ECtel (ECTX)

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ECTX » Topics » Note 10 - Commitments and Contingencies

This excerpt taken from the ECTX 6-K filed Aug 10, 2009.

Note 9 – Commitments and Contingencies

Lease commitments

ECtel has entered into operating leases (in respect of premises and motor vehicles) in Israel and abroad. The agreements expire on various dates from 2010 to 2012 (some have renewal options) and are in US dollars, local currencies or linked to the US dollar.

Future minimum annual rental payments which ECtel is committed to pay under the above leases, at rates in effect at December 31, 2008, are as follows:

	Year ending December 31:			$ in thousands




	2009				1,347
	2010				1,324
	2011				861
	2012				235

As to rent expense in connection with ECtel’s leased premises and vehicles, see Note 13F.

Royalty commitments

The Company is committed to pay royalties for several approved programs to the Office of Chief Scientist (hereinafter – “OCS”), on proceeds from sales of products in which the Israeli Government participated by way of grants for research and development. The royalties are computed at the rate of 3%-3.5% of the aggregate proceeds from sale of such products, up to an amount not exceeding 100% of such grants plus interest at the LIBOR rate. Royalties to the Government of Israel are presented in cost of revenues.

In April 2006, the Company repaid to the OCS an amount of $364 thousand, which represents the entire obligation of Telesoft, in connection with the grants participation received in prior years.

During the fourth quarter of 2006, the Company committed to repay in full its primary program, which the OCS had sponsored during prior years and in the R&D efforts of which the OCS had participated. The total amount to be paid to the OCS was approximately $3 million, which includes interest accrued on the outstanding balance of the amounts funded. Such amounts funded were presented in the cost of revenues of 2006. The repayment was made in five installments during 2007.

As at December 31, 2008, the balance of the grants received for remaining programs totaled $432 thousand of which $90 thousand has been repaid as royalties.

Guarantees

At December 31, 2008, the Company has granted guarantees to third parties in the sum of $1 million mainly as guarantees of the Company’s performance, and that can be demanded in case of material breach of contracts. The expiration dates of the guarantees are from January 2009 through December 2009.

F - 24

ECtel Ltd. and Subsidiaries


Notes to the Consolidated Financial Statements

This excerpt taken from the ECTX 20-F filed May 12, 2009.

Note 9 – Commitments and Contingencies

Lease commitments

Future minimum annual rental payments which ECtel is committed to pay under the above leases, at rates in effect at December 31, 2008, are as follows:

	Year ending December 31:			$ in thousands




	2009				1,347
	2010				1,324
	2011				861
	2012				235

As to rent expense in connection with ECtel’s leased premises and vehicles, see Note 13F.

Royalty commitments

In April 2006, the Company repaid to the OCS an amount of $364 thousand, which represents the entire obligation of Telesoft, in connection with the grants participation received in prior years.

As at December 31, 2008, the balance of the grants received for remaining programs totaled $432 thousand of which $90 thousand has been repaid as royalties.

Guarantees

F - 24

ECtel Ltd. and Subsidiaries


Notes to the Consolidated Financial Statements

This excerpt taken from the ECTX 6-K filed Aug 20, 2008.

Note 10 – Commitments and Contingencies

Lease commitments

The Company has entered into operating leases (in respect of premises and motor vehicles) in Israel and abroad. The agreements expire on various dates from 2008 to 2012 (some have renewal options) and are in US dollars, local currencies or linked to the US dollar.

Future minimum annual rental payments which the Company is committed to pay under the above leases, at rates in effect at December 31, 2007, are as follows:

	Year ending December 31:			$ in thousands




	2008				1,320
	2009				767
	2010				604
	2011				473
	2012				232

As to rent expense in connection with the Company’s leased premises and vehicles, see Note 14K.

Royalty commitments

The Company is committed to pay royalties for several approved programs to the Government of Israel, Ministry of Industry and Commerce and Office of Chief Scientist (hereinafter – “OCS”), on proceeds from sales of products in which the Israeli Government participated by way of grants for research and development. The royalties are computed at the rate of 3%-3.5% of the aggregate proceeds from sale of such products, up to an amount not exceeding 100% of such grants plus interest at the LIBOR rate. Royalties to the Government of Israel are presented in cost of revenues (see Note 14F).

In April 2006, the Company repaid to the OCS an amount of $364 thousand, which represents the entire obligation of Telesoft, in connection with the grants participation received in prior years.

During the fourth quarter of 2006, the Company committed to repay in full its primary program, which the OCS had sponsored during prior years and in the R&D efforts of which the OCS had participated. The total amount to be paid to the OCS was approximately $3 million, which includes interest accrued on the outstanding balance of the amounts funded. Such amounts funded were presented in the cost of revenues of 2006 (see also Note 14D). The repayment was made in five installments during 2007.

As at December 31, 2007, the balance of the grants received for remaining programs totaled $432 thousand of which $90 thousand has been paid as royalties.

F - 25

ECtel Ltd. and Subsidiaries


Notes to the Consolidated Financial Statements

This excerpt taken from the ECTX 20-F filed Jun 18, 2008.

Note 10 – Commitments and Contingencies

Lease commitments

Future minimum annual rental payments which the Company is committed to pay under the above leases, at rates in effect at December 31, 2007, are as follows:

	Year ending December 31:			$ in thousands




	2008				1,320
	2009				767
	2010				604
	2011				473
	2012				232

As to rent expense in connection with the Company’s leased premises and vehicles, see Note 14K.

