Contingent Liabilities And Commitments

12 Months Ended

Dec. 31, 2011

Contingent Liabilities And Commitments [Abstract]

Contingent Liabilities And Commitments

 

NOTE 8     -   CONTINGENT LIABILITIES AND COMMITMENTS

A. In consideration of grants by the Chief Scientist of the Ministry of Industry and Trade of the Government of Israel (the "Chief Scientist"), the Company is obligated to pay the Chief Scientist, in respect of awarded grants, royalties of 3.5% of sales of products developed with funds provided by the Chief Scientist, until the dollar-linked amount of such royalty payments is equal to 100% (150% for certain grants)of the grant payments received by the Company plus Libor interest rate (the Libor interest rate applies to grants received since January 1999). With respect to funds provided by the Chief Scientist for development projects held until December 31, 2000, the Company received grants in a total amount of $9,500, and paid back to the Chief Scientist royalties in the amount of approximately $6,600. The Company believes that the majority of products that it has sold since January 1, 2005 are not based on technology developed with funds provided by the Chief Scientist and that, accordingly, such sales should not be subject to the payment of royalties to the Chief Scientist. Nevertheless, the Company has accrued royalty expenses in its financial reports for the periods from January 1st, 2005 to March 31st, 2010 in the amount of approximately $3,000, but has not paid any royalties associated with the products mentioned above to the Chief Scientist. The Company's contingent liability to the Chief Scientist in respect of such grants as of December 31, 2011 is approximately $2,000, and the company does not intend to further accrue for royalty expenses in its financial statements, as it believes that the chances for actual payments above the amounts already accrued are remote.

B. Regarding commitments in respect of the Company's approved enterprises see Note 10.A.

C. In consideration of grants received from the Fund for the Encouragement of Overseas Marketing of the Israeli Government's Ministry of Industry and Trade (the "Fund"), the Company is obligated to pay the Fund royalties amounting to 3% to 4% of the Company's incremental exports, up to a maximum of 100% of the grants received.   The Company's contingent liability to the Fund as of December 31, 2011 is $558, contingent upon the Company's incremental exports.

D.    The Company uses technology in respect of which it is obligated to pay annual royalties to third parties, up to an amount of $1,224, until December 31, 2013.

E.    Lease commitments

The premises of the Company and its subsidiaries are leased under various operating lease agreements, which expire on various dates.

Rent expenses for the years ended December 31, 2011, 2010 and 2009 were approximately $1,194, $1,187, and $1,180, respectively.

The Company leases its motor vehicles under cancelable operating lease agreements for periods through 2011. The minimum payment under these operating leases, that would be due upon the cancellation thereof, amounted to $929 as of December 31, 2011.

Future minimum lease commitments under the Company's operating leases as of December 31, 2011 are as follows:

Year ended December 31,
2012	1,867
2013	1,598
2014	1,637
2015	1,376
2016 and thereafter	1,072
	7,550