NOTE 15 - COMMITMENTS AND CONTINGENCIES

Lease Commitments

A summary of future payments of operating lease commitments is as follows (dollars in thousands):

2017 (remainder)	$	5,309
2018		5,511
2019		3,990
2020		2,538
2021		1,330
Thereafter		3,623
Total	$	22,301

Legal Proceedings

In December 2013, a patent infringement lawsuit was filed against the Company by Omega Patents, LLC, (“Omega”), a non-practicing entity. Omega alleged that certain of the Company's vehicle tracking products infringed on certain patents asserted by Omega. On February 24, 2016, a jury in the U.S. District Court for the Middle District of Florida awarded Omega damages of $2.9 million, for which CalAmp recorded a full reserve in the fiscal 2016 fourth quarter. Following trial, Omega brought a motion seeking entry of judgment, an injunction and requesting the court to exercise its discretion to treble damages and assess attorneys' fees. The Company filed an opposition to Omega's motion, and the judge's ruling has not yet been rendered. Motions for judgment as a matter of law and a new trial have not yet been filed because no judgment has been entered. If, following resolution of all post-trial motions, judgment is ultimately entered in Omega's favor, CalAmp intends to pursue an appeal at the Court of Appeals for the Federal Circuit. In addition to its appeal, CalAmp is seeking to invalidate a number of Omega's patents in actions filed with the U.S. Patent and Trademark Office. Notwithstanding the adverse jury verdict, the Company continues to believe that its products do not infringe Omega's patents and that Omega's patents are not valid, and thus CalAmp intends to continue pursuing its judicial and administrative options. While it is not feasible to predict with certainty the outcome of this litigation, its ultimate resolution could be material to cash flows and results of operations. Furthermore, if an injunction is issued by the court, the Company could be prevented from manufacturing and selling a number of our products, which could have a material adverse effect on the Company's business, results of operations, financial condition and cash flows.

On April 7, 2016, a patent infringement lawsuit was filed against the Company by Orbcomm Inc. (“Orbcomm”) in the U.S. District Court for the Eastern District of Virginia. Orbcomm alleged that certain of the Company's systems for tracking, monitoring, and controlling vehicles, machinery, and other assets infringed on certain patents asserted by Orbcomm. Orbcomm has not yet made a specific damages claim, but seeks compensatory damages, treble damages, and an injunction. The Company believes that its products and services do not infringe Orbcomm's patents and/or that Orbcomm's patents are invalid. Thus, on May 27, 2016, the Company filed a motion to dismiss Orbcomm's claims on the basis, inter alia, that Orbcomm's patents are directed at ineligible subject matter and are therefore invalid under 35 U.S.C. § 101. Regardless of the outcome of this motion, the Company intends to vigorously defend itself against Orbcomm's claims and otherwise assert the Company's intellectual property rights. At this early stage of the lawsuit, it is not feasible to predict with any certainty the outcome of this litigation.

In connection with the Company's acquisition of LoJack in March 2016, the Company assumed the following LoJack legal proceedings.

On October 13, 2010, a suit was filed by G.L.M. Security & Sound, Inc. (“G.L.M.”) against LoJack in the United States District Court for the Eastern District of New York (the “Court”) alleging breach of contract, misrepresentation, and violation of the New York franchise law, Mass. Gen. Laws c. 93A and the Robinson-Patman Act, among other claims. G.L.M. sought damages of $10,000,000, punitive damages, interest and attorney's fees, and treble damages. On September 19, 2014, the Court entered summary judgment in favor of LoJack on G.L.M's three remaining claims for breach of contract, breach of the duty of good faith and fair dealing, and violation of Mass. Gen. Laws c. 93A. The Court denied G.L.M.'s attempt to amend its complaint on the basis of futility and undue delay. The Court also entered summary judgment in favor of LoJack on its counterclaim for breach of contract. The Court set a deadline for the parties to provide a schedule to brief the issue of monetary damages related to the Company's successful counterclaim for breach of contract.

