LEASE COMMITMENTS

12 Months Ended

Dec. 31, 2012

LEASE COMMITMENTS

Operating Leases:

We lease our Louisville, Kentucky facility from a related party (see Note 6 - "Related Party Transactions") under an operating lease that, as of December 31, 2012, automatically renews for a five-year option period under terms of the lease agreement. The rent was adjusted in January 2008 per the agreement to monthly payments of $48.5 thousand through December 2012. Effective January 1, 2013, the lease amount increased to $53.8 thousand per month based on the CPI index as stated in the lease agreement. In addition, the Company is also responsible for real estate taxes, insurance, utilities and maintenance expense.

We lease equipment from a related party (see Note 6 - "Related Party Transactions") under operating leases expiring November 2015 and May 2016 for a monthly payment totaling $10.5 thousand.

We lease office space in Dallas, Texas. The lease was renewed effective October 1, 2012 for a period of one year with monthly payments of $1.0 thousand.

We lease a lot in Louisville, KY for a term that commenced in March 2012 and ends in February 2016. The monthly payment amount from March 2012 through February 2014 is $3.5 thousand. The monthly payment amount then increases to $3.8 thousand for the remaining term.

We leased a facility in Lexington, Kentucky for $4.5 thousand per month; the lease terminated February 10, 2012. We subleased this property for a term commencing March 1, 2007 and ending January 31, 2012 for $4.5 thousand per month.

Future minimum lease payments for operating leases, in thousands, as of December 31, 2012 are as follows:



2013	$	823
2014	817
2015	817
2016	679
2017	646

Future minimum lease payments	$	3,782

Total rent expense for the years ended December 31, 2012, 2011 and 2010 was $925.6 thousand, $1.0 million, and $968.9 thousand, respectively.

Capital Leases:

We made the final payments for the equipment under capital leases in June of 2010. We now own the equipment and no longer have any equipment under capital leases.

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

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