Royalty commitments

In April 2006, the Company repaid to the OCS an amount of $364 thousand, which represents the entire obligation of Telesoft, in connection with the grants participation received in prior years.

During the fourth quarter of 2006, the Company committed to repay in full its primary program, which the OCS had sponsored during prior years and in the R&D efforts of which the OCS had participated. The total amount to be paid to the OCS was approximately $3 million, which includes interest accrued on the outstanding balance of the amounts funded. Such amounts funded were presented in the cost of revenues of 2006 (see also Note 14D). The repayment was made in five installments during 2007.

As at December 31, 2007, the balance of the grants received for remaining programs totaled $432 thousand of which $90 thousand has been paid as royalties.

F - 25

ECtel Ltd. and Subsidiaries


Notes to the Consolidated Financial Statements

This excerpt taken from the ECTX 20-F filed May 17, 2007.

Note 10 – Commitments and Contingencies

Lease commitments

The Company has entered into operating leases (in respect of premises and motor vehicles) in Israel and abroad. The agreements expire on various dates from 2007 to 2012 (some have renewal options) and are in US dollars, local currencies or linked to the US dollar.

Future minimum annual rental payments which the Company is committed to pay under the above leases, at rates in effect at December 31, 2006, are as follows:

	Year ending December 31:			$ in thousands




	2007				1,173
	2008				1,085
	2009				525
	2010				413
	2011 and thereafter				624

As to rent expense in connection with the Company’s leased premises, see Note 14J.

Royalty commitments

The Company is committed to pay royalties for several approved programs to the Government of Israel, Ministry of Industry and Commerce and Office of Chief Scientist (hereinafter – “OCS”) , on proceeds from sales of products in which the Israeli Government participated by way of grants for research and development. As at December 31, 2006, the Company had received, for remaining programs after repayment of some of the programs, as mentioned below, a total of $432 thousand in grants and had paid or accrued a total of $90 thousand in royalties. The royalties are computed at the rate of 3%-3.5% of the aggregate proceeds from sale of such products, up to an amount not exceeding 100% of such grants plus interest at the LIBOR rate. Royalties to the Government of Israel are presented in cost of revenues, (see Note 14E).

In April 2006, the Company repaid to the OCS an amount of $364 thousand, which represents the entire obligation of Telesoft, in connection with the grants participation received in prior years.

During the fourth quarter of 2006, the Company committed to repay in full its primary program, which the OCS had sponsored during prior years and in the R&D efforts of which the OCS had participated. The total amount to be paid to the OCS is approximately $3 million, which includes interest accrued on the outstanding balance of the amounts funded. Such amounts funded are presented in the cost of revenues (see also Note 14C). The repayment will be made in five installments during 2007.

F - 26


ECtel Ltd. and Subsidiaries
Notes to the Consolidated Financial Statements

This excerpt taken from the ECTX 20-F filed Jun 28, 2005.

Note 10 – Commitments and Contingencies

Lease commitments

The Company and its subsidiaries have entered into operating leases (in respect of premises and motor vehicles) in Israel and abroad. The agreements expire on various dates from 2005 to 2014 (some have renewal options) and are in US dollar, local currencies or linked to the US dollar.

Future minimum annual rental payments which the Company and its subsidiaries are committed to pay under the above leases, at rates in effect at December 31, 2004, are as follows:

Year ending December 31:			$ in thousands




2005				1,188
2006				468
2007				470
2008				423
2009				420

As to rent expense in connection with the Company’s leased premises, see Note 14K.

Royalty commitments

The Company is committed to pay royalties to the Government of Israel on proceeds from sales of products in which the Israeli Government participated by way of grants for research and development. As at December 31, 2004 the Company had received a total of $ 7.7 million in grants and has paid a total of $ 4.4 million in royalties. The royalties are computed at the rate of 3.5% of the aggregate proceeds from sale of such products, up to an amount not exceeding 100% of such grants plus interest at the LIBOR rate. Royalties to the Government of Israel are presented in cost of revenues (see Note 14F).

Capital expenditure commitments

The Company invests in capital expenditures according to “Approved Enterprise”programs. At December 31, 2004, in order to comply with current approved programs, $ 232 thousand remain to be invested (see Note 12A.1).

Guarantees

At December 31, 2004, the Company has granted guarantees to third parties in the sum of $ 4.1 million mainly as performance guarantees that can be demanded in case of material breach of contracts. The expiration dates of the guarantees are from January 2005 through December 2006.

F - 21

ECtel Ltd.

Notes to the Consolidated Financial Statements as at December 31, 2004

EXCERPTS ON THIS PAGE:

6-K	Aug 10, 2009

20-F	May 12, 2009

6-K	Aug 20, 2008

20-F	Jun 18, 2008

20-F	May 17, 2007

20-F	Jun 28, 2005

ECtel (ECTX)

ECTX » Topics » Note 10 - Commitments and Contingencies

Note 9 – Commitments and Contingencies

Note 9 – Commitments and Contingencies

Note 10 – Commitments and Contingencies

Note 10 – Commitments and Contingencies

Note 10 – Commitments and Contingencies

Note 10 – Commitments and Contingencies

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