Leases

On January 1, 2011, Adept entered into a new lease in conjunction with the opening of our new facility in Shanghai, China. The lease agreement is for premises of 8,296 square feet, for a term of one and a half years and an option to extend for an additional four-year period. Annual rental payments are 506,350 Chinese Yuan Renminbi. Based on historical exchange rates, we approximate the US dollar annual expense to range between $75,000 and $80,000, barring unforeseen fluctuations in exchange rates.

In October 2008, Adept entered into two new leases to relocate its principal executive offices and research and manufacturing operations from Livermore, California to Pleasanton, California. The first lease agreement is for premises of 33,864 square feet, with a right of first offer on 11,059 additional square feet in Pleasanton, California for a term of seven years and an option to extend for an additional five-year period. Annual rent payments are $690,826 initially, subject to a 3% annual increase. During the second quarter of fiscal 2012, we received a four month rent abatement on this lease, the savings of which will be recognized over the remaining life of the lease through December 31, 2015. The annual rent savings from the abatement is approximately $55,000. The second lease agreement is for premises near the location of the first lease, consists of 23,027 square feet and includes a right of first offer on 12,000 additional square feet in Pleasanton, California for a term of seven years, with an option to extend for one additional five-year period, for initial annual rent of $414,486, subject to a 3% annual increase.

Adept also leases facilities for sales and operations in Dortmund, Germany. Other leased Adept facilities include Amherst, New Hampshire; Wissous and Annecy, France; Frederikshavn, Denmark; and Singapore. All of Adept’s facilities are used by both of the Company’s two reportable business segments. In October 2011, the Company announced the decision to consolidate the InMoTx operations in Frederikshavn, Denmark into the Company's Pleasanton, California operations. As of March 31, 2012, Adept had $63,000 accrued in lease termination costs associated with this consolidation.

Adept records lease expense on a straight-line basis over the related lease term. A summary of contractual obligations as of March 31, 2012 follows:



	Total		Year 1		Year 2		Year 3		Year 4		More than 5 years
Lease Obligations	$	6,839	$	1,958	$	1,608	$	1,508	$	1,197	$	568
Capital Lease Obligations	83		43		35		5		—		—
Total	$	6,922	$	2,001	$	1,643	$	1,513	$	1,197	$	568