Landlord’s Work the Access Property shall complywith all applicable laws, ordinances, rules, regulations, orders, and permits. Landlord’s Work is or shall be warranted to be free from defects in material andworkmanship for one (1) year from the Lease Commencement Date (or substantial completion of the applicable aspect of Landlord’s Work, if later). Landlordshall promptly correct defects in Landlord’s Work discovered within the foregoing one (1) year period at no cost to Tenant. Landlord, after receiving writtennotice from Tenant of such defect, shall work in good faith to resolve the defect.Landlord shall use commercially reasonable efforts to promptly and diligently complete Landlord’s Work (other than the lot line adjustment which must becompleted prior to the purchase of the Premises by Tenant) by November 30, 2009. If Landlord shall not complete Landlord’s Work (other than the lot lineadjustment) in accordance with the terms and conditions of this Exhibit “B” by December 15, 2009, unless the delay is outside the control of Landlord, thenTenant shall be entitled to a credit against Tenant’s obligation to pay Basic Rent equal to one (1) day for every one (1) day beyond December 15, 2009 thatLandlord fails to complete Landlord’s Work (other than the lot line adjustment) as required hereunder. In addition, if Landlord fails to complete Landlord’sWork (other than the lot line adjustment) by June 1, 2010 in accordance with the terms and conditions of this Lease, Tenant may, at Tenant’s option, bynotice in writing to Landlord terminate this Lease. If Tenant terminates this Lease as provided in the preceding sentence, the parties shall be discharged fromall obligations hereunder. Within five (5) days of notice to Tenant that Landlord has completed Landlord’s Work (other than the lot line adjustment), Tenantmay send Landlord a “punch list” of any items which are incomplete or defective. On receipt of such punch list, Landlord shall have thirty (30) days,weather permitting and subject to Article 27 herein, to complete the items designated therein; and if Landlord shall fail to do so within said thirty (30) dayperiod, then Tenant may complete the items on behalf of Landlord and deduct the cost of completion of such items from Rent (up to an amount not to exceedfifteen percent (15%) of each monthly installment thereof) due hereunder (provided that if Landlord has commenced to complete such items within said thirty(30) days, and thereafter is prosecuting same to completion, said thirty (30) day period shall be extended, where, due to the nature of the particular item(s), it isunable to be completely cured within thirty (30) days). Landlord agrees to provide Tenant with a copy of the performance bond required by Draper City toinsure the Landlord’s completion of the Landlord’s Work. Said copy will be delivered to Tenant within five (5) business days of the date it is provided toDraper City.II. TENANT’S WORKA.ESTIMATED COSTS; GENERAL REQUIREMENTSTenant’s current good faith estimates assess the total cost of Tenant’s Work to be Four Hundred Thousand Dollars ($400,000.00) for build-out of theoffice area (including restrooms) of approximately 7,444 square feet. Once Tenant has bid or otherwise received reliable third party estimates for the cost ofTenant’s Work, which shall be in accordance with the Exhibit “B”, “C” and “D” of the Lease Agreement and the Tenant Design Criteria, Tenant willprovide Landlord with a revised estimate together with a copy of all the information as required in the Lease. All replacements of existing improvements inthe Premises shall be made by Tenant in accordance with the Lease, the Exhibits thereto, and shall be subject to Landlord’s review and written approval.Any structural alterations, modifications to the concrete shell/warehouse floor and/or additions and reinforcements to the Building which are required toaccommodate Tenant’s Work shall be approved by Landlord as provided in the Lease.Notwithstanding the foregoing, however, as of the date of execution of this Lease Agreement, except as specifically set forth herein, Tenant is not requiredto do any additional work in the Premises. Provided, however, that if at any time during the term of this Lease Tenant wishes to make improvements tothe Premises, such work shall be done in accordance with this Exhibit “B” and at Tenant’s sole cost and expense.B-2B.DRAWINGS PLANS AND SPECIFICATIONS1.Tenant Package. Landlord shall provide Tenant, a Tenant Package to better identify the Premises and provide details in describing conditions of theshell structure. This package may contain such items as:a.Lease Plan showing Premises in relation to other tenant areas.b.Dimensional floor plans or “record” drawings, if available. Tenant, however, may not rely on such plans or drawings and must verify physicaldimensions and existing conditions in the Premises.c.Tenant Design Criteria.2.Tenant’s Submittal. After receipt of Tenant Package and prior to commencement of construction, Tenant agrees to submit to Landlord for Landlord’sapproval, two (2) sets of 1/16” scale fully-dimensioned architectural, mechanical, electrical and structural drawings with one (1) set of reproducible(.PDF format) drawings prepared by Tenant’s architect and/or engineer, as may be applicable given the scope and nature of the contemplated work.Submittals are to be sent to the attention of the Landlord and shall indicate the specific requirements of the Premises, clearly outlining the proposedscope of work as described below. Each set and page of drawings shall be wet stamped, sealed and signed by Tenant’s architect and/or engineer.Mechanical and electrical plans shall set forth all electrical and mechanical requirements of Tenant, all in conformity with this Lease, all Exhibitsthereto and the Tenant Design Criteria. Tenant’s architect and engineer shall be licensed in the state where the building Premises is located.3.Submittal Specifications. Tenant’s submittal and drawings shall incorporate all applicable Landlord requirements and criteria as established by theLease, Exhibits thereto, and including, but not limited to the following, if applicable to the contemplated work:a.Architectural plans and sample board showing:i.Demolition plans;ii.Framing plans and details with sections through the storefront;iii.Separate sign drawings in accordance with Exhibit “C” of this Lease;iv.Floor plan showing flooring material and interior partitions;v.Reflected ceiling plan;vi.Material and sample board of all interior finish materials and colors;b.Plumbing plans showing:i.Sewer piping and connection details;ii.Roof penetration and flashing details;iii.Domestic water and sewer riser diagram;iv.Clean-out locations;v.Specifications for materials used;vi.Fixture schedule;vii.Condensate piping detail;viii.Saw cutting and slab repair specifications;c.Electrical plans, calculations and schedules showing:i.Number of circuits;ii.Connected load of each circuit;iii.Number of space circuits;iv.Riser diagram;v.Light fixtures (size and number of each); andAll electrical equipment and loads;B-3d.Mechanical plans showing:i.The heating and cooling loads;ii.Engineered calculations for energy consumption, of HVAC equipment;iii.Duct configuration, type, size, total CFM at each register;iv.The calculations required by applicable energy efficiency codes;i.Location of all roof penetrations with sections for curb installation and structural support details;v.Location, capacity, size and weight of all roof-mounted equipment;vi.Air balance requirements for supply, exhaust and make-up air;vii.Roof walk pads around all equipment;viii.Removal of: all abandoned equipment serving the Premises or located in or directly above the Premises, including conduits, pipes, wiring,curbs, etc. and the repairing of the affected area to original like new condition.e.Structural plans, engineer’s calculations.i.Calculations for all Tenant necessitated loading and modifications to the building structure.ii.Support framing plan for all roof mounted equipment.iii.Support details for: transformers, water heaters, duct shafts, racking, etc.f.Fire protection plans, calculations and design.Tenant shall submit all fire protection drawings to Landlords insurance review consultant. Send to: Liberty Mutual, Senior Loss PreventionConsultant, P.O. Box 35920, Phoenix, AZ 85069-5920.4.Landlord approval. Landlord or its architect and/or engineer shall review Tenant’s plans and specifications for compliance with the provisionscontained within the Lease and Exhibits thereto, the Tenant Package, and Tenant Design Criteria. Such drawings will be returned to Tenant markedeither “Approved”, “Approved as Noted”, “Approved as Noted-Resubmit”, or “Disapproved-Resubmit” within thirty (30) five (5) business daysafter receipt by Landlord. Tenant will have fifteen (15) days to revise and resubmit for Landlord approval. Tenant must comply with the Landlordnotes and comments on any drawings and re-submit for Landlord’s approval. Should Landlord’s architect/engineer be required to review Tenant’splans and specifications as a result of Tenant’s proposed structural modifications or changes, Tenant shall be responsible for the reasonable expenseand costs for Landlord’s architect or engineers services. The review and approval of Tenant’s plans, specifications or calculations by Landlord or itsagents or representatives shall not constitute an implication, representation or certification by Landlord that said improvements are in compliancewith any statutes, codes, ordinances and other regulations.5.Changes. Any subsequent material changes, modifications or alterations to Landlord’s Work or to Tenant’s drawings which are proposed by Tenantor which are requested or made by Tenant, shall be reviewed by Landlord or its architect or engineer, and any additional reasonable charges,expenses or costs so incurred shall be at the sole cost and expense of Tenant. Landlord shall have the right to demand payment for any suchapproved changes, modifications or alterations to Landlord’s Work prior to Tenant’s performance of work in the Premises. No changes,modifications or alterations to Landlord’s Work or to Tenant’s previous approved drawings shall be made without the written consent of Landlord,not to be unreasonably withheld, conditioned or delayed. Tenant shall provide Landlord with copies of any change orders in excess of Five ThousandDollars ($5,000.00) prior to the work set forth in such change order being commenced.6.Drawings Kept On-Site. Tenant shall ensure that it’s contractor performs work in strict accordance with, and retains on-site at all times during thecourse ofB-4construction, the complete set of plans and specifications approved by both the Landlord and the local Building Department.7.Compliance Responsibility. Tenant shall have the sole responsibility for compliance with all applicable statutes, codes, ordinances and othergovernmental regulations for all work performed by or on behalf of Tenant. Tenant shall be responsible for any Tenant required structuralmodifications to the existing building structure resulting from work performed by or on behalf of Tenant. Landlord or Landlord’s agents’ agents’or representatives’ approval of plans, specifications, calculations or of Tenant’s Work shall not constitute an implication, representation orcertification by Landlord that said improvements are in compliance with any statues, codes, ordinances and other regulations. In instances whereseveral different standards are applicable, the standard of Landlord’s insurance underwriter, the strictest standard shall apply unless prohibitedby applicable Codes.8.Permits. In accordance with the Landlord’s agreement with the local building department, Tenant, within fifteen (15) days after receivingLandlord’s approval of submitted drawings, shall submit one extra set of the required number of copies to the local building department forpermit. The Building Department shall review the plans and issue two approved sets to the Tenant. One of these sets shall be given to theLandlord’s representative when the Tenant’s contractor checks in with the Landlord and attends the required pre-construction meeting inaccordance with Section II Paragraph K of this Exhibit “B”.9.As-built Drawing. After completion of any material build out or modifications to Premises, Tenant will supply Landlord, within thirty (30) days ofcompletion of construction, one (1) full size set of reproducible (.PDF format) “as-built” architectural, mechanical, and structural (if modified)drawings, if such drawings were required in order to obtain permits and approvals.C.INTERIOR FINISHES1. Floorsa.Floor. The Landlord has provided a finished concrete floor slab. Any cutting and patching of this level slab requires written approval byLandlord before work by Tenant can be initiated. Any damage done to existing under-slab utilities caused by Tenant or occurring duringTenant’s occupancy of the Premises shall be repaired by Tenant at Tenant’s sole cost and expense. The concrete slab shall be patched back inaccordance with the Tenant Design Criteria and as set forth in the following criteria.i. Compact backfill and sub-grade work to 95% ASTM D-1557 modified procter at optimum moisture. Tenant to supply soilscompaction reports from an approved testing company if requested by Landlord.ii.Verify quantity of granular fill. Provide additional fill as required to bottom of slab. Granular fill to be ¾” to 1” minus gap graded gravel.iii.Replace concrete in trench excavation with 6.5” thick slab on granular fill with #4 rebar doweled to existing slab 12” on center.b.Materials. Commercial grade 26 oz. glue down level loop nylon carpet with a minimum density of 6000 with at least 26 oz. weight and/orother quality floor materials, such as glazed or unglazed paver tile or wood parquet shall be used in Tenant’s office areas. Raw concrete orvinyl products shall not be used in the Tenant’s office areas without prior written approval of Landlord. Commercial grade sheet vinyl in allrestrooms.B-5c.Expansion Joint. Expansion joints are installed as a necessary function of the building structure. In the unlikely event that such expansion jointoccurs within the Premises, such expansion joint shall be clearly identified on Tenant’s submitted plans. Tenant shall be responsible to install finishmaterials adjacent to these joints in a top quality workmanlike manner. Landlord will not accept responsibility for finish materials installed nearand/or over the expansion joints.d.All penetrations through the floor slab shall be properly sealed and made water tight to prevent liquids and/or odors from leaking through the slab.Tenant shall install a trowel down water proofing membrane system if a mezzanine is installed or existing in the premise over the entire floor area ofrestrooms, areas containing sinks, food and beverage preparation equipment, service areas and over other similar areas as designated by Landlord.2.Storefront Worka.Plans. All storefront signage and plans shall be in conformance with Exhibit “D” (Signage Criteria) and be first approved by Landlord, whichapproval shall not be unreasonably withheld.3.Ceilinga.Elevation. Tenant is made aware that ceiling height limitations are created by “as-built” conditions and floor-to-floor heights vary throughout thebuilding. Any relocation of or modification to existing piping, sprinkler systems, gas fired unit heaters, conduit and/or ductwork necessitated byTenant’s installation of a ceiling shall be at the expense of Tenant.b.Expansion Joint. Should an expansion joint occur in the Premises, Tenant is responsible for the construction of the floors, walls and ceilings affectedby such joint in a manner consistent with prevailing construction and design practices and Landlord’s written approval.c.Access Panels. Access panels and/or catwalks above the ceilings required to serve Tenant’s or Landlord’s equipment shall be installed by Tenant at itssole cost and expense.d.Materials. All ceiling material must be non-combustible equal to Class “A” installation. Ceiling material finishes are subject to written approval byLandlord. (Refer to Tenant Design Criteria).1.Office area to receive a standard 2’-0 × 4’-0 metal ceiling grid system with regressed spline tiles in 2’-0 × 2’-0 pattern,comparable to Armstrong® “Dune-second look” tiles.e.Bracing. Tenant at its sole cost and expense may be required to install additional bracing predicated by the type of ceiling system approved.4.Perimeter Worka.Service Doors. If not existing, Tenant shall provide service doors and hardware including existing control devices serving the Premises as required bylocal building codes and Landlord requirements. The primary purpose of the service door is that of an exit, and must swing at least 90 degrees in thedirection of travel without causing an obstruction and be equipped with necessary code required hardware. If required by applicable code, Tenant shallfurnish and install a minimum 3’-0” × 7’-0” × 1 ¾” warehouse to office area hollow metal service door and welded SDI grade III frame, connectingoffice to warehouse area or the exterior of the premises as required by code. Tenant is required to provide for theB-6complete installation and shall include but be limited to: the installation of the cutout and construction of an alcove if required, patching,repairing and matching all existing finishes, necessary headers, proper anchorage of the frame, installation of 4041-H-CUSH-689 LCN closure,kick plates on both sides of service door.b.Finishes. When Tenant’s Work joins or meets other existing work, Tenant shall be responsible to repair and replace to like new condition, anyexisting work disturbed by Tenant.c.Demising Partitions. All demising partitions shall be constructed with a one-hour fire rating as a minimum. A two-hour rating may be required insome cases. Tenant shall furnish and install a full height wall with 6” 20 gauge metal studs and track, on 16” center with 5/8” (Type X) firerated gypsum board, taped, and to the roof deck above (minus roof deflection), on it’s (the Tenant’s) side of all demising walls.d.Insulation. Tenant is required to install sound insulation in the demising walls separating tenant spaces, the demise wall separating the office areafrom the warehouse area, and all bathroom walls. If not already existing, Tenant shall insulate all perimeter-demising walls of the Premisesaccording to Local Building Codes and Landlord requirements.e.Equipment Screens. If Tenant is allowed by Landlord to install any equipment located at or near the exterior of the Premises as provided in theLease, and such equipment is visible, if required by applicable law or the CC&Rs, Landlord or Tenant shall erect screening to shield theequipment from public view at Tenant’s sole cost and expense. All rooftop HVAC equipment, pipes, vents, etc. will be located a minimum of 18’back from parapet wall.D.FIXTURES AND FURNISHINGSTenant shall furnish and install all fixtures, furnishings, equipment, shelving, trade fixtures, leasehold improvements, interior decorations,graphics, signs, mirrors, coves and decorative light fixtures and other special effects (all as first approved and permitted by Landlord). Tenant shallprovide Landlord with anticipated load and weight calculations for any wall hung fixtures. If Landlord deems necessary, Tenant shall providebacking and bracing support to demising walls to compensate for loading imposed by Tenant’s wall-hung fixtures at Tenant’s expense.E.UTILITIES1.Plumbinga.System. Tenant shall provide a complete plumbing system, including fixtures and toilet accessories, minimum one (1) floor drain in each toiletroom and in each kitchen with accessible clean-outs. All plumbing work must be installed according to all local, state and national codes,including the Americans with Disabilities Act and Landlord requirements.b.Insulation. Tenant shall insulate all domestic water runs and condensate lines serving the Premises downstream of Landlord’s valve.c.Water Closet. Water closets shall be water conservative tank type or flush valve type. Tenants are encouraged to locate toilets in areas where sewerstubs are provided. Tenant shall excavate and complete plumbing connections, backfill, compact and place concrete floor as required underSection II paragraph C of this Exhibit B. If Tenant’s design does not coincide with the location of existing sewer lines, then Tenant shall saw cutexisting slab according to acceptedB-7construction practices, install required plumbing, compact backfill material and replace concrete floor of same thickness/doweled with #4 rebar 12”on center.d.Water. Water service and distribution exists at the Building. If Tenant requires larger service and/or additional distribution within the Building, if notalready existing, large water consumers, in the reasonable judgment of Landlord, shall furnish and install a water meter conforming to the localwater utility company. If a larger meter is required, it shall be installed by Tenant, at Tenant’s expense.e.Grease Interceptor. Food service Tenants shall connect food waste lines to a grease interceptor system designed, furnished, installed and paid for byTenant in accordance with all local requirements.f.Oil - Water Separator - Tenants with uncommon or heavy effluent discharge shall install and pay for, at their sole cost and expense, the necessaryand required systems, including design, permits and monitoring charges, in accordance with all Landlord and municipal requirements.2. Electricala.Current Condition. Upon the Possession Date the Premises shall contain 2,000 amps of 277/480 volts main electrical gear, consisting of meter baseand CT cabinet located exterior of the Building, 2,000 amp main breaker and associated distribution and branch panels currently feeding thePremises, located interior of the Building. In order to feed the Premises with a full 2,000 amps of 277/480 volts, the transformer and associatedequipment may need to be upgraded by Rocky Mountain Power. In the event there are costs associated with upgrading the power to the Premises, atTenant’s option, Tenant may either pay these costs directly to Rocky Mountain Power or deduct such costs from the Tenant Allowance.b.Conduit and Equipment. Tenant shall pull copper conductors in conduit and make final connections at the electrical distribution panel. Conductorsshall be continuous with no splices between the switch gear at the distribution area and panels within the Premises. Tenant will furnish all necessarylabor, and related electrical equipment to provide a complete approved electrical system serving the Premises. This shall include, panels, transformerscircuit breakers, connection to HVAC power supply, temperature controls, connection to necessary smoke detector or smoke evacuation system ifrequired.c.Design Load. Tenant’s total connected load shall be limited to the maximum allowable load as allowed to the Tenant space and per the local or stateenergy code plus a reasonable amount of miscellaneous equipment load. Tenant shall provide Landlord with proof of electrical inspection prior toTenant’s occupancy.d.Electrical Constructioni.Location of the electrical equipment: distribution panels, transformers, panel board, breaker panel, etc, shall be located on the rear/backwall of Premises and not along or on, demise wall wherever possible but subpanels will be allowed within or adjacent to manufacturingand/or clean room areas subject to the Landlord’s reasonable approval.ii.Material. All electrical materials shall be new and as a minimum, shall be to International Electrical Code standard and shall bear theUnderwriter’s Laboratories (U.L.) label.iii.Time Switches. Time clocks shall be provided by Tenant to control signs in accordance with the Lease and shall be mounted next to theelectrical panel.iv.Lighting Fixtures. Recessed fixtures shall be connected by means of flexible conduit and “AF” wire run to a branch circuit outlet box, whichis independent of the fixture.B-8v.Nameplates. The following equipment shall be identified with engraved Bakelite name plates: Distribution panels, motor starters, lightingpanels disconnects, switchgear and push-button stations.vi.Water Heaters. Electrical water heaters, if needed, shall be provided by Tenant for its domestic hot water requirements. All units shall have awater collection pan with drain and shall be U.L. approved. Heaters will have pressure relief piped to nearest drain in the Premises inaccordance with applicable building codes.vii.Fluorescent Fixtures. All fluorescent fixtures shall have internal protection devices and conform to Tenant’s requirements for clean room andother construction. Prismatic or acrylic lenses will be allowed in the Tenant’s office area without Landlord written approval. Fluorescent striptask lighting will be allowed within the clean room spaces. T5 fluorescent and metal halide high bay fixtures will be allowed in the warehouse.Fluorescent ballasts shall be high power factor type with individual non-resetting overload protection.viii. Panel Board. Panel boards shall be furnished and installed by Tenant. 277/480-volt panels shall be equal to Square-D Type NQOD withsingle or multiple pole bolted thermal magnetic breakers. Tenant shall provide type-written panel schedules.xi.Transformers. All necessary transformers shall be furnished and installed by Tenant and shall be dry type and floor mounted unless otherwiseapproved by Landlord in writing.x. Fuses. Fuses are to be U.L. rated and sized per the NEC requirements.xi.Meter. If required, Tenant shall be responsible for contracting directly with the local Water/Power Utility providers for installation of serviceand meter as required.3. Telephone/DataTenant shall provide all necessary equipment and shall pull wires in conduit and terminate at a punch block provided in Landlord’s distribution area.Any special equipment required by Tenant, shall be installed within the Tenant’s Premises. The local telephone utility shall make final interconnect totrunk lines.F. HEATING, VENTILATION AND AIR CONDITIONING (HVAC)1.StandardsThe HVAC system serving the Premises must be designed to cool and heat air automatically as to maintain conditioninginside the Premises as follows:a.Heating equipment shall be capable of maintaining the office area with an inside dry bulb temperature of 70 degrees Fahrenheit with an outsidetemperature of 3 degrees Fahrenheit.b.The cooling system shall be capable of maintaining the office area with an inside temperature of 72 degrees Fahrenheit with an outside conditionof 105 degrees Fahrenheit by bulb and 70 degrees Fahrenheit wet bulb.c.The HVAC will be sized to provide one (1) ton of cooling per 300 square feet of office area and will have an economizer on each roof top unit.d.SMOKE EVACUATION: At Tenant’s sole cost and expense, the design of Tenant’s HVAC system shall incorporate all code-required smokecontrol/exhausts as required by the governing authorities. All costs for construction, installation, and connection shall be at Tenant’s sole cost andexpense.B-9e. Clean Room, Manufacturing and Production Areas shall be constructed to meet the requirements of the Tenant’s criteria.2. Installation, Repairs and MaintenanceThe HVAC systems shall be installed, repaired, maintained and replaced in accordance with the provisions of the Lease, all Exhibits thereto and asfollows:a.Tenant shall design and install its own HVAC system, unless designed and installed by Landlord, and paid for by Tenant. All HVAC workrequired by Tenant in addition to that, if any, which may have been provided by Landlord pursuant to this Exhibit B, shall be approved byLandlord, and designed and installed by Tenant at Tenant’s expense. This work shall include without limitation, additional gas fired unitheaters, and/or HVAC, connection to supply and return lines, duct work, and any controls or circuitry required for the operations of said air-conditioning systems per the Tenant Design Criteria. Tenant shall provide all necessary structural modifications to the existing Building structureincluding, but not limited to, structural engineering plans, calculations, etc., prepared and stamped by a structural engineer licensed in the statethe Building is located, for the installation of all rooftop equipment and Building systems.b.A one-year unit warranty with a five-year compressor and ten-year heat exchanger guarantee shall be provided to Landlord.c.At Landlord’s option, Tenant or Landlord, at Tenant’s expense, shall supply and install roof supports for roof mounted equipment units as wellas any roofing, additional curbs, counter-flashing, roof repairs, etc,. as required. Roofing work shall be performed by Landlord’s approvedroofing contractor.d.Tenant shall install a 110 volt 20amp GFI circuit with weather proof cover at its roof top HVAC unit, provided same is required by code.e.Tenant shall provide, when required by applicable code, condensate piping from fan-coil into the sanitary sewer or roof drainage system and inaccordance with the Landlord requirements and local code requirements.3. HVAC Systema.Duct Work. Tenant shall provide at its expense all duct work and accessories for air distribution. All duct work shall be designed and installedin accordance with the procedures described in the ASHRAE Guide and in accordance with the latest methods recommended in the Sheet Metaland Air Conditioning Contractor’s National Associations (SMACNA) Low Velocity Duct Manual, latest edition.b.Diffusers. Ceiling diffusers shall be white and similar in quality to the Tuttle& Bailey DSLA with #6 controls, which is as opposed blade volume control and separate extractor.c.Ceiling Access Panels. Tenant shall provide 24” x 24” access panels in the ceiling as required to provide access to equipment, dampers, etc.d.Balance. Tenant shall have the HVAC system balanced by an independent balancing contractor and submit balance reports of Landlord.e.Duct Shafts. Fire rated duct shafts shall be supported from the floor of the building structure.B-104.Automatic Temperature Control System. Tenant shall furnish and install thermostat(s) which control the temperature in the Premises during operatinghours. It is the Tenant’s responsibility to operate the system properly at all times. Odor producing tenants must maintain a negative air pressure toensure odors do not disturb other Tenants in the building (see Special Exhaust Systems, Section II Paragraph F-6).5.Toilet Exhaust Systems. Toilet exhaust fan must be connected and controlled by the toilet room light switch and shall be vented above roof. Tenantshall be responsible for installing and maintaining all exhaust ducts serving the Premises.6.Special Exhaust Systemsa.As determined by Tenant’s design criteria special exhaust systems may be require at certain equipment and lab hoods. Odors from kitchens,dining rooms, cafeterias, warehouse equipment or areas, must be exhausted to the atmosphere through a Tenant-furnished and installed exhaustsystem as directed by Landlord and as set forth in the Lease, Exhibits and the Tenant Design Criteria.b.Maximum exhaust air levels shall be based on applicable codes and special Tenant requirements. Grease fans shall be provided with a drainagearea at the bottom of the unit complete with a residue trough equipped to be cleaned quarterly. The location of the exhaust fan shall be not less than15’-0” from any air in-takes so as to avoid contaminating air supplied to the Building.c.Tenant shall install, at its sole cost and expense, on all roof-mounted grease producing equipment, a grease containment system manufactured byFacilitec®. No substitutions will be allowed. The Tenant must contact Facilitec® at 180 Corporate Drive, Elgin, IL 60123; phone: (800)284-8273; fax: (847)931-9629.7.Discharge Dampers. Exhaust fan discharge dampers shall be parallel blade, white in color, neoprene lined edge, reasonably air-tight when closed,located close to outdoor outlet with damper control operator to keep same closed when fan is off and open as required when fan is on.8.Rooftop Equipment. Exhaust discharge outlets and relief air outlets shall be roof mushroom type with roof locations and projections above roofapproved by Landlord and to comply with governing codes. Projection above 3’0” require special approval. (See Section II Paragraph F(6) above forspecial requirements for odor handling exhaust units). All equipment, pipes, etc. to be set back a minimum of 18’ from parapet wall. If required byapplicable code, Tenant shall provide additional screening of rooftop equipment at Tenant’s expense. All rooftop mounted HVAC equipment shall beinstalled and mounted a minimum of 18’ from parapet wall.9.Damper Controls and Interlock. The necessary damper controls and interlock to maintain the original design air balance shall be provided by Tenant atTenant’s expense and approved by Landlord. Exhaust and make up air equipment controls must be interlocked to ensure simultaneous operation.10.Food Preparation System (if installed in the future)a.Equipment and systems for food preparation areas shall be installed in accordance with the National Fire Protection Association Standard, latestedition.b.The fire extinguishing systems shall be Underwriters’ Laboratory approved CO2 or dry chemical pre-engineered system as required by the localgoverning authority with the following features as a minimum:i.Protection of the hood and dust;ii.Surface Protection for deep fat fryer, griddle, broiler and range;B-11iii.Automatic devices for shut down of fuel or power to the appliances with surface protection. It should be noted that these devices must be ofthe manual reset type and not automatic reset.iv.A readily accessible means to manually actuate the fire extinguishing equipment shall be provided in the exit path and shall be clearlyidentified. Actuation shall be mechanical.10.Contractor Qualifications. The installation of all HVAC equipment and systems shall be made only by persons properly trained and qualified by themanufacturer of the equipment or system to be installed.12.Maintenance. Tenant shall contract directly with a Landlord approved HVAC company to provide any replacement and regular quarterly maintenancefor the air-conditioning system.G. ROOFTenant shall make no roof penetrations or install any type of equipment on the roof or within the roof area etc. without prior written approval of Landlordand subject to the provisions of Section 8.6 of the Lease. Any and all roof penetrations desired by Tenant and approved by Landlord shall be at Tenant’ssole cost and expense. Roof walk pads shall be installed around all roof-mounted equipment by Landlord’s approved roofing contractor. All equipmentcurbs shall be counter flashed and sealed in a water tight manner. All abandoned equipment, curbs, pipes, conduits vents etc. serving the Premises and notbeing used by Tenant shall be entirely removed and the affected area(s) returned to original condition. All roofing work must be performed by Landlord’sapproved roofing contractor at Tenant’s expense.Landlord shall provide Tenant (and/or its architect) with a list of Landlord’s approved contractors to be used by Tenant to bid roofing work.H. FIRE SPRINKLERSIf not already existing and required by code and/or Landlord’s insurance carrier, Tenant at Tenant’s sole cost and expense shall provide for the installationand modification of the fire sprinkler system in accordance with the requirements of the local building codes and fire marshal and as approved by theLandlord and the Landlord’s Insurance Carrier. Tenant shall contract with a Landlord approved fire sprinkler contractor to provide the necessary designand installation of the Tenant’s system. Tenant shall reimburse Landlord for Landlord’s work if required. (See Section II of paragraph F 10 forrequirements kitchen hood extinguishing systems).I.SIGNSAll signs shall be designed, constructed and located in accordance with Landlord’s Exhibit “D” (Sign Criteria) attached hereto.J. CONNECTIONSTenant shall provide electrical and mechanical hook-up and connections of all fixtures and equipment controls, telephone systems, warehouse locatedequipment, computer systems, kitchen and food service equipment and other equipment utilized by Tenant.K. CONSTRUCTION PROCEDURES1.Commencement of construction. Landlord shall notify Tenant of the time when Tenant can commence Tenant’s Work and Tenant agrees to commencesuch work forthwith and thereafter diligently prosecute such work to completion.B-122. Commencement Requirements. Tenant’s construction may not commence until each of the following conditions are satisfied:a.The Lease agreement is fully executed or the Tenant has delivered to Landlord a signed letter of indemnity on Landlord’s form.b.Tenant has obtained Landlord approved plans.c.Tenant has obtained all necessary permits from the Landlord approved plans and provided evidence to Landlord that all required buildingpermits, connection fees, impact fees and other permits in connection with Tenant’s construction have been obtained and paid for by Tenant.d.Tenant’s contractor has attended a pre-construction meeting with Landlord’s representative.e.Tenant or Tenant’s contractor has provided to Landlord a certificate of insurance as required in Exhibit “B” Section II Paragraph L of this LeaseAgreement.f.Tenant or Tenant’s contractor submits to Landlord payment of the required construction security deposits and fees.g.Tenant submits to Landlord the names, addresses and phone numbers of the general contractor and all subcontractors, material suppliers, fixturesuppliers and installers engaged in the construction of Tenant’s work.h.Tenant provides to Landlord a copy of each and every contract with any and all contractors, suppliers (if typically available), and providers (iftypically available) and written acknowledgements in the form attached hereto as Form 1 from the general contractor, and from eachsubcontractor and material supplier providing in excess of Two Thousand Dollars ($2,000.00) in work or materials to the Premises, that suchentity is not entitled to and will not assert a mechanic’s lien or any other interest in the Landlord’s fee interest in the Building/Park, and that suchentity shall look solely to Tenant and Tenant’s interest in the Premises under this Lease for payment.i.Tenant or Tenant’s contractor provides to Landlord a copy of the contractor’s license for the state in which the Building is located.j.Tenant or Tenant’s contractor provides to Landlord a construction schedule showing anticipated beginning and completion dates of each phase ofTenant’s construction, including fixturing and stocking.L. INSURANCE1.Coverages. Tenant shall not permit its contractor(s) to commence any work until all required insurance has been obtained and certified copies ofpolicies or certificates naming Tenant’s general contractor as the primary insured and naming Landlord as additional insured have been delivered toLandlord. Tenant shall secure, pay for and maintain or cause its contractor(s) to secure, pay for and maintain during the continuance of constructionand fixturing work within the Premises the following insurance in the following amounts:a.Worker’s compensation insurance with limits in accordance with the statutory requirements of the state in which the work is being performed andemployer’s liability insurance with limits of at least $500,000.00 per person, $500,000.00 per accident and $500,000.00 for occupational diseases(including “stop gap” and “all states” endorsements).B-13b.Comprehensive commercial general liability insurance including contractor’s protective liability coverage, contractual liability coverage, explosionand collapse coverage, underground hazard coverage, and completed operations coverage insuring against bodily and personal injury and propertydamage in the combined single limit amount of not less than $1,000,000, $2,000,000 aggregate.c.Comprehensive automobile liability insurance with a non-owned and hired liability endorsement covering bodily injury and property damage in thecombined single limit amount of not less than $1,000,000, $2,000,000 aggregate.d.Builders’ Risk Completed Value Form affording “all risks of physical loss or damage” on its work in the Premises as it relates to the building inwhich the Premises are located, naming the interests of Landlord, Tenant’s general contractor and all subcontractors as their respective interests mayappear, within a radius of 100 feet of the Premises.e.Tenant agrees to indemnify, defend, and hold harmless Landlord, Landlord’s affiliates and its trustees, beneficiaries, partners, officers, agents andemployees from and against all claims, liabilities, losses, damages, and expenses of whatever nature including those to the person and property ofTenant, its employees, agents, invitiees, licensees, and others arising out of or in conjunction with the performance of Tenant’s Work except to theextent same may arise out of Landlord’s or its trustees’, beneficiaries’, partners’, officers’, agents’ or employees’ direct negligence, it beingunderstood and agreed that the foregoing indemnity shall be in addition to the insurance requirements set forth above and shall not be in discharge ofor in the substitution for same. All such policies shall be appropriately endorsed to name as additional insureds, Landlord and any other party soindicated by Landlord, for itself and other lenders as insured parties and to provide that Landlord shall be given thirty (30) days prior written noticeof any alteration or termination of coverage.2.Compliance. The above-described insurance shall comply in all respects with the provisions contained in the Lease. Such insurance shall cover injuryto persons and damage to property arising out of the construction activities and operations of Tenant, the Tenant’s General Contractor, the primesubcontractors or their respective subcontractors and material men or the employees of any of them.3.Scope. Such liability insurance shall insure the Tenant’s General Contractor and/or subcontractors against any and all claims for bodily injury,including death resulting therefrom and damage to the property of others arising from its operations under the contract, whether such operations areperformed by the general contractor, subcontractors, or any of their respective subcontractors or by anyone directly or indirectly employed by any ofthem.M. ADDITIONAL ITEMS/REQUIREMENTS1.Contractor Requirements. All contractors engaged by Tenant shall be bondable, licensed in the state where the Building is located, having good laborrelations, capable of performing quality workmanship and working in harmony with other contractors and subcontractors on the job. Tenant’s Workshall be coordinated with Landlord’s general construction work, if any.2.Evidence of Payment Capability. If required by Landlord, Tenant shall furnish Landlord satisfactory evidence that it has funds or financing to coverits anticipated construction obligations before commencing, or from time to time thereafter before proceeding further, with such construction.B-143.Intentionally Omitted.4.Inspection. During the course of construction, Tenant’s Work shall be subject to inspection by Landlord. Tenant shall require its general contractorto cooperate with Landlord and to correct any deficiency noted by Landlord during construction. Prior to the installation of any ceiling or concretefloor-slab work in the Premises, Tenant’s contractor shall contact Landlord’s representative to arrange for an inspection of all work in the Premises.The Premises shall be inspected by Landlord for the purpose of determining the quality of the workmanship and adherence to Landlord approveddrawings and the provisions of this Exhibit “B”. Landlord shall notify Tenant in writing of any unacceptable items and Tenant shall have thirty(30) days to complete such items. Landlord or Landlord’s agent shall, upon written notification to Tenant, complete any item still outstanding at theend of the thirty (30) day period.5.Warranties. Upon completion of Tenant’s Work, warranties (one [1] year minimum) on all work and equipment shall be assigned to Landlord byTenant.6.Work Rules. Tenant or Tenant’s general contractor, shall not commence any work without checking in with Landlord’s representative andsatisfying all requirements of Section II, paragraph K, of this Exhibit “B”. All work performed by Tenant during the term of the Lease shall beperformed in accordance with this Lease Agreement, all Exhibits thereto, the Tenant Design Criteria and as directed by Landlord’s representativeand shall be performed so as not to cause interference with other tenants and the operation of the Building/Park. Tenant will take all precautionarysteps to protect its facilities and the facilities of others affected by Tenant’s Work. Construction equipment and materials are to be located inconfined areas and truck traffic is to be routed in and from the site as directed by Landlord. Tenant shall require its General Contractor and allSubcontractors to comply with Landlord’s Construction Job Rules which shall be issued to Tenant’s General Contractor at the time of the per-construction meeting as described in Section II K.7.State Sales Tax. Contractor must provide evidence of payment of all applicable state Sales Tax at the completion of the project.8.Waste Storage. Tenants must store and contain all bi-products and waste within Tenant’s premises (to include grease, oils and all other potentiallyhazardous materials). No waste may accumulate for longer than a 24 hour period and must be legally disposed.N.TENANT CLOSE-OUT AND PROJECT COMPLETIONUpon completion of Tenant’s construction, Landlord will deliver to Tenant a project close out package. Tenant shall promptly and diligently complete allrequirements and forms within thirty (30) days of receipt of close out package as set forth below. (See Section III of this Exhibit)1.Letter of Acceptance. Upon the completion of Tenant’s construction, fixturing, and satisfaction of the conditions set forth below, Landlord shallinspect the Premises, and if such Premises are acceptable, Landlord shall issue a Letter of Acceptance to Tenant. Tenant’s Work shall not be deemedto be in compliance with the terms of this Lease or Exhibits thereto until such Letter of Acceptance has been issued by Landlord to Tenant. Theissuance of such a Letter of Acceptance shall be contingent upon all of the following:a.Tenant shall have satisfactorily completed the work to be performed by Tenant as required in this Lease Agreement and Exhibits thereto inaccordance with the working drawings and specifications thereof, and as approved by Landlord.B-15b.Tenant shall have furnished Landlord with final unconditional waivers of lien and contractor’s affidavits, substantially in the form attachedhereto, from all parties performing labor or supplying equipment and/or materials in connection with Tenant’s Work, including Tenant’sarchitect. Such waivers and affidavits shall establish that all of said parties have been compensated in full, shall be in the form of swornstatements and “long form” affidavits, and shall establish that payment has been made for all labor and materials, all equipment and fixtures,all architectural and engineering fees and all other contractor services, and shall certify that all work has been performed in accordance withLandlord-approved plans and specifications. In addition, Tenant shall have furnished a Tenant affidavit substantially in the form of Form Cattached hereto stating that Tenant has paid for all work performed and for all fixtures, equipment and materials supplied on its behalf. (SeeSection III for close out forms).c.Tenant shall submit to Landlord a cost breakdown attached hereto in the form of Form D, stating Tenant’s final and total construction costs, together withreceipted invoices showing payment thereof, evidence of payment of any state Sales Tax, or such evidence of payment as is satisfactory to Landlord (seeSection III).d.Tenant shall secure and deliver to Landlord a copy of a Certificate of Occupancy property issued by the governmental entity havingjurisdiction.e.Tenant shall deliver to Landlord one (1) set of “as-built” construction drawings of the Premises.f.Tenant shall have reimbursed Landlord for the work and related items performed by Landlord within and for the Premises in accordance withthe Lease, and this Exhibit B.g.Tenant shall furnish Landlord with an HVAC air balance report performed by an independent air-balancing contractor.h.Tenant shall have completed all Landlord required punch-list items as Landlord shall detail as part of Form E. i.Tenant shall have requested in writing to Landlord that a Letter of Acceptance be issued to Tenant.O.FAILURE TO PAY SUMS DUE LANDLORD1.Remedies. Should Tenant fail to timely pay the sums which are due Landlord, or should Tenant fail to pay Landlord or any of Landlord’s affiliatesfor any work performed by Landlord or such affiliate on Tenant’s behalf under this Exhibit, or as a contractor or subcontractor for Tenant, orotherwise, such failure shall constitute a breach of this Lease, subject to the applicable notice and cure periods and entitle Landlord to exercise anyor all available remedies contained in the Lease.2.Interest. All sums which are required to be paid hereunder and which are not paid when due shall bear interest as and to the extent described in theLease.P.GENERAL REQUIREMENTS1.Intentionally Omitted.2.Intentionally Omitted.3.OSHA. Tenant shall comply with all current provisions of the Occupational Safety and Health Act (OSHA), that may apply to Tenant’s operations.B-164.Environment. Tenant shall comply with the latest Environmental Protection Agency (EPA) requirements covering Tenant’s operations from thePremises. In addition, Tenant shall comply with all other existing or future City, County, State or Federal regulations or legislation regardingenvironmental hazards as such applies to Tenant’s operations.5.Intentionally Omitted.6.Exterior Conduit. Tenant shall not install conduit, pipes, wires or other lines of any type on any exterior portion of the Building/Park withoutLandlord written approval or as shown on the approved Tenant’s construction documents.7.Trash Removal. Landlord does not provide and is not responsible for Tenant’s construction or move-in trash removal. It is Tenant’s responsibilityto contain and remove all construction debris, packaging and move-in debris from its Premises prior to opening. Unless other arrangements areapproved in advance by Landlord, Tenant or Tenant’s contractor shall provide an open-top dumpster for the containment of Tenant’s constructionand move in debris. Tenant is not to use the Building/Park dumpsters or trash receptacles at any time during its construction. Trash removal forTenant’s construction shall be approved by and coordinated through the Landlord’s representative with all costs being Tenant’s responsibility.Trash accumulation will not be permitted overnight in the Premises, Common Area or truck dock areas. Tenant shall not allow excessive trash toaccumulate within the Premises or allow any trash to accumulate in the Common Areas. The Premises and adjacent Common Areas must be“broom clean” at the end of each construction shift. Tenant shall pay any costs incurred by Landlord in removing Tenant or Tenant’s contractorstrash from areas in and around the Premises (plus a 15% surcharge for overhead).8.Portable Bathroom. If applicable, Tenant’s contractor to provide, at their cost, a portable bathroom during the construction time period.9.Landlord’s Approval and Consent. Wherever Landlord’s approval or consent is required (or that of its Architect, Engineer or other agent orrepresentative) under this Exhibit “B” (or any riders, attachments or exhibits hereto), such consent or approval shall not be unreasonably withheld,conditioned or delayed and shall be provided within ten (10) working days of Landlord’s receipt of request therefor.III. FORMS (attached)A.PROJECT PRE-COMMENCEMENT FORMS1.FORM 1-CONTRACTOR’S ACKNOWLEDGEMENT: Each contractor and material supplier providing in excess of two thousand dollars($2,000) in work or materials shall execute Form 1 prior to performing any work or supplying any materials.B.PROJECT CLOSE OUT FORMS1.Form A- General Contractor’s Lien Wavier and Affidavit: Must be completed and signed by Tenant’s General Contractor, notarized andreturned to Landlord. Use of an alternative form must be approved by the Landlord.2.Form B- Subcontractors, Lower Tier Contractor and Material-Men Lien Wavier: Must be completed by each party who performed work orprovided materials, valued in excess of $500.00. Follow same instructions per Form “A” above. (Tenant must make copies as required)B-173.Form C – Tenant’s Affidavit: Must be completed and signed by the appropriate officer of Tenant, notarized and returned to Landlord.4.Form D – Cost Breakdown: Must be completed and signed by the appropriate officer of Tenant and returned to Landlord along with copies ofreceipts showing payment, canceled checks or other evidence of payment.5.Form E – PUNCH LIST ITEMS: Tenant’s work will be inspected by the Landlord for the purpose of determining the quality of work doneand the adherence to the plans approved by the Landlord. Items and comments pertaining to Landlord’s inspection will be forwarded to Tenanton Form E.Approved as to form byApproved as to form byLandlord’s RepresentativeTenant’s Representative[SIGNATURE APPEARS HERE][SIGNATURE APPEARS HERE]Date Date B-18B-19PROJECT CLOSE OUTProperty: Lone Peak Business ParkPROJECT PRE-COMMENCEMENTFORM 1CONTRACTOR’S ACKNOWLEDGMENT FORMOwner InformationContractor Information Company Name 230 East South TempleAddress Salt Lake City, Utah 84111 Phone (801) 478-8000 Fax (801) 478-8001PhoneFax TenantSpace #Project Information: Property Contractor understands that as a condition of Tenant’s Lease, Contractor must have and maintain in force at all times valid policies of workers compensationinsurance, comprehensive general liability insurance and comprehensive automobile liability insurance, providing certain coverage’s as detailed in the Lease.Attached are current certificates from Contractor’s workers compensation, general liability insurance companies, and comprehensive automobile liabilityinsurance, verifying that Contractor has the coverages required by the Lease.Contractor acknowledges and agrees that it is not entitled to and will not assert a mechanic’s lien or any other interest in the Landlord’s fee interest in theBuilding/Park, and that Contractor shall look solely to Tenant and Tenant’s interest in the premises under the Lease for payment.NameTitleDateAny questions regarding the completion or distribution of this form should be directed to:The Landlord’s Representative . 230 East South Temple . Salt Lake City . Utah . 84111Ph. (801) 478-8000 . Fax(801) 478-8001PROJECT CLOSE OUTProperty: Lone Peak Business ParkFORM A GENERAL CONTRACTORAFFIDAVIT, LIEN WAIVER, WARRANTY, AND FINAL RELEASE OF CLAIMSOwner Information Contractor Information Company Name 230 East South Temple Address Salt Lake City, Utah 84111 Phone (801) 478-8000Fax (801) 478-8001PhoneFaxProject InformationTenant Space # Property KNOW ALL MEN BY THESE PRESENT that______________________ (the “General Contractor”), for and in consideration of the receipt of the sum of$_______________ by General Contractor from construction contract (the “Agreement”) between the parties dated the_________ dayof________________, 200_____, hereby release and forever discharges the Tenant and Owner(s) collectively, and their respective successors, affiliates,agents, and assigns, and the property of any of them from all claims and demands whatsoever, including but not limited to lien rights, in any manner arisingout of or related to said Agreement including labor performed and materials, supplies, equipment, and work furnished by or through General Contractor inconnection with, or incidental to, the construction project indicated above.In consideration of and for the purpose of inducing tenant to make the aforesaid final payment, General Contractor hereby represents, warrants, and agreesthat: (1) all sums due or to become due and all debts, accounts, damages, obligations, claims, and demands of every nature and kind whatsoever in anymanner arising out of or related to labor performed or materials, supplies, equipment, and work furnished in connection with, or incidental to, saidconstruction have been paid and satisfied; (2) there are no unsettled claims for injuries to or death of any persons or damage to or destruction of property inany manner arising out of, or related to, the aforesaid construction performed on behalf of Tenant was done so and performed in strict accordance with plansand specifications as provided by Tenant and approved by the local governing jurisdiction, and stamped “Approved as Noted” by owner or its representative;and (3) it shall indemnify and hold harmless Tenant and Owner and their respective successors, affiliates, agents, and assigns from and against any claims,demands, liens, claims of liens, judgments, attachments, and costs related thereto, including attorney’s fees, in any manner arising out of, or related to, theaforesaid construction.The undersigned does hereby further acknowledge that it has no claims or rights of lien of any kind or nature with respect to the Project or the Agreementagainst Tenant or Owner or their respective successors, affiliates, agents, and assigns, including their respective subsidiaries, general partners, lenders, andemployees.The provisions hereof shall inure to the benefit of and shall release and indemnify Tenant and Owner and their respective successors, affiliates, agents, andassigns, including without limitation, their respective subsidiaries, general partners, lenders and employees, as fully and completely as if each of said personsand entities were specifically named or referred to herein as Owner.NameTitleDateA duly authorized and constituted agent and representative Subscribed and sworn to before meMy Commission Expires this_______ day of_________________200_______ Notary Public: ____________________________ Any questions regarding the completion or distribution of this form should be directed to:The Landlord’s Representative . 230 East South Temple . Salt Lake City . Utah . 84111Ph. (801) 478-8000 . Fax(801) 478-8001PROJECT CLOSEOUTProperty: Lone Peak Business ParkFORM BSUBCONTRACTOR, LOWER-TIER SUBCONTRACTOR, OR MATERIAL MEN LIEN WAIVER, WARRANTY, AND FINAL RELEASE OF CLAIMSOwner Information: Sub-Contractor/Supplier Information: Company Name 230 East South Temple Address Salt Lake City, Utah 84111 Phone (801) 478-8000Fax (801) 478-8001PhoneFaxProject Information:Tenant Sapce # Property KNOW ALL MEN BY THESE PRESENT that ______________________ (the “Payee”), in consideration of the sum of $_______________ receipt ofwhich is hereby acknowledged from______________________ (Contractor) and/or ______________________ collectively, (the Payor”), representing thefinal payment under that certain contract between Payer and Payee dated the _______ day of _______________ ,200____ (the “Contract”). Hereby releasesand forever discharges Payer and Owner(s) collectively, and their respective successors, affiliates, agents, and assigns, and the property of any of them fromall claims and demands whatsoever, including but not limited to lien rights, in any manner arising out of or related to said Contract or labor performed ormaterials, supplies, equipments, and work furnished by or through payee in connection with, or incidental to, the construction project indicate above.In consideration of and for the purposes of inducing Payer to make the aforesaid final payment, Payee hereby represents, warrants, and agrees that: (1) allsums due or to become due and all debts, accounts, damages, obligations, claims, and demands of every nature and kind whatsoever in any manner arisingout of or related to labor performed or incidental to, said construction have been paid and satisfied; (2) there are no unsettled claims for injuries to or death ofany persons or damage to or destruction of property in any manner arising out of, or related to, the aforesaid construction; and (3) it shall indemnify and holdharmless Owner and Payer, and their respective successors, affiliates, agents, and assigns from and against any claims, demands, liens, claims of liens,judgments, attachments, and costs related thereto, including attorney’s fees, in any manner arising out of, or related to, the aforesaid construction.The undersigned Payee does hereby further acknowledge that it has no claims or rights of lien of any kind or nature with respect to the Project or the Contractor any claims or rights against Owner or Payer, or their respective successors, affiliates, agents, and assigns.The provisions hereof shall inure to the benefit of and shall release, indemnify, and otherwise apply to Owner and Payer, and their respective successors,affiliates, agents and assigns, including without limitations, their respective general partners, lenders, subsidiaries, and employees, as fully and completely asif each of said persons and entities were specifically named or referred to herein as Owner.NameTitleDateA duly authorized and constituted agent and representative Subscribed and sworn to before me this_______ day of_________________200_______ Notary Public: ____________________________ My Commission Expires: PROJECT CLOSEOUTProject: Lone Peak Business ParkFORM CAny questions regarding the completion or distribution of this form should be directed to:The Landlord’s Representative . 230 East South Temple . Salt Lake City . Utah . 84111Ph. (801) 478-8000 . Fax(801) 478-8001TENANT AFFIDAVITOwner Information: Tenant Information: Company Name 230 East South Temple Address Salt Lake City, Utah 84111 Phone (801) 478-8000Fax (801) 478-8001PhoneFaxProject Information:Tenant Sapce # Property The undersigned hereby certifies that the Tenant, has otherwise satisfied all obligations for all materials and equipment furnished, for all work, labor, andservices performed, and for all known indebtedness and claims against the Tenant for damages arising in any manner in connection with the constructionproject indicated above, for which the Owner(s) collectively, and their respective successors, affiliates, agents, or their property might in any way be heldresponsible.In addition, the Tenant hereby warrants that the improvements made and construction performed on behalf of the Tenant at the aforementioned location wasdone so and performed in strict accordance with plans and specifications as provided by the local governing jurisdiction and stamped “Approved as Noted”by Price Logistics Center Draper One, LLC.NameTitleDateA duly authorized and constituted agent and representative Subscribed and sworn to before me this_______ day of_________________200_______ Notary Public: ____________________________ My Commission Expires: Any questions regarding the completion or distribution of this form should be directed to:The Landlord’s Representative . 230 East South Temple . Salt Lake City . Utah . 84111Ph. (801) 478-8000 . Fax(801) 478-8001PROJECT CLOSEOUTProject: Lone Peak Business ParkFORM DCOST BREAKDOWNGeneral Contractor Information:Tenant Information:Company Named.b.aContract AmountSpace #GENERAL CONTRACT BREAKDOWN: Amount:Carpentry, Drywall, and Framing Acoustical Ceilings Plumbing Mechanical Electrical Paint/Wall covering Flooring OTHER COSTS BORNE BY TENANT:Signage Store Fixtures Architectural/Engineering Fees TOTAL COST OF IMPROVEMENTS I certify that the above amounts comprise the total and correct cost breakdown of “Tenant’s Work” as described in Exhibit B-1 (Tenant Allowance) to the LeaseAgreement between Tenant and Landlord.NameTitleDateA duly authorized and constituted agent and representative Subscribed and sworn to before me this_______ day of_________________200_______ Notary Public: ____________________________ My Commission Expires: Any questions regarding the completion or distribution of this form should be directed to:The Landlord’s Representative . 230 East South Temple . Salt Lake City . Utah . 84111Ph. (801) 478-8000 . Fax(801) 478-8001Any questions regarding the completion or distribution of this form should be directed to:The Landlord’s Representative . 230 East South Temple . Salt Lake City . Utah . 84111Ph. (801) 478-8000 . Fax(801) 478-8001PROJECT CLOSEOUTProject: Lone Peak Business ParkFORM EPUNCH-LISTTenant Information:d.b.a. Space #Tenant space was inspected on __________________________and the following punch list items were noted. A follow-up inspection will be made within 30days of his date to verify satisfactory completion of such items. Tenant shall insure that a copy of this punch list is received by Tenant’s contractor(s). Pleaseretain a copy for your record.I hereby certify that the above punch list item(s) have been completed or rectified to the Landlord’s satisfaction.Name Title DateThe Landlord’s Authorized RepresentativeOCCUPANCY CHARGE SCHEDULEATTACHMENT VI.1To be completed by Landlord’s RepresentativesEXHIBIT “B-1”TENANT ALLOWANCENotwithstanding anything to the contrary contained in this Exhibit “B-1” and Exhibit “B”, Landlord agrees to contribute to Tenant a tenant allowance inthe amount of four hundred thousand dollars ($400,000.00) which sum shall apply towards the work to be done by Tenant as set forth in the Section ofExhibit “B” entitled “Tenant’s Work”, except that such sum shall not in any event apply towards Tenant’s trade fixtures, signs or architectural fees. Said sumis hereinafter referred to as the “Tenant Allowance”. Tenant’s current, good faith estimates assess the total cost of Tenant’s Work to be Four HundredThousand Dollars ($400,000.00). Once Tenant has bid or otherwise received reliable third party estimates for the cost of Tenant’s Work, Tenant will provideLandlord with a revised estimate. Notwithstanding the foregoing to the contrary, the Tenant Allowance set forth herein above, is amortized over theterm of the lease at a rate of eight percent (8%). Such amortization is reflected in the Base Rent as shown in Section 1.1 of the Lease. SuchTenant Allowance shall be used for the construction of up to approximately six thousand square feet of office space, installation of Tenant’srequired dock equipment, power distribution and lighting, all of which shall meet Landlord’s Standard Criteria. In no event shall Tenant utilizeany of the Tenant Allowance for personal property, furniture, fixtures, equipment, moving expenses or any other item(s) beyond base buildingimprovements, as described herein above. Provided Tenant provides written notice to Landlord of its completion of Tenant Improvements, anyallowance dollars which are unused by Tenant within 12 months from the date of lease execution shall be credited dollar for dollar, including theeight percent (8%) amortized interest rate, in the form of free rent.Additional Items/Requirements.1.Contractor Requirements. All contractors engaged by Tenant shall be State of Utah licensed contractors, having good labor relations, capable ofperforming quality workmanship and working in harmony with other contractors and subcontractors on the job. Tenant shall coordinateTenant’s work with Landlord’s general construction work. All of Tenant’s contractors and subcontractors shall be under written obligation tocomply with the provisions of Article 7 of the Lease. All of Tenant’s contractors, subcontractors, and material suppliers providing in excess ofTwo Thousand Dollars ($2,000.00) in work or materials to the Premises shall, prior to providing any work or material to the Premises, provideLandlord with a written acknowledgment in the form attached hereto as “Contractor’s Acknowledgement” that such entity is and shall not beentitled to and will not assert a mechanic’s lien or any other interest in the Landlord’s fee interest in the Park and that such entity will looksolely to Tenant and Tenant’s interest in the Premises under this Lease for payment.2. [Intentionally deleted]3.Tenant Work By Landlord. Landlord shall have the right to perform on behalf of and for the account of Tenant, subject to promptreimbursement by Tenant, any of Tenant’s work which Landlord determines shall be so performed. Such work shall be limited only to workwhich Landlord reasonably believes is required because of an emergency situation, to work pertaining to structural components or requiringroof penetrations, and to work which pertains to the general utility systems for the Business Park. Reimbursement shall also be limited to thereasonable costs incurred in performing the work.4.Inspection. During the course of construction, Tenant’s Work shall be subject to the inspection and approval by Landlord and Landlord’sArchitect. Tenant shall require its general contractor to cooperate with Landlord and to correct any deficiency noted by Landlord duringconstruction. Upon completion of Tenant’s Work, the Premises shall be inspected by Landlord for the purpose of determining the quality of theworkmanship and adherence to Landlord approved drawings and the provisions of this Exhibit “B-1” and Exhibit “B”. Landlord shall notifyTenant in writing of any unacceptable items and Tenant shall have thirty (30) days to complete such items.Landlord or Landlord’s agent shall, upon written notification to Tenant, complete any item still outstanding at the end of the thirty (30) day period.[Intentionally Deleted]5.Work Rules. Tenant shall insure that its contractor(s) shall not commence work without checking in with Landlord’s on-site representative, holds a pre-construction meeting, provides a copy of the building permit, its State contractors license number, and certificate of insurance and executes anAcceptance of Premises form. All work performed by Tenant during the term of the Lease shall be performed so as to cause a minimum of interferencewith other tenants and the operation of the Park. Tenant will take all precautionary steps to protect its facilities and the facilities of others affected byTenant’s Work and to police the same properly. Construction equipment and materials are to be located in confined areas and truck traffic is to berouted in and from the site as directed by Landlord so as not to burden the construction or operation of the Park. In addition to the foregoing, Tenantshall require its General Contractor and all subcontractors to comply with Landlord’s Construction Work Rules [Please forward as soon as possible sothey can be provided to Tenant’s design team] which shall be issued to Tenant’s General Contractor at the time of the project check-in and itsacceptance of Premises. Such Work Rules will generally describe, but not be limited to, access, hours of work, trash removal, conduct of workers,parking, material delivery, storage of material, etc.6.Pay Applications. Tenant shall forward to Landlord copies of each and every pay application (“Certified Pay Application”) received by Tenantrespecting Tenant’s Work on a monthly basis until the Tenant Allowance has been fully expended. All such pay applications shall be certified byTenant’s architect.7. Procedures and schedules for the construction of the Premises by Tenant.A. Commencement of Construction. Tenant agrees that once commenced, such work shall thereafter be diligently prosecuted to completion.B. Commencement Requirements. Tenant shall submit to Landlord, prior to the commencement of construction the following information and items:a. The names, addresses, and phone numbers, of the general contractor and all the subcontractors and material suppliers, including fixturesuppliers, and installers, engaged in the construction of Tenant’s Work.b. The actual commencement date of construction and the estimated date of completion of Tenant’s Work, including its fixturing andstocking.c. Evidence that all required building, connection fees, impact fees and other related permits in connection with the construction andcompletion of Tenant’s Work have been obtained and paid for by Tenant.d. Certificates of Insurance as required in the Lease and elsewhere in Exhibit “B” and this Exhibit “B-1”.e. Tenant provides to Landlord a copy of each and every contract with any and all contractors, suppliers (if typically available), andproviders (if typically available) and written acknowledgments in the form attached hereto as Form 1 from the general contractor, and formeach subcontractor and material supplier Providing in excess of Two Thousand Dollars ($2,000.00) in work or materials to the Premises, thatsuch entity is not entitled to and will not assert a mechanic’s lien or any other interest in the Landlord’s fee interest in the Building/Park, andthat such entity shall look solely to Tenant and Tenant’s interest in the Premises under this Lease for payment. [Taken from Exhibit B, SectionII, K(h)28.Changes. Any material changes, modifications or alterations to Tenant’s Work or to Tenant’s drawings which are proposed by Tenant or whichare requested or made by Tenant, shall be reviewed by Landlord or its Architect/Engineer. No material changes, modifications or alterations toLandlord’s Work or to Tenant’s previous approved drawings shall be made without the written consent of Landlord. Tenant shall provideLandlord with copies of any change orders in excess of Five Thousand Dollars ($5,000.00) prior to the work set forth in such change orderbeing commenced and Landlord shall complete and notify Tenant of its review within five (5) working days of Landlord’s receipt.9.The Tenant Allowance shall be paid by Landlord to Tenant in a single payment upon (i) the performance by Tenant of all of its obligationspursuant to the Exhibit “B”, and (ii) the occurrence of each of the following conditions:(a) The filing of a Notice of Completion and the expiration of applicable lien periods, provided that no mechanics’ or materialmens’ liens areasserted or filed within such lien period; or in the alternative, presentation to Landlord of full and complete releases of mechanics’,materialmens’ and laborers’ liens respecting Tenant’s Work;(b) Issuance of final Certificate of Occupancy with respect to the Premises by the City in which the Park is located;(c) Delivery to Landlord not later than thirty (30) days after completion of Tenant’s Work as described in this Exhibit “B-1” and Exhibit “B”a written statement of the cost breakdown and a copy of the general contract for the performance of Tenant’s Work. Such cost breakdown shallbe certified to be correct by Tenant or by the managing general partner of Tenant if Tenant is a partnership or by the President or a VicePresident of Tenant if Tenant is a corporation;(d) Tenant is current with all obligations under the Lease or under this Exhibit “B-1” and Exhibit “B”; and(e) Delivery to Landlord of a certificate of Tenant’s architect certifying that Tenant’s Work has been completed in accordance with plans andspecifications approved by Landlord and certifying the correctness of the final billing of Tenant’s contractor to Tenant;(f) Delivery to Landlord no later than thirty (30) days after completion of Tenant’s work as described in this Exhibit “B-1” and Exhibit “B”of a notarized statement certifying that Tenant’s obligations for all materials and equipment furnished for all work, labor and servicesperformed have been satisfied which shall include a statement certifying that all known indebtedness and claims against the Tenant fordamages arising in any manner in connection with the construction of the Premises have been satisfied; and(g) Tenant has completed to Landlord’s reasonable satisfaction (i) those items specifically found by Landlord (or its architect, engineer, orother representative) or any governmental building inspector, to be (A) incomplete or of unacceptable workmanship, (B) deficient because ofinadequate or inferior materials, or (C) not in compliance with the approved plans and specifications and (ii) any other “punch list” items.10. Landlord’s Approval and Consent. Wherever Landlord’s approval or consent is required (or that of its Architect, Engineer or other agent orrepresentative) under this Exhibit “B-1” (or any riders, attachments or exhibits hereto), such consent or approval shall not be unreasonably withheld,conditioned or delayed and shall be provided within five (5) working days of Landlord’s receipt of request therefore. Approved as to form by Landlord’s Representative [Signature appears here]Approved as to form byTenant’s Representative[Signature appears here] Date 8/18/09Date August 20, 2009CONTRACTOR’S ACKNOWLEDGMENTTo: From: (“Contractor”)3RE:Lease by (“Tenant”) of Premises at (“Park”)1.Contractor understands that as a condition of Tenant’s Lease, Contractor must have and maintain in force at all times valid policies of workerscompensation insurance, comprehensive general liability insurance and comprehensive automobile liability insurance, providing certain coverages asdetailed in the Lease.2.Attached are current certificates from Contractor’s workers compensation, general liability insurance companies, and comprehensive automobileliability insurance, which show that Contractor has the coverages required by the Lease.3.Contractor acknowledges and agrees that it is not entitled to and will not assert a mechanic’s lien or any other interest in the Landlord’s fee interest in thePark, and that Contractor shall look solely to Tenant and Tenant’s interest in the Premises under the Lease for payment.Date: Contractor4EXHIBIT “C”RULES, REGULATIONS AND RESTRICTIVE COVENANTSLONE PEAK BUSINESS PARKThe Lease authorizes the Landlord to adopt reasonable rules and regulations for the Premises, Building and the Park. Failure to comply with such rulesand regulations constitutes an event of default under the Lease beyond any applicable notice and cure period and so long as same is not inconsistent with theterms and conditions of the Lease. The following rules and regulations have been adopted and shall be binding upon Tenant, its employees, agents,contractors, invitees, licensees, customers, guests and visitors:1.For purposes hereof, the terms “Landlord,” “Tenant,” “Building,” “Park,” and “Premises” are defined in the Lease to which these Rules andRegulations are attached. Wherever Tenant is obligated under these Rules and Regulations to do or refrain from doing an act or thing, such obligationshall include the exercise by Tenant of its commercially reasonable efforts to secure compliance with such obligation by the servants, employees,contractors, jobbers, agents, invitees, licensees, guests and visitors of Tenant. The term “Building” shall include the Premises, any obligations ofTenant hereunder with regard to the Building shall apply with equal force to the Premises and to other parts of the Building.2. Intentionally Omitted3.Tenant shall comply with and use its commercially reasonable efforts to cause all persons and vehicles serving or making deliveries to Tenant to use theservice areas and facilities provided by Landlord in accordance with any and all rules and regulations governing the use of truck or vehicle access,parking, loading and unloading, deliveries, and permissible hours and places therefor, as the same may be from time to time reasonably established,modified, or amended by Landlord.4.Tenant shall comply with all rules, orders, regulations and requirements of the governing Fire Department, the applicable Fire Rating Bureau, or anyother similar body.5.The Building shall be maintained as a “smoke free” environment. No smoking shall be permitted anywhere within the Building including, withoutlimitation, any corridors, hallways, entry ways, restrooms, elevators, stairwells of the Building. Landlord may, but shall not be obligated to, post “nosmoking” signs at various locations on the exterior of the Building. Tenant shall be responsible to assure that there is no smoking in the Building by itsemployees, and make reasonable efforts to assure that there is no smoking by its agents, contractors, and licensees.6.All office equipment and any other device of any electrical or mechanical nature shall be placed by Tenant in the Premises in such a way as to absorb orprevent any vibration, noise, or annoyance.7.Tenant shall be permitted to go upon the roof of the Building to perform maintenance and repairs without prior written consent of Landlord, but withprior notice to Landlord (which notice may be oral), except in the event of an emergency when no prior notice is required.8.Tenant shall not deposit any trash, refuse, cigarettes, or other substances of any kind within or out of the Building, except in the refuse containersprovided therefor.9. Intentionally Omitted.10.Tenant shall use the Common Areas only as a means of ingress and egress. Landlord shall in all cases retain the right to control or prevent access theretoby all persons whose presence, in the reasonable judgment of Landlord, shall be detrimental to the safety, character, reputation or interest of the Parkand its tenants.11.Tenant shall not use the washrooms, restrooms and plumbing fixtures of the Building, and appurtenances thereto, for any other purpose than thepurposes for which they were constructed, and Tenant shall not deposit any sweepings, rubbish, rags, toxic materials or other improper substancestherein. Tenant shall not waste water by interfering or tampering with the faucets or outlets or otherwise. If Tenant or Tenant’s servants, employees,agents contractors, jobbers or licensees cause damage to such washrooms, restrooms, plumbing fixtures or appurtenances, such damage shall berepaired at Tenant’s expense and Landlord shall not be responsible therefor.12.Upon removal of any wall decorations or installations or floor coverings by Tenant, any damage to the walls or floors shall be repaired by Tenant andTenant’s sole cost and expense. Tenant shall refer all contractors’ representatives, installation technicians, janitorial workers and other mechanics,artisans and laborers rendering any service in connection with the repair, maintenance or improvement of the Premises to Landlord for Landlord’sapproval before performance of any such service as and to the extent required by the Lease. The provisions of this paragraph shall apply to all workperformed in the Building, including without limitation installation of telephones, transmission lines, equipment, electrical devices and attachmentsand installations of any nature any other portion of the Building. Plans and specifications for such work, prepared at Tenants’ sole expense, shall besubmitted to Landlord and shall be subject to Landlord’s prior written approval in each instance before the commencement of work as and to the extentrequired by the Lease. All installations, alterations and additions shall be constructed by Tenant in a good and workmanlike manner and good grades ofmaterials shall be used in connection therewith as provided in the Lease. The means by which telephone, transmission lines and similar wires are to beintroduced to the Premises and the location of telephone, servers, call boxes, and other office equipment affixed to the Premises shall be subject to priorwritten approval of Landlord, not to be unreasonably withheld, conditioned or delayed.13.Landlord shall have the right to prohibit any publicity, advertising or use of the name of the Park by Tenant which, in Landlord’s opinion, tends toimpair the reputation of the Park, and upon written notice from Landlord, Tenant shall refrain from or discontinue any such publicity, advertising oruse of the Park name.14.Tenant shall not obstruct, alter or in any way impair the efficient operation of Landlord’s heating, ventilating, air conditioning, electrical, fire, safety orlighting systems. No heating, ventilating, air conditioning, electrical, or other equipment shall be installed on the roof of any building or structureunless the same is installed in a manner which shall have first been approved in writing by Landlord and, if required by code, properly screened.15.Tenant shall not install any radio or television antenna, satellite dish, loudspeaker or other device on the roof or exterior walls of the Building withoutLandlord’s prior written consent, except as provided in the Lease. Tenant shall not interfere with radio or television broadcasting or wirelesscommunications or reception, from or in the Building or elsewhere in the Park.16.Employees or agents of Landlord shall not contract with nor render free or paid services to Tenant or Tenant’s servants, employees, contractors,jobbers, agents, invitees, licensees, guests or visitors. In the event that any of Landlord’s employees perform any such services, such employees shallbe deemed to be the agents of Tenant regardless of whether or how payment is arranged for such services, and Tenant hereby indemnifies and holdsLandlord harmless from any and all liability in connection with any such services and any associated injury or damage to property or injury or deathto persons resulting therefrom.17.No land or buildings within the Park shall be used so as to permit the keeping of articles, goods or materials in the open or exposed to public view. Nostorage units, buildings, huts, etc. are permitted outside of the Building. No overnight storage of pallets, shipping materials, boxes or other materialsshall be allowed within the Park. Landlord reserves the right to remove any materials prohibited hereunder at Tenant’s expense.18.No storage of vehicles shall be allowed other than those directly used in the operation of normal business.19.No maintenance or repairs of vehicles shall be allowed in any Common Area or areas reserved for customer or employee parking.20.Tenant shall not leave vehicles in the customer/office parking areas overnight nor park any vehicles in the customer/office parking areas other thanautomobiles, motorcycles, bicycles or light (four wheeled) trucks. All other vans, trucks, tractors, semi-trailers and delivery vehicles must be parkedin the rear of the Building in the truck court areas. There shall be no parking of any vehicles in the Common Areas.21.No Common Areas or areas reserved for customer or employee parking shall be used for motorcycle traffic or off highway vehicles similar to mini-bikes, motorcycles, dune buggies, snowmobiles or any other vehicle not normally used on streets, or subject to regulated legal registration.22.Tenant shall not use, or permit any other person to use the Premises or any part thereof, or adjacent sidewalks or common areas for conducting thereona second hand store or any auction, distress, fire, bankruptcy, moving, liquidation or going out of business sale.23.No portion of the Park shall be used to distribute handbills, circulars or other political, charitable or similar material or to seek members for anyorganization, or to solicit contributions, or for lodging purposes, or for any parade or demonstration or other conduct which may tend to interfere withor impede the use of the Common Areas by Landlord or other tenants of the Park, or their respective employees, customers or invitees.24.Tenant shall not produce, release, use, store, transport, handle or dispose of any Hazardous Material within the Park or otherwise knowingly permitthe presence of any Hazardous Material on, under or about the Park, except in accordance with all Environmental Laws and as provided in the Lease.Tenant shall immediately notify the Landlord if Tenant acquires knowledge that Tenant is in breach of any of the Environmental Laws. In the eventTenant shall breach the foregoing prohibition, Landlord shall have the right, but not the obligation, to cure Tenant’s failure in that regard after Landlordshall have given Tenant reasonable notice and an opportunity to cure such failure as and to the extent provided in the Lease. If Tenant’s acts oromissions shall give rise to a violation of this section, then Tenant shall indemnify, defend, hold harmless and protect the Landlord from any and allEnvironmental Damages arising from such violation as and to the extent provided in the Lease. Nothing contained in this section shall be deemed alimitation on, or a waiver of, any rights or remedies available to Landlord. As used in this section, the term “Hazardous Material” means anyhazardous substance, pollutant, or contaminant regulated under any applicable Environmental Laws. As used in this section, the term “EnvironmentalLaws” means all federal, state, regional, county, municipal, or other local laws, regulations, and ordinances regulating any substance, waste ormaterial determined by any environmental authority or agency to be capable of imposing a risk of injury to health, safety or property. As used in thissection, the term “Environmental Damages” means all claims, demands, orders, judgments, damages, losses, penalties, fines, liabilities,encumbrances, liens, costs and expenses of investigation and defense of any claim related to Environmental Laws, whether or not such claim isultimately defeated, a good faith settlement or judgement, and attorneys’ fees, including without limitation, damages for personal injury, injury toproperty or natural resources, and consultant and contractor fees.25.Landlord may waive any one or more of these rules and regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord shallbe construed as a waiver of such rules and regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any suchrules and regulations against any or all of the tenants of the Building.26.No portion of the Premises may be occupied by any of the following uses:(1)Residential purposes except for the dwelling of watchmen or other employees attached to a particular enterprise authorized in the area.