Note 3 - Commitments and Contingencies

Leases

Pursuant to a lease amendment effective January 4, 2010, Optex Systems Holdings leases its office and manufacturing facilities under a non-cancellable operating lease expiring July 31, 2015, in addition to maintaining several non-cancellable operating leases for office and manufacturing equipment.

On December 10, 2013 Optex Systems Holdings executed a lease amendment, renewing its Richardson, TX lease, effective as of December 10, 2013. Under the terms of the amendment:

Total expense under facility lease agreements as of the three months ended December 29, 2013 was $54 thousand, and total expense for manufacturing and office equipment was $6 thousand.  Total expense under facility lease agreements as of the three months ended December 30, 2012 was $74 thousand, and total expense for manufacturing and office equipment was $4 thousand.

As of December 29, 2013, the remaining minimum lease payments under the non-cancelable operating leases for equipment, office and facility space are as follows:

The total unamortized deferred rent related to the prior lease agreement as of December 29, 2013 was zero as compared to $44 thousand as of September 29, 2013. During the three months ending December 29, 2013, Optex Systems Inc. recognized $44 thousand in unamortized deferred rent expense related to the previous lease agreement due to the December 10, 2013 lease amendment. Commencing on April 1, 2014, the base rent payment will be $20.4 thousand per month. Pursuant to the terms of the recent amendment to the facilities lease, there is no base rent payment due from January 1, 2014 through March 31, 2014, and the total value of the rent abatement to occur over the next three months is $61 thousand. The value of this deferred rent expense will be amortized at a rate of $0.7 thousand per month over the life of the lease.