SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 14, 2007
____________________
Exact Name of Registrant as
Specified in Its Charter: CalAmp Corp.
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DELAWARE 0-12182 95-3647070
_____________________________ ____________ _____________
State or Other Jurisdiction of Commission I.R.S. Employer
Incorporation or Organization File Number Identification No.
Address of Principal Executive Offices: 1401 N. Rice Avenue
Oxnard, CA 93030
_________________________
Registrant's Telephone Number, Including
Area Code: (805) 987-9000
_________________________
Former Name or Former Address,
if Changed Since Last Report: Not applicable
_____________________________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 425 under the Exchange Act
(17 CFR 240.14.a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On December 14, 2007, CalAmp Corp. ("CalAmp") entered into a
settlement agreement with EchoStar Technologies Corporation ("EchoStar")
that resolves matters regarding a