(2)Exterior storage in bulk of any junk, wrecked autos or materials of any nature in or adjacent to the Premises.(3)No portion of the Premises or any building or structure thereon at any time shall be used for the manufacture, storage, distribution, or sale ofany products or items which shall increase the fire hazard of adjoining property; or for any business which constitutes a nuisance or causes theemission of odors of a gas injurious to products manufactured or stored on adjoining property or which emit undue noise or for any purposewhich will injure the reputation of the Premises or the neighboring property or for any use which is in violation of any of the laws of DraperCity or the State of Utah.27.Sign Criteria has been established for the purpose of assuring an outstanding development and for the mutual benefit of all property owners. Signsinstalled as nonconforming or unapproved must be brought into conformance at the expense of Tenant. All signage must be repaired immediately whendamaged. No Banner or other advertising signage will be allowed on the Premises unless approved in advance in writing by Landlord.28.Each Tenant is provided with a dumpster area. All waste, garbage, cardboard, and rubbish materials shall be disposed of in a Tenant supplieddumpster to be located in Landlord designed dumpster area. Tenant will contract with a licensed waste disposal contractor and dispose of all wastematerials. Tenant will remove and dispose of waste materials as frequently as necessary to maintain a clean dumpster area.29.Trucks and tractor-trailers must be parked in Loading Dock areas adjacent to Tenant’s Premise. The Landlord will consider, on a case by case basis,alternative and/or additional parking areas for Tenants.30.All roof top equipment and exterior roof top mechanical equipment will be set back at least eighteen (18) feet from parapet wall.31.If a court of competent jurisdiction should hold any provision of this instrument, or the application thereof to any person or circumstance, to beinvalid, void or illegal, the remaining provisions hereof and the application of such provision to any person or circumstance other than those as towhich it is held to be invalid, void or illegal, shall nevertheless remain in full force and effect to the maximum extent permitted by law and shall not beaffected thereby.32.Landlord reserves the right at any time to change or rescind anyone or more of these Rules and Regulations or to make any additional reasonable Rulesand Regulations that, in Landlord’s reasonable judgment, may be necessary or helpful for the management, safety or cleanliness of the Premises,Building or Park; the preservation of good order; or the convenience of occupants and Tenants of the Building generally. Landlord will notify Tenant ofsaid change. Tenant shall be considered to have read these Rules and Regulations and to have agreed to abide by them as a condition of Tenant’soccupancy of the Premises. Landlord agrees to enforce these Rules and Regulations in a non-discriminatory manner.Landlord’s Signature : [Signature Appears Here]Date J. Steven Price, Manager Tenant’s Signature : [Signature Appears Here]Date August 20, 2009 EXHIBIT “D”SIGN CRITERIALone Peak Business ParkOffice/WarehouseGENERAL REQUIREMENTS1.The purpose of these criteria is to establish a unified sign program and the standards necessary to insure coordinated proportional exposure for all Tenants.Conformance shall be strictly enforced and the Tenant shall remove any non-conforming signs.2.No signage, lettering or graphics will be permitted except as expressly allowed by these sign criteria. Without limiting the general statement in any way,signage will be permitted only as provided for in the Allowable Signage section below. In no case will signage be permitted on the roof, exterior walls,overhead doors, dock high doors, columns, or service doors, nor shall any freestanding monument, parking lot or pole sign be permitted - other thanLandlord-provided tenant directory. Notwithstanding the foregoing, Tenant shall be entitled to place on and about the Premises or Tenant’s parking areadirectional, way-finding, parking, identification and similar signs relating to Tenant’s operations at the Premises without Landlord’s consent so long assame comply with all applicable legal requirements and Exhibit “D”3.Tenant shall submit to the Landlord for approval four (4) copies of a detailed shop drawing of all proposed signage in conformance with these criteria. Eachsubmittal shall include, but not be limited to, pertinent dimensions, installation details and color call-outs. The Landlord must approve sign contractorsprior to any design work or fabrication.4.Styles or Tenant logos are encouraged and may be permitted subject to approval by the Landlord, which approval shall not be unreasonably withheld,conditioned or delayed. Landlord’s design approval will be based upon compatibility with storefront design, and with regard for the character intended ofthe overall Business Park.5.Tenant shall submit Landlord-approved drawings to all agencies requiring approval, and shall pay for required permits.6.Tenant will be responsible for supplying Landlord with copy of sign permit prior to sign installation. Tenant shall pay for all signs, their installationmaintenance, removal, and after removal, restoration of the sign surface to a new and “as-built” condition.7.All signs will be of excellent quality and workmanship. Work will be performed by contractor licensed to do business in Utah. Landlord reserves the rightto reject any work reasonably determined to be of substandard quality. This applies to manufacturing and installation of all signs. Tenant will be fullyresponsible for the actions of Tenant’s sign contractor. The sign company will carry workers compensation and public liability insurance in an amountrequired by Landlord. No sign manufacturers’ names or logos are allowed on sign/display.8.All signs and their installation must comply with the Draper City Sign Ordinance, as well as local building and electrical codes.9.Signs built and/or installed without Landlord or governmental approvals and permit, or contrary to corrections made by Landlord or any governmentalentity, will be altered to conform to these standards at Tenant’s expense. If Tenant’s sign has not been brought into conformance within fifteen (15) daysafter written notice from Landlord, Landlord shall have the right to remove and/or correct said sign at the expense of Tenant.10.Within five (5) days of vacating the premises, Tenant will remove all signage and repair all surfaces in accordance with Landlord’s standards and to thecondition when Premises was leased. If Tenant has not removed the sign and repaired the fascia to Landlord’s satisfaction, Landlord may exercise any ofthe right and remedies as set forth in the lease.11.Banners, advertising placards, pennants, posters, promotional or seasonal signage, temporary fixtures for the display of goods or merchandise, or otherdescriptive material are not permitted and shall not be affixed or maintained upon the first or second surface of the store front windows, the entrance door,the exterior walls, canopy signage area, or Common Areas.Grand Opening banners and promotional banners or signage are permitted with the Landlords prior written permission. Banners, signage, location, methodof attachment and duration of display must he approved in writing by the Landlord.12.Permanent advertising devices such as attraction boards, posters, cardboard signs, stickers/decals, banners and flags will not be permitted.13.All Tenant signs installed in the Tenant I.D. signage area (above canopy) will be vertically and horizontally centered within the fascia band fronting thePremises. No projections above or below designated sign area will be permitted.14.All signs will bear the Underwriters Laboratories (U.L.) label. U.L. labels must be placed on top of the sign and no portion of the labels shall be seen frombelow. Manufacturer’s labels and logos are not allowed on the sign.ALLOWABLE SIGNAGE AREAS (see attached Diagram, DW-1)1.Tenant I.D. Sign Area (Above Canopy). Tenant will provide its own I.D. sign. Tenant I.D. signs will be individual, non-illuminated, ½” thick laser cutaluminum letters & logo. Each letter will be 12” high, painted automotive finish, semi-gloss black and mounted with minimal non-corrosive studs andsilicone. Were the tenants name and logo are too long to fit within the signage area, due to the 12” letter height, the Landlord will work with Tenant to makeaccommodations to the letter height. Signage is limited to Tenant name and logo only.2.Tenant Directory (if existing). Landlord will include Tenant in the Tenant Directories in the Park located north of the canal. Tenant will install and pay thecost of an identification sign on the Tenant Directory, which will be maintained by the Landlord. Signage is limited to Tenant’s name and logo only.3.Window Graphics. Tenant may also apply silver vinyl signage on front entry door and main entrance windows. These signs will be limited to first surface(outside of window) and be limited to Tenant’s name, logo, address numerals, and business hours of operation. Location of signage on main entrancewindows must be approved in writing by the Landlord prior to installation.4.Loading Dock Service/Man Door. Each Tenant has a rear entry service door and may have, as approved by Landlord, uniformly applied silver coloredvinyl, three inch (3”) high letters and logo, centered on door, with Tenants name and logo. Tenant will maintain letters in a new condition and remove whenpremise is vacated and repair and repaint door if necessary.5.Loading Dock Overhead Door. Tenant may install numbers or other identification relating to its warehouse management system above each overhead door.No additional signage will be permitted on or above overhead doors without Landlord’s consent, not to be unreasonably withheld, conditioned or delayed.SIGN INSTALLATION1.Each letter and logo will be attached flush to the wall within the signage area. A combination of pins and adhesive will be permitted.2.Where a tenant is the sole occupant of any building over 50,000 sf, tenant may use signage painted directly to exterior tilt panel. Tenant is responsible forpatching, repairing, painting, and cleaning the sign band area to a like-new and “as-built” condition and must remove all evidence of the prior signsexistence. When re-painting the signage area, the paint must match the existing color and wall and will be re-painted from score joint to score joint. If thelocation is not bordered by score joints, the entire tilt panel must be re-painted to match the existing color(s).3.When removing signage in the Tenant I.D. Sign Area (above canopy), Tenant is responsible for patching, repairing, painting, and cleaning the sign bandarea to a like-new and “as-built” condition and must remove all evidence of the prior signs existence. When re-painting the signage area, the paint mustmatch the existing color and wall and will be re-painted from score joint to score joint. If the location is not bordered by score joints, the entire tilt panelmust be re-painted to match the existing color(s).24.All signs, permits and related electrical hookup and installation costs shall be Tenant’s responsibility. Tenant shall repair any damage to the Premisescaused by the work of Tenant’s sign contractor. All signs must conform to any applicable EPA requirements or other governmental regulations.5.Sign installers shall be licensed sign contractors in accordance with the regulations of all applicable governmental agencies. Sign installers shall obtain allrequired permits prior to fabrication and installation of signage.6.All signage must be installed no later than the date Tenant opens for business.PROHIBITED SIGNS. The following types of signs or sign components are prohibited:1.Animated, flashing, audible or revolving signs, or signs emitting smoke, odors or other material.2.Window signage, other than that specifically outlined under the Window Graphics criteria.3.No exposed conduits, wires, housings, transformers, lamps, tubing, crossover, or fastening clips will be permitted.4.Painted lettering, mass manufactured temporary signage, or window signage other than specifically outlined in Allowable Signage Areas - window graphics.Approved by Tenant: [Signature Appears Here]Date: Approved by Landlord: [Signature Appears Here]Date: Approved as to formLandlord’s Representative: [Signature Appears Here]Date: 3EXHIBIT “E”DECLARATION OF COVENANTS, CONDITIONS ANDRESTRICTIONS FOR LONE PEAK BUSINESS PARKAFTER RECORDING RETURN TO: David J. CastletonBlackburn & Stoll, LC257 East 200 South, #800Salt Lake City, Utah 84111DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONSFOR LONE PEAK BUSINESS PARKTHIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (the “Declaration”) is made this day of 2009, by PRICELOGISTICS CENTER DRAPER, LLC, a Utah limited liability company, PRICE LOGISTICS CENTER DRAPER ONE, LLC, a Utah limited liabilitycompany, PRICE LONE PEAK WEST, LLC, a Utah limited liability company, PRICE LONE PEAK RETAIL, LLC, a Utah limited liability company,and PRICE LONE PEAK COMPANY, LLC, a Utah limited liability company (hereinafter individually referred to as “Grantor” and collectively referred to as“Grantors”).WITNESSETH:A. Whereas, Grantors are the fee simple owners of certain real property commonly known and identified as Lone Peak Business Park, Salt LakeCounty, Utah, as more particularly described on Schedule A attached hereto (hereinafter defined as the “Property”);B. Whereas, Grantors intend to own and develop portions of the Property and/or to convey portions of the Property to other persons or entities fordevelopment, all in accordance with certain covenants, agreements, easements, conditions and restrictions as are contained in this Declaration (together the“Protective Covenants”) pertaining to the ownership and development of the Property;C. Whereas, Grantors are desirous of subjecting the Property to the Protective Covenants hereinafter set forth, each and all of which is and are for thebenefit of said Property and for the Grantors and each subsequent owner and occupant of any portion of the Property; andD. Whereas, Grantors have deemed it advisable that they should create a Committee (the “Committee”), consisting of representatives chosen by theGrantors until such time as the earlier of 40 years from the date hereof or the sale by Grantors of 95 % or more of the overall acreage of the Property, whichCommittee shall have overall responsibility for implementation and enforcement of such Protective Covenants by declaring itself the entity to provide for thepower of, and responsibility for, administering the terms of the Protective Covenants by approving the prospective plans of an owner to develop portions of theProperty and for appointing a Management Company to maintain and repair all common areas and equipment located on the Property.DECLARATION:NOW, THEREFORE, Grantors do hereby proclaim, publish and declare that the Property is and shall be held, owned, transferred, sold, conveyed,hypothecated, leased, subleased, occupied and improved in accordance with and subject to the Protective Covenants hereinafter set forth, which ProtectiveCovenants shall run with the land and be binding upon the Grantors and upon all parties having or acquiring any right, title or interest in and to any part ofthe Property, and shall inure to the benefit of each and every owner or owners of all or any part of the Property.ARTICLE 1 DEFINITIONS1.1 Definitions. In addition to the terms defined elsewhere in this Declaration, the following words, unless the context otherwise requires, shall have thefollowing meanings:“Affiliate” shall mean, when used with reference to a specified person or entity, any person that directly or indirectly controls, is controlled by or isunder common control with the specified person or entity.“Back of Curb” shall mean the farthest edge of a Street curb adjacent to a Street, which in some cases will be ten (10) feet from the boundary line of aBuilding Site depending upon applicable governmental regulation.“Building” shall mean and include, but not be limited to, any structure built for permanent use on a Building Site, and all projections or extensionsthereof, including but not limited to garages, outside platforms and docks, storage tanks, carports, canopies, enclosed malls and porches, sheds, tents,mailboxes, radios or TV antenna, fences, signboards or any other temporary or permanent improvement to such Building Site.“Building Site” shall mean a tract of real property, or any subdivision thereof, within the Property that may as allowed by this Declaration andexisting and applicable zoning and land use regulations, have built thereon a building or buildings. If fee simple title to two (2) or more adjacent BuildingSites, as defined hereinabove, is acquired by the same Owner, such commonly owned Building Sites may, at the option of said Owner, be combined andtreated as a single Building Site for the purposes of this Declaration, provided that the location of the Improvements on such combined Building Site shall besubject to the-prior written approval of the Committee.“Committee” shall mean the committee created pursuant to the terms of Article IX hereof to perform the various tasks set forth under the terms of thisDeclaration.“Declaration” shall mean this Declaration of Covenants, Conditions and Restrictions, together with all of the provisions provided herein, which shallbe recorded in the office of the2Salt Lake County Recorder, State of Utah, as the same may from time to time be supplemented or amended in the manner described herein.“Deed” shall mean any deed, assignment, lease or other instrument conveying fee title or a leasehold interest in any part of the Property.“Grantors” shall mean the entities described in the first paragraph of this Declaration, or their successors or assigns.“Improvements” shall mean and include, but not be limited to, Buildings, out buildings, driveways, exterior lighting, fences, landscaping, lawns,loading areas, parking areas, railroad trackage, retaining walls, roads, screening walls, Signs, utilities, and walkways located on a Building Site.“Landscaping” shall mean a space of ground covered with lawn and/or ground cover, combined with shrubbery, trees and the like, which may becomplemented with earth berms, masonry or similar materials.“Lawn” Shall mean a space of ground covered principally with grass.“Management Company” shall mean such person or entity designated by the Committee from time to time to maintain and repair all common areasand equipment located on the Property pursuant to Article VI hereof. The Management Company may include an Affiliate of the Committee or any of theGrantors.“Occupant” and/or “Tenant”,which may be referred to interchangeably, shall mean a person or entity, including but not limited to a corporation, jointventure, partnership, limited liability company, trust, or unincorporated organization or association, that, through receipt of a Deed or otherwise, haspurchased, leased, rented or has otherwise legally acquired the right to occupy and use a Building, Building Site or any portion of any Building or BuildingSite, whether or not such right is exercised.“Owner” shall mean a person or entity, including but not limited to a corporation, joint venture, partnership, limited liability company, trust, orunincorporated organization or association, that is the record owner of any fee simple estate, or that has an equity of redemption, in all or any portion of theBuilding Site.“Property” shall mean the property described in the first Whereas clause above and as more fully described on Exhibit A attached hereto.“Protective Covenants” shall have the meaning as set forth in the second Whereas clause of this Declaration.“Sign” shall mean and include every advertising message, announcement, declaration, demonstration, display, illustration, insignia, surface orspace erected or maintained in view of the observer thereof for the identification, advertisement, or promotion of the interests of any3person, entity, product or service. The term “Sign” shall also include the sign structure, supports, lighting systems and any attachments, ornaments or otherfeatures used to draw the attention of observers. This definition does not include any flag, badge, or ensign of any government or governmental agency erectedfor and used to identify said government or governmental agency.“Street” shall mean any public or private street or highway, whether presently constructed, dedicated by plat map or contemplated in the future,under a site plan approved by any public authority.ARTICLE IIPURPOSES OF DECLARATION; MUTUALITY OF BENEFITS AND OBLIGATIONS2.1 Purposes. The purposes of this Declaration are:(a) to insure proper use and appropriate, adequate and reasonable development of the Property and each Building Site located thereon;(b) to preserve and enhance the value to each Owner and Occupant of all Buildings and Building Sites;(c) to protect against the erection of Improvements constructed of improper, unsuitable or undesirable material;(d) to encourage the construction and maintenance of attractive, permanent Improvements that are compatible and harmonious as toappearance, function and location with Improvements situated on or planned for other Building Sites;(e) to ensure adequate off-street parking space and off-street truck loading and maneuvering facilities on the Property; and(f) in general to provide for the orderly, aesthetic and high quality architectural and engineering development, improvement and design of theProperty and each Building thereon so as to promote the general welfare of the then current and future Owners and Occupants and to enhance the propertyvalue of the Property and Improvements.2.2 Mutuality. The Protective Covenants set forth herein are made for the mutual benefit of each and every Owner and are intended to create reciprocalrights and obligations between the respective Owners and future Owners of all or any portion of the Property; and to create a privity of contract and estatebetween the grantees of said properties, their heirs, successors and assigns. All Deeds, and any Buildings located on the land represented by the Deeds, shall be held, transferred, sold, conveyed, used, leased, occupied, mortgaged orotherwise encumbered subject to all the terms, conditions and provisions contained in this Declaration. Every person who is or becomes an Owner of anyportion of the Property does by reason of taking such title, by Deed or otherwise, agree to all of the terms, conditions and provisions of this Declaration.4ARTICLE IIIPOWERS, DUTIES, AND RESPONSIBILITIES OF GRANTORSTo the extent Grantors are Owners of any portion of the Property, Grantors shall be entitled to all of the same rights and privileges as accorded to eachand every Owner pursuant to the terms and provisions of this Declaration. In addition, Grantors, their successors and assigns, shall have the followingpowers, duties and privileges that shall pertain only to Grantors, their successors and assigns, and not to any other Owner: (i) the right to appoint themembers of the Committee as described in Article VIII below; (ii) the right with respect to sales of various portions of the Property as described in Section 9.5below; and (iii) any and all other rights specifically granted to Grantors, as opposed to an Owner, pursuant to the provisions of the Declaration.ARTICLE IVGENERAL RESTRICTIONS, COVENANTS AND REQUIREMENTSThe following restrictions, covenants and requirements are imposed on the Property, and on all Buildings, Improvements and Building Sites locatedthereon, and are binding upon all Owners and Occupants, and may be enforced against such Owners and Occupants, jointly and/or severally:4.1 Use. Each Building and Building Site shall be used for industrial, commercial, office, distribution, warehouse, manufacturing-limited, and/orretail purposes, and such other commercial purposes that are allowed by applicable zoning regulations and approved in advance by the Committee. In so usingthe Building and Building Site, the Owner or Occupant, as the case may be, shall at all times comply with all present and future safety, health, environmentalor other laws, ordinances, orders, rules, regulations and requirements of all federal, state, county and municipal governments, departments, commissions,boards and officers, and all order, rules and regulations of the National Board of Fire Underwriters or any other body exercising similar functions, whichmay be applicable to the Building and Building Site. Grantor, Owner, Occupant, Management Company and the Committee, as the case may be and as towhich such person has control over the particular property, shall (a) comply with all federal, state and local statutes, rules and regulations governingsubstances or materials identified as toxic, hazardous or otherwise damaging to person or property by reason of its chemical nature (the “EnvironmentalLaws”) and (b) promptly notify the Committee and any other affected Owner or Occupant in the event of any discharge, spillage, uncontrolled loss, seepage,release or filtration of oil or petroleum or chemical liquids or solids, particles, liquids or gaseous products, hazardous waste or any product of byproduct ofsuch Owner’s or Occupant’s operations that may constitute an environmental hazard upon, on or under the Building or Building Site or any other matterrelating to the Environmental Laws as they may affect the Property.4.2 Restrictions on Use. No Owner or Occupant shall use or permit the use of the Property which is, in the reasonable opinion of the Committee,substantially inconsistent with or materially detrimental to the operation of the Park. The following uses and operations shall not be allowed without the priorwritten consent of the Committee:5(a) Any use which emits or results in an obnoxious odor, noise, or sound which may constitute a public or private nuisance;(b) Any use which is physically damaging to other portions of the Project or which creates dangerous hazards;(c) Any assembly or manufacturing operation which would be permitted only in a heavy manufacturing or heavy industrial zone; or anydistillation, refining, smelting, drilling or mining operation;(d) Any residential use or use involving animals;(e) Any incineration of garbage or refuse;(f) Any distribution of handbills, circulars or other political, charitable or similar material or to seek members for any organization, or tosolicit contributions; or(g) Any parade or demonstration or other conduct which may tend to interfere with or impede the use of the Common Areas by other Ownersand Occupants, or their respective employees, customers or invitees.4.3 Location of Buildings. All Buildings shall be set back from the back of curb on their respective Building Sites by at lease twenty (20) feet from theBack of Curb in the case of any frontage boundaries on 12200 South and 11950 South, by at lease eighty (80) feet in the case of any frontage boundaries on12300 South, by at least thirty (30) feet in the case of any frontage boundaries on Lone Peak Parkway, and at lease twenty (20) feet from each interior (non-street frontage) property line, except for underground Improvements such as storage tanks, which may be placed within those portions of setback areas thatare not included in the twenty (20) foot landscaped areas identified in Section 4.5.The above minimum setbacks have been established to create and preserve an attractive setting for all Buildings. However, total uniformity ofsetback is not necessarily desired, and accordingly the Committee is authorized, in its sole discretion, to authorize variations from the minimums on an adhoc basis. Any such variation must be expressly approved in writing by the Committee.4.4 Parking and Parking Areas. No parking shall be permitted on any street or drive, or any place other than parking areas located upon Building Sites.All driveways and areas for parking, maneuvering, loading and unloading shall be paved with asphalt, concrete or similar materials, curbed with concreteand screened to the extent practical with Landscaping materials. Each Owner or Occupant shall be responsible for compliance by its employees and visitors.4.5 Landscaping. Landscaping and irrigation shall be installed for a minimum depth of twenty (20) feet, beginning at the applicable back of curb onthat portion of any building site that abuts any Streets. Owner shall also provide Landscaping and irrigation in the areas between its boundary lines and itsadjacent Back of Curb. All other unimproved areas (i.e., areas that are6either unpaved, un-built or un-tracked and not within the setback areas described above) shall have either Landscaping and be maintained with an irrigationsystem or, at the discretion of the Committee, graveled areas that are regularly maintained. Every Building Site shall be landscaped in accordance with planssubmitted and approved in writing by the Committee. Landscaping, including Landscaping between such Owner’s boundary line and adjacent Back of Curbshall be installed within ninety (90) days after completion of Building construction, or as soon thereafter as weather will permit, and shall be maintained in themanner as outlined below in Section 4.21.4.6 Fences. Fences, if allowed, will only be erected in the truck dock areas and used for the exclusive purpose of security. If approved by theCommittee, all fencing will have to also be approved by Draper City and any site plan amendments will be the responsibility of the applicant to obtain.4.7 Curb Cuts. Curb cuts for Driveways shall be a minimum of twenty (20) feet from adjacent property lines, except for any driveway that is sharedby adjacent Owners in which case the curb cut will be centered on property line.4.8 Signs.(a) Subject to approval of the Committee, all Signs shall conform to the following general requirements:(i) Only a company name and/or company logo shall be permitted, along with such other identifying features and information as theCommittee may permit.(ii) All illumination shall be provided by a concealed source and all back-lighting shall be contained within the area of the Sign.(iii) No neon, traveling, flashing, intermittent or similar illumination of any kind shall be permitted.(iv) All wiring and all appurtenant electrical equipment shall be installed inside the Building, underground or within the Sign.(v) All signage will comply with the Draper City Sign ordinance and the then current signage criteria established by the Committee.(b) During the period of development and prior to the completion of the principal building on each Building Site, the Building Site shall haveonly one temporary construction sign. After the completion of the principal Building on each Building Site, the availability for sale or lease of all or any part ofthe principle Building may be advertised by only one temporary marketing sign. Each temporary sign shall conform to the standards set forth in Section4.8(a) with respect to all signs generally and as set forth in Section 4.8(c) with respect to “Single Tenant Roadway Signs” as shown in Exhibit B.7(c) Each single-tenant Building may have (1) one sign located in proximity to the Building Site’s curb-cut that is within a reasonable distanceof the intersection of its principal access driveway and the abutting public street (“Roadway Sign”), and (1) one on the front surface of such Building(“Building Mounted Sign”). Any such Roadway Signs shall conform to the format and specification set forth in Exhibit B hereto. The Committee shallapprove the number and locations of such signs and at its discretion may allow for more than one location of any such signs particularly where the Ownermay have exposure to more than one public street. Each Multi-tenant Building shall have a Roadway Sign which conforms with Exhibit C hereto.(d) Each Building Site may have directional signs designating parking areas, off-street loading areas, entrances and exits and conveyingsimilar information. All such signs shall conform to the format and specifications set forth in Exhibit B hereto, and if more than one principle Building islocated on a Building Site, additional building identification signs may be used which conform with Exhibit B hereto. Two such signs that are visible from thestreet or from adjacent Building Sites, and a reasonable number of additional signs that are not visible, shall be permitted on such Building Site.(e) The Committee may from time to time make changes or modification to the above requirements to take into account changes in technologyor other considerations deemed by the Committee to be in the best interests of the Property and the Owners.4.9 Exterior Construction, Materials and Colors. All exterior walls of any Building or other Improvement must be finished with architectural masonryunits, natural stone, precast concrete (including cast in place concrete tilt-up panels), aluminum or glass materials, or their equivalent, along with such otherarchitecturally and aesthetically suitable building materials as shall be approved in writing by the Committee. All finish material shall be maintainable andsealed as appropriate against the effects of weather and soiling. Color shall be harmonious and compatible with colors of the natural surroundings and adjacentBuildings.4.10 Temporary Structures. No temporary Buildings or other temporary structures shall be permitted on any Building Site; provided, however, trailer,temporary buildings and the like shall be permitted for construction purposes during the construction period of a permanent Building. The location and natureof such structures must be submitted to and approved by the Committee and shall be placed as inconspicuously as practicable, shall cause no inconvenienceto Owners or Occupants of other Building Sites, and shall be removed not later than thirty (30) days after the date of substantial completion for beneficialoccupancy of the Building(s) in conjunction with which the temporary structure was used.4.11 Antennas, Aerials and Dishes. No antenna or device for transmission or reception of any signals, including but not limited to telephone, radio ortelevision antenna, aerial, dish or similar facility, shall be erected or maintained on any Building or Building Site in a manner such that it is visible from five(5) feet above the ground or ground floor level at a distance of five hundred (500) feet in any direction, without the prior approval of the Committee. Occupantshall not interfere with radio or television broadcasting or wireless communications or reception, from or in the Building or elsewhere in the Park.4.12 Utility’s; Mechanical Equipment; Roof Projections; etc.8(a) Except as may otherwise be required under applicable laws or utility company guidelines, all electrical, gas, telephone, data and waterservices shall be installed and maintained underground.(b) Transformers that may be visible from any primary visual exposure area shall be screened with either plantings or a durable non-combustible enclosure (of a design configuration acceptable to Rocky Mountain Power). Where possible, trash enclosures shall be screened in a similarfashion for continuity.(c) Transformer enclosures shall be designed of durable materials with finishes and colors which are unified and harmonious with the overallarchitectural theme.(d) Exterior-mounted electrical and gas equipment shall be mounted on exposed surfaces only when an interior mounting is impractical. Whenmounted on the exterior, electrical equipment shall be mounted in a location that is substantially screened from public view. In no case shall electricalequipment be mounted on the street side or significant exposure side of any Building without the approval of the Committee. In no event will any roof topequipment and exterior roof top mechanical equipment be set back less than eighteen (18) feet from parapet wall.(e) Exterior-mounted electrical equipment and conduits shall be kept to a visible minimum. Where visible, they shall be installed in a neat andorderly fashion and shall be painted to blend with their mounting backgrounds.(f) Water towers, storage tanks, processing equipment, skylights, cooling towers, communication towers, vents and any other similar structuresor equipment placed upon any Building Site shall be adequately screened from public view and from the view of other Building Sites by a screening methodapproved in writing by the Committee prior to the construction or erection of said structures or equipment. Physical features customary to light industrialfacilities shall be identified by Owner for consideration by the Committee and shall not require screening if, at the discretion of the Committee, exposure ofsuch features is acceptable.4.13 Loading and Servicing Areas. Loading doors, docks, material hauling facilities, accessory structures and serving areas shall be screened, as muchas reasonably practical at the discretion of the Committee, to minimize the effect of their appearance from public areas or neighboring sites. Moreover, loadingand servicing areas shall be designed as an integral part of the Building architecture, so that the entire loading and servicing operation can be conducted withinthe confines of any such area. Loading areas shall not encroach into setback areas along street frontages. Off Street loading spaces shall be designed to includean additional area or means of ingress and egress which shall be adequate for maneuvering. Trucks and tractor-trailers must be parked in loading dock areas.The Committee will consider, on a case by case basis, alternative and/or additional parking areas for Occupants. No land or buildings within the Park shallbe used so as to permit the keeping of articles, goods or materials in the open or exposed to public view. No storage units, buildings, huts, etc. are permittedoutside of the Building.94.14 Garbage and Debris. No refuse, garbage, trash, grass, shrub or tree clippings, plant waste, compost, bulk materials or debris of any kind shall bekept, stored or allowed to accumulate on any Building Site except within an enclosed structure or container approved by the Committee or unless appropriatelyscreened from view in a manner acceptable to the Committee, except that any refuse or storage container containing such materials and approved by theCommittee, may be located outside at such time as may be reasonably necessary to permit garbage or trash pickup or materials storage. The Committee, in itsdiscretion, may adopt and promulgate reasonable rules and regulations relating to the type and appearance of permitted trash receptacles, the screening thereofby fences or otherwise, and the manner of locating the same on the Property. Occupants shall remove and dispose of waste materials as frequently as necessaryto maintain a clean dumpster area.4.15 Accumulation of Materials; Storage Areas. Materials, supplies, merchandise, equipment, company-owned vehicles or similar items shall be storedin a location that shall be adequately screened as much as reasonably practical, at the discretion of the Committee, from the view of adjacent Buildings, publicstreets and pedestrian walkways by either a fence, wall, landscaping screen or similar manner, but then only if approved in writing by the Committee. Subjectto the consent of the Committee, fuel and other storage tanks and coal bins shall be installed underground wherever practicable and in any event screened frompublic view. No overnight storage of pallets, junk, wrecked autos, shipping materials, boxes or other materials shall be allowed within the Park. TheCommittee reserve the right to remove any materials prohibited hereunder at the violating party’s expense. No outside storage of vehicles shall be allowed otherthan those directly used in the operation of normal business.4.16 Utilities. Other than for street lighting, all pipes, lines and other facilities for utilities, including water, gas, sewer and drainage, and all lines andconduits of any type hereafter installed for the transmission of audio and visual signals or electricity shall be located beneath the ground or within an enclosedstructure or adequately screened, except that overhead lighting and utility appurtenances may be located above ground if they are adequately screened byLandscaping or by suitable Building materials that are harmonious with the surrounding structures, so as not to be visible from adjacent Buildings, publicstreets and pedestrian walkways. Each Owner and Occupant shall use the shared or common utility lines for the purposes for which they were constructedand shall not overload or use the same to excess.4.17 Maintenance of Property. Each Owner or Occupant shall at its own expense keep each Building Site owned by it, as well as the land between itsboundary line and adjacent Back of Curb, and all Improvements located thereon, as well as all property from the back of the street curb to such Owner’s orOccupant’s property, in a clean, safe, attractive and aesthetically pleasing condition, in good order and repair, including without limitation, (a) painting andrepairing and generally maintaining the exterior of all Buildings and other Improvements at such times as necessary to maintain the appearance of a first classindustrial facility, (b) maintaining (including snow removal) and repairing any parking lot and truck dock areas, road, driveway, storm sewer, utilities, orsimilar Improvement located within the perimeter of all such Building Sites in a manner and with such frequency as is consistent with good propertymanagement, (c) maintaining and landscaping all Lawns, trees, grass, shrubs, flowers and other Landscaping in10accordance with the requirements of Section 5.20 hereof and (d) maintaining or repairing any utility lines that service such Owner’s or Occupant’s Building orImprovements to the extent such lines are not required to be maintained or repaired by Draper City or any applicable utility company. The expense of anymaintenance, repairs or landscaping required in this section shall be the sole expense of each individual Owner or Occupant, and the Grantors and theCommittee shall in no way be responsible for any expenses related to any maintenance, repair, landscaping or improvement on any Building Site.4.18 Sounds. No exterior speakers, horns, whistles, bells or other sound devices, other than devices used exclusively for safety, security, fire preventionof fire control purposes, shall be located or used on any Building Site except to the extent permitted by the Committee.4.19 Maintenance of Drainage. Each Building Site shall have appropriate provision for water retainage/detention as may be necessary to appropriate for theProperty’s overall drainage system, as determined in the reasonable judgment of the Committee. The established drainage pattern over any Building Site maynot be altered except as approved in writing by the Committee. Each site shall be designed to the current standards of any applicable governmental authorityhaving jurisdiction.4.20 Water Systems. No individual water supply system shall be installed or maintained for any Building or Building Site unless such system isapproved by the Committee and is designed, located constructed and equipped in accordance with the requirements, standards and recommendations of anyapplicable governmental authority having jurisdiction.4.21 Maintenance. Any Lawn and all Landscaping shall be maintained by the Owners and Occupants of the Building Site in substantially the followingmanner:CutCut all Lawn areas on a regular basis with mowers so as to maintain amanicured appearance.TrimTrim around all Buildings, trees, poles, fences and other obstacles during suchservicing.EdgeEdge all walks, curbs, driveways, and similar areas upon such servicing.WeedRemove all weeds from areas as needed.Clean UpRemove all grass clippings from walks, drives, and parking areas after suchservicing.Shrub PruningPrune all shrubbery as needed to maintain and promote a manicured and healthyappearance.Tree PruningPrune all trees as required to remove damaged branches, sucker growth, deadwood, and similar matters.Leaf RemovalCollect and remove all fallen leaves.4.22 Application of Restrictions. All real property within the Property shall be held, used and enjoyed subject to the limitations, restrictions and otherprovisions set forth in this Declaration. However, reasonable variations from the strict application of the limitations and restrictions in this Article IV in anyspecific case may be granted by the Committee in11accordance with Article VII if such strict application would be unreasonable or unduly harsh under the circumstances or otherwise not in the best interests of,or harmful to, the other Owners and Occupants. Any such variance shall not constitute a waiver or estoppel with respect to any of the provisions of thisdeclaration on any future action by the Committee.ARTICLE VCOMMON AREA MAINTENANCE AND CHARGES5.1 Management of Common Areas. The Committee shall from time to time appoint a Management Company to maintain and repair all common areasand equipment located on the Property. Such common areas or equipment shall include, by way of example and without limitation, the area designated ascommon area on any plat map of the Property on any part thereof, water detention areas, any open drainage areas, irrigation systems, common access orroadways, park signs and street lighting, but shall not include yard areas between Back of Curb and Owner’s or Occupant’s property lines that arecontiguous with their respective front or side yards. Such maintenance and repair shall include, without limitation:(a) Cleaning, maintaining and re-lamping of any lighting fixtures and signage, except such fixtures or signage that are the property of anyutility or governmental body or are part of a property, or signage of, a separate Owner.(b) Performance of necessary repair and maintenance on all Landscaping within common areas, including trimming, watering, andfertilization of all grass, ground cover, shrubs and trees; removal of dead or waste material; and replacement of any dead or diseased grass, ground cover,shrubs, or trees.(c) The removal of trash, rubbish, snow and other debris or obstructions, where reasonably necessary, within the common areas.(d) Maintenance of general public liability insurance for the benefit of Grantors and all Owners and Occupants against claims for bodilyinjury, death, or property damage occurring on, in, or about the common areas and the adjoining streets, sidewalks, and passageways, but not within anyBuilding Site or and Building or other Improvements thereon or within any other area within the exclusive control of and Owner or Occupant; such insuranceto afford protection of not less than $1,000,000.00 with respect to bodily injury or death to any one person, not less than $5,000,000.00 with respect of any oneaccident, and not less than $l,000,000.00 with respect to property damage.(e) Payment or reimbursement of any legal or related costs incurred by or on behalf of the Grantors, the Management Company or theCommittee in enforcing, defending, complying with, interpreting or otherwise acting within the terms of, the provisions of this Declaration, including withoutlimitation, the Protective Covenants.(f) Payment of any property taxes on the common areas that are not otherwise owned by a particular Owner.125.2 Allocation of Maintenance Costs. The costs and expenses of maintaining the common areas and facilities and all real property taxes attributable tothe common areas pursuant to Section 6.1 shall be allocated pro rata among all of the Owners. Each Owner shall bear its pro rata share of all such costs andreal property taxes, based on the ratio of the acreage size of the Building Site of such Owner to the acreage size of the Building Sites of all Owners.5.3 Computation of Maintenance Costs. All of the costs and expenses incurred, or otherwise paid, by the Management Company in connection with themaintenance and repair of the common areas of the Property, pursuant to Section 5.1, shall be paid or reimbursed to the Management Company, includingwithout limitation all of the Managements Company’s actual out of pocket expenses to perform such services; a reasonable amount for the administrationthereof, including accounting for the computation and collection of maintenance costs and real property taxes; a reasonable reserve for delinquent accounts;any costs incurred to provide security to the subject property, if necessary; and any other costs or expenses reasonably related to or arising out of the above.5.4 Assessment of Maintenance Costs. All estimated costs and expenses of maintenance may at the discretion of the Management Company be assessedin advance and billed to each Owner monthly, quarterly or annually. Such assessments shall be paid by each Owner promptly upon receipt thereof. Theamount, if any, by which any assessments received in advance from any Owner exceed such Owner’s actual share of maintenance expenses for the billing period shall be credited against the estimated costs and expenses for theensuing billing period. Owners and Occupants shall have the right, upon reasonable notice and during normal office hours, to audit the costs and expensescomprising the assessments.ARTICLE VIZONING AND OTHER RESTRICTIONSThe Protective Covenants shall not be taken as permitting any action or thing prohibited by zoning laws, or the laws, rules or regulations of anygovernmental authority, or by specific restrictions imposed by and deed or lease, that are applicable to the Property. In the event of any conflict, the mostrestrictive provision of such laws, rules, regulations, deeds, leases or the Protective Covenants shall be taken to govern and control. Any approval of theCommittee required in this Declaration does not in any way relieve Owners and Occupants from obtaining approvals or otherwise complying with any laws,rules or regulations required by and governmental body or other person having jurisdiction or other legal rights thereunder.ARTICLE VII APPROVAL OF PLANS; CONSTRUCTION7.1 Plans. No exterior construction, exterior reconstruction, or exterior alterations of any Building or other exterior Improvements, including Signs, may becommenced without written approval by the Committee of the plans or such construction or alteration, which approval shall13be sought in accordance with the provisions of Article VIII below. The plans submitted for approval of the Committee shall include all plans, specifications,drawing, studies, reports and other materials, both written and otherwise, as the Committee may reasonably request in order to grant an informed approval ordisapproval in compliance with the terms and provisions of this Declaration. Approval of plans by the Committee may be secured prior to acquisition of aBuilding Site pursuant to the terms of a sales contract.7.2 Construction. Upon receipt of approval of plans, Owner or Occupant shall diligently proceed with the commencement and completion of allapproved construction. Unless work on the approved construction shall be commenced within one (1) year from the date of such approval and diligentlypursued to completion thereafter, the approval shall automatically expire unless the Committee has given a written extension of time.7.3 Arbitration. If, after the initial construction of a Building upon a Building Site, the Owner or Occupant submits plans for exterior alteration,addition or exterior reconstruction, and have receive a decision of the Committee, feels that said decision is not consistent with the provision of thisDeclaration, such Owner or Occupant may submit the decision to determination by arbitration in the following manner:The party desiring arbitration shall serve upon the Committee a written notice naming an arbitrator. Within ten (10) days after the delivery of saidnotice, the Committee shall likewise appoint an arbitrator and notify the party desiring arbitration of such appointment, and if the Committee fails within saidten (10) days so to do, the arbitrator appointed by the party desiring arbitration shall proceed in the determination of plan approval and his/her decision as tosuch approval shall be final. If the Committee appoints an arbitrator within the prescribed time, the two arbitrators so appointed shall choose a third arbitrator.If the two arbitrators so chosen shall fail to agree upon the selection of a third arbitrator within a reasonable time, such arbitrator shall be appointed, uponapplication of either party, by and judge of the District Court of the United States for the district which shall then include the locality in which the BuildingSite is situated, but such application shall not be made until such party shall have given ten (10) days written notice to the other party of its intention to do so.The board of arbitrators, constituted as aforesaid, shall proceed to determine whether or not he proposed plans shall be approved and the decision of the board,or of any two members thereof, as to such shall be binding upon the parties hereto. All expenses of such arbitration shall be apportioned equally between theparties to the arbitration.ARTICLE VIII THE COMMITTEE8.1 The Committee.(a) Duties. The Committee is hereby created pursuant to this Declaration the functions of which shall be to (i) enforce the provisions of thisDeclaration, (ii) grant approvals of construction, reconstruction and development of Building Sites and Improvements in accordance with the restrictions,requirements and provisions contained in the Declaration,14including without limitation the right to insure that all Improvements on the Property harmonize with existing surroundings and structures on the Property, and(iii) grant such other approvals or variances and perform such other functions and duties as may be required by the terms of the Declaration.(b) Organization and Operation. The Committee shall consist of three persons. Until the sooner to occur of 40 years from the date of this Declarationor the date upon which Grantors have sold and conveyed to third parties (as opposed to transferred to another entity or entities controlled by Grantors orAffiliates of Grantors) more than ninety-five percent (95%) of the total acreage contained in the Property (hereinafter the “Turnover Date”), Grantors shall havethe right and privilege to appoint all members of the Committee. After the Turnover Date, the members of the Committee shall be appointed and elected bymajority vote of the Owners in the Property. Each Owner shall have votes equal to the number of whole acres existing in the Owner’s Building Site, and themajority vote of all votes attributable to all Owners shall elect each member. Votes shall not be accumulated for the election of members of the Committee.Members shall serve for three year periods, unless earlier removed pursuant to a vote of the Owners. Any person may serve as a member of the Committee,and need not be an Owner, or a representative or employee or other associate of an Owner. Meetings of the Owners for the purpose of electing the Committeeshall be called by the existing Committee in September of every three years. In the absence or failure of the existing Committee members to call such meetings,or in a special meeting is desired by the Owners, Owners owning at least 10 percent of the total votes in the Property may call a meeting of the Owners for thepurpose of electing a new Committee at any time. Notice of any meeting of Owners, whether given by the Committee or Owners having at least 10% of the totalvotes, shall be give at least 20 days prior to any such meeting by written notice to all Owners at the then address of each Owner on its Building Site, unless theOwner gives another address to the Committee or the Owners for purposes of receiving notice. Said meetings may be held in any location in Salt Lake County,Utah.8.2 Approval Procedure. Any Plans and specifications, or any other matter required by this Declaration to be, submitted to the Committee shall beapproved or disapproved by it in writing no later than thirty (30) days after submission. A majority vote of the Committee shall be required to approve ordisapprove any plans or specifications or other matter submitted to the Committee. If the Committee fails to respond to a properly submitted application forapproval of plans and specifications within sixty (60) days of the proper submission of such application, such application shall be deemed approved.8.3 Standards. In deciding whether to approve or disapprove plans and specifications submitted to it, the Committee shall use its best judgment toinsure that all improvements within the Property conform to and harmonize with the requirements and restrictions of this Declaration.8.4 Development Guidelines. The Committee may from time to time adopt such “Development Guidelines” as it deems necessary to clarify, amplify uponand further develop the restrictions, guidelines and requirements of the Declaration, and to inform Owners and Occupants of the standards that will be appliedin approving or disapproving matters submitted to the Committee pursuant to the provisions of this Declaration. Such Development Guidelines15may amplify but may not be less restrictive than the regulations and restrictions stated in this Declaration, and shall be binding upon all Owners andOccupants. Such Development Guidelines may state more specifically the rules and regulations of the Committee with respect to the submission of plans andspecifications for approval, the time or times within which such plans or specifications must be submitted, and may state such other rules, regulations,policies and recommendations that the Committee will consider in approving or disapproving proposed construction of or alterations to Buildings andImprovements, or other matters submitted to the Committee pursuant to this Declaration.8.5 No Liability for Damages. Neither the Committee nor the Grantors, or any of its or their agents, assigns, owners, manages or otherwise, shall beliable for damages by reason of any action, inaction, approval, or disapproval by the Committee with respect to any request made pursuant to thisDeclaration.8.6 Payment. Before any application shall be approved by the Committee, the Owner or Occupant who submits the plans and specifications for approvalshall provide assurance, in such forms as the Committee shall determine, for the payment or reimbursement to the Committee for its reasonable professionalcosts (including architectural or legal costs, whether or not such costs are incurred with respect to members of the Committee) incurred as part of the review bythe Committee of such plans and specifications.ARTICLE IXGENERAL EASEMENTS9.1 Drainage. Grantors hereby reserve easements over each Building Site for drainage of surface water wherever and whenever reasonably necessary inorder to maintain reasonable standards of health, safety and appearance; provided, however, that such easements shall terminate as to any particular BuildingSite when the initial principal Building and Landscaping approved for such Building Site has been completed. These easements and rights expressly includethe right to cut any trees, bushes or shrubbery, make any grading of the soil, or to take any other similar action reasonably necessary to provide economicaland safe utility installation and to maintain reasonable standards of health and appearance. Grantors shall promptly restore any area affected by the exercise ofsuch easements and rights, and shall indemnify the Owner of such Building Site, its lessees and sub-lessees, from all costs incurred as a result of anydamage to such Building Site due to the negligence or misconduct of Grantors in the exercise of such easement and rights.9.2 Grading. Grantors may at any time make such cuts and fills upon the Property and do such grading and moving of earth as, in its judgment, maybenecessary to improve or maintain the streets in or adjacent to the Property and to drain surface waters there from; and may assign such rights to Salt LakeCounty or to any municipal or public authority; provided, however, that after plans for the initial principle Building upon a Building Site shall have beenapproved by the Committee as provided herein, the rights of the Grantors under this section shall terminate with respect to all parts of such Building Site otherthan the easement area thereof, except thatGrantors or any such municipal or public authority shall thereafter have the right to maintain existing streets and drainage structures.9.3 Utilities and Signs. Grantors hereby reserve unto themselves an easement and right of way, including but not limited to rights of ingress and egress,within a ten (10) foot right of way around the perimeter of any property, for the limited purpose of constructing, erecting, operating, replacing and/ormaintaining utilities and similar public or quasi-public improvements on the Property as necessary to complete, constrict, develop, expand and improve the Property and the Building Sites and also to construct and maintain one ormores Signs indicating the name and location of the Property. Any use of such easement shall be performed in such a reasonable manner as to minimize theimpact of such construction, maintenance, or use, upon the Property. Each Owner or Occupant shall also dedicate, from time to time, if requested, on itsBuilding Site, to the respective utility company or governing body, one or more easements for any utility from the property line to the Building. In the event ofnecessity, and only in the event of necessity, the Owner of each parcel of the Property agrees to the location of common utility facilities across and under suchOwner’s parcel in locations other than those designated herein, so long as such location does not unreasonably interfere with the use and operation of suchparcel and so long as the common utility facilities concerned are located underground and do not cross within ten (10) feet of any Building erected or to beerected upon such parcel.9.4 Maintenance and Interference. Grantors, Owners and Occupants, whichever the case may be, hereby agree to use their best efforts to minimizeinterference with Owners, Occupants and their guest and/or invitees in connection with the Grantors’ use of the easements described in this Article IX.9.5 Exception for Grantor. Notwithstanding any restrictions or provisions contained in this Declaration to the contrary, until the expiration ofGrantors’ right to appoint the members of the Committee as described in Article VIII above, a Grantor shall have the right to use any Building Site owned bysuch Grantor in furtherance of any marketing or sales effort, or to facilitate construction or improvements of any Building or of the Property.ARTICLE X GENERAL1610.1 Owners Acceptance. The Owner or Occupant of any Building Site on the Property by acceptance of a Deed or other instrument conveying an interestin or title to, or the execution of a contract for the purchase thereof, whether from a Grantor or subsequent Owner or Occupant of such Building Site, shallaccept such Deed or other contract upon and subject to each and all of the terms of this Declaration, including without limitation the Protective Covenants, andis required to deliver a copy of this Declaration any subsequent Owner or Occupant taking a Deed under such Owner. Owner agrees to cause any occupant ofits Building or Building Site to agree to be bound by the terms of this Declaration including, without limitation, the Protective Covenants and payment ofcommon maintenance charges.1710.2 Indemnity for Damages. Each and every Owner or Occupant and future Owner or Occupant in accepting a Deed or contract for any Building Siteagrees to indemnify Grantors, the Committee and the Management Company for any damage caused by such Owner or Occupant, or the contractor, agent, oremployees of such Owner or Occupant, to roads, streets, gutters, walkways or other aspects of public ways, including all surfacing thereon, or to water,drainage or storm sewer lines or sanitary sewer lines owned by a Grantor, the Committee or the Management Company or for which a Grantor, the Committeeor the Management Company has responsibility at the time of such damage.10.3 Limitation of Liability. Each and every Owner or Occupant or future Owner or Occupant in accepting a Deed or contract for any Building Siteacknowledges and agrees that neither the Grantors, the Committee, the Management Company nor any of their respective partners, owners, manages, officers,directors, employees, agents or Affiliate, shall be liable to the Owner or Occupant or any person acting by, through or under such Owner or Occupant (any onsuch person or entity herein called “Aggrieved Person”) for any injury or damage, including monetary damage, to the Business, equipment, merchandise orother property of the Aggrieved Person resulting from any cause, including, but not limited to claims of breach of fiduciary duty, losses due to mistakes or thenegligence of any of the employees, brokers or other agents, of the Grantors, the Committee or the Management Company or otherwise, except if and to theextent that such act or omission constitutes gross negligence or willful misconduct and except the actions of a Grantor in its capacity as an Owner.10.4 Enforcement. Enforcement of the provisions of this Declaration may be made by Grantors, the Committee or the Management Company or anyOwner or Occupant affected thereby, and shall be by any appropriate proceeding at law or in equity against any Owner or Occupant, person, corporation,trust or other entity violating or attempting to violate said provisions, either to restrain such violation, to enforce liability, or to recover damages, or by andappropriate proceeding at law or in equity against the land to enforce any lien or charge arising by virtue thereof. Neither Grantors, the Committee nor theManagement Company shall be liable for the enforcement of, or failure to enforce, said provisions, and failure of Grantor, the Committee or the ManagementCompany or any Owner of Occupant to enforce any of the provisions of the Declaration shall in no event be deemed a waiver of the right to do so thereafter.10.5 Severability. Every one of the provisions of this Declaration, including the Protective Covenants, is hereby declared to be independent of, andseverable from the rest of such provisions and of and from every combination of such provisions. Invalidation by any court of any provision or restriction inthis declaration shall in no way affect any of the other provisions or Protective Covenants, which shall remain in full force and effect.10.6 Captions. The captions preceding the various sections, paragraphs and subparagraphs of this Declaration are for the convenience of reference only,and none of them shall be used as an aid to the construction of any provision of the Declaration. Wherever and whenever applicable, the singular form of aword shall be taken to mean or apply to the plural, and the masculine form shall be taken to mean or apply to the feminine or the neuter.1810.7 Mortgages; Deeds of Trust. Breach of any of the provisions of this Declaration or any of the foregoing Protective Covenants shall not defeat or renderinvalid the lien of any mortgage or deed of trust made in good faith and for the value and covering any portion of the Property; but this Declaration and saidProtective Covenants shall be binding upon and effective against any Owner or Occupant of said property whose title thereto is acquired by foreclosure,trustee’s sale or otherwise.10.8 Duration, Modification and Termination. The conditions, restrictions, covenants, easements and reservations set forth in this Declaration shall runwith and bind the land within the Property and shall be and remain in effect, and shall inure to the benefit of, and be enforceable by, through and underGrantors or the Owner of any portion of the Property, subject to and pursuant to the terms of the Declaration, their heirs, successors and assigns for a term offorty (40) years from the date this Declaration is recorded with the Salt Lake County Recorder after which time these Protective Covenants shall expire andterminate. Any modification, amendment or early termination of this Declaration shall take place only by the affirmative vote of two thirds (2/3) of all votesentitle to be voted. Each Owner, except Grantors, shall have one vote for each acre of land, or any fraction thereof, owned by it. Grantors shall have the greaterof (a) votes equal to the total votes of all Owners other than Grantors, or (b) one vote per acre or any fraction thereof owned by Grantors in the Property.10.9 Assignability. A Grantor may assign all of its rights and obligations herein to any person or entity to which a Grantor simultaneously conveys itsinterest in all or substantially all of the Property owned by such Grantor as of the date of such assignment and conveyance. The foregoing assignment andassumption shall be evidenced by a signed and acknowledged written declaration recorded in the office of the Recorder of Salt Lake County. By suchassignment and assumption, the grantee thereof shall be conclusively deemed to have accepted such assignment and shall thereafter have the same rights andbe subject to the same obligations as are given the assumed by Grantors herein. Upon such assignment, the Grantor shall be released from all obligationswhich shall arise thereafter, but not from obligations arising prior to such assignment.10.10 Law Governing. This Declaration shall be governed by and construed in accordance with the laws of the State of Utah.IN WITNESS WHEREOF, Grantors have caused this instrument to be signed by their duly authorized persons on the date first above written.PRICE LOGISTICS CENTER DRAPER, LLCBy[SIGNATURE APPEARS HERE] J. Steven Price, Manager19PRICE LOGISTICS CENTER DRAPER ONE, LLCBy[SIGNATURE APPEARS HERE] J. Steven Price, ManagerPRICE LONE PEAK WEST, LLCBy[SIGNATURE APPEARS HERE] J. Steven Price, ManagerPRICE LONE PEAK COMPANY, LLCBy[SIGNATURE APPEARS HERE] J. Steven Price, ManagerPRICE LONE PEAK RETAIL, LLCBy[SIGNATURE APPEARS HERE] J. Steven Price, Manager20STATE OF UTAH) :COUNTY OF SALT LAKE)On the day of , 2009, personally appeared before me J. Steven Price, a signer of the foregoing instrument who duly acknowledged to me that heexecuted the same, for and in behalf of Price Logistics Center Draper, LLC._______________________________________NOTARY PUBLICResiding at__________________________My Commission Expires:____________________STATE OF UTAH) :COUNTY OF SALT LAKE)On the day of , 2009, personally appeared before me J. Steven Price, a signer of the foregoing instrument who duly acknowledged to me that heexecuted the same, for and in behalf of Price Logistics Center Draper, LLC.____________________________________NOTARY PUBLICResiding at________________________ My Commission Expires: 21STATE OF UTAH) :COUNTY OF SALT LAKE)On the ___day of , 2009, personally appeared before me J. Steven Price, a signer of the foregoing instrument who duly acknowledged to me that heexecuted the same, for and in behalf of Price Lone Peak West, LLC._______________________________________NOTARY PUBLICResiding at__________________________My Commission Expires: STATE OF UTAH) :COUNTY OF SALT LAKE)On the ___day of , 2009, personally appeared before me J. Steven Price, a signer of the foregoing instrument who duly acknowledged to me that heexecuted the same, for and in behalf of Price Lone Peak Company, LLC._______________________________________NOTARY PUBLICResiding at________________________My Commission Expires:_____________________22STATE OF UTAH) :COUNTY OF SALT LAKE)On the ___day of , 2009, personally appeared before me J. Steven Price, a signer of the foregoing instrument who duly acknowledged to me that heexecuted the same, for and in behalf of Price Lone Peak Retail, LLC.