NOTE 6 - FINANCING ARRANGEMENTS AND CONTRACTUAL CASH OBLIGATIONS

Subordinated Promissory Notes

On December 22, 2009 and January 15, 2010, the Company raised an aggregate amount of $5,000,000 from the issuance of subordinated promissory notes (the "Subordinated Notes") that bore interest at 12% per annum and had a maturity date of December 22, 2012. On August 15, 2011, in conjunction with entering into the Fourth Amendment with Square 1 Bank, the Company paid in full the $5,000,000 outstanding principal balance of the Subordinated Notes plus accrued interest of approximately $76,000, which included Subordinated Notes totaling $325,000 that were held by two officers and one director of the Company.

Bank Credit Facility

On March 1, 2013, CalAmp Corp. (the "Company" or "CalAmp") and Square 1 Bank entered into the Eighth Amendment (the "Eighth Amendment") to the Loan and Security Agreement dated as of December 22, 2009 (as amended by the Eighth Amendment, the "Amended Loan Agreement"). The Eighth Amendment increased the maximum credit limit of the facility from $12 million to $15 million, lowered the interest rate on outstanding borrowings from prime plus 1.0% to prime, and extended the facility maturity date from August 15, 2014 to March 1, 2017. The Eighth Amendment provided for a new $5 million term loan (the "New Term Loan") that was fully funded on March 4, 2013, which was just after the end of fiscal 2013. Concurrent with funding the New Term Loan, the pre-existing term loan with an outstanding principal balance of $1.8 million was retired. Principal of the New Term Loan is repayable at the rate of $83,333 per month beginning April 2013, with a $1.1 million principal payment due at maturity. The revolver portion of the Amended Loan Agreement has a borrowing limit equal to the lesser of (a) $15 million minus the term loan principal outstanding at any point in time, or (b) 85% of eligible accounts receivable. There were no borrowings outstanding on the revolver at the end of fiscal 2013 or 2012. Interest is payable on the last day of each calendar month. The Company agreed to pay loan fees to Square 1 Bank in connection with the Eighth Amendment of $7,500 on the first anniversary and $37,500 on each of the next three anniversaries of the New Term Loan.

The Amended Loan Agreement contains financial covenants that require the Company to maintain a minimum level of earnings before interest, income taxes, depreciation, amortization and other noncash charges ("EBITDA") and a minimum debt coverage ratio, both measured monthly beginning March 2013 on a rolling 12-month basis. At and subsequent to February 28, 2013, the Company was in compliance with its debt covenants under the credit facility. The credit facility also provides for a number of customary events of default, including a provision that a material adverse change constitutes an event of default that permits the lender, at its option, to accelerate the loan. Among other provisions, the credit facility requires a lock-box and cash collateral account whereby cash remittances from the Company's customers are directed to the cash collateral account and which amounts are applied to reduce, if applicable, the outstanding revolving loan principal.

Debt

Long-Term Debt

Long-term debt is comprised of the following (in thousands):

	February 28,			February 28,
	2013			2012
Bank term loan	$	1,800		$	3,000
Note payable to Navman		2,895			-
		4,695			3,000
Less portion due within one year		(2,261	)		(1,100	)
Long-term debt	$	2,434		$	1,900

The Navman note is payable in the form of a 15% rebate on certain products sold by the Company to Navman under the Supply Agreement. The unpaid balance of the Navman note would become immediately due and payable upon any termination of the Supply Agreement by the Company before the end of its five-year term (other than as a result of an uncured breach of the Supply Agreement by Navman), except that in the case of such acceleration the note balance would be subordinated to the Company's bank debt pursuant to the provisions of a debt subordination agreement. In the absence of an acceleration event, the Navman note is payable solely in the form of a rebate on products sold by CalAmp to Navman under the Supply Agreement. After all rebates have been applied to pay down the note balance, and assuming that an acceleration event has not occurred, any unpaid balance remaining on the Navman note would be forgiven at the later of May 7, 2017 or the final date to which the Supply Agreement is extended pursuant to a force majeure event. During the year ended February 28, 2013, the Company made principal payments in the aggregate amount of $535,000 on the note.

Other Non-Current Liabilities

Other non-current liabilities consist of the following (in thousands):

	February 28,		February 28,
	2013		2012
Deferred rent	$	251	$	279
Deferred revenue		1,285		724
Contingent royalties consideration payable to Navman		303		-
	$	1,839	$	1,003

The contingent royalties consideration in the aggregate fair value amount of $884,000 at February 28, 2013 is payable to Navman at approximately 15% of the revenue from the sale by CalAmp of certain products acquired from Navman under the Asset Purchase Agreement during the first three years. During the year ended February 28, 2013, the Company made royalty payments of $24,000 to Navman.

Contractual Cash Obligations

Following is a summary of the Company's contractual cash obligations as of February 28, 2013 (in thousands):

	Future Cash Payments Due by Fiscal Year

Contractual Obligations	2014		2015		2016		2017		2018		Thereafter		Total
Bank term loan	$	917	$	883	$	-	$	-	$	-	$	-	$	1,800
Note payable to Navman		1,407		901		901		256		-		-	$	3,465
Operating leases		1,087		902		849		346		58		-		3,242
Purchase obligations		32,853		-		-		-		-		-		32,853
Total contractual obligations	$	36,264	$	2,686	$	1,750	$	602	$	58	$	-	$	41,360

Purchase obligations consist primarily of inventory purchase commitments. Rent expense under operating leases was $1,707,000, $1,566,000 and $1,918,000 in fiscal years 2013, 2012 and 2011, respectively.