NOTE 8:- COMMITMENTS AND CONTINGENT LIABILITIES a. Guarantees: As of March 31, 2020, contingent liabilities exist regarding guarantees in the amounts of $51,472, $18,643, $2,033 and $56 in respect of projects with customers, bank loans, office rent lease agreements and customs transactions, respectively. b. Contractual purchase obligations: The Company has contractual obligations to purchase goods and raw materials. These contractual purchase obligations relate to inventories held by contract manufacturers and purchase orders initiated by the contract manufacturers and suppliers, which cannot be canceled without penalty. The Company utilizes third parties to manufacture its products. In addition, it acquires raw materials or other goods and services, including product components, by issuing to suppliers authorizations to purchase based on its projected demand and manufacturing needs. As of March 31, 2020, the Company had non-cancellable purchase obligations totaling approximately $500,414 out of which the Company already recorded a provision for loss in the amount of $2,119. As of March 31, 2020, the Company had contractual obligations for capital expenditures totaling approximately $70,961. These commitments reflect purchases of automated assembly lines and other machinery related to the Companys manufacturing. c. Legal claims: From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. In September, 2018, the Companys German subsidiary, SolarEdge Technologies GmbH received a complaint filed by competitor SMA Solar Technology AG (SMA). The complaint, filed in the District Court Dusseldorf, Germany, alleges that SolarEdge's 12.5kW - 27.6kW inverters infringe two of the plaintiffs patents. In its complaint, SMA requests inter alia an injunction and a determination for a claim for damages for sales in Germany. Plaintiff also asserts a value in dispute of 5 million Euros (approximately $5,500) for both patents. In November 2019, the first instance court accepted the claim of infringement for one of the two patents and the Company has filed an appeal to the Appeals Court Dusseldorf and is challenging the validity of the allegedly infringed patent in the German Patent Court. Also, in November 2019 the first instance court stayed the infringement proceedings regarding the other one of the two patents since it considered it to be highly likely that the patent would be invalid. The Company believes that it has meritorious defenses to the claims asserted and intends to vigorously defend against these lawsuits. F-17 SOLAREDGE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share and per share data) NOTE 8:- COMMITMENTS AND CONTINGENT LIABILITIES (Cont.) In May 2019, the Company was served with three lawsuits by Huawei Technologies Co., Ltd., a Chinese entity (Huawei), against the Company's two Chinese subsidiaries and its equipment manufacturer in China. The lawsuits, filed in the Guangzhou intellectual property court, allege infringement of three patents and ask for an injunction of manufacture, use, sale and offer for sale, and damage awards of 30 million RMB (approximately $4,250). Following the receipt of the lawsuits, the Company filed three lawsuits in China against Huawei for unauthorized use of patented technology. The Company believes that it has meritorious defenses to the claims asserted and intends to vigorously defend against these lawsuits. In August 2019, the Company was served with a lawsuit by certain former shareholders of S.M.R.E S.p.A (SMRE), against its Italian subsidiary that purchased the shares of SMRE in the tender offer which followed the SMRE Acquisition. The shareholders who tendered their shares are asking for the difference between 6 Euro per share, which is the amount they tendered their shares, and 6.77 Euro per share, for a total award of 2.7 million Euros (approximately $2,950). The Company believes it has meritorious defenses to the claims asserted and intends to vigorously defend against this lawsuit. In December 2019, the Company received a lawsuit filed by a former consultant of the Company and its Israeli subsidiary in the amount of 25.5 million NIS (approximately $7,150) claiming damages caused relating to a terminated consulting agreement and stock options therein. The Company believes it has meritorious defenses to the claims asserted and intends to vigorously defend against this lawsuit.