______________________________________NOTARY PUBLICResiding at__________________________My Commission Expires:____________________23EXHIBIT ADESCRIPTION OF PROPERTYProperty located in Salt Lake County, Utah, more particularly described as follows:PARCEL 1A Parcel of land located in the East Half of Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian, Salt Lake County, Utah, describedas follows:Beginning at a point on the Southerly line of the Jordan and Salt Lake Canal and the West right-of-way line of Lone Peak Parkway, said point being North89°32’42” West 1,365.42 feet along the North line of Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian and South 2,339.07 feetfrom the Northeast Corner of said Section 25, and thence along said West right-of-way line the following two courses: 1) South 08°55’39” East 386.32 feetand 2) South 00°46’54” East 113.55 feet to the North line of Lone Peak Business Park, a subdivision recorded in Book 2000P at Page 180 of the Salt LakeCounty records; thence along said North line South 89°13’06” West 1,069.80 feet; thence North 00°07’27” East 546.28 feet to said Southerly line of theJordan and Salt Lake Canal and a point on the arc of a 717.00 foot radius non-tangent curve to the right, the center of which bears South 02°10’19” West;thence along said Southerly line the following four courses: 1) Easterly 108.94 feet along said curve through a central angle of 08°42’21” and a long chord ofSouth 83°28’30” East 108.84 feet, 2) South 79°07’20” East 374.63 feet, 3) South 76°10’06” East 272.30 feet and 4) North 67°16’25” East 289.01 feet tothe point of beginning.PARCEL 2A Parcel of land located Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian, Salt Lake County, Utah, described as follows:Beginning at a point on the Southerly line of the Jordan and Salt Lake Canal and the Northerly extension of the West line of Lone Peak Business Park, asubdivision recorded in Book 2000P at Page 180 of the Salt Lake County records, said point being North 89°32’42” West 2,372.46 feet along the North lineof Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian and South 2,310.56 feet from the Northeast Corner of said Section 25 andthence along said West line and its extension South 00°07’27” West 895.63 feet to the North line of property described in that certain Quit Claim Deedrecorded November 30, 1981, as Entry No. 3627200, in Book 5317 at Page 1210 of said records; thence along said North line North 89°53’00” West285.51 feet to the East line of the Southwest Quarter of said Section 25; thence along said East line South 00°07’00” West 26.09 feet to a point South00°07’00” West 565.51 feet from the Center Quarter Corner of said Section 25 and the South line of property described in that certain Warranty Deedrecorded January 18, 1965 as Entry No. 2055164 in Book 2282 at Page 559 of said records; thence along said South line North 84°51’00” West 1,043.33feet to the Easterly right-of-way of the Denver and Rio Grande Western Railroad and a point on the arc of a 5,321.42 foot radius non-tangent curve to the right,the center of which bears South 89°13’28” East; thence along said Easterly right-of-way line the following two courses: l) Northerly 444.46 feet along saidcurve through a central angle of 04°47’08” and a long chord of North 03°10’06”24East 444.33 feet and 2) North 05°33’40” East 300.99 feet to the South line of Property described in that certain Special Warranty Deed recorded May 02, 2003as Entry No. 8637429 in Book 8791 at Page 891 of said records; thence along the boundary of said property the following three courses: 1) South84°26’20” East 10.00 feet, 2) North 05°33’40” East 188.00 feet and 3) North 84°26’20” West 10.00 feet to said Easterly railroad right-of-way line; thencealong said Easterly right-of-way line North 05°33’40” East 384.73 feet to said Southerly line of the Jordan and Salt Lake Canal and a point on the arc of a108.00 foot radius non-tangent curve to the left, the center of which bears North 55°02’29” East; thence along said Southerly line the following nine courses:1) Southeasterly 57.97 feet along said curve through a central angle of 30°45’17” and a long chord of South 50°20’10” East 57.28 feet, 2) South 65°42’48”East 402.40 feet to a point of tangency of a 267.00 foot radius curve to the right, 3) Southeasterly 66.80 feet along said curve through a central angle of14°20’05” and a long chord of South 58°32’45” East 66.63 feet, 4) South 51°22’52” East 211.19 feet to a point on the arc of a 833.00 foot radius non-tangent curve to the left, the center of which bears North 37°12’57” East 5) Southeasterly 255.70 feet along said curve through a central angle of 17°35’15”and a long chord of South 61°34’40” East 254.69 feet to a point of compound curvature of a 200.00 foot radius curve to the left, 6) Easterly 76.93 feet alongsaid curve through a central angle of 22°02’20” and a long chord of South 81°23’28” East 76.46 feet, 7) North 87°35’22” East 120.78 feet, 8) North83°31’17” East 56.69 feet to a point of tangency of a 717.00 foot radius curve to the right, and 9) Easterly 108.25 feet along said curve through a centralangle of 08°39’02” and a long chord of North 87°50’48” East 108.15 to the point of beginning.PARCEL 3A parcel of land located in the Northeast Quarter of Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian, Salt Lake County, Utah,described as follows:BEGINNING at a point on the northerly line of the Jordan and Salt Lake Canal, said point being South 00°12’10” West 2,259.13 feet (South 2,276.21 feetby record) along the east line of Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian and West 1,363.20 feet (1358.11 feet by record)from the Northeast Corner of said Section 25, and thence along said northerly line the following four courses: 1) South 67°16’25” West 288.55 feet, 2)North 76°10’06” West 252.20 feet, 3) North 79°07’20” West 376.33 feet to a point on the arc of a 783.00 foot radius non-tangent curve to the left, the centerof which bears South 10°52’40” West and Westerly 115.25 feet along said curve through a central angle of 08°25’59” and a long chord of North 83°20’19”West 115.14 feet; thence North 00°18’32” East 836.90 feet to the south right-of-way line of the 72.00 foot wide road dedication described in that certainSpecial Warranty Deed recorded June 12, 1990 as Entry No. 4927653 in Book 6227 at Page 2839 of the Salt Lake County records; thence along said southright-of-way line the following two courses: 1) South 89°41’28” East 827.34 feet to a point of tangency of a 30.00 foot radius curve to the right, 2)Southeasterly 42.23 feet along said curve through a central angle of 80°39’15” and a long chord of South 49°21’50” East 38.83 feet to the westerly right-of-way line of Lone Peak Parkway; thence along said westerly right-of-way line South 09°02’13” East 850.90 feet to the POINT OF BEGINNING. Said parcelcontains 838,862 square feet or 19.26 acres, more or less.PARCEL 4A parcel of land located in the Northeast Quarter of Section 25, Township 3, South, Range 1 West, Salt Lake Base and Meridian, Salt Lake County, Utah,described as follows:25Beginning at a point on the North line of the Southwest Quarter of the Northeast Quarter of Section 25, Township 3 South, Range 1 West, Salt Lake Baseand Meridian, said point being South 00°12’10” West 1,327.06 feet (South 1,319.79 feet by record) along the East line of said Section 25 to said North lineand North 89°41’58” West 1,510.87 feet (West 1,515.73 feet by record) along said North line from the Northeast Corner of said Section 25, and thencealong the West line of property described in that certain Quit Claim Deed recorded April 27, 1995 as Entry No. 6068786 in Book 7140 at Page 1641 of theSalt Lake County records South, 10°07’51” East 2.51 feet to the North right-of-way line of the 72.00 foot wide road dedication described in that certainSpecial Warranty Deed recorded June 12, 1990 as Entry No. 4927653 in Book 6227 at Page 2839 of said records; thence North 89°41’28” West 846.17feet; thence North 00°18’32” East 2.34 feet to said North line of the Southwest Quarter of the Northeast Quarter; thence South 89°41’58” East 845.71 feet tothe point of beginning.PARCEL 5 [THIS LEGAL DESCRIPTION WILL NEED TO BE CORRECTED TO INCLUDE BOUNDARY LINE CHANGE]A parcel of land located in the North Half of Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian, Salt Lake County, Utah,described as follows:BEGINNING at a point on the northerly line of the Jordan and Salt Lake Canal, said point being South 00°12’10” West 2,225.93 feet (South 2,238.81 feetby record) along the east line of Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian and West 2,358.28 feet (2,371.11 feet by record)from the Northeast Corner of said Section 25, said point also being on the arc of a 783.00 foot radius curve to the left, the center of which bears South02°26’41” West; thence along said northerly line the following five courses: 1) Westerly 121.95 feet along said curve through a central angle of 08°55’24”and a long chord of South 87°58’59” West 121.82 feet, 2) South 83°31’17” West 54.35 feet, 3) South 87°35’22” West 118.56 feet to a point of tangencyof a 134.00 foot radius curve to the right, 4) Westerly 51.61 feet along said curve through a central angle of 22°03’59” and a long chord of North 81°22’38”West 51.29 feet to a point of compound curvature of a 767.00 foot radius curve to the right and 5) Northwesterly 216.35 feet along said curve through acentral angle of 16°09’43” and a long chord of North 62°15’47” West 215.64 feet; thence North 00°24’36” East 360.25 feet; thence South 89°35’24” East535.64 feet; thence South 00°18’32” West 449.06 feet to the POINT OF BEGINNING. Said parcel contains 237,367 square feet or 5.45 acres, more or less.PARCEL 6 [THIS LEGAL DESCRIPTION WILL NEED TO BE CORRECTED TO INCLUDE BOUNDARY LINE CHANGE]A parcel of land located in the North Half of Section 25, Township 3 South, Range 1 West, Salt Lake Base and Meridian, Salt Lake County, Utah,described as follows:BEGINNING at a point on the north line of the Southwest Quarter of the Northeast Quarter of Section 25, Township 3 South, Range 1 West, Salt Lake Baseand Meridian, said point being South 00°12’10” West 1,327.06 feet along the east line of said Section 25 to said north line and along said north line North89°41’58” West 2,356.58 feet from the Northeast Corner of said Section 25, and thence South 00°18’32” West 462.19 feet; thence North 89°35’24” West535.64 feet; thence South 00°24’36” West 360.25 feet to the northerly line of the Jordan and Salt Lake City Canal and a point on the arc of a 767.00 footradius non-tangent curve to the right, the center of which bears North 35°49’04” East; thence along the northerly and westerly line of said canal the followingnine courses: 1) Northwesterly 18.11 feet along said curve through a central angle of 01°21’10” and a long chord of North 53°30’21” West 18.11 feet, 2)North 51°22’52” West 210.35 feet to a point of tangency of a 333.00 foot radius curve to the left, 3)26Northwesterly 83.30 feet along said curve through a central angle of 14°19’56” and a long chord of North 58°32’50” West 83.08 feet, 4) North 65°42’48”West 399.70 feet to a point of tangency of a 42.00 foot radius curve to the right, 5) Northwesterly 53.40 feet along said curve through a central angle of72°50’30” and a long chord of North 29°17’33” West 49.87 feet, 6) North 07°07’42” East 261.01 feet, 7) North 33°28’35” East 88.98 feet to a point oftangency of a 53.00 foot radius curve to the left, 8) Northerly 45.35 feet along said curve through a central angle of 49°01’51” and a long chord of North08°57’40” East 43.98 feet and 9) North 15°33’16” West 54.23 feet to the north line of the Southeast Quarter of the Northwest Quarter of said Section 25;thence South 89°51’16” East 810.65 feet to the Northwest Corner of said Southwest Quarter of the Northeast Quarter; thence South 89°41’58” East294.78 feet to the POINT OF BEGINNING. Said parcel contains 626,867 square feet or 14.39 acres, more or less.PARCEL 7Lots 2, LONE PEAK BUSINESS PARK, according to the official plat thereof recorded in the office of the County Recorder of Salt Lake County, Utah.PARCEL 8Lots 101, 102 and 103, LONE PEAK BUSINESS PARK, LOT 3 AMENDED, according to the official plat thereof recorded in the office of the CountyRecorder of Salt Lake County, Utah.27Haemonetics Corporation2005 Long-Term Incentive Compensation PlanEffective July 27, 2005As Amended:July 31, 2008July 29, 2009July 21, 2011November 30, 201245TABLE OF CONTENTSPageArticle 1.Establishment, Objectives, and Duration 1Article 2.Definitions 1Article 3.Administration 4Article 4.Shares Subject to the Plan and Maximum Awards 5Article 5.Eligibility and Participation 6Article 6.Stock Options 7Article 7.Stock Appreciation Rights 8Article 8.Restricted Stock 9Article 9.Deferred Stock/Restricted Stock Units……………………………………………10Article 10.Other Stock Unit Awards…………………………………………………………11Article 11.Performance Shares 11Article 12.Performance Measures 12Article 13.Rights of Participants 13Article 14.Termination of Employment/Directorship 13Article 15.Change in Control 14Article 16.Amendment, Modification, and Termination 15Article 17.Withholding 15Article 18.Successors 16Article 19.General Provisions 16BOS1472419.8 -1- Article 1. Establishment, Objectives, and Duration1.1 Establishment of the Plan. Haemonetics Corporation, a Massachusetts corporation, hereby adopts the “HaemoneticsCorporation 2005 Long-Term Incentive Compensation Plan” (hereinafter referred to as the “Plan”), as set forth in this document. ThePlan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, DeferredStock/Restricted Stock Units, Other Stock Units and Performance Shares.Subject to approval by the Company’s stockholders, this Plan shall become effective as of July 27, 2005 (the “Effective Date”).Awards may be granted under this Plan prior to such stockholder approval; provided, the effectiveness of such Awards shall becontingent on such stockholder approval being obtained.1.2 Objectives of the Plan. The objectives of the Plan are to optimize the profitability and growth of the Company throughincentives that are consistent with the Company’s goals and that link the personal interests of Participants to those of the Company’sstockholders, to provide Participants with an incentive for excellence in individual performance, and to promote teamwork amongParticipants.The Plan is further intended to provide flexibility to the Company and its Subsidiaries in their ability to motivate, attract, and retainthe services of Participants who make significant contributions to the Company’s success and to allow Participants to share in thatsuccess.1.3 Duration of the Plan. The Plan shall remain in effect, subject to the right of the Committee to amend or terminate the Planat any time pursuant to Article 16 hereof, until the earlier of when (a) all Shares subject to it shall have been purchased or acquiredaccording to the Plan’s provisions or (b) the tenth (10th) anniversary of the Effective Date. In no event may an Award of an IncentiveStock Option be granted under the Plan on or after the tenth (10th) anniversary of the Effective Date.Article 2. DefinitionsWhenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, theinitial letter of the word shall be capitalized:2.1 “Award” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive StockOptions, Stock Appreciation Rights, Restricted Stock, Deferred Stock/Restricted Stock Units, Other Stock Units or PerformanceShares.2.2 “Award Agreement” means a written or electronic agreement entered into by the Company and a Participant setting forththe terms and provisions applicable to an Award granted under this Plan.2.3 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of theGeneral Rules and Regulations under the Exchange Act.2.4 “Board” or “Board of Directors” means the Board of Directors of the Company.BOS1472419.8 -1- 2.5 “Change in Control” shall be deemed to have occurred if any person or any two or more persons acting as a group, and allaffiliates of such person or persons, who prior to such time owned less than thirty-five percent (35%) of the then outstanding commonstock of the Company, shall acquire such additional shares of the Company’s common stock in one or more transactions, or series oftransactions, such that following such transaction or transactions, such person or group and affiliates beneficially own thirty-five percent(35%) or more of the Company’s common stock outstanding.2.6 “Code” means the Internal Revenue Code of 1986, as amended from time to time.2.7 “Committee” means the committee appointed from time to time by the Company's Board of Directors to administer thePlan. The full Board of Directors, in its discretion, may act as the Committee under the Plan, whether or not a Committee has beenappointed, and shall do so with respect to grants of Awards to non-employee Directors. The Committee may delegate to one or moremembers of the Committee or officers of the Company, individually or acting as a committee, any portion of its authority, except asotherwise expressly provided in the Plan. In the event of a delegation to a member of the Committee, officer or a committee thereof,the term "Committee" as used herein shall include the member of the Committee, officer or committee with respect to the delegatedauthority. Notwithstanding any such delegation of authority, the Committee comprised of members of the Board of Directors andappointed by the Board of Directors shall retain overall responsibility for the operation of the Plan.2.8 “Company” means Haemonetics Corporation, a Massachusetts corporation, and any successor thereto as provided inArticle 18 hereof.2.9 “Covered Employee” means a Participant who, as of the date of vesting and/or payout of an Award, or the date theCompany or any of its Subsidiaries is entitled to a tax deduction as a result of the Award, as applicable, is one of the group of “coveredemployees,” as defined in the regulations promulgated under Code Section 162(m), or any successor statute.2.10 “Deferred Stock Unit” means an Award granted to a Participant pursuant to Article 9 hereof.2.11 “Director” means any individual who is a member of the Board of Directors of the Company; provided, however, that anyDirector who is employed by the Company shall be treated as an Employee under the Plan.2.12 “Disability” shall mean a condition whereby the Participant is unable to engage in any substantial gainful activity by reasonof any medically determinable physical impairment which can be expected to result in death or which is or can be expected to last for acontinuous period of not less than twelve months, all as verified by a physician acceptable to, or selected by, the Company.2.13 “Effective Date” shall have the meaning ascribed to such term in Section 1.1 hereof.2.14 “Employee” means any employee of the Company or its Subsidiaries.2.15 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor actthereto.BOS1472419.8 -2- 2.16 “Fair Market Value” as of any date and in respect of any Share means the average of the high and low trading prices forthe Shares as reported on the New York Stock Exchange for that date, or if no such prices are reported for that date, the average of thehigh and low trading prices on the next preceding date for which such prices were reported, unless otherwise determined by theCommittee. In no event shall the fair market value of any Share be less than its par value.2.17 “Incentive Stock Option” or “ISO” means an option to purchase Shares granted under Article 6 hereof and that isdesignated as an Incentive Stock Option and that is intended to meet the requirements of Code Section 422.2.18 “Insider” shall mean an individual who is, on the relevant date, an executive officer, director or ten percent (10%)beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all asdefined under Section 16 of the Exchange Act.2.19 “Key Employee” shall mean an employee (as defined in Code Section 416(i) (but without regard to paragraph (5)thereof)) of the Company.2.20 “Nonqualified Stock Option” or “NQSO” means an option to purchase Shares granted under Article 6 hereof that isnot intended to meet the requirements of Code Section 422, or that otherwise does not meet such requirements.2.21 “Option” means an Incentive Stock Option or a Nonqualified Stock Option.2.22 “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.2.23 “Other Stock Unit Award” means an Award granted to a Participant, as described in Article 10 hereof.2.24 “Participant” means an Employee or Director who has been selected to receive an Award or who has an outstandingAward granted under the Plan.2.25 “Performance-Based Exception” means the performance-based exception from the tax deductibility limitations of CodeSection 162(m).2.26 “Performance Share” means an Award granted to a Participant, as described in Article 11 hereof.2.27 “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock is limited in some way(based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by theCommittee, at its discretion), and the Shares are subject to a substantial risk of forfeiture, pursuant to the Restricted Stock AwardAgreement, as provided in Article 8 hereof.2.28 “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d)and 14(d) thereof and the rules promulgated thereunder, including a “group” as defined in Section 13(d) thereof and the rulespromulgated.BOS1472419.8 -3- 2.29 “Restricted Stock” means an Award granted to a Participant pursuant to Article 8 hereof.2.30 “Restricted Stock Unit” means an Award granted to a Participant pursuant to Article 9 hereof.2.31 “Shares” means shares of the Company’s common stock, par value $.01 per share.2.32 “Stock Appreciation Right” or “SAR” means an Award granted pursuant to the terms of Article 7 hereof.2.33 “Subsidiary” means any corporation, partnership, joint venture, or other entity in which the Company, directly orindirectly, has a majority voting interest. With respect to Incentive Stock Options, “Subsidiary” means any entity, domestic or foreign,whether or not such entity now exists or is hereafter organized or acquired by the Company or by a Subsidiary that is a “subsidiarycorporation” within the meaning of Code Section 424(d) and the rules thereunder.2.34 “Ten Percent Shareholder” means an employee who at the time an ISO is granted owns Shares possessing more thanten percent of the total combined voting power of all classes of stock of the Company or any Subsidiary, within the meaning of CodeSection 422.Article 3. Administration3.1 General. Subject to the terms and conditions of the Plan, the Plan shall be administered by the Committee. The members ofthe Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors. The Committee shallhave the authority to delegate administrative duties to officers of the Company. For purposes of making Awards intended to qualify forthe Performance Based Exception under Code Section 162(m), to the extent required under such Code Section, the Committee shall becomprised solely of two or more individuals who are “outside directors”, as that term is defined in Code Section 162(m) and theregulations thereunder.3.2 Authority of the Committee. Except as limited by law or by the Certificate of Incorporation or Bylaws of theCompany, and subject to the provisions hereof, the Committee shall have full power to select Employees and Directors who shall beoffered the opportunity to participate in the Plan; determine the sizes and types of Awards; determine the terms and conditions of Awardsin a manner consistent with the Plan (including, but not limited to, termination provisions); construe and interpret the Plan and anyagreement or instrument entered into under the Plan; establish, amend, or waive rules and regulations for the Plan’s administration; andamend the terms and conditions of any outstanding Award as provided in the Plan. Further, the Committee shall make all otherdeterminations that it deems necessary or advisable for the administration of the Plan. As permitted by law and the terms of the Plan, theCommittee may delegate its authority herein. No member of the Committee shall be liable for any action taken or decision made in goodfaith relating to the Plan or any Award granted hereunder.BOS1472419.8 -4- 3.3 Decisions Binding. All determinations and decisions made by the Committee pursuant to the provisions of the Plan and allrelated orders and resolutions of the Committee shall be final, conclusive, and binding on all persons, including the Company, itsstockholders, Directors, Employees, Participants, and their estates and beneficiaries, unless changed by the Board.Article 4. Shares Subject to the Plan and Maximum Awards4.1 Number of Shares Available for Grants. Subject to adjustment as provided in Section 4.4 hereof, the number of Shareshereby reserved for issuance on or after July 31, 2008 to Participants under the Plan shall equal 7,529,672. Subject to adjustment asprovided in Section 4.4 hereof, the maximum number of Shares that may be issued pursuant to Incentive Stock Options shall not exceed500,000. Any Shares that are subject to Award of Stock Options or Stock Appreciation Rights shall be counted against this limit as one(1) Share for every one (1) Share issued. Any Shares that are subject to Awards other than Stock Options or Stock Appreciation Rightsshall be counted against this limit as 6.52 Shares for every one (1) Share granted on or after July 31, 2008.4.2 Calculation of Remaining Shares. Shares may be authorized or unissued shares. Except as otherwise provided in thisArticle 4, the Committee shall determine the appropriate methodology for calculating the number of Shares issued pursuant to the Plan.Any Shares covered by an Award (or portion of an Award) granted under the Plan which is settled in cash in lieu of Shares, forfeited,terminated or otherwise canceled or expires shall be deemed not to have been delivered for purposes of determining the maximumnumber of Shares available for delivery under the Plan. If a Participant tenders shares (either actually, by attestation or otherwise) to payall or any part of the Option Price or purchase price on an Award or if any shares payable with respect to any Award are retained by theCompany in satisfaction of the Participant’s obligation for taxes, the number of shares actually tendered or retained shall not become oragain be, as the case may be, included in the Share limit described in this Section 4.1. Following the exercise of a SARs Award, thedifference between the number of Shares subject to such Award and the number of Shares issued in such exercise shall not be includedin the maximum number of Shares available for delivery under the Plan. The Company shall not use cash proceeds from the excise ofan Option by a Participant to repurchase Shares for the purpose of increasing the maximum number of Shares available for deliveryunder the Plan. 4.3 Limitations on Awards. The following limitations shall apply to the grant of any Award to a Participant in a fiscal year:(a) Stock Options: The maximum aggregate number of Shares that may be granted in the form of StockOptions pursuant to Awards granted in any one fiscal year to any one Participant shall be 1,200,000.(b) SARs: The maximum aggregate number of Shares that may be granted in the form of Stock AppreciationRights pursuant to Awards granted in any one fiscal year to any one Participant shall be 500,000.BOS1472419.8 -5- (c) Restricted Stock: The maximum aggregate number of Shares that may be granted with respect toAwards of Restricted Stock granted in any one fiscal year to any one Participant shall be 500,000.(d) Deferred Stock/Restricted Stock Unit Awards: The maximum aggregate grant or award with respectto Awards of Deferred Stock Units made in any one fiscal year to any one Participant may not exceed $7,000,000.The maximum aggregate grant with respect to Awards of Restricted Stock Units made in any one fiscal year to anyone Participant may not exceed $7,000,000.(e) Other Stock Unit Awards: The maximum aggregate grant with respect to Awards of Other Stock Unitsmade in any one fiscal year to any one Participant may not exceed $10,000,000.(f) Performance Shares Awards: The maximum aggregate grant with respect to Awards of PerformanceShares made in any one fiscal year to any one Participant shall be equal to the Fair Market Value of 500,000 Shares(measured on the date of grant).Notwithstanding anything in the Plan to the contrary and subject to adjustment as provided in Section 4.4, the maximum aggregatenumber of Shares that may be granted as Awards in any one fiscal year to a Director shall be equal to the Fair Market Value of 20,000Shares (measured on the date of grant) and the maximum aggregate number of Shares that may be granted as Awards to any Directorcumulatively under this Plan is 700,000.The maximum amount that may be paid under the Annual Target Bonus Plan in any one fiscal year to a participant in that plan shallbe $2 million. 4.4 Adjustments in Authorized Shares. Upon a change in corporate capitalization, such as a stock split, stock dividend or acorporate transaction, such as any merger, consolidation, combination, exchange of shares or the like, separation, including a spin-off, orother distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within thedefinition of such term in Code Section 368) or any partial or complete liquidation of the Company, such adjustment shall be made inthe number and class of Shares that may be delivered under Section 4.1, in the number and class of and/or price of Shares subject tooutstanding Awards granted under the Plan, and in the Award limits set forth in Section 4.1, as may be determined to be appropriate andequitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights.4.5 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee maymake adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events(including, without limitation, the events described in Section 4.4 hereof) affecting the Company or the financial statements of theCompany or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that suchadjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made availableunder the Plan; provided that, unless the Committee determines otherwise at the timeBOS1472419.8 -6- such adjustment is considered, no such adjustment shall be authorized to the extent that such authority would be inconsistent with thePlan’s or any Award’s meeting the requirements of Section 162(m) of the Code, as from time to time amended.Article 5. Eligibility and Participation5.1 Eligibility. Persons eligible to participate in this Plan include all Employees and Directors of the Company and itsSubsidiaries.5.2 Actual Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligibleEmployees and Directors, those to whom Awards shall be granted and shall determine the nature and amount of each Award, providedthat Incentive Stock Options shall only be awarded to Employees of the Company or its Subsidiaries.Article 6. Stock Options6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number,and upon such terms, and at any time and from time to time as shall be determined by the Committee.6.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, theduration of the Option, the number of Shares to which the Option pertains, and such other provisions as the Committee shall determinewhich are not inconsistent with the terms of the Plan.6.3 Option Price. The Option Price for each Option shall equal the Fair Market Value of the Shares at the time such option isgranted. No ISOs will be granted to a Ten Percent Shareholder. The Option Price may not be decreased with respect to an outstandingOption following the date of grant and no Option will be replaced with another Option with a lower Option Price.6.4 Duration of Options. Each Option granted to a Participant shall expire at such time as the Committee shall determine at thetime of grant, provided that an Option must expire no later than the seventh (7th) anniversary of the date the Option was granted.6.5 Exercise of Options. Options shall be exercisable at such times and be subject to such restrictions and conditions as theCommittee shall in each instance approve, which need not be the same for each grant or for each Participant.6.6 Payment. Options shall be exercised by the delivery of a written, electronic or telephonic notice of exercise to the Companyor its designated agent, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by fullpayment of the Option Price for the Shares.Upon the exercise of any Option, the Option Price for the Shares being purchased pursuant to the Option shall be payable to theCompany in full either: (a) in cash or its equivalent; (b) subject to the Committee’s approval, by delivery of previously acquired Shareshaving an aggregate Fair Market Value at the time of exercise equal to the total Option Price (provided that the Shares that are deliveredmust have been held by the Participant for at least six (6) monthsBOS1472419.8 -7- prior to their delivery to satisfy the Option Price); (c) subject to the Committee’s approval, by authorizing a third party to sell Shares (ora sufficient portion of the Shares) acquired upon exercise of the Option and remitting to the Company a sufficient portion of the salesproceeds to pay the Option Price; (d) subject to the Committee’s approval, by a combination of (a), (b), or (c); or (e) by any other methodapproved by the Committee in its sole discretion. Unless otherwise determined by the Committee, the delivery of previously acquiredShares may be done through attestation. No fractional shares may be tendered or accepted in payment of the Option Price.Unless otherwise determined by the Committee, cashless exercises are permitted pursuant to Federal Reserve Board’s RegulationT, subject to applicable securities law restrictions, or by any other means which the Committee determines to be consistent with thePlan’s purpose and applicable law.Subject to any governing rules or regulations, as soon as practicable after receipt of notification of exercise and full payment, theCompany shall deliver to the Participant, in the Participant’s name, Share certificates in an appropriate amount based upon the number ofShares purchased pursuant to the Option(s).Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in UnitedStates dollars.6.7 Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant tothe exercise of an Option granted under this Article 6 as it may deem advisable, including, without limitation, restrictions underapplicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listedand/or traded, or under any blue sky or state securities laws applicable to such Shares.6.9 Special Limitation on Grants of Incentive Stock Options. No ISO shall be granted to an Employee under the Plan orany other ISO plan of the Company or its Subsidiaries to purchase Shares as to which the aggregate Fair Market Value (determined as ofthe date of grant) of the Shares which first become exercisable by the Employee in any calendar year exceeds $100,000. To the extentan Option initially designated as an ISO exceeds the value limit of this Section 6.9 or otherwise fails to satisfy the requirementsapplicable to ISOs, it shall be deemed a NQSO and shall otherwise remain in full force and effect.6.10 Dividends and Other Distributions. Participants holding Options shall not be credited with dividends or any equivalentamount in lieu of dividends.Article 7. Stock Appreciation Rights7.1 Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and fromtime to time as shall be determined by the Committee.BOS1472419.8 -8- Subject to the terms and conditions of the Plan, the Committee shall have complete discretion in determining the number of SARsgranted to each Participant and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to suchSARs.The grant price of a SAR shall equal the Fair Market Value of a Share on the date of grant.7.2 SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the grant price, the term ofthe SAR, and such other provisions as the Committee shall determine.7.3 Term of SARs. The term of an SAR granted under the Plan shall be determined by the Committee, in its sole discretion,provided that an SAR must expire no later than the seventh (7th) anniversary of the date the SAR was granted.7.4 Exercise of SARs. SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion,imposes upon them.7.6 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Companyin an amount determined by multiplying:(a) The amount by which the Fair Market Value of a Share on the date of exercise exceeds the grant price ofthe SAR; by(b)The number of Shares with respect to which the SAR is exercised.The payment upon SAR exercise shall be in Shares. Any Shares delivered in payment shall be deemed to have a value equal to theFair Market Value on the date of exercise of the SAR.7.7 Dividends and Other Distributions. Participants holding SARs shall not be credited with dividends or any equivalentamount in lieu of dividends.Article 8. Restricted Stock8.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Committee, at any time and from time totime, may grant Shares of Restricted Stock to Participants in such amounts as the Committee shall determine.8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be evidenced by a Restricted Stock Award Agreement thatshall specify the Period(s) of Restriction, the number of Shares of Restricted Stock granted, and such other provisions as the Committeeshall determine which are not inconsistent with the terms of this Plan.8.3 Other Restrictions. The Committee may impose such other conditions and/or restrictions on any Shares of RestrictedStock granted pursuant to the Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulatedpurchaseBOS1472419.8 -9- price for each Share of Restricted Stock, restrictions based upon the achievement of specific performance goals, time-based restrictionson vesting following the attainment of the performance goals, time-based restrictions, and/or restrictions under applicable federal orstate securities laws.To the extent deemed appropriate by the Committee, the Company may retain the certificates representing Shares of RestrictedStock in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied.Except as otherwise provided in the Award Agreement, Shares of Restricted Stock covered by each Restricted Stock grant madeunder the Plan shall become freely transferable by the Participant after the last day of the applicable Period of Restriction.8.5 Voting Rights. If the Committee so determines, Participants holding Shares of Restricted Stock granted hereunder may begranted the right to exercise full voting rights with respect to those Shares during the Period of Restriction.8.6 Dividends and Other Distributions. During the Period of Restriction, Participants holding Shares of Restricted Stockgranted hereunder (whether or not the Company holds the certificate(s) representing such Shares) may, if the Committee sodetermines, be credited with dividends paid with respect to the underlying Shares while they are so held. The Committee may apply anyrestrictions to the dividends that the Committee deems appropriate. Without limiting the generality of the preceding sentence, if thegrant or vesting of Restricted Shares granted to a Covered Employee is designed to comply with the requirements of the Performance-Based Exception, the Committee may apply any restrictions it deems appropriate to the payment of dividends declared with respect tosuch Restricted Shares, such that the dividends and/or the Restricted Shares maintain eligibility for the Performance-Based Exception.Article 9. Deferred Stock and Restricted Stock Units9.1 Award of Deferred Stock Units. Subject to the terms and provisions of the Plan, the Committee, at any time and fromtime to time, may award Deferred Stock Units to Participants in lieu of payment of a bonus or other Award if so elected by a Participantunder such terms and conditions as the Committee shall determine, including terms that provide for the grant of Deferred Stock Unitsvalued in excess of the bonus or Award deferred.9.2 Election to Receive Deferred Stock Units. A Participant must make an election to receive Deferred Stock Units in thecalendar year before the calendar year in which the services related to the Award are first performed. The Committee may require aParticipant to defer, or permit (subject to any conditions as the Committee may from time to time establish) a Participant to elect to defer,receipt of all or any portion of any payment of cash or Shares that otherwise would be due to such Participant in payment or settlementof an Award under the Plan, to the extent consistent with Section 409A of the Code. (Such payments may include, without limitation,provisions for the payment or crediting of reasonable interest in respect of deferred payments credited in cash, and the payment orcrediting of dividend equivalents in respect ofBOS1472419.8 -10- deferred amounts credited in stock equivalents.) Settlement of any Deferred Stock Units shall be made in a single sum of cash orShares.9.3 Grant of Restricted Stock Units. Subject to the terms and provisions of the Plan, the Committee, at any time and fromtime to time, may grant Restricted Stock Units to Participants in such amounts as the Committee may determine.9.4 Restricted Stock Units Agreement. Each Restricted Stock Unit grant shall be evidenced by a Restricted Stock Unit AwardAgreement that shall specify the date or dates and any other terms and conditions on which the Restricted Stock Units may vest andsuch other terms and conditions of the grant as the Committee shall determine.9.5 Form and Timing of Payment of Restricted Stock Units. Payment of vested Restricted Stock Units, or, if a RestrictedStock Unit Award is subject to partial vesting, the vested portion of such Award, shall be made in a single sum of cash or Shares or acombination thereof as soon as practicable after the Restricted Stock Units or portion of the Award vests, but in no event later than 2½months after the calendar year in which vesting occurs. It is intended that a Restricted Stock Unit Award be exempt from the applicationof Section 409A of the Code as a “short-term deferral.”Article 10. Other Stock Unit Awards10.1 Grant of Other Stock Unit Awards. Subject to the terms of the Plan, Other Stock Unit Awards that are valued in wholeor in part by reference to, or are otherwise based on, Shares or other property, may be granted to Participants, either alone or in additionto other Awards granted under the Plan, and such Other Stock Units shall also be available as a form of payment in the settlement ofother Awards granted under the Plan. Other Stock Units shall be granted upon such terms, and at any time and from time to time, asshall be determined by the Committee.10.2 Award Agreement. Each Other Stock Unit grant shall be evidenced by an Other Stock Unit Agreement that shall specifythe restrictions upon such Other Stock Units, if any, the number of Other Stock Units granted, and such other provisions as theCommittee shall determine which are not inconsistent with the terms of this Plan.Article 11. Performance Shares11.1 Grant of Performance Shares Awards. Subject to the terms of the Plan, Performance Shares Awards may be grantedto Participants in such amounts and upon such terms, and at any time and from time to time, as shall be determined by the Committee.11.2 Award Agreement. At the Committee’s discretion, each grant of Performance Shares Awards may be evidenced by anAward Agreement that shall specify the initial value, the duration of the Award, the performance measures, if any, applicable to theAward, and such otherBOS1472419.8 -11- provisions as the Committee shall determine which are not inconsistent with the terms of the Plan.11.3 Value of Performance Shares Awards. Each Performance Share shall have an initial value equal to the Fair MarketValue of a Share on the date of grant. The Committee shall set performance goals in its discretion which, depending on the extent towhich they are met, will determine the number and/or value of Performance Shares Awards that will be paid out to the Participant. Forpurposes of this Article 11, the time period during which the performance goals must be met shall be called a “Performance Period.”11.4 Earning of Performance Shares Awards. Subject to the terms of this Plan, after the applicable Performance Period hasended, the holder of Performance Shares Awards shall be entitled to receive a payout based on the number and value of PerformanceShares Awards earned by the Participant over the Performance Period, to be determined as a function of the extent to whichthe corresponding performance goals have been achieved.11.5 Form and Timing of Payment of Performance Shares Awards. Payment of earned Performance Shares Awards shallbe as determined by the Committee and, if applicable, as evidenced in the related Award Agreement. Subject to the terms of the Plan,the Committee, in its sole discretion, may pay earned Performance Shares Awards in the form of cash or in Shares (or in a combinationthereof) that have an aggregate Fair Market Value equal to the value of the earned Performance Shares Awards at the close of theapplicable Performance Period. Such Shares may be delivered subject to any restrictions deemed appropriate by the Committee. Nofractional shares will be issued. The determination of the Committee with respect to the form of payout of such Awards shall be setforth in the Award Agreement pertaining to the grant of the Award or the resolutions establishing the Award.Unless otherwise provided by the Committee, Participants holding Performance Shares shall be entitled to receive dividend unitswith respect to dividends declared with respect to the Shares represented by such Performance Shares.Article 12. Performance MeasuresUnless and until the Committee proposes for shareholder vote and the Company’s shareholders approve a change in the generalperformance measures set forth in this Article 12, the attainment of which may determine the degree of payout and/or vesting withrespect to Awards to Covered Employees that are designed to qualify for the Performance-Based Exception, the performancemeasure(s) to be used for purposes of such grants shall be chosen from among: revenue, earnings per share, operating income, netincome (before or after taxes), cash flow (including, but not limited to, operating cash flow and free cash flow), gross profit, growth inany of the preceding measures, gross profit return on investment, gross margin return on investment, working capital, gross margins,EBIT, EBITDA, return on equity, return on assets, return on capital, revenue growth, total shareholder return, economic value added,customer satisfaction, technology leadership, number of new patents, employee retention, market share, market segment share,product release schedules, new product innovation, cost reductionBOS1472419.8 -12- through advanced technology, brand recognition/acceptance, and product ship targets. Additionally, the Committee may exclude theimpact of an event or occurrence which the Committee determines should appropriately be excluded, including an event not within thereasonable control of the Company’s management.Performance measures may be set either at the corporate level, subsidiary level, division level, or business unit level.Awards that are designed to qualify for the Performance-Based Exception, and that are held by Covered Employees, may not beadjusted upward (the Committee shall retain the discretion to adjust such Awards downward).If applicable tax and/or securities laws change to permit Committee discretion to alter the governing performance measures withoutobtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtainingshareholder approval.Article 13. Rights of Participants13.1 Employment. Nothing in the Plan shall confer upon any Participant any right to continue in the Company’s or itsSubsidiaries’ employ, or as a Director, or interfere with or limit in any way the right of the Company or its Subsidiaries to terminate anyParticipant’s employment or directorship at any time.13.2 Participation. No Employee or Director shall have the right to be selected to receive an Award under this Plan, or, havingbeen so selected, to be selected to receive a future Award.13.3 Rights as a Stockholder. Except as provided in Sections 8.5, 8.6 and 11.5 or in the applicable Award Agreementconsistent with Articles 8, 9, 10, or 11, a Participant shall have none of the rights of a shareholder with respect to shares of Companycommon stock covered by any Award until the Participant becomes the record holder of such Shares.13.4 Nontransferability. Unless otherwise set forth by the Committee in an Award Agreement, Awards (except for vestedshares) shall not be transferable by a Participant except by will or the laws of descent and distribution (except pursuant to a Beneficiarydesignation) and shall be exercisable during the lifetime of a Participant only by such Participant or his or her guardian or legalrepresentative. Under no circumstances will an Award be transferable for value or consideration. A Participant’s rights under the Planmay not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to claims of the Participant’s creditors.Article 14. Termination of Employment/Directorship14.1 Effect on Options. Upon termination of the Participant's employment or directorship for any reason other than Disability,death, or, in the case of NQSOs, retirement, an Option granted to the Participant may be exercised by the Participant or permittedtransferee atBOS1472419.8 -13- any time on or prior to the earlier of the expiration date of the Option or the expiration of three (3) months after the date of terminationbut only if, and to the extent that, the Participant was entitled to exercise the Option at the date of termination.14.2 Effect of Retirement on NQSOs. Upon termination of the Participant’s employment or directorship due to retirement(as defined in the Award Agreement), a NQSO granted to the Participant may be exercised by the Participant or permitted transferee atany time on or prior to the earlier of the expiration date of the Option or one of the two following deadlines: (a) in the case of Optionsgranted prior to July 29, 2009, the expiration of two (2) years after the date of termination due to retirement, or (b) in the case of Optionsgranted after July 29, 2009, the expiration of five (5) years after the date of termination due to retirement. The term “retirement” hasthe meaning given to it in the Award Agreement. In either case, the Participant may only exercise the NQSO if, and to the extent that,the Participant was entitled to exercise the Nonqualified Stock Option at the date of termination.14.3 Effects on Other Awards. Upon termination of the Participant’s employment or directorship for any reason otherthan Disability or death, all Awards other than Options shall be treated as set forth in the applicable Award Agreement. If theemployment or directorship of a Participant terminates by reason of the Participant's Disability or death, all Awards shall be treated as setforth in the applicable Award Agreements.14.4 Leaves of Absence. Unless otherwise determined by the Committee, an authorized leave of absence pursuant to awritten agreement or other leave entitling an Employee to reemployment in a comparable position by law or rule shall not constitute atermination of employment for purposes of the Plan unless the Employee does not return at or before the end of the authorized leave orwithin the period for which re-employment is guaranteed by law or rule.14.5 Definition of Termination. For purposes of this Article, a “termination” includes an event which causes a Participant tolose his eligibility to participate in the Plan (e.g., an individual is employed by a company that ceases to be a Subsidiary). In the case of anonemployee director, the meaning of “termination” includes the date that the individual ceases to be a director of the Company or itsSubsidiaries.14.6 Exceptions. Notwithstanding the foregoing, the Committee has the authority to prescribe different rules that apply uponthe termination of employment of a particular Participant, which shall be memorialized in the Participant’s original or amended AwardAgreement or similar document.14.7 Termination of Awards. An Award that remains unexercised after the latest date it could have been exercised under anyof the foregoing provisions or under the terms of the Award shall be forfeited.Article 15. Change in ControlIn the event of (1) any sale or conveyance to another entity of all or substantially all of the property and assets of the Company or(2) a Change in Control, unless otherwise specifically prohibited under applicable laws, or by the rules and regulations of any governinggovernmentalBOS1472419.8 -14- agencies or national securities exchange or trading system, or unless the Committee shall otherwise specify in the Award Agreement,the Board, in its sole discretion, may:(a) elect to terminate Options or SARs in exchange for a cash payment equal to the amount by which the FairMarket Value of the Shares subject to such Option to the extent the Option or SAR has vested exceeds the exerciseprice with respect to such Shares;(b) elect to terminate Options or SARs provided that each Participant is first notified of and given the opportunityto exercise his/her vested Options for a specified period of time (of not less than 15 days) from the date of notificationand before the Option or SAR is terminated;(c) permit Awards to be assumed by a new parent corporation or a successor corporation (or its parent) andreplaced with a comparable Award of the parent corporation or successor corporation (or its parent);(d) amend an Award Agreement or take such other action with respect to an Award that it deems appropriate; or(e) implement any combination of the foregoing.Article 16. Amendment, Modification, and Termination16.1 Amendment, Modification, and Termination. Subject to the terms of the Plan, the Board may at any time and from timeto time, alter, amend, suspend, or terminate the Plan in whole or in part.16.2 Awards Previously Granted. Notwithstanding any other provision of the Plan to the contrary, no termination,amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan,without the written consent of the Participant holding such Award. Except in connection with a corporate transaction involving thecompany (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization,merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding awards may not be amended toreduce the exercise price of outstanding Options or SARs or cancel outstanding Options or SARS in exchange for cash, other awards orOptions or SARs with an exercise price that is less than the exercise price of the original Options or SARs without stockholder approval.16.3 Shareholder Approval Required for Certain Amendments. Shareholder approval will be required for anyamendment of the Plan that does any of the following: (a) increases the maximum number of Shares subject to the Plan; (b) changes thedesignation of the class of persons eligible to receive ISOs under the Plan; or (c) modifies the Plan in a manner that requires shareholderapproval under applicable law or the rules of a stock exchange or trading system on which Shares are traded.Article 17. WithholdingBOS1472419.8 -15- The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amountsufficient to satisfy any applicable taxes (including social security or social charges), domestic or foreign, required by law or regulation tobe withheld with respect to any taxable event arising as a result of this Plan. The Participant may satisfy, totally or in part, suchParticipant’s obligations pursuant to this Section 17 by electing to have Shares withheld, to redeliver Shares acquired under an Award, orto deliver previously owned Shares that have been held for at least six (6) months, provided that the election is made in writing on orprior to (i) the date of exercise, in the case of Options or SARs; (ii) the date of payment, in the case of Performance Shares/DeferredStock Units/Restricted Stock Units; or (iii) the expiration of the Period of Restriction in the case of Restricted Stock. Any election madeunder this Section 17 may be disapproved by the Committee at any time in its sole discretion. If an election is disapproved by theCommittee, the Participant must satisfy his obligations pursuant to this paragraph in cash.Article 18. SuccessorsAll obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to theCompany, whether the existence of such successor is the result of a direct or indirect purchase, through merger, consolidation, orotherwise, of all or substantially all of the business, stock and/or assets of the Company.Article 19. General Provisions19.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shallinclude the feminine; the plural shall include the singular and the singular shall include the plural.19.2 Severability. If any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall notaffect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not beenincluded.19.3 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicablelaws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.19.4 Securities Law Compliance. With respect to Insiders, transactions under this Plan are intended to comply with allapplicable conditions of Rule 16b‑3 or its successors under the Exchange Act, unless determined otherwise by the Board. To the extentany provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by lawand deemed advisable by the Board.19.5 Listing. The Company may use reasonable endeavors to register Shares issued pursuant to Awards with the United StatesSecurities and Exchange Commission or to effect compliance with the registration, qualification, and listing requirements of any state orforeign securities laws, stock exchange, or trading system.BOS1472419.8 -16- 19.6 Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body havingjurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shareshereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisiteauthority shall not have been obtained.19.7 No Additional Rights. Neither the Award nor any benefits arising under this Plan shall constitute part of an employmentcontract between the Participant and the Company or any Subsidiary, and accordingly, subject to Section 16.2, this Plan and the benefitshereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to liability on the partof the Company for severance payments.19.8 Noncertificated Shares. To the extent that the Plan provides for issuance of certificates to reflect the transfer of Shares,the transfer of such Shares may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of anystock exchange or trading system.19.9 Governing Law. The Plan and each Award Agreement shall be governed by the laws of Massachusetts, excluding anyconflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law ofanother jurisdiction. Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan are deemed to submit tothe exclusive jurisdiction and venue of the federal or state courts whose jurisdiction covers Massachusetts, to resolve any and all issuesthat may arise out of or relate to the Plan or any related Award Agreement.19.10 Compliance with Code Section 409A. No Award that is subject to Section 409A of the Code shall provide for deferral ofcompensation that does not comply with Section 409A of the Code, unless the Board, at the time of grant, specifically provides that theAward is not intended to comply with Section 409A of the Code. Notwithstanding any provision in the Plan to the contrary, with respectto any Award subject to Section 409A, distributions on account of a separation from service may not be made to Key Employees beforethe date which is six (6) months after the date of separation from service (or, if earlier, the date of death of the employee).BOS1472419.8 -17- Dated as of July 27, 2005 Haemonetics CorporationAmended:July 31, 2008July 29, 2009July 21, 2011November 30, 2012By: /s/ Brian Concannon Chief Executive Officer Date of Shareholder Approval: July 27, 2005Amendment to Section 4.1 Approved by Shareholders: July 31, 2008Amendment to Article 14 Approved by Compensation Committee under delegation from the Board of Directors: July 29, 2009Amendments to Section 1.3, and Articles 4, 6 and 7 Approved by Shareholders: July 21, 2011Amendments to Section 4.1 and 4.3 by Compensation Committee under delegation from the Board of Directors: November 30, 2012 BOS1472419.8 -18-  Individual letters for, future new EC membersCHANGE IN CONTROL AGREEMENTThis Change in Control Agreement (this “Agreement”), made effective on insert date (the “Effective Date”), betweenHaemonetics Corporation, a Massachusetts corporation with its principal offices at 400 Wood Road, Braintree, Massachusetts, 02184,(herein referred to as the “Company”) and Name (the “Officer”). The Company and the Officer are collectively referred to herein asthe “Parties” and individually referred to as a “Party.”WITNESSETH THATWHEREAS, the Officer is employed by the Company as a senior executive of the Company or one, or more than one, of theCompany’s subsidiaries; andWHEREAS, the Board of Directors of the Company (the “Board”) decided that the Company should provide certaincompensation and benefits to the Officer in the event that the Officer’s employment is terminated on or after a change in the ownershipor control of the Company under certain circumstances;NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, for so long as Executiveremains a member of the Company’s Operating Committee, then the Parties agree as follows:1.Purpose. The Company considers a sound and vital management team to be essential. Management personnel who becomeconcerned about the possibility that the Company may undergo a Change in Control (as defined in Paragraph 2 below) mayterminate employment or become distracted. Accordingly, the Board has determined to extend this Agreement to minimize thedistraction the Officer may suffer from the possibility of a Change in Control.2.Change in Control. The term “Change in Control” for purposes of this Agreement shall mean the earliest to occur of thefollowing events during the Term (as defined in Paragraph 3(d) below):(a)a person, or any two or more persons acting as a group, and all affiliates of such person or persons, who prior to suchtime owned less than thirty-five percent (35%) of the then outstanding shares of the Company’s $0.01 par valuecommon stockPage 1 of 1BST99 1615257-2.071858.0010 (“Common Stock”), shall acquire such additional shares of the Company’s Common Stock in one or more transactions,or series of transactions, such that following such transaction or transactions such person or group and affiliatesbeneficially own thirty-five percent (35%) or more of the Company’s Common Stock outstanding,(b)closing of the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person orentity, and(c)there is a consummation of any merger, reorganization, consolidation or share exchange unless the persons who werethe beneficial owners of the outstanding shares of the common stock of Company immediately before theconsummation of such transaction beneficially own more than 50% of the outstanding shares of the common stock ofthe successor or survivor entity in such transaction immediately following the consummation of such transaction. Forpurposes of this Paragraph 2(c), the percentage of the beneficially owned shares of the successor or survivor entitydescribed above shall be determined exclusively by reference to the shares of the successor or survivor entity whichresult from the beneficial ownership of shares of common stock of the Company by the persons described aboveimmediately before the consummation of such transaction.3. Term. The initial term of this Agreement shall extend until insert date – 5 yrs from date of letter (the “Initial Term”);provided, however, that this Agreement shall automatically renew for successive additional five year periods (“Renewal Terms”) unlessnotice of nonrenewal is given by either Party to the other Party at least one year prior to the end of the Initial Term or, if applicable, thethen current Renewal Term; and provided, further, that if a “Change of Control” occurs during the Term, the Term shall automaticallyextend until the second anniversary of the Change in Control (the “Protection Period”). The Term of this Agreement shall be the InitialTerm plus all Renewal Terms and, if applicable, the duration of the Protection Period. At the end of the Term, this Agreement shallterminate without further action by either the Company or the Executive. If no Change in Control occurs prior to expiration of theTerm or if the Officer Separates from Service (as defined in Paragraph 4(a) below) before a Change in Control, or if the Officer is nolonger a member of the Company’s Executive Committee or Operating Committee before a Change in Control, this Agreement shallautomatically terminate without any further action; provided, however, that Paragraph 13 (regarding arbitration) shall continue to applyto the extent the Officer disputes the termination of this Agreement. The obligations of the Company and the Officer under thisAgreement which by their nature may require either partial or total performance after its expiration shall survive any such expiration.4.Severance Benefits. If, during the Protection Period (as defined in Paragraph 3(a)(ii) above), the Officer “Separates fromService” (as defined in Paragraph 5(a) below) due to termination of employment by the Company and its subsidiaries without“Cause” (as defined in Paragraph 5(b)) or by the Officer due to “Constructive Termination” (as defined in Paragraph 5(c)) (each,a “Qualifying Termination”), the Officer shall be entitled to the severance benefits set forth in this Paragraph 4. The Officershall not be entitled to severance benefits upon any other Separation from Service, including a termination of employment bythePage 2 of 2BST99 1615257-2.071858.0010 Company for “Cause” or due to the Officer’s death or Disability (as defined in Paragraph 5(d)). The payments and benefitsprovided for under this Paragraph 4 shall be in lieu of any other severance benefits otherwise payable by the Company to theOfficer and shall be subject to reduction due to application of the Section 280G Cap as provided under Paragraph 6 below.Payment of the severance benefits as may be reduced by the 280G Cap, if applicable, shall commence 30 days after a QualifyingTermination, provided that the Officer has timely executed a release that is not revoked as provided under Paragraph 7 below.No severance benefit shall be paid if the Executive has not timely executed a release under Paragraph 7.(a) Salary and Bonus Amount. The Company will pay to the Officer thirty days after a QualifyingTermination a lump sum cash amount equal to the product obtained by multiplying:(i)the sum of (A) salary at the annualized rate which was being paid by the Company and/or subsidiaries to the Officer immediately priorto the time of such termination or, if greater, at the time of the Change in Control plus (B) the annual target bonusand/or any other annual cash incentive award opportunity applicable to the Officer at the time of the QualifyingTermination or, if greater, at the time of the Change in Control, by(ii)2.0(b) Payment for Welfare Benefits. The Officer shall be entitled to receive a lump sum cash amount intendedto cover the approximate cost of the Company’s portion of the premiums necessary to continue the coverage under theOfficer’s medical, dental, life insurance and disability insurance coverages (collectively, the “Welfare Benefits”) as ineffect upon Separation from Service for a period of two years following a Qualifying Termination. For avoidance ofdoubt, medical coverage for this purpose shall include medical coverage provided to members of the Executive’simmediate family under a Company sponsored plan, policy or program at the time of the Executive’s employmenttermination, and premiums with respect to medical and dental coverage shall be determined using the rate charged forCOBRA coverage. The Officer shall be entitled to elect continued Welfare Benefit is as provided under any employeebenefit plan, policy or program sponsored by the Company as in effect on the Officer’s Separation from Service,including but not limited to COBRA.(c) Outplacement Services. In the event of a Qualifying Termination, the Company shall provide to theOfficer executive outplacement services provided on a one-to-one basis by a senior counselor of a firm nationallyrecognized as a reputable national provider of such services for up to twelve months following Separation from Service,plus evaluation testing, at a location mutually agreeable to the Parties, up to a maximum amount of $35,000. If theexecutive elects not to take advantage of such program within 30 days of separation, unless otherwise agreed in writing,there will be no obligation to continue this service. In no circumstance will the Company provide a cash payment in lieuof the use of these services.Page 3 of 3BST99 1615257-2.071858.0010 (d) Equity Awards. The vesting of the Officer’s Equity Awards shall be governed by this Section 4(d). Theterm “Equity Award” shall mean stock options, stock appreciation rights, restricted stock, restricted stock units,performance shares or any other form of award that is measured with reference to the Company’s Common Stock.(i)The vesting of the Officer’s Equity Awards granted on or after the Effective Date that vest solely on the basis of continued employmentwith the Company or any of its subsidiaries shall be accelerated solely by reason of a Change in Control only if thesurviving corporation or acquiring corporation following a Change in Control refuses to assume or continue theOfficer’s Equity Awards or to substitute similar Equity Awards for those outstanding immediately prior to the Changein Control. If such Officer’s Equity Awards are so continued, assumed or substituted and at any time after theChange in Control the Officer incurs a Qualifying Termination, then the vesting and exercisability of all suchunvested Equity Awards held by the Officer that are then outstanding shall be accelerated in full and anyreacquisition rights held by the Company with respect to any such Equity Award shall lapse in full, in each case,upon such termination.(ii)The vesting of the Officer’s Equity Awards that vest, in whole or in part, based upon achieving Performance Criteria shall be acceleratedon a pro rata basis by reason of a Change in Control. The pro rata vesting amount shall equal the designated targetaward multiplied by a fraction, the numerator of which is the number of days the Officer was employed during theaward’s performance period as of the date of the Change in Control, and (b) the denominator is the number of daysin the performance period. For purposes of this Paragraph 4(d), “Performance Criteria” means anybusiness criteria that apply to the Officer, a business unit, division, subsidiary, affiliate, the Companyor any combination of the foregoing.(iii)Enforcement of the terms of this Paragraph 4(d) shall survive termination of this Agreement.Equity Awards granted before the Effective Date shall not be subject to this Paragraph 4(d).By accepting severance benefits under this Paragraph 4, the Officer waives the Officer’s right, if any, to have any payment made underthis Paragraph 4 taken into account to increase the benefits otherwise payable to, or on behalf of, the Officer under any employee benefitplan, policy or program, whether qualified or nonqualified, maintained by the Company (e.g., there will be no increase in the Officer’stax-qualified retirement plan benefits, non-qualified deferred compensation plan benefits or life insurance because of severance benefitsreceived hereunder).Page 4 of 4BST99 1615257-2.071858.0010 5.Definitions of “Separation from Service,” “Cause,” “Constructive Termination,” and “Disability”. For purposes of thisAgreement, the following terms shall have the meanings set forth below:(a)The term “Separation from Service” or “Separates from Service” for purposes of this Agreement shall mean a “separation from service”within the meaning of Section 409A of the Code (after applying the presumptions in Treas. Reg. Sect. 1.409A-1(h)).(b)“Cause” means (i) the Officer’s conviction of (or a plea of guilty or nolo contendere to) a felony or any other crime involving moralturpitude, dishonesty, fraud, theft or financial impropriety; or (ii) a determination by a majority of the Board in good faith thatthe Officer has (A) willfully and continuously failed to perform substantially the Officer’s duties (other than any suchfailure resulting from the Officer’s Disability or incapacity due to bodily injury or physical or mental illness), after a writtendemand for substantial performance is delivered to the Officer by the Board that specifically identifies the manner in whichthe Board believes that the Officer has not substantially performed the Officer’s duties, (B) engaged in illegal conduct, an actof dishonesty or gross misconduct, or (C) willfully violated a material requirement of the Company’s code of conduct or theOfficer’s fiduciary duty to the Company. No act or failure to act on the part of the Officer shall be considered “willful”unless it is done, or omitted to be done, by the Officer in bad faith and without reasonable belief that the Officer’s action oromission was in, or not opposed to, the best interests of the Company or its subsidiaries. In order to terminate the Officer’semployment for Cause, the Company shall be required to provide the Officer a reasonable opportunity to be heard (withcounsel) before the Board, which shall include at least ten (10) business days of advance written notice to the Officer.Further, the Officer’s attempt to secure employment with another employer that does not breach the Officer’snon-competition obligations shall not constitute an event of “Cause”.(c) “Constructive Termination” means, without the express written consent of the Officer, the occurrence ofany of the following during the Protection Period (as defined in Paragraph 3(a)(ii) above):(i)a material reduction in the Officer’s annual base salary as in effect immediately prior to a Change in Control oras the same may be increased from time to time, and/or a material failure to provide the Officer with anopportunity to earn annual incentive compensation and long-term incentive compensation at least as favorable asin effect immediately prior to a Change of Control or as the same may be increased from time to time,(ii)a material diminution in the Officer’s authority, duties, or responsibilities as in effect at the time of the Changein Control;Page 5 of 5BST99 1615257-2.071858.0010 (iii)a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Officer isrequired to report (it being understood that if the Officer reports to the Board, a requirement that the Officerreport to any individual or body other than the Board will constitute “Constructive Termination” hereunder);(iv)a material diminution in the budget over which the Officer retains authority;(v)the Company’s requiring the Officer to be based anywhere outside a fifty mile radius of the Company’s officesat which the Officer is based as of immediately prior to a Change of Control (or any subsequent location atwhich the Officer has previously consented to be based) except for required travel on the Company’s businessto an extent that is not substantially greater than the Officer’s business travel obligations as of immediately priorto a Change in Control or, if more favorable, as of any time thereafter; or(vi)any other action or inaction that constitutes a material breach by the Company or any of its subsidiaries of theterms of this Agreement.In no event shall the Officer be entitled to terminate employment with the Company on account of “ConstructiveTermination” unless the Officer provides notice of the existence of the purported condition that constitutes“Constructive Termination” within a period not to exceed ninety (90) days of its initial existence, and the Company failsto cure such condition (if curable) within thirty (30) days after the receipt of such notice.(d)“Disability” means the Officer’s inability, due to physical or mental incapacity resulting from injury, sickness ordisease, for one hundred and eighty (180) days in any twelve-month period to perform his duties hereunder.6. Section 280G Restriction. Notwithstanding any provision of this Agreement to the contrary, the following provisions shall apply:(a)If it is determined that part or all of the compensation and benefits payable to the Officer (whether pursuant to the termsof this Agreement or otherwise) before application of this Paragraph 6 would constitute “parachute payments” underSection 280G of the Code, and the payment thereof would cause the Officer to incur the 20% excise tax under Section4999 of the Code, then the amounts otherwise payable to or for the benefit of the Officer pursuant to this Agreement(or otherwise) that, but for this Paragraph 6 would be “parachute payments,” (referred to below as the “TotalPayments”) shall either (i) be reduced so that the present value of the Total Payments to be received by the Officer willbe equal to three times the “base amount” (as defined under Section 280G of the Code less $1,000 (the “280G Cap”), or(ii) paid in full, whichever produces the better after-tax position to the Officer (taking into account all applicable taxes,including but not limited to the excise tax under SectionPage 6 of 6BST99 1615257-2.071858.0010 4999 of the Code and any federal and state income and employment taxes). Any required reduction under clause (A)above shall be made in a manner that maximizes the net after-tax amount payable to the Officer, as reasonablydetermined by the Consultant (as defined below).(b)All determinations required under this Paragraph 6 shall be made by a nationally recognized accounting, executivecompensation or law firm appointed by the Company (the “Consultant”) that is reasonably acceptable to the Officer onthe basis of “substantial authority” (within the meaning of Section 6662 of the Code). The Consultant’s fee shall be paidby the Company. The Consultant shall provide a report to the Officer that may be used by the Officer to file theOfficer’s federal tax returns.(c)It is possible that payments could be made by the Company that should not have been made pursuant to this Paragraph 6.If a reduced payment or benefit is provided and through error or otherwise that payment or benefit, when aggregatedwith other payments and benefits from the Company (or its subsidiaries) used in determining the 280G Cap, then theOfficer shall immediately repay such excess in cash to the Company upon notification that an overpayment has beenmade.(d)Nothing in this Paragraph 6 shall require the Company to be responsible for, or have any liability or obligation withrespect to, any excise tax liability under Section 4999 of the Code.7.Release. The Officer agrees that the Company will have no obligations to the Officer under Paragraph 4 above until the Officerexecutes a release in a form acceptable by the Company and, further, will have no further obligations to the Officer underParagraph 4 if the Officer revokes such release. The Officer shall have 21 days after Separation from Service to considerwhether or not to sign the release. If the Officer fails to return an executed release to the Company’s Vice President of HumanResources within such 21 day period, or the Officer subsequently revokes a timely filed release, the Company shall have noobligation to pay any amounts or benefits under Paragraph 4 of this Agreement.8.No Interference with Other Vested Benefits. Regardless of the circumstances under which the Officer may terminate fromemployment, the Officer shall have a right to any benefits under any employee benefit plan, policy or program maintained bythe Company which the Officer had a right to receive under the terms of such employee benefit plan, policy or program after atermination of the Officer’s employment without regard to this Agreement. The Company shall within thirty (30) days ofSeparation from Service pay the Officer any earned but unpaid base salary and bonus, shall promptly pay the Officer for anyearned but untaken vacation and shall promptly reimburse the Officer for any incurred but unreimbursed expenses which areotherwise reimbursable under the Company’s expense reimbursement policy as in effect for senior executives immediatelybefore the Officer’s employment termination.Page 7 of 7BST99 1615257-2.071858.0010 9.Consolidation or Merger. If the Company is at any time before or after a Change in Control merged or consolidated into or withany other corporation, association, partnership or other entity (whether or not the Company is the surviving entity), or ifsubstantially all of the assets thereof are transferred to another corporation, association, partnership or other entity, theprovisions of this Agreement will be binding upon and inure to the benefit of the corporation, association, partnership or otherentity resulting from such merger or consolidation or the acquirer of such assets (collectively, “acquiring entity”) unless theOfficer voluntarily elects not to become an employee of the acquiring entity as determined in good faith by the Officer.Furthermore, in the event of any such consolidation or transfer of substantially all of the assets of the Company, the Companyshall enter into an agreement with the acquiring entity that shall provide that such acquiring entity shall assume this Agreementand all obligations and liabilities under this Agreement; provided, that the Company’s failure to comply with this provision shallnot adversely affect any right of the Officer hereunder. This Paragraph 9 will apply in the event of any subsequent merger orconsolidation or transfer of assets.In the event of any merger, consolidation or sale of assets described above, nothing contained in this Agreement willdetract from or otherwise limit the Officer’s right to or privilege of participation in any restricted stock plan, bonus or incentiveplan, stock option or purchase plan, profit sharing, pension, group insurance, hospitalization or other compensation or benefitplan or arrangement which may be or become applicable to officers of the corporation resulting from such merger orconsolidation or the corporation acquiring such assets of the Company.In the event of any merger, consolidation or sale of assets described above, references to the Company in thisAgreement shall, unless the context suggests otherwise, be deemed to include the entity resulting from such merger orconsolidation or the acquirer of such assets of the Company.10.No Mitigation. The Company agrees that the Officer is not required to seek other employment after a Qualifying Termination orto attempt in any way to reduce any amounts payable to the Officer by the Company under Paragraph 4 of this Agreement.Further, the amount of any payment or benefit provided for in this Agreement shall not be reduced by any compensation earnedby the Officer as the result of employment by another employer, by retirement benefits, by offset against any amount claimedto be owed by the Officer to the Company, or otherwise.11.Payments. All payments provided for in this Agreement shall be paid in cash in the currency of the primary jurisdiction in whichthe Executive provided services to the Company and its subsidiaries immediately prior to Separation from Service. TheCompany shall not be required to fund or otherwise segregate assets to ensure payments under this Agreement.12.Tax Withholding; Section 409A.Page 8 of 8BST99 1615257-2.071858.0010 (a)All payments made by the Company to the Officer or the Officer’s dependents, beneficiaries or estate will be subject tothe withholding of such amounts relating to tax and/or other payroll deductions as may be required by law.(b)The Parties intend that the benefits and payments provided under this Agreement shall be exempt from, or complywith, the requirements of Section 409A of the Code. Notwithstanding the foregoing, the Company shall in no event beobligated to indemnify the Officer for any taxes or interest that may be assessed by the IRS pursuant to Section 409A ofthe Code.13.Arbitration.(a)The Parties shall submit any disputes arising under this Agreement to an arbitration panel conducting a binding arbitrationin Boston, Massachusetts or at such other location as may be agreeable to the Parties, in accordance with the NationalRules for the Resolution of Employment Disputes of the American Arbitration Association in effect on the date of sucharbitration (the “Rules”), and judgment upon the award rendered by the arbitrator or arbitrators may be entered in anycourt having jurisdiction thereof. The award of the arbitrator shall be final and shall be the sole and exclusive remedybetween the Parties regarding any claims, counterclaims, issues or accountings presented to the arbitrator.(b)The Parties agree that the arbitration shall be conducted by one (1) person mutually acceptable to the Company and theOfficer, provided that if the Parties cannot agree on an arbitrator within thirty (30) days of filing a notice of arbitration,the arbitrator shall be selected by the manager of the principal office of the American Arbitration Association in SuffolkCounty in the Commonwealth of Massachusetts. Any action to enforce or vacate the arbitrator’s award shall begoverned by the federal Arbitration Act, if applicable, and otherwise by applicable state law.(c)If either Party pursues any claim, dispute or controversy against the other in a proceeding other than the arbitrationprovided for herein, the responding Party shall be entitled to dismissal or injunctive relief regarding such action andrecovery of all costs, losses and attorney’s fees related to such action.(d)All of Officer’s reasonable costs and expenses incurred in connection with such arbitration shall be paid in full by theCompany promptly on written demand from the Officer, including the arbitrators’ fees, administrative fees, travelexpenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees and attorneys’ fees;provided, however, the Company shall pay no more than $50,000 per year in attorneys’ fees unless a higher figure isawarded in the arbitration, in which event the Company shall pay the figure awarded in the arbitration.(e)Reimbursement of reasonable costs and expenses under Paragraph 13(d) shall be administered consistent with thefollowing additional requirements as set forth inPage 9 of 9BST99 1615257-2.071858.0010 Treas. Reg. § 1.409A-3(i)(1)(iv): (i) the Officer’s eligibility for benefits in one year will not affect the Officer’seligibility for benefits in any other year; (ii) any reimbursement of eligible expenses will be made on or before the lastday of the year following the year in which the expense was incurred; and (iii) the Officer’s right to benefits is notsubject to liquidation or exchange for another benefit. Notwithstanding the foregoing, reimbursement for benefits underthis Paragraph 13 shall commence no earlier than six months and a day after the Officer’s Separation from Service.(f)The Officer acknowledges and expressly agrees that this arbitration provision constitutes a voluntary waiver of trial byjury in any action or proceeding to which the Officer or the Company may be parties arising out of or pertaining to thisAgreement.14.Assignment; Payment on Death.(a)The provisions of this Agreement shall be binding upon and shall inure to the benefit of the Officer, the Officer’sexecutors, administrators, legal representatives and assigns and the Company and its successors.(b)In the event that the Officer becomes entitled to payments under this Agreement and subsequently dies, all amountspayable to the Officer hereunder and not yet paid to the Officer at the time of the Officer’s death shall be paid to theOfficer’s beneficiary. No right or interest to or in any payments shall be assignable by the Officer; provided, however,that this provision shall not preclude the Officer from designating one or more beneficiaries to receive any amount thatmay be payable after the Officer’s death and shall not preclude the legal representatives of the Officer’s estate fromassigning any right hereunder to the person or persons entitled thereto under the Officer’s will or, in the case ofintestacy, to the person or persons entitled thereto under the laws of intestacy applicable to the Officer’s estate. Theterm “beneficiary” as used in this Agreement shall mean the beneficiary or beneficiaries so designated by the Officer toreceive such amount or, if no such beneficiary is in existence at the time of the Officer’s death, the legal representativeof the Officer’s estate.(c)No right, benefit or interest hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance,charge, pledge, hypothecation, or set-off in respect of any claim, debt or obligation, or to execution, attachment, levy orsimilar process, or assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specifiedin the immediately preceding sentence shall, to the full extent permitted by law, be null, void and of no effect.15.Amendments and Waivers. Except as otherwise specified in this Agreement, this Agreement may be amended, and theobservance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively orprospectively), only with the written consent of the Parties.Page 10 of 10BST99 1615257-2.071858.0010 16.Integration. The terms of this Agreement shall supersede any prior agreements, understandings, arrangements orrepresentations, oral or otherwise, expressed or implied, with respect to the subject matter hereof which have been made byeither Party, including but not limited to the Prior Agreement. By signing this Agreement, the Officer releases and dischargesthe Company from any and all obligations and liabilities heretofore or now existing under or by virtue of such prior agreements.17.Notices. