NOTE 8:-COMMITMENTS AND CONTINGENCIES

The Subsidiary leases facilities under an operating lease agreement. The leasing period for the leased area is 62 months as of July 1, 2007. The monthly payment is $17 starting from September 1, 2007 and is linked to the Israeli Consumer Price Index ("CPI"). On September 1, 2012, the Subsidiary extended the leasing period by 4 months. On December 31, 2012, the Subsidiary extended the leasing period by an additional 12 months. As of June 30, 2013 the monthly payment on the leasing is approximately $21.

On January 15, 2012, the Subsidiary leased additional facilities under another operating lease agreement. The leasing period for the additional leased area is 45 months as of June 30, 2013. The monthly payment is approximately $40 and is linked to the Israeli CPI. The Subsidiary may extend the leasing period by 60 months, if an advance notice is given.

In January 2013 the Subsidiary received from the lessor a non-refundable payment, which payment represents his participation in the leasehold improvements, of approximately $816. The payment will be deductible against lease expenses as it is accrued. The upfront payment received and not recognized as a deduction from lease expenses is included in the balance sheet as advance payment. As of June 30, 2013, the monthly leasing payments for the new facilities are approximately $40. The monthly leasing expenses, net of the lessor participation are approximately $32.

On January 2013 the Subsidiary leased additional facilities under another operating lease agreement. The leasing period for the additional leased area is 26.5 months as of June 30, 2013. The monthly payment is approximately $1 and is linked to the Israeli CPI.

In addition, the Subsidiary has issued a bank guarantee in favor of the lessor in the amount of $389.

Lease expenses amounted to $678, $382 and $245 for the years ended June 30, 2013, 2012 and 2011, respectively.

As of June 30, 2013 future aggregate rental commitments under the existing lease agreements are as follows:

Year ending June 30, 2014	$	528
Year ending June 30, 2015		391
Year ending June 30, 2016		388
Year ending June 30, 2017		291
Total	$	1,598

b.	The Subsidiary leases 19 cars under operating lease agreements, which expire in years 2013 through 2016. The monthly payment is approximately $18 and is linked to the Israeli CPI. In order to secure these agreements, the Subsidiary pledged a deposit in the amount of $41.

Lease expenses amounted to $215, $176 and $148 for the years ended June 30, 2013, 2012 and 2011, respectively.

As of June 30, 2013 future aggregate rental commitments under the existing lease agreements are as follows:

Year ending June 30, 2014	$	164
Year ending June 30, 2015		101
Year ending June 30, 2016		34
Total	$	299

c.	An amount of $705 of cash and deposits was pledged by the Subsidiary to secure the hedging transactions, credit line and Bank guarantees.

d.	As of June 30, 2013, the Subsidiary has aggregate contractual obligations to suppliers and contractor as follows:

Year ending June 30, 2014	$	673
Year ending June 30, 2015		36
Total	$	709

Under the Law for the Encouragement of Industrial Research and Development, 1984, (the "Research Law"), research and development programs that meet specified criteria and are approved by a governmental committee of the OCS are eligible for grants of up to 50% of the project's expenditures, as determined by the research committee, in exchange for the payment of royalties from the sale of products developed under the program. Regulations under the Research Law generally provide for the payment of royalties to the Chief Scientist of 3% to 5% on sales of products and services derived from a technology developed using these grants until 100% of the dollar-linked grant is repaid. The Company's obligation to pay these royalties is contingent on its actual sale of such products and services. In the absence of such sales, no payment is required. Outstanding balance of the grants will be subject to interest at a rate equal to the 12 month LIBOR applicable to dollar deposits that is published on the first business day of each calendar year. Following the full repayment of the grant, there is no further liability for royalties.

Through June 30, 2013 and 2012, total grants obtained aggregated $10,882 and $9,412, respectively.

Through June 30, 2013 and 2012, total royalties expenses amounted to $42 and $21, respectively.