NOTE 7 – FINANCING ARRANGEMENTS AND CONTRACTUAL CASH OBLIGATIONS

Bank Credit Facility

The Company has a credit facility with Square 1 Bank that provides for borrowings up to $15 million or 85% of eligible accounts receivable, whichever is less. The credit facility expires on March 1, 2017. Borrowings under this line of credit bear interest at the bank's prime rate. There were no borrowings outstanding under this credit facility at February 28, 2015 or February 28, 2014.

The bank credit facility 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 on a rolling 12-month basis. At February 28, 2015, 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. Borrowings, if any, under the bank credit facility are secured by substantially all of the assets of the Company and its domestic subsidiaries.

Long-Term Debt

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

	February 28,			February 28,
	2015			2014
Note payable to Navman, net of unamortized discount	$	688		$	1,858
Less portion due within one year		(688	)		(1,156	)
Long-term debt	$	-		$	702

The Navman Wireless (Navman) note is payable in the form of a 15% rebate on certain products sold by CalAmp to Navman under a five-year $25 million supply agreement (the Supply Agreement) that was entered into in May 2012 in conjunction with CalAmp's purchase of a product line from Navman. 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. The Company made note principal payments of $1,404,000 and $1,308,000 in fiscal 2015 and 2014, respectively.

Other Non-Current Liabilities

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

	February 28,		February 28,
	2015		2014
Deferred revenue	$	1,652	$	1,977
Acquisition-related contingent consideration		-		1,092
Deferred compensation		2,246		131
Deferred rent		329		98
	$	4,227	$	3,298

In August 2013, the Company adopted a non-qualified deferred compensation plan in which the executive officers and certain other management employees are eligible to participate whereby such participants may defer a portion of their annual base and/or variable compensation until retirement or a date specified by each participant in accordance with the plan. Effective July 1, 2014, the plan was amended to include restricted stock units as a deferrable form of compensation and to allow non-employee directors to participate in the plan. The Company is informally funding the deferred compensation plan obligations by making cash deposits to a Rabbi Trust that are invested in mutual funds in generally the same proportion as the investment elections made by the participants for their compensation deferrals. Rabbi Trust assets and deferred compensation plan liabilities as of February 28, 2015 were approximately $2,222,000 and $2,246,000, respectively, and are included in other assets and other non-current liabilities, respectively, in the accompanying consolidated balance sheet at that date.

Contractual Cash Obligations

Following is a summary of the Company's contractual cash obligations as of February 28, 2015 (in thousands):

	Future Estimated Cash Payments Due by Fiscal Year
Contractual Obligations	2016		2017		2018		2019		2020		Total
Note payable to Navman	$	753	$	-	$	-	$	-	$	-	$	753
Operating leases		1,640		1,732		1,564		1,513		880		7,329
Purchase obligations		44,711		-		-		-		-		44,711
Total contractual obligations	$	47,104	$	1,732	$	1,564	$	1,513	$	880	$	52,793

Purchase obligations consist primarily of inventory purchase commitments. Rent expense under operating leases was $2,146,000, $1,886,000 and $1,707,000 in fiscal years 2015, 2014 and 2013, respectively.