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be inwriting and shall be deemed to have been duly given (a) on the date of delivery if delivered by hand, (b) on the date oftransmission, if delivered by confirmed facsimile, (c) on the first business day following the date of deposit if delivered byguaranteed overnight delivery service, or (d) on the fourth business day following the date delivered or mailed by United Statesregistered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Officer: at the address (or to the facsimile number) shown on the records of the Company.If to the Company:General CounselHaemonetics Corporation400 Wood RoadBraintree, MA 02184or to such other address as either Party may have furnished to the other in writing in accordance herewith, except that notices ofchange of address shall be effective only upon receipt.18.Severability. Any provision of this Agreement held to be unenforceable under applicable law will be enforced to the maximumextent possible, and the balance of this Agreement will remain in full force and effect.19.Headings of No Effect. The paragraph headings contained in this Agreement are included solely for convenience or referenceand shall not in any way affect the meaning or interpretation of any of the provisions of this Agreement.20.Not an Employment Contract. This Agreement is not an employment contract and shall not give the Officer the right tocontinue in employment by Company or any of its subsidiaries for any period of time or from time to time nor shall thisAgreement give the Officer the right to continued membership on the Company’s Executive Committee or OperatingCommittee.. This Agreement shall not adversely affect the right of the Company or any of its subsidiaries to terminate theOfficer’s employment with or without cause at any time.Page 11 of 11BST99 1615257-2.071858.0010 Membership on the Company’s Executive Committee and Operating Committee shall be determined in the sole discretion ofthe Company’s President and Chief Operating Officer21.Governing Law. This Agreement and its validity, interpretation, performance and enforcement shall be governed by the laws ofthe Commonwealth of Massachusetts (without reference to the choice of law principles thereof).20.Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of whichtogether will constitute one and the same instrument. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereto duly authorized, and theOfficer has signed this Agreement.HAEMONETICS CORPORATIONDate: ________________ By: ________________________________Brian ConcannonIts: President and Chief Executive OfficerDate: ________________ OFFICER______________________________Page 12 of 12BST99 1615257-2.071858.0010HAEMONETICS CORPORATION NON-QUALIFIED DEFERRED COMPENSATION PLAN Haemonetics Corporation, a Massachusetts corporation (the “Company”), hereby establishes this Non-QualifiedDeferred Compensation Plan (the “Plan”), effective July 27, 2012 (the “Effective Date”), for the purpose of promoting the interests ofthe Company and its stockholders by enabling the Company to attract and retain well-qualified executives and directors. The Plan isintended to, and shall be interpreted to, comply in all respects with Code Section 409A and those provisions of ERISA applicable to “aplan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation benefits for aselect group of “management or highly compensated employees.”ARTICLE I TITLE AND DEFINITIONS1.1 “Account” or “Accounts” shall mean the bookkeeping account or accounts established under this Plan pursuant toArticle 4.1.2 “Base Salary” shall mean a Participant’s annual base salary, excluding incentive and discretionary bonuses, commissions,reimbursements and other non-regular remuneration, received from the Company prior to reduction for any salary deferrals underbenefit plans sponsored by the Company, including but not limited to, plans established pursuant to Code Section 125 or qualifiedpursuant to Code Section 401(k).1.3 “Beneficiary” or “Beneficiaries” shall mean the person, persons or entity designated as such pursuant to Section 7.1.1.4 “Board” shall mean the Board of Directors of Company.1.5 “Bonus(es)” shall mean amounts paid to the Participant by the Company annually in the form of discretionary orincentive compensation or any other bonus designated by the Committee before reductions for contributions to or deferrals under anypension, deferred compensation or benefit plans sponsored by the Company.1.6 “Code” shall mean the Internal Revenue Code of 1986, as amended, as interpreted by Treasury regulations and applicableauthorities promulgated thereunder.1.7 “Committee” shall mean the person or persons appointed by the Board to administer the Plan in accordance with Article 8.1.8 “Commissions” shall mean commissions payable to the Participant for the applicable Plan Year (as determined by theCommittee in compliance with Code Section 409A) before reductions for contributions to or deferrals under any pension, deferredcompensation or benefit plans sponsored by the Company.1.9 “Company Contributions” shall mean the contributions, if any, made by the Company pursuant to Section 3.2.1.10 “Company Contribution Account” shall mean the Account maintained for the benefit of the Participant which iscredited with Company Contributions, if any, pursuant to Section 4.2.1.11 “Compensation” shall mean all amounts eligible for deferral for a particular Plan Year under Section 3.1(a).1.12 “Crediting Rate” shall mean the notional gains and losses credited on the Participant’s Account balance which are basedon the Participant’s choice among the investment alternatives made available by the Committee pursuant to Section 3.3 of the Plan.1.13 “Deferral Account” shall mean the Account maintained for each Participant which is credited with Participant deferralspursuant to Section 4.1.1.14 “Director” shall mean a member of the Board.1.15 “Directors Fees” shall mean compensation for services as a member of the Board of Directors of the Companyexcluding reimbursement of expenses or other non‑regular forms of compensation, before reductions for contributions to or deferralsunder any deferred compensation plan sponsored by the Company.1.16 “Disability” shall mean (consistent with the requirements of Section 409A) that the Participant (i) is unable to engage inany substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to resultin death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinablephysical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan coveringemployees of the Company. The Committee may require that the Participant submit evidence of such qualification for disability benefitsin order to determine that the Participant is disabled under this Plan.1.17 “Distributable Amount” shall mean the vested balance in the applicable Account as determined under Article 4.1.18 “Eligible Executive” shall mean a highly compensated or management level employee or Director of the Companyselected by the Committee to be eligible to participate in the Plan.1.19 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, including Department ofLabor and Treasury regulations and applicable authorities promulgated thereunder.21.20 “Financial Hardship” shall mean a severe financial hardship to the Participant resulting from an illness or accident ofthe Participant, the Participant’s spouse, or a dependent (as defined in IRC Section 152(a)) of the Participant, loss of the Participant’sproperty due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the controlof the Participant, (but shall in all events correspond to the meaning of the term “unforeseeable emergency” under Code Section409A(a)(2)(v)). The need to purchase a home or pay college tuition are not unforeseeable emergencies.1.21 “Fund” or “Funds” shall mean one or more of the investments selected by the Committee pursuant to Section 3.3 ofthe Plan.1.22 “Hardship Distribution” shall mean an accelerated distribution of benefits or a reduction or cessation of currentdeferrals pursuant to Section 6.5 to a Participant who has suffered a Financial Hardship.1.23 “Interest Rate” shall mean, for each Fund, an amount equal to the net gain or loss on the assets of such Fund duringeach month, as determined by the Committee.1.24 “Long-Term Cash Award” shall mean long-term cash awards designated as such by the Company.1.25 “Participant” shall mean any Eligible Executive who becomes a Participant in this Plan in accordance with Article 2.1.26 “Participant Election(s)” shall mean the forms or procedures by which a Participant makes elections with respect to(1) voluntary deferrals of his/her Compensation, (2) the investment Funds which shall act as the basis for crediting of interest onAccount balances, and (3) the form and timing of distributions from Accounts. Participant Elections may take the form of an electroniccommunication followed by appropriate confirmation according to specifications established by the Committee.1.27 “Payment Date” shall mean the date by which a total distribution of the Distributable Amount shall be made or the dateby which installment payments of the Distributable Amount shall commence. Unless otherwise specified, the Payment Date shall bethe first day of the seventh (7th) month commencing after the event triggering the payout occurs. Subsequent installments shall bemade in April of each succeeding Plan Year. In the case of death, the Committee shall be provided with documentation reasonablynecessary to establish the fact of the Participant’s death. The Payment Date of a Scheduled Distribution shall be April of the Plan Year inwhich the distribution is scheduled to commence. Notwithstanding the foregoing, the Payment Date shall not be before the earliest dateon which benefits may be distributed under Code Section 409A without violation of the provisions thereof as reasonably determined bythe Committee.1.28 “Plan Year” shall mean the calendar year except that the first Plan Year shall begin on the Effective Date and end on thelast day of the calendar year in which the Effective Date occurs.31.29 “Restricted Stock Unit” shall mean restricted stock unit awards granted under the Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, or any successor plan.1.30 “Scheduled Distribution” shall mean a scheduled distribution date elected by the Participant for distribution of amountsfrom a specified Deferral Account, including notional earnings thereon, as provided under Section 6.4.1.31 “Termination of Service” shall mean the date of the cessation of the Participant’s provision of services to the Companythat constitutes a “separation from service” as defined under Code Section 409A for any reason whatsoever, whether voluntary orinvoluntary, including as a result of the Participant’s death or Disability.1.32 “Years of Service” shall mean the cumulative consecutive years of continuous full-time employment with theCompany (including approved leaves of absence of six months or less or legally protected leaves of absence), beginning on the date theParticipant first began service with the Company, and counting each anniversary thereof. The Committee may promulgate rules forcrediting Years of Service for Participants who commence service with the Company by reason of merger, acquisition, purchase ofassets or other similar transaction.ARTICLE II PARTICIPATIONAn Eligible Executive shall become a Participant in the Plan by completing and submitting to the Committee theappropriate Participant Elections, including such other documentation and information as the Committee may reasonably request, duringthe enrollment period established by the Committee prior to the beginning of the first Plan Year in which the Eligible Executive shall beeligible to participate in the Plan. In the case of the first Plan Year in which an Eligible Executive becomes eligible to participate in thePlan, the Eligible Executive may make an initial deferral election within thirty (30) days after the date the Eligible Executive becomeseligible to participate in the Plan.ARTICLE III CONTRIBUTIONS & DEFERRAL ELECTIONS3.1 Elections to Defer Compensation.(a) Form of Elections. A Participant may only elect to defer Compensation attributable to services provided after thetime an election is made. Elections shall take the form of a whole percentage (less applicable payroll withholding requirements forSocial Security and income taxes and employee benefit plans as determined in the sole and absolute discretion of the Committee) of upto(1) 75% of Base Salary (five percent (5%) minimum),(2) 75% of Bonuses (five percent (5%) minimum),(3) 100% of Commissions (five percent (5%) minimum),4(4) 100% of Director’s Fees,(5) 100% of Restricted Stock Units, and(6) 100% of Long-Term Cash Awards.The Committee may provide for separate elections for Director’s Fees that are retainers, committee fees, chairmanfees and meeting fees, as applicable.(b) Duration of Compensation Deferral Election. An Eligible Executive’s initial election to defer Compensation shallbe made during the enrollment period established by the Committee prior to the Effective Date of the Participant’s commencement ofparticipation in the Plan and shall apply only to Compensation for services performed after such deferral election is processed. AParticipant may increase, decrease, terminate or recommence a deferral election with respect to Compensation for any subsequent PlanYear by filing a Participant Election during the enrollment period established by the Committee prior to the beginning of such Plan Year,which election shall be effective on the first day of the next following Plan Year. In the absence of an affirmative election by theParticipant to the contrary, the deferral election for the prior Plan Year shall continue in effect for future Plan Years, except with respectto any deferral of Restricted Stock Units and Long-Term Cash Awards. After the beginning of the Plan Year, deferral elections withrespect to Compensation for services performed during such Plan Year shall be irrevocable except in the event of Financial Hardship.Notwithstanding the general requirement that a deferral election be made prior to the beginning of a Plan Year, the Committee mayallow a Participant to make an initial deferral election with respect to Compensation that constitutes “performance-based compensation”(as defined in Section 1.409A-1(e) of the regulations for Code Section 409A) on or before the date that is six (6) months before the endof the performance period, provided that the Participant performs services for the Company continuously from the later of thebeginning of the performance period or the date that the performance criteria are established through the date the deferral election ismade, and further provided that in no event may an election to defer performance-based compensation be made after such Compensationhas become “readily ascertainable” for purposes of the Code Section 409A regulations.3.2 Company Contributions. The Company shall have the discretion to make Company Contributions to the Plan at any timeon behalf of any Participant. Company Contributions shall be made in the complete and sole discretion of the Company and no Participantshall have the right to receive any Company Contribution in any particular Plan Year regardless of whether Company Contributions aremade on behalf of other Participants. Such Company Contributions may be made as a matching contribution, a profit-sharingcontribution, or in any other manner as the Company may determine from time to time. Company Contributions may be varied amongParticipants and need not be uniform for similarly-situated Participants.3.3 Investment Elections.(a) Participant Designation. At the time of entering the Plan and/or of making the deferral election under the Plan, theParticipant shall designate, on a Participant Election provided by the Committee, the Funds in which the Participant’s Account orAccounts shall be deemed to be5invested for purposes of determining the amount of earnings and losses to be credited to each Account. The Participant may specify thatall or any percentage of his or her Account or Accounts shall be deemed to be invested, in whole percentage increments, in one or moreof the Funds selected as alternative investments under the Plan from time to time by the Committee pursuant to subsection (b) of thisSection. A Participant may change the designation made under this Section at least monthly by filing a revised election, on a ParticipantElection provided by the Committee.(b) Investment Funds. Prior to the beginning of each Plan Year, the Committee may select, in its sole and absolutediscretion, each of the types of commercially available investments communicated to the Participant pursuant to subsection (a) of thisSection to be the Funds. The Interest Rate of each such commercially available investment shall be used to determine the amount ofearnings or losses to be credited to Participant’s Account under Article IV. The Participant’s choice among investments shall be solely forpurposes of calculation of the Crediting Rate on Accounts. The Company shall have no obligation to set aside or invest amounts asdirected by the Participant and, if the Company elects to invest amounts as directed by the Participant, the Participant shall have no moreright to such investments than any other unsecured general creditor.3.4 Distribution Elections.(a) Initial Election. At the time of making a deferral election under the Plan, the Participant shall designate the timeand form of distribution of deferrals made pursuant to such election (together with any earnings credited thereon) from among thealternatives specified in Section 6.1 or 6.4.(b) Modification of Election. A new distribution election may be made at the time of subsequent deferral electionswith respect to deferrals in Plan Years beginning after the election is made. However, a distribution election with respect to previouslydeferred amounts may only be changed under the terms and conditions specified in Code Section 409A. Except as expressly provided inSection 6.3, no acceleration of a distribution is permitted. A subsequent election that delays payment or changes the form of paymentshall be permitted if and only if all of the following requirements are met:(1) the new election does not take effect until at least twelve (12) months after the date on which the newelection is made;(2) in the case of payments made on account of Termination of Service or a Scheduled Distribution, the newelection delays payment for at least five (5) years from the date that payment would otherwise have been made, absent the newelection; and(3) in the case of payments made according to a Scheduled Distribution, the new election is made not less thantwelve (12) months before the date on which payment would have been made (or, in the case of installment payments, the firstinstallment payment would have been made) absent the new election.For purposes of application of the above change limitations, installment payments shall be treated as a single payment and only onechange shall be allowed to be made by a Participant per Deferral6Account with respect to form of benefits to be received by such Participant. Election changes made pursuant to this Section shall bemade in accordance with rules established by the Committee, and shall comply with all requirement of Code Section 409A andapplicable authorities.ARTICLE IV DEFERRAL ACCOUNTS4.1 Deferral Accounts. The Committee shall establish and maintain up to five (5) Deferral Accounts for each Participantunder the Plan, two (2) of which may be payable upon Termination of Service as further described in Section 6.1(a) (the “Terminationof Service Accounts”) and three (3) of which may be payable on a fixed date or according to a fixed schedule as further described inSection 6.4(a) (the “Scheduled Distribution Accounts”). Each Participant’s Deferral Account shall be further divided into separatesubaccounts (“Fund Subaccounts”), each of which corresponds to a Fund elected by the Participant pursuant to Section 3.2. AParticipant’s Deferral Account shall be credited as follows:(a) As soon as reasonably possible after amounts are withheld and deferred from a Participant’s Compensation, theCommittee shall credit the Fund Subaccounts of the Participant’s Deferral Account with an amount equal to Compensation deferred bythe Participant in accordance with the Participant’s election under Section 3.2; that is, the portion of the Participant’s deferredCompensation that the Participant has elected to be deemed to be invested in a Fund shall be credited to the Fund Subaccount to beinvested in that Fund;(b) Each business day, each investment fund subaccount of a Participant’s Deferral Account shall be credited withearnings or losses in an amount equal to that determined by multiplying the balance credited to such Fund Subaccount as of the prior day,less any distributions valued as of the end of the prior day, by the Interest Rate for the corresponding Fund as determined by theCommittee pursuant to Section 3.2(b); and(c) In the event that a Participant elects for a given Plan Year’s deferral of Compensation a Scheduled Distribution, allamounts attributed to the deferral of Compensation for such Plan Year shall be accounted for in a manner which allows separateaccounting for the deferral of Compensation and investment gains and losses associated with amounts allocated to such each separateScheduled Distribution.4.2 Company Contribution Account. The Committee shall establish and maintain a Company Contribution Account for eachParticipant under the Plan. Each Participant’s Company Contribution Account shall be further divided into separate Fund Subaccountscorresponding to the investment Fund elected by the Participant pursuant to Section 3.2(a). A Participant’s Company ContributionAccount shall be credited as follows:(c) As soon as reasonably possible after a Company Contribution is made, the Company shall credit the FundSubaccounts of the Participant’s Company Contribution Account with an amount equal to the Company Contributions, if any, made onbehalf of that Participant, that is, the proportion of the Company Contributions, if any, which the Participant has elected to be deemed tobe invested in a certain Fund shall be credited to the Fund Subaccount to be invested in7that Fund. Unless the Participant elects otherwise, any Company Contribution that may not be deemed invested in such a Fund shall bedeemed invested in the default Fund selected by the Committee for such purpose from time to time; and(d) Each business day, each Fund Subaccount of a Participant’s Company Contribution Account shall be credited withearnings or losses in an amount equal to that determined by multiplying the balance credited to such Fund Subaccount as of the prior day,less any distributions valued as of the end of the prior day, by the Interest Rate for the corresponding Fund as determined by theCommittee pursuant to Section 3.2(b).4.3 Trust. The Company shall be responsible for the payment of all benefits under the Plan. At its discretion, the Companymay establish one or more grantor trusts for the purpose of providing for payment of benefits under the Plan. Such trust or trusts maybe irrevocable, but the assets thereof shall be subject to the claims of the Company’s creditors. Benefits paid to the Participant from anysuch trust or trusts shall be considered paid by the Company for purposes of meeting the obligations of the Company under the Plan.4.4 Statement of Accounts. The Committee shall provide each Participant with electronic statements at least quarterly settingforth the Participant’s Account balance as of the end of each calendar quarter.ARTICLE V VESTING5.1 Vesting of Deferral Accounts. The Participant shall be vested at all times in amounts credited to the Participant’s DeferralAccount or Accounts.5.2 Vesting of Company Contributions Account. Amounts credited to a Participant’s Company Contributions Account shall bevested based upon a vesting schedule to be determined in writing by the Committee.ARTICLE VI DISTRIBUTIONS6.1 Termination of Service Distributions.(c) Timing and Form of Deferral Account Distributions. Except as otherwise provided in this Plan, in the event of aParticipant’s Termination of Service other than by reason of the Participant’s death or Disability, the Distributable Amount credited tothe Participant’s Deferral Accounts that are Termination of Service Accounts shall be paid to the Participant in a lump sum on thePayment Date following the Participant’s Termination of Service unless the Participant has made an alternative benefit election on atimely basis pursuant to Section 3.4 to receive substantially equal annual installments over a period following Termination of Service ofno less than two (2) years and no more than ten (10) years.8(d) Distribution of Company Contributions Account. In the event of a Participant’s Termination of Service for anyreason other than death or Disability, the Distributable Amount credited to the Participant’s Company Contribution Account shall be paidin a lump sum on the Payment Date following the Participant’s Termination of Service.(e) Small Benefit Exception. If on commencement of benefits payable from a Termination of Service Account theDistributable Amount from such Account is less than or equal to twenty-five thousand dollars ($25,000), the total Distributable Amountfrom such Account shall be paid in a lump sum on the scheduled Payment Date. For purposes of this Section 6.1(c) whether aTermination of Service Account equals or exceeds $25,000 shall be determined by combining all Deferral Accounts that areTermination of Service Accounts.6.2 Disability Distributions. In the event of a Participant’s Termination of Service by reason of Disability and regardless of thetime and form of payment otherwise elected by the Participant, the Distributable Amount credited to all of such Participant’s Accountsshall be paid in a lump sum sixty (60) days after the Participant’s Termination of Service.6.3 Death Benefits. In the event of a Participant’s death and regardless of the time and form of payment otherwise elected bythe Participant, the Distributable Amount credited to all of such Participant’s Accounts shall be paid in a lump sum to the Participant’sBeneficiary sixty (60) days after the Participant’s date of death.6.4 Scheduled Distributions.(a) Scheduled Distribution Election. Participants shall be entitled to elect to receive a Scheduled Distribution from aDeferral Account prior to Termination of Service. Except as otherwise provided in this Plan, in the case of a Participant who has electedto receive a Scheduled Distribution, such Participant shall receive the Distributable Amount, with respect to the specified deferrals,including earnings thereon, which have been elected by the Participant to be subject to such Scheduled Distribution election inaccordance with Section 3.4 of the Plan. A Participant’s Scheduled Distribution commencement date with respect to deferrals ofCompensation for a given Plan Year shall be no earlier than two (2) years from the last day of the Plan Year in which the deferrals arecredited to the Participant’s Account. The Participant may elect to receive the Scheduled Distribution from the Participant’s ScheduledDistribution Accounts in a single lump sum or substantially equal annual installments over a period of up to five (5) years. A Participantmay delay and change the form of a Scheduled Distribution, provided such extension complies with the requirements of Section 3.4.(b) Termination of Service. In the event of a Participant’s Termination of Service prior to commencement of aScheduled Distribution, the Scheduled Distributions shall be distributed from the Participant’s Scheduled Distribution Accounts in theform applicable to such Termination of Service under Sections 6.1, 6.2 or 6.3 above. In the event that a Participant has established two(2) Termination from Service Accounts, the payment will be made in the manner designated for Termination from Service Accountnumber one (1). In the event of a Participant’s Termination of Service for any reason other than death or Disability after a ScheduledDistribution has commenced installment payments, such Scheduled Distribution benefits shall continue to be paid at the same9time and in the same form as they would have been paid to the Participant had the Participant not terminated service.6.5 Hardship Distribution. Upon a finding that the Participant (or, after the Participant’s death, a Beneficiary) has suffered aFinancial Hardship, subject to compliance with Code Section 409A the Committee may, at the request of the Participant or Beneficiary,accelerate distribution of benefits or approve reduction or cessation of current deferrals under the Plan in the amount reasonablynecessary to alleviate such Financial Hardship subject to the following conditions:(a) The request to take a Hardship Distribution shall be made by filing a form provided by and filed with theCommittee prior to the end of any calendar month.(b) The amount distributed pursuant to this Section with respect to a Financial Hardship shall not exceed the amountnecessary to satisfy such financial emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution,after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insuranceor otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financialhardship), or by cessation of deferrals under the Plan.(c) The amount determined by the Committee as a Hardship Distribution shall be paid in a lump sum as soon aspracticable after the end of the calendar month in which the Hardship Distribution election is made and approved by the Committee.(d) Upon a finding that the Participant (or, after the Participant’s death, a Beneficiary) has suffered a FinancialHardship, subject to Treasury Regulations promulgated under Code Section 409A the Committee may at the request of the Participant,accelerate distribution of benefits or approve reduction or cessation of current deferrals under the Plan in the amount reasonablynecessary to alleviate such Financial Hardship. The amount distributed pursuant to this Section with respect to an emergency shall notexceed the amount necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of thedistribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensationby insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself causesevere financial hardship).6.6 Delay of Distributions Due to Loss of Tax Deduction. Notwithstanding anything to the contrary contained in this Plan, anypayment or payments may be delayed to the extent that the Committee reasonably anticipates that if the payments were made asscheduled, the Company’s deduction for federal income tax purposes with respect to such payment would not be permitted due to theapplication of Code Section 162(m), provided that the payment or payments are made in accordance with the regulations issued underCode Section 409A.6.7 Medium of Payment. Unless the Committee determines otherwise in writing, all distributions shall be payable in cash.ARTICLE VII 10PAYEE DESIGNATIONS AND LIMITATIONS7.1 Beneficiaries.(a) Beneficiary Designation. The Participant shall have the right, at any time, to designate any person or persons asBeneficiary (both primary and contingent) to whom payment under the Plan shall be made in the event of the Participant’s death. TheBeneficiary designation shall be effective when it is submitted to and acknowledged by the Committee during the Participant’s lifetimein the format prescribed by the Committee.(b) Absence of Valid Designation. If a Participant fails to designate a Beneficiary as provided above, or if every persondesignated as Beneficiary predeceases the Participant or dies prior to complete distribution of the Participant’s benefits, then theCommittee shall direct the distribution of such benefits to the Participant’s estate.7.2 Payments to Minors. In the event any amount is payable under the Plan to a minor, payment shall not be made to theminor, but instead be paid (a) to that person’s living parent(s) to act as custodian, (b) if that person’s parents are then divorced, and oneparent is the sole custodial parent, to such custodial parent, to act as custodian, or (c) if no parent of that person is then living, to acustodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect inthe jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold thefunds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if noguardian of the estate for the minor is duly appointed and currently acting within sixty (60) days after the date the amount becomespayable, payment shall be deposited with the court having jurisdiction over the estate of the minor.7.3 Payments on Behalf of Persons Under Incapacity. In the event that any amount becomes payable under the Plan to aperson who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a validreceipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, tohave assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge ofany and all liability of the Committee and the Company under the Plan.7.4 Inability to Locate Payee. In the event that the Committee is unable to locate a Participant or Beneficiary within two yearsfollowing the scheduled Payment Date, the amount allocated to the Participant’s Deferral Account shall be forfeited. If, after suchforfeiture, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or earnings.ARTICLE VIII ADMINISTRATION8.1 Committee. The Plan shall be administered by a Committee appointed by the Board, which shall have the exclusive rightand full discretion (a) to appoint agents to act on its behalf, (b)11to select and establish Funds, (c) to interpret the Plan, (d) to decide any and all matters arising hereunder (including the right to remedypossible ambiguities, inconsistencies, or omissions), (e) to make, amend and rescind such rules as it deems necessary for the properadministration of the Plan and (f) to make all other determinations and resolve all questions of fact necessary or advisable for theadministration of the Plan, including determinations regarding eligibility for benefits payable under the Plan. All interpretations of theCommittee with respect to any matter hereunder shall be final, conclusive and binding on all persons affected thereby. No member ofthe Committee or agent thereof shall be liable for any determination, decision, or action made in good faith with respect to the Plan. TheCompany will indemnify and hold harmless the members of the Committee and its agents from and against any and all liabilities, costs,and expenses incurred by such persons as a result of any act, or omission, in connection with the performance of such persons’ duties,responsibilities, and obligations under the Plan, other than such liabilities, costs, and expenses as may result from the bad faith, willfulmisconduct, or criminal acts of such persons.8.2 Claims Procedure. Any Participant, former Participant or Beneficiary may file a written claim with the Committee settingforth the nature of the benefit claimed, the amount thereof, and the basis for claiming entitlement to such benefit. The Committee shalldetermine the validity of the claim and communicate a decision to the claimant promptly and, in any event, not later than ninety (90)days after the date of the claim. The claim may be deemed by the claimant to have been denied for purposes of further review describedbelow in the event a decision is not furnished to the claimant within such ninety (90) day period. If additional information is necessary tomake a determination on a claim, the claimant shall be advised of the need for such additional information within forty-five (45) daysafter the date of the claim. The claimant shall have up to one hundred eighty (180) days to supplement the claim information, and theclaimant shall be advised of the decision on the claim within forty-five (45) days after the earlier of the date the supplementalinformation is supplied or the end of the one hundred eighty (180) day period. Every claim for benefits which is denied shall be deniedby written notice setting forth in a manner calculated to be understood by the claimant (a) the specific reason or reasons for the denial,(b) specific reference to any provisions of the Plan (including any internal rules, guidelines, protocols, criteria, etc.) on which the denialis based, (c) description of any additional material or information that is necessary to process the claim, and (d) an explanation of theprocedure for further reviewing the denial of the claim and shall include an explanation of the claimant’s right to file suit in Federalcourt in the event of an adverse determination on review.8.3 Review Procedures. Within sixty (60) days after the receipt of a denial on a claim, a claimant or his/her authorizedrepresentative may file a written request for review of such denial. Such review shall be undertaken by the Committee and shall be afull and fair review. The claimant shall have the right to review all pertinent documents. The Committee shall issue a decision not laterthan sixty (60) days after receipt of a request for review from a claimant unless special circumstances, such as the need to hold ahearing, require a longer period of time, in which case a decision shall be rendered as soon as possible but not later than one hundredtwenty (120) days after receipt of the claimant’s request for review. The decision on review shall be in writing and shall include specificreasons for the decision written in a manner calculated to be understood by the claimant with specific reference to any provisions of thePlan on which the decision is based and12shall include an explanation of the claimant’s right to file suit in Federal court in the event of an adverse determination on review.ARTICLE IX MISCELLANEOUS9.1 Amendment or Termination of Plan. The Company may, at any time, direct the Committee to amend or terminate thePlan, except that no such amendment or termination may reduce a Participant’s Account balances. If the Company terminates the Plan,no further amounts shall be deferred hereunder, and amounts previously deferred or contributed to the Plan shall be fully vested andshall be paid in accordance with the provisions of the Plan as scheduled prior to the Plan termination. Notwithstanding the forgoing, to theextent permitted under Code Section 409A and applicable authorities, the Company may, in its complete and sole discretion, acceleratedistributions under the Plan in the event of a “change in ownership” or “effective control” of the Company or a “change in ownership ofa substantial portion of assets” or under such other terms and conditions as may be specifically authorized under Code Section 409A andapplicable authorities.9.2 Unsecured General Creditor. The benefits paid under the Plan shall be paid from the general assets of the Company, andthe Participant and any Beneficiary or their heirs or successors shall be no more than unsecured general creditors of the Company withno special or prior right to any assets of the Company for payment of any obligations hereunder. It is the intention of the Company thatthis Plan be unfunded for purposes of ERISA and the Code.9.3 Restriction Against Assignment. The Company shall pay all amounts payable hereunder only to the person or personsdesignated by the Plan and not to any other person or entity. No part of a Participant’s Accounts shall be liable for the debts, contracts, orengagements of any Participant, Beneficiary, or their successors in interest, nor shall a Participant’s Accounts be subject to execution bylevy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate,anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. Exceptas provided in Section 9.7 of the Plan, as provided by any clawback, recoupment or similar policy adopted by the Company, or as requiredby law, no part of a Participant’s Accounts shall be subject to any right of offset against or reduction for any amount payable by theParticipant or Beneficiary, whether to the Company or any other party, under any arrangement other than under the terms of this Plan.9.4 Withholding. The Participant shall make appropriate arrangements with the Company for satisfaction of any federal, stateor local income tax withholding requirements, Social Security and other employee tax or other requirements applicable to the granting,crediting, vesting or payment of benefits under the Plan. There shall be deducted from each payment made under the Plan or any otherCompensation payable to the Participant (or Beneficiary) all taxes which are required to be withheld by the Company in respect to suchpayment or this Plan. The Company shall have the right to reduce any payment (or other Compensation) by the amount of cashsufficient to provide the amount of said taxes.139.5 Protective Provisions. The Participant shall cooperate with the Company by furnishing any and all information requestedby the Committee, in order to facilitate the payment of benefits hereunder and taking such other actions as may be requested by theCommittee. If the Participant refuses to so cooperate, the Company shall have no further obligation to the Participant under the Plan.9.6 Receipt or Release. Any payment made in good faith to a Participant or the Participant’s Beneficiary shall, to the extentthereof, be in full satisfaction of all claims against the Committee, its members and the Company with respect to the Plan andparticipation in the Plan. The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, toexecute a receipt and release to such effect.9.7 Errors in Account Statements, Deferrals or Distributions. In the event an error is made in an Account statement, sucherror shall be corrected on the next statement following the date such error is discovered. In the event of an error in deferral amount,consistent with and as permitted by any correction procedures established under IRC Section 409A, the error shall be correctedimmediately upon discovery by, in the case of an excess deferral, distribution of the excess amount to the Participant, or, in the case ofan under deferral, reduction of other compensation payable to the Participant. In the event of an error in a distribution, the over or underpayment shall be corrected by payment to or collection from the Participant consistent with any correction procedures established underIRC Section 409A, immediately upon the discovery of such error. In the event of an overpayment, the Company may, at its discretion,offset other amounts payable to the Participant from the Company (including but not limited to salary, bonuses, expensereimbursements, severance benefits or other employee compensation benefit arrangements, as allowed by law and subject tocompliance with IRC Section 409A) to recoup the amount of such overpayment(s).9.8 Employment Not Guaranteed. Nothing contained in the Plan nor any action taken hereunder shall be construed as acontract of employment or as giving any Participant any right to continue the provision of services in any capacity whatsoever to theCompany.9.9 Successors of the Company. The rights and obligations of the Company under the Plan shall inure to the benefit of, andshall be binding upon, the successors and assigns of the Company.9.10 Notice. Any notice or filing required or permitted to be given to the Company or the Participant under this Agreementshall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, in the case of the Company, to the principaloffice of the Company, directed to the attention of the Committee, and in the case of the Participant, to the last known address of theParticipant indicated on the employment records of the Company. Such notice shall be deemed given as of the date of delivery or, ifdelivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Notices to the Companymay be permitted by electronic communication according to specifications established by the Committee.9.11 Headings. Headings and subheadings in this Plan are inserted for convenience of reference only and are not to beconsidered in the construction of the provisions hereof.149.12 Gender, Singular and Plural. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine,or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural andthe plural as the singular.9.13 Governing Law. The Plan is intended to be an unfunded plan maintained primarily to provide deferred compensationbenefits for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301 and 401 ofERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA. In the event any provision of, or legal issue relating to,this Plan is not fully preempted by federal law, such issue or provision shall be governed by the laws of the Commonwealth ofMassachusetts.IN WITNESS WHEREOF, the Board of Directors of the Company has approved the adoption of this Plan as of the EffectiveDate and has caused the Plan to be executed by its duly authorized representative this 27th day of July, 2012.HAEMONETICS CORPORATION,By /s/ Christopher Lindop Title Vice President and Chief Financial Officer15THIRD AMENDMENT TO AGREEMENT OF LEASEMADE THIS 23rd DAY OF MARCH, 2004BY AND BETWEENTHE BUNCHER COMPANY (hereinafter called “Landlord”), a Pennsylvania corporation having its principal place of business in AlleghenyCounty, PennsylvaniaANDHAEMONETICS CORPORATION, (hereinafter called “Tenant”), a Massachusetts corporation having its principal place of business in the City ofBraintree, Norfolk County, Massachusetts.WHEREAS, the parties hereto have entered into a certain Agreement of Lease dated July 17, 1990 as amended by First Amendment to Agreement ofLease dated April 30, 1991 and by Second Amendment to Agreement of Lease dated October 18, 2000 (said Agreement of Lease as amended is hereinaftercollectively called the “Lease”) covering certain property located in the Buncher Commerce Park, Leetsdale, Allegheny County, Pennsylvania and herein andtherein called the Lease Premises; andWHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Lease unless otherwise provided herein; andWHEREAS, the parties hereto desire to amend the Lease to (i) expand the Leased Premises by an additional 5,672 square feet of land area (the“Parking Area”) shown shaded in red on Exhibit A-3 attached hereto and made a part hereof, and (ii) provide Landlord with the right to take back the ParkingArea as provided herein.NOW, THEREFORE, in consideration of the premises and intending to be legally bound the parties hereto promise, covenant and agree that theLease be and is hereby amended as follows:1.LEASED PREMISES: Effective on the date hereof, the Lease is hereby amended to include in the Leased Premises the Parking Area and theParking Area shall be included in and become a part of the Leased Premises. After the inclusion of the Parking Area, the Leased Premises is and shall be allthat certain area outlined in red on Exhibit A-3 attached hereto.2.REDUCTION RIGHT: At any time during the existing term of the Lease or any extension thereof, Landlord shall have the right upon thirty(30) days prior written notice to Tenant to cancel Tenant’s right to use and occupy the Parking Area (as defined herein) and if the said notice is given Tenantshall vacate and surrender toLandlord on the last day of said notice all Tenant’s right and interest in the Parking Area which Landlord agrees to accept and effective on such date theParking Area shall be removed from and no longer be included in the Leased Premises.3 .Except as amended hereby all terms and conditions of the Lease shall remain in full force and effect.WITNESS the due execution hereof.ATTEST: THE BUNCHER COMPANY By[Signature appears here] By[Signature appears here] TitleSECRETARY TitlePRESIDENT(Corporate Seal) ATTEST: HAEMONETICS CORPORATION By[Signature appears here] By[Signature appears here] Title[Signature appears here] Title[Signature appears here][Graphic appears hear]2FOURTH AMENDMENT TO AGREEMENT OF LEASEMADE THIS 12th DAY OF MARCH, 2008BY AND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having its principal place of business in AlleghenyCounty, PennsylvaniaANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of business in the City ofBraintree, Norfolk County, MassachusettsWHEREAS, the parties hereto have entered into a certain Agreement of Lease dated July 17, 1990, as amended by FirstAmendment to Agreement of Lease dated April 30, 1991, by Second Amendment to Agreement of Lease dated October 18, 2000 andby Third Amendment dated March 23, 2004 (hereinafter collectively called the “Lease”) covering certain property known as Buildings18 and 18A in the Buncher Commerce Park, Borough of Leetsdale, Allegheny County, Pennsylvania and more particularly describedin the Lease and called herein and therein the Leased Premises; andWHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Lease unlessotherwise provided herein; andWHEREAS, the parties hereto desire to further amend the Lease to (i) expand the Leased Premises by 28,309 square feet ofagreed upon space located in a portion of Building #3 in the Buncher Commerce Park, Borough of Leetsdale, Allegheny County,Pennsylvania (the “Building #3 Space”) as shown outlined in red on Exhibit A-4 which is attached hereto and made a part hereof, (ii)establish the rent for the Building #3 Space, (iii) establish the term of the Lease for the Building #3 Space, and (iv) such otheramendments or supplements to accomplish the intent of the parties hereto.NOW, THEREFORE in consideration of the premises and intending to be legally bound, the parties hereto promise, covenantand agree that the Lease be and is hereby amended as follows:1. LEASED PREMISES: Subject to the provisions of paragraph 3 of this Fourth Amendment to Agreement of Lease, effectiveApril 1, 2008 the Leased Premises shall be expanded to include Building #3 Space and the Building #3 Space shall be included in andbecome a part of the Leased Premises.2. TERM: The term of the Lease for the Building #3 Space (the “Building #3 Lease Term”) shall be twelve (12) months tocommence April 1, 2008 (the “Building #3Space Commencement Date”) and end at 11:59 pm on March 31, 2009, subject nevertheless to the following covenants and conditionswhich Landlord and Tenant respectively covenant and agree to keep and perform. The expiration date of the Lease and the Roll OverTerm thereof for the Leased Premises, exclusive of the Building #3 Space shall remain June 30, 2011.3. COMPLETION: Landlord shall use Landlord’s commercially reasonable efforts to substantially complete, at Landlord’scost and expense, the renovations to the Building #3 Space described on Exhibit B-4 attached hereto and made a part hereof (the“Building #3 Renovations”) within thirty (30) days of receipt of fully executed Lease and prior to the Building #3 SpaceCommencement Date. If the Building #3 Renovations are not so completed, the Lease shall remain in full force and effect except thatthe rental, utility payments and other sums due as additional rental for Building #3 Space under the Lease shall not commence until theseventh (7th) day (hereinafter known as the “Building #3 Space Beginning Date”) after Landlord has provided written notice to Tenant(“Second Letter Amendment”) setting forth (i) that the Building #3 Renovations are substantially completed and the Building #3 Spaceis ready for occupancy, (ii) the actual Building #3 Space Commencement Date and the expiration date of the Building #3 Lease Term,and (iii) subject to paragraph 4 of this Fourth Amendment to Agreement of Lease, the dates and amounts of the rental payments duehereunder. The Second Letter Amendment when issued as provided herein shall be incorporated into and made a part of the Lease. If theBuilding #3 Space Beginning Date is other than the first day of a month, Tenant shall pay to Landlord as rental the sum of $329.63 foreach day from the Building #3 Space Beginning Date to but not including the first day of the month following the Building #3 SpaceBeginning Date, and the initial term for the Building #3 Space shall run for a full twelve (12) months from the first day of the monthfollowing the Building #3 Space Beginning Date (the “Building #3 Space Rent Commencement Date”) so as to end on the last day ofthe twelfth (12th) full month after the Building #3 Space Rent Commencement Date.All terms and conditions of the Lease, as it pertains to the Building #3 Space, shall be effective from the Building #3 SpaceBeginning Date as though the Building #3 Lease Term of the Lease had commenced on the Building #3 Space Beginning Date exceptthe expiration date of the Building #3 Lease Term shall be as provided above in this paragraph 3.With Landlord’s permission, Tenant may, thirty (30) days prior to the Building #3 Space Commencement Date or the Building#3 Space Rent Commencement Date, occupy portions of the Building #3 Space as designated by Landlord for the purpose of installingTenant’s communication wiring and cabling and to prepare the space for Tenant’s occupancy without the payment of rental hereunderprovided Tenant shall be responsible for any additional utility cost incurred as a result of such occupancy. In installing Tenant’scommunications wiring and cabling and to prepare the space for Tenant’s occupancy, Tenant and its contractors shall not interfere ordelay Landlord or its contractors in performing Landlord’s Work.24. RENT: Tenant shall pay to Landlord as monthly rental for the Lease Premises as and when expanded by the Building #3Space the following amounts at the following times:A.Tenant shall continue to pay to Landlord as monthly rental for the Leased Premises, excluding the Building #3Space, the existing monthly rental of $28,666.13 to and including the later of March 1, 2008 or the first day of themonth preceding the month in which the Building #3 Space Rent Commencement Date occurs, whichever isapplicable.B.On April 1, 2008 or on the Building #3 Space Rent Commencement Date, whichever is applicable, Tenant shall payto Landlord the per diem rental set forth in paragraph 3 of this Fourth Amendment to Agreement of Lease, if any.C.Beginning April 1, 2008 or on the Building #3 Space Rent Commencement Date, whichever is applicable, and onthe first day of the next succeeding eleven (11) months thereafter, Tenant shall pay to Landlord as monthly rentalfor the Leased Premises, as expanded by the Building #3 Space, the amount of $38,692.23.D.In the event Tenant exercised its option to extend the Lease and the term thereof for the Building #3 Space for theNew Renewal(s) as provided in paragraph 7 herein, Tenant shall continue to pay to Landlord as monthly rental forthe Leased Premises, as expanded by the Building #3 Space, the amount of $38,692.23 plus any additional rental forreal estate taxes or insurance premiums over the base year, if any, to the expiration of the extant New RenewalTerm.E.Beginning on the first day of the month following the expiration of the Building #3 Lease Term for whatever cause,and on the first day of each calendar month thereafter during the balance of the term of the Lease, Tenant shall payto Landlord as monthly rental for the Leased Premises the amount of $28,666.13.The rentals under this paragraph 4 shall be payable in advance, without demand, deduction or set off. All rentals and other sumspayable as additional rental hereunder shall be paid to Landlord at 5600 Forward Avenue, P.O. Box 81930, Pittsburgh, PA 15217-0930 orat such other place or to such other person as may be designated by Landlord in writing.35. REAL ESTATE TAXES AND INSURANCE: Section 2 (Taxes) and the second full paragraph of Section 8 (Insurance)of the Agreement of Lease dated July 17, 1990 shall not be applicable to the Building #3 Space.The rental for the Building #3 Space includes Tenant’s allocable share of real estate taxes and insurance premiums asdetermined by Landlord on the Building #3 Space for the Building #3 Lease Term, which initial term is called the base year. If Tenantextends the Building #3 Lease Term of the lease for a New Renewal Term, as defined herein, Tenant shall pay to Landlord as additionalrent within 30 days of billing by Landlord, any increase in Tenant’s allocable share of real estate taxes and insurance premiums over thebase year real estate taxes and insurance premiums.6. INSURANCE: Landlord shall maintain commercial property insurance covering the perils insured under the ISO SpecialForm or any substitution thereof on the insurable portion of the Building #3 Space for its replacement value in such amounts asLandlord may from time to time reasonably determine. Within fifteen (15) days after Landlord provides Tenant with supportingdocumentation the cost of insuring the insurable portion of the Building #3 Space, Tenant shall pay to Landlord as additional rentalhereunder, Tenant’s share of the insurance premium as determined by Landlord, paid or payable by Landlord, for the purpose of insuringthe insurable portion of the Building #3 Space over the base year. In addition, Tenant shall be liable for any increase in such insurancepremiums resulting from Tenant’s specific use of the Building #3 Space. If the Building #3 Space is damaged as a result of an insuredrisk, Tenant shall be responsible for its proportionate share of the deductible portion of Landlord’s insurance coverage which deductibleis currently $5,000.00.7. RENEWAL OPTION: Tenant shall have the right and option to extend the Building #3 Lease Term for the Building #3Space only for two consecutive terms of six (6) months (each a “New Renewal Term”) to commence immediately following theexpiration of the Building #3 Lease Term or the first New Renewal Term. Tenant may exercise the right to extend the Building #3Lease Term for a New Renewal Term only by delivering to Landlord written notice of Tenant’s exercise of such right no less than three(3) months prior to the expiration date of the Building #3 Lease Term or the first New Renewal Term, if applicable, time being of theessence. The terms and conditions of the Building #3 Lease Term shall continue in full force and effect for each New Renewal Termand the monthly rental for each New Renewal Term, if applicable, shall continue at the same rental of $38,692.23.Notwithstanding the above, if Haemonetics Corporation itself is not in full possession of the Building #3 Space continuallyduring the Building #3 Lease Term or the first New Renewal Term and at the commencement of each New Renewal Term, Landlordmay at its option terminate the Building #3 Lease Term, as of the last day of the Building #3 Lease Term or the first New RenewalTerm of the Lease.48. TERMINATION OF NEW RENEWAL TERMS: If Tenant has exercised its right to extend the Building #3 Lease Term,at any time during the first New Renewal Term or the second New Renewal Term, if applicable, Landlord or Tenant, by written noticeto the other given two (2) months in advance, may terminate the Lease and the Building #3 Lease Term thereof, as it applies to theBuilding #3 Space only, effective two (2) months after the date of said notice and the Building #3 Lease Term thereof, as to the Building#3 Space, shall terminate as though such date was the scheduled termination date of Building #3 Lease Term.9. MAINTENANCE AND REPAIR: Notwithstanding the provisions of section 4 of the Agreement of Lease dated July 17,1990, Landlord shall be responsible for the snow plowing of the driveway shown shaded in orange on Exhibit A-4 attached hereto andmade a part hereof. Landlord shall also be responsible for roof and structural repairs as set forth in the Lease.10. UTILITIES: Tenant shall be responsible for all utility charges for services used or consumed in connection with theBuilding #3 Space, including but not limited to, electric, gas, sewer, and water. All utilities will be either separately metered and billeddirectly to Tenant by the appropriate utility company or sub-metered and billed to Tenant by Landlord.11. RESERVATIONS: Landlord reserves for itself and all tenants in the commerce park where the Building #3 Space islocated, the use of access roads and of utilities, and the right to make additional connections as Landlord may deem necessary, withoutunreasonable interference with the operations of Tenant.Landlord also reserves for itself, its tenants, and business invitees the area shown shaded in orange on Exhibit A-4 attachedhereto to be used in common with Tenant, its employees and business invitees as a driveway for pedestrian and vehicular ingress andegress from and to the Building #3 Space.(THE REMAINDER OF THIS PAGE INTENTIONALLY REMAINS BLANK)512. BROKER: Landlord is represented by The Buncher Company and Tenant is being represented by DTZ FHO Partners andneither party shall be responsible for the payment of commissions or fees to the other party’s broker. Each party agrees to indemnify theother for any liability or claims for commissions or fees arising from a breach of this warranty by the indemnifying party.WITNESS the due execution hereof on the day and year first written above.ATTEST:THE BUNCHER COMPANYBY:(SIGNATURE APPEARS HERE) BY:(SIGNATURE APPEARS HERE) Bernita Buncher Thomas J. Balestrieri Secretary President/CEO(Corporate Seal)ATTEST: HAEMONETICS CORPORATIONBY:(SIGNATURE APPEARS HERE) BY:(SIGNATURE APPEARS HERE) Name:(SIGNATURE APPEARS HERE) Name:(SIGNATURE APPEARS HERE) Title:(SIGNATURE APPEARS HERE) Title:(SIGNATURE APPEARS HERE) (Corporate Seal)6EXHIBITB-4BUILDING FINISHESEXTERIOR:The exterior of the warehouse is painted concrete block. FRAME:Rigid steel frame construction with bay spacing of 50’ x 23’. Interior steel and roof deck is paintedwhite. FLOOR:6” reinforced concrete over compacted fill at dock height. Landlord will clean the concrete floor priorto Tenant’s occupancy. ROOF:20 gauge steel decking, insulated, single membrane rubber roof system. HEAT:Warehouse: Gas-fired unit heaters thermostatically controlled to provide 50°F inside temperature at 0°Foutside temperature in warehouse to be delivered by Landlord in good working order. Landlord willinspect all existing unit heaters and perform any repairs, if necessary. ELECTRICAL:Existing electrical service to the building is 480/277 volt, 3- phase, 4-wire to service the existing officeand warehouse. Any additional power required by Tenant shall be at Tenant’s sole cost and expense. LIGHTING:Warehouse: Existing lighting is 400-watt metal halide light and fixture in the warehouse area; landlordwill inspect and replace any bad ballasts or burned out bulbs. TRUCK DOORS:Landlord will inspect the existing dock doors to include the drive-up ramp lift door and anycorresponding dock lights, making any necessary repairs so that they are delivered in good workingorder. SPRINKLERS:Ordinary hazard 125’ wet system conforming to N.F.P.A. Pamphlet 13 to be delivered in good workingorder. The system is designed with 165°F sprinkler heads with a flow rate of .20 GPM over the mostremote 2,000 square feet. Product must remain 18” below sprinkler heads. It is Tenant’s responsibilityto check for adequacy of the system as it relates to their product. DEMISING WALLS:The warehouse is separated from the adjacent tenants by block demising walls. Landlord will repaint theinside face of the northern and western exterior block walls. EXHIBITB-4(SIGNATURE APPEARS HERE)PAGE1OF2OFFICE AREA — TENANT ALLOWANCESAREA:Landlord will refurbish the existing mezzanine office space consisting of approximately 410 square feet, inaccordance with the following finishes and allowances: LIGHTING:Fluorescent, lay-in recessed fixtures to provide a minimum of 50’ candle power at desk level. ELECTRICALOUTLETS:110-volt duplex electrical outlets, as exists. FLOORS:New vinyl tile floor to be installed. INTERIOR DOORS:Existing interior doors are solid core birch, 13/4” (3’x7’) with Schlage brushed aluminum, or equal,hardware. CEILING:Install new acoustical tile (2’x4’ lay-in on T-bar grid system) throughout the office and restrooms. INTERIOR WALLS:Existing interior walls are constructed of metal studs, with 1/2” gypsum board taped, spackled, and sanded.Landlord will paint the walls, color to be chosen by Tenant from The Buncher Company’s standardselections. CENTRAL HEATING/H.V.A.C:Landlord will inspect and service the existing HVAC wall mounted package units for proper operation anddeliver them in good working order. SANITARYFACILITIES:Landlord will inspect all fixtures for proper operation and professionally clean and sanitize the warehouserestrooms and deliver them compliant with ADA as well as local code and ordinances. EMERGENCYLIGHTING:Battery powered back-up night-lights and exit lights. EXHIBITB-4PAGE2OF2[LOGO GRAPHIC APEAR HERE]Tel: 412/422-9900Fax: 412/422-3900 Real Estate GroupPenn Liberty Plaza I1300 Penn Avenue, Suite 300Pittsburgh, PA 15222-4211November 26, 2008Mr. Sean M. Teague- PartnerDTZ FHO PartnersOne International PlaceBoston, MA 02110RE:FIFTH AMENDMENT TO AGREEMENT OF LEASE DATED JULY 17, 1990 BY AND BETWEEN THE BUNCHER COMPANY, ASLANDLORD, AND HAEMONETICS CORPORATION, AS TENANT, AS AMENDED BY FIRST AMENDMENT TO AGREEMENT OFLEASE DATED APRIL 30, 1991, AS AMENDED BY SECOND AMENDMENT TO AGREEMENT OF LEASE DATED OCTOBER 18, 2000,AS AMENDED BY THIRD AMENDMENT TO AGREEMENT OF LEASE DATED MARCH 23, 2004, AND AS AMENDED BY FOURTHAMENDMENT DATED MARCH 12, 2008 (COLLECTIVELY “THE LEASE”) COVERING THE PROPERTY LOCATED IN BUNCHERCOMMERCE PARK, LEETSDALE, PA (THE “LEASED PREMISES”)Dear Mr. TeagueEnclosed is one (1) fully executed original of the above referenced Fifth Amendment to Agreement of Lease. We retained two signed originals for our files.Thank you for your cooperation in finalizing this transaction.Should you have any questions regarding this matter, do not hesitate to give me a call.Very truly yours[SIGNATHURE GRAPHIC HERE]Brian R. GoetzExecutive Vice President - Real Estate GroupBRG/mczEnclosureFIFTH AMENDMENT TO AGREEMENT OF LEASEMADE AS OF THE 1st DAY OF October, 2008BY AND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having its principal place of business in Allegheny County, PennsylvaniaANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of business in the City of Braintree, NorfolkCounty, MassachusettsWHEREAS, the parties hereto have entered into a certain Agreement of Lease dated July 17, 1990, as amended by First Amendment to Agreement ofLease dated April 30, 1991, by Second Amendment to Agreement of Lease dated October 18, 2000, by Third Amendment to Agreement of Lease dated March23, 2004, and by Fourth Amendment to Agreement of Lease dated March 12, 2008 (hereinafter collectively called the “Lease”), covering certain propertyknown as Buildings 18 and 18A on Avenue C and a portion of Building 3 on Avenue A (the “Building #3 Space”), in the Buncher Commerce Park, Boroughof Leetsdale, Allegheny County, Pennsylvania and more particularly described in the Lease and called herein and therein the Leased Premises; andWHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Lease unless otherwise provided herein; andWHEREAS, the parties hereto desire to further amend the Lease to (i) expand the Leased Premises by 809 square feet of agreed upon space locatedalongside Building 18 (the “Building 18 Expansion Space”) as shown shaded in yellow on Exhibit A-5 which is attached hereto and made a part hereof, (ii)extend the Roll Over Term of the Lease for seven (7) additional years (the “Second Extended Term”), (iii) increase the monthly rental for the Leased Premises,(iv) provide for two additional extensions of the term of the Lease (each an “Additional Renewal Term”), (v) provide Tenant with an allowance (“TenantImprovement Allowance”) to make certain improvements to the Leased Premises, and (vi) provide for other changes to the Lease that reflect the agreementreached by the parties.NOW, THEREFORE in consideration of the premises and intending to be legally bound, the parties hereto promise, covenant and agree that the Lease beand is hereby amended as follows:1. LEASED PREMISES: Subject to the provisions of paragraph 3 of this Fifth Amendment to Agreement of Lease, effective October 1, 2008, theLeased Premises shall be expanded to include the Building 18 Expansion Space and the Building 18 Expansion Space shall be included in and become a partof the Leased1Premises. The total rentable square footage of the Leased Premises, including the Building 18 Expansion Space shall be 111,047, allocated as follows:Building 18 and 18A (81,929); Building 3 Space (28,309); and Building 18 Expansion Space (809). Tenant has examined the Building 18 ExpansionSpace and takes the same AS IS/WHERE IS.2. TERM: The term of the Lease, exclusive of the Building #3 Space, is hereby extended for the Second Extended Term to commence immediatelyfollowing the expiration of the Roll Over Term. The expiration date of the Lease as extended by the Second Extended Term, exclusive of the Building #3 Space,is hereby changed from June 30, 2011, to June 30, 2018. The expiration date of the Lease, as it applies to the Building #3 Space, shall remain April 30, 2009.3. RENT: Tenant shall pay to Landlord as monthly rental for the Leased Premises, as expanded by the Building #18 Expansion Space, the followingamounts at the following times:A.Tenant shall continue to pay to Landlord as monthly rental for the Leased Premises (i.e. Building 18 and 18A and the Building #3 Space)the existing monthly rental of $38,692.23 to and including October 1, 2008.B.Beginning October 1, 2008 and on the first day of each succeeding calendar month thereafter to and including March 1, 2009, Tenant shallpay to Landlord as monthly rental for the Leased Premises, as expanded by the Building 18 Expansion Space, the amount of $38,942.23.C.In the event Tenant exercises its option to extend the Lease and the term thereof for the Building #3 Space for the New Renewal Term(s) asprovided in paragraph 7 of the Fourth Amendment to Agreement of Lease, beginning on April 1, 2009, Tenant shall continue to pay toLandlord as monthly rental for the Leased Premises (i.e. Building 18 and 18A, Building 18 Expansion Space and the Building #3 Space)the amount of $38,942.23.D.In the event the Building #3 Lease Term or any extension thereof terminates for whatever cause, beginning on the first day of the monthfollowing the termination of the Building #3 Lease and on the first day of each calendar month thereafter to and including June 1, 2011,Tenant shall pay to Landlord as monthly rental for the Leased Premises (i.e. Building 18 and 18A and the Building 18 Expansion Spacethe amount of $28,916.13.E.Beginning on July 1, 2011, and on the first day of each calendar month thereafter for the balance of the Second Extended Term, Tenantshall pay to Landlord as monthly rental for the Leased2Premises (i.e. Building 18 and 18A and the Building 18 Expansion Space) the amount of $31,997.49.The rentals under this paragraph 3 shall be payable in advance, without demand, deduction or set off. All rentals and other sums payable as additionalrental hereunder shall be paid to Landlord at 1300 Penn Avenue, P.O. Box 768, Pittsburgh, PA 15230-0768 or at such other place or to such other person asmay be designated by Landlord in writing.4. Paragraph 5 of the Second Amendment to Agreement of Lease dated October 18, 2000, is hereby deleted in its entirety.5. RENEWAL OPTION: Tenant shall have the right and option to extend the Second Extended Term of the Lease for the Leased Premises, excluding theBuilding #3 Space, for two additional terms of five (5) years (each an “Additional Renewal Term”) to commence immediately following the expiration of theSecond Extended Term, or first Additional Renewal Term, whichever is applicable. Tenant may exercise the right to extend the term of the Lease for anAdditional Renewal Term only by delivering to Landlord written notice of Tenant’s exercise of such right no less than nine (9) months prior to the expirationdate of the Second Extended Term or the first Additional Renewal Term, if applicable, time being of the essence. The terms and conditions of the Lease shallcontinue in full force and effect for each Additional Renewal Term except that the monthly rental for each Additional Renewal Term shall be calculatedpursuant to the following formula:The monthly rental for the Additional Renewal Term for which this calculation is made shall equal $31,997.49 multiplied by a fraction, the numeratorof which is the CPI in effect on the expiration of the Second Extended Term or the first Additional Renewal Term, whichever is applicable, and thedenominator of which is the CPI in effect for June 2011.Notwithstanding the result of the above calculation, the monthly rental for each applicable Additional Renewal Term shall not be less that the monthlyrental in effect for the preceding term.The CPI, as referred to herein, means the Consumer Price Index for all Urban Consumers 1984=100 relating to the United States City Average, asissued by the Bureau of Labor Statistics of the United States Department of Labor, or any successor to the function thereof. In the event of the conversion ofthe CPI to a different standard reference base or any other revision thereof, the determination hereunder shall be made with the use of such Bureau of LaborStatistics or successor to the functions thereof or in the absence of the publication of such conversion factor, such formula or table as the parties shallmutually designate.As a condition precedent to the commencement of the first Additional Renewal Term, or the second Additional Renewal Term, whichever is applicable,Tenant shall not be in default of the Lease, and Haemonetics Corporation, itself or its affiliate, shall be in full possession of the Leased Premises continuallyduring the Second Extended Term3and at the commencement of the first Additional Renewal Term, or during the first Additional Renewal Term, and at the commencement of the SecondAdditional Renewal Term, whichever is applicable. If the conditions precedent are not met, Landlord may, at its option, terminate the Lease as of the last dayof the Second Extended Term or first Additional Term, whichever is applicable, of the Lease.6. TENANT IMPROVEMENT ALLOWANCE: As an inducement for Tenant entering into the Second Extended Term and the faithful performance ofits obligations under the Lease, Landlord shall, provided Tenant is not then in default hereunder, pay to Tenant a Tenant Improvement Allowance in theamount of $82,000.00 to be used to offset the cost of tenant improvements to the Leased Premises. Landlord shall pay to Tenant the Tenant ImprovementAllowance within twenty (20) days after receipt of proper documentation of the cost of the completed tenant improvements. Any amount of TenantImprovement Allowance not used by Tenant shall be retained by Landlord and shall be used to offset rental.7. TENANT’S WORK: Tenant shall have the right at Tenant’s sole cost and expense to make certain improvements as shown on Exhibit B-5 attachedhereto and made a part hereof (“Tenant’s Work”) to the Leased Premises and to the Building 18Expansion Space. Tenant’s Work shall be made in a good and workmanlike manner. All contracts for Tenant’s Work shall require signed releases againstmechanics liens upon payment in full for such Tenant’s Work.If Tenant’s Work is constructed by persons other than Landlord or Tenant, Tenant shall cause its contractors to provide Landlord with evidence ofcommercial general liability insurance at the limits set forth in section 8 of the Agreement of Lease and shall name Landlord as additional insured and shallprovide Landlord with evidence of Workers’ Compensation and Employers Liability insurance. Tenant shall indemnify and save harmless Landlord from allexpense, liens, claims, damages or injuries to either persons or property arising out of, or resulting from the making of Tenant’s Work. Tenant’s Work shallbe subject to the terms and conditions set forth in section 5 of the Agreement of Lease dated July 17, 1990.8. RIGHT OF FIRST OFFER: During the Second Extended Term only, Landlord, before offering any vacant space in Building #19/19A for rent to anythird party, shall first offer same to Tenant for lease upon terms and conditions Landlord is willing to accept. Tenant shall have the right within fifteen (15)business days of the notice of such written offer to accept or reject such offer, which acceptance or rejection shall be in writing. If Tenant rejects such offer,does not accept the offer or fails to respond to said offer within said fifteen (15) day period, Landlord may offer such space for rent to third parties, andLandlord shall have no further obligation to offer such space to Tenant.9. RENOVATIONS AND REPAIRS: Landlord shall use Landlord’s best efforts to substantially complete within a commercially reasonable period oftime following execution of this Fifth Amendment to Agreement of Lease, and at Landlord’s sole cost and expense, the following renovations and repairs: (i)milling, repaving, and re-striping the existing parking lot; and (ii) inspecting, repairing and/or replacing the unit4heaters in the warehouse portion of Buildings 18 and 18A of the Leased Premises (the “Renovations and Repairs”).The parties acknowledge and understand that Landlord will be performing the Renovations and Repairs in the Leased Premises during the time Tenantoccupies the Leased Premises. Landlord and Tenant shall each take reasonable steps to protect Tenant’s property from loss or damage during the time theRenovations and Repairs are being performed and the parties shall reasonably cooperate with one another so that Landlord may complete the Renovations andRepairs with all due dispatch while minimizing interference with the conduct of Tenant’s business operations.10. BROKER: Except as provided below, Landlord and Tenant each hereby warrants to the other that no real estate broker has been involved in thistransaction on its behalf and that no finder’s fees, referral fees, or real estate commissions have been earned by any third party. Tenant hereby agrees toindemnify Landlord and Landlord hereby agrees to indemnify Tenant for any liability or claims for commissions or fees arising from a breach of thiswarranty by it. The only real estate broker involved in this transaction is DTZ FHO Partners whose commission or fee with respect to this transaction shall bepaid by Landlord in accordance with that certain letter to DTZ FHO dated July 11, 2008.WITNESS the due execution hereof on the day and year first written above.ATTEST:THE BUNCHER COMPANYBY:[SIGNATURE APPEARS HERE] BY:[SIGNATURE APPEARS HERE] Bernita Buncher Thomas J. Balestrieri Secretary President/CEO(Corporate Seal) ATTEST:HAEMONETICS CORPORATIONBY:[SIGNATURE APPEARS HERE] BY:[SIGNATURE APPEARS HERE]Name:[SIGNATURE APPEARS HERE] Name:[SIGNATURE APPEARS HERE]Title:[SIGNATURE APPEARS HERE] Title:[SIGNATURE APPEARS HERE](Corporate Seal) 5SIXTH AMENDMENT TO AGREEMENT OF LEASEMADE AS OF THE 8th DAY OF January, 2010BY AND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having an office in the City of Pittsburgh, AlleghenyCounty, PennsylvaniaANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of business in the City ofBraintree, Norfolk County, MassachusettsWHEREAS, the parties hereto have entered into a certain Agreement of Lease dated July 17, 1990, as amended by FirstAmendment to Agreement of Lease dated April 30, 1991, by Second Amendment to Agreement of Lease dated October 18, 2000, byThird Amendment to Agreement of Lease dated March 23, 2004, by Fourth Amendment to Agreement of Lease dated March 12, 2008,and by Fifth Amendment to Agreement of Lease dated October 1, 2008 (hereinafter collectively called the “Lease”), covering certainproperty known as Buildings 18 and 18A, the Building 18 Expansion Space and a portion of Building 3 (the “Building #3 Space”), in theBuncher Commerce Park, Borough of Leetsdale, Allegheny County, Pennsylvania and more particularly described in the Lease andcalled herein and therein the “Leased Premises;” andWHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Lease unlessotherwise provided herein; andWHEREAS, the parties hereto desire to further amend the Lease to (i) extend the term for the Building #3 Space for six (6)additional months (the third “Renewal Term”), (ii) establish the rental for the Building #3 Space during the third Renewal Term, (iii)provide for a further extension of the term of the Building #3 Space (the fourth “Renewal Term”), and (iv) establish a right to terminatethe third Renewal Term or fourth Renewal Term, if applicable, by either party.NOW, THEREFORE in consideration of the premises and intending to be legally bound, the parties hereto promise, covenantand agree that the Lease be and is hereby amended as follows:1.TERM: The term of the Lease exclusive for the Building #3 Space is hereby extended for the third Renewal Term tocommence immediately following the expiration of the second Renewal Term. The expiration date of the term of the Lease for theBuilding #3 Space, as extended by the third Renewal Term, is hereby changed from 11:59 p.m. on March 31, 2010, to September 30,2010. 