On August 21, 2015, the Court issued a Memorandum and Opinion with respect to LoJack's claim for damages on its breach of contract counterclaim. The Court found that LoJack is entitled to recover damages and interest on its counterclaim in the total amount of $1.9 million. The Court ordered that judgment enter in that amount and that the case be closed. On August 25, 2015, the clerk of the Court entered judgment in LoJack's favor.

On September 23, 2015, G.L.M. filed a notice of appeal. The case will proceed to appeal in the Second Circuit Court of Appeals. The Company will vigorously defend against the appeal, but there can be no assurances that the Company will be able to recover the full amount of the judgment, if any.

LoJack was notified in 2013 by some of its international licensees that some of the batteries manufactured by LoJack's former battery supplier, EVE Energy Co., Ltd. (“EVE”), and included in self-powered LoJack units these licensees had purchased from LoJack, exhibited degraded performance below LoJack's quality standards. These notifications led LoJack to perform its own investigation. As a result of this investigation, LoJack confirmed that batteries manufactured by EVE that were included in certain self-powered LoJack units sold in the United States and to LoJack's international licensees were exhibiting variability in performance that could impact the ability of the LoJack unit to transmit a signal when called upon for stolen vehicle recovery. LoJack manufactures both vehicle and self-powered (battery) units and this degraded performance potentially affects only the transmit battery pack in the self-powered units. As of the date of this report, the majority of LoJack units in circulation are vehicle powered.

LoJack has incurred, and expects to continue to incur, costs and expenses related to the actions that it decided to take to address this matter. These costs and expenses may include, among others, those related to quality assurance programs, product or battery replacements, warranty claims, extension of product warranties, legal and other professional fees, litigation, and payments or other business concessions to LoJack's customers. Because of the ongoing nature of this matter, the Company cannot predict what other actions will be required, nor can it predict the outcome nor estimate the possible loss or range of loss with respect to any such actions.

LoJack filed a formal claim under its relevant insurance policy and was paid $5,000,000.

On October 27, 2014, LoJack and LoJack Ireland, a wholly-owned subsidiary, commenced arbitration proceedings against EVE by filing a notice of arbitration with the Hong Kong International Arbitration Centre. The filing alleges that EVE breached representations and warranties made in a supply agreement relating to the quality and performance of batteries supplied by EVE. The arbitration proceedings against EVE began on June 6, 2016, and are expected to be concluded by the end of fiscal 2017. At the present time, the Company cannot estimate when the arbitration panel will render its decision, nor can the Company predict the ultimate outcome of the arbitration proceedings or the amount of damages, if any, that the Company may be awarded by the arbitration panel.

In addition to the foregoing matters, from time to time as a normal consequence of doing business, various claims and litigation may be asserted or commenced against the Company. In particular, the Company in the ordinary course of business may receive claims concerning contract performance, or claims that its products or services infringe the intellectual property of third parties. While the outcome of any such claims or litigation cannot be predicted with certainty, management does not believe that the outcome of any of such matters existing at the present time would have a material adverse effect on the Company's business, results of operations, financial condition and cash flows.

Loan Guarantees

LoJack loan guarantees to dealers represents the maximum potential amount of future payments under an agreement with a certain financing company. Pursuant to the agreement, the Company guarantees the amortized value of LoJack units purchased by customers via auto loans underwritten by the financing company. Under this agreement, the Company will reimburse participating dealers the remaining unamortized cost of a financed LoJack unit upon a borrower's default within the initial eighteen months of the auto loan. This agreement was renewed for the year ended December 31, 2016. Payment to the participating dealers is remitted by us under this agreement on a claim-by-claim basis. Based on the unamortized cost of units sold, our maximum potential amount of future payments under this agreement, assuming the default of all participants, is $4,191,000 as of May 31, 2016. The expected obligation is accrued based on sales to the participating dealers and industry default statistics. As of May 31, 2016, the Company had accrued $78,000 under this guarantee. Accruals for loan guarantees are recorded as a reduction of revenue in the consolidated statement of operations.