Note 3 - Commitments and Contingencies

Leases

Optex Systems Holdings leases its office and manufacturing facilities under a non-cancellable operating lease expiring March 31, 2021, in addition to maintaining several non-cancellable operating leases for office and manufacturing equipment.

The terms of the office and manufacturing facilities lease are as follows:

Total expense under facility lease agreements as of the three and nine months ended June 29, 2014 was $82 thousand and $256 thousand, respectively, and total expense for manufacturing and office equipment was $4 thousand and $15 thousand, respectively.  Total expense under facility lease agreements as of the three months and nine months ended June 30, 2013 was $79 thousand and $224 thousand, respectively, and total expense for manufacturing and office equipment was $5 thousand and $14 thousand, respectively.

As of June 29, 2014, the remaining minimum lease payments under the non-cancelable operating leases for equipment, office and facility space are as follows:

Pursuant to the terms of the recent amendment to the facilities lease, there was no base rent payment due from January 1, 2014 through March 31, 2014, and the total value of the rent abatement related to the lease amendment is $63.5 thousand. As of June 29, 2014 the unamortized deferred rent was $94 thousand as compared to $44 thousand as of September 29, 2013. Deferred rent expense is recognized at a rate of $1.2 thousand per month over the life of the lease. Commencing on April 1, 2014 the base rent payment is $21.2 thousand per month.