2. RENT: Tenant shall pay to Landlord as monthly rental for the Leased Premises the following amounts at the followingtimes:A.Tenant shall continue to pay to Landlord on the first (1st) day of each calendar month for the balance of thesecond Renewal Term to and including March 1, 2010, as monthly rental for the Leased Premises (i.e. Buildings18 and 18A, the Building 18 Expansion Space and the Building #3 Space) the amount of $38,942.23.B.Beginning on April 1, 2010, and on the first (1st) day of each succeeding calendar month thereafter for thebalance of the third Renewal Term to and including September 1, 2010, Tenant shall pay to Landlord as monthlyrental for the Leased Premises (i.e. Buildings 18 and 18A, the Building 18 Expansion Space and the Building #3Space) the amount of $38,942.23.C.In the event the third Renewal Term or fourth Renewal Term, whichever may be applicable, terminates orexpires for the Building #3 Space for whatever cause, beginning on the first (1st) day of the month followingthe termination or expiration of the third Renewal Term or fourth Renewal Term, whichever may be applicable,and on the first (1st) day of each calendar month thereafter during the Second Extended Term to and includingJune 1, 2011, Tenant shall pay to Landlord as monthly rental for the Leased Premises (i.e. Buildings 18 and 18Aand the Building 18 Expansion Space the amount of $28,916.13.D.Beginning on July 1, 2011, and on the first (1st) day of each calendar month thereafter for the balance of theSecond Extended Term, Tenant shall pay to Landlord as monthly rental for the Leased Premises (i.e. Building18 and 18A and the Building 18 Expansion Space) the amount of $31,997.49.The rentals under this paragraph 2 shall be payable in advance, without demand, deduction or set off. All rentals and other sumspayable as additional rental hereunder shall be paid to Landlord at 1300 Penn Avenue, P.O. Box 768, Pittsburgh, PA 15230- 0768 or atsuch other place or to such other person as may be designated by Landlord in writing.3. RENEWAL OPTION: Tenant shall have the right and option to extend the term of the Lease for the Building #3 Spaceonly for one (1) additional term of six (6) months (i.e. the fourth Renewal Term) to commence immediately following expiration of thethird Renewal Term. Tenant may exercise the right to extend the term of the Lease for the Building #3 Space only by delivering toLandlord written notice of Tenant’s exercise of such right no less than three (3) months prior to expiration of the third Renewal Term,time being of the essence. The terms and conditions of the third2Renewal Term shall continue in full force and effect for the fourth Renewal Term, and Tenant shall continue to pay to Landlord asmonthly rental for the Leased Premises (i.e. Buildings 18 and 18A, the Building 18 Expansion Space and the Building #3 Space) theamount of $38,942.23.Notwithstanding the above, if Tenant, itself or its affiliate is not in full possession of the Building #3 Space continually duringthe last three (3) months of the third Renewal Term and at the commencement of the fourth Renewal Term, Landlord may, at itsoption, terminate the Lease as to the Building #3 Space, as of the last day of the third Renewal Term.4. RIGHT OF TERMINATION: Provided the notifying party is not in default under the Lease, at any time during the thirdRenewal Term or the fourth Renewal Term, if applicable, Landlord or Tenant may, upon two (2) months advanced written notice to theother, terminate the third Renewal Term or fourth Renewal Term, whichever may be applicable, effective two (2) months after thedate of said notice and the third Renewal Term or fourth Renewal Term, whichever may be applicable, shall terminate as though suchdate was the scheduled termination date of the third Renewal Term or fourth Renewal Term, whichever may be applicable, and themonthly rental shall be adjusted as provided in paragraph 2C hereof. Further provided, monthly rental shall not be pro-rated should thetermination date under this paragraph 4 occur on a date other than the first (1st) day of a month.5. LANDLORD’S EXCULPATORY: Anything contained in the Lease to the contrary notwithstanding, Tenant agrees that itshall look solely to the estate and interests of the Landlord in the Property for the collection of any judgment (or other judicial process)requiring the payment of money by Landlord in the event of any default or breach by Landlord that arises or occurs after the day andyear first written above with respect to any of the terms, covenants and conditions of the Lease to be observed and/or performed byLandlord (a “Prospective Breach”), and with respect to a Prospective Breach, no other property or assets of Landlord or its stockholders,officers, employees, or partners or their respective heirs, legal representatives, successors and assigns shall become subject to levy,execution, attachment or other enforcement procedures for the satisfaction of Tenant’s remedies. The covenants, obligations andconditions on the part of Landlord under the Lease shall, as of the day and year first written above, not be covenants, obligations andconditions of the partners comprising Landlord individually; only the Property shall be subject to any liability of Landlord hereunder. Nopartner, whether individual, corporate, trust or partnership, shall be individually liable for a Prospective Breach of any covenant,obligation or condition of Landlord and no recourse shall be had against any assets of any partner or payment of any sums due orenforcement of any other relief based upon any claim made under the Lease for a Prospective Breach of any of Landlord’s covenants,obligations, or conditions, and Tenant does expressly release each such partner from any personal liability under the Lease relating tosuch a Prospective Breach. If the Property is transferred or conveyed, Landlord, its stockholders, officers, employees or partners ortheir respective heirs, legal representatives, successors and assigns shall be relieved of3all covenants and obligations under the Lease thereafter accruing and Tenant shall look to such transferee thereafter.6. ANTI-TERRORISM DISCLOSURE:A. Tenant certifies that to the best of Tenant’s knowledge and belief:1. Tenant is not in violation of any Anti-Terrorism Law;2. Tenant is not, as of the date hereof:a. conducting any business or engaging in any transaction or dealing with any Prohibited Person,including the making or receiving of any contribution of funds, goods or services to or for the benefit ofany Prohibited Person;b. dealing in or otherwise engaging in any transaction or dealing with any Prohibited Person, includingthe making or receiving of any contribution of funds, goods, or services to or for the benefit of anyProhibited Person;3. Tenant is not engaging in or conspiring to engage in any transaction that evades or avoids, or has the purposeof evading or avoiding, or attempts to violate any of the prohibitions set forth in, any Anti-Terrorism Law; and4. Neither Tenant nor any of its officers, directors, shareholders or members, as applicable, is a ProhibitedPerson.B. Tenant hereby agrees to defend, indemnify, and hold harmless Landlord from and against any and all claims, damages,losses, risks, liabilities, and expenses (including attorney’s fees and costs) arising from or related to any breach of the foregoingcertification.C. If at any time any of these representations becomes false, then it shall be considered a material default under the Lease.As used herein, “Anti-Terrorism Law” is defined as any law relating to terrorism, anti-terrorism, money-laundering or anti-money laundering activities, including without limitation, the United States Bank Secrecy Act, the United States Money LaunderingControl Act of 1985, Executive Order No. 13224, and Title 3 of the USA Patriot Act, and any regulations promulgated under any ofthem. As used herein “Executive Order No. 13224” is defined as Executive Order No. 13224 on Terrorist Financing effectiveSeptember 24, 2001, and relating to “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit,or Support Terrorism”, as may be amended from time to time. “Prohibited Person” is defined as (i) a person or entity that4is listed in the Annex to Executive Order No. 13224, or a person or entity owned or controlled by an entity that is listed in the Annex toExecutive Order No. 13224; (ii) a person or entity with whom Landlord is prohibited from dealing or otherwise engaging in anytransaction by any Anti-Terrorism Law; or (iii) a person or entity that is named as a “specially designated nation and blocked person” onthe most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website,htp://www.treas.gov/ofac/t11sdn.pdf or at any replacement website or other official publication of such list. “USA Patriot Act” is definedas the “United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001”(Public Law 107-56), as may be amended from time to time.7. BROKER: Landlord and Tenant each hereby warrants to the other that no real estate broker has been involved in thistransaction on its behalf and that no finder’s fees or real estate commissions have been earned by any third party. If either party breachesthe foregoing warranty, the breaching party shall indemnify, defend and hold harmless the other for any liability or claims forcommissions or fees, including reasonable attorneys’ fees and costs, arising from a breach of this warranty.WITNESS the due execution hereof on the day and year first written above.ATTEST:THE BUNCHER COMPANYBY:(SIGNATURE APPEARS HERE) BY:(SIGNATURE APPEARS HERE) Bernita Buncher Thomas J. Balestrieri Secretary President/CEO (Corporate Seal) ATTEST:HAEMONETICS CORPORATIONBY:(SIGNATURE APPEARS HERE) BY:(SIGNATURE APPEARS HERE) Name:(SIGNATURE APPEARS HERE) Name:(SIGNATURE APPEARS HERE) Title:(SIGNATURE APPEARS HERE) Title:(SIGNATURE APPEARS HERE) (Corporate Seal) 5[Graphic appears here]May 13, 2011Tel: 412/422-9900 Fax: 412/422-3900Real Estate GroupPenn Liberty Plaza I1300 Penn Avenue, Suite 300Pittsburgh, PA 15222-4211Mr. Sean M. TeaguePartnerFHO Partners1 International PlaceBoston, MA 02110RE: SEVENTH AMENDMENT TO AGREEMENT OF LEASE DATED MARCH 31, 2011 BY AND BETWEEN THE BUNCHER COMPANY, ASLANDLORD, AND HAEMONETICS CORPORATION, AS TENANT, AS AMENDED BY FIRST AMENDMENT TO AGREEMENT OF LEASEDATED APRIL 30, 1991, AS AMENDED BY SECOND AMENDMENT TO AGREEMENT OF LEASE DATED OCTOBER 18, 2000, ASAMENDED BY THIRD AMENDMENT TO AGREEMENT OF LEASE DATED MARCH 23, 2004, AS AMENDED BY FOURTH AMENDMENTDATED MARCH 12, 2008, AS AMENDED BY FIFTH AMENDMENT TO AGREEMENT OF LEASE DATED OCTOBER 1, 2008, AND ASAMENDED BY SIXTH AMENDMENT TO AGREEMENT OF LEASE DATED JULY 17, 1990 (COLLECTIVELY "THE LEASE") COVERINGBUILDINGS 18/18A AND 3 LOCATED IN BUNCHER COMMERCE PARK, LEETSDALE, PA (THE "LEASED PREMISES")Dear Mr. TeagueEnclosed are three (3) original counterparts of the above referenced Seventh Amendment to Agreement of Lease.Please have all three (3) counterparts signed and attested and then return same to our office. Upon execution by The Buncher Company, we will return one (1)Seventh Amendment to Agreement of Lease to you for your file.Should you have any questions regarding this matter, do not hesitate to give me a call.Very truly yours[Graphic appears here]Brian R. GoetzExecutive Vice President-Real Estate GroupSEVENTH AMENDMENT TO AGREEMENT OF LEASEMADE AS OF THE 31st DAY OF MARCH, 2011BY AND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having an office in the City of Pittsburgh, Allegheny County,PennsylvaniaANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of business in the City of Braintree,Norfolk County, MassachusettsWHEREAS, the parties hereto have entered into that certain Agreement of Lease dated July 17, 1990; as amended by First Amendment to Agreementof Lease dated April 30, 1991; by Second Amendment to Agreement of Lease dated October 18, 2000; by Third Amendment to Agreement of Lease datedMarch 23, 2004; by Fourth Amendment to Agreement of Lease dated March 12, 2008; by Fifth Amendment to Agreement of Lease dated October 1, 2008; andby Sixth Amendment to Agreement of Lease dated January 8, 2010 (hereinafter collectively called the "Lease"); along with the renewal letter dated June 8, 2010,exercising the renewal option for the Fourth Renewal Term pursuant to paragraph 3 of the Sixth Amendment to Agreement of Lease, covering certain propertyknown as Buildings 18 and 18A, the Building 18 Expansion Space, and a portion of Building 3 (the "Building #3 Space"), in the Buncher Commerce Park,Borough of Leetsdale, Allegheny County, Pennsylvania, and more particularly described in the Lease and called herein and therein the "Leased Premises;" andWHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Lease unless otherwise provided herein; andWHEREAS, the parties hereto desire to further amend the Lease to (i) extend the term for the Building #3 Space only for one (1) additional year (the"Fifth Renewal Term"), (ii) increase the monthly rental during the Fifth Renewal Term, (iii) provide for further extensions of the term of the Lease as to theBuilding #3 Space only, and (iv) establish Tenant's right to terminate the Lease with respect to the Building #3 Space only during the Fifth Renewal Term.NOW, THEREFORE in consideration of the premises and intending to be legally bound, the parties hereto promise, covenant and agree that theLease be and is hereby amended as follows:1. TERM: The term of the Lease as it applies to the Building #3 Space only is hereby extended for the Fifth Renewal Term to commence immediatelyfollowing the expiration of the Fourth Renewal Term. The expiration date of the term of the Lease for the Building #3 Space only, as extended by the FifthRenewal Term, is hereby changed from March 31, 2011, to March 31, 2012.2. RENT: Tenant shall pay to Landlord as monthly rental for the Leased Premises the following amounts at the following times:A.Tenant shall continue to pay to Landlord on the first (1st) day of each calendar month for the balance of the Fourth Renewal Term,to and including June 1, 2011, as monthly rental for the Leased Premises (i.e. Buildings 18 and 18A, the Building 18 ExpansionSpace and the Building #3 Space), the amount of $38,942.23.B.Beginning on July 1, 2011, and on the first (1st) day of each succeeding calendar month thereafter to and including March 1,2012, Tenant shall pay to Landlord as monthly rental for the Leased Premises (i.e. Buildings 18 and 18A, the Building 18Expansion Space and the Building #3 Space) the amount of $42,023.59.C.In the event the Fifth Renewal Term terminates or expires for the Building #3 Space for whatever cause, beginning on the first (1st)day of the month following the termination or expiration of the FifthRenewal Term, and on the first (1st) day of each calendar month thereafter during the balance of Second Extended Term, Tenantshall pay to Landlord as monthly rental for the Leased Premises (i.e. Buildings 18 and 18A and the Building 18 ExpansionSpace) the amount of $31,997.49.The rentals under this paragraph 2 shall be payable in advance, without demand, deduction or set off. All rentals and other sums payable asadditional rental under the Lease shall be paid to Landlord at 1300 Penn Avenue, P.O. Box 768, Pittsburgh, PA 15230-0768 or at such other place or to suchother person as may be designated by Landlord in writing.3. RENEWAL OPTION: Provided Tenant has not terminated the Lease pursuant to paragraph 4 of this Seventh Amendment to Agreement of Lease,Tenant shall have the right and option to extend the term of the Lease for the Building #3 Space only for two (2) consecutive terms of one (1) year each (the"Sixth Renewal Term" and the "Seventh Renewal Term," respectively). The Sixth Renewal Term shall commence immediately following expiration of the FifthRenewal Term, and the Seventh Renewal Term shall commence immediately following expiration of the Sixth Renewal Term, if2applicable. So long as Tenant is not in default of the Lease, Tenant may exercise the right to extend the term of the Lease for the Sixth Renewal Term andSeventh Renewal Term only by delivering to Landlord written notice of Tenant's exercise of such right no less than three (3) months prior to the expiration ofthe extant renewal term, time being of the essence. The terms and conditions of the Fifth Renewal Term shall continue in full force and effect for the SixthRenewal Term and the Seventh Renewal Term, if applicable, except that the monthly rental for the Leased Premises during the Sixth Renewal Term and theSeventh Renewal Term, if applicable, shall be $42,259.50.Notwithstanding the above, if Tenant, itself or its affiliate or subsidiary is in default under the Lease or is not in full possession of the Building #3Space continuously during the last three (3) months of the Fifth Renewal Term or the Sixth Renewal Term, whichever is applicable, and at the commencementof the applicable renewal term, Landlord may, at its option, terminate the Lease as to the Building #3 Space only, as of the last day of the Fifth Renewal Termor the Sixth Renewal Term, whichever is applicable.4. RIGHT OF TERMINATION: Tenant shall have the right and option to terminate the Lease and the term thereof as to the Building #3 Space only,effective November 30, 2011. To exercise said right, and as conditions precedent to such termination, Tenant shall i) notify Landlord in writing of its intent toterminate no later than September 1, 2011, time being of the essence; ii) pay to Landlord as a termination fee and not as a penalty the amount of $1,229.22,on the first day of the calendar month immediately following the date of the notice, and iii) not be in default of the Lease. Said termination fee is in addition tothe monthly rental due under the Lease. If the notice is duly given, the termination fee is paid as aforesaid, and Tenant is not in default under the Lease, theLease and the term thereof, as to the Building #3 Space only, shall terminate on November 30, 2011, as though such date was the scheduled termination dateof the Lease for the Building #3 Space, and the Lease for Buildings 18 and 18A and the Building 18 Expansion Space shall remain in full force and effect.5. BROKER: Except as provided below, Landlord and Tenant each hereby warrants to the other that no real estate broker has been involved in thistransaction on its behalf and that no finder's fees or real estate commissions have been earned by any third party. Tenant hereby agrees to indemnify Landlordand Landlord hereby agrees to indemnify Tenant for any liability or claims for commissions or fees arising from a breach of this warranty by it. The only realestate broker involved in this transaction is FHO Partners whose commission or fee with respect to this transaction shall be paid by Landlord in accordancewith that certain letter to Mr. Sean M. Teague dated March 1, 2011.36. Except as amended and supplemented hereby, all terms and conditions of the Lease shall remain in full force and effect.WITNESS the due execution hereof on the day and year first written above.ATTEST: THE BUNCHER COMPANY By: By: Bernita Buncher Thomas J. Balestrieri Secretary President/CEO ATTEST: HAEMONETICS CORPORATION By:[Graphic appears here] By:[Graphic appears here]Name:[Graphic appears here] Name:[Graphic appears here]Title:[Graphic appears here] Title:[Graphic appears here]4Tel: 412/422-9900Fax: 412/422-1298(Graphics appears hear)Penn Liberty Plaza I1300 Penn Avenue, Suite 300Pittsburgh, PA 15222-4211February 26, 2013Mr. James MclnernyDirector of Real EstateHAEMONETICS CORPORATIONS400 Wood RoadBraintree, MA 02184RE:EIGHTH AMENDMENT TO AGREEMENT OF LEASE DATED MARCH 31, 2011 BY AND BETWEEN THEBUNCHER COMPANY, AS LANDLORD, AND HAEMONETICS CORPORATION, AS TENANT, AS AMENDED BYFIRST AMENDMENT TO AGREEMENT OF LEASE DATED APRIL 30, 1991, AS AMENDED BY SECONDAMENDMENT TO AGREEMENT OF LEASE DATED OCTOBER 18, 2000, AS AMENDED BY THIRDAMENDMENT TO AGREEMENT OF LEASE DATED MARCH 23, 2004, AS AMENDED BY FOURTH AMENDMENTDATED MARCH 12, 2008, AS AMENDED BY FIFTH AMENDMENT TO AGREEMENT OF LEASE DATEDOCTOBER 1, 2008, AS AMENDED BY SIXTH AMENDMENT TO AGREEMENT OF LEASE DATED JULY 17, 1990,AS AMENDED BY SEVENTH AMENDMENT TO AGREEMENT OF LEASE DATED MARCH 31, 2011, AND ASAMENDED BY LETTER AGREEMENT DATED JANUARY 27, 2012 (COLLECTIVELY “THE LEASE”) COVERINGBUILDINGS 18/18A AND 3 LOCATED IN BUNCHER COMMERCE PARK, LEETSDAIJE, PA (THE “LEASEDPREMISES”)Dear Mr. TeagueEnclosed is one (1) fully executed original of the above referenced Eighth Amendment to Agreement of Lease. We retained two (2)signed originals for our files.Thank you for your cooperation in finalizing this transaction.Should you have any questions regarding this matter, do not hesitate to give me a call.Very truly yours(Graphics appears hear)Brian R. GoetzExecutive Vice President-Real Estate GroupBRG/adhEnclosureEIGHTH AMENDMENT TO AGREEMENT OF LEASEDATED THIS ____ DAY OF ________________, 2013BYAND BETWEENTHE BUNCHER COMPANY, as Landlord, a Pennsylvania corporation having an office in the City of Pittsburgh, AlleghenyCounty, PennsylvaniaANDHAEMONETICS CORPORATION, as Tenant, a Massachusetts corporation having its principal place of business in the Cityof Braintree, Norfolk County, MassachusettsWHEREAS, the parties hereto have entered into that certain Agreement of Lease dated July 17, 1990; as amended by FirstAmendment to Agreement of Lease dated April 30, 1991; by Second Amendment to Agreement of Lease dated October 18, 2000; byThird Amendment to Agreement of Lease dated March 23, 2004; by Fourth Amendment to Agreement of Lease dated March 12, 2008;by Fifth Amendment to Agreement of Lease dated October 1, 2008; by Sixth Amendment to Agreement of Lease dated January 8,2010; by Seventh Amendment to Agreement of Lease dated March 31, 2011; and by letter agreement dated January 27, 2012(hereinafter collectively called the “Lease”); along with the renewal letter dated June 8, 2010, exercising the renewal option for theFourth Renewal Term pursuant to paragraph 3 of the Sixth Amendment to Agreement of Lease, covering certain property known asBuildings 18 and 18A, the Building 18 Expansion Space, and a portion of Building 3 (the “Building #3 Space”), in the BuncherCommerce Park, Borough of Leetsdale, Allegheny County, Pennsylvania, and more particularly described in the Lease and calledherein and therein the “Leased Premises;” andWHEREAS, all terms defined in the Lease and used herein shall have the same meaning herein as in the Lease unlessotherwise provided herein; andWHEREAS, the parties hereto desire to further amend the Lease to (i) extend the term for the Building #3 Space only forone (1) additional year (the “Seventh Renewal Term”), (ii) establish the monthly rental during the Seventh Renewal Term, and (iii)establish Tenant’s right to terminate the Lease with respect to the Building #3 Space only during the Seventh Renewal Term.NOW, THEREFORE in consideration of the premises and intending to be legally bound, the parties hereto promise, covenantand agree that the Lease be and is hereby amended as follows:1. TERM: The term of the Lease as it applies to the Building #3 Space only is hereby extended for the Seventh RenewalTerm to commence immediately followingthe expiration of the Sixth Renewal Term. The expiration date of the term of the Lease for the Building #3 Space only, as extended bythe Seventh Renewal Term, is hereby changed from March 31, 2013, to March 31, 2014.2. RENT: Tenant shall pay to Landlord as monthly rental for the Leased Premises the following amounts at the followingtimes:A.Tenant shall, for the balance of the Sixth Renewal Term, during the Seventh Renewal Term, and for thebalance of the Second Extended Term continue to pay to Landlord on the first (1st) day of each calendar monthto and including March 1, 2014, as monthly rental for the Leased Premises (i.e. Buildings 18 and 18A, theBuilding 18 Expansion Space and the Building #3 Space), the amount of $42,259.50.B.In the event the term of the Lease terminates or expires for the Building #3 Space only for whatever cause,beginning on the first (1st) day of the month following the termination or expiration of the term of the Lease forthe Building #3 Space only, and on the first (1st) day of each calendar month thereafter during the balance ofSecond Extended Term, Tenant shall pay to Landlord as monthly rental for the Leased Premises, excluding theBuilding #3 Space (i.e. Buildings 18 and 18A and the Building 18 Expansion Space) the amount of $31,997.49.The rentals under this paragraph 2 shall be payable in advance, without demand, deduction or set off. All rentals and othersums payable as additional rental under the Lease shall be paid to Landlord at 1300 Penn Avenue, P.O. Box 768, Pittsburgh, PA 15230-0768 or at such other place or to such other person as may be designated by Landlord in writing.3. RIGHT OF TERMINATION: Tenant shall have the right and option to terminate the Lease and the term thereof as to theBuilding #3 Space only, effective September 30, 2013. To exercise said right, and as conditions precedent to such termination, Tenantshall i) notify Landlord in writing of its intent to terminate no later than July 31, 2013, time being of the essence; and ii) not be in defaultof the Lease. If the notice is duly given and Tenant is not in default under the Lease, the Lease and the term thereof, as to the Building#3 Space only, shall terminate on September 30, 2013, as though such date was the scheduled termination date of the Lease for theBuilding #3 Space, and the Lease for Buildings 18 and 18A and the Building 18 Expansion Space shall remain in full force and effect.4. BROKER: Except as provided below, Landlord and Tenant each hereby warrants to the other that no real estate brokerhas been involved in this transaction on its behalf and that no finder’s fees or real estate commissions have been earned by any thirdparty. Tenant hereby agrees to indemnify Landlord and Landlord hereby agrees toindemnify Tenant for any liability or claims for commissions or fees arising from a breach of this warranty by it. The only real estatebroker involved in this transaction is Cassidy Turley Commercial Real Estate Services, whose commission or fee with respect to thistransaction shall be paid by Landlord in accordance with that certain letter to Mr. Sean M. Teague dated January 8, 2013.5. Except as amended and supplemented hereby, all terms and conditions of the Lease shall remain in full force and effect.WITNESS the due execution hereof on the day and year first written above.ATTEST: THE BUNCHER COMPANYBy:(Graphics appears hear) By:(Graphics appears hear) Bernita BuncherSecretary Thomas J. BalestrieriPresident / CEO(Corporate Seal)ATTEST: THE BUNCHER COMPANYBy:(Graphics appears hear) By:(Graphics appears hear)Name:(Graphics appears hear) Name:(Graphics appears hear)Title:(Graphics appears hear) Title:(Graphics appears hear)(Corporate Seal)CONVENIO MODIFICATORIO ACONTRATO DE ARRENDAMIENTOCONVENIO MODIFICATORIO A CONTRATO DEARRENDAMIENTO QUE CELEBRAN BBVA BANCOMERSERVICIOS, S.A. EN SU CARACTER DE FIDUCIARIO DELFIDEICOMISO “SUBMETROPOLI DE TIJUANA” REPRESENTADOEN ESTE ACTO POR SENOR FERNANDO SILVESTRE LLAMASFIERRO Y EL SENOR GABRIEL LEON PENA (A QUIENES EN LOSUCESIVO SE LE DENOMINARA EL “ARRENDADOR”) YENSATEC, S.A. DE C.V., REPRESENTADA EN ESTE ACTO POREL SENOR HECTOR M. MACHADO B. (A QUIEN EN LOSUCESIVO SE LE DENOMINARA EL “ARRENDATARIO”), CONLA PARTICIPACION DE GE REAL ESTATE MEXICO, S. DE R.L. DEC.V., REPRESENTADA EN ESTE ACTO POR EL LIC. FEDERICORIOS PATRON, Y DE PALL CORPORATION, REPRESENTADA PORLOS SENORES ROBERTO PEREZ Y ROGER ROBERTS DECONFORMIDAD CON LAS SIGUIENTES DECLARACIONES YCLAUSULAS:AMENDMENT TO LEASE AGREEMENTAMENDMENT TO LEASE AGREEMENT ENTERED INTO BY ANDBETWEEN BBVA BANCOMER SERVICIOS, S.A. AS TRUSTEEOF THE “SUBMETROPOLI DE TIJUANA” TRUST, REPRESENTEDHEREIN BY MR. FERNANDO SILVESTRE LLAMAS FIERRO ANDMR. GABRIEL LEON PENA (HEREINAFTER REFERRED TO AS“LESSOR”), AND BY ENSATEC, S.A. DE C.V., REPRESENTEDHEREIN BY MR. HECTOR M. MACHADO B., (HEREINAFTERREFERRED TO AS “LESSEE”) WITH THE PARTICIPATION OF GEREAL ESTATE MEXICO, S. DE R. L. DE C.V., REPRESENTEDHEREIN BY MR. FEDER1CO RIOS PATRON, AND OF PALLCORPORATION, REPRESENTED HEREIN BY MR, ROEERTO PEREZAND ROGER ROBERTS, PURSUANT TO THE FOLLOWINGRECITALS AND CLAUSES:DECLARACIONES:Las partes declaran por conducto de sus representantes correspondientes:1Que con fecha 21 de febrero de 2000, el ARRENDADOR y elARRENDATARIO celebraron un Contrato de Arrendamiento cuyo objetoes la nave industrial y las mejoras accesorias ubicadas en la Calle Colinas#11730 del Fraccionamiento Parque Industrial El Florido, SeccionColinas, Delegacion La Presa. en esta ciudad de Tijuana, Baja California,Mexico (en lo sucesivo el “Contrato de Arrendamiento”)RECITALS:The parties, through their representatives, state:1That on February 21, 2000, the LESSOR and the LESSEE entered into aLease Agreement in connection with the industrial building and certainimprovements located at Calle Colinas #11730 of Parque Industrial ElFlorido Seccion Colinas, Delegacion La Presa, in the City of Tijuana,Baja California, Mexico (hereinafter referred as the “Lease Agreement”).12.Que el termino del Contrato de Arrendamiento es de diez (10) anos.3Que la Fecha de Inicio del Arrendamiento, segun convinieron las partescontratantes, quedó fijada como el dia 31 de julio de 2000, motivo por elcual se estableció esa como la fecha de inicio de los diez anos de términodel arrendamiento, el cual concluye 30 de julio de 20104.Que es voluntad del ARRENDADOR y del ARRENDATARIO celebrar elpresente convenio modificatorio del Contrato de Arrendamiento, y que GEREAL ESTATE MEXICO, S. DE R.L. DE C.V. y PALLCORPORATION están de acuerdo en que se celebre la modificación deconformidad con el clausulado siguiente.5.Que las personas que intervienen en el presente convenio modiflcatoriocuentan con Ia capacidad legal necesaria para representar a susmandantes, y que dicha capacidad no les ha sido limitada de maneraalguna.Habiendo declarado lo anterior, las partes convienen y se obligan en losterminos de 1as siguientes:2.That the term of the Lease Agreement is of ten (10) years.3That the Lense Commencement Date, as agreed by the contracting parties,was set to be July 31, 2000, reason for which the ten year term of the leaseexpires on July 30, 2010.4,That it is the will of the LESSOR and the LESSEE to enter into thisamendment agreement to the Lease Agreement, ard that GE REALESTATE MEXICO, S. DE R.L DE C.V. and PALL CORPORATIONagree that the amendment be made in accordance with the followingclauses.5.That the individuals signing this amendment agreemeit have sufficientlegal authority to represent their principals, and that such legal authorityhas not been limited in any way.Having stated the foregoing, the parties agree and submit themselves to theterms of the following:CLAUSULAS:PRIMERA. PRÔRROGA. El ARRENDADOR y el ARRENDATARIO convienen en prorrogar la vigencia del Contrato de Arrendamiento hasta el dia 15(quince) de agosto del ano 2011 (dos mil once); es decir, el Contrato de Arrendamiento continuara vigente hasta el dia 15 (quince) de agosto del ano 2011 (dosmil once), salvo que el ARRENDATARIO haga uso del derecho de prorroga que le concede el parrafo 6.2. del Contrato de Arrendamiento, o que el mismo fuerarescindido o terminado anticipadamente en los terminos del mismo.CLAUSES:FIRST. EXTENSION AUTHORIZATION. The LESSOR and the LESSEE agree to extend the term of the Lease Agreement up to August 15 (fifteen) ofyear 2011 (two thousand eleven); that is, the Lease Agreement will continue to be in effect until August 15 (fifteen)2of year 2011 (two thousand eleven), unless the LESSEE exercises its right to further extend the life of the lease granted under paragraph 6.2 of the LeaseAgreement, or that the lease be rescinded or early terminated under the terms thereof.3SEGUNDA. RESTO DEL CONTRATO DE ARRENDAMIENTO.Las partes convienen que todas aquellas disposiciones del Contrato deArrendamiento distintas a las mencionadas en la cláusula inmediata anteriory que no hayan sido expresamente modificadas en el presente convenio,continuarán inalteradas y en plena vigencia, salvo aquellas que por mediode otros convenios escritos hayan sido modificadas por las partes.TERCERA. CONSENTIMIENTO DE GE REAL ESTATEMEXICO, S. DE R.L. DE C.V. Y DE PALL CORPORATION.Mediante la firma de sus representantes o apoderados, tanto GE REALESTATE MEXICO, S. DE R.L. DE C.V. y PALL CORPORATIONmanifiestan su conformidad y autorización para la celebración del presenteconvenio modificatorio y la consecuente prórroga del término de vigencia delContrato de Arrendamiento.CUARTA. IDIOMA. El presente convenio modificatorio se redacta en losidiomas Espanol e Inglés para facilitar la referencia de las partesparticipantes; sin embargo, estas convienen que en caso de discrcpanciaentre ambas versiones, sera la redactada en idioma Espanol la queprevalezca.QUINTA. LEY APLICABLE Y JURISDICCION. Las partesconvienen que el presente convenio debera ser interpretado de conformidadcon lo dispuesto por las leyes aplicables del Estado de Baja California. Porotro lado, ambas partes acuerdan en someter la interpretacion y ejecucion delpresente contrato a la jurisdiccion de los tribunals competentes en la ciudadde Tijuana, Baja California, Mexico, renunciando en forma expresa acualquier fuero que pudiera corresponderles por razon de sus domiciliospresentes o futuros, o por cualquier otra razon.SECOND. REST OF THE LEASE AGREEMENT. The parties agreethat all the provisions of the Lease Agreement not mentioned in the precedingclause and that have not been expressly modified in this amendmentagreement, shall continue unaltered and in full force, save for those thathave been previously modified by the parties through other writtenamendment agreements.THIRD. CONSENT OF GE REAL ESTATE MEXICO. S. DE R.L.DE C.V. AND OFF PALL CORPORATION. With the execution hereofby the representatives or attorneys-in-fact of GE REAL ESTATE MEXICO,S. DE R.L. DE C.V. and PALL CORPORATION, both entities express theirconformity with and authorization of this amendment agreement and theconsequent extension of the term of the Lease Agreement.FOURTH. LANGUAGE. This amendment agreement is written in theSpanish and English languages to facilitate the reference of all partiesinvolved; however, all parties agree that in the event of discrepancy betweenboth versions, the Spanish version shall prevail.FIFTH, GOVERNING LAW AND JURISDICTION. The parties agreethat this agreement shall be interpreted in accordance with the applicablelaws for the State of Baja California. Also, the parties agree to submit theinterpretation and enforcement of this agreement to the jurisdiction of thecompetent courts in the City of Tijuana, Baja California, Mexico, expresslywaiving any other forum they may otherwise be entitled to by reason of theirpresent or future domiciles or for any other reason.45EN TESTIMONIO DE LO CUAL, ambas partes celebran y firman elpresente convenio modificatorio el dia 25 de julio de 2008, ante dos testigosque tambien lo firman.IN WITNESS WHEREOF, the parties execute and sign this amendmentagreement on July 25, 2008, in the presence of two witnesses who also signit.6“ARRENDADOR” / “LESSOR”BBVA BANCOMER SERVICIOS, S.A.F1DUCIARIO DEL FIDEICOMISO “SUBMETROPOLI DE TIJUANA” Por / By: Fernando Silvestre Llamas FierroPor / By: Gabriel Leon Pena“ARRENDATARIO” / “LESSEE”ENSATEC, S.A. DE C.V.Por / By: Héctor M. Machado B.GE REAL ESTATE MEXICO,S. DE R.L. DE C.V.Por / By: Federico Rios PatronPALL CORPORATION[GRAPHIC APPERS HERE][GRAPHIC APPERS HERE] Por / By: Roberto PerezPor /By: Roger Roberts TESTIGOS / WITNESSES Nombre:Nombre:7AGREEMENT (THE “AGREEMENT”) WITH EFFECTIVE DATE OF AUGUST 14, 2011, ENTERED INTO BY PARTY OF THEFIRST PART PROCADEF 1, S.A.P.I. DE C.V., HEREINAFTER REFERRED TO AS THE “LESSOR,” REPRESENTED IN THIS ACTBY DR. GEORGINA SERRANO CUEVAS AND MR. JOSÉ LUIS NORIEGA BALCÁRCEL, AND PARTY OF THE SECOND PARTENSATEC, S.A. DE C.V., HEREINAFTER REFERRED TO AS THE “LESSEE,” REPRESENTED IN THIS ACT BY MR. HÉCTORMACHADO BARRAZA, ENGINEER, WITH THE APPEARANCE OF PALL CORPORATION, REPRESENTED IN THIS ACT BY MR.ROBERT KUHBACH AND MR. JAMES PORRETTO, AND OF FC2010, S.A. DE C.V., HEREINAFTER REFERRED TO AS “FC,”REPRESENTED IN THIS ACT BY DR. GEORGINA SERRANO CUEVAS AND MR. JOSÉ LUIS NORIEGA BALCÁRCEL, INACCORDANCE WITH THE FOLLOWING STATEMENTS AND CLAUSES:STATEMENTS:The parties to this agreement state and certify as follows:1.On February 21, 2000, BBVA BANCOMER SERVICIOS, S.A., in its capacity as Trustee of the “Submetrópoli de Tijuana” Trust and theLESSEE entered into a Lease Contract in relation to the industrial unit and ancillary improvements located at Calle Colinas 11730,Fraccionamiento Parque Industrial El Florido, Sección Colinas, Delegación La Presa, Tijuana, Baja California, Mexico. 2.Paragraph 6.2 of Clause Six of the lease contract mentioned in Statement 1 above, sets out the following exact wording: “6.2 The Lesseeshall have the right to renew the Lease Terms for two consecutive periods of 5 years each. The Lessee shall exercise its rightto extend the Lease Terms by written notice delivered to the Lessor at the domicile indicated in this contract at least six (6)months before expiration of the Lease Terms, or of the first renewal of five (5) years. In order to exercise its right to extendthe contract, the Lessee must be in compliance with this contract.” 3.Several agreements have been entered into related to the lease contract mentioned in Statement 1 above. 4.The lease contract mentioned in Statement 1 above, as amended to date, shall hereinafter be referred to as the “Lease Contract.” 5.The LESSOR is the current holder of the rights and obligations as lessor under the Lease Contract and FC is the owner of the building beingleased to the LESSEE in the Lease Contract. 6.Dr. Georgina Serrano Cuevas and Mr. José Luis Noriega Balcárcel declare under oath that they have sufficient powers to represent theLESSOR and FC in the signature of the present Agreement. 7.Mr. Héctor Machado Barraza, Engineer, states that he proves that he has sufficient powers to represent the LESSEE in the signature of thepresent Agreement with the documentation attached hereto as a copy in Annex “A.”[signatures]8.Mr. Robert Kuhbach and Mr. James Porreto state that they prove that they have sufficient powers to represent PALL CORPORATION in thesignature of the present Agreement with the documentation attached hereto as a copy in Annex “B.” 9.The undersigned state that the power of attorney with which each of them is appearing in order to sign this Agreement has not been revokedor limited in any way. 10.Clause One of the Amending Agreement to the Lease Contract dated July 25 (twenty-five), 2008 (two thousand eight) was entered into withthe following exact wording: “ONE. EXTENSION. The LESSOR and the LESSEE agree to extend the effective period of theLease Contract until August 15, (fifteen), 2011 (two thousand eleven); that is to say, the Lease Contract shall remain ineffect until August 15, (fifteen), 2011 (two thousand eleven), unless the LESSEE exercises its right of extension grantedunder paragraph 6.2 of the Lease Contract, or the said contract is rescinded or terminated early in the terms thereunder.” 11.Prior to the signature of this instrument and in accordance with paragraph 6.2 of Clause Six of the Lease Contract and Clause One of theAmending Agreement to the Lease Contract dated July 25, (twenty-five), 2008 (two thousand eight), the LESSEE informed the LESSORof its intention to exercise the first renewal period of the Lease Terms. 12.The parties to this Agreement state that they have agreed to extend the effective period of the Lease Contract in accordance with the terms andconditions set out herein.Now therefore, the parties agree to the following:CLAUSES:ONE. Extension of the Lease Contract. The LESSOR and the LESSEE hereby agree to extend the effective period of the Lease Contract so thatit will remain effective until August 16 (sixteen), 2018 (two thousand eighteen). In light of the foregoing, the parties to this Agreement state andcertify that the Lease Terms shall continue to remain in effect until August 16 (sixteen), 2018 (two thousand eighteen), on which date the effectiveperiod of the said Lease Contract shall cease, unless it is extended or renewed for an additional period of five (5) years in accordance with paragraph6.2 of the Lease Contract, or rescinded or terminated early by the LESSOR in accordance with the terms thereunder.TWO. Extension Option. For all appropriate legal purposes, the LESSOR and the LESSEE state and certify that the present Agreement is enteredinto as a result of the LESSEE’s exercise of its first right to extend[signatures] 2the Lease Terms mentioned in paragraph 6.2 of Clause Six of the Lease Contract, with it being agreed that the said first renewal shall be for a periodof seven (7) years instead of the five (5) years agreed in the said Clause of the Lease Contract and therefore, the LESSEE shall only have the right toextend the effective period of the Lease Contract based on the provisions set out in paragraph 6.2 of Clause Six of the said Lease Contract for asingle additional period of five (5) years. Notwithstanding the provisions set forth in paragraph 6.2 of Clause Six of the Lease Contract, the partieshereby agree that the agreed term shall not be extendable, and therefore the LESSEE hereby waives the benefits granted in Article 2359 of the CivilCode for the State of Baja California.THREE. Waiver of the pre-emptive right and the right of first refusal. The LESSEE, as of the signature of the present Agreement, waives itspre-emptive right and the right of first refusal referred to in Article 2321 of the Civil Code for the State of Baja California. Furthermore, theLESSEE hereby agrees that the legitimate owner of the building under the Lease Contract, as well as whoever assumes that capacity in the future,shall be authorized to sell, assign, or in any other way freely transfer the ownership of the building under the Lease Contract.FOUR. Rent. With regard to the extension referred to in Clause One above, the LESSOR and the LESSEE agree that the monthly rent under theLease Contract effective as of August 16 (sixteen), 2011 (two thousand eleven) till July 30 (thirty), 2012 (two thousand twelve) shall be for anamount of US$ 24,953.60 (twenty-four thousand nine hundred fifty-three US dollars 60/100, legal tender of the United States of America) permonth, plus the amount corresponding to Value Added Tax.In addition, it is understood and agreed between the LESSOR and the LESSEE that the monthly rent during the agreed extension period shall becumulatively increased from August 1 (one), 2012 (two thousand twelve) by 3% (three percent) for each period of 12 (twelve) months. In otherwords, the rent for each month in the period from August 1 (one), 2012 (two thousand twelve) to July 30 (thirty), 2013 (two thousand thirteen)shall be for an amount of $25,702.20 (twenty-five thousand seven hundred and two US dollars 20/100 legal tender of the United States of America)per month, plus the amount corresponding to Value Added Tax, and this amount shall be increased cumulatively in the following twelve-month periodand for the subsequent twelve-month periods by 3% (three percent) for each twelve-month period.FIVE. Assignment of the Lease Contract and Cancellation of Guarantee 2000. By entering into the Agreement, the LESSOR authorizes theLESSEE to assign to Pall Mexico Manufacturing, S. de R. L. de C.V., all its rights and obligations as lessee in the Lease Contract, as long as PallCorporation issues and delivers a Guarantee to the LESSOR, in the terms established in the document attached as Annex “C” (the “Guarantee”).The LESSOR and the LESSEE agree that the said assignment shall take effect immediately after: (i) the LESSOR and Pall Mexico Manufacturing,S. de R. L. de C.V. has notified the LESSOR in writing that the said assignment has been performed and (ii) Pall Corporation has signed anddelivered the guarantee to the LESSOR.[signatures] 3The LESSOR and the LESSEE agree that it will not be necessary to obtain any other authorization from the LESSOR in order for the saidassignment to take effect, and that as of the date on which the said assignment takes effect, the LESSOR shall, where appropriate, release Ensatec,S.A. de C.V. from the fulfillment of any obligation derived from the Lease Contract, whereupon such release cannot be revoked, limited, or modifiedin any way, thus granting it the fullest settlement permitted by law.Furthermore, the LESSOR agrees that as soon as Pall Corporation has delivered the Guarantee, the guarantee that Pall Corporation entered into in themonth of February 2000, a copy of which is attached as Annex “D” (the “Guarantee 2000” shall be immediately and automatically cancelled, thusreleasing Pall Corporation as of delivery of the Guarantee from any obligation derived from the Guarantee 2000.SIX. Consent of Pall Corporation. By signing this Agreement, Pall Corporation states and ratifies its authorization and consent, as guarantor of theLESSEE, in relation to the signature of the present Agreement and consequent extension of the effective period of the Lease Contract.SEVEN. Consent of FC2010, S.A. de C.V. By signing this Agreement, FC states and certifies its authorization and consent in relation to the termsestablished in this Agreement, thus undertaking to observe those terms in their entirety in the event that the usufruct on the building in favor of theLESSOR ends before the commitments agreed in this Agreement and in the Lease Contract, and agrees to bind any assignee or new owner of the saidbuilding to comply with the terms established in this Agreement and in the Lease Contract in the event that the ownership of the said building istransferred.EIGHT. Domiciles. For the purposes of this Agreement and of the Lease Contract, the parties indicate the following as their domiciles to hear andreceive all types of notifications and notices, even those of a personal nature, including summons:THE LESSOR: Paseos de los Héroes 9188, Piso 5, Zona Urbana Río Tijuana, Tijuana, Baja California, Mexico.THE LESSEE: Calle Colinas 11730 del Fraccionamiento Parque Industrial El Florido, Sección Colinas, Delegación La Presa, Tijuana, BajaCalifornia, Mexico.PALL CORPORATION: 2200 Northern Boulevard, East Hills, New York 11458-1289, USA.FC: Paseos de los Héroes 9188, Piso 5, Zona Urbana Río Tijuana, Tijuana, Baja California, Mexico.[signatures] 4NINE.- Statements. The parties agree that the statements in this Agreement are an integral part of the terms and conditions herein, and therefore aredeemed to be incorporated herein by reference.TEN.- Scope. The parties agree and acknowledge that the present Agreement is an integral part of the Lease Contract, and are thus subject to all itsterms and conditions since they do not object to the content herein.LESSORPROCADEF 1, S.A.P.I. DE C.V.[signature] [signature]Dr. Georgina Serrano Cuevas Mr. José Luis Noriega BalcárcelAttorney in fact Attorney in factLESSEEENSATEC, S.A. DE C.V. PALL CORPORATION[signature] [signature]Mr. Héctor Machado Barraza, Engineer Mr. Robert Kuhbach[signature] Mr. James PorrettoFC2010, S.A. DE C.V.[signature] [signature]Dr. Georgina Serrano Cuevas Mr. José Luis Noriega BalcárcelAttorney in fact Attorney in factWITNESSES______________________ _____________________5[initials]14 de Agosto de 2011/August 14 2011Pall Mexico Manufacturing, S. de R.L. de C.V.Calle Colinas 11730,Fraccionamiento Parque Industrial El Florido,Seccion Colinas, Delegacion La Presa,Tijuana, Baja California, Mexico Atencion/Attention: Lic. Leobardo Tenorio Malof Estimado/Dear Lic. Tenorio: En nombre y representacion de PROCADEF 1 SAP.I. de C.V.("PROCADEF") y de FC2010, S.A. de C.V. ("FC"), senalando ambassociedades como domicilio para oir y recibir todo tipo de notificaciones elubicado en Paseo de los Heroes 9188, Piso 5, Zona Urbana Rio Tijuana, enTijuana, Baja California, Mexico, por medio de la presente hacemos constarlo siguiente: On behaIf of PROCADEF 1 S.A.P.I. de C.V. ("PROCADEF") andFC2010, S,A. de C.V. ("FC"), stating as their domicile to hear and receiveall types of notices the one located at Paseo de los Heroes 9188, Piso 5,Zona Urbana Rio Tijuana, in Tijuana, Baja California, Mexico, wehereby would like to confirm the following:En relation con la nave industrial y mejoras accesorias ubicadas en CalleColinas 11730, del Fraccionamiento Parque Industrial El Florido, SeccionColinas, Delegacion La Presa, en Tijuana, Baja California, Mexico (el"Inmueble"), la cual es objeto de cierto Contrato de Arrendamiento de fecha21 de febrero del ano 2000, FC en su caracter de nudo propietario delInmueble, y PROCADEF en su caracter de actual arrendador bajo el mismo,de conformidad con el articulo 2321 y demas disposiciones aplicables delCodigo Civil de Baja California, en este acto otorgamos a favor de PallMexico Manufacturing, S. de R,L. de C.V., sus filiales y subsidiarias (enconjunto "Pall"), el derecho del tanto para adquirir el Inmueble en caso deque se desee vender el Inmueble a cualquier tercero. With regard to the industrial building and improvements located at CalleColinas 11730, in Fraccionamiento Parque Industrial EI Florido, SeccionColinas, Delegacion La Presa, in Tijuana, Baja California, Mexico (the"Real Property"), which is the subject matter of certain Lease Agreementdated February 21, 2000, FC, as the legitimate owner of the Real Property,and PROCADEF, as the current lessor thereunder, in accordance witharticles 2321 and other applicable of the Civil Code for the State of BajaCalifornia, hereby grant to Pall Mexico Manufacturing, S. de R.L, deC.V., its affiliates and subsidiaries (jointly "Pall"), the preferential right toacquire the Real Property in the event that it is decided to sell it to any thirdparty.Pall, FC y PROCADEF acuerdan que dicho derecho del tanto estara en vigordurante todo el tiempo en que: (i) se encuentre en vigor el contrato dearrendamiento del Inmueble (el Pall, FC and PROCADEF agree that such preferential right will be in forceduring all of the time that: (i) the lease agreement for the Real Property (the"Agreement") entered currently with1"Contrato") celebrado actualmente con ENSATEC, S.A. de C.V., comoarrendatario, y Pall Corporation como garante, y (ii) durante todo el tiempoen que Pall, Pall Corporation, o una empresa filial o subsidiaria de PallCorporation sea parte en eI Contrato como arrendatario o garante. ENSATEC, S.A. de C.V., as lessee, and Pall Corporation, as guarantor, isin force, and (ii) during all of the time that Pall, Pall Corporation and anyaffiliate or subsidiary of Pall Corporation is a party in the Agreement aslessee or guarantor.No obstante lo anterior, Pall y FC en este acto acuerdan que FC o podralibremente transmitir la propiedad del Inmueble a cualquiera de laspersonas que se enlistan a continuacion, sin necesidad de otorgar dichoderecho del tanto a favor de Pall siempre que eI nuevo propietario otorgue afavor de Pall el derecho del tanto para adquirir el Inmueble en los mismosterminos que los aqui establecidos simultaneamente al momento deadquisicion del Inmueble. Las personas a las que FC podra transmitirlibremente la propiedad del Inmueble son: (i) PROCADEF; (ii) cualquierpersona fisica o moral que sea accionista de la sociedad denominada ELFLORIDO CALIFORNIA, S.A, DE C.V.; (iii) cualquier persona fisica omoral que sea accionista de los accionistas de la sociedad denominada ELFLORIDO CALIFORNIA, S.A. DE C.V.; (iv) cualquier sociedad en laque EL FLORIDO CALIFORNIA, S.A. DE C.V. sea socio o accionista;(v) cualquier sociedad en la que cualquiera de los accionistas de lasociedad denominada EL FLORIDO CALIFORNIA, S.A, DE C.V. seanaccionistas o socios; y (vi) cualquier sociedad en la que cualquiera de losaccionistas de los accionistas de la sociedad denominada EL FLORIDOCALIFORNIA, S.A. DE C.V. sean socios o accionistas. Asimismo quedaconvenido y acordado por Pall, que cualesquiera de las personasanteriormente enlistadas y sus sucesores podran a su vez transmitirlibremente la propiedad del Inmueble a cualesquiera de la personasanteriormente enlistadas, sin necesidad de otorgar dicho derecho del tanto afavor de Pall siempre que el nuevo propietario del Inmueble otorgue a favorde Pall el derecho del tanto para adquirir el Inmueble en los mismosterminos que Notwithstanding the foregoing, Pall and FC hereby agree that FC maytransfer the ownership of the Real Property to any of the persons listedbelow without the need of granting such preferential right in favor of Pall ifthe new owner grants in favor of Pall the preferential right to acquire the RealProperty in the same terms that the ones provided herein simultaneously atthe time of acquisition the Real Property. The persons to whom FC mayfreely transfer ownership to such Real Property are: (i) PROCADEF; (ii)any individual or entity that is shareholder of EL FLORIDOCALIFORNIA, S.A. DE C.V.; (iii) any individual or entity that isshareholder of any shareholder of EL FLORIDO CALIFORNIA, S.A, DEC.V.; (iv) any company on which EL FLORIDO CALIFORNIA, S.A. DEC.V. is a partner or shareholder; (v) any company on which any of theshareholders of EL FLORIDO CALIFORNIA, S.A. DE C.V. is ashareholder or partner; and (vi) any company on which any of theshareholders of the shareholders of EL FLORIDO CALIFORNIA, S.A, DEC.V. are partners or shareholders. Likewise, it is agreed by Pall that any ofthe above listed persons and entities and their successors may freelytransfer ownership to the Real Property to any of the above listed personsand entities, without the need of granting such preferential right in favor ofPall if the new owner grants in favor of Pall the preferential right to acquirethe Real Property in the same terms that the ones provided hereinsimultaneously at the time of acquisition the Real Property2los aqui establecidos simultaneamente al momento de adquisicion del Inmueble.Atentamente/Truly yours, (Graphics appears hear) (Graphics appears hear)Dr .Georgina Serrano CuevasRepresentante legal deLegal Agent ofPROCADEF 1, S.A.P.I de C.V. Lic. Jose Luis Noriega BalcarcelRepresentante legal deLegal Agent ofPROCADEF 1, S.A.P.I de. C.V.FC2010, S.A. DE C.V., en su caracter de nudo propietario del Inmueble/ as legal owner of the Real Property, (Graphics appears hear) (Graphics appears hear)Dra .Georgina Serrano CuevasRepresentante legal deLegal Agent ofFC2010,S.A. DE C.V. Lic. Jose Luis Noriega BalcarcelRepresentante legal deLegal Agent ofFC2010,S.A. de C.V.Acepto de conformidad: (Graphics appears hear) Lic. Leobardo Tenorio MalofRepresentante legal deLegal Agent ofPall Mexico Manufacturing , S.de R.L. de C.V. 3FINAL VERSIONTijuana, B.C., a 23 de febrero de 2012PROCADEF 1, S.A.P.I. DE C.VPaseos de los Heroes 9188Piso 5Zona Urbana Rio TijuanaTijuana, Baja California, Mexico.Re: Aviso de cesion.En relacion con el Contrato de Arrendamiento celebrado con fecha 21 de febrero del año 2000, entre BBVA Bancomer Servicios, S. A., en su caracter deFiduciario del Fideicomiso “Submetropoli de Tijuana” y Ensatec, S.A. de C.V., respecto a la nave industrial y mejoras accesorias ubicadas en la CalleColinas11730 del Fraccionamiento Parque industrial EI Florido, Seccion Colinas, Delegacion La Presa, Tijuana, Baja California, Mexico, asi como con elConvenio que celebramos con ustedes con frecha efectiva del 14 de agosto de 2011 (el “Convenio”) venimos a avisarle y notificarle lo siguiente:I.Que de conformidad con la Clausula Quinta del Convenio Ensateç S.A. de C.V. con fecha efectiva del 23 de febrero de 2O12, cedio todos y cada unode sus derechos a favor de Pall Mexico Manufacturing, S. de R.L. de C.V.II.Que en lo relacionado con la Clausula Octava del Convenio, Ensatec, S.A. de C.V. señala como su domicilio para oir y recibir toda clase denotiflcaciones y avisos el ubicado en; Blvd. Agua Caliente 10470, Desp #1, Centro Comercial Barranquitas, Col. Revolución, Tijuana, B.C. Mexico22015.Sin mas por el momentro, agradecemos sus atenciones al presente aviso y notificacion.Atentamertte,Pall Mexico Manufacturing, S. de R.L. de C.V. Ensatec, S.A. de C.V.[Graphic appears here]Lic. Leobardo Tenorio Malof[Graphic appears here]Ing. Hector machado Barraza LEASE CONTRACTThe year two thousand two the 2nd day of the month of November in Ascoli PicenobetweenThe Company TEMPERA INFISSI srl with registered office in Ascoli Piceno (AP), Zona Industriale Campolungo [CampolungoIndustrial Zone], Tax ID and VAT no. 01241950441, registered in the Business Registry at the C.C.I.A.A. [Chamber of Commerce,Industry, Small Business and Agriculture] of Ascoli Piceno at no. 122340, represented by Ms. Anna Casciani, born in Ascoli Piceno (AP)on 11/29/1949, domiciled at Via del Commercio 14, Ascoli Piceno, referred to hereinafter as “LESSOR”andPALL ITALIA Srl with registered office in Milano - Via Bruzzesi 38/40 - Tax ID (VAT no.) 01679980159, represented by ChiefExecutive Officer Giuseppe Bolli, born in Milan on 04/29/1945 and residing in Rho, Via A. Moro n. 30 A, and by the Ascoli Piceno PlantManager Patrizio Giorgi, born in Venarotta on 12/22/1960 and residing in Ascoli Piceno, Via dei Platani 31, referred to hereinafter as“LESSEE”THE PARTIES STIPULATE AND AGREE AS FOLLOWS:Art. 1 - Exhibits to the contract -Exhibits A (cadastral floor plans) and B (certification of delivery and acceptance) constitute an integral and substantive part of this contract.Art. 2 - Subject of the lease -The Lessor hereby leases to the Lessee the premises for industrial use shown in the floor plans attached (Exh. A) located in Ascoli Piceno - ZonaIndustriale Campolungo registered at the land-registry office at NCEU [New Urban Building Land Register] sheet 85 lot no. 191.1[16.4.1] [Contratto Tempera.pdf] [Page 1 of 9]Art. 3 - Adapting the leased premises to the Lessee’s needs -The Lessor agrees to contribute up to a total maximum amount of EUR 51,645 to the work adapting the premises to the level of standard fittings,including such additional fittings for the purpose of achieving the specific functionality necessary for the Lessee’s specific business, with the costsexceeding that amount to be borne by the Lessee. The Lessor also agrees to deliver the premises no later than the month of November 2002.The delivery of the premises will be set forth in a Certification of Delivery and Acceptance (Exh. B), which will certify the functionality andconformity with current building and zoning laws.All legal certifications (fitness for use; zoning use; title; building permit, retroactive building permit or building authorization and related graphicrepresentations; real property registration; fire prevention; compliance of mechanicals with Law 46/90, existing ISPESL [Italian Prevention andWorkplace Safety Institute] elevator testing, etc.), must be made available by the Lessor on the date the premises are delivered.Art. 4 - Term of the lease and Lessor’s election to not renew the contract -The lease shall have a term of six (6) years from 11/02/2002 to 10/31/2008 and will renew automatically for subsequent six-year terms pursuant toArt. 28 of Law no. 392 of July 27, 1978.The Lessor, in relation to notice of nonrenewal of the contract at its first expiration and of nonrenewal at expirations following the first term, statesthat the combined provisions of Arts. 28 (Renewal of the contract) and 29 (Notice of nonrenewal of the contract at its first expiration) of Law no.392 of July 27, 1978, are applicable. At the expiration of the first six years, therefore, that Landlord may exercise the right of2[16.4.1] [Contratto Tempera.pdf] [Page 2 of 9]nonrenewal only for one of the reasons stated in the cited Art. 29, in the manner and by the deadlines set forth therein, as well as in compliance withthe manner and deadlines stated in Art. 28 for purposes of the notice of nonrenewal.Art. 5 - Rent commencement and payment of the rent -The Lessor expressly accepts that payment of rent by the Lessee shall take effect on the date of actual delivery of the premises under Art. 3 above.The aforesaid clause is an essential condition for the execution of this contract. The annual rental payment is agreed to be EUR 74,369.79 (seventy-four thousand three hundred sixty-nine and 79/100), plus VAT, to be paid in monthly installments in advance of EUR 6,197.48 (six thousand onehundred ninety-seven and 48/100) plus VAT, upon presentation of an invoice to be sent to PALL ITALIA srl, Via Bruzzesi 38/40 -Milano-. Paymentof such installments shall be made within 15 days after the due date thereof to the bank account that will be communicated later by the Lessor.If this lease contract is renewed for another 6 years (six years), after the first six-year term, the parties agree that the annual rental payment shall beEUR 61,974.83 (sixty-one thousand nine hundred seventy-four and 83/100) to be paid in the same manner described above in monthly installmentsof 5,164.57 (five thousand one hundred sixty-four and 57/100) net of ISTAT [Italian National Statistics Institute] adjustments made from the dateof execution of this contract in accordance with the procedure under Art. 7 of this contract.Art. 6 - Lessee’s withdrawal and indemnification of the Lessor -The Lessee may withdraw from this contract at any time, by providing notice to the Landlord by registered mail with receipt of delivery to3[16.4.1] [Contratto Tempera.pdf] [Page 3 of 9]be sent at least six months prior to the intended effective date of the withdrawal, in accordance with the provisions of Art. 27, para. 7, of Law no.392 of July 27, 1978, subject to payment of rent for the entire six-months’ notice period, even if the withdrawal takes effect before the end of suchsix-month period.Art. 7 - ISTAT adjustment to the rent -Pursuant to Art. 32 of Law no. 392 of July 27, 1978, as replaced by Art. 1, para. 9 sexies of Law no. 118 of April 5, 1985, the rent may beadjusted annually at the Lessor’s request starting at the beginning of the second year of the lease.The Lessor’s request must be received by the Lessee no later than the last day of each year of the lease. Otherwise, the adjustment will be applied as ofthe first day of the month following the month when the request was received, and the Lessor shall not be entitled to the payment of amounts in arrearsand/or the application, with a compounding effect, of ISTAT adjustments made but that were not requested. Increases in the rent may not exceed75% of the increases, determined by ISTAT, in the consumer price index for families of workers and employees published monthly in the OfficialGazette.Art. 8 - Use of the premises, compensation for loss of goodwill and covenant of quiet enjoyment -The lease is for the sole use of Pall Italia srl. This declaration cites and references the contents and the consequences of Arts. 34 and 35 of Law no. 392 of July27, 1978. The Lessor agrees to covenant, for the entire term of the contract, the quiet enjoyment of the premises subject to this contract.4[16.4.1] [Contratto Tempera.pdf] [Page 4 of 9]Art. 9 - Additional expenses -The Lessee shall bear all of the expenses listed in Art. 9, paragraphs 1 and 2, of Law no. 392 of July 27, 1978. The payment shall be made by theLessee by the deadlines stated in Art. 9, para. 3 of the cited Law. The Lessee may provide for the supplying of electricity, gas, water, etc., where itdeems it appropriate, by directly subscribing for service and/or via its own systems.Art. 10 - Transfer of the leased premises and right of first refusal -Pursuant to Art. 38 of Law no. 392 of July 27, 1978 and in accordance with the procedures stated therein, the Lessor grants the Lessee a right offirst refusal and agrees to grant preference to the Lessee over others in the transfer of ownership of the leased premises for valuable consideration.Art. 11 - Sublease and assignment of the contract -Without the Lessor’s written consent, the Lessee may not: 1) sublease the premises, in whole or in part, even for no consideration; 2) assign thiscontract to third parties; or 3) transfer the leased premises and/or lend them free of charge, either partially or entirely, to third parties. The provisionsof Art. 36 of Law no. 392 of July 27, 1978 shall apply, thus permitting, in any event, the Lessee to freely assign the contract, with the release of theassignor, to affiliated, subsidiary or parent companies.Art. 12 - Ordinary and extraordinary maintenance -The Lessee, in regard to the certification of delivery and acceptance (Exh. B) under Art. 3 above, represents that it has visited the premises and deemsthem to be perfectly suitable for the use for which they are intended.5[16.4.1] [Contratto Tempera.pdf] [Page 5 of 9]Pursuant to Arts. 1576 and 1609 C.C. [Civil Code], the Lessee shall pay all costs of ordinary maintenance and all small maintenance repairs.Mechanicals, fixtures, improvements and changes that are not removed by the Lessee upon redelivery of the premises shall be deemed owned by theLessor, with the Lessor having no obligation to pay any compensation. In accordance with the provisions of Art. 1576 C.C., the Lessor shall paycosts of extraordinary maintenance and for remodeling, modifications and changes required by law. If the Lessee, in violation of the provisions of thecited law, does not perform necessary extraordinary maintenance, the Lessee, after a demand to perform made within 15 days, may take care of thesame at its own expense and may deduct the cost from the rent payments until the total amount of the costs incurred has been covered, subject to theLessee’s right to compensation for any additional damages.Art. 13 - Modifications, changes and improvements to the leased premises -During the lease, the Lessee may not make any modification, addition, improvement or change of a prejudicial nature to the leased premises and to itsmechanicals without the Lessor’s prior written consent.Art. 14 - Lessee’s obligations/liability and release of the Lessor -The Lessee is made the custodian of the leased premises and is liable, under Art. 2051 C.C., for damages caused during this lease to the leasedpremises, the related mechanicals and to property owned by the Lessor, third parties and others. Pursuant to Art. 1587 C.C.,6[16.4.1] [Contratto Tempera.pdf] [Page 6 of 9]the premises shall be managed during the lease with care and diligence by the Lessee, who guarantees its functionality and appearance, and shallperform all work necessary for that purpose at its expense.The Lessee shall be liable for injuries and damages that may occur to individuals, property and mechanicals due to inaction, negligence or failure toperform the work it is obligated to perform. It shall also give immediate notice to the Lessor if the need arises for repairs that the Lessee is notobligated to provide. In addition, the Lessor disclaims any liability:-regarding the Lessee’s possession of all legal requirements necessary to conduct its business, including in relation to health, workplace hygiene,tax and social security matters;-for injuries or damages that may occur to any person in accessing the leased premises/portion of the real property leased and/or remaining therein.Art. 15 - Security deposit -In accordance with Art. 11 of Law no. 392 of July 27, 1978, the Lessee, to guarantee all the obligations it assumes under this contract, shall pay tothe Lessor 6,197.48 (six thousand one hundred ninety-seven and 48/100), corresponding to one month’s rent, as a security deposit bearing legalinterest, which interest shall be paid to the Lessee at the end of each lease year. Such deposit will be returned to the Lessee following due redelivery ofthe premises and may not be used for rent. The security deposit must be replenished if it is used.Art. 16 - Legal expenses and tax charges -This contract is subject to Value Added Tax and therefore, pursuant to Art. 40 of Presidential Decree of 04/26/1986, no. 131, registration tax will7[16.4.1] [Contratto Tempera.pdf] [Page 7 of 9]be applied in a fixed amount. The tax for any registration of this contract shall be borne by the parties equally. The Lessee and Lessor shall bear thecosts of drafting this document and stamp duty equally.Art. 17 - Compliance with laws and regulations -The Lessee agrees to comply with all laws and regulations governing the conducting of the business for which the premises were leased.Art. 18 - Reference to legal provisions -For all matters not addressed in this contract, the contracting Parties expressly reference the provisions of the Civil Code and current laws relating tothe lease of real property for non-residential use.Art. 19 - Court with jurisdiction -The Parties agree that the Court of Milan shall have exclusive jurisdiction over any judicial disputes that in any way arise from this contract. Thiscontract has been prepared in three original counterparts, each of which consists of nine pages.Read, approved and signedDated 11/02/2002 THE LESSORTempera Infissi Srl[stamp:]TEMPERA INFISSI SrlWOODEN DOORS AND WINDOWS FACTORY ZONA INDUSTRIALE CAMPOLUNGO63100 ASCOLI PICENOC.C.I.A.A. 122340 - Tax ID no. 01241950441[signature] THE LESSEE Pall Italia Srl [signature] [signature] __________________________8[16.4.1] [Contratto Tempera.pdf] [Page 8 of 9]In accordance with Arts. 1341 and 1342 C.C., the Parties, by mutual agreement, having read the clauses contained in this contract,particularly with respect to the following articles, state that they approve them, and reject any challenge to them by either party:Art. 1) Exhibits to the contractArt. 2) Subject of the leaseArt. 3) Adapting the leased premises to the Lessee’s needsArt. 4) Term of the lease and Lessor’s election to not renew the contractArt. 5) Rent commencement and payment of the rentArt. 6) Lessee’s withdrawal and indemnification of the LessorArt. 7) ISTAT adjustment to the rentArt. 8) Use of the premises, compensation for loss of goodwill and covenant of quiet enjoymentArt. 9) Additional expensesArt. 10) Transfer of the leased premises and right of first refusalArt. 11) Sublease and assignment of the contractArt. 12) Ordinary and extraordinary maintenanceArt. 13) Modifications, changes and improvements to the leased premisesArt. 14) Lessee’s obligations/liability and release of the LessorArt. 15) Security depositArt. 16) Legal expenses and tax chargesArt. 17) Compliance with laws and regulationsArt. 18) Reference to legal provisionsArt. 19) Court with jurisdiction9[16.4.1] [Contratto Tempera.pdf] [Page 9 of 9]TENANT:Haemoscope CorporationPROPERTY:HOWARD COMMONS620 -6295 HOWARD STREETNILES, ILLINOIS 60714SUITE: 6227PREMISES RENTABLE SQUARE FOOTAGE:16,748TENANT’S PROPORTIONATE SHARE: 5.3%SECURITY DEPOSIT: $10,000.00DATE OF LEASE: MARCH 23, 2004INDUSTRIAL/OFFICE BUILDING LEASEBETWEENHOWARD COMMONS ASSOCIATES, L.L.C.,LANDLORD,ANDHAEMOSCOPE CORPORATIONTENANTTHIS INDUSTRIAL/OFFICE BUILDING LEASE, made as of March 23, 2004, W1TNESSETH: HOWARD COMMONS ASSOCIATES,L.L.C., a Delaware limited liability company, (herein called “Landlord”), hereby leases to Haemoscope Corporation, an Illinois corporation, (hereincalled “Tenant”), and Tenant hereby accepts the premises as outlined on the depiction attached hereto as Exhibit A (herein called the “Premises”) and referredto as Suite 6227 of the building known as Howard Commons, located at 6201 West Howard Street, Niles, Illinois 60714 (herein called the “Building”) whichis situated on the property legally described in Exhibit A-1, together with the right to use in common with other tenants any portions of the Building orproperty which are designated by the Landlord as common areas, for a term (herein called “Term”) of Five (5) years, commencing (the “CommencementDate”) upon July 15, 2004 or delivery of the premises with Landlord’s Work (as defined below) substantially complete, whichever is later, and shall expirefive (5) years thereafter (or, if the Commencement Date did not occur on the first day of a calendar month, then the term shall expire on the last day of the 60thcalendar month which is after the Commencement Date) unless sooner terminated as provided herein. Tenant shall pay as rent therefor the sums hereinafterprovided, without any setoff, abatement, counterclaim or deduction whatsoever, except as set forth below.IN CONSIDERATION THEREOF, THE PARTIES HERETO COVENANT AND AGREE:1. Base Rent. Tenant shall pay an annual base rent (herein called “Base Rent”) to Landlord for the Premises which Base Rent shall bepayable in equal monthly installments (herein called “Monthly Base Rent”), in advance on the first day of each calendar month of the Term in the amounts setforth in, and in accordance with the provisions of, Exhibit B, attached hereto and incorporated herein by this reference thereto. If the Term shall begin on anydate except the first day, or shall end on any day except the last day of a calendar month, Base Rent shall be payable at a per diem rate based on the thencurrent monthly payment.Base Rent, Additional Rent (as hereinafter defined), and all other amounts becoming due from Tenant to Landlord hereunder (hereincollectively called the “Rent”) shall be paid in lawful money of the United States to Landlord at the office of Landlord, or as otherwise designated from time totime by written notice from Landlord to Tenant. Concurrently with the execution hereof and at Landlord’s request. Tenant shall pay Landlord Monthly BaseRent for the first full calendar month of the Term.Landlord may authorize Tenant to take possession of all or any part of the Premises prior to the beginning of the Term. lf Tenant does takepossession pursuant to authority so given, all of the covenants and conditions of this lease shall apply to and shall control such pre-Term occupancy, exceptas to the payment of Rent, as provided in the First Addendum hereto. If applicable, Rent for such pre-Term occupancy shall be paid upon occupancy and onthe first day of each calendar month thereafter at the rate set forth in Sections 1 and 2 hereof. If the Premises are occupied for a fractional month, Rent shall beprorated on a per diem basis for such fractional month. The payment of Rent hereunder is independent of each and every other covenant and agreementcontained in this lease.If any payment of Rent is not received by Landlord within five (5) days after the date due, then Tenant shall pay Landlord a late chargeequal to three percent (3%) of the amount of said delinquent payment.2. Additional Rent. In addition to Base Rent, Tenant shall also pay Additional Rent (as hereinafter defined) in accordance with thefollowing provisions:(a) Definitions. As used in this lease,(i)“Expenses” shall mean and include all reasonable expenses, costs, fees and disbursements paid or incurred by or on behalfof the Landlord for owning, managing, operating, maintaining and repairing the “Real Property’ (hereinafter defined) andthe personal property used in conjunction therewith (said Real Property and personally being herein collectively called the“Project”), including (without limitation): the cost of electricity, steam, water, gas, fuel, heating, lighting, air conditioning;window cleaning; insurance, including but not limited to, fire, extended coverage, liability, workmen’s compensation,elevator, or any other insurance carried by the Landlord and applicable to the Project; painting; uniforms; managementfees, not to exceed 3% of gross rents per year; costs of maintaining an on-site management office; supplies, sundries, salesor use taxes on supplies or services; cost of wages and salaries of all persons engaged in the operation, administration,maintenance and repair of the Project; and fringe benefits, including social security taxes, unemployment insurance taxes,cost for providing coverage for disability benefits, cost of any pensions, hospitalization. welfare or retirement plans, or anyother similar or like expenses incurred under the provisions of any collective bargaining agreement, or any other cost orexpense which Landlord pays or incurs to provide benefits for on-site employees so engaged in the operation,administration, maintenance, management and repair of the Project; the charges of any independent contractor who, undercontract with the Landlord or its representatives, does any of the work of operating, maintaining or repairing of the Project;legal and accounting expenses, including, but not to be limited to, such expenses as relate to seeking or obtaining reductionsin and refunds of real estate taxes; any costs or expenses allocated to the Project under easement agreements, service oroperating agreements. declarations, covenants or other instruments providing for sharing of facilities or payment forservices; or any other expense or charge, whether or not hereinbefore mentioned, which would be considered as an expenseof owning. managing, operating, maintaining or repairing the Project. Expenses shall not include costs or other itemsincluded within the meaning of the term “Taxes” (as hereinafter defined), those items set forth in Exhibit “F”’ attachedhereto, costs of alterations of the premises of tenants of the Building, costs of capital improvements to the Real Property,depreciation charges, interest and principal payments on mortgages, ground rental payments, and real estate brokerage andleasing commissions, except as hereinafter otherwise provided, notwithstanding anything contained in this clause (i) ofSection 2(a) to the contrary:(A) The cost of any capital improvements to the Real Property made after the date of this lease which areintended to reduce Expenses or enhance the safety of the Real Property or which are required under any governmental laws,regulations, or ordinances applicable to the Real Property, whether or not in effect at the date this lease was executed,amortized over such reasonable period as Landlord shall determine, together with interest on the unamortized cost of anysuch improvement (at the prevailing loan rate available to Landlord on the date the cost of such improvement was incurred)shall be included in Expenses.(ii)“Taxes” shall mean real estate taxes, assessments (whether they be general orspecial), sewer rents, rates and charges, transit taxes, taxes based upon the receipt of rent, and any other federal, state orlocal governmental charge, general, special, ordinary or extraordinary (but not including income or franchise taxes, capitalstock, inheritance, estate, gift, or any other taxes imposed upon or measured by the Landlord’s income or profits, unlessthe same shall be imposed in lieu of real estate taxes or other ad valorem taxes), which may now or hereafter be levied,assessed or imposed against the Building or the land on which the Building is located (the “Land”), or both. The Buildingand the Land are herein collectively called the “Real Property.”Notwithstanding anything contained in this clause (ii) of Section 2(a) to the contrary.(A) If at any time during the Term of this lease the method of taxation then prevailing shall be altered so that anynew tax, assessment, levy, imposition or charge or any part thereof shall be imposed upon Landlord in place or partly inplace of any such Taxes, or contemplated increase therein, and shall be measured by or be based in whole or in part uponthe Real Property or the rents or other income therefrom, then all such new taxes, assessments, levies, impositions orcharges or part thereof, to the extent that they are so measured or based, shall be included in Taxes levied, assessed orimposed against the Real Properly to the extent that such items would be payable if the Real Property were the only propertyof Landlord subject thereto and the income received by Landlord from the Real Property were the only income of Landlord.(B) Notwithstanding the year with respect to which any such taxes or assessments are levied, (i) in the case ofspecial taxes or assessments which may be payable in installments, the amount of each installment, plus any interestpayable thereon, paid during a calendar year shall be included in Taxes for that year and (ii) if any taxes or assessmentspayable during any calendar year shall he computed with respect to a period in excess of twelve calendar months, then taxesor assessments applicable to the excess period shall be included in Taxes for that year. Except as provided in the precedingsentence, all references to Taxes “for” a particular year shall be deemed to refer, at Landlord’s option, to (i) Taxes levied,assessed or imposed for such year without regard to when such Taxes are payable, or (ii) Taxes paid or payable for suchyear without regard to when such Taxes are levied, assessed or imposed, so long as Landlord throughout the Termconsistently applies the chosen method of determining Taxes.(C) Taxes shall also include any personal property taxes (attributable to the calendar year in which paid)imposed upon the furniture, fixtures, machinery, equipment, apparatus, systems and appurtenances used in connectionwith the Real Property or Project or the operation thereof.(D) If the Building is not at least ninety percent (90%) occupied by tenants during all or a portion of any year,then Landlord may elect to make an appropriate adjustment for such year of components of Taxes which may varydepending upon the occupancy level of the Building such that the amount of such Taxes which would have been incurred ifthe Building had been fully occupied during the entire year shall also be deemed taxes levied or assessed against theReal Property and included in Taxes for such year.(iii)“Rentab1e Area of the Building” shall be deemed to be 310,983 square feet. If, during the Term of this lease, the actualRentable Area of the Buildings increased or decreased as a result of adding space to the Building or removing space from theBuilding, Landlord may change the Rentable Area of the Building and Tenant’s Proportionate Share by written notice toTenant.(iv)“Rentable Area of the Premises” is stipulated by the parties to be 16,748 square feet.(v)“Tenant’s Proportionate Share” shall mean 5.3% which is the percentage obtained by dividing the Rentable Area of thePremises by the Rentable Area of the Building.(vi)“Additional Rent” shall mean Tenant’s Proportionate Share of Taxes and Expenses.(b) Computation of Additional Rent. Tenant shall pay Tenant’s Proportionate Share of Taxes in excess of “Base Amount Taxes” andTenant’s Proportionate Share of Expenses in excess of “Base Amount Expenses.” For purposes hereof, “Base Amount Taxes” shall be an amount equal toTenant’s Proportionate Share of Taxes for the 2004 calendar year and “Base Amount Expenses” shall be an amount equal to Tenant’s Proportionate Share ofExpenses for the 2004 calendar year. Commencing in the 2005 year, Tenant’s Proportionate Share of Expenses other than insurance and snowplowing shall notincrease by more than ten cents per square foot over the previous calendar year.(c) Payments of Additional Rent; Projections. Tenant shall make payments on account of its Additional Rent with respect to each yearthat Taxes and Expenses (on an aggregated basis per square foot of the Premises) exceed or are estimated to exceed Base Amount Taxes and Expenses, effectiveas of the first day of each calendar year (the “Adjustment Date”) as follows:(i)Landlord may, prior to each Adjustment Date or from time to time during the year, deliver to Tenant a written notice ornotices (“Projection Notice”) setting forth (A) Landlord’s reasonable estimates, forecasts or projections (collectively, the“Projections”) of Taxes and Expenses with respect to such year, and (B) Tenant’s Proportionate Share of Taxes andExpenses with respect to such year based upon the Projections.(ii)Until such time as Landlord furnishes a Projection Notice with respect to any year, Tenant shall pay to Landlord amonthly installment of Additional Rent (at the time of and together with each payment of Monthly Base Rent) equal to thelatest monthly installment of Additional Rent. On or before the first day of the next calendar month following Landlord’sservice of a Projection Notice, and on or before the first day of each month thereafter, Tenant shall pay to Landlord one-twelfth (1/12) of Tenant’s Proportionate Share of Taxes and Expenses shown in the Projection Notice. Within fifteen (15)days following Landlord’s service of a Projection Notice, Tenant shall also pay Landlord a lump sum equal to the monthlyTenant’s Proportionate Share of Taxes and Expenses shown in the Projection Notice for January to and including themonth(s) in which the Projection Notice was sent (the “Gap Period”) less the sum of any previouspayments of Additional Rent made during such Gap Period.(d) Readjustments.At any time and from time to time following the end of each year (and after Landlord shall have determined the actual amounts of Taxesand Expenses to be used in calculating Tenant’s Proportionate Share of Taxes and Expenses with respect to such year) if the actual Tenant’s ProportionateShare of Taxes and Expenses owed for such year exceeds the Additional Rent paid by Tenant during such year, then Tenant shall, within thirty (30) days afterthe date of Landlord’s statement, pay to Landlord an amount equal to such excess. If the Additional Rent paid by Tenant during such year exceeds the actualTenant’s Proportionate Share of Taxes and Expenses owed for such year, then Landlord shall credit such excess to Rent payable after the date of Landlord’sstatement until such excess has been exhausted. If this lease shall expire prior to full application of such excess, Landlord shall promptly pay to Tenant thebalance thereof not theretofore applied against Rent and not reasonably required for payment of Additional Rent for the year in which the lease expires. Nointerest or penalties shall accrue on any amounts which Landlord is obligated to credit or pay to Tenant by reason of this Section 2(d). Unless Tenant shalltake written exception to any item within one hundred eighty (180) days after the furnishing of Landlord’s statement, Landlord’s statement shall be consideredfinal and accepted by Tenant.(e) Proration and Survival.With respect to any year which does not fall entirely within the Term, Tenant shall be obligated to pay as Additional Rent for such yearonly a pro rata share of Additional Rent as hereinabove determined, based upon the number of days of the Term falling within the year. Following expiration ortermination of this lease, Tenant shall pay any Additional Rent due to the Landlord within fifteen (15) days after the date of Landlord’s statement sent toTenant. Without limitation on other obligations of Tenant which shall survive the expiration or termination of’ this lease, the obligations of Tenant to payAdditional Rent provided for in this Section 2 shall survive the expiration or termination of this lease.