Note 11. Commitments

Leases

We lease office space and equipment under noncancelable operating and capital leases with various expiration dates, some of which contain renewal options.

On March 1, 1996, we entered into a twenty-year capital lease for a building in Ashburn, Virginia, that serves as our corporate headquarters. We have accounted for this transaction as a capital lease and have accordingly recorded assets and a corresponding liability of approximately $12.3 million.

The following is a schedule by years of future minimum payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2011 (in thousands):

	Property			Equipment			Total

2012	$	2,064		$	38		$	2,102
2013		2,064			1			2,065
2014		2,064			----			2,064
2015		2,064			----			2,064
2016		515			----			515

Total minimum obligations		8,771			39			8,810
Less amounts representing interest (ranging from 4.4% to 17.4%)		(2,828	)		(1	)		(2,829	)

Net present value of minimum obligations		5,943			38			5,981
Less current portion		(996	)		(37	)		(1,033	)

Long-term capital lease obligations at December 31, 2011	$	4,947		$	1		$	4,948

In accordance with the Ashburn lease agreement, every three years the rent is subject to adjustments in accordance with changes in the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index (“CPI”). Accordingly, effective April 2011, the adjustment in monthly rent payment based on the change in CPI was $7,000 per month, from $165,000 to $172,000.

Accumulated amortization for property and equipment under capital leases at December 31, 2011 and 2010 is $11.1 million and $10.6 million, respectively.

Future minimum lease payments for all noncancelable operating leases at December 31, 2011 are as follows (in thousands):

2012	$	534
2013		319
2014		252
2015		256
2016		123
Total minimum lease payments	$	1,484

Rent expense charged to operations for 2011, 2010, and 2009, totaled $1.2 million, $1.2 million, and $1.3 million, respectively.

Warranties

We provide product warranties for products sold through certain U.S. Government contract vehicles. We accrue a warranty liability at the time that we recognize revenue for the estimated costs that may be incurred in connection with providing warranty coverage. Warranties are valued using historical warranty usage trends; however, if actual product failure rates or service delivery costs differ from estimates, revisions to the estimated warranty liability may be required. Accrued warranties are reported as other current liabilities on the Consolidated Balance Sheets.

	Balance Beginning of Year		Accruals			Warranty Expenses			Balance End of Year
	(amount in thousands)

Year Ended December 31, 2011	$	1,079	$	257		$	(383	)	$	953
Year Ended December 31, 2010	$	1,708	$	(341	)	$	(288	)	$	1,079
Year Ended December 31, 2009	$	1,686	$	542		$	(520	)	$	1,708

Note 12. Certain Relationships and Related Transactions

Information concerning certain relationships and related transactions between us and certain of our current shareholders and former officers is set forth below.

The brother of our Chairman and CEO, Emmett Wood, has been an employee of ours since 1996. The amounts paid to this individual as compensation for 2011, 2010, and 2009 were $320,000, $298,000, and $221,000, respectively. Additionally, Mr. Wood owned 250,000 shares and 50,000 shares of the Company's Class A Common Stock and Class B Common Stock, respectively, as of December 31, 2011 and 2010.

On April 8, 2011, the Company redeemed a total of 637 shares of Senior Redeemable Preferred Stock, including 220 shares and 307 shares of Series A-1 and Series A-2 Redeemable Preferred Stock, respectively, held by Mr. Porter and Toxford, the beneficial owner of 44.0% of our Class A Common Stock. Mr. Porter is the sole stockholder of Toxford. Subsequent to such redemption, Mr. Porter and Toxford held 763 shares and 1,069 shares of Series A-1 and Series A-2, respectively, or 82.7% of the Senior Redeemable Preferred Stock.