COMMITMENTS AND CONTINGENCIES


(a)	Leases of Property and Equipment

Office rental and automobile leasing expenses, for 2011, 2012 and 2013, were $871, $1,028 and $1,239 respectively. The Company and its subsidiaries lease office space, cars and equipment under operating lease agreements. Those leases will expire on different dates from 2014 to 2019. Future minimum lease payments on non-cancelable operating leases as of December 31, 2013 are as follows:



Years ending December 31,
2014	$	978
2015	914
2016	437
2017	150
2018	107
2019 and thereafter	109
	$	2,695


(b)	Guarantees

The Company’s DSIT subsidiary provides various performance, advance and tender guarantees as required in the normal course of its operations. As at December 31, 2013, such guarantees totaled approximately $1,226, all of which is due to expire in 2014. As a security for these guarantees, DSIT has deposited with an Israeli bank $306 (presented as current restricted deposits on the Company’s Consolidated Balance Sheets).

See Note 13(d) with respect to guarantees on the Company’s lines of credit.


(c)	Royalties

(i) In April 2012, USSI and Northrop Grumman Guidance and Electronics Company, Inc. signed a license agreement involving several of Northrop Grumman’s fiber-optic technology patents. The license agreement calls for an initial payment of $150 and for a royalty payment of 10% of the net selling price of each unit of licensed products used or sold during the term of the agreement, subject to an annual minimum royalty of $50 for the first ten years of the license term.

(ii) In June 2012, the Company's DSIT and USSI subsidiaries were awarded a joint $900 grant from the Israel-United States Binational Industrial Research and Development (“BIRD”) Foundation for the joint development of the next generation integrated passive/active threat detection system for underwater site protection. In September 2012, a Cooperation and Project Funding Agreement was signed between the companies and the BIRD Foundation which allowed for the commencement of the funding which is expected to take place over a 24 month period. DSIT anticipates receipt of a majority of the grant based on the expected allocation of project costs between DSIT and USSI. In both 2012 and 2013, the Company received $180 ($113 by DSIT and $67 by USSI) from the BIRD Foundation. Grant amounts from the BIRD Foundation are netted against research and development expense.

Under the terms of the grant agreement between BIRD, DSIT and USSI, both DSIT and USSI will have to repay the grant based on 5% of gross sales of the commercialized product. If repaid within one year of the successful completion of the project, the total repayment amount is equal to the grant amount. The companies are entitled to extend the repayment period to two years in return for total repayment of 113% of the grant amount, to three years in return for total repayment of 125%, to four years in return for total repayment of 138%, or to five years or more in return for total repayment of 150% of the grant amount. The companies are entitled to prepay the repayment of the grant amount at any time.

(iii) GridSense is required to pay an aggregate royalty of 6% of the sales of a particular product to two employees. The royalty amount for the year ended December 31, 2013 was $25.