(f) No Decrease In Base Rent.In no event shall any Additional Rent result in a decrease of the Base Rent payable hereunder as set forth in Section I hereof.3. Security Deposit. Tenant has deposited with Landlord the sum of Ten Thousand Dollars ($10,000.00) as security for the full andfaithful performance of every obligation to Landlord to be performed by Tenant. If Tenant defaults with respect to any such obligation, including, but notlimited to, the provisions relating to the payment of Rent, after any required notice is given and the expiration of any applicable cure period, Landlord mayuse, apply or retain all or any part of this security deposit for the payment of any Rent and any other sum in default, or for the payment of any other amountwhich Landlord may spend or become obligated to spend by reason of Tenant’s default or to compensate Landlord for any other loss or damage whichLandlord may suffer by reason of Tenant’s default, or which is otherwise owing by Tenant to Landlord. If any portion of said deposit is to be used or applied,Tenant shall within five (5) business days after written demand therefor deposit cash with Landlord in an amount sufficient to restore the security deposit toits original amount and Tenant’s failure to do so shall be a material breach of this lease. Tenant may not elect to apply any portion of the security deposittoward the payment of Rent or other charges payable by Tenant under this lease. Landlord shall not be required to keep this security deposit separate from itsgeneral funds and Tenant shall not he entitled to interest on such deposit. If Tenant shall perform every obligation to be performed by Tenant, the securitydeposit or any balance thereof shall be returned to Tenant (or at Landlord’s option to the last assignee of Tenant’sinterest hereunder) within thirty (30) days after the expiration of the lease Term and Tenant’s vacation of the Premises. Tenant hereby agrees not to look to anymortgagee as mortgagee, mortgagee in possession, or successor in title to the Building for accountability for any security deposit required by the Landlordhereunder, unless said sums have actually been received by said mortgagee or successor in title as security for the Tenant’s performance of this lease. Inconnection with a purchase of the Building, the security deposit shall be deemed to have been actually received by the purchaser to the extent same received acredit therefor on any so called “closing” statement or the like. The Landlord may deliver the funds deposited hereunder by Tenant to the purchaser ofLandlord’s interest in the Building, in the event that such interest is sold, or credit same on any closing statement, and thereupon Landlord shall be dischargedfrom any further liability with respect to such security deposit.4. Use of Premises. Subject to the terms and provisions herein contained, Tenant shall use and occupy the Premises only formanufacturing, assembly and warehousing of medical instruments and related consumables and for general office purposes. Tenant shall not use or occupythe Premises or permit the use or occupancy of the Premises for any purpose or in any manner which (i) is unlawful or in violation of any applicable legal orgovernmental requirement, ordinance or rule; (ii) may be dangerous to persons or property; (iii) may invalidate or increase the amount of premiums for anypolicy of insurance affecting the Project, and if any additional amounts of insurance premiums are so incurred, Tenant shall pay to Landlord the additionalamounts on demand or (iv) may create a nuisance, disturb any other tenant of the Building or injure the reputation of the Building.Except for small quantities of Hazardous Materials necessary to the conduct of Tenant’s business which Tenant shall use, store anddispose of in strict compliance with applicable laws, Tenant shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, orused in or about the Premises or the Project by Tenant, its agents, employees, contractors, or invitees, without the prior written consent of Landlord (whichLandlord shall not unreasonably withhold as long as Tenant demonstrates to Landlord’s reasonable satisfaction that such Hazardous Material is necessary oruseful to Tenant’s business and will at all times be used, kept, stored and disposed of in a manner that complies at all times with all laws regulating any suchHazardous Material so brought upon or used or kept in or about the Premises and/or the Project and such storage will not create an undue risk to other tenantsof the Building, giving consideration to the nature of the Building). If Tenant breaches the obligations stated in the preceding sentence, or if the presence ofHazardous Material on the Premises or the Project caused or permitted by Tenant results in contamination of the Premises or the Project or if contamination ofthe Premises or the Project, by Hazardous Material otherwise occurs for which Tenant is legally liable to Landlord for damage resulting therefrom, then Tenantshall indemnify, defend and hold Landlord harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses (including,without limitation, diminution in value of the Premises or the Project, damages for the loss or restriction on use of rentable or usable space or of any amenity ofthe Premises or the Project, damages arising from any adverse impact on marketing of space in the Building, and sums paid in settlement of claims,attorneys’ fees, consultant fees and expert fees) which arise during or after the term of this lease as a result of such contamination or the presence of moldwithin the Premises. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of siteconditions or any cleanup, remedial, removal or restoration work required by any federal, state, or local governmental agency or political subdivision becauseof Hazardous Material present in, on, or about the Premises or the Project or in the soil or ground water on or under the Premises or the Project. Withoutlimiting the foregoing, if the presence of any Hazardous Material in, on or about the Premises or the Project caused or permitted by Tenant results in anycontamination of the Premises or the Project, Tenant shall promptly take all actions at its sole expense as are necessary to return the Premises or the Project tothe condition existing prior to the introduction of any such Hazardous Material thereto; provided that Landlord’s approval of such actions shall first beobtained, which approval shall not be unreasonablywithheld so long as such actions would not potentially have any material (as determined by Landlord) adverse long-term or short-term effect on the Premises orthe Project or exposes Landlord to any liability therefor and such actions are undertaken in accordance with all applicable laws, rules and regulations andaccepted industry practices.Tenant, at its sole cost and expense, shall reasonably monitor the Premises for the presence of mold or for any conditions that reasonablycan be expected to give rise to mold (“Mold Conditions”), including, but not limited to, observed or suspected instances of water damage, mold growth,repeated complaints of respiratory ailment or eye irritation by Tenant’s employees or any other occupants in the Premises, or any notice from a governmentalagency of complaints regarding the indoor air quality at the Premises. Tenant is not responsible to monitor for the presence of mold behind walls unless waterleakage has occurred through act or neglect of Tenant. Tenant shall promptly notify Landlord in writing if it suspects mold or Mold Conditions at thePremises. In the event that mold or Mold Conditions are present at the Premises which were caused by the act or neglect of Tenant, then Tenant, at its sole costand expense, shall promptly retain a qualified environmental contractor to remediate the Mold Conditions and the causes thereof in the Premises. Theenvironmental contractor and the proposed remediation plan shall be subject to prior approval by Landlord.“Hazardous Material” is used in this lease in its broadest sense and shall mean any asbestos, petroleum based products, toxic mold,pesticides, paints and solvents, polychlorinated biphenyl, lead, cyanide, DDT, acids, ammonium compounds and other chemical products and anysubstance or material defined or designated as hazardous or toxic substance, or other similar term, by any federal, state or local environmental statute,regulation, or ordinance affecting the Premises or the Project presently in effect or that may be promulgated in the Future, as such statutes, regulations andordinances may be amended from time to time, including but not limited to the statutes listed below (“Environmental Laws”):Resource Conservation and Recovery Act of 1976,42 U.S.C. § 6901 et seq.Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 40 U.S.C. § 1801 et seq.Clean Air Act, 42 U.S.C. §§ 7401-7626.Water Pollution Control Act (Clean Water Act of 1977), 33 U.S.C. § 1251 et seq.Insecticide, Fungicide, and Rodenticide Act (Pesticide Act of 1987), 7 U.S.C. § 135 et seq.Toxic Substances Control Act, IS U.S.C. § 2601 et seq.Safe Drinking Water Act, 42 U.S.C. § 300(f) et seq.National Environmental Policy Act (NEPA) 42 U.S.C. § 4321 et seq.Refuse Act of 1899, 33 U.S.C. § 407 et seq.Landlord represents and warrants to Tenant that, to its actual knowledge, as of the date of this Lease, and as of the Commencement Date,the Premises do not contain any Hazardous Materials and are in compliance with Environmental Laws and do not contain any Mold Conditions. Landlordshall protect, indemnify and save harmless Tenant, Landlord’s shareholders, and their agents, employees, officers and directors, from and against allliabilities, obligations, claims, damages, penalties. causes of action. costsand expenses, including, without limitation, attorneys fees and expenses, incurred, arising or asserted try reason of Hazardous Materials released, deposited,discharged, stored, moved onto, created upon or removed from the Premises on or before the date of this Lease or the Commencement Date, or any MoldCondition existing on the Commencement Date, including, without limitation, (i) claims of third parties, including governmental entities, for damages,penalties, remediation and response costs, clean-up costs, injunctive or other relief; and (ii) costs and expenses relating to remediation, restoration, removaland disposal of Hazardous Materials, including fees and costs of environmental engineers, attorneys and experts, audit costs and costs of reporting theexistence of Hazardous Materials to any governmental agency, and Landlord agrees to be responsible for any required remediation in connection therewith.Landlord’s indemnification obligations set forth in this lease shall survive the expiration or termination of this lease5. Utilities/Services.Tenant shall pay for all utility services furnished for the operation of the Premises. Tenant shall apply to the applicable utility company ormunicipality for gas, electricity, telephone and all other utility services required by Tenant for use in the Premises, and Tenant shall be responsible for theconnection and installation of same. In the event that any such utilities are provided to Tenant in common with other tenants in the Building and not metereddirectly to Tenant, Tenant agrees to pay Landlord for such utility usage based upon Landlord’s allocation of such utility usage among such tenants, includingTenant. In the event Tenant fails to pay any utility bill within forty-five (45) days after the due date, Landlord may but shall not be obligated to pay such bills(without any duty to investigate the validity thereof). in which event Tenant shall immediately reimburse Landlord for the amount paid by Landlord plusinterest at the default interest rate set forth in this lease.Landlord shall not provide any janitorial service to the Premises. Tenant shall be responsible, at its sole cost and expense, for providingjanitorial service to the Premises on a daily basis, or alternatively, securing a janitorial service contract for the Premises which is reasonably acceptable toLandlord.Tenant shall have the right to 24/7 365 Day access to the Premises. Landlord shall clear sidewalks and Parking areas of snow and debrisas Landlord deems reasonably necessary. Landlord shall properly maintain the exterior lighting from Premises office doors to the parking lot.Tenant agrees that Landlord and its agents shall not be liable in damages. by abatement of Rent or otherwise, for any failure of Tenant tosecure gas, electrical or other utility services from local utilities. Tenant further agrees that Landlord and its agents shall not be liable in damages, by abatementof Rent or otherwise, for Landlord’s failure to furnish or delay in furnishing any service which Landlord is obligated to provide pursuant to the terms andprovisions of this lease, or for Landlord’s failure to perform or delay in performing any other obligation required to be performed by Landlord under this leaseor by operation of law, when such failure or delay is occasioned, in whole or in part, by repairs, renewals or improvements, by any strike, lockout or otherlabor trouble, by inability to secure electricity, gas, water, or other fuel at the Building after reasonable effort so to do, by any accident or casualty whatsoever,by the act or default of Tenant or other parties, or by any cause beyond the reasonable control of Landlord; and such failures or delays, or the nonexistence ofany utility, whether occasioned by Landlord or some third party, shall never be deemed to constitute an eviction or disturbance of the Tenant’s use andpossession of the Premises or relieve the Tenant from paying Rent or performing any of its obligations under this lease. Tenant will look to its own businessinterruption insurance for any losses or damages arising from such interruptions.Tenant agrees to cooperate fully. at all times, with Landlord in abiding by all reasonableregulations and requirements which Landlord may prescribe for the proper functioning and protection of all utilities and services reasonably necessary for theoperation of the Premises and the Building. Landlord, throughout the term of this lease, shall have free access to any and all mechanical installations, andTenant agrees that there shall be no construction or partitions or other obstructions which might interfere with the moving of the servicing equipment ofLandlord to or from the enclosures containing said installations, provided that Landlord gives Tenant at least 24 hour’s advance notice of such access (exceptin cases of emergency), and that such access does not interfere with the conduct of Tenant’s business. Tenant further agrees that neither Tenant nor itsservants, employees, agents, visitors, licensees or contractors shall at any time tamper with, adjust or otherwise in any manner affect Landlord’s mechanicalinstallations.6. Condition and Care of Premises.Subject to the terms of the First Addendum, Tenant’s taking possession of the Premises or any portion thereof shall be conclusive evidence against Tenant thatthe portion of the Premises taken possession of was then in satisfactory condition. Tenant acknowledges that it has had the opportunity to inspect the conditionof the Premises prior to execution hereof. Except as otherwise expressly provided in this Lease, no promises of the Landlord to alter, remodel, improve, repair,decorate or clean the Premises or any part thereof have been made, and no representation respecting the condition of the Premises, the Building or the Land, hasbeen made to Tenant by or on behalf of Landlord and Tenant accepts the Premises in AS IS condition. Any and all work necessary or desirable to repair, alteror improve the Premises for Tenant’s use and occupancy, shall be performed by Tenant at its sole cost and expense. Tenant agrees that blinds, shades, drapesor other forms of window coverings and treatments shall not be placed in, on or about the outside windows in the Premises, except to the extent that thecharacter, shape, color, material and make thereof is expressly approved by the Landlord. This lease does not grant any rights to light or air over or about theproperty of Landlord. Except for any damage resulting from any act of Landlord or its employees and agents, and subject to the provisions of’ Section 14hereof, Tenant shall at its own expense keep the Premises in good repair and tenantable condition, including without limitation (to the extent the following existwithin or serve only the Premises) the walls, doors, windows, floors, electrical, plumbing, HVAC, mechanical and other systems and components therein,and shall promptly and adequately perform all maintenance, repairs and replacements thereto as and when necessary. Tenant shall enter and maintainthroughout the Lease Term an HVAC maintenance contract on terms and with a contractor reasonably satisfactory to Landlord. Provided that Tenant hasproperly serviced the HVAC units, Landlord shall replace rootfop HVAC units as necessary unless damaged by the act or neglect of Tenant or its contractors.Tenant shall further (i) repair all damage to the Premises caused by Tenant or any of its employees, agents or invitees, including replacing or repairing alldamaged or broken glass, fixtures and appurtenances resulting from any such damage, and (ii) maintain and, to the extent necessary, alter the Premises inaccordance and compliance with all applicable governmental laws and regulations both currently existing and hereinafter enacted, with any such work to thePremises to be performed under the supervision and with the approval of Landlord and within any reasonable period of time specified by Landlord. If Tenantdoes not do so promptly and adequately, Landlord may, but need not, make such repairs and replacements and Tenant shall pay Landlord the cost thereof ondemand.Landlord shall maintain and repair the building structure, roof and parking areas and other common areas as Landlord deems reasonably necessary from timeto time, the cost of which shall be included in Expenses.As of the date hereof, Landlord has received no written notice of code violations of the Building or the Premises which have not heretofore been corrected.7. Return of Premises. At the termination of this lease by lapse of time or otherwise or upon termination of Tenant’s right of possessionwithout terminating this lease, Tenant shall surrender possession of the Premises to Landlord and deliver all keys to the Premises to Landlord and makeknown to the Landlord the combination of all locks of vaults then remaining in the Premises, and shall (subject to the following paragraph) return thePremises and all equipment and fixtures of the Landlord therein to Landlord in as good condition as when Tenant originally took possession, ordinary wear,loss or damage by fire or other insured casualty or eminent domain, damage resulting from the act of Landlord or its employees and agents, and alterationsmade with Landlord’s consent excepted, failing which Landlord may restore the Premises and such equipment and fixtures to such condition and Tenant shallpay the cost thereof to Landlord on demand.All installations, additions, partitions, hardware, light fixtures, non-trade fixtures and improvements, temporary or permanent, exceptmovable furniture and equipment belonging to Tenant, in or upon the Premises, whether placed there by Tenant or Landlord, shall be Landlord’s property andshall remain upon the Premises, all without compensation, allowance or credit to Tenant; provided, however, that if Tenant requests Landlord’s consent tosuch installation Landlord shall notify Tenant within five (5) business days after receipt thereof whether Tenant will be required to remove the same upontermination of the Lease. If Landlord so notifies Tenant (or if Tenant makes installations without written notice to Landlord) then on demand of Landlord,Tenant, at Tenant’s sole cost and expense, shall promptly remove such of the installations, additions, partitions, hardware, light fixtures, non-trade fixturesand improvements placed in the Premises by Tenant and repair any damage to the Premises caused by such removal, failing which Landlord may remove thesame and repair the Premises upon advance written notice to Tenant and Tenant shall pay the cost thereof to Landlord on demand.Tenant shall leave in place any floor covering without compensation to Tenant. Tenant shall also remove Tenant’s furniture, machinery,safes, trade fixtures and other items of movable personal property of every kind and description from the Premises prior to the end of the Term or ten (10) daysfollowing termination of this lease or Tenant’s right of possession, whichever might be earlier, failing which Landlord may do so and thereupon the provisionsof Section 16(c) shall apply.All obligations of Tenant under this Section shall survive the expiration of the Term or sooner termination of this lease.8. Holding Over. The Tenant shall pay Landlord for each day Tenant retains possession of the Premises or any part thereof aftertermination of this lease, by lapse of time or otherwise, an amount which is 150% of the amount of Rent for a day (computed on a year of 360 days) based onthe annual rate of Base Rent and Additional Rent applicable under Sections 1 and 2 to the period in which such possession occurs (and if such possessionoccurs following the full Term of this lease. 150% of the annual Base Rent and Additional Rent applicable in the last year of this lease). In addition, if suchholdover exceeds sixty days, Tenant shall be liable for any and all damages, consequential as well as direct, sustained by Landlord by reason of suchholdover. Nothing in this Section contained, however, shall be construed or operate as a waiver of Landlord’s right of re-entry or any other right of Landlord.9. Rules and Regulations. Tenant agrees to observe the rights reserved to Landlord contained in Section 10 hereof and agrees, for itself,its employees, agents, clients, customers, invitees and guests, to comply with the rules and regulations set forth in Exhibit C attached to this lease and by thisreference incorporated herein and such other rules and regulations as shall be adopted by Landlord pursuant to Section 10(m) of this lease.Any violation by Tenant of any of the rules and regulations contained in Exhibit C attached to this lease or other Section of this lease, or asmay hereafter be adopted by Landlord pursuant to Section 10(m) of this lease, may be restrained: but whether or not so restrained, Tenant acknowledges andagrees that it shall be and remain liable for all damages, loss, costs and expense resulting from any violation by the Tenant of any of said rules andregulations. Nothing in this lease contained shall be construed to impose upon Landlord an duty or obligation to enforce said rules and regulations, or theterms, covenants and conditions of any other lease against any other tenant or any other persons, and Landlord and its beneficiaries shall not be liable toTenant for violation of the same by any other tenant, its employees, agents, invitees, or by any other person.10. Rights Reserved to Landlord. Landlord reserves the following rights, exercisable without notice and without liability to Tenant fordamage or injury to property, person or business and without effecting an eviction or disturbance of Tenant’s use or possession or giving rise to any claim forsetoff or abatement of rent or affecting any of Tenant’s obligations under this lease:(a) To change the name or Street address of the Building.(b) To install and maintain signs on the exterior and interior of the Building, and to prescribe the location and style of the suite numberand identification sign or lettering for the Premises occupied by the Tenant.(c) To designate the character, shape, color, material and make of all window coverings and treatments on all outside windows in thePremises.(d) To retain at all times, and to use in appropriate instances, pass keys to the Premises.(e) To grant to anyone the right to conduct any business or render any service in the Building, whether or not it is the same as or similarto the use expressly permitted to Tenant by Section 4.(f) To exhibit the Premises during regular business hours, upon at least 24 hours’ advance notice to Tenant.(g) To have access for Landlord and other tenants or occupants of the Building to all mail chutes according to the rules of the UnitedStates Postal Service.(h) To enter the Premises at reasonable hours for reasonable purposes, upon reasonable advance notice to Tenant, including the posting ofnotices of nonresponsibility, inspection and supplying services to be provided to Tenant hereunder.(i) To require all persons entering or leaving the Building during such hours as Landlord may from time to time reasonably determine toidentify themselves to security personnel by registration or otherwise, and to establish their right to enter or leave. Landlord shall not be liable in damages forany error with respect to admission to or eviction or exclusion from the Building of any person. In case of fire, invasion, insurrection, mob, riot, civildisorder, public excitement or other commotion, or threat thereof, Landlord reserves the right to limit or prevent access to the Building during the continuanceof the same, shut down elevator service, activate elevator emergency controls, or otherwise take such action or preventive measures deemed necessary byLandlord for the safety of the tenants or other occupants of the Building or the protection of the Building and the property in the Building. Tenant agrees tocooperate in any reasonable safety program developed by Landlord.(j) To control and prevent access to common areas and other areas.(k) Provided that reasonable access to the Premises shall be maintained and the business of Tenant shall not be interfered withunreasonably, to relocate, enlarge. reduce or change corridors, exits. entrances in or to the Building and to decorate and to make repairs, alterations, additionsand improvements, structural or otherwise, in or to the Building or any part thereof, and any adjacent building, land, street or alley, including for the purposeof connection with or entrance into or use of the Building in conjunction with any adjoining or adjacent building or buildings, now existing or hereafterconstructed, and may for such purposes erect scaffolding and other structures reasonably required by the character of the work to be performed, and duringsuch operations may enter upon the Premises and take into and upon or through any part of the Building, including the Premises, all materials that may berequired to make such repairs, alterations, improvements, or additions, and in that connection Landlord may temporarily close public entry ways, otherpublic spaces, stairways or corridors and interrupt or temporarily suspend any services or facilities agreed to be furnished by Landlord, all without the sameconstituting an eviction of Tenant in whole or in part and without abatement of rent by reason of loss or interruption of the business of Tenant or otherwise andwithout in any manner rendering Landlord liable for damages or relieving Tenant From performance of Tenant’s obligation under this lease; Landlord may atits option make any repairs, alterations, improvements and additions in and about the Building and the Premises during ordinary business hours, providedLandlord shall use reasonable efforts to minimize disruption to the conduct of Tenant’s business.(l) From time to time to make and adopt such reasonable rules and regulations, in addition to or other than or by way of amendment ormodification of the rules and regulations contained in Exhibit C attached to this lease or other Sections of this lease, for the protection, welfare, andharmonious operation of the Building and its tenants and occupants, as the Landlord may reasonably determine, and the Tenant agrees to abide by all suchrules and regulations.H. Alterations.(a) Without Landlord’s prior written consent, which shall not be unreasonably withheld, Tenant shall not make or cause to be made anydecorating, painting, exterior, structural, electrical, plumbing, ventilation, air conditioning or other type of alterations, improvements, additions, changes orrepairs in or to the Premises or the Building, except to the extent the same is non-structural and costs less than $10,000. As a condition to granting its consent,Landlord may impose reasonable requirements in addition to any set forth in this lease, including, without limitation, requirements as to the manner and timefor the performance of any such work, the posting of security to assure payment for such work, and the type and amount of insurance and bonds Tenantmust acquire and maintain in connection therewith. In addition, at Landlord’s option, Landlord shall have the right: to approve the contractors or mechanicsperforming the work; to approve all plans and specifications relating to the work; to review the work of Tenant’s architects, engineers, contractors ormechanics and to control any construction or other activities being undertaken within the Building, with Landlord to be reimbursed on demand of same forany costs incurred in connection with such review or control; and to require correction of the work in instances in which materials or workmanship isdefective or not in accordance with plans or specifications previously approved by Landlord. Landlord’s approval of any plans and specifications shall createno responsibility on the part of Landlord for the completeness, design, sufficiency or compliance with all laws, ordinances, regulations, rules andrequirements of governmental entities having jurisdiction. Tenant shall deliver to Landlord for Landlord’s files, at Tenant’s sole cost and expense, completecopies of all final working drawings and plans and specifications. Except as expressly provided herein, all alterations, improvements, additions, changes orrepairs shall be provided by and paid for by Tenant at its sole expense, but shall become the property of Landlord and shall be surrendered with the Premisesupon termination of this lease; provided, however, that Landlord may, by written notice to Tenant as providedin Section of this Lease, require that Tenant, at Tenant’s sole cost and expense, remove any or all improvements, alterations, additions orfixtures installed or made by. Tenant on or to the Premises and to repair any damages to the Premises caused by such removal. Notwithstanding the foregoing.Tenant shall not be required to remove the improvements which constitute Landlord’s Work.(b) All work in connection with any alterations, improvements, changes, additions or repairs in the Premises or the Building made by orfor the benefit of Tenant shall be performed in full compliance with all laws, ordinances, regulations, rules and requirements of all governmental entitieshaving jurisdiction and in full compliance with all insurance rules, orders, directions, regulations and requirement, and Tenant shall be responsible for allsuch compliance. If there is now or if there shall be installed in the Building a sprinkler system, and if any fire rating bureau or an similar body havingjurisdiction or any governmental authority having jurisdiction requires or recommends that any changes, modifications, alterations, additional sprinklerheads or other equipment be made or supplied by reason of Tenant’s business or the improvements it has added, Tenant shall, at its own cost, promptly makeand supply all such changes, modifications, alterations, additional sprinkler heads or other equipment; otherwise, Landlord shall be responsible.(c) Before work is commenced as provided in this Section II, Tenant shall give Landlord at least fifteen (15) days’ written notice.Landlord shall be entitled to enter the Premises during regular hours to post a notice of non-responsibility. If the cost of such work exceeds $75,000, Tenantshall provide Landlord with such assurances as Landlord may reasonably require regarding the payment of such work and avoidance of liens. During theprogress of the work, Tenant shall at its sole cost and expense, upon Landlords request, furnish Landlord with sworn contractor’s statements and lien waiverscovering all work theretofore performed, together with such endorsements to Landlord’s title insurance policy as Landlord may require. Any mechanic’s liensfor work claimed to have been performed for, or materials claimed to have been furnished to, Landlord or Tenant shall be discharged by Tenant, at Tenant’ssole expense as provided in Section 31. Tenant agrees to indemnify, hold harmless and defend Landlord from any loss, cost, damage or expense, includingattorney’s fees, arising out of any such lien claim or out of any other claim relating to work done or materials supplied to the Premises at Tenant’s request or onTenant’s behalf.12. Assignment and Sub1etting.(a) Tenant shall not: (i) voluntarily mortgage, pledge, hypothecate or encumber or subject to or permit to exist upon or be subjected to anylien or charge, this lease or any interest under it. (ii) assign this Lease or sublet the Premises or any part thereof without, Landlord’s consent which shall not beunreasonably withheld subject to the provisions set forth below, or (iii) permit the use or occupancy of the Premises or any part thereof by anyone other thanthe Tenant and Tenant’s employees. In no event shall this lease be assigned or assignable by voluntary or involuntary bankruptcy proceedings or otherwise,and in no event shall this lease or any rights or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or reorganization proceedings.(b) Tenant shall, by notice in writing, advise Landlord of its intention from, on and after a stated date (which shall not be less than thirty(30) days after the date of Tenant’s notice) to assign this lease or sublet any part or all of the Premises for the balance or any part of the Term, and, in suchevent, Landlord shall have the right, to be exercised by giving written notice to Tenant within fifteen (15) days after receipt of Tenant’s notice, to recapture thespace described in Tenant’s notice and such recapture notice shall, if given, terminate this lease with respect to the space therein described as of the date statedin Tenant’s notice. Tenant’s notice shall state the name and address of the proposed subtenant or assignee and a true and complete copy of the proposedsublease or assignment shall be delivered to Landlord withsaid notice. If Tenant’s notice shall cover all of the space hereby demised, and if Landlord shall give the aforesaid recapture notice with respect thereto, theTerm of this lease shall expire and end on the date stated in Tenant’s notice as fully and completely as if that date had been herein definitely fixed for theexpiration of the Term. If, however, this lease be terminated pursuant to the foregoing with respect to less than the entire Premises, the Rent and the Tenant’sProportionate Share as defined herein shall be adjusted by Landlord on the basis of the number of rentable square feet retained by Tenant, and this lease as soamended shall continue thereafter in full force and effect. If Landlord, upon receiving Tenant’s notice with respect to any such space, shall not exercise its rightto terminate as aforesaid, Landlord will not unreasonably withhold its consent to Tenant’s assignment or subletting the space covered by its notice; provided,however, that in addition to other circumstances under which Landlord’s consent may be withheld (whether similar or dissimilar to the following reasons),Tenant agrees that the withholding by Landlord of its consent to Tenant’s assignment or subletting the space covered by its notice will not be deemed“unreasonable” if (i) the proposed assignee or subtenant is disreputable or otherwise not in keeping with the nature or class of tenants in the Building, (ii) theproposed assignee or subtenant is not sufficiently financially responsible, or in Landlord’s reasonable opinion will not in the future be sufficiently financiallyresponsible, to perform its obligations under the lease or its sublease, (iii) the use of the Premises by the proposed assignee or subtenant would, in Landlord’sreasonable judgment, significantly increase the pedestrian traffic in and out of the Building or would require Landlord to perform any alterations to theBuilding to comply with applicable building code requirements or other laws, (iv) there is at the time of such notice, any uncured default by Tenant pursuantto this lease; or (v) the proposed subtenant or assignee has expressed an interest in other available space owned by Landlord or its affiliates.(c) Tenant agrees that all advertising by Tenant or on Tenant’s behalf with respect to the leasing of space in the Building must beapproved in writing by Landlord prior to publication.(d) If Tenant is a corporation, (other than a corporation whose stock is traded through a national or regional exchange or over-the-counter),any transaction or series of transactions (including, without limitation, any dissolution, merger, consolidation or other reorganization of Tenant, or anyissuance, sale, gift, transfer or redemption of any capital stock of Tenant, whether voluntary, involuntary or by operation of law, or any combination of anyof the foregoing transactions) resulting in the transfer of control of Tenant, other than by reason of death, shall be deemed to be transfer of Tenant’s interestunder this lease for the purpose of Section 12(a). If Tenant is a partnership, any transaction or series of transactions (including, without limitation, anywithdrawal or admittance of a partner or any change in any partner’s interest in Tenant. whether voluntary, involuntary or by operation of law, or anycombination of any of the foregoing transactions) resulting in the transfer of control of Tenant, other than by reason of death, shall be deemed to be a transferof Tenant’s interest under this lease for the purposes of Section 12(a). The term “control” as used in this Section 12(e) means the power to directly or indirectlydirect or cause the direction of the management or policies of Tenant. If Tenant is a corporation, a change or series of changes in ownership of stock whichwould result in direct or indirect change in ownership by the stockholders or an affiliated group of stockholders of less than fifty percent (50%) of theoutstanding stock as of the date of the execution and delivery of this lease or which are effected through a recognized stock exchange to stockholders not actingin concert to obtain control shall not he considered a change of control.Notwithstanding the foregoing, with prior written notice to Landlord, Tenant may sublease not more than 25% of the Premises to anaffiliate of Tenant, including, without limitation, Tenant’s parent or subsidiary, or a entity owned or controlled by Tenant’s or Tenant’s parent or subsidiary.(e) Consent by Landlord to any assignment, subletting, use or occupancy, or transfer shallnot operate to relieve the Tenant from any covenant or obligation hereunder, except to the extent, if any, expressly provided for in such consent, or be deemed tobe a consent to or relieve Tenant from obtaining Landlord’s consent to any subsequent assignment, transfer, lien, charge, subletting, use or occupancy. Tenantshall pay all of Landlord’s costs, charges and expenses, including attorney’s fees incurred in connection with any assignment or sublease requested or madeby Tenant.13. Waiver of Certain Claims: Indemnity by Tenant.(a) To the extent not expressly prohibited by law, Landlord and Tenant each releases and waives any and all claims for, and rights torecover, damages against and from the other, and the other’s respective agents, partners, shareholders, officers, directors (and, in the case of claims byTenant, any trustee (“Trustee”) holding legal title to the Real Property if same is held in trust) and employees (collectively, the “Released Parties”), for loss,damage or destruction to any of its property (including the Premises, the Building and their contents), the elements of which are insured against or whichwould have been insured against had such party suffering such loss, damage or destruction maintained the property or physical damage insurance policiesrequired under Section 20 hereof. In no event shall this clause be deemed, construed or asserted (i) to affect or limit any claims or rights against any ReleasedParties other than the right to recover damages for loss, damage or destruction to property, or (ii) to benefit any third party other than the Released Parties.(b) To the extent not expressly prohibited by law, Tenant agrees to hold harmless and indemnify the Landlord and the Landlord’s agents,partners, shareholders, officers, directors, Trustee, and employees (collectively, the “Landlord Indemnitees”) from any losses, damages, judgments, claims,expenses, costs and liabilities imposed upon or incurred by or asserted against the Landlord Indemnitees, including reasonable attorney’s fees and expenses,for death or injury that may arise from or be caused directly or indirectly by any negligent act of omission or commission of any willful misconduct of Tenantor any of Tenant’s agents, partners, or employees or any default by Tenant under this Lease. Such third parties shall not be deemed third party beneficiaries ofthis agreement. In case any action, suit or proceeding is brought against any of the Landlord Indemnitees by reason of any such act of the Tenant or any ofTenant’s agents, partners or employees, then the Tenant will, at the Tenant’s expense and at the option of said Landlord Indemnitees, by counsel reasonablyapproved by Landlord, resist and defend such action, suit or proceeding.To the extent not expressly prohibited by law, Landlord agrees to hold harmless and indemnify the Tenant and Tenant’s agents, partners,shareholders, officers, directors, Trustee, and employees (collectively, the “Tenant Indemnitees”) from any losses, damages, judgments, claims, expenses,costs and liabilities imposed upon or incurred by or asserted against the Tenant indemnitees. including reasonable attorney’s fees and expenses, for death orinjury that may arise from or be caused directly or indirectly by any negligent act of omission or commission of any willful misconduct of the Landlord orany of Landlord’s respective agents, partners, or employees or any default by Landlord under this Lease. Such third parties shall not be deemed third partybeneficiaries of this agreement. In case any action, suit or proceeding is brought against any of the Tenant Indemnitees by reason of any such act of theLandlord or any of Landlord’s agents, partners or employees, then the Landlord will, at Landlord’s expense and at the option of said Tenant Indemnitees, bycounsel reasonably approved by Tenant, resist and defend such action, suit or proceeding.(c) Subject to the provisions of Section 13(a) to the extent permitted by law, no agreement of Tenant in this Section 13 shall be deemed toexempt Landlord from liability or damages for injury topersons or damage to property caused by or resulting from the willful negligence of Landlord, its agents, servants or employees, in the operation ormaintenance of the Premises or Building.14. Damage or Destruction by Casualty. If the Premises or any part of the Building shall be damaged by fire or other casualty and ifsuch damage does not render all or a “material portion” (as reasonably determined) of the Premises or the Building untenantable, then Landlord shall proceedto repair and restore the Premises with reasonable promptness, subject to reasonable delays for insurance adjustments and delays caused by matters beyondLandlord’s control. If any such damage renders all or a material portion of the Premises or the Building untenantable, Landlord shall, with reasonablepromptness after the occurrence of such damage, estimate the length of time that will be required to substantially complete the repair and restoration of suchdamage and shall by notice advise Tenant of such estimate. If it is so estimated that the amount of time required to substantially complete such repair andrestoration will exceed one hundred eighty (180) days from the date such damage occurred, then either Landlord or Tenant (but as to Tenant, only if all or amaterial portion of the Premises are rendered untenantable) shall have the right to terminate this lease as of the date of such damage upon giving notice to theother at any time within twenty (20) days after Landlord gives Tenant the notice containing said estimate (it being understood that Landlord may, if it elects todo so, also give such notice of termination together with the notice containing said estimate). Unless this lease is terminated as provided in the precedingsentence. Landlord shall proceed with reasonable promptness to repair and restore the Premises, subject to reasonable delays for insurance adjustments anddelays caused by matters beyond Landlord’s control, and also subject to zoning laws and building codes then in effect. Landlord shall have no liability toTenant, and Tenant shall not be entitled to terminate this lease if such repairs and restoration are not in fact completed within the time period estimated byLandlord, as aforesaid, or within said one hundred eighty (180) days, so long as Landlord shall proceed with reasonable diligence to complete such repairsand restoration. Notwithstanding anything to the contrary herein set forth, Landlord shall have no duty pursuant to this Section 14 to repair or restore anyportion of the alterations, additions or improvements made by Tenant in the Premises or to expend for any repair or restoration amounts in excess of insuranceproceeds paid to Landlord and available for repair or restoration.in the event any such fire or casualty damage renders the Premises untenantable, and to the extent Tenant vacates the Premises as a result,and if this lease shall not be terminated pursuant to the foregoing provisions of this Section 14 by reason of such damage, then Rent shall abate during theperiod beginning with the date of such damage and ending with the date when Landlord completes its repair and restoration. Such abatement shall be in anamount bearing the same. ratio to the total amount of Rent for such period as the portion of the Premises not ready for occupancy from time to time bears to theentire Premises. In the event of termination of this lease pursuant to this Section 14, Rent shall be apportioned on a per diem basis and be paid to the date of thefire or casualty.15. Eminent Domain. If all or a substantial portion of the Building, or any part thereof which includes all or a substantial portion ofthe Premises, shall be taken or condemned by any competent authority for any public or quasi-public use or purpose, the Term of this lease shall end uponand not before the date when the possession of the part so taken shall be required for such use or purpose, and without apportionment of the award to or for thebenefit of Tenant. If any condemnation proceeding shall be instituted in which it is sought to take or damage any part of the Building, the taking of whichwould, in Landlord’s reasonable opinion, prevent the economical operation of the Building, or if the grade of any street or alley adjacent to the Building ischanged by any competent authority, and such taking, damage or change of grade makes it reasonably necessary to remodel the Building to conform to thetaking, damage or changed grade, Landlord shall have the right to terminate this lease upon not less than ninety (90) days’ notice prior to the date oftermination designated in the notice. In either of the events above referred to, Rent at the then current rate shall be apportioned as of the date of the termination.No money or otherconsideration shall be payable by the Landlord to the Tenant for the right of termination, and the Tenant shall have no right to share in the condemnationaward, whether for a partial or total taking, for loss of Tenant’s leasehold or improvements, or in any judgment for damages caused by the change of grade.16. Default: Landlord’s Rights and Remedies.(a) If default shall be made in the payment of the Rent or any installment thereof or any other sum required to be paid by Tenant under theterms of any other agreement between Landlord and Tenant, and such monetary default shall continue for five (5) business days after written notice to Tenant,or if a default involves a hazardous condition and is not cured by Tenant within five (5) business days’ written notice to Tenant, or if the interest of Tenant inthis lease shall he levied or under execution or other legal process, or if any voluntary petition in bankruptcy or for corporate reorganization or any similarrelief shall be filed by Tenant, or if any involuntary petition in bankruptcy shall be filed against Tenant under any federal or state bankruptcy or insolvencyact and shall not have been dismissed within sixty (60) days from the filing thereof, or if a receiver shall he appointed for Tenant or any of the property ofTenant by any court and such receiver shall not have been dismissed within sixty (60) days from the date of his appointment, or if Tenant shall make anassignment for the benefit of creditors, or if Tenant shall admit in writing Tenant’s inability to meet Tenant’s debts as the mature, or if Tenant shall abandonor vacate the Premises during the Term, or if default shall be made in the observance or performance of any of the other covenants or conditions in this leasewhich Tenant is required to observe and perform and such non-monetary default shall continue for thirty (30) days after written notice to Tenant (providedthat, if such default cannot reasonably he cured by Tenant within said 30 day time period, such time period for cure shall be extended to such time period asin reasonably necessitated to effect such cure, provided that the Tenant acts diligently, but in event longer than an additional ninety (90) days), then Landlordmay treat the occurrence of any one or more of the foregoing events as a breach of this lease, and thereupon at its option may, with or without notice or demandof any kind to Tenant or any other person, have any one or more of the following described remedies (any of which may be pursued by Landlord in its ownname or by and in the name of the beneficiaries of Landlord or the agent of such beneficiaries) in addition to all other rights and remedies provided at law or inequity or elsewhere herein:(i)Landlord may terminate this lease and the Term created hereby, in which event Landlord may forthwith repossess thePremises and be entitled to recover forthwith as damages a sum of money equal to the value of the Rent provided to be paidby Tenant for the balance of the original Term, less the rental value of the Premises for said period (“Rental Value”), andplus any other sum of money and damages owed by Tenant to Landlord. Should the Rental Value exceed the value of theRent provided to be paid by Tenant for the balance of the original Term of the lease, Landlord shall have no obligation topay to Tenant the excess or any part thereof.(ii)Landlord may terminate Tenant’s right of possession and may repossess the Premises by forcible entry and detainer suit,by taking peaceful possession or otherwise, without terminating this lease, in which event Landlord may, but shall beunder no obligation to, relet the same for the account of Tenant, for such rent and upon such terms as shall be satisfactoryto Landlord. For the purpose of such reletting, Landlord is authorized to decorate or to make any repairs. If Landlord shallfail to relet the Premises, Tenant shall pay to Landlord as damages a sum equal to the amount of the Rent reserved in thislease for the balance of its original Term. If the Premises are relet and a sufficient sum shall not be realized from suchreletting after paying all of the costs and expenses of such decorations,repairs, changes, alterations and additions and the other expenses of such reletting and of the collection of the rent accruingtherefrom to equal or exceed the Rent provided for in this lease for the balance of its original Term, Tenant shall satisfy andpay such deficiency upon demand therefor from time to time. Tenant agrees that Landlord may file suit to recover any sumsfalling due under the terms of this Section 16 from time. to time and that no suit or recovery of any portion due Landlordhereunder shall be any defense to any subsequent action brought for any amount theretofore reduced to judgment in favor ofLandlord.(b) If’ Landlord exercises either of the remedies provided for in subparagraphs (i) and (ii) of the foregoing Section 16(a), Tenant shallsurrender possession and vacate the Premises immediately and deliver possession thereof to the Landlord, and Landlord may then or at any time thereafter re-enter and take complete and peaceful possession of the Premises, with or without process of law, full and complete license so to do being hereby granted to theLandlord, and Landlord may remove all occupants and property therefrom, without being deemed in any manner guilty of trespass, eviction or forcible entryand detainer and without relinquishing Landlord’s right to Rent or any other right given to Landlord hereunder or by operation of law.(c) All property removed from the Premises by Landlord pursuant to any provisions of this lease or of law may be handled, removed orstored by the Landlord at the cost and expense of the Tenant, and the Landlord shall in no event be responsible for the value, preservation or safekeepingthereof. Tenant shall pay Landlord for all expenses incurred by Landlord in such removal and storage charges against such property so long as the same shallbe in Landlord’s possession or under Landlord’s control. All property not removed from the Premises or retaken from storage by Tenant within thirty (30)days after the end of the Term, however terminated, shall, at Landlord’s election, be conclusively deemed to have been conveyed by Tenant to Landlord as bybill of sale without further payment or credit by Landlord to Tenant.(d) Tenant shall pay all of Landlord’s costs, charges and expenses, including court costs and attorneys’ fees, incurred in enforcingTenant’s obligations under this lease or incurred by Landlord in any litigation, negotiation or transactions in which Tenant causes the Landlord, withoutLandlord’s fault, to become involved or concerned.(e) In the event that Tenant shall file for protection under any chapter of the Bankruptcy Code now or hereafter in effect, or a trustee-in-bankruptcy shall be appointed for Tenant, Landlord and Tenant agree, to the extent permitted by law, to request that the debtor-in-possession or trustee-in-bankruptcy, if one is appointed, shall assume or reject this lease within sixty (60) days thereafter.17.Subordination.(a) Landlord may have heretofore or may hereafter encumber with a mortgage or trust deed the Real Property or any interest therein, andmay have heretofore and may hereafter sell and tease back the Land, or any part of the Real Property, and may have heretofore or may hereafter encumber theleasehold estate under such lease with a mortgage or trust deed. (Any such mortgage or trust deed is herein called a “Mortgage” and the holder of any suchmortgage or the beneficiary under any such trust deed is herein called a “Mortgagee”. Any such lease of the underlying land is herein called a ‘Ground Lease”,and the lessor under any such lease is herein called a “Ground Lessor”. Any Mortgage which is a first lien against the Building, the Land, the Real Property,the leasehold estate under a Ground Lease or any interest therein is herein called a “First Mortgage” and the holder or beneficiary of any First Mortgageis herein called a ‘First Mortgagee’.).(b) If requested by a Mortgagee or Ground Lessor, Tenant will either (i) subordinate its interest in this lease to said Mortgage or GroundLease, and to any and all advances made thereunder and to the interest thereon, and to all renewals, replacements, supplements, amendments, modificationsand extensions thereof, provided, such Mortgagee or Ground Lessor shall concurrently therewith provide Tenant with a non-disturbance agreement incustomary form or (ii) make certain of Tenant’s rights and interest in this lease superior thereto; and Tenant will promptly execute and deliver such agreementor agreements as may be reasonably required by such Mortgagee or Ground Lessor; provided however, Tenant covenants it will not subordinate this lease toany Mortgage other than a First Mortgage without the prior written consent of the First Mortgagee.(c) It is further agreed that (i) if any Mortgage shall be foreclosed, or if any Ground Lease be terminated. (A) the liability of’ the Mortgageeor purchaser at such foreclosure sale or the liability of a subsequent owner designated as Landlord under this lease shall exist only so long as such Mortgagee,purchaser or owner is the owner of the Building. Land or Real Property, and such liability shall not continue or survive after further transfer of ownership; (B)the Mortgagee or Ground Lessor or their successors or assigns that succeeds to the interest of the Landlord in the Building or the Land, or acquires the right topossession of the Building or the Land, shall not be (j) liable for any act or omission of the party named above (or any successor in title thereto) as theLandlord, under this lease; (2) liable for the performance of Landlord’s covenants pursuant to the provisions of this lease which arise and accrue prior to suchentity succeeding to the interest of Landlord (or any successor in title thereto) under this lease or acquiring such right to possession; (3) subject to any offsetsor defenses which Tenant may have at any time against Landlord(or any successor in title thereto); (4) bound by any Rent which the Tenant may have paidpreviously for more than one (I) month; (5) liable for the performance of any covenant of Landlord under this lease which is capable of performance only bythe original Landlord (or any successor in title thereto); and (C) upon request of the Mortgagee, if the Mortgage shall be foreclosed, Tenant will attorn, asTenant under this lease, to the purchaser at any foreclosure sale under any Mortgage or upon request of the Ground Lessor, if any Ground Lease shall beterminated, Tenant will attorn as Tenant under this lease to the Ground Lessor, and Tenant will execute such instruments as may be necessary or appropriateto evidence such attornment; and (ii) this lease may not be modified or amended so as to reduce the Rent or shorten the Term, or so as to adversely affect inany other respect to any material extent the rights of the Landlord, nor shall this lease be cancelled or surrendered, without the prior written consent, in eachinstance, of the First Mortgagee or any Ground Lessor.(d) Should any prospective First Mortgagee or Ground Lessor require a modification or modifications of this lease, which modification ormodifications will not cause an increased cost or expense to Tenant or in any other way materially and adversely change the rights and obligations of Tenanthereunder, in the reasonable judgment of Tenant, then and in such event, Tenant agrees that this lease may be so modified and agrees to execute whateverdocuments are required therefor and deliver the same to Landlord within ten (10) days following the request therefor. Should any prospective Mortgagee orGround Lessor require execution of a short form of lease for recording (containing, among other customary provisions, the names of the parties, a descriptionof the Premises and the Term of this lease), Tenant agrees to execute such short form of’ lease and deliver the same to Landlord within ten(10) days following the request therefor.Landlord shall provide Tenant with a Subordination. Non-Disturbance and Attornment Agreement from its existing mortgage lender,LaSalle Bank, NA, in such form as LaSalle Bank may reasonably require, on or before the Commencement Date.18. Mortgagee and Ground Lessor Protection. Tenant agrees to give any First Mortgagee and any Ground Lessor, by registered orcertified mail, a copy of any notice or claim of default served upon the Landlord by Tenant, provided that prior to such notice Tenant has been notified inwriting (by way of service on Tenant of a copy of an assignment of Landlord’s interests in leases, or otherwise) of the address of such First Mortgagee orGround Lessor (hereinafter the “Notified Party”). Tenant further agrees that if Landlord shall have failed to cure such default within twenty (20) days aftersuch notice to Landlord (or if such default cannot he cured or corrected within that time, then such additional time as may be necessary if Landlord hascommenced within such twenty (20) days and is diligently pursuing the remedies or steps necessary to cure or correct such default), then the Notified Partyshall have an additional thirty (30) days within which to cure or correct such default (or if such default cannot be cured or corrected within that time, thensuch additional time as may be necessary if such Notified Party has commenced within such thirty (30) days and is diligently pursuing the remedies or stepsnecessary to cure or correct such default, including the time necessary to obtain possession if possession is necessary to cure or correct such default) beforeTenant may exercise any right or remedy which it may have on account of any such default of Landlord.19. Insurance.(a) At all times during the Term of this lease, Tenant shall at its sole cost and expense maintain in full force and effect insuranceprotecting Tenant and Landlord (and Landlord’s beneficiaries if Landlord is ever a land trust), and provided Tenant is provided with written notice thereof),and their respective agents, and any other parties designated by Landlord from time to time, with terms. coverages and in companies at all times satisfactory toLandlord as follows:(i) Commercial General Liability Insurance against claims for personal injury, death or property damage occurring in connection with theuse and occupancy of the Premises, including contractual liability insuring the indemnification provisions contained in this lease, naming Landlord, andLandlord’s mortgagee, principals and principals’ beneficiaries, and the management of the Building, as additional insureds, such insurance to affordprotection to the limit of not less than Two Million Dollars ($2,000,000.00) for each occurrence and annual aggregate.(ii) Workers Compensation Insurance, as required to meet the applicable laws of the state in which the Building is located, andEmployers Liability Insurance.(iii) At all times when any work is in process in connection with any change or alteration being made by Tenant. Tenant shall require allcontractors and subcontractors to maintain the insurance described in (i) and (ii). Landlord and Landlord’s mortgagee. principals and principals’ beneficiariesand the management of the Building will be added as additional insureds to such policies, and evidence of same shall be delivered to Landlord.(iv) Property insurance on an “all risk” basis (including sprinkler leakage, if applicable) for the full replacement cost of all additions,improvements and alterations to the Premises and of all office equipment, furniture, trade fixtures, merchandise and all other items of Tenant’s property on thePremises. Tenant agrees to have such insurance policies endorsed to provide for a waiver of subrogation against Landlord by the insurance carrier.Tenant shall, prior to the commencement of the Term hereof and prior to the expiration of any policy, furnish Landlord certificatesevidencing that all required insurance is in force and providing that such insurance may not be cancelled or changed without at least thirty (30) days’ priorwritten notice to Landlord and Tenant (unless such cancellation is due to nonpayment of premiums, in which event ten(10) days’ prior notice shall be provided).(b) Tenant shall comply with all applicable laws and ordinances, all orders and decrees of court and all requirements of othergovernmental authority and shall not directly or indirectly make any use of the Premises which may thereby be prohibited or be dangerous to person orproperty or which may jeopardize any insurance coverage, or may increase the cost of insurance or require additional insurance coverage.(c) Landlord and Tenant hereby waive all claims of recovery from the other party for toss or damage to any of its property to the extent ofany recovery collectible under valid and collectible property insurance policies.Landlord agrees to maintain property coverage for the replacement cost of the Building and general liability insurance, in such form and amounts as Landlordmay in its discretion deem prudent. The premiums for such policies shall be included in Expenses.20. Nonwaiver. No waiver of any condition expressed in this lease shall be implied by any neglect of either party to enforce any remedyon account of the violation of such condition whether or not such violation be continued or repeated subsequently, and no express waiver shall affect anycondition other than the one specified in such waiver and that one only for the time and in the manner specifically stated. Without limiting the provisions ofSection 8, it is agreed that no receipt of moneys by Landlord from Tenant after the termination in any way of the Term or of Tenant’s right of possessionhereunder or after the giving of any notice shall reinstate, continue or extend the Term or affect any notice given to Tenant prior to the receipt of such moneys. Itis also agreed that after the service of notice or the commencement of a suit or after final judgment for possession of the Premises, Landlord may receive andcollect any moneys due, and the payment of said moneys shall not waive or affect said notice, suit or judgment.21. Estoppel Certificate. Tenant agrees that from time to time upon written request by Landlord, or the holder of any Mortgage or anyground lessor, Tenant (or any permitted assignee, subtenant or other occupant of the Premises claiming by through or under Tenant) will deliver to Landlord orto the holder of any Mortgage or ground lessor or contract purchaser of an interest in Landlord or in the Building, within ten (10) business days after suchwritten request shall have been served upon Tenant, a statement in writing signed by Tenant, addressed to such person or persons as Landlord shall request,certifying (a) that this lease is unmodified and in full force and effect (or if there have been modifications, that the lease as modified is in full force and effectand identifying the modifications); (b) the date upon which Tenant began paying Rent and the dates to which the Rent and other charges have been paid, (c)the date upon which the Term shall end, (d) that the Landlord is not in default under any provision of this lease, or, if in default, the nature thereof in detail;(e) that the Premises have been completed in accordance with the terms hereof and Tenant is in occupancy and paying Rent on a current basis with no rentaloffsets or claims, or otherwise, if applicable; (f) that there has been no prepayment of Rent other than that provided for in the lease; (g) the amount of anysecurity deposit made by Tenant or Tenant-successor, (h) that there are no actions, whether voluntary or otherwise, pending against Tenant under thebankruptcy laws of the United States or any State thereof’, and (i) such other matters as may be reasonably required by the Landlord, holder of a Mortgage,ground lessor or contract purchaser.Landlord agrees that from time to time upon written request by Tenant, that Landlord will deliver to Tenant, within ten (10) business daysafter such written request, a Landlord estoppel certificate in substantially the same form as required of Tenant above, addressed to such person or persons asTenant shall request.22. Tenant-Corporation or Partnership. In case Tenant is a corporation, Tenant (a) represents and warrants that this lease has beenduly authorized, executed and delivered by and on behalf of the Tenant and constitutes the valid and binding agreement of the Tenant in accordance with theterms hereof and (b) if Landlord so requests, it shall deliver to Landlord or its agent, concurrently with the delivery of this lease executed by Tenant, certifiedresolutions of the hoard of directors (and shareholders, if required) authorizing Tenant’s execution and delivery of this lease and the performance of Tenant’sobligations hereunder. In case Tenant is a partnership, Tenant represents and warrants that all of the persons who are general or managing partners in saidpartnership have executed this lease on behalf of Tenant, or that this lease has been executed and delivered pursuant to and in conformity with a valid andeffective authorization therefor by all of the general or managing partners of such partnership, and is and constitutes the valid and binding agreement of thepartnership and each and every partner therein in accordance with its terms. Also. it is agreed that each and every present and future general partner in Tenantshall be and remain at all times jointly and severally liable hereunder and that the death, resignation or withdrawal of any partner shall not release the liabilityof such partner under the terms of this lease unless and until the Landlord shall have consented in writing to such release, Landlord being under no obligationto so consent.23. Real Estate Brokers. Tenant and Landlord represents to each other that neither has directly dealt with any broker other thanColliers, Bennett & Kahnweiler (whose commission, if any, shall be paid by Landlord pursuant to separate agreement) as broker in connection with thislease. Each party agrees to indemnify and hold the other harmless from all damages, liability and expense (including reasonable attorneys’ fees) arising fromany claims or demands of any other broker or brokers or finders for any commission alleged to be due such broker or brokers or finders in connection withits participating in the negotiation with such party of this lease.24. Notices. All notices to or demands upon Landlord or Tenant desired or required to be given under any of the provisions hereof shallbe in writing. Any notices or demands from Landlord to Tenant shall be deemed to have been given if a copy thereof has been personally delivered to Tenant orTenant’s agent (including without limitation delivery by messenger or courier, with evidence of receipt) or mailed by United States registered or certified mail,return receipt requested, or by recognized overnight courier service, addressed to Tenant at the address of the Premises after Tenant’s occupancy of thePremises; prior to occupancy notices to Tenant shall be given at 5693 W. Howard Street, Niles. IL 60714. Any notices or demands from Landlord to Tenantmay be signed by Landlord, its beneficiaries, the managing agent for the Building or any agent of any of them. Any notices or demands from Tenant toLandlord shall be deemed to have been given if a copy thereof has been personally delivered to Landlord or the managing agent of the Building (includingwithout limitation delivery by messenger or courier, with evidence of receipt) or by recognized overnight courier service or mailed by United States registered orcertified mail, return receipt requested, to Landlord in care of Christina Fitzgerald, 6201 West Howard Street, Niles, Illinois 60714. with a copy to James G.Haft. 131 S. Dearborn Street 30th floor. Chicago, Illinois 60603. Landlord, its beneficiaries, or the managing agent of the Building may, upon notice to Tenant,change either the address for, or the party who shall receive, notices or demands from Tenant to Landlord on Landlord’s behalf. All notices to or demandsupon Landlord or Tenant mailed by registered or certified mail, return receipt requested, shall be deemed served two (2) business days after the date the samewere posted. Notices may be given by telecopy provided that simultaneous duplicate notice is given by one of the methods provided above.25. Miscellaneous.(a.) Each provision of this lease shall extend to and shall bind and inure to the benefit notonly of Landlord and Tenant, but also their respective heirs, legal representatives, successors and assigns. but this provision shall not operate to permit anytransfer, assignment, mortgage, encumbrance, lien, charge, or subletting contrary to the provisions of Section 12.(b) All of the agreements of Landlord and Tenant with respect to the Premises are contained in this lease; and no modification, waiver oramendment of this lease or of any of its conditions or provisions shall be binding upon Landlord unless in writing signed by Landlord.(c) Submission of this instrument for examination shall not constitute a reservation of or option for the Premises or in any manner bindLandlord and no lease or obligation on Landlord shall arise until this instrument is signed and delivered by Landlord and Tenant; provided, however, theexecution and delivery by Tenant of this lease to Landlord or the agent of Landlord’s beneficiary shall constitute an irrevocable offer by Tenant to lease thePremises on the terms and conditions herein contained, which offer may not be revoked for thirty (30) days after such delivery.(d) The word “Tenant” whenever used herein shall construed to mean Tenants or any one or more of them in all cases where there is morethan one Tenant: and the necessary grammatical changes required to make the provisions hereof apply either to corporations or other organizations.partnerships or other entities, or individuals, shall in all cases be assumed as though in each case fully expressed. In all cases where there is more than oneTenant, the liability of each shall be joint and several.(e) Clauses, plats, and riders, if any, signed by Landlord and Tenant and endorsed on or affixed to this lease are part hereof and in theevent of variation or discrepancy the duplicate original hereof, including such clauses, plats and riders, if any, held by Landlord shall control.(f) The headings of Sections are for convenience only and do not limit, expand or construe the contents of the Sections.(g) Time is of the essence of this lease and of each and all provisions thereof.(h) All amounts (including, without limitation, Base Rent and Additional Rent) owed by Tenant to Landlord pursuant to any provision ofthis lease shall not be deemed a loan but shall bear interest from the date due until paid at the annual rate equal to five percent (5%) plus the rate of interestannounced from time to time by Bank of America or any successor thereto, as its corporate base rate, changing as and when said corporate base rate changes,unless a lesser rate shall then be the maximum rate permissible by law with respect thereto, in which event said lesser rate shall be charged.(i) The invalidity of any provision of this lease shall not impair or affect in any manner the validity, enforceability or effect of the rest ofthis lease.(j) All understandings and agreements, oral or written, heretofore made between the parties hereto are merged in this lease, which alonefully and completely expresses the agreement between Landlord (and its beneficiary and their agents) and Tenant.(k) The parties agree that, in the event any legal action is brought by either party against the other party in connection with this lease, theprevailing party in such action shall be entitled to recover its reasonable attorney’s fees incurred in connection with such action.26. Delivery of Possession. If the Landlord shall be unable to give possession of thePremises on the date of the commencement of the Term for any reason, Landlord shall not be subject to any liability for failure to give possession. Under suchcircumstances the Rent reserved and covenanted to be paid herein shall not commence until the Premises are available for occupancy, and no such failure togive possession on the date of commencement of the Term shall affect the validity of this lease or the obligations of the Tenant hereunder. Provided, however, ifthe Premises are not delivered to Tenant by the Commencement Date as stated on page one of this lease, the Commencement Date and the stated expiration dateas set forth on page one of this lease shall he adjusted so as to accord the parties hereto with the term they would have had if the Premises had been delivered onthe original Commencement Date. In accordance therewith, and in such event, Landlord and Tenant shall execute an amendment to this lease reflecting the newcommencement date and the new expiration date.27. Intentionally Deleted.28. Intentionally Deleted.29. Signs. No signs shall be installed on the exterior of, or adjacent to, the Premises or the Building, except as provided herein. Tenantshall have the right to display its corporate name in the building lobby sign and at the entry area to the Premises, provided such signs shall be in accordancewith the building signage standard designated by Landlord and subject to Landlord’s prior written approval. The installation and maintenance of’ any and allsigns by or on behalf of Tenant shall be in full compliance with all applicable laws, ordinances, regulations, rules and orders of any governmental authorityhaving jurisdiction, and Tenant shall obtain all necessary licenses and permits in connection therewith. Tenant shall install and promptly repair. maintain andservice all such signs in accordance with proper techniques and procedures, and shall indemnify, hold harmless and defend Landlord from all loss, cost,damage or expense, including attorney’s fees, arising out of any claim relating to the installation, existence, operation, maintenance, repair, removal orcondition of any such sign. On or before the termination of this lease, Tenant shall, at its sole expense, remove all such signs in a manner satisfactory toLandlord and shall immediately repair, at Tenant’s sole expense, any injury or damage caused by removal. All costs and expenses relating to the installation,maintenance and removal of such signs shall be borne solely by Tenant.30. Landlord. The term “Landlord” as used in this lease means only the owner or owners at the time being of Landlord’s interest in theBuilding and the Land so that in the event of any assignment, conveyance or sale, once or successively, of Landlord’s interest in the Land and Building, orany assignment of this lease by Landlord, said Landlord making such sale, conveyance or assignment shall be and hereby is entirely freed and relieved of allcovenants and obligations of Landlord hereunder accruing after such conveyance, sale or assignment, and Tenant agrees to look solely to such purchaser,grantee or assignee with respect thereto. This lease shall not be affected by any such conveyance, assignment or sale, and Tenant agrees to attorn to thepurchaser, grantee or assignee.31. Title and Covenant Against Liens. The Landlord’s title is and always shall be paramount to the title of the Tenant and nothing inthis lease contained shall empower the Tenant to do any act which can, shall or may encumber the title of the Landlord. Tenant covenants and agrees not tosuffer or permit any lien of mechanics or materialmen to be placed upon or against the Real Property any portion thereof including the Premises or against theTenant’s leasehold interest in the Premises and, in case of any such lien attaching, to immediately pay and remove same. Tenant has no authority or power tocause or permit any lien or encumbrance of any kind whatsoever, whether created by act of Tenant, operation of law or otherwise, to attach to or be placedupon the Real Property, Land. Building orPremises, and any and all liens and encumbrances created by Tenant shall attach only to Tenant’s interest in the Premises. If any such liens created, caused orpermitted by Tenant so attach and Tenant fails to pay and remove same within ten (10) days, Landlord, at its election, may pay and satisfy the same. In suchevent the sums so paid by Landlord shall be deemed to be additional rent due and payable by Tenant at once without notice or demand, with interest from thedate of payment at the rate set forth in Section 26(i) hereof for amounts owed Landlord by Tenant.32. Exculpatory Provisions. The liability of any Landlord under this lease or any amendment to this lease, or any instrument ordocument executed in connection with this lease, shall be limited to and enforceable solely against the assets of such Landlord constituting an interest in theLand or Building (including, where the Landlord is a trustee of a land trust, the subject matter of the trust) and not other assets of such Landlord. Assets of aLandlord which is a partnership do not include the assets of the partners of such Landlord, and negative capital account of a partner in a partnership which isa Landlord and an obligation of a partner to contribute capital to the partnership which is Landlord shall not be deemed to be assets of the partnership which isLandlord. No directors, officers, employees or shareholders of any corporation which is Landlord shall have any personal liability arising from or inconnection with this lease. At any time during which Landlord is trustee of a land trust, all of the representations, warranties, covenants and conditions to beperformed by it under this lease or any documents or instruments executed in connection with this lease are undertaken solely as trustee, as aforesaid, and notindividually, and no personal liability shall be asserted or be enforceable against it or any of the beneficiaries under said trust agreement by reason of any ofthe representations, warranties, covenants or conditions contained in this lease or any documents or instruments executed in connection with this lease.33. Financial Statements. Tenant shall deliver to Landlord, upon Landlord’s request, from time to time, current financial statements ofTenant in the form required by Tenant’s bank or financial institution, provided that such request may not be made more than twice in any calendar year.34. Jurisdiction and Venue. TENANT HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY EITHERPARTY AND ARISING DIRECTLY OR INDIRECTLY OF THIS LEASE SHALL BE LITIGATED IN THE CIRCUIT COURT OF COOK COUNTY,ILLINOIS, OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS. TENANT HEREBY EXPRESSLYSUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY EITHER PARTY INANY OF SUCH COURTS, AND HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS ORPAPERS ISSUED THEREIN, AND AGREE THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAYBE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO TENANT AT THE ADDRESSES TO WHICH NOTICES ARE TO BE SENTPURSUANT TO THIS I..EASE. TENANT WAIVES ANY CLAIM THAT COOK COUNTY ILLINOIS OR THE FEDERAL DISTRICT COURT FORTHE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACKOF VENUE. THE EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THEENFORCEMENT, BY LANDLORD, OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING. BY LANDLORD OF ANYACTION TO ENFORCE THE. SAME IN ANY OTHER APPROPRIATE JUR1SDICTJON. AND TENANT HEREBY WAIVES THE RIGHT, IF ANY,TO COLLATERALLY ATTACH ANY SUCH JUDGMENT OR ACTION.35. Waiver of Right of Jury Trial. TENANT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAYARISE UNDER OR WITH RESPECT TO THIS LEASEIN WITNESS WHEREOF. the parries have caused this lease, to be executed on the date first above written.LANDLORD:HOWARD COMMONS ASSOCIATES, L.L.C.,A DELA WARE LIMITED LIABILITY COMPANYBY ITS MANAGERMCZ/JAMESON, INCAN ILLINOIS CORPORATIONBY: [Graphic appears here] JAMES G. HAFT, VICE-PRESIDENTTENANT:HAEMOSCOPE CORPORATION,AN ILLINOIS CORPORATIONBy: [Graphic appears here]ITS: [Graphic appears here]EXHIBIT APREM1SES FLOOR PLAN[Graphic appears here]EXHIBIT A-1DESCRIPTION OF PREMISESPARCEL 1:THAT PART OF THE NORTH 19 CHAINS OF THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SECTION 29, TOWNSHIP 41 NORTH. RANGE 13EAST OF THE THIRD PRINCIPAL MERIDIAN, BOUNDED BY A LINE DESCRIBED AS FOLLOWS:BEGINN1NG AT THE NORTHEAST CORNER OF THE \VEST 1/2 OF THE SOUTHWEST 1/4 OF SAID SECTION 29; THENCE SOUTH 89DEGREES 23 MINUTES 23 SECONDS WEST ALONG THE NORTH LINE OF THE SOUTHWEST 1/4 OF SAID SECTION 29. A DISTANCE OF1018.95 FEET TO A POINT IN SAID LINE 299.0 FEET EAST OF (AS MEASURED ALONG SAID NORTH LINE) THE NORTHWEST CORNEROF SAID SOUTHWEST QUARTER SECTION: THENCE SOUTH 00 DEGREES 00 MINUTES 00 SECONDS WEST ALONG THE LAST LINE OFTHE WEST 299.0 FEET OF THE SOUTHWEST 1/4 OF SAID SECTION 29 (SAID EAST LINE ALSO BEING THE EAST LINE OF A PUBL1CROAD KNOWN AS CRONAME ROAD) 962.51 FEET; THENCE NORTH 90 DEGREES 00 MINUTES 00 SECONDS EAST 586.24 FEET;THENCE NORTH 00 DEGREES 00 MINUTES 00 SECONDS EAST. 383.37 FEET; THENCE NORTH 90 DEGREES 00 MINUTES 00 SECONDSEAST; 431.86 FEET TO A POINT IN THE EAS1’ LINE OP THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SAID SECTION 29; THENCE NORTH00 DEGREES 04 MINUTES 38 SECONDS EAST ALONG THE LAST MENTIONED EAST LINE, 589.99 FEET TO THE I’OINT OF BEGINNING.IN COOK. COUNTY. ILLINOIS.EXCEPTING THEREFROM THE FOLLOWING:THAT PART OF THE NORTH 19 CHAINS OF THE WEST 1/2 OF THE SOUTH WEST 1/4 OF SECTION 29, TOWNSHIIP 41 NORTH, RANGE 13EAST OF THE THIRD PRINCIPAL MERIDIAN, BOUNDED BY A LIEN DESCRIBED AS FOLLOWS:BEGINNING AT THE NORTHEAST CORNER OF THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SAID SECTION 29: THENCE WEST ALONGTHE NORTH LINE OF THE SOUTHWEST 1/4 OF SAID SECTION 29, TO ITS INTERSECTION WITH THE NORTHERLY EXTENSION OF THECENTERLINE OF CRONAME ROAD (SAID POINT OF INTERSECTION BEING HEREINAFTER REFERRED TO AS POINT “A”); THENCESOUTH ALONG SATH) CENTHRLINE 319.46 FEET THENCE EAST 30.0 FEET TO THE EAST LINE OF CRONAME ROAD: THENCENORTHEASTERLY TO A POINT 47.5 I FEET EAST OF THE CENTERLINE OF CRONAME ROAD AND 99.41 FEET SOUTH (AS MEASUREDALONG SAID CENTERLINE) Of’ POINT “A” HEREINT3EFORE DESCRIBED; FHENCE NORTHEASTERLY TO A POINT 64.51 FEET EAST OFTHE CENTERLINE OF CRONAME ROAD AND 64.46 FEET SOUTH (AS MEASURED ALONG SAID CENTERLINE) OF POINT “A”HEREINI3EFORE DESCRIBED; THENCE NORTHEASTERLY TO A POINT 49.37 FEET SOUTH OF SAID NORTH LINE OF THE SOUTHWEST1/4 OF SECTION 29 AND 83.80 FEET EAST (AS MEASURED ALONG SALD NORTH LINE) OF POINT “A” HEREINBEFORE DESCRIBED;THENCE NORTHEASTERLY TO A POINT ON A LINE 40.0 FEET SOUTH OF AND PARALLEL WITH SAID NORTH LINE OF THESOUTHWEST 1/4 OF SEC’I’ION 29. 