COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2014

Notes to Financial Statements

COMMITMENTS AND CONTINGENCIES

Real Estate Leases

The Company leases its facilities under various operating lease agreements, which contain renewal options and escalation provisions. Rent expense was $2,270,000 and $1,978,000 for the years ended December 31, 2014 and 2013, respectively. The Company is responsible for paying all operating costs under the terms of the leases. As of December 31, 2014, the aggregate future minimum lease payments are as follows:

For the year ending	Plant Avenue Annual Rent		Fifth Street Annual Rent		Lamar Street Annual Rent		Motor Parkway AnnualRent		Porter Street Annual Rent		Old Willets Path Annual Rent		Total  Rents
December 31, 2015	$	633,000	$	684,000	$	360,000	$	117,000	$	115,000	$	22,000	$	1,931,000
December 31, 2016		615,000		704,000		360,000		103,000		115,000		-		1,897,000
December 31, 2017		543,000		725,000		360,000		106,000		115,000		-		1,849,000
December 31, 2018		559,000		747,000		300,000		110,000		115,000		-		1,831,000
December 31, 2019		576,000		769,000		-		113,000		48,000		-		1,506,000
Thereafter		3,865,000		5,832,000		-		219,000		-		-		9,916,000
Total Rents	$	6,791,000	$	9,461,000	$	1,380,000	$	768,000	$	508,000	$	22,000	$	18,930,000

The leases provide for scheduled increases in base rent. Rent expense is charged to operations using the straight-line method over the term of the lease which results in rent expense being charged to operations at inception of the lease in excess of required lease payments. This excess is shown as deferred rent in the accompanying consolidated balance sheets.

One of the Company’s former subsidiaries was located in the Plant Avenue facility and following the discontinuance of its operations, a portion of the facility was vacant. The Company recorded a charge for $579,000 at December 31, 2009 representing the estimated discounted future cost of part of the Plant Avenue facility.

As of December 31, 2014, the estimated discounted future cost of the Plant Avenue lease that will be charged to expense for the year ending December 31, 2015 will be $56,000.

On July 1, 2010, the Company entered into a sublease with a third party to rent a portion of the vacant space at the Plant Avenue facility.  Under the terms of the sublease, the sub-tenant occupied approximately 17,787 square feet for the months of July 2010 through October 2010. Beginning in November 2010, the sub-tenant occupied approximately 27,787 square feet. The space was being subleased for $3.00 per square foot, with a discount in the first month of 50%.  The sublease was a month-to-month lease and could be terminated by either party with 90 days written notice. This sublease was terminated on June 30, 2013.