118.81 FEET EAST (AS MEASURED ALONG SAID NORTH LINE) OF POINT “A” HEREINBEFOREDESCRIBED; THENCE EAST ALONG SAID PARALLEL LINE TO THE EAST LINE OF SAID WEST 1/2 OF THE SOUTHWEST 1/4 OFSECTION 29: THENCE NORTH ALONG SAID WEST L1NE TO THE POINT OF BEGINNING, IN COOK COUNTY, ILLINOIS.ALSO EXCEPTING THEREFROM THAT PART DEDICATED FOR CRONAME ROAD AND HOWARD STREET, IN COOK COUNTY, ILLINOIS.PARCEL 2:BASEMENT FOR THE BFNEFIT OF PARCEL I AS CREATED BY GRANT RECORDED SEPTEMBER 26. 1985 AS DOCUMENT 85206474 FORINGRESS AND EGRESS OVER THE FOLLOWING:THAT PART OF THE NORTH 19 CHAINS OF THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SECTION 29, TOWNSHIP 41 NORTH, RANGE 13EAST OF THE THIRD PRINCIPAL. MERIDIAN, BOUNDED BY A LINE DESCRIBED AS FOLLOWS:COMMENCING AT THE NORTHEAST CORNER OF THE WEST 1/2 OF THE SOUTHWEST 1/4 OF SAID SECTION 29: THENCE. SOUTH 00DEGREES 04 MINUTES 38 SECONDS WEST, ALONG THE EAST LINE OF THE WEST 1/2 OF THE SOUTH WEST 1/4 OF SECTION 29AFORESAID, 589.99 FEET, THENCE SOUTH 90 DEGREES 00 MINUTES 00 SECONDS WEST, 431.86 FEET; THENCE SOUTH 00 DEGREES00 MINUTES 00 SECONDS WEST, 383.37 FEET TO THE POINT OF BEGINNING OF THE PARCEL TO BE DESCRIBED; THENCECONTINUING SOUTH 00 DEGREES 00 MINUTES 00 SECONDS WEST, 86.00 FEET; THENCE SOUTH 90 DEGREES 00 MINUTES 00SECONDS WEST, 8.00 FEET; THENCE SOUTH 00 DEGREES 00 MINUTES 00 SECONDS WEST, 56.50 FEET; THENCE NORTH 88 DEGREES10 MINUTES 39 SECONDS EAST, 52.44 FEET; THENCE SOUTH 00 DEGREES 04 MINUTES 40 SECONDS EAST., 53.83 FEET; THENCESOUTH 52 DEGREES 59 MINUTES 13 SECONDS EAST, 41.75 FEET TO THE NORTHERLY LINE. OF GROSS POINT ROAD; THENCESOUTH 64 DEGREES 03 MINUTES 29 SECONDS WEST, ALONG SAID NORTHERLY LINE OF GROSS POINT ROAD, 43.42 FEET; THENCENORTH 47 DEGREES 06 MINUTES 06 SECONDS WEST, 51.63 FEET; THENCE NORTH 34 DEGREES 24 MINUTES 37 SECONDS WEST:34.82 FEET; THENCE NORTH 58 DEGREES 50 MINUTES 18 SECONDS WEST, 57.84 FEET; THENCE NORTH 00 DEGREES 00 MINUTES 00SECONDS EAST, 145.00 FEET; THENCE NORTH 90 DEGREES 00 MINUTES 00 SECONDS EAST, 68.20 FEET TO THE POINT OFBEGINNING, IN COOK COUNTY, ILLINOIS.EXHIBIT B BASE RENTLease Year/Period .Rentable Square FootageBase Rent per. Rentable sq. ft.Annual Base RentMonthly Base RentYear I $$120,000.0010.000.00Year 2 $$123,000.00$10,250.00Year 3 $$126,075.00$10,506.25Year4 $$129,227.00$10,768.90Year5 $132,458.00$11,038.13 Base Rent shall abate for fifteen (15) days after the Commencement Date For the above purposes, Year 1 commences on the Commencement Date and ends 12 months thereafter, except that if the Commencement Date does not occuron the first day of a month, then Year 1 shall end 12 months after the end of the calendar month in which the Commencement Date occurs. Each subsequentYear shall be a 12 month period. EXHIBIT C RULES AND REGULATIONSATTACHED TO AND MADE A PART OF THE LEASEThe following Rules and Regulations shall be in effect at the Building. Landlord reserves the right to adopt reasonable modifications and additions hereto. In the case of any conflictbetween these regulations and the Lease, the Lease shall be controlling.1.Except with the prior written consent of Landlord, no tenant shall conduct an retail sales in or from the Premises, or any business other than that specifically providedfor in the Lease.2.Landlord reserves the right to prohibit personal goods and services vendors from access to the Building except upon such reasonable terms and conditions,including but not limited to a provision for insurance coverage, as are related to the safety, care and cleanliness of the Building, the preservation of good orderthereon, and the relief of any financial or other burden on Landlord occasioned by the presence of such vendors or the sale by them of personal goods or services to atenant or its employees. If reasonably necessary for the accomplishment of these purposes, Landlord may exclude a particular vendor entirely or limit the number ofvendors who may be present at any one time in the Building. The term “personal goods or services vendors” means persons who periodically enter the Building ofwhich the Premises are a part for the purpose of selling goods or services to a tenant, other than goods or services which are used by a tenant only for the purposeof conducting its business on the Premises. “Personal goods or services” include, but are not limited to, drinking water and other beverages, food, barberingservices, and shoeshining services.3.The sidewalks, halls, passages, and stairways shall not be obstructed by any tenant or used by it, its employees. invitees, and any visitors for any purpose other thanfor ingress to and egress from their respective premises. Tenant shall not and shall not permit its employees, invitees, and any visitors to loiter or wait fortransportation in the halls passages, entrances, stairways, sidewalks or any other area in or around the Building, except those areas, if any, which may be specificallydesignated by Landlord. The halls, passages, entrances, stairways, janitorial closets, if any, and roof are not for the use of the general public, and Landlord shall in allcases retain the right to control and prevent access thereto of all persons whose presence in the judgment of Landlord shall he prejudicial to the safety, characterreputation and interests of the Building and its tenants, provided that nothing herein contained shall he construed to prevent such access to persons with whomTenant normally deals only for the purpose of’ conducting its business on the Premises (such as clients, customers, office suppliers and equipment vendors, and thelike) unless such persons are engaged in illegal activities. No tenant arid no employees of any tenant shall go upon the roof of the Building without the written consentof Landlord.4.The sashes, sash doors, windows, glass lights, and any lights or skylights that reflect or admit light into the halls or other places of the Building shall not be coveredor obstructed. The toilet rooms, water and wash closets and other water apparatus shall not he used for any purpose other than that for which they wereconstructed, and no foreign substance of any kind whatsoever shall be thrown therein, and the expense of any breakage, stoppage or damage, resulting from theviolation of this rule shall be borne by the tenant who, or whose clerks, agents, employees, or visitors, shall have caused it.5.No sign, advertisement or notice visible from the exterior of the Premises or Building shall be inscribed, painted or affixed by Tenant on any part of the Building or the Premises without the prior written consent of Landlord. If Landlordshall have given such consent at any time, whether before or after the execution of this Lease, such consent shall in no way operate as a waiver orrelease of any of the provisions hereof or of this Lease, and shall be deemed to relate only to the particular sign, advertisement or notice so consented toby Landlord and shall not be construed as dispensing with the necessity of obtaining the specific written consent of Landlord with respect to each andevery such sign, advertisement or notice other than the particular sign, advertisement or notice, as the case may be, so consented to by Landlord. 6.In order to maintain the outward professional appearance of the Building, all window coverings to be installed at the Premises shall be subject toLandlords prior reasonable approval. If Landlord, by a notice in writing to Tenant, shall object to any curtain, blind, shade or screen attached to, orhung in, or used in connection with, any window or door of the Premises, such use of such curtain, blind, shade or screen shall be forthwithdiscontinued by Tenant. No awnings shall be permitted on any part of the Premises.7.Tenant shall not do or permit anything to be done in the Premises, or bring or keep anything therein, which shall in any way increase the rate of fireinsurance on the Building, or on the property kept therein, or obstruct or interfere with the rights of other tenants, or in any way injure or annoy them;or conflict with the regulations of the Fire Department or the fire laws, or with any insurance policy upon the Building, or any part thereof, or with anyrules and ordinances established by the Board of Health or other governmental authority.8.Except as approved by Landlord, no safes or other large objects shall be brought into or installed in that portion of’ the Premises intended to be used forgeneral office purposes. Landlord shall have the power te prescribe the weight, method of installation and position of such safes or other objects. Themoving of safes shall occur only between such hours as may be designated by, and only upon previous notice to, the manager of the Building, and thepersons employed to move safes in or out of the Building must be acceptable to Landlord. No freight, furniture or bulky matter of any description shallbe received into the Building, excluding warehouse space, except during hours and in a manner approved by Landlord.9.No tenant shall sweep or throw or permit to be swept or thrown from the Premises any dirt or other substance into any of the corridors or halls, or outof the doors or windows or stairways of the Building, and Tenant shall not use, keep or permit to be used or kept any foul or noxious gas or substancein the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of theBuilding by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business therein, nor shall any animalsor birds be kept in or about the Building. Smoking or carrying lighted cigars or cigarettes in the elevators of the Building is prohibited.10.Except for the use of’ microwave ovens and coffee makers and a toaster oven for Tenant’s personal use, no cooking shall he done or permitted byTenant on the Premises, nor shall the Building be used for lodging.11.Tenant shall not use or keep in the Building any kerosene, gasoline, or inflammable fluid or any other illuminating material, or use any method ofheating other than that supplied by Landlord.12.If Tenant desires telephone or telegraph connections, Landlord will direct electricians as to where and how the wires are to be introduced. No boring orcutting for wires or other otherwise shall be made without directions from Landlord.13.Each tenant, upon the termination of its tenancy, shall deliver to Landlord all the keys of offices, rooms and toilet rooms, and security accesscard/keys which shall have been furnished such tenant or which such tenant shall have had made, and in the event of loss of any keys sofurnished, shall pay Landlord therefor.14.No tenant shall lay linoleum or other similar floor covering so that the same shall be affixed to the floor of the Premises in any manner except by apaste, or other material which may easily be removed with water, the use of cement or other similar adhesive materials being expressly prohibited.The method of affixing any such linoleum or other similar floor covering to the floor, as well as the method of affixing carpets or rugs to the Premisesshall be subject to reasonable approval by Landlord. The expense of repairing any damage resulting from a violation of this rule shall be borne byTenant by whom, or by those agents, clerks, employees or visitors, the damage shall have been caused.15.No furniture, packages or merchandise will be received in the Building, except between such Building hours as shall be designated by Landlord.16.Landlord shall in no case be Liable for damages for the admission to or exclusion from the Building of any person whom Landlord has the right toexclude under Rule 3 above, In case of invasion, mob, riot, public, excitement, or other commotion, Landlord reserves the right but shall not beobligated to prevent access to the Building during the continuance of the same by closing the doors or otherwise, for the safety of the tenants andprotection of property in the Building.17.Tenant shall be responsible for securing the Premises and in accordance therewith shall see that the windows and doors of’ the Premises are closedand securely locked before leaving the Building and Tenant shall exercise extraordinary’ care and caution that all water faucets or water apparatus areentirely shut off before Tenant or Tenant’s employees leave the Building, and that Tenant shall be responsible for maintaining a temperature withinthe Premises at all times as to prevent waste or damage of the fire safety, plumbing and mechanical systems servicing the Premises, and for anydefault or carelessness Tenant shall make good all injuries sustained by other tenants or occupants of the Building or Landlord.18.Tenant shall not alter, or allow to be altered, any lock or install a new or additional lock or any bolt on any door of’ the Premises without priorwritten consent of Landlord. If Landlord shall give its consent, Tenant shall in each case furnish Landlord with a key for any such lock.19.Tenant shall not install equipment, such as but not limited to electronic tabulating or computer equipment, requiring electrical or air conditioningservice in excess of those to be provided by Landlord under the Lease.20.No shopping cart, or other vehicle or any animal with the exception of’ humans or fish shall be brought into the Premises or the halls, corridors,elevators or any part of the Building by Tenant.21.Landlord shall have the right to prohibit the use of the name of the Building or Project or any other publicity by Tenant which in Landlord’s opiniontends to impair the reputation of the Building or Project or their desirability for other tenants, and upon written notice from Landlord, ‘Tenant willrefrain from or discontinue such publicity. 22.Tenant shall not erect any aerial or antenna on the roof or exterior walls of the Premises, Building, or Project without the prior written consent ofLandlord.23.The Tenant shall not install in the Premises any equipment which uses an excessive amount of electricity without the advance written consent of theLandlord. The Tenant shall ascertain from the Landlord the maximum amount of electrical current which can safely be used in the Premises takinginto account the capacity of electric wiring in the Building and the Premises and the needs of other tenants in the Building and shall not use more thansuch safe capacity. The Landlord’s consent to the installation of electric equipment shall not relieve the Tenant from the obligation not to use moreelectricity than such safe capacity.24.The following rules and regulations govern the parking and the use of the parking areas on the Project and shall not be deemed to expand any parkingrights or privileges granted or restrictions thereon contained in this Lease. These parking rules and regulations shall apply to any and all vehiclesowned, leased or rented by Tenant, its employees, agents, representatives, invitees, customers, contractors, servicemen and deliverymen. Tenant shallbe, responsible for compliance with the following rules and regulations by any and all of its employees, agents, representatives, invitees, customers,contractors, servicemen and deliverymen.a. Parking at the Project is for standard passenger size vehicles only. No vehicles may be parked in any assigned parking stalls except thevehicle which has been granted permission to park in such stall as designated by Landlord. Parking spaces clearly marked for the use by a specificparty shall not be used at any time by any other tenant, or by their employees, invitees, or any other visitor. Any and all oversized vehicles (i.e., thosethat cannot fit within the individually marked parking stalls either in length or width), including without limitation any trucks, delivery trucks andvans, and semi-trailers, may not be parked in any location on the Project without Landlord’s prior written consent. In granting its consent, Landlordreserves the right to determine in its sole discretion the length of time that any said oversized vehicle may be parked at the Project and to determine inits sole discretion the location where any said oversized vehicle may be parked on the Project. The foregoing shall not be deemed to prohibit any saidoversized vehicle from parking at any loading dock or drive-in door servicing the Premises for any reasonable period of time while loading orunloading. Landlord reserves the right to grant exceptions to the foregoing rule as Landlord may determine in its sole discretion, including withoutlimitation an exception for the parking of oversized vehicles for commercial overnight courier services while overnight packages are being delivered totenants and occupants of the Project.b. No type of maintenance, service or repair work of any type may be performed at any time on any vehicle located any where on theProject, provided however, that emergency repair work may be performed on a vehicle located on the Project only to the extent needed to be able toremove said vehicle from the Project (i.e. getting a dead battery replaced or “jumped” in order to be able to start said vehicle, or replacing a flat tire).The foregoing exception shall not be deemed to allow major repair work to be performed on the Project (i.e. replacement of engine or engine parts ortransmission or transmission parts), which if needed shall require said vehicle to be towed of the Project for repair or service.c. No vehicles of any type may at any time, park, stand, drop off or pick up, load or unload in the any driveway or traffic lane servicingthe Project. Landlord reserves the right to designate areas to he used for any standing vehicles, including without limitation, any cars, step vans,truck, busses, or taxis, which provide services to any tenant, their employees, invitees, or any otherEXHIBIT D FIRST ADDENDUM THIS FIRST ADDENDUM TO 1NDUSTRAL BUILDING LEASE (this “First Addendum”) is attached to and made a part of the Industrial BuildingLease dated as of March 23, 2004 (the “Lease”) between Howard Commons Associates, L.L.C. (“Landlord”) and Haemoseope Corporation (“Tenant”).ARTICLE I Addendum Controls/Definitions1.01 First Addendum Controls. To the extent that the terms and provisions of this First Addendum conflict with the terms and provisions of thebody of this Lease to which this First Addendum is attached and incorporated therein by reference thereto, the terms and provisions of this First Addendumshall control.1.02 Definitions. To the extent not otherwise defined herein to the contrary, all capitalized terms and phrases used in this First Addendum shall havethe respective meanings ascribed to them in this Lease.ARTICLE II 2.01 Landlord’s Work. (a) Prior to delivery of possession of the Premises to Tenant, Landlord shall complete the work described in Exhibit “E” (referred to as “Landlord’s Work”).Landlord shall provide an allowance of $12.50 per square foot of the office area only to cover the cost of Landlord’s Work, and in addition. Landlord shallpay for the cost of installing the bathrooms and demising wails (which shall be in addition to the $12.50 allowance.) Tenant shall be responsible for any costsin excess of $12.50/ft of the office area, which excess shall be paid to Landlord upon demand.(b) Provided Tenant has paid the first month’s rent, and security deposit and delivered evidence of insurance as required by this Lease, Landlord shall usereasonable efforts to complete Landlord’s Work and deliver possession of the Premises to Tenant byJuly 15, 2004, subject to Tenant delays, delays in vacating by Nightingale Conant, permit delays, and other delays beyond Landlord’s reasonable control. Allwork shall be performed by Landlord in a good and workmanlike manner, using new materials where components are being replaced or added, and uponcompletion of the Work the Premises will be delivered to Tenant in compliance with all applicable laws, ordinances and codes. Tenant acknowledges thatLandlord intends to utilize many existing components and systems within the Premises, including without limitation the HVAC system. Landlord shall deliverthe Premises with all mechanical, HVAC, electrical, plumbing and other related systems in good working order on the Commencement Date. Except for Tenantdelays, if Landlord has not substantially completed the Landlord’s Work on or before July 15, 2004, then the Commencement Date shall be extended one dayfor each day of delay until Landlord is able to deliver possession of the Premises to Tenant with Landlord’s Work complete. Landlord shall have the right tocomplete punchlist items of Landlord’s Work during Tenant’s occupancy and Tenant shall not unreasonably interfere with Landlord’s Work.(c) Within ten (10) days of delivery of possession to Tenant of the Premises, Landlord shall schedule with Tenant a walk through for the purpose ofdetermining unperformed and improperly performed work. visitor. d. Landlord reserves the right to take any action necessary to keep the fire lane and drive lanes in the parking lot clear for free access at all times. e. Landlord reserves the right to charge any Tenant for its costs incurred in enforcing the above parking rules and regulations. 25.Landlord retains the right to designate the entrance and exit locations to be used by the tenant and their staff and employees during the regular businessday. Landlord and Tenant shall jointly determine and set forth in writing signed by both Landlord and Tenant said items and the cost and expense of completingsame (the “Punchlist Items”). Landlord shall thereafter promptly proceed with the correction of the Punehlist Items following delivery of possession to Tenant,subject in any and all events to delays outside the control of Landlord. 2.02 Tenant Work. Except for Landlord’s Work, Landlord has made no agreement to make any improvements to the Premises, and Tenantaccepts the same in AS IS condition. Any and all other work necessary or desirable for Tenant’s use and occupancy of the Premises shall be Tenant’s soleresponsibility. Tenant acknowledges and agrees that Tenant at its sole cost shall be responsible for obtaining, delivering and installing iii the Premises allnecessary and desired furniture, telephone equipment, computer cabling, telephone cabling, telephone service, business equipment, art work and other similaritems, and that Landlord shall have no responsibility whatsoever with regard thereto. Provided such access to the Premises does not interfere with Landlordsobligations under this lease. Tenant shall be allowed access to the Premises prior to the Commencement Date to install its equipment and furnishings and toperform such other related activity in the Premises preparatory to its occupancy, without the obligation of payment of Rent. Landlord shall use its reasonableefforts to accommodate Tenant’s access to the Premises for such purposes, but in no event shall Tenant interfere, disrupt or delay with Landlord’s obligationsunder this lease. 2.03 Safe. Tenant shall have the right to keep a fireproof safe in the Premises, provided such safe shall not be permanently affixed to thePremises and Tenant shall remove such safe upon expiration or termination of this Lease. 2.04 Parking. Subject to compliance with the Rules and Regulations, Tenant shall have the right to utilize up to forty (40) parking spaces inthe Building parking lot in common with other tenants of the Building. 2.05 Nightingale Consent. As of the date hereof, the Premises are leased to Nightingale-Conant Co. (“Nightingale”). Landlord’s obligationshereunder are conditioned upon Landlord and Nightingale executing a partial termination agreement of Nightingale’s lease with respect to the Premiseshereunder. If Landlord and Nightingale have not executed such partial termination agreement by March 31, 2003, then either party may terminate this Lease bywritten notice to the other given before execution of such partial termination agreement and thereafter neither party shall have any further obligation hereunder. 2.06 Temporary Space. If the Landlord’s Work is not completed by July 15, 2004, then Tenant, at its option, may temporarily takeoccupancy of such then available suites in the Building as Landlord may identify and as may be reasonably acceptable to Tenant (“Temporary Premises”). Allterms and conditions of this Lease shall apply to Tenant’s occupancy of’ such Temporary Premises, except that during such temporary occupancy, rentotherwise due hereunder shall be adjusted in proportion to the square footage of the Temporary Premises, Tenant shall vacate and surrender the TemporaryPremises (and repair any damage to such spaces caused by Tenant) within five business days after Landlord delivers possession of the Premises withLandlord’s Work substantially complete. 2.07 EXHIBIT E LANDLORD WORK 1. UP TO FOUR I2X12 OFFICES 2. UP TO THREE I2X16 OFFICES 3. ONE STORAGE ROOM, APPROXIMATELY I6X21 4. ONE LARGECONFERENCE ROOM, 16X21 5. ONE CLEAN ROOM, 12X24. CLEAN ROOM INCLUDES DROPPED CEILING, SOLID FLOOR (I.E. NOT TILED). WINDOWS AROUND THEWALLS (NOT NECESSARILY OUTSIDE WINDOWS). 6. ONE LUNCH ROOM APPROX 16x20. LUNCHROOM MUST BE ADIACENT TO BATHROOM. 7. ONE BANK OF BATHROOMS. WOMEN’S TO HAVE TWO STALLS. MENS TO HAVE ONE URINALS AND ONE STALL. ANY UPGRADETO BATHROOM SPECIFIC SHALL BE AT TENANTS EXPENSE. 8. THE FOLLOWING SHOULD HAVE DROPPED CEILINGS: CLEAN ROOM, KITCHEN, BATHROOMS. AND ANY OTHER ROOM LOCATEDAGAINST BACK WALL OF OFFICE AREA. ALL DROPPED-CEILING ROOMS WILL BE NEXT TO ONE ANOTHER SO THAT THERE IS ONLYONE DROPPED-CEILING AREA. EXHIBIT F EXCLUSIONS FROM EXPENSESiGround rental payments, interest and principal payments on mortgages, and other costs for borrowed funds, if any: ii.Depreciation charges; iii.Expenses incurred in leasing or procuring new tenants, such as real estate brokers’ leasing commissions (including all renewal leasingcommissions or compensation, fees of counsel, costs of maintaining a leasing office and advertising and promotional expenses with respectthereto; iv.To the extent covered by insurance, expenses for repairs or other work occasioned by: (a) fire, wind storm or other casualty, or (b) theexercise of the right of eminent domain, or (c) the negligence of Landlord; v.Court cost, fees of counsel and any other ancillary expenses incurred in connection with any other lease, license, or concession agreement; vi.Any amount payable by Landlord to any tenant by reason of Landlord’s default in obligations to such tenant or as damages, reimbursement orindemnity to any person because of any act or omission of Landlord or its agents; vii.Renovating or otherwise improving or decorating, painting or redecorating any leaseable space in the Building other than ordinary maintenancesupplied to all tenants equally and other than to common areas; viii.Landlord’s cost of electricity or other utilities which are provided without cost to certain tenants of the Building and not supplied to all tenantsof the Building or which are sold separately to tenants of the Building and for which Landlord is entitled to be reimbursed; ix.Costs due to violation by Landlord or its agent of the terms and conditions of any lease or debt instrument. x.Overhead and profit paid to Landlord or to subsidiaries or affiliates of Landlord for services on or to the Building to the extent that fees paidfor such services exceed competitive costs of such services. xi.Any expense associated with the operation of Landlord’s business entity or interest therein as distinguished from the cost and operation of theBuilding. xii.Compensation paid to clerks, attendants or other personnel in commercial concessions. xiii.Any cost or expense incurred in connection with the treatment, encapsulation or removal of currently existing asbestos, PCBs or otherhazardous materials that are in violation of applicable law. xiv.Any expense for which Landlord is compensated by proceeds through insurance or warranties. xv.Any cost or expense incurred in connection with leasing or improving vacant space at the Project, and utilities consumed by such vacantspace FIRST AMENDMENT TO LEASETI-US FIRST AMENDMENT TO LEASE (this “Amendment”), is entered into as of June 10, 2004, by and between HOWARDCOMMONS ASSOCIATES, L.LC., a Delaware limited liability company, (hereinafter “Landlord” or “Lessor”), and HAEMOSCOPECORPORATION, an Illinois corporation, (hereinafter “Tenant” or “Lessee”).RECITALS:A. Landlord and Tenant are parties to that certain Industrial/Office Lease Agreement dated March 23, 2004, for the space knownas Suites 6227 (the “Premises”), located in the building, (the “Building”), commonly known as Howard Commons, 6201 West HowardStreet, Niles, Illinois.B. Tenant and Landlord desire to modify’ the Lease as herein provided.NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord andTenant agree as follows:1. Defined Terms; Conflicts. To the extent not otherwise defined or modified herein, all capitalized terms and capitalized phrases usedin this Amendment shall have the respective meanings ascribed to them in the Lease. To the extent the terms and provisions of thisAmendment conflict with the terms and provisions of the Lease and/or previous Amendments thereto, the terms and provisions of thisAmendment shall control.2. Amendment to the Lease. The Lease is hereby amended as follows:A. The introductory paragraph of the Lease is amended as follows: The Term of the Lease shall be seven (7) years, commencingon the date Landlord delivers possession of the Premises with Landlord’s Work substantially complete (“CommencementDate”), and expiring seven (7) years thereafter, except that if the Commencement Date does not occur on the first day of amonth, then the Term shall expire 84 months after the last day of the calendar month in which the Commencement Dateoccurs.B. Exhibit “B” to the Lease is deleted and replaced by Exhibit “B” attached heretoC. Exhibit “E” to the Lease is deleted and replaced by Exhibit “E” attached hereto.D. Tenant shall have the right to terminate this Lease effective on the last day of the 60th month after the month in which theCommencement Date occurs, by giving Landlord no less than six (6) months prior written notice thereof which notice shallbe accompanied by a termination payment of $37,000. In addition, Tenant shall have the right to terminate this Leaseeffective on the last day of the 72nd month after month in which the Commencement Date occurs, by giving Landlord noless than six (6) months prior written notice thereof which notice shall be accompanied by a termination payment of$18,500. Tenant shall not have the right to exercise any such early termination option if Tenant is in default under this Lease,either on the date of exercise or effective date of termination.E.Subsection 2.01(a) of Exhibit “D” is deleted and replaced by the following “Prior to the delivery of the Premises to Tenant,Landlord shall substantially complete the work described in Exhibit “E” (referred to as “Landlord’s Work”), at Landlord’sexpense, except that Tenant shall pay Landlord as Tenant’s contribution toward the cost of such work the sum of FiftyThousand Dollars ($50,000,00) upon execution of this Amendment and an additional Fifty Thousand Dollars ($50,000.00)within 30.. days of commencement of Landlord’s Work. Any changes to the Landlord’s Work requested by Tenant shall besubject to Landlord approval, and if approved, Tenant shall pay the cost of such changes, and any delays resulting from suchchanges shall not operate to extend the Commencement Date. Except for acts of Tenant, Tenant shall not be responsible forany increases in the cost of Landlord’s Work.”F.In Subsection 2.0 1(b) and Section 2.06 of Exhibit “D” delete “July 15, 2004” each place it appears and replace with “60 daysafter commencement of work”. Landlord makes no warranties as to whether the 60 days delivery can be achieved, and shallnot be obligated to use double shifts, overtime or other extraordinary measures to achieve such date. However, if Landlord isunable to complete Landlord’s work by 60 days after commencement of work, Landlord will, subject to the requirements ofLandlord’s contractor and the Village of Niles, allow Tenant to occupy such portions of the Premises as Landlord’s contractormay designate, provided, Tenant shall not interfere with or delay the completion of Landlord’s Work and neither Landlordnor its contractor shall be responsible for any loss, damage or injury to person or property within the Premises during suchconstruction; all such risk being assumed by Tenant. During such occupancy. all provisions of the Lease shall apply exceptthat Base Rent shall not commence until the Commencement Date.3. Confirmation. As modified hereby, the Lease remains in full force and effect,IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first-above written.LANDLORD: HOWARD COMMONS ASSOCIATES, L.L.C.,a Delaware limited liability companyBy its managerMCZ/Jameson, inc., an lilinois corporationBy [Graphic appears here]James G. Haft, Vice-PresidentTENANT: HAEMOSCOPE CORPORATIONBy [Graphic appears here]EXHIBIT BBASE RENTLeaseYear/PeriodRentableSquare FootageBase Rent per. Rentablesq. ft.Annual Base RentMonthly Base RentYear 1 16,4787.28$120,000.00$10,000.00Year 216.7487.34$123,000.00$10,250.00Year 316,7487.53$126,075.00$10,506.25Year 416,7487.72$129,226.88$10,768.91Year 516.7487,91$132,457.55$11,038.13Year 616,7488.11$135,768.99$11,314.08Year 716.7488.31$l39,163.21$11,596.93Base Rent shall abate for fifteen (15) days after the Commencement DateFor the above purposes, Year 1 commences on the Commencement Date and ends 12 months thereafter, except that it’ theCommencement Date does not occur on the first day of a month, then Year I shall end 12 months after the end of the calendar month inwhich the Commencement Date occurs. Each subsequent Year shall be a 12 month period.SECOND AMENDMENT TO LEASETHIS SECOND AMENDMENT TO LEASE (this “Amendment”) is made and entered into as of the 5th day of June 2007 (the “Effective Date”), byand between CABOT II - ILl W02— W03, LLC. a Delaware limited liability company (“Landlord”), and HAEMOSCOPE CORPORATION, an Illinoiscorporation (“Tenant”).WHEREAS, Landlord’s predecessor-in-interest, and Tenant entered into a certain industrial/Office Building Lease dated as of March 23, 2004, asamended by a certain First Amendment to Lease dated as of June 10, 2004 (as amended, the “Lease”), pursuant to which Tenant leases certain premisesconsisting of approximately 16,748 rentable square feet (Suite 6227) (the “Existing Premises”) in the building commonly known as Howard Commons, 6201West Howard Street, Niles, Illinois (the “Building”);WHEREAS, Tenant desires to lease an additional 3,680 rentable square feet in the Building (Suite 6225) as shown on Exhibit A attached hereto (the“Expansion Premises”, which together with the Existing Premises shall be referred to as the “Premises”). and Landlord desires to lease the Expansion Premisesto Tenant on the terms set forth herein;WHEREAS, Landlord and Tenant desire to memorialize their understanding and modify the Lease consistent therewith;NOW, THEREFORE, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Landlord and Tenanthereby agree as follows:1. Expansion Premises. As of July 1, 2007 (the “Expansion Commencement Date”), the Premises shall hereby be expanded to include the ExpansionPremises. Tenant shall have the right to enter the Expansion Premises following the Effective Date of this Amendment and prior to the ExpansionCommencement Date for the sole purpose of installing its furniture. fixtures and equipment, provided, however, that Tenant shall observe all of’ the terms andprovisions of the Lease (other than the obligation to pay rent until the Expansion Commencement Date).2. Base Rent. Commencing on the Expansion Commencement Date, Tenant hereby agrees to pay to Landlord monthly installments of Base Rent for thePremises on the first day of each month in advance, without offset, deduction or prior demand as follows:Time PeriodAnnual Base RentMonthly Base Rent7.1.07 – 7.31.07$153,822.84$12,818.578.1.07 – 7.31.08$157,704.16$13,142.018.1.08 – 7.31.09$161,585.48$13,465.468.1.09 – 7.31.10$165,671.08$13,805.928.1.10 – 7.31.11$169,756.68$14,146.393. Tenant’s. Proportionate Share. Commencing on the Expansion Commencement Date, Tenant’s Proportionate Share shall be 6.57%.4. Security Deposit. Concurrently with the execution of this Amendment, Tenant is increasing the Security Deposit by $3,142.01 for a total SecurityDeposit of$13,142.01.5. Tenant Improvements. In connection with this Amendment, Tenant is accepting the Expansion Premises, in “as is” condition, and Landlord shallhave no obligation to perform any work or construction to the Premises, provided, however, that Landlord shall deliver the Expansion Premises “broom clean”.6. Brokers. Tenant represents and warrants that it has dealt with no broker, agent, or other person in connection with this transaction and that nobroker, agent or other person brought about this transaction, and Tenant agrees to indemnify and hold Landlord harmless from and against any claims byany other broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with Tenant with regard to this leasingtransaction. The provisions of this paragraph shall survive the termination of the Lease.7. No Other Amendments. In all other respects, the terms and provisions of the Lease are ratified and reaffirmed hereby, are incorporated herein by thisreference and shall be binding upon the parties to this Amendment.8. Definitions. All capitalized terms used and not otherwise defined herein, shall have the meanings ascribed to them in the Lease.9. Conflicts. Any inconsistencies or conflicts between the terms and provisions of the Lease and the terms and provisions of this Amendment shall beresolved in favor of the terms and provisions of this Amendment.10. Execution. The submission of this Amendment shall not constitute an offer, and this Amendment shall not be effective and binding unless and untilfully executed and delivered by each of the parties hereto. Tenant represents and warrants for itself that all requisite organizational action has been taken inconnection with this transaction, and the individuals signing this Amendment on behalf of Tenant represent and warrant that they have been duly authorizedto bind the Tenant by their signatures.11. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which togethershall constitute one and the same instrument. Additionally, telecopied signatures may be used in place of original signatures on this Amendment. Landlord andTenant intend to be bound by the signatures on the telecopied document, are aware that the other party will rely on the telecopied signatures, and hereby waiveany defenses to the enforcement of the terms of this Amendment based on the form of signature.SIGNATURES FOLLOW ON NEXT PAGEIN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be duly executed, under seal, in multiple copies each to be consideredan original hereof, as of the day and year first above written.LANDLORD:CABOT II— ILl W02-W03, LLC,By: Cabot Industrial Value Fund II Operating Partnership. L.P.By: Graphic appears hereName: Stephen P. vallarelliTitle: Senior Vice PresidentTENANT:HAEMOSCOPE CORPORATIONBy: Graphic appears hereName: Margalit TocherTitle: Chief Operating OfficerEXHIBIT AEXPANSION PREMISESGraphic appears hereHaemoscope Corporation6231, West Howard StreetNiles, IL 60714info@haemoscope.comFAXDate: March 7, 2006 Number of pages including cover sheet: 4 To: From: Michael Lee Deborah Weishaar For Margalit Tocher Ph. 312-207-6514 Ph. 847-588-.453/800-438-2834 Fax 312-207-6400 Fax 847-588-0455 CC: REMARKSËUrgentÈFor your reviewËReply ASAPËPlease commentACTIVITY REPORTTIME : 03/07/2006 15:12DATETIMEFAX NO./NAMEDURATIONPAGE (S)RESULTCOMMENT03/0615:406308983166401OKRXECM03/0616:27866-216-5303551OKRXECM03/0617:301817656530503:029OKTX 03/0618:33206 598 615901:363OKRXECM03/0619:32 01:251OKRXECM03/0619:35 01:370NGRX 03/0623:14656785800501:261OKRX 03/0709:33847 671 5950361OKRXECM03/0709:3818476715950281OKTXECM03/0709:405173464796381OKRXECM03/0709:415173464796391OKRXECM03/0709:49BHCS F01:162OKRX 03/0710:06116567858005522OKTXECM03/0710:33 01:164OKRXECM03/0710:51 07:296OKRX 03/0711:21LAWSONFAXSVR01:503OKTX 03/0711:55+3042432971392OKRXECM03/0712:18508334802102:026OKRXECM03/0712:30 461OKRXECM03/0712:3715083348021382OKTXECM03/0712:3818176565305502OKTX 03/0712:40 482OKRX 03/0712:52913 588 723901:394OKRXECM03/0713:17001:212OKRXECM03/0713:30 01:141OKRXECM03/0713:32LAWSONFAXSVR01:513OKRX 03/0713:54 02:122OKRXECM03/0714:231312207640001:424OKTX 03/0714:57S H C01:172OKRX 03/0715:031708283860707:0415OKTXECMBUSY: BUSY/NO RESPONSENG : POOR LINE CONDITIONCV : COVERPAGECA :CALL BACK MSGPOL : POLLINGRET : RETRIEVALTRANSMISSION VERIFICATION REPORTTIME: 08/28/2007 11:21DATE, TIME08/28 11:19FAX NO. / NAME18475100453PAGE (S)00:01:45 5RESULTOKMODESTANDARDECMTHIRD AMENDMENT TO AND ASSIGNMENT OF LEASETHIS THIRD AMENDMENT TO AND ASSIGNMENT OF LEASE (this “Amendment”) is made and entered into as of the 19th day of November,2007 (the “Effective Date”), by and among CABOT II - ILI W02-W03, LLC, a Delaware limited liability company (“Landlord”), HAEMOSCOPECORPORATION, a Delaware corporation (“Original Tenant”), and HURON ACQUISITION CORPORATION (“New Tenant”);WHEREAS, Landlord’s predecessor-in-interest, and Original Tenant entered into a certain industrial/Office Building Lease dated as of March 23, 2004,as amended by a certain First Amendment to Lease dated as of June 10, 2004, as further amended by a certain Second Amendment to Lease dated as of June 5,2007 (as amended, the “Lease”), pursuant to which Original Tenant leases certain premises consisting of approximately 20,428 rentable square feet (the“Existing Premises”) in the building commonly known as Howard Commons, 6201 West Howard Street, Niles, Illinois (the “Building”);WHEREAS, Original Tenant desires to assign the Lease to New Tenant and New Tenant desires to assume the Lease (the “Lease Assignment”);WHEREAS, in connection with the Lease Assignment, the Existing Premises shall be reduced by 3,680 rentable square feet so that 16,748 rentablesquare feet shall be subject to the Lease;WHEREAS, Landlord, Original Tenant and New Tenant desire to memorialize their understanding and modify the Lease consistent therewith;NOW, THEREFORE, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Landlord, OriginalTenant and New Tenant hereby agree as follows:1. Assignment and Assumption. As of the Effective Date, Original Tenant hereby assigns to New Tenant all of its right, title and interest to the Leaseand New Tenant hereby assumes all of Original Tenant’s right, title and interest to the Lease. From and after the Effective Date, the “Tenant” under the Leaseshall mean New Tenant.2. New Tenant Premises. As of the Effective Date, the Existing Premises shall be reduced by 3,680 rentable square feet. From and after the EffectiveDate, the “Premises” under the Lease shall mean Suite 6231 (formerly known as Suite 6227) containing approximately 16,748 rentable square feet as shownon Exhibit A attached hereto.3. Base Rent. Commencing on the Effective Date, Tenant hereby agrees to pay to Landlord monthly installments of Base Rent for the Premises on thefirst day of each month in advance, without offset, deduction or prior demand as follows:Time PeriodAnnual Base RentMonthly Base RentEffective Date – 7/31/08$129,294.56$10,774.558/1/08 – 7/31/09$132,476.68$11,039.728/1/09 – 7/31/10$135,826.28$11,318.868/1/10 – 7/31/11$139,175.88$11,597.994. Tenant’s Proportionate Share. Commencing on the Effective Date, Tenant’s Proportionate Share shall, be 5.38% and the Rentable Area of theBuilding shall equal 311,103 square feet.5. Security Deposit. The Security Deposit of $13,142.01 under the Lease shall be applied by Landlord as the security deposit under that certainIndustrial Office/Building Lease to be entered into between Landlord and Original Tenant as of the date hereof. Within ten (10) business days of the EffectiveDate, Tenant shall deposit with Landlord the sum of $10,774.55 which shall constitute the “Security Deposit” under the Lease from and after the EffectiveDate.6. Effect of Assignment. The Lease Assignment shall not release or discharge Original Tenant from any past liability under the Lease. OriginalTenant acknowledges and agrees that Landlord shall have the right to pursue Original Tenant for any failure of payment or performance of any covenant orobligation of Original Tenant under the Lease which occurred prior to the Effective Date.7. Guaranty. As a condition to this Amendment being executed by Landlord, Haemonetics Corporation is concurrently herewith executing a Guarantyof Lease which guaranties Tenant’s obligations under this Lease.8. Tenant Improvements. In connection with this Amendment, Tenant is accepting the Premises in “as is” condition and Landlord shall have noobligation to perform any work or construction to the Premises.9. Brokers. Each of Original Tenant and Tenant represents and warrants that it has dealt with no broker, agent, or other person in connection withthis transaction and that no broker, agent or other person brought about this transaction, and Original Tenant and Tenant each agrees to indemnify and holdLandlord harmless from and against any claims by any other broker, agent or other person claiming a commission or other form of compensation by virtue ofhaving dealt with Original Tenant or Tenant, respectively, with regard to this leasing transaction. The provisions of this paragraph shall survive thetermination of the Lease.10. No Other Amendments. In all other respects, the terms and provisions of the Lease are ratified and reaffirmed hereby, are incorporated herein bythis reference and shall be binding upon the parties to this Amendment.11. Definitions. All capitalized terms used and not otherwise defined herein, shall have the meanings ascribed to them in the Lease.12. Conflicts. Any inconsistencies or conflicts between the terms and provisions of the Lease and the terms and provisions of this Amendment shallbe resolved in favor of the terms and provisions of this Amendment.13. Execution. The submission of this Amendment shall not constitute an offer, and this Amendment shall not be effective and binding unless anduntil fully executed and delivered by each of the parties hereto. Each of Original Tenant and Tenant represents and warrants for itself that all requisiteorganizational action has been taken in connection with this transaction, and the individuals signing this Amendment on behalf of Original Tenant and Tenantrepresent and warrant that they have been duly authorized to bind the Original Tenant and Tenant, respectively, by their signatures.14. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which togethershall constitute one and the same instrument. Additionally, telecopied signatures may be used in place of original signatures on this Amendment. OriginalTenant, Landlord and Tenant intend to be bound by the signatures on the telecopied document, are aware that the other party will rely on the telecopiedsignatures, and hereby waive any defenses to the enforcement of the terms of this Amendment based on the form of signature.SIGNATURES FOLLOW ON NEXT PAGEIN WITNESS WHEREOF, Landlord, Original Tenant and Tenant have caused this Amendment to be duly executed, under seal, in multiple copies,each to be considered an original hereof, as of the day and year first above written.LANDLORD:CABOT II – ILIW02-W03, LLC,By: Cabot Industrial Value Fund II Operating Partnership, LP.By: [GRAPHIC APPEARS HERE]Name: [GRAPHIC APPEARS HERE]Title: [GRAPHIC APPEARS HERE]ORIGINAL TENANT:HAEMOSCOPE CORPORATIONBy: [GRAPHIC APPEARS HERE]Name: [GRAPHIC APPEARS HERE]Title: [GRAPHIC APPEARS HERE]TENANT:HURON ACQUISITION CORPORATIONBy: [GRAPHIC APPEARS HERE]Name: [GRAPHIC APPEARS HERE]Title: [GRAPHIC APPEARS HERE]EXHIBIT APREMISES[GRAPHIC APPEARS HERE]FOURTH AMENDMENT TO AND ASSIGNMENT OF LEASE THIS FOURTH AMENDMENT TO AND ASSIGNMENT OF LEASE (this “Amendment”) is made and entered into as of the 22nd day ofDecember, 2010 (the “Effective Date”), by and among CABOT II -– IL1W02—W03, LLC, a Delaware limited liability company (“Landlord”),HAEMOSCOPE CORPORATION, a Massachusetts corporation (“Existing Tenant”), and HAEMONETICS CORPORATION, a Massachusettscorporation (“New Tenant” or “Tenant”). WITNESSETH: WHEREAS, Landlord’s predecessor-in-interest, and Haemoscope Corporation, an Illinois corporation (“Original Tenant”), entered into a certainIndustrial/Office Building Lease dated as of March 23, 2004, as amended by a certain First Amendment to Lease dated as of June 10, 2004 (the “FirstAmendment”), as further amended by a certain Second Amendment to Lease dated as of June 5, 2007, and as further amended by a certain ThirdAmendment to and Assignment of Lease (the “Third Amendment”) dated as of November 19, 2007 (as amended, the “Lease”), pursuant to whichExisting Tenant leases certain premises consisting of approximately 16,748 rentable square feet (the “Premises”) in the building commonly known asHoward Commons, 6201 West Howard Street, Niles, Illinois (the “Building”); and WHEREAS, pursuant to letter dated March 23, 2006, Landlord consented to the assignment of the Lease from Original Tenant toHaemoscope, Inc. [Corporation], a Delaware corporation (“HC”), in connection with the merger of Original Tenant into HC (with HC as thesurviving entity). Further, as described in the Third Amendment, Landlord further consented to assignment of the Lease from HC to HuronAcquisition Corporation, a Massachusetts corporation. By Articles of Amendment filed with the Massachusetts Secretary of State on November 21,2007, Huron Acquisition Corporation changed its name to Haemoscope Corporation, a Massachusetts corporation, which entity is currently the“Tenant”; andWHEREAS, Existing Tenant desires to assign the Lease to New Tenant and New Tenant desires to assume the Lease (the “LeaseAssignment”);WHEREAS, Landlord and Tenant have agreed to extend the Term of the Lease for a period of one (1) year, pursuant to the terms hereof;andWHEREAS, Landlord, Existing Tenant, and Tenant desire to memorialize their understanding and modify the Lease consistent therewith.NOW, THEREFORE, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged,Landlord, Existing Tenant, and Tenant hereby agree as follows:1. Assignment and Assumption. As of the Effective Date, Existing Tenant hereby assigns to New Tenant all of its right, title and interest tothe Lease, and New Tenant hereby assumes all of Original Tenant’s right, title and interest to the Lease. From and after the Effective Date, the “Tenant” under the Lease shall mean New Tenant, with a principal place of business at 400 Wood Road, Braintree, Massachusetts02184”, which address shall be Tenant’s address for purposes of providing notices under the Lease. 2. Term. (a) Notwithstanding anything to the contrary contained in the Lease, the Term of the Lease will expire on July 31, 2012. (b) The Lease is amended by deleting in its entirety without replacement Paragraph 2(D) of the First Amendment. (c) The Lease is amended by adding the following as a new Section 2.07 to Exhibit D, First Addendum to the Lease: “2.07 Extension Term. Provided Tenant is not in monetary default under this Lease, and Tenant is not otherwise in default hereunder beyondany applicable notice and cure period at the time an option may be exercised and at the time the Extension Option (as defined below) commences,Landlord grants to Tenant one option (the “Extension Option”) to extend this Lease with respect to all of the Premises for one additional period of one(1) year (the “Extension Period”). The Extension Option may be exercised by Tenant delivering written notice (the “Extension Notice”) to Landlordat least six (6) months prior to the expiration of the Lease Term (i.c., no later than January 31, 2012). In the event that Tenant fails timely to give suchnotice to Landlord, this Lease shall automatically terminate at the end of the Lease Term, and Tenant shall have no option to extend the Lease Term.Time is of the essence in the exercise of the Extension Option.The rate of Base Rent (the “Extension Rental Rate”) for the Extension Period shall be equal to one hundred percent of the then current market rentalrate at the Building charged by Landlord, taking into account all relevant factors. Not later than thirty (30) days following Landlord’s receipt of theExtension Notice, Landlord shall provide Tenant with Landlord’s good faith estimate (“Landlord’s FMV Notice”) of such Extension Rental Rate.Tenant shall have fifteen (15) days from its receipt of Landlord’s FMV Notice to notify Landlord whether Tenant accepts or rejects Landlord’sdetermination of the Extension Rental Rate. If Tenant is unwilling to accept Landlord’s determination of the Extension Rental Rate as set forth inLandlord’s FMV Notice, and if the parties are unable to reach agreement thereon within thirty (30) days after the delivery of Tenant’s notice toLandlord rejecting such rental determination, then the Extension Option shall lapse, the Lease shall automatically terminate at the end of the Term andTenant shall have no further option to extend the term of this Lease.Landlord and Tenant shall execute an amendment to this Lease within thirty (30) days after the determination of the Extension Rental Rate, whichamendment shall set forth the extended Lease Term and the Extension Rental Rate. Except for the change in the rate of Rent, the Extension Periodshall be subject to all of the terms and conditions of this Lease and the Premises shall be delivered in their then “as is” condition at the time theExtension Period commences. Neither any option granted to Tenant in this Lease or in any collateral instrument to renew or extend the Lease Term, nor the exercise of any suchoption by Tenant, shall prevent Landlord from exercising any option or right granted or reserved to Landlord in this Lease or in any collateral instrument or that Landlord may otherwise have,to terminate this Lease or any renewal or extension of the Lease Term either during the original Lease Term or during the renewed or extended Term.Any renewal or extension right granted to Tenant shall be personal to Tenant and may not be exercised by any assignee, subtenant or legalrepresentative of Tenant. Any termination of this Lease shall serve to terminate any such renewal or extension of the Lease Term, whether or notTenant shall have exercised any option to renew or extend the Lease Term. No option granted to Tenant to renew or extend the Lease Term shall bedeemed to give Tenant any further option to renew or extend.”3. Base Rent. The Lease is amended by deleting the last line of the Base Rent schedule added to the Lease by paragraph 3 of the ThirdAmendment and replacing such line as follows (such Base Rent to continue to be paid to Landlord in monthly installments on the first day of eachmonth in advance, without offset, deduction or prior demand, and as otherwise set forth in the Lease):Time PeriodAnnual Base RentMonthly Base Rent8/1/10 —2/28/11$139,175.88$11,597.993/1/2011$142,358.00$11,863.17” 4. Base Year. Notwithstanding the provisions of the Lease to the contrary, effective as of March 1, 2011, “Base Amount Taxes” shall bean amount equal to Tenant’s Proportionate Share of Taxes for the 2011 calendar year, and “Base Amount Expenses” shall be an amount equal toTenant’s Proportionate Share of Expenses for the 2011 calendar year. Commencing on March 1, 2011, Tenant’s payment of Additional Rent shall becomputed based on the Base Amount Taxes and Base Amount Expenses described in this Fourth Amendment.5. Heating and Air Conditioning. Tenant acknowledges and agrees that since the commencement of the Term, the HVAC serving thePremises has been, is, and will continue to be controlled by Tenant and separately metered. All utility bills of any type related to the such PremisesHVAC system shall be paid for by Tenant pursuant to Section 5 of the Lease.6. Brokers. Tenant represents and warrants that it has dealt with no broker, agent, or other person in connection with this transaction, otherthan Colliers International and Studley, Inc. (collectively, the “Broker”), and that no other broker, agent or other person brought about this transaction,and Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming acommission or other form of compensation by virtue of having dealt with Tenant with regard to this leasing transaction. Landlord shall be solelyresponsible for any commissions or fees due the aforementioned Brokers in connection with this Amendment. The provisions of this paragraph shallsurvive the termination of the Lease.7. No Other Amendments. In all other respects, the terms and provisions of the Lease are ratified and reaffirmed hereby, are incorporatedherein by this reference and shall be binding upon the parties to this Amendment. 8. Definitions. All capitalized terms used and not otherwise defined herein, shall have the meanings ascribed to them in the Lease.9. Conflicts. Any inconsistencies or conflicts between the terms and provisions of the Lease and the terms and provisions of thisAmendment shall be resolved in favor of the terms and provisions of this Amendment. 10. Execution. The submission of this Amendment shall not constitute an offer, and this Amendment shall not be effective and bindingunless and until fully executed and delivered by each of the parties hereto. Tenant represents and warrants for itself that all requisite organizationalaction has been taken in connection with this transaction, and the individual signing this Amendment on behalf of Tenant represents and warrants thathe/she has been duly authorized to bind the Tenant by his/her signature.11. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all ofwhich together shall constitute one and the same instrument. Additionally, telecopiedor e-mailed signatures may be used in place of original signatures on this Amendment. Tenant and Landlord intend to be bound by the signatures on thetelecopied or e-mailed document, are aware that the other party will rely on the teleeopied or e-mailed signatures, and hereby waive any defenses to theenforcement of the terms of this Amendment based on the form of signature.[SIGNATURES FOLLOW ON NEXT PAGE] IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be duly executed, under seal, in multiple copies, each to beconsidered an original hereof, as of the day and year first above written.LANDLORD:CABOT II- ILIWO2-W03, LLCBy: Cabot Industrial Value Fund II Operating Partnership, L.P.By: [Graphic appears here] Name: Stephen P. Vallarelll Title: Senior Vice PresidentEXISTING TENANT:HAEMOSCOPE CORPORATION, a Massachusetts corporation By: [Graphic appears here] Name: Christopher Lindop Title: PresidentNEW TENANT: HAEMONETICS CORPORATION, a Massachusetts corporation By: [Graphic appears here] Name: Christopher Lindop Title: CFOFIFTH AMENDMENT TO LEASETHIS FIFTH AMENDMENT TO LEASE (this “Amendment”) is entered into as of the 24 day of July, 2012, by and between CABOT II —IL1W02—W03, LLC, a Delaware limited liability company (“Landlord”) and HAEMONETICS CORPORATION, a Massachusetts corporation (“Tenant”).WHEREAS, Landlord, as a successor-in-interest to Howard Commons Associates, L.L.C., a Delaware limited liability company, and Tenant, as asuccessor-in-interest to Haemoscope Corporation, an Illinois corporation, are parties to that certain Industrial/Office Building Lease dated as of March 23, 2004(the “Lease Agreement”) covering certain space in the building known as Howard Commons and located at 6201-6295 West Howard Street, Niles, Illinois60714 (the “Building”), as more particularly described therein;WHEREAS the Lease Agreement has been previously amended by that certain First Amendment to Lease dated as of June 10, 2004, that certainSecond Amendment to Lease dated as of June 5, 2007, that certain Third Amendment to and Assignment of Lease dated as of November 19, 2007, and thatcertain Fourth Amendment to and Assignment of Lease (the “Fourth Amendment”) dated as of December 22, 2010 (the Lease Agreement, as amended, the“Lease”) whereby Tenant currently leases from Landlord approximately 16,748 rentable square feet of space known as Suite 6231 (the “Premises”) in theBuilding;WHEREAS, Landlord is the current owner of the Building and is the landlord under the Lease;WHEREAS, the Term of the Lease is currently scheduled to expire on July 31, 2012, and Tenant desires to extend the Term for a period of twelve(12) months to expire on July 31, 2013;WHEREAS, subject to the terms and conditions set forth below, Landlord has agreed to extend the Term for a period of twelve (12) months to expireon July 31, 2013; andWHEREAS, Landlord and Tenant desire to amend the Lease to reflect their agreements as to the terms and conditions governing the extension of theTerm.NOW, THEREFORE, in consideration of the premises and the mutual covenants between the parties herein contained, Landlord and Tenant agree asfollows:1. Term. The Term of the Lease is hereby extended for a period of twelve (12) months to expire on July 31, 2013, unless sooner terminated in accordancewith the terms of the Lease.2. Base Rent. From and after the date hereof and continuing through July 31, 2012, Tenant shall continue to pay Base Rent in accordance with the terms ofthe Lease. Commencing August 1, 2012 and continuing through July 31, 2013, Tenant shall pay Base Rent for the Premises in the amount of $13,258.83 permonth. All such Base Rent shall be payable in accordance with the terms of the Lease.13. Additional Rent. Tenant shall continue to pay Additional Rent in accordance with the terms of the Lease; provided that, effective as of August 1, 2012,the “Base Amount Taxes” shall be amended to mean an amount equal to Tenant’s Proportionate Share of Taxes for the 2012 calendar year, and the “BaseAmount Expenses” shall be amended to mean an amount equal to Tenant’s Proportionate Share of Expenses for the 2012 calendar year. In connection with theupdating of the base year, all caps on Expenses previously provided under the Lease are hereby deleted.4. Utilities. Tenant shall continue to pay for all utilities provided to the Premises and for Tenant’s insurance premiums in accordance with the terms of theLease.5. Acceptance of the Premises. Tenant acknowledges that it currently occupies the Premises and hereby accepts the Premises and the Project in “as is”condition. Landlord shall not be required to perform any leasehold improvements or provide any improvement allowance in connection with this Amendment.6. Landlord’s Addresses. Landlord’s addresses for notices under the Lease are hereby amended in their entireties to the following:CABOT II — IL1W02—W03, LLCc/o Cabot PropertiesOne Beacon Street, Suite 1700Boston, Massachusetts 02108Attn: Asset ManagementPayments of Rent only shall be made payable to the order of Landlord at the following address:Cabot Industrial Value Fund II Operating Partnership, L.P.Lockbox # 7740664066 Solutions CenterChicago, IL 60677-4000or such other name and address as Landlord shall, from time to time, designate.7. Expansion Option.(a) At any time prior to October 31, 2012, Tenant shall have the option (the “Expansion Option”) to lease the approximately 5,366 rentable squarefeet of space in the Building currently known as Suite 6233 (the “Expansion Space”) in its entirety by providing Landlord written notice (the “ExpansionNotice”) from Tenant of the exercise of its Expansion Option, if:(i) Tenant is not in default under the Lease, as amended hereby, beyond any applicable cure periods at the time that Landlord receives theExpansion Notice; and2(ii) No part of the Premises is sublet at the time Landlord receives the Expansion Notice; and(iii) The Lease has not been assigned prior to the date that Landlord receives the Expansion Notice.(b) If Tenant is entitled to and properly exercises its Expansion Option, Tenant shall pay Base Rent for the Expansion Space in the amount of$4,248.08 per month. All such Base Rent shall be payable in accordance with the terms of the Lease, as amended hereby. Tenant shall pay Additional Rentand other sums for the Expansion Space in accordance with the terms of the Lease.(c) The Expansion Space (including improvements and personalty, if any) shall be accepted by Tenant in its “as-built” condition andconfiguration existing on the earlier of the date Tenant takes possession of the Expansion Space or as of the date the term for the Expansion Space commences.The term for the Expansion Space shall commence on the date Landlord delivers possession of the Expansion Space to Tenant, and shall end, unless soonerterminated pursuant to the terms of the Lease, on the expiration of the Term of the Lease, as extended hereby, it being the intention of the parties hereto that theterm for the Expansion Space and the Term for the current Premises shall be coterminous, The Expansion Space shall be considered a part of the Premises,subject to all the terms and conditions of the Lease, except that no allowances, credits, abatements or other concessions (if any) set forth in the Lease for thecurrent Premises shall apply to the Expansion Space.(d) If Tenant is entitled to and properly exercises the Expansion Option, Landlord and Tenant shall enter into an amendment (the “ExpansionAmendment”) to reflect the commencement date of the term for the Expansion Space and the changes in Base Rent, square footage of the Premises, Tenant’sProportionate Share, and other appropriate terms; provided that an otherwise valid exercise of the Expansion Option shall be fully effective whether or not theExpansion Amendment is executed. The Expansion Option granted herein shall terminate upon November 1, 2012 and if Tenant fails to timely deliver theExpansion Notice, Tenant’s exercise of the Expansion Option shall be of no force or effect, time being of the essence in delivery of the Expansion Notice.(e) Notwithstanding anything herein to the contrary, Tenant’s Expansion Option is subject and subordinate to (i) the renewal or extension rights ofany tenant leasing all or any portion of the Expansion Space, and (ii) the expansion rights (whether such rights are designated as a right of first offer, right offirst refusal, expansion option or otherwise) of any tenant of the Building existing on the date hereof.8. Renewal. Section 2.07 to Exhibit D. First Addendum to the Lease Agreement, as added by Section 2(c) of the Fourth Amendment, is hereby deleted, andTenant shall have no further right or option to extend or renew the Term.9. Insurance. The commercial general liability insurance policies required to be carried by Tenant under the Lease shall name Landlord, its propertymanager, any mortgagee, Cabot3Industrial Value Fund II Operating Partnership, L.P., Cabot Properties, Inc., and such other parties as Landlord may designate, as additiona1 insureds.10. Brokers. Tenant warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Amendment otherthan Colliers International (“Landlord’s Broker”) and Studley, Inc. (“Tenant’s Broker”), and that it knows of no other real estate brokers or agents who are ormight be entitled to a commission in connection with this Amendment. Landlord agrees to pay a commission to Landlord’s Broker and Tenant’s Broker inconnection with this Amendment pursuant to separate written agreements between Landlord and such brokers. Tenant agrees to indemnify and hold harmlessLandlord from and against any liability or claim arising in respect to any brokers or agents other than Tenant’s Broker claiming a commission by, through, orunder Tenant in connection with this Amendment.11. Estoppel. Tenant hereby represents, warrants and agrees that: (a) there exists no breach, default or event of default by Landlord under the Lease, or anyevent or condition which, with the giving of notice or passage of time or both, would constitute a breach, default or event of default by Landlord under theLease; (b) the Lease continues to be a legal, valid and binding agreement and obligation of Tenant; and (c) Tenant has no current offset or defense to itsperformance or obligations under the Lease.12. Authority. Tenant and each person signing this Amendment on behalf of Tenant represents to Landlord as follows: (i) Tenant is duly formed andvalidly existing under the laws of the Commonwealth of Massachusetts, (ii) Tenant has and is qualified to do business in Illinois, (iii) Tenant has the fullright and authority to enter into this Amendment, and (iv) each person signing on behalf of Tenant was and continues to be authorized to do so.13. Defined Terms. All defined terms used but not otherwise defined herein shall have the same meaning assigned to them in the Lease.14. Ratification of Lease. Except as amended hereby, the Lease shall remain in full force and effect in accordance with its terms and is hereby ratified. In theevent of a conflict between the Lease and this Amendment, this Amendment shall control. In no event shall Landlord be liable for any consequential, special,or punitive damages as a result of any breach of or default under the Lease, as amended hereby, by Landlord.15. No Representations. Landlord and Landlord’s agents have made no representations or promises, express or implied, in connection with this Amendmentexcept as expressly set forth herein and Tenant has not relied on ay representations except as expressly set forth herein.16. Entire Agreement. This Amendment, together with the Lease, contains all of the agreements of the parties hereto with respect to any matter covered ormentioned in this Amendment or the Lease, and no prior agreement, understanding or representation pertaining to any such matter shall be effective for anypurpose.17. Section Headings. The section headings contained in this Amendment are for convenience only and shall in no way enlarge or limit the scope or meaningof the various and several sections hereof.418. Successors and Assigns. The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respectivesuccessors and assigns.19. Severability. A determination that any provision of this Amendment is unenforceable or invalid shall not affect the enforceability or validity of any otherprovision hereof and any determination that the application of any provision of this Amendment to any person or circumstance is illegal or unenforceable shallnot affect the enforceability or validity of such provision as it may apply to any other persons or circumstances.20. Governing Law. This Amendment shall be governed by the laws of the State of Illinois.21. Submission of Amendment Not Offer. The submission by Landlord to Tenant of this Amendment for Tenant’s consideration shall have no bindingforce or effect, shall not constitute an option, and shall not confer any rights upon Tenant or impose any obligations upon Landlord irrespective of any reliancethereon, change of position or partial performance. This Amendment is effective and binding on Landlord only upon the execution and delivery of thisAmendment by Landlord and Tenant.[Signature page follows.]5IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.LANDLORD:CABOT II- IL1W02—W03, LLC, aDelaware limited liability companyBy:Cabot Industrial Value Fund II Operating Partnership, L.P., a Delaware limited partnership, its sole memberBy:[Graphic appears here]Name: Bradford M. OtisTitle: Vice PresidentTENANT:HAEMONETICS CORPORATION,a Massachusetts corporationBy: :[Graphic appears here]Name: [Graphic appears here]Title :[Graphic appears here]6LEASE AGREEMENT ENTERED INTO BY AND BETWEEN MRS. BLANCA ESTELA COLUNGA SANTELICES, BY HER OWNRIGHT, HEREINAFTER REFERRED TO AS "COLUNGA", AND PALL LIFE SCIENCES MEXICO, S. DE R.L. DE C.V.,REPRESENTED HEREIN BY MR. LEOBARDO TENORIO MALOF, AS ITS ATTORNEY-IN-FACT, HEREINAFTER REFERRED TO AS"PALL", ACCORDING TO THE FOLLOWING RECITALS AND CLAUSES.RECITALSI. COLUNGA STATES:A)That she acquired being married under separate property regime, and she is the title holder of plot number 7, block 930 of Parque Industrial ElFlorido, Seccion Colinas, in Tijuana, Baja California, with a surface area of 11,092.22 square meters, as established in public deed number40,888, issued by Mr. Ricardo del Monte Nunez, Notary Public No. 8, in and for this city, duly registered in the Public Registry of Property andCommerce, of the city of Tijuana, B.C., under file number 5203904, Civil Section, on January 12, 2001.B)That in the aforementioned plot, she built, on her own account, a building for light industrial manufacturing and warehousing, with a surface area of62,000.00 square feet, same that has a production and/or warehousing area, offices, snack bar, men and woman's rest rooms and 52 (fifty two)parking spaces. The address of said real property is that located at Calle Colinas No. 11730, Parque Industrial El Florido, Seccion Colinas,Delegacion La Presa, Tijuana, B.C. 22680.C)That it is her wish to give in lease, the lot and the construction which is referred to in paragraphs A) and B) of these recitals, hereinafter referred asthe LEASED PREMISES. The LEASED PREMISES are described in the plot plan attached hereto as Exhibit 1.D)That the LEASED PREMISES shall be destined for the industrial use needed by PALL, by this, the light manufacturing and warehousing ofproducts. The LEASED PREMISES has within its boundaries the infrastructure services of water, sewage, electric energy and telephone.II. PALL THROUGH ITS LEGAL REPRESENTATIVE STATES:A)That he/she has the necessary faculties to execute the present agreement on behalf of PALL.B)That it is a corporation legally incorporated according to the laws of the Mexican Republic, with the legal capacity to execute this Agreement, asestablished in Public Instrument Number 20,262, dated October 25, 2006, executed before Mr. Juan Jose Thomas Moreno, Notary Public Numer 7for the State of Baja California, same that is duly recorded in the Public Registry of Property and Commerce of Tijuana, B.C.C)That it is PALL's best interests to formalize this Agreement.D)That he/she has inspected the LEASED PREMISES on behalf of PALL, and is interested in leasing said premises under the terms of this agreement.III. THE PARTIES STATE:A) That in the execution of this agreement there has been no error, violence or bath faith between them and that they have sufficient faculties, same that havenot been revoked, diminished or limited in any way.CLAUSESFIRST. SUBJECT MATTERUnder the terms and conditions of the present agreement, by this means, COLUNGA leases to PALL, the LEASED PREMISES referred to in paragraph A)and B) of Recital I) of this agreement, and PALL hereby receives the LEASED PREMISES to its satisfaction, having carried out an inspection of theLEASED PREMISES.SECOND. TERM AND DELIVERY OF LEASED PREMISES2COLUNGA shall deliver the LEASED PREMISES to PALL for Beneficial Occupancy (as defined below) no later than December 3, 2007. The parties agreethat the rent described in Clause Third below shall not be due and payable during Beneficial Occupancy of the LEASED PREMISES. The initial term of thisAgreement, same that is strictly binding on both parties, begins on January 1st, 2008, and will conclude on December 31, 2012.Beneficial Occupancy shall mean the period commencing no later than December 3, 2007 and ending on December 31, 2007, in which PALL will receivepossession of the LEASED PREMISES without obligation to pay rent; however, all other obligations of PALL and COLUNGA hereunder shall be in fullforce and effect during Beneficial Occupancy and PALL will be responsible for the LEASED PREMISES under the terms and conditions hereof.PALL has the option to extend the term of this Lease Agreement for 2 (two) additional period of 5 (five) binding years each. In the event that PALL decides toexecute its extension rights, it must deliver a written notice to COLUNGA, with at least 180 (one hundred and eighty) natural days prior to the termination ofthe corresponding term. Otherwise, the Lease Agreement will automatically expire at the term agreed and PALL must return the LEASED PREMISES withoutany previous requirement.In the event that PALL does not execute its extension correctly once this lease agreement has expired, and that it does not evict the LEASED PREMISES, theparties must observe Clause Twelfth, first paragraph of this agreement. The fact that PALL does not vacate the LEASED PREMISES or that the payment ofthe rents are received in account, will not constitute novation, extension or implied continuation of this Agreement. Therefore, COLUNGA maintains in everymoment the right and action to force PALL to evict the LEASED PREMISES immediately following the end of the relevant term.THIRD. RENTBoth parties agree and set forth the price for the Lease, the monthly rent in the amount of $27,280.00 (twenty seven thousand two hundred eighty dollars00/100) legal currency of the United States of America, or in its equivalent in Mexican legal3currency, at the exchange rate published by the Bank of Mexico in the Federal Official Gazette of the date of effective payment, plus the Value Added Tax.The parties agree that after the thirteenth month of the lease, and until the termination of same, the monthly rent shall be raised, every year, in 3.5% per year.Such increase shall occur only once per year.The same procedure will remain in case of extension of the lease agreement.The monthly installments of rent shall be paid in advance on or before the third business day of the applicable month, at the address of COLUNGA or, atany other address indicated by COLUNGA to PALL; the aforementioned in accordance to the Clause SEVENTEENTH of the present agreement.PALL must pay the total amount of the monthly rent, even if it delivers possession of the LEASED PREMISES to COLUNGA before the end of thecorresponding month, therefore, it waives its right to pay only a part of the monthly rent as established by the article 2303 of the Civil Code for the State ofBaja California.Under no circumstances shall PALL withhold the rent, except under the case stated by article 2294 of the Civil Code for this State. It is expressly agreed thatall claims by PALL in the events described in articles 2295, 2319 and 2364 of said Civil Code, as the case may be, shall be filed by PALL independently ofPALL's obligations to pay the rent during the term of this agreement.FOURTH. GUARANTY DEPOSITAt the moment of execution of this Agreement, PALL delivers to COLUNGA, and COLUNGA receives from PALL the amount of US$54,560.00 (fifty fourthousand five hundred sixty dollars 00/100) legal currency of the United States of America, equivalent to 2 (two) months of rent, as a guaranty deposit, inorder to guaranty the compliance with all the obligations of PALL derived from the present Lease. The amount deposited will be returned to PALL at thetermination of the present Lease, or of its extension, provided that no amount is due in favor of COLUNGA and that the4building is returned in good conditions, normal wear and tear excepted. PALL will not have the right to receive interests for said deposit.FIFTH. DESTINATION OF THE LEASED PREMISESPALL will use the LEASED PREMISES for light manufacturing and/or warehousing of products.PALL agrees to comply with the Internal Rules of Parque Industrial El Florido, and the possible future modifications made known to PALL in writing,avowing to know and understand said rules in all their terms. The rules are attached hereto as Exhibit 2.SIXTH. RIGHT TO REDUCE THE PRICE OF THE LEASEIn the event that the LEASED PREMISES were destroyed or suffered severe damages by any reason not imputable to PALL, in such a way that preventsPALL from using the LEASED PREMISES for the purposes it was leased, COLUNGA, must determine within the following twenty (20) days afterCOLUNGA is informed of said damage or destruction, if the LEASED PREMISES can be rehabilitated or reconstructed to the same conditions as before thedamage within two (2) months following the damage or destruction, and will notify PALL of said determination. If COLUNGA determines that the LEASEDPREMISES can not be restored or reconstructed to the same conditions as before the damage, or the LEASED PREMISES are not so restored or reconstructed,within the two (2) month period from the date that the damage or destruction occurred, each of the parties, COLUNGA and PALL, will have the right toterminate this Lease without liability to either party, by way of written notice to the other party.If COLUNGA determines that the LEASED PREMISES can be rehabilitated or reconstructed within the mentioned two (2) months, COLUNGA on its ownaccount, will proceed to rehabilitate or reconstruct the LEASED PREMISES, and no rent shall be payable by PALL during the time the reconstruction lasts.It is established that in the event of partial destruction of the LEASED PREMISES, for causes not imputable to PALL, the rent shall be partially reduced, inthe same proportion that PALL is limited to use the LEASED PREMISES. This obligates PALL to5notify COLUNGA of such event, by written notice, as soon as practical, but in no event later than 5 (five) days after the date in which PALL has knowledgeof said damage.SEVENTH. IMPROVEMENTS PAID BY PALLPALL, at its own cost, will have the right to make interior improvements to the LEASED PREMISES without need of authorization, as long as the cost of saidimprovements do not exceed the amount of US$25,000 Dollars (Twenty Five Thousand Dollars 00/100) currency of the United States of America, andprovided that they do not change or affect the structural integrity or the exterior appearance of the LEASED PREMISES. Notwithstanding the foregoing, PALLagrees not to make any structural modifications to the LEASED PREMISES without the written authorization from COLUNGA. The parties agree that allalterations on the floor or roof of the LEASED PREMISES shall also require the prior written authorization from COLUNGA. COLUNGA will act diligentlyand reasonably whenever written authorization is required, and under the basis that her consent will not be denied unless there is a justified cause. The requestfor said modifications must be sent with a set of layouts or blueprints and specifications to COLUNGA, for its authorization. If COLUNGA in a period nolonger than 10 (ten) days, starting from the reception of the written request, does not oppose it, then such authorization will be considered granted. PALL isobligated to deliver the LEASED PREMISES to COLUNGA, in the same conditions and with the same characteristics it has at the moment of receiving it,normal wear and tear excepted. PALL agrees to pay for the damages caused to COLUNGA from removing or taking the leasehold improvements, in order toleave the LEASED PREMISES in its original condition. COLUNGA may apply the guaranty deposit to the payment of such repairs in the event that PALLdoes not comply with its obligation.EIGHTH. UTILITIES OF THE LEASED PREMISESCOLUNGA states that the LEASED PREMISES have infrastructure installed for the provision of utilities in the following capacities: 1,000 KVA's ofelectricity, 0.81 Ips of water, 0.81 Ips of sewer, infrastructure for telephone lines. PALL is obligated to pay, at its own cost, for the connection and installationof the utilities, such as electricity, water, and telephone, among others, and, consequently, PALL shall directly negotiate with the company or person providingsuch utility services, and will be liable for any6harm and damages caused to COLUNGA or to third parties by PALL, derived from the improper use of the utilities.NINTH. MAINTENANCE OF THE LEASED PREMISES IN CHARGE OF COLUNGACOLUNGA must repair any defects of construction, including any repairs of the roofs, walls, floors and any other construction defect of the LEASEDPREMISES.COLUNGA will also be responsible for the repairs of the construction defects of the structural items of the LEASED PREMISES.COLUNGA agrees to repair in a timely manner, at its own account, the repairs referred to in this clause.If COLUNGA does not perform its repair obligations described in this clause, PALL, after 10 (ten) days written notice to COLUNGA, shall have the right totake the actions necessary to perform the repairs. The costs reasonably incurred by PALL in connection with the repairs shall be reimbursed by COLUNGAwithin 5 (five) days after receiving notice and supporting documentation.TENTH. MAINTENANCE OF THE LEASED PREMISES IN CHARGE OF PALLPALL will maintain and repair all items as required from its use of the LEASED PREMISES or from an inadequate maintenance by PALL, includingmaintenance of electric systems and sewage, restrooms, the hydroneumatic pump, water storage system and piping, the interior and exterior paint, carpets,structural and non-structural walls, divisions, roofs, ventilation systems, air conditioner and ducts, doors and windows, of the LEASED PREMISES, inorder to maintain them in the same condition that are received, including the necessary preventive maintenance. PALL is obligated to maintain the LEASEDPREMISES in good state, and not to allow the accumulation of trash, wastes or any other scrap in the interior, exterior, as well as in the loading andunloading areas. PALL will not use the roof area of the LEASED PREMISES for storage, deposit or enclosure of goods or wastes, or any activity differentfrom its natural purpose.7Once this Agreement or its extension(s) if any, expire, PALL is obligated to return the LEASED PREMISES in the same condition and state as it were at themoment of delivery, excepting the normal wear and tear, consequence of its ordinary use. PALL is obligated to return the interior and exterior paint of theLEASED PREMISES in the condition that it received the premises excepting the normal wear and tear.COLUNGA will have the right to inspect the LEASED PREMISES during business days and hours in order to determine the condition and state of saidpremises, with prior notice to PALL at least 48 (forty eight) hours in advance to the inspection, to which effect COLUNGA shall comply with all necessarysafety measures imposed by PALL during the inspection. Inspections by COLUNGA will not be more often than twice a year and COLUNGA shall exerciseits inspection right in a manner not to interfere or disturb PALL's use and enjoyment of the LEASED PREMISES.ELEVENTH. RIGHT OF SUBLETTING OR ASSIGNINGPALL will have the right to sublet part or all the LEASED PREMISES, for light manufacturing and/or warehousing of products, but only with prior writtenauthorization from COLUNGA, except in the event of sublease to subsidiaries or affiliated companies of PALL or PALL CORPORATION or to the companyEnsatec, S.A. de C.V., in which events prior notice to COLUNGA will suffice.In this last event, PALL will continue to be responsible before COLUNGA, as if it continued to be using/ occupying the LEASED PREMISES.In the event of a partial or total assignment of the LEASED PREMISES by PALL to subsidiaries or affiliated companies of PALL or PALL CORPORATION,a prior written notice to COLUNGA will be required. If it is not the case, the partial or total assignment by PALL, will require the previous written consent ofCOLUNGA.It is agreed between the parties that no authorization will be given by COLUNGA to assign part or all of the LEASED PREMISES to the company Ensatec,S.A. de C.V., unless it becomes a wholly owned subsidiary of PALL CORPORATION.8TWELFTH. DELIVERY OF LEASED PREMISESIt is expressly agreed that if PALL does not deliver the LEASED PREMISES after the expiration term of this Lease Agreement or its extension, if any, themonthly rental payments will automatically increase in a 100% (one hundred percent), taking into consideration the last price settled for said monthlypayment. The aforementioned, does not constitute novation, extension or implied continuation of the Lease Agreement. Therefore, COLUNGA maintains inevery moment, the right and action to obligate PALL to evict the LEASED PREMISES immediately after the end of the relevant term.In the event that after the expiration term of this agreement, PALL leaves material and equipment at the LEASED PREMISES, same will be considered uselessand idle and could be destroyed and handled as waste at COLUNGA’s consideration.THIRTEENTH. INSURANCEThe parties agree that PALL will be responsible for the payment of an insurance policy, with coverage to the LEASED PREMISES for fire, lightning,explosion, earthquake, aircraft collision, smoke, storms, any type of vehicle collision, strike, student or civil riots, acts of vandalism, and floods, actions ofits employees, workers, contractors, suppliers, clients, visitors and directors of PALL, in an amount of not less than the replacement value of the LEASEDPREMISES which is currently the amount of US$2'170,000.00 (Two million one hundred seventy thousand dollars 00/100) dollars, currency of the UnitedStates of America. The insurance amount will be updated from time to time but not more than once a year. The insurance shall include civil liability for up to$500,000.00 dollars (five hundred thousand 00/100 dollars) United States of America Currency, and coverage for rental payments interruption for up to 12(twelve) months. To such effect, COLUNGA will procure the issuance of an insurance policy complying with the terms of this Clause, with any authorizedInsurance Company reasonably acceptable to PALL and offering competitive prices; the corresponding insurance company shall issue the policy directly infavor of COLUNGA and PALL will directly pay to the insurance company, on annual basis, and at least within 5 (five) days period before expiration date ofthe policy. This policy will cover the reposition value of the LEASED PREMISES, and will not include its contents.9FOURTEENTH. PAYMENT OF TAXESThe Value Added Tax (Impuesto al Valor Agregado) caused by this Agreement, will be covered by PALL and paid by COLUNGA.Likewise, PALL is expressly obligated to reimburse COLUNGA the amounts paid for Real Estate Tax levied by the LEASED PREMISES. Therefore,COLUNGA will pay said tax in advance and at an annual basis on January of each year, and PALL will reimburse that amount to COLUNGA. The partiesagree, however, that PALL shall not reimburse any fines, interests, or other amounts that might be payable by COLUNGA derived from an untimely orinaccurate payment of property tax by COLUNGA. COLUNGA shall pay property tax to the corresponding authorities in a manner so as to take advantageof any incentives or discounts that may be available as a result of timely and/or early payment of property tax. COLUNGA shall provide copies of theproperty tax paid when requesting the reimbursement, and shall deliver to PALL the invoice corresponding to the reimbursed amount.FIFTEENTH. PAYMENT OF MAINTENANCE FEESPALL is obligated to pay directly the corresponding quotas, for the maintenance of the LEASED PREMISES, to PARQUE INDUSTRIAL EL FLORIDO,Seccion Colinas, located in this city, in exchange of the relevant invoices to be issued by such entity or the responsible for such maintenanceSIXTEENTH. RIGHT OF FIRST REFUSALThe parties agree that in the event COLUNGA decides to sell the LEASED PREMISES, PALL shall have a right of first refusal to acquire the LEASEDPREMISES. To such effect, upon COLUNGA's receipt of a bona fide offer to buy the LEASED PREMISES from a third party prospect, COLUNGA shallnotify PALL with respect to such good faith offer from the prospect and shall include a copy of the letter of intent signed by such prospect, and PALL shallhave a term of 60 (sixty) days as of the date of receipt of the notice by COLUNGA, to exercise its right of first refusal for the acquisition of the LEASEDPREMISES. A third party prospect means an individual or entity unrelated to COLUNGA that in good faith has signed a letter of intention with COLUNGAwhereby COLUNGA is legally obligated to sell the LEASED PREMISES, subject only to10the exercise by PALL of its right of first refusal under the terms of this Clause. PALL shall exercise its right of first refusal in writing and the parties shallexecute the corresponding purchase and sales contract before a notary public within 30 (thirty) days following the date of exercise of the right of first refusal byPALL.In the event that PALL does not exercise its right, in writing, during the term mentioned, PALL will lose its right to acquire the LEASED PREMISES.SEVENTEENTH. ADDRESSFor all legal effects derived from the present Lease, the parties designate the following as their addresses; in reserve of any other future domicile designated bythem.COLUNGAMRS. BLANCA ESTELA COLUNGA SANTELICESCerro del Obispado No. 11507Lomas de Agua CalienteTijuana, B.C., 22440MexicoPALLPALL LIFE SCIENCES MEXICO, S. DE R.L. DE C.V.Calle Colinas No. 11730Parque Industrial El Florido, Seccion ColinasDelegacion La PresaTijuana, B.C. 22680GUARANTORPALL CORPORATION2200 Northern Blvd.East Hills, New York 11548Attention: Legal DepartmentAny notice or judicial order to be delivered under the terms of this agreement, must be made in writing and delivered personally to the other party, or sentthrough certified mail, prepaid mailing stamp, or overnight courier, to the address established above, in which case the corresponding notice will be considereddelivered 15 (fifteen) days after the day it was sent.EIGHTEENTH. ASSIGNMENT OR ALLOWANCE11COLUNGA may, subject to the right of first refusal set forth in Clause Sixteenth, assign or negotiate its rights under the present Lease to any Credit orBanking Institution, whether it be foreign or national, or to any other legally incorporated entity or individual, provided that the assignee or purchaser of saidrights agrees will not disturb the peaceful possession of the LEASED PREMISES or any other right of PALL derived from the present Lease Agreement, aslong as PALL continues to comply with its obligations under this Agreement. In the event that PALL does not exercise its right of first refusal under ClauseSixteenth, and the title of property is transferred or purchased, the assignee shall be obligated to accept PALL as its tenant in this Lease, and to comply withthe assumed obligations by COLUNGA in the present Lease; PALL agrees to recognize such assignee or any other person acquiring title of the LEASEDPREMISES.In order to comply with the aforementioned, PALL will have the obligation to deliver to COLUNGA within the next 10 (ten) days after receiving thecorresponding notice, estoppel letters as reasonably required by COLUNGA for said operation.In such event, COLUNGA will notify PALL by writing, of its intention to assign the rights to this Agreement, and PALL will have the obligation to make therental payments in the address of the corresponding asignee.NINETEENTH. BREACHThe parties agree that the breach of any obligations established herein by one party will grant the other party the right to claim obligatory and specificperformance or the termination of the present Agreement.In the event that one of the parties fails to fulfill with any of the obligations established in this agreement, and once said breach has been notified, it/she willhave a term of 10 (ten) working days to fulfill said obligation. The aforementioned, will not apply to the obligations related to the payment of rent andreimbursement of property tax and insurance agreed by PALL, which will have to be fulfilled at the time established in this agreement.12Likewise, if PALL abandons the LEASED PREMISES for a period of 60 (sixty) days or more without paying the rent, COLUNGA could terminate thisagreement without prior judicial order and will have the right to occupy the LEASED PREMISES immediately. The aforementioned, independently of the rightto file an action for damages and losses against PALL.TWENTY. ENVIRONMENTALPALL agrees to comply with all Environmental Laws applicable to PALL's use of the LEASED PREMISES during all the term that PALL is in possession ofthe LESAED PREMISES. PALL may use any ordinary and customary materials, which are reasonably required to be used in the normal course, so long asthe use thereof is in compliance with all Environmental Laws, and does not expose the LEASED PREMISES or neighboring property to any meaningful riskof hazardous substance contamination or damage or expose COLUNGA to any liability therefore. Any contamination of the LEASED PREMISES generatedby PALL, shall be cleaned up and remediated at PALL's own cost and expense, including expenses, fees, as well as any other costs for final disposal and/orconfinement of any hazardous residues and/or materials.COLUNGA shall indemnify PALL for any contamination that may be found at the LEASED PREMISES provided that such contamination was generatedprior to the execution of this agreement. In such event, COLUNGA shall perform all activities needed to clean up and/or remediate the LEASED PREMISESin compliance with the Environmental Laws.The parties hereby acknowledge that PALL has been allowed to perform a Phase I environmental study on the LEASED PREMISES prior to the date ofexecution hereof, and that such study concluded that no apparent signs of contamination were found at the LEASED PREMISES. Attached is a copy of saidstudy, as Exhibit 3.The term "Environmental Laws" shall mean any and all laws, regulations, resolutions, orders, and permits concerning the preservation and restoration of theecological balance, as well as the environmental protection within the Mexican Republic.13TWENTY FIRST. GUARANTORPALL has required PALL CORPORATION to execute a Lease Guaranty, which executed and notarized copy has been delivered to COLUNGA, wherebyPALL CORPORATION guarantees and obligates itself with COLUNGA to assure an adequate and opportune fulfillment of every economic obligationacquired by PALL under this agreement; including the payment of rent, moratorium and any related indemnification amount. Through the Lease GuarantyPALL CORPORATION obligates itself as guarantor jointly and severally, in an unlimited way, with PALL, to pay any amount that may result from saidconcepts. Likewise, PALL CORPORATION waives the benefits of order, the right of excusion, and any other right, guaranty, or caution that could exist in itsfavor.The guarantor shall guaranty PALL's obligations, for the duration of this agreement, its extension(s), if any, or implied continuation, until PALL had paidand fulfilled all the obligations established herein, including increments in the rent as established herein. The aforementioned should not prevent that a graceperiod could be granted to PALL for the payment or fulfillment of its obligations or that a legal action could not be filed immediately after PALL's breach ofcontract.TWENTY SECOND. JURISDICTIONEverything related to the interpretation and compliance of the present Agreement, is submitted by the parties to the jurisdiction and venue of the Courts of thecity of Tijuana, State of Baja California, and to the applicable laws to said state, expressly waiving any other jurisdiction that might correspond them byreason of their present or future domiciles.TWENTY THIRD. LANGUAGEThis agreement is executed in English and Spanish versions. For its interpretation, or in the event of any controversy or dispute with respect to its terms, theSpanish version will prevail.TWENTY FOURTH. AMENDMENTSThe parties agree that any amendment to this agreement will only be valid if it is in writing signed by COLUNGA and PALL, with prior notice toGUARANTOR, in the understanding that the lack of notice shall not affect the terms and conditions of the Guaranty.The parties knowing the content, reach, and legal consequences of all and each one of the aforementioned clauses obligate themselves, to abide by them, andthey sign it before witnesses, in the city of Tijuana, Baja California, on December 3, 2007.COLUNGAMRS. BLANCA ESTELACOLUNGA SANTELICES[GRAPHIC APPEARS HERE]MRS. BLANCA ESTELA COLUNGASANTELICESPALLPALL LIFE SCIENCES MEXICO, S. DE R.L. DE C.V.[GRAPHIC APPEARS HERE]Leobardo Tenorio MalofREPRESENTATIVEWITNESS1415Mr. Felix M. DiazPresident Global Manufacturing & Latin AmericaWITNESSWITNESS[GRAPHIC APPEARS HERE] MR. MANUEL F. PASERO[GRAPHIC APPEARS HERE] 16EXHIBITS1PLOT PLAN2REGULATIONS OF INDUSTRIAL PARK3PHASE I STUDY17CONVENIO DE CESION DE ARRENDAMIENTO / ASSIGNMENT OF LEASE AGREEMENTRuben Guilloty Arvelo, en nombre y representacion de Pall Life SciencesMexico, S. de R.L. de C.V. (“Pall”), y, Leobardo Tenorio Malof en nombre yrepresentacion de Pall Mexico Manufacturing, S. de R.L. de C.V. (“PallMexico”), por medio de la presente exponemos y acordamos lo siguiente:Ruben Guilloty Arvelo, on behalf of Pall Life Sciences Mexico, S, de R.L. deC.V. (“Pall”), and Leobardo Tenorio Malof, on behalf of Pall MexicoManufacturing, S. de R.L. de C.V, (“Pall Mexico”), hereby declare and agreeto the following:De conformidad con lo establecido en la Clausula Decima Primera del Contratode Arrendamiento (el “Contrato”) que celebro Pall con la senora Blanca EstelaColunga Santelices (la “Arrendadora”) el 3 de diciembre del 2007 en relacioncon el inmueble industrial con domicilio en Calle Colinas No. 11731, ParqueIndustrial el Florido, Seccion Colinas, Delegacion La Presa, en Tijuana, BajaCalifornia, Mexico, 22680 (el “Inmueble”), a partir del dia de hoy, 2 dediciembre del 2011, Pall cede a favor de Pall Mexico todos sus derechos yobligaciones en el Contrato (la “Cesion”).In accordance with Clause Eleventh of the Lease Agreement (the “Agreement”) that Pall entered with Mrs. Blanca Esteia Colunga Santelices (the “Lessor”) on December 3rd 2007 regarding the industrial building located in CalleColinas No. 11731, Parque Industrial el Florido, Seccion Colinas, DelegacionLa Presa, in Tijuana, Baja California, Mexico, 22680 (the “Real Property”), as of today, December 2, 2011, Pall assigns in favor of Pall Mexico all ofits rights and obligations in the Agreement (the “Assignment”).Lo anterior de conformidad con la notification que fe fue entregada a laArrendadora y que recibio de conformidad el 2 de diciembre del 2011. Unacopia de dicha notificacion que contiene la aceptacion por la Arrendadora a laCesion del Contrato a favor Pall Mexico se adjunta al presente como Anexo “A”.The above in accordance with the notice that was delivered to Lessor, and towhich Lessor agreed to on December 2, 2011, Pall assigns in favor of PallMexico all of. A copy of the notice containing the acknowledgment by Lessorto the assignment of the Agreement in favor of Pall Mexico is enclosed asExhibit “A”.En virtud de la Cesion, Pall Mexico, en su caracter de nuevo arrendatario delInmueble, libera a partir del 2 de diciembre del 2011 a Pall de cualesquierobligacion que se derive del Contrato o del arrendamiento del Inmueble, por loque le otorga a Pall enIn view of Assignment, Pall Mexico, in its capacity of new lessee of the RealProperty, liberates and frees Pall as of December 2, 2011 of any obligationderiving from the Agreement or from the leasing of the Real Property, herebygranting in favor of Pall the este acto el finiquito mas amplio que en derecho proceda sin reservarse derechoalguno en su contra.most ample waiver awarded by Law without reserving any right whatsoeveragainst same.De conformidad con lo anterior, los representantes de Pall y Pall Mexicoplasman sus respectivas firmas el 2 de diciembre del 2011.In accordance with the above, the legal agents of Pall and Pall Mexico sign thisdocument on December 2, 2011.Pall Life Sciences Mexico, S. de R.L. de C.V.Pall Mexico Manufacturing, S. de R.L. de C,V. [GRAPHIC APPEARS HERE][GRAPHIC APPEARS HERE] Nombre: Name: Ruben Guilloty ArveloNombre: Name; Leobardo Tenorio MalofRepresentante Legal/Attorney-in-factRepresentante Legal/Attorney-in-factTestigo/Witness[GRAPHIC APPEARS HERE]Testigo/Witness[GRAPHIC APPEARS HERE]Nombre: (Name:) [GRAPHIC APPEARS HERE]Nombre: (Name:) [GRAPHIC APPEARS HERE]1 2CONTRATO DE SUBARRENDAMIENTO SUBLEASE CONTRACT CONTRATO DE SUBARRENDAMIENTO (el"Contrato") que se celebra con efectos a partir del 3 de diciembre de 2011 entre PALL MEXICO MANUFACTURING, S. DE R.L. DE C.V. (en lo sucesivo referida como la"SUBARRENDADORA"), representada en este acto por el senorLeobardo Tenorio Malof, en su caracter de Apoderado, y PALL LIFESCIENCES MEXICO, S. DE R.L. DE C.V. (en lo sucesivo referidacomo la "SUBARRENDATARIA"), representada en este acto por elsenor Ruben Guilloty Arvelo en su caracter de Apoderado, deconformidad con las siguientes declaraciones y clausulas: SUBLEASE CONTRACT (the “Contract”) entered into effectiveDecember 3, 2011 by and between PALL MEXICOMANUFACTURING, S. DE R.L. DE C.V., represented herein by Mr.Leobardo Tenorio Malof, in his capacity as Attorney-in-fact of saidcorporation (hereinafter referred to as the "SUBLESSOR"), and PALLLIFE SCIENCES MEXICO, S. DE R.L. DE C.V. represented herein byMr. Ruben Guilloty Arvelo in his capacity as Attorney-in-fact of saidcorporation (hereinafter referred to as the "SUBLESSEE"), in accordancewith the following: DECLARACIONES: RECITALS: 1. La SUBARRENDADORA, por conductode su apoderado, declara que: 1. The SUBLESSOR, hereby states that: a) Es una sociedad de responsabilidad limitada de capital variable mexicana, constituida y validamente existente de conformidad con las leyes de los Estados Unidos Mexicanos (en lo sucesivo "Mexico"). a) It is an entity duly incorporated and existing pursuant to the laws of theUnited Mexican States ("Mexico"). b) Es arrendataria de los edificios industriales con superficie total de 62,000 pies cuadrados ubicados en Calle Colinas No, 11731, Parque Industrial El Florido, Seccion Colinas, Delegacion La Presa, Tijuana, B.C., 22680 (en lo sucesivo el "Edificio"), construidos sobre el lote 7 con superficie de 11,092.22 metros cuadrados, ubicado en la manzana 930 de dicho Parque Industrial El Florido, Seccion Colinas. b) It is the tenant of the industrial facilities with a surface area of 62,000square feet located at Calle Colinas No. 11731, Parque Industrial El Florido,Seccion Colinas, Delegacion La Presa, Tijuana, B.C., 22680 (the"Building"), built on lot 7 with a surface area of 11,092.22 square meters,located at block 930 of such Parque Industrial El Florido, Seccion Colinas. c) Desea dar en subarrendamiento una porcion del Edificio con superficie de 500 pies cuadrados (en lo sucesivo referida como la "Propiedad Arrendada"). La Propiedad Arrendada se describe en el plano adjunto al presente Contrato como Anexo "A", el cual se tiene por reproducido en este acto mediante la presente referenda, por lo que forma parte integrante de este Contrato para todos los efectos a que haya lugar. c) It wishes to sublease a portion of the Building with an area of 500 squarefeet (hereinafter the "Leased Property"). The Leased Property is describedin the plot plan attached hereto as Exhibit "A", which is herebyincorporated by reference and becomes a part hereof. d) Desea dar en subarrendamiento la d) It desires to sublease the Leased Property Propiedad Arrendada a la SUBARRENDATARIA, conforme a losterminos y condiciones de este Contrato. to the SUBLESSEE, under the terms and conditions hereinafter set forth. II.- La SUBARRENDATARIA, por conducto de su apoderado declaraque: II.- SUBLESSEE, through its legal representative states: a) Es una sociedad de responsabilidad limitada de capital variablemexicana, constituida y validamente existente de conformidad con las leyesde Mexico. a) It is an entity duly incorporated and existing pursuant to the laws ofMexico. b) Desea recibir en subarrendamiento la Propiedad Arrendada, conforme a los terminos y condiciones de este Contrato. b) That its principal desires to sublease the Leased Property, subject to the terms and conditions contained herein. c) Su representante cuenta con facultades suficientes para celebrar este Contrato, las cuales no le han sido limitadas ni revocadas en forma alguna. c) That its attorney-in-fact has all the authorities required to enter into this Contract, which authorities have not been limited nor revoked in any manner whatsoever. III.- LAS PARTES, POR CONDUCTO DE SUS RESPECTIVOSAPODERADOS, DECLARAN QUE: III.- THE PARTIES, THROUGH THEIR LEGAL REPRESENTATIVES,STATE: a) En la celebracion del presente Contrato no ha existido error, mala fe, dolo o vicio del consentimiento alguno entre ellas. a) That in the execution of this Contract there has been no error, bad faithnor duress amongst them. b) En consideracion de las anteriores declaraciones, las partes se obligan de conformidad con las siguientes: b) In consideration of the above recitals, the parties agree on the following: CLAUSULAS: CLAUSES PRIMERA. SUBARRENDAMIENTO DE LA PROPIEDADARRENDADA FIRST. SUBLEASE OF THE LEASEDPROPERTY La SUBARRENDADORA en este acto entrega en subarrendamiento a laSUBARRENDATARIA y la SUBARRENDATARIA en este acto recibeen subarrendamiento de parte de la SUBARRENDADORA, la PropiedadArrendada, con todo lo que le corresponde. SUBLESSOR hereby subleases to SUBLESSEE and SUBLESSEEhereby subleases from SUBLESSOR, the Leased Property, together with alleasements and rights of way appurtenant thereto. La SUBARRENDATARIA recibe la Propiedad Arrendada a satisfacciontal y como la misma se encuentra. SUBLESSEE hereby receives the Leased Property "as is" to itssatisfaction. SEGUNDA. TITULARIDAD DE LAPROPIEDAD ARRENDADA SECOND. OWNERSHIP OF THELEASED PROPERTY La SUBARRENDADORA cuenta con la plena posesion de la PropiedadArrendada. y garantiza que la SUBARRENDATARIA tendra el uso ygoce pacifico de la Propiedad Arrendada durante el plazo de este Contrato. The SUBLESSOR has the right of exclusive use and possession of theLeased Property, and it guarantees that the SUBLESSEE will have the quietenjoyment of the Leased Property during all the term of this Contract.TERCERA. PLAZO Y ENTREGA DE LA PROPIEDADARRENDADA THIRD. TERM AND DELIVERY OFTHE LEASED PROPERTY A. Plazo. El plazo inicial de este Contrato es de l (un) ano contado a partirde la fecha de su firma (el "Plazo"), el cual podra ser prorrogado conformea lo previsto en la seccion B de esta Clausula. A. Term. The initial term of this Contract is for a period of 1 (one) year as ofthe date of execution hereof, unless it is extended pursuant to the provisions ofparagraph B. of this clause (the “Term”).B. Prorroga del Plazo. La SUBARRENDATARIApodra prorrogar el Plazo de este Contrato por 3 (tres) periodos adicionalesde un ano cada, los cuales seran prorrogados automaticamente. B. Extension to the Lease Term. The SUBLESSEE may extend the Term for3 (three) additional terms of one year each, which will be extendedautomatically..C. Entrega de la Propiedad Arrendada. La SUBARRENDADORA entrega la Propiedad Arrendada a la SUBARRENDATARIA en la fecha de firma de este Contrato. C. Delivery. SUBLESSOR hereby delivers the Leased Property toSUBLESSEE on the date of execution of this Contract.CUARTA.- USO DE LA PROPIEDAD ARRENDADA FOURTH.- USE OF THE LEASED PROPERTYLa SUBARRENDATARIA usara la Propiedad Arrendada unicamentepara actividades de industria ligera y almacenaje de productos. Bajoninguna circunstancia podra la SUBARRENDATARIA usar laPropiedad Arrendada para operaciones de industria quimica o pesada, nipara actividades que violen las leyes, regiamentos y normas municipals,estatales o federales. The SUBLESSEE shall use the Leased Property only for light industrialoperations and storage of products. Under no conditions whatsoever will theSUBLESSEE be permitted to use the Leased Property for chemical andheavy industrial operations, nor activities which are in violation of anyapplicable municipal, state and federal laws, regulations or ordinances.La SUBARRENDATARIA se obliga a cumplir con el Reglamento Interiordel PARQUE INDUSTRIAL EL FLORIDO, en vigor, el cual manifiestaconocer en todos sus terminos, asi como con las posibles modificacionesque pudiera sufrir en el futuro. SUBLESSEE agrees to comply with the Internal Rules of Parque IndustrialEl Florido, and the possible future modifications, avowing to know andunderstand said rules in all their terms. QUINTA. RENTA Y DEPOSITO FIFTH. RENT AND DEPOSITA. Renta. Durante el Plazo inicial de este Contrato, la SUBARRENDATARIA pagara como Renta por la Propiedad Arrendada. la cantidad de US$0.50 (cincuenta centavos 25/100 Dolares) moneda de los Estados Unidos de America ("Dolares"), por pie cuadrado del Edificio, por ano; es decir, la cantidad de US$3,000.00 Dolares (tres mil 00/100 Dolares) por ano. El monto anterior incluye mantenimiento. servicios publicos, seguro e impuesto predial. A. Rent. For the initial Term of this Contract, the SUBLESSEE shall pay as Rent for the Leased Property, US$ US$0.50 (fifty cents 50/100 Dollars) currency, of the United States of America, per square foot of the Building per year, (that is the total amount of US$3,000.00 Dollars (three thousand 00/100 Dollars) per year. The previous amount includes maintenance, utilities, insurance and land tax.B. Pago. El pago de la Renta anual mas el Impuesto al Valor Agregado ("IVA") correspondiente, sera pagada por la SUBARRENDATARIA a la SUBARRENDADORA en una sola exhibicion dentro de los primeros siete (7) dias naturales del mes de enero de cada ano, sin necesidad de notificacion o solicitud de cobro alguna. Una vez que la SUBARRENDADORA reciba el pago anual de Renta. la SUBARRENDADORA entregara la factura correspondiente a la SUBARRENDATARIA. la cual cumplira con los requisitos fiscales aplicables. El pago anual de la Renta sera entregado en el domicilio de la SUBARRENDADORA. como se establece en este Contrato, o en cualquier otro lugar que la SUBARRENDADORA notifique por escrito a la SUBARRENDATARIA con al menos 10 (diez) dias de anticipacion. B. Payment. An annual Rent plus the corresponding Value Added Tax ("VAT") shall be paid by SUBLESSEE to SUBLESSOR in one payment within the first seven (7) calendar days of each January, without notice or demand being required. Once SUBLESSOR receives the annual payment of the Rent, SUBLESSOR will deliver the corresponding official invoice to the SUBLESSEE, in compliance with Mexican tax requirements. The annual payment of the Rent will be paid at SUBLESSOR'S domicile, as provided hereof or to whatever place the SUBLESSOR notifies in writing SUBLESSEE at least 10 (ten.) days in advance.Las partes acuerdan que el primer pago anual de la Renta deberapagarlo la SUBARRENDATARIA dentro de los diez (10) diasnaturales siguientes a que la SUBARRENDADORA le notifique ala SUBARRENDATARIA que cuenta con cuenta bancaria y concomprobantes fiscales. The parties hereby agree that the first annual paymem of the Rent shall be paidby SUBLESSOR within ten (10) calendar days after it receives notice from theSUBLESOR that SUBLESOR has open a bank account and that it has thecorresponding official Mexican tax receipts.C. Pago en mora. Si la SUBARRENDATARIA no paga la amortizacion mensual de la Renta en tiempo. la SUBARRENDATARIA pagara a la SUBARRENDADORA, un interes moratorio mensual equivalente al dos por ciento (2%) de la cantidad total no pagada en tiempo, hasta que la misma sea totalmente pagada. C. Late Payment. If SUBLESSEE does not pay the monthly installments of Rentwhen due, the SUBLESSEE, shall pay SUBLESSOR, as contractual penalty, amonthly interest equivalent to two percent (2%) of the total unpaid amount, until itspayment in full.D. Pago de IVA. La SUBARRENDATARIApagara el IVA correspondiente a las amortizaciones mensuales deRenta antes senaladas. D. Payment of VAT. The SUBLESSEE will pay the Value Added Tax("VAT") which may be applicable to the above monthly installments of Rent.E. Incrementos de Renta. De prorrogarse el Plazo de este Contrato como seestablece en Ia cláusula tercera, Ia Renta serã incrementada en un 3.5% (tiespunto cinco por ciento) anual fijo.SEXTA. MODIFICACIONES A LA PROPIEDAD ARRENDADALa SUBARRENDATARIA no podrá efectuar modificación alguna en IaPropiedad Arrendada sin la autorización previa y por escrito de LaSUBARRENDADORA, Ia cual no será negada sin causa justificada.Todas las instalaciones y equipo sea cual fuere su naturaleza. que seainstalado en Ia Propiedad Arrendada por Ia SUBARRENDATARIA. yasea que fuere instalado permanentemente o no, continuarã siendo propiedadde la SUBARRENDATARIA. y deherá ser removido por IaSUBARRENDATARIA a Ia expiración del plazo o term macion de esteContrato. a menos que Ia SUBARRENDATARIA reciha confirmación porescrito de parte de Ia SUBARRENDADORA, por adelantado, en cadacaso especifico. de que las mejoras o iristalaciones o cquipo en Ia PropiedadArrendada pueden permanecer en Ia Propiedad Arrendada. LaSUBARRENDATARIA deberá. a su costo. reparar todo daflo causado aIa Propiedad Arrendada como resultado de Ia remociOn de cualquier equipo,instalaciones o mejoras. La SUBARRENDATAR1A entregará LaPropiedad Arrendada a Ia SUBARRENDADORA en condicionesadecuadas de orden. presentacion y limpieza.SEPTIMA. CESION SUBARRENI) AMIENTO VLa SUBARRENDATARIA no podrá subarrendar La PropiedadArrendada o ceder este Contrato. a menos que obtenga Ia autorizaciOnexpresa previa y por escrito de La SUBARRENDATARIA. Ia cual no seránegada sin causajustificada.OCTAVA. ENTREGA PROPIEDAD ARRENDADA DE LALa SUBARRENDATARIA entregará Ia Propiedad Arrendada a IaSUBARRENDADORA el ultimo dia del Plazo de este Contrato. o en elmomento de E. Rent escalation. If the Term is extended as provided for in the thirdclause of this Agreement. the Rent shall increase in 3.5% (three point fiveper cent) annually.SIXTH. ALTERATIONSThe SUBLESSEE may not perform any alteration at the Leased Propertywithout the prior written authorization of SUBLESSOR. whichauthorization shall not be unreasonably withheld. All fixtures and/orequipment of whatsoever nature that are installed in the Leased Property bythe SUBLESSEE, whether permanently affixed thereto or otherwise, willcontinue to be the property of the SUBLESSEE. and will be removed bySUBLESSEE at the expiration or termination of this Contract or anyrenewal or extension thereof, unless the SUELESSEE receives writtenconfirmation of SUBLESSOR. in advance, in each specific case. that theimprovements made on the Leased Property may remain in the LeasedProperty. SUBLESSEE must at its own cost and expense repair anydamage to the Leased Property resulting from the removal of any equipmentand/or accessories. SUBLESSEE shall deliver the Leased Property to theSUBLESSOR in adequate conditions of order. presentation andcleanliness.SEVENTH. ASSIGNN1 AND SUBLETTINGThe SUBLESSEE may not sublease the Leased Property or assign thisContract, unless it has the prior express written authorization of theSUBLESSOR. which authorization will not be unreasonably withheld.EIGHTH. SURRENDERSUBLESSEE will, on the last day of the Lease Term or its extensions, orupon anticipated termination, surrender and deliver the Leasedla terminación anticipada del mismo, sin demora, en buenas condiciones deorden. limpieza y reparación, excepto por ci desgaste normal causado por eluso normal y el paso del tiempo. Todos los anuncios, inscripciones,señalamientos e instalaciones de naturaleza similar efectuados o instaladospor el SUBARRENDATARIA serãn removidos en o antes de la entrega dela Propiedad Arrendad en los términos de esta cláusula. Todo el mobiliario,instalaciones y equipo instalados por laSUBARRENDATARIA continuarán siendo propiedad de laSUBARRENDATARIA deberán ser removidos por laSUBARRENDATARIA antes de la entrega de la Propiedad Arrendada a laSUBARRENDADORA, y La SUBARRENDATARIA a su costo,reparará cualquier dano que pudiere resultar de la instalación o remocion dedichos bienes.Todo bien que permanezca en la Propiedad Arrendada durante treinta (30)dias posteriores a Ia terminacion de este Contrato, sea que estuviereninstalados permanentemente en la Propiedad Arrendada o no, podrán serconsiderados abandonados a eleccion de la SUBARRENDADORA, y ellapodrá retenerlos en calidad de propietaria, o disponer de los mismos, segunlo considere pertinente, sin responsabilidad alguna a su cargo.NOVENA. RETENCION DE LA PROPIEDAD ARRENDADALa SUBARRENDATARIA entregara en forma inmediata la PropiedadArrendada a la SUBARRENDADORA a la terminación de este Contratopor expiración de su plazo o por cualquier otra causa.DECIMA. DISPOSICIONES AMBIENTALESA partir de la fecha de firma de este Contrato, laSUBARRENDATARIA cumplirá con todas las leyes, reglamentos ynormas relativas al equilibrio ecologico y la protección al ambienteaplicables en relacion con el uso de la Propiedad Arrendada.La SUBARRENDADORA declara que en su leal saber y entender, laPropiedad Arrendada se encuentra actualmente libre de contaminación. Property into the possession and use of the SUBLESSOR without delay, ingood order, conditions and repair, except for normal wear and tear due tonormal use and the passage of time. All signs, inscriptions, canopies andinstallations of like nature made by SUBLESSEE shall be removed at orprior to the expiration of the term of this Contract. All furniture, tradefixtures and equipment installed by SUBLESSEE shall remain theproperty of the SUBLESSEE and shall be removed by SUBLESSEE atany time during or at the end of the term and the SUBLESSEE shall, at itsown expense, repair all damages resulting from the installation or removalthereof.Any property, being permanently affixed to the Leased Property or not,which remains in the Leased Property thirty (30) days after the terminationof the Contract may, at the option of SUBLESSOR, be deemed to havebeen abandoned and either may be retained by SUBLESSOR as theirproperty or be disposed of, without liability, in such manner asSUBLESSOR may see fit.NINETH. HOLDING OVERThe SUBLESSEE shall at the termination of the Contract by lapse of timeor otherwise, immediately deliver the possession of the Leased Property toSUBLESSOR.TENTH. ENVIRONMENTAL CLAUSEAs of the date of execution hereof, the SUBLESSEE shall observe all lawsand regulations regarding ecological equilibrium and environment protectionapplicable to the use of the Leased Property.SUBLESSOR states that, to the best of its knowledge the Leased Propertyis currently free of contamination.DECIMA PRIMERA. DERECHO DE LA SUBARRENDAIORA ALLEVAR A CABO LAS OBLIGACIONES DE LASUBARRENDATARIASi la SUBARRENDATARIA incumple con alguna de sus obligacionesestablecidas en este Contrato, la SUBARRENDADORA. una veztranscurridos diez (10) dias luego de haber dado aviso por escrito a laSUBARRENDATARIA respecto de dicho incumplimiento (o sinnecesidad de dar aviso alguno en caso de emergencia) y sin que elloimplique renuncia alguna por parte de la SUBARRENDADORA respectode las obligaciones de la SUBARRENDATARIA pactadas en esteContrato, podrá, sin estar obligada a ello, llevar a cabo dichas obligacionesde la SUBARRENDATARIA y podra entrar a la Propiedad Arrendadapara dicho fin y llevar a cabo cuantas acciones sean necesarias al efecto.Todas las cantidades que razonablemente hubiere pagado laSUBARRENDADORA en relación con costos y gastos incurridos por elcumplimiento de las obligaciones incumplidas por IaSUBARRENDATARIA, deberán ser pagadas por laSUBARRENDATARIA a la SUBARRENDADORA dentro de los diez(10) dias siguientes a su cobro.DECIMA SEGUNDA. DERECHO DE LA SUBARRENDATARIAA LLEVAR A CABO LAS OBLIGACIONES DE LASUBARRENDADORASi la SUBARRENDADORA incumple con alguna de sus obligacionesestablecidas en este Contrato, la SUBARRENDATARIA, una veztranscurridos diez (10) dias luego de haber dado aviso por escrito a laSUBARRENDADORA respecto de dicho incumplimiento (o sinnecesidad de dar aviso alguno en caso de emergencia) y sin que elloimplique renuncia alguna por parte de la SUBARRENDATARIA respectode las obligaciones de la SUBARRENDADORA pactadas en esteContrato, podrá, sin estar obligada a ello, llevar a cabo dichas obligacionesde la SUBARRENDADORA y llevar a cabo cuantas acciones seannecesarias al efecto. Todas las cantidades que razonablemente hubierepagado la SUBARRENDATAR1A en relación con costos y ELEVENTH. SUBLESSOR’S RIGHT TO PERFORMSUBLESSEE’S COVENANTSIf SUBLESSEE fails to perform any one or more of its obligationshereunder, SUBLESSOR, after ten (10) days written notice toSUBLESSEE (or without notice in the case of an emergency) and withoutwaiving or releasing SUBLESSEE from any obligation ofSUBLESSEE contained in this Contract, may but shall be under noobligation to perform any act on SUBLESSEE’s part to be performed asprovided in this Contract, and may enter upon the Leased Property for thatpurpose and take all such actions thereon as may be necessary to sucheffect. All reasonable sums paid by SUBLESSOR and all costs andexpenses incurred by SUBLESSOR in connection with the performance ofany such obligation of SUBLESSEE, shall be payable bySUBLESSEE to SUBLESSOR within ten (10) days after receiving notice.TWELFTH. SUBLESSEE’S RIGHT TO PERFORM SUBLESSORCOVENANTSIf SUBLESSOR fails to perform any one or more of its obligationshereunder, SUBLESSEE, after ten (10) days written notice toSUBLESSOR (or without notice in the case of an emergency) and withoutwaiving or releasing SUBLESSOR from any obligation ofSUBLESSOR contained in this Contract, may but shall be under noobligation to perform any act on SUBLESSOR’s part to be performed asprovided in this Contract, and may take all such actions thereon as may benecessary to such effect. All reasonable sums paid by SUBLESSEE andall costs and expenses incurred by SUBLESSEE in connection with theperformance of any such obligation of SUBLESSOR, will be payable bySUBLESSOR to SUBLESSEE within ten (10) days aftergastos incurridos por el cumplimiento de las obligaciones incumplidasSUBARRENDADORA, deberán ser pagadas por laSUBARRENDADORA a la SUBARRENDATARIA dentro de los diez(10) dias siguientes a su cobro.DECIMA TERCERA. ACCESO A LA PROPIEDADARRENDADA POR PARTE DELA SUBARRENDAIDORALa SUBARRENDATARIA permitirá a Ia SUBARRENDADORA y a Iapropietaria de Ia Propiedad Arrendada, y a sus respectivos representantes, elacceso a Ia Propiedad Arrendada todas las veces que sea razonablementeconveniente a fin de inspeccionarla.DECIMA CUARTA. ANUNCIOSLa SUBARRENDATARIA podrá instalar en Ia Propiedad Arrendada losanuncios que requiera para sus operaciones, incluyendo anuncios relativosa Ia contratación de personal. Cualquier otro anuncio distinto de losmencionados anteriormente que desee instalar Ia SUBARRENDATARIA,deberá ser aprobado por escrito y con anticipación por IaSUBARRENDADORA.DECIMA QUINTA. NOTIFICACIONESSiempre que sea necesario o conveniente para las partes entregar avisos onotificaciones a la otra parte conforme a lo previsto en este Contrato, dichosavisos o notificaciones, para ser vãlidos, deberan ser entregados en formapersonal, o mediante correo certificado o registrado con acuse de recibo, omediante servicio de mensajeria reconocido, dirigidos a las siguientesdirecciones:SUBARRENDADORA:Calle Colinas No. 11731Parque Industrial El Florido, Sección ColinasDelegación La PresaTijuana, B.C. 22680SUBARRENDATARIA:Calle Colinas No. 11731-AParque Industrial El Florido, Seccion ColinasDelegación La PresaTijuana, B.C. 22680 receiving notice.THIRTHEENTH. ENTRY TO LEASED PROPERTY BYSUBLESSORSUBLESSEE will allow SUBLESSOR and the owner of the LeasedPremises and their respective representatives to enter into the LeasedProperty at all reasonable times for the purpose of inspecting same.FOURTEENTH. SIGNSThe SUBLESSEE may place on the Leased Property or attach to theexterior of the Building its signs and other signs it require for its operationincluding signs regarding the hiring of personnel. No other signs may beplaced in or on the Leased Property without SUBLESSOR’s writtenconsent.FIFTENTH. NOTICESWhenever it shall be necessary or desirable for one of the parties to serveany notice or demand upon the other pursuant to the provisions of thisContract, such notice or demand will be served personally, or by registeredor certified mail, return receipt requested, or by reputable courier serviceaddressed to:SUBLESSOR:Calle Colinas No. 11731Parque Industrial El Florido, Sección ColinasDelegación La PresaTijuana, B.C. 22680SUBLESSEE:Calle Colinas No. 11731-AParque Industrial El Florido, Sección ColinasDelegacion La PresaTijuana, B.C. 22680DECIMA SEXTA. SUBTITULOSLas partes convienen que los subtitulos utilizados en este Contrato son paraefectos de facilitar la referencia de sus cláusulas. por lo que no seránconsiderados parte del Contrato ni serán utilizados para efectos de suinterpretaciOn.DECIMA SEPTIMA. LEY APLICABLE Y JURISDICCIONEste Contrato será interpretado de conformidad con lo previsto en el CodigoCivil del Estado de Baja California y demás leyes aplicables en el Estado deBaja California. Mexico, y las partes expresamente se someten a lajurisdicción de los tribunales de Tijuana. Baja California. Mexico.renunciado a cualquier otro fuero que pudiere corresponderles.DECIMA OCTAVA. TRADUTCCIONLas partes convienen en que el presente Contrato se firma en los idiomasingles y espanol. Las panes convienen que la version en espafiol constituyeIa versiOn oficial acordada por las partes, Ia cual prevalecerá en todomomento.EN TESTIMONIO DE LO ANTERIOR.Las partes manifiestan su consentimiento con el contenido de este Contratocon efectos a partir de Ia fecha que se menciona en el encabezado delpresente Contrato. SIXTEENTH. CAPTIONSThe parties mutually agree that the headings and captions contained in thisContract are inserted for convenience of reference only and are not to bedeemed part of or to be used in construing this Contract.SEVENTHEENTH. JURISDICTIONThis Contract will be interpreted in accordance with provisions of the CivilCode and laws of the State of Baja California, Mexico. and both partieshereby expressly submit to the jurisdiction of the Courts of Tijuana. Stateof Baja California. Mexico. and they waive any other forum that couldcorrespond to them for any reason whatsoever.EIGHTEENTH.TRANSLATIONSUBLESSOR and SUBLESSEE agree that this Contract is executed in theEnglish and Spanish languages. The parties agree that the Spanish versionshall prevail in all events.IN WITNESS WHEREOFThe undersigned parties, through their duly authorized representatives,have executed this Contract effective as of the date stated in the header ofthis Agreement.SUBARREN1ADORA/SIJBLESSORPALL MEXICO MANUFACTURING, S. DE R.L. DE C.V.(Graphics appears hear)Por:/By: Leabardo Tenorio-MalofSUBARRENDATARIA/SUBLESSEEPALL LIFE SCIENCES MEXICO, S. DE R.L. DE C.V.(Graphics appears hear)Por:/By: Ruben Guilloty ArveloANEXO A/EXHIBIT APLANO/PLOT PLANCONTRATO DE SUBARRENDAMIENTO SUBLEASE CONTRACTCONTRATO DE SUBARRENDAMIENTO (el "Contrato") que secelebra entre PALL MEXICO MANUFACTURING, S. DE R.L.DE C.V., representada en este acto por el senor Leobardo TenorioMalof, en su caracter de Apoderado de dicha sociedad (en lo sucesivoreferida como la "SUBARRENDADORA"), y ENSATEC, S.A.DE C.V., representada en este acto por el senor Hector MachadoBarraza en su caracter de Apoderado de dicha sociedad (en losucesivo referida como la "SUBARRENDATARIA"), deconformidad con las siguientes declaraciones y clausulas: SUBLEASE CONTRACT (the ''Contract") entered into by andbetween PALL MEXICO MANUFACTURING, S. DE R.L. DEC.V., represented herein by Mr. Leobardo Tenorio Malof, in his capacity as Attorney-in-fact ofsaid company (hereinafter referred to as the "SUBLESSOR"),and ENSATEC, S.A. DE C.V., represented herein by Mr. HectorMachado Barraza in his capacity as Attorney-in-fact of saidcompany (hereinafter referred to as the "SUBLESSEE"), inaccordance with the following:DECLARACIONES: RECITALS:1. La SUBARRENDADORA, por conductode su apoderado, declara que: 1. The SUBLESSOR, through its legal representative states:a) Es una sociedad de responsabilidad limitada de capital variable mexicana, constituida y validamente existente de conformidad con las leyes de los Estados Unidos Mexicanos (en lo sucesivo denominados "Mexico"). a) It is a Mexican limited liability company of variable capital, dulyorganized pursuant to the laws of the United Mexican States("Mexico").b) De conformidad con el contrato de arrendamiento celebrado con la senora Blanca Estela Colunga Santelices ("Contrato de Arrendamiento") el 3 de diciembre de 2007, es arrendataria de los edificios industriales con superficie total de 62,000 pies cuadrados ubicados en Calle Colinas No. 11731, Parque Industrial El Florido, Seccion Colinas, Delegacion La Presa, Tijuana, B.C., 22680 (en lo sucesivo el "Edificio"), construidos sobre el lote 7 con superficie de 11,092.22 metros cuadrados, ubicado en la manzana 930 de dicho Parque Industrial El Florido, Seccion Colinas. b) Pursuant to the lease contract entered with Mrs. Blanca EstelaColunga Santelices ("Lease Contract") on December 3, 2007, it is thetenant of the industrial facilities with a surface area of 62,000 squarefeet located at Calle Colinas No. 11731, Parque Industrial El Florido,Seccion Colinas, Delegacion La Presa, Tijuana, B.C., 22680 (the"Building"), built on lot 7 with a surface area of 11,092.22 squaremeters, located at block 930 of such Parque Industrial ElFlorido, Seccion Colinas.c) Desea dar en subarrendamiento una porcion del Edificio con superficie de 2,250 pies cuadrados ("Propiedad Arrendada"). La Propiedad Arrendada se describe en el plano adjunto al presente Contrato como Anexo "A", el cual se tiene por reproducido en este acto mediante la presente referencia, por lo c) It desires to sublease a portion of the Building with an area of 2,250square feet ("Leased Property"). The Leased Property is described onthe plot plan attached hereto as Exhibit "A", which is herebyincorporated by reference and becomes a part hereof. The Leased que forma parte integrante de este Contrato para todos los efectos a quehaya lugar. La Propiedad Arrendada incluye un espacio paraestacionamiento identificado como el numero tres (3). Property includes a parking space identified as parking space numberthree (3).d) Que en los terminos del Contrato de Arrendamiento esta autorizadopara subarrendar cualquier porcion del Edificio a laSUBARRENDATARIA y, consiguientemente, desea dar ensubarrendamiento la Propiedad Arrendada a laSUBARRENDATARIA, conforme a los terminos y condiciones deeste Contrato. d) Pursuant to the Lease Contract, it has the right to sublease at will anyportion of the Building to SUBLESSE and, accordingly, it desires tosublease the Leased Property to the SUBLESSEE under the terms andconditions hereinafter set forth.e) Su representante cuenta con facultades suficientes para celebrar este Contrato, las cuales no le han sido limitadas ni revocadas en forma alguna. e) That its Attorney-in-fact has all the authorities required to enter intothis Contract, which authorities have not been limited nor revoked in anymanner whatsoever.II.- La SUBARRENDATARIA, por conducto de su apoderado,declara que: II.- The SUBLESSEE, through its legal representative states:a) Es una sociedad anonima de capital variable mexicana, constituiday validamente existente de conformidad con las leyes de Mexico, cuyoprincipal asiento de negocios se ubica en Calle Colinas No. 11731-B,Parque Industrial El Florido, Seccion Colinas, Delegacion La Presa,Tijuana, B.C. 22680. a) That its principal is a Mexican corporation of variable capital duly incorporated pursuant to the General Law of Mercantile Corporations, with its principal place of business at Calle Colinas No. 11731-B, Parque Industrial El Florido, Seccion Colinas, Delegacion La Presa, Tijuana, B.C. 22680.b) Desea recibir en subarrendamiento la Propiedad Arrendada, conforme a los terminos y condiciones de este Contrato. b) That its principal desires to sublease the Leased Property, subject to the terms and conditions contained herein.c) Su representante cuenta con facultades suficientes para celebrar este Contrato, las cuales no le han sido limitadas ni revocadas en forma alguna. c) That its Attorney-in-fact has all the authorities required to enter into this Contract, which authorities have not been limited nor revoked in any manner whatsoever.III.- Las partes, por conducto de sus respectivos apoderados, declaranque: III.- The parties, through their legal representatives, state:En la celebracion del presente Contrato no ha existido error, mala fe,dolo o vicio del consentimiento alguno entre ellas. That in the execution of this Contract there has been no error, bad faithnor duress amongst them.En consideracion de las anteriores declaraciones, las partes se obligande conformidad con las siguientes: In consideration of the above recitals, the parties agree on the following:CLAUSULAS: CLAUSESPRIMERA. SUBARRENDAMIENTO DE LA PROPIEDADARRENDADA FIRST. SUBLEASE OF THE LEASED PROPERTYLa SUBARRENDADORA en este acto entrega en subarrendamiento a la SUBARRENDATARIA y la SUBARRENDATARIA en este acto recibe en subarrendamiento de parte de la SUBARRENDADORA, la PropiedadArrendada, con todo lo que le corresponde. SUBLESSOR hereby subleases to SUBLESSEEand SUBLESSEE hereby subleases from SUBLESSOR, the LeasedProperty, together with all easements and rights of way appurtenantthereto.La SUBARRENDATARIA recibe la Propiedad Arrendada asatisfaccion tal y como la misma se encuentra, y expresamenterenuncia a los derechos en su favor establecidos en los articulos 2286fraccion V y 2295 del Codigo Civil del Estado de Baja California,articulos que la SUBARRENDATARIA manifiesta conocer ycomprender en su integridad, por lo que la presente renuncia es validade conformidad con el articulo 7 del Codigo Civil del Baja California. SUBLESSEE hereby receives the Leased Property "as is" to itssatisfaction, therefore expressly waiving the rights that in its favor areset forth in articles 2286 section V and 2295 of the Civil Code for theState of Baja California. SUBLESSEE expressly states that it knowsand understands said articles in their entirety, and therefore these waiversare valid pursuant to article 7 of the Civil Code for the State of BajaCalifornia.SEGUNDA. TITULARIDAD DE LA PROPIEDADARRENDADA SECOND. TITLE TO THE LEASED PROPERTYLa SUBARRENDADORA cuenta con el uso exclusivo y posesionde la Propiedad Arrendada, y garantiza que la SUBARRENDATARIAtendra el uso y goce pacifico de la Propiedad Arrendada durante elplazo de este Contrato. The SUBLESSOR has the right of exclusive use and possession ofthe Leased Property, and it guarantees that the SUBLESSEE will havethe quiet enjoyment of the Leased Property during the term of thisContract.TERCERA. PLAZO Y ENTREGA DE LAPROPIEDAD ARRENDADA THIRD. TERM AND DELIVERY OF THE LEASEDPROPERTYA. Plazo. El plazo inicial de este Contrato es de un (1) ano contado apartir de la fecha de su firma; sin embargo, laSUBARRENDATARIA lo podra dar por terminado el presenteContrato, en cualquier tiempo, sin ninguna responsabilidad para laSUBARRENTARIA, con un aviso, por escrito, al A. Term. The initial term of this Contract is for a period of one (1) yearas of the date of execution hereof; notwithstanding, the SUBLESSEmay terminate this Contract, at any time, without any liability toSUBLESSE, by giving SUBLESSOR in writing a notice thirty (30)days in advance ofSUBARRENDAROR con treinta (30) dias de anticipation de lafecha efectiva de terminacion (el "Plazo"). the termination date (the "Term").B. Entrega de la Propiedad Arrendada. LaSUBARRENDADORA entrega la Propiedad Arrendada a laSUBARRENDATARIA en la fecha de firma de este Contrato. B. Delivery. SUBLESSOR hereby delivers the Leased Property toSUBLESSEE on the date of execution hereof.CUARTA.- USO DE LA PROPIEDADARRENDADA FOURTH.- USE OF THE LEASED PROPERTYLa SUBARRENDATARIA usara la Propiedad Arrendada unicamente para actividades de ensamble de productos y almacenaje de productos. Bajo ninguna circunstancia podra la SUBARRENDATARIA usar laPropiedad Arrendada para operaciones de industria quimica opesada, ni para actividades que violen las leyes, reglamentos ynormas municipales, estatales o federales. The SUBLESSEE shall use the Leased Property only for assembly ofproducts and storage of products. Under no conditions whatsoever will theSUBLESSEE be permitted to use the Leased Property for chemical andheavy industrial operations, nor activities which are in violation of anyapplicable municipal, state and federal laws, regulations or ordinances.La SUBARRENDATARIA se obliga a cumplir con elReglamento Interior del PARQUE INDUSTRIAL ELFLORIDO, en vigor, el cual manifiesta conocer en todos susterminos, asi como con las posibles modificaciones que pudierasufrir en el futuro. Dicho reglamento se adjunta al presente comoAnexo B. SUBLESSEE agrees to comply with the Internal Rules of Parque IndustrialEl Florido, and the possible future modifications, avowing to know andunderstand said rules in all their terms. The rules are attached hereto as Exhibit B.QUINTA. RENTA FIFTH. RENTA. Renta. Durante el Plazo de este Contrato, laSUBARRENDATARIA pagara como renta por la PropiedadArrendada, la cantidad de US$0.50 (cincuenta centavos; 50/100Dolares) moneda de los Estados Unidos de America ("Dolares"),por pie cuadrado de la Propiedad Arrendada, por mes; es decir, lacantidad de US$13,500.00 Dolares (trece mil quinientos 00/100Dolares) por ano (la "Renta"). La Renta incluye todos los gastos ycostos de mantenimiento, servicios publicos, seguro, impuestopredial, etc. A. Rent. For the Term of this Contract, the SUBLESSEE shall pay as rentfor the Leased Property US$0.50 (fifty cents; 50/100 Dollars), currency ofthe United States of America ("Dollars"), per square foot of the LeasedProperty per month; that is the total amount of US$13,500.00 Dollars (thirteenthousand five hundred 00/100 Dollars) per year (the "Rent"). The Rent amountis all inclusive and includes all maintenance, utilities, insurance, land tax, etc.B. Pago. Una doceava parte de dicha Renta anual mas el Impuesto al Valor Agregado ("IVA") correspondiente, sera pagada por la SUBARRENDATARIA a la SUBARRENDADORA por adelantado dentro de los primeros cinco (5) dias naturales de cada mes, sin necesidad de notificacion o solicitud de cobro alguna. Consecuentemente, la SUBARRENDATARIA entregara a la SUBARRENDADORA en forma de amortizacion mensual, la cantidad de US$1,125.00 Dolares (mil ciento veinticinco 00/100 Dolares). Una vez que la SUBARRENDADORA reciba el pago de la amortizacion mensual de Renta, la SUBARRENDADORA entregara la faclura correspondiente a la SUBARRENDATARIA, la cual cumplira con Ios requisitos fiscales aplicables. El pago de la amortizacion mensual de la Renta sera entregado en el domicilio de la SUBARRENDADORA, como se establece en este Contrato, o en cualquier otro lugar que la SUBARRENDADORA notifique por escrito a la SUBARRENDATARIA con al menos diez (10) dias de anticipacion. B. Payment. One-twelfth of such annual Rent plus the corresponding ValueAdded Tax ("VAT") shall be paid by SUBLESSEE to SUBLESSOR inadvance within the first five (5) calendar days of the month, without noticeor demand being required. As a result of the foregoing, the SUBLESSEEmust deliver to the SUBLESSOR on a monthly basis, the amount of US$ 1,125.00 Dollars (one thousand one hundred and twenty five 00/100Dollars). Once SUBLESSOR receives the monthly installments of Rent,SUBLESSOR will deliver the corresponding official invoice to theSUBLESSEE, in compliance with Mexican tax requirements. Themonthly installments of Rent will be paid at SUBLESSOR'S domicile, asprovided hereof, or to whatever place the SUBLESSOR notifies in writingto SUBLESSEE at least ten (10) days in advance.C. Pago en mora. Si la SUBARRENDATARIA no paga la amortizacion mensual de la Renta en tiempo, la SUBARRENDATARIA pagara a la SUBARRENDADORA, un interes moratorio mensual equivalents al dos porciento (2%) de la cantidad total no pagada en tiempo, hasta que la misma sea totalmente pagada. C. Late Payment. If SUBLESSEE does not pay the monthly installmentsof Rent when due, the SUBLESSEE shall pay SUBLESSOR, asa contractual penalty, a monthly interest equivalent to two (2%) percent of thetotal unpaid amount, until its payment in full.D. Pago Proporcional. Si la fecha de inicio del Plazo de este Contrato es un dia distinto al primer dia de un mes natural, la cantidad correspondiente a la primera amortizacion mensual de la Renta sera la parte proporcional equivalente a la porcion del primer mes natural que la Propiedad Arrendada sea subarrendada por la SUBARRENDATARIA. D. Proportional Payment. If the commencement date of the Term of this Contract is a day other than the first day of a calendar month, the amount of the first monthly installment of Rent will be that pro rata portion of the monthly Rent payment which is equal to the portion of the first calendar month that the Leased Property is effectively under sublease by the SUBLESSEE.E. Pago de 1VA. La SUBARRENDATARIA pagara a laSUBARRENDADORA el IVA E. Payment of VAT. The SUBLESSEE will pay to SUSBLESSOR the VAT which iscorrespondiente a las amortizaciones mensuales de Renta antessenaladas. applicable to the above monthly installments of Rent.F. Incrementos de Renta. De prorrogarse elPlazo de este Contrato, la Renta sera incrementada en un tres ymedio porciento (3.5%) anual fijo. F. Rent escalation. If the Term of this Contract is extended by the parties, the Rent shall increase three and one-half (3.5%) percent annually.G. Renuncias. Todas las Rentas que hayan comenzado a causarse durante el mes deberan cubrirse integramente, aunque laSUBARRENDATARIA entregue la Propiedad Arrendada antesdel vencimiento del periodo correspondiente, a cuyo efectorenuncia al derecho de cubrir solo parte de la Renta como lopreviene el articulo 2303 del Codigo Civil para el Estado de BajaCalifornia. Por ningun motive podra la SUBARRENDATARIAretener las Rentas. Las partes convienen que todas lasreclamaciones por parte de la SUBARRENDATARIA en loscasos previstos por los articulos 2295, 2319 y 2364 del CodigoCivil para este Estado de Baja California, en su caso, seranpresentadas por la SUBARRENDATARIA en formaindependiente de la obligacion de la SUBARRENDATARIAde pagar la Renta integramente durante el termino de este Contrato. G. Waivers. SUBLESSEE must pay the total amount of Rent per month, even if it delivers possession of the Leased Property before the end of the month, therefore, it waives its right to pay only a part of the Rent as established by article 2303 of the Civil Code for the State of Baja California. Under no circumstances shall SUBLESSEE withhold the Rent. It is expressly agreed that all claims by SUBLESSEE in the events described in articles 2295, 2319 and 2364 of the Civil Code for the State of Baja California, as the case may be, shall be filed by SUBLESSEE independently of SUBLESSEE's obligations to pay the Rent during the term of this Contract.SEXTA. MODIFICACIONES A LAPROPIEDAD ARRENDADA SIXTH. ALTERATIONSLa SUBARRENDATARIA no podra efectuar modificacion alguna en la Propiedad Arrendada sin la autorizacion previa y por escrito de la SUBARRENDADORA, la cual no sera negada sin causa justificada. Todas las instalaciones y equipo sea cual fuere su naturaleza, que sea instalado en la Propiedad Arrendada por laSUBARRENDATARIA, ya sea que fuere instaladopermanentemente o no, continuara siendo propiedad de laSUBARRENDATARIA, y debera ser removido por laSUBARRENDATARIA a la expiracion del plazo oterminacion de este Contrato, a menos quela SUBARRENDATARIA reciba confirmacion por escritode parte de la SUBARRENDADORA, por adelantado, encada The SUBLESSEE may not perform any alteration at the Leased Propertywithout the prior written authorization of SUBLESSOR, which authorizationshall not be unreasonably withheld. All fixtures and/or equipment of whatsoevernature that are installed in the Leased Property by the SUBLESSEE, whetherpermanently affixed thereto or otherwise, will continue to be the property of theSUBLESSEE, and will be removed by SUBLESSEE at the expiration ortermination of this Contract or any renewal or extension thereof, unless theSUBLESSEE receives written confirmation of SUBLESSOR, in advance, ineach specific case, that the improvements made on the Leased Property mayremain in the Leased Property.caso especifico, de que las mejoras o instalaciones o equipo enla Propiedad Arrendada pueden permanecer en la PropiedadArrendada. SEPTIMA. CESION Y SUBARRENDAMIENTO SEVENTH. ASSIGNMENT AND SUBLETTINGLa SUBARRENDATARIA no podra subarrendar laPropiedad Arrendada o ceder este Contrato, a menos queobtenga la autorizacion expresa previa y por escrito de laSUBARRENDORA, la cual no sera negada sin causajustificada. The SUBLESSEE may not sublease the Leased Property or assign thisContract, unless it has the prior express written authorization of theSUBLESSOR, which authorization will not be unreasonably withheld.OCTAVA. ENTREGA DE LAPROPIEDAD ARRENDADA EIGHTH. SURRENDERLa SUBARRENDATARIA entregara la Propiedad Arrendada a la SUBARRENDADORA el ultimo dia del Plazo de este Contrato, o en el momento de la terminacion anticipada del mismo, sin demora, en buenas condiciones de orden, limpieza y reparacion, excepto por el desgaste normal causado por el uso normal y el paso del tiempo. Todos los anuncios, inscripciones, senalamientos e instalaciones de naturaleza similar efectuados o instalados por la SUBARRENDATARIA seran removidos en o antes de la entrega de la Propiedad Arrendad en los terminos de esta clausula. Todo el mobiliario, instalaciones y equipo instalados por la SUBARRENDATARIA continuaran siendo propiedad de la SUBARRENDATARIA deberan ser removidos por la SUBARRENDATARIA antes de la entrega de la Propiedad Arrendada a la SUBARRENDADORA, y laSUBARRENDATARIA a su costo, reparara cualquier dano quepudiere resultar de la instalacion o remocion de dichos bienes. SUBLESSEE will, on the last day of the lease Term or its extensions, orupon anticipated termination, surrender and deliver the Leased Property intothe possession and use of the SUBLESSOR without delay, in good order,conditions and repair, except for normal wear and tear due to normal useand the passage of time. All signs, inscriptions, canopies and installations oflike nature made by or affixed by SUBLESSEE shall be removed at orprior to the expiration of the Term of this Contract. All furniture, tradefixtures and equipment installed by SUBLESSEE shall remain theproperty of the SUBLESSEE and shall be removed by SUBLESSEE atany time during or at the end of the Term, and the SUBLESSEE shall, atits own expense, repair all damages resulting from the installation orremoval thereof.Todo bien que permanezca en la Propiedad Arrendada durante treinta (30) dias posteriores a la terminacion de este Contrato, sea que estuvieren instalados permanentemente en la Propiedad Arrendada o no, podran ser considerados abandonados a eleccion de laSUBARRENDADORA, y ella podra retenerlos en Any property, being permanently affixed to the Leased Property or not, whichremains in the Leased Property thirty (30) days after the termination of theContract may, at the option of SUBLESSOR, be deemed to have beenabandoned and either may be retained by SUBLESSOR as its property or bedisposed of, without liability, in such manner ascalidad de propietaria, o disponer de los mismos, segun loconsiders pertinente, sin responsabilidad alguna a su cargo. SUBLESSOR may see fit.NOVENA. RETENCION DE LAPROPIEDAD ARRENDADA NINETH. HOLDING OVER La SUBARRENDATARIA entregara en forma inmediata laPropiedad Arrendada a la SUBARRENDADORA a laterminacion de este Contrato por expiracion de su plazo o porcualquier otra causa. The SUBLESSEE shall at the termination of the Contract by lapse of time orotherwise, immediately deliver the possession of the Leased Property toSUBLESSOR.DECIMA. DISPOSICIONESAMBIENTALES TENTH. ENVIRONMENTAL CLAUSEA partir de la fecha de firma de este Contrato, laSUBARRENDATARIA cumplira con todas las leyes,reglamentos y normas relativas al equilibrio ecologico y laproteccion al ambiente aplicables en relacion con el uso de laPropiedad Arrendada. As of the date of execution hereof, the SUBLESSEE shall observe all laws andregulations regarding ecological equilibrium and environment protectionapplicable to the use of the Leased Property.La SUBARRENDADORA declara que en su leal saber yentender, la Propiedad Arrendada se encuentra actualmente librede contaminacion. SUBLESSOR states that, to the best of its knowledge, the Leased Property iscurrently free of contamination.DECIMA PRIMERA. DERECHO DE LASUBARRENDADORA A LLEVAR A CABO LASOBLIGACIONES DE LA SUBARRENDATARIA ELEVENTH. SUBLESSOR'S RIGHT TO PERFORMSUBLESSEE'S COVENANTSSi la SUBARRENDATARIA incumple con alguna de susobligaciones establecidas en este Contrato, laSUBARRENDADORA, una vez transcurridos diez (10) dias luegode haber dado aviso por escrito a la SUBARRENDATARIA respectode dicho incumplimiento (o sin necesidad de dar aviso alguno en casode emergencia) y sin que ello implique renuncia alguna por parte de laSUBARRENDADORA respecto de las obligaciones de laSUBARRENDATARIA pactadas en este Contrato, podra, sin estarobligada a ello, llevar a cabo dichas obligaciones de laSUBARRENDATARIA y podra entrar a la Propiedad Arrendada paradicho fin y llevar a cabo If SUBLESSEE fails to perform any one or moreof its obligations hereunder, SUBLESSOR, after ten (10) days writtennotice to SUBLESSEE (or without notice in the case of anemergency) and without waiving or releasing SUBLESSEE from anyobligation of SUBLESSEE contained in this Contract, may but shallbe under no obligation to perform any act on SUBLESSEE's part to beperformed as provided in this Contract, and may enter upon the LeasedProperty for that purpose and take all such actions thereon as may benecessary to such effect. All reasonable sums paid by SUBLESSORand all costs and expenses incurred by SUBLESSOR in connectionwith the performance of any such obligation ofcuantas acciones sean necesarias al efecto. Todas las cantidades que razonablemente hubiere pagado la SUBARRENDADORA en relacion con costos y gastos incurridos por el cumplimiento de las obligaciones incumplidas por laSUBARRENDATARIA, deberan ser pagadas por la SUBARRENDATARIA a laSUBARRENDADORA dentro de los diez (10) dias siguientes a sucobro. SUBLESSEE, shall be payable by SUBLESSEE toSUBLESSOR within ten (10) days after receiving notice. DECIMA SEGUNDA. DERECHO DE LA SUBARRENDATARIA A LLEVAR A CABO LAS OBLIGACIONES DE LASUBARRENDADORA TWELFTH. SUBLESSEE'S RIGHT TO PERFORMSUBLESSOR'S COVENANTS Si la SUBARRENDADORA incumple con alguna de sus obligaciones establecidas en este Contrato, la SUBARRENDATARIA, una vez transcurridos diez (10) dias luego de haber dado aviso por escrito a la SUBARRENDADORA respecto de dicho incumplimiento (o sin necesidad de dar aviso alguno en caso de emergencia) y sin que ello implique renuncia alguna por parte de la SUBARRENDATARIA respecto de las obligaciones de laSUBARRENDADORA pactadas en este Contrato, podra, sin estar obligada a ello, llevar a cabo dichas obligaciones de la SUBARRENDADORA y llevar a cabo cuantas acciones sean necesarias al efecto. Todas las cantidades que razonablemente hubiere pagado la SUBARRENDATARIA en relacion con costos y gastos incurridos por el cumplimiento de las obligaciones incumplidas por la SUBARRENDADORA, deberan serpagadas por la SUBARRENDADORA a laSUBARRENDATARIA dentro de los diez (10) dias siguientes a sucobro. If SUBLESSOR fails to perform any one or more of its obligationshereunder, SUBLESSEE, after ten (10) days written noticeto SUBLESSOR (or without notice in the case of an emergency) andwithout waiving or releasing SUBLESSOR from any obligationof SUBLESSOR contained in this Contract, may but shall be underno obligation to perform any act on SUBLESSOR's part tobe performed as provided in this Contract, and may take all suchactions thereon as may be necessary to such effect. All reasonablesums paid by SUBLESSEE and all costs and expenses incurredby SUBLESSEE in connection with the performance of any suchobligation of SUBLESSOR, will be payable by SUBLESSORto SUBLESSEE within ten (10) days after receiving notice. DECIMA TERCERA. ACCESO A LA PROPIEDADARRENDADA POR PARTE DE LA SUBARRENDADORA THIRTEENTH. ENTRY TO LEASED PROPERTY BYSUBLESSOR La SUBARRENDATARIA permitira ala SUBARRENDADORA y a la propietaria de la PropiedadArrendada, y a sus respectivos representantes, el acceso a la PropiedadArrendada SUBLESSEE will allow SUBLESSOR and the owner of theLeased Premises and their respective representatives to enter into theLeased Property at all reasonable times for the purpose of inspectingsame. todas las veces que sea razonablemente conveniente a fin deinspeccionarla. DECIMA CUARTA. ANUNCIOS FOURTEENTH. SIGNS La SUBARRENDATARIA podra instalar en la PropiedadArrendada los anuncios que requiera para sus operaciones.Cualquier otro anuncio distinto de los mencionadosanteriormente que desee instalar la SUBARRENDATARIA,debera ser aprobado por escrito y con anticipacion por laSUBARRENDADORA. The SUBLESSEE may place on the Leased Property or attachto the exterior of the Building its signs and other signs it mayrequire for its operation. No other signs may be placed in or onthe Leased Property without SUBLESSOR'S writtenconsent. DECIMA QUINTA. NOTIFICACIONES FIFTEENTH. NOTICES Siempre que sea necesario o conveniente para las partes entregaravisos o notificaciones a la otra parte conforme a lo previsto eneste Contrato, dichos avisos o notificaciones, para ser validos,deberan ser entregados en forma personal, o mediante correocertificado o registrado con acuse de recibo, o mediante serviciode mensajeria reconocido, dirigidos a las siguientes direcciones: Whenever it shall be necessary or desirable for one of the partiesto serve any notice or demand upon the other pursuant to theprovisions of this Contract, such notice or demand will be servedpersonally, or by registered or certified mail, return receiptrequested, or by reputable courier service addressed to: SUBARRENDADORA:Calle Colinas No. 11731Parque Industrial El Florido, Seccion ColinasDelegacion La PresaTijuana, B.C., Mexico 22680 SUBLESSOR:Calle Colinas No. 11731Parque Industrial El Florido, Seccion ColinasDelegacion La PresaTijuana, B.C., Mexico 22680 SUBARRENDATARIA:Blvd. Agua Caliente 10470, Desp.# l Centro ComercialBarranquitas Col. Revolucion Tijuana, B.C. Mexico 22015 SUBLESSEE:Blvd. Agua Caliente 10470, Desp,#l Centro ComercialBarranquitas Col. Revoluci6n Tijuana, B.C., Mexico 22015 DECIMA SEXTA. SUBTITULQS SIXTEENTH. CAPTIONS Las partes convienen que los subtitulos utilizados en esteContrato son para efectos de facilitar la referencia de susclausulas, por lo que no seran considerados parte del Contrato niseran utilizados para efectos de su interpretacion. The parties mutually agree that the headings and captionscontained in this Contract are inserted for convenience ofreference only and are not to be deemed part of or to be used inconstruing this Contract. DECIMA SEPTIMA. ACUERDOS ANTERIORES SEVENTEENTH. PREVIOUS AGREEMENTS Este Contrato sustituye a cualquier y todos los contratos dearrendamiento que las partes hayan celebrado con anterioridad,otorgandose el mutuamente el finiquito mas amplio que en derechoproceda. El presente Contrato solamente podra modificarse medianteacuerdo escrito firmado por un representante debidamente autorizado decada una de las partes. This Contract substitutes any and all lease agreements previouslyexisting between the parties, granting each other the fullest release asaccepted by law. This Contract may only be amended through a writtenagreement signed by a duly authorized representative of each party.DEC1MAOCTAVA. LEY APLICABLE Y JURISDICCION EIGHTEENTH. APPLICABLE LAW AND JURISDICTIONEste Contrato sera interpretado de conformidad con lo previsto en elCodigo Civil del Estado de Baja California y demas leyes aplicables enel Estado de Baja California, Mexico, y las partes expresamente sesometen a la jurisdiccion de los tribunales de Tijuana, Baja California,Mexico, renunciado a cualquier otro fuero que pudierecorresponderles. This Contract will be interpreted in accordance with theprovisions of the Civil Code and laws of the State of BajaCalifornia, Mexico, and both parties hereby expressly submit tothe jurisdiction of the Courts of Tijuana, State of Baja California,Mexico, waiving any other forum that could correspond to themfor any reason whatsoever.DEC1MA NOVENA. TRADUCCION NINETEENTH. TRANSLATIONLas partes convienen en que el presente Contrato se firma en Iosidiomas ingles y espanol. Las partes convienen que la version enespanol prevalecera en todo momento. The parties agree that this Contract is executed in the English andSpanish languages. The parties agree that the Spanish version shallprevail in all events.EN TESTIMONIO DE LO ANTERIOR, IN WITNESS WHEREOFLas partes manifiestan su consentimiento con el contenido de esteContrato, las parte lo firman el dia 23 de febrero de 2012. The undersigned parties, through their duly authorizedrepresentatives, have executed this Contract on February 23,2012.SUBARRENDADORA/SUBLESSORPALL MEXICO MANUFACTURING, S. DE R.L. DE C.V.(Graphic Appears Here)Por:/ By: Leobardo Tenorio MalofSUBARRENDATARIA/SUBLESSEE ENSATEC, S.A. DE C.V.(Graphi Appears Here)Por:/By: Hector Machado BarrazaANEXO A/EXHIBIT A PLANO/PLOT PLAN(Graphi Appears Here)EXHIBIT 21.1SUBSIDIARIES OF HAEMONETICS CORPORATIONEntity NameJurisdiction of Incorporation5D Information Management, Inc.DelawareArryx, Inc.NevadaGlobal Med Technologies, Inc.ColoradoHaemonetics (Hong Kong) LimitedHong KongHaemonetics (Hong Kong) Limited Liaison OfficeHaryana - IndiaHaemonetics (UK) LimitedUnited KingdomHaemonetics Asia IncorporatedDelawareHaemonetics Asia Incorporated Taiwan BranchUnknownHaemonetics Asia UK Ltd.England/WalesHaemonetics Asia, Inc.Taipei - TaiwanHaemonetics Australia PTY Ltd.VictoriaHaemonetics Belgium NVBrussels - BelgiumHaemonetics BVBreda - NetherlandsHaemonetics Canada Ltd.British ColumbiaHaemonetics CZ, spol. s.r.o.Brno - Czech RepublicHaemonetics France S.a.r.lPlaisir - FranceHaemonetics GmbHMunich - GermanyHaemonetics Handelsgesellschaft m.b.H.Vienna - AustriaHaemonetics Healthcare India Private LimitedIndiaHaemonetics Hospitalar Ltda.Sao Paulo - BrazilHaemonetics International Finance S.a.r.l.LuxembourgHaemonetics International Holdings GmbHLuzern, SwitzerlandHaemonetics IP HC SarlSigny - SwitzerlandHaemonetics Italia s.r.l.Milan - ItalyHaemonetics Japan GKToyko - JapanHaemonetics Korea, Inc.Seoul - KoreaHaemonetics LimitedBedfordshire - United KingdomHaemonetics Manufacturing, Inc.DelawareHaemonetics Massachusetts Security CorporationMassachusettsHaemonetics Medical Devices (Shanghai) International Trading Co., Ltd.Shanghai - ChinaHaemonetics New Zealand LimitedNew ZealandHaemonetics Produzione Italia S.r.l.ItalyHaemonetics Puerto Rico LLCPuerto RicoHaemonetics S.A.Signy - SwitzerlandHaemonetics S.A. Representative OfficeBeirut - LebanonHaemonetics S.A. Representative OfficeMadridHaemonetics S.A. Representative OfficeMoscow - RussiaHaemonetics Scandinavia ABLund - SwedenHaemonetics Singapore Pte. Ltd.SingaporeHaemoscope CorporationMassachusettsInlog SASFranceInlog Deutschland GmbHGermanyInlog Holdings France SASFranceNeoteric Technology (UK) Ltd.Coventry - United KingdomTransfusion Technologies CorporationDelawareConsent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-181847, 333-61453, 333-61455, 333-60020, 333-62598, 333-136839, 333-149205 and 333-159434) of our reports dated May 20, 2013, with respect to the consolidated financial statements and schedule of HaemoneticsCorporation and the effectiveness of internal control over financial reporting of Haemonetics Corporation, included in this Annual Report (Form 10-K) for thefiscal year ended March 30, 2013./s/ Ernst & Young LLPBoston, MassachusettsMay 20, 2013EXHIBIT 31.1CERTIFICATIONI, Brian Concannon, certify that:1.I have reviewed this Annual Report on Form 10-K of Haemonetics Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date : May 20, 2013 /s/ Brian Concannon Brian Concannon, President and Chief Executive Officer (Principal Executive Officer) EXHIBIT 31.2CERTIFICATIONI, Christopher Lindop, certify that:1.I have reviewed this Annual Report on Form 10-K of Haemonetics Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting.Date : May 20, 2013 /s/ Christopher Lindop Christopher Lindop, Chief Financial Officer and Executive Vice President Business Development(Principal Financial Officer) EXHIBIT 32.1Certification Pursuant To18 USC. Section 1350,As Adopted Pursuant ToSection 906 of the Sarbanes/Oxley Act of 2002In connection with the Annual Report of Haemonetics Corporation (the “Company”) on Form 10-K for the period ended March 30, 2013 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Brian Concannon, President and Chief Executive Officer of the Company, certify,pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with the requirements of Section 13(a) or 15(d) of theSecurities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.Date : May 20, 2013 /s/ Brian Concannon Brian Concannon, President and Chief Executive Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature thatappears in typed form within the electronic version of this written statement required by Section 906, has been provided to Haemonetics and will be retainedby Haemonetics and furnished to the Securities and Exchange Commission or its staff upon request.EXHIBIT 32.2Certification Pursuant To18 USC. Section 1350,As Adopted Pursuant ToSection 906 of the Sarbanes/Oxley Act of 2002In connection with the Annual Report of Haemonetics Corporation (the “Company”) on Form 10-K for the period ended March 30, 2013 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Christopher Lindop, Chief Financial Officer and Vice President BusinessDevelopment of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18, United States Code, that this Report fully complies with therequirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Report fairly presents, in all materialrespects, the financial condition and results of operations of the Company.Date : May 20, 2013 /s/ Christopher Lindop Christopher Lindop, Chief Financial Officer and Executive Vice PresidentBusiness Development A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature thatappears in typed form within the electronic version of this written statement required by Section 906, has been provided to Haemonetics and will be retainedby Haemonetics and furnished to the Securities and Exchange Commission or its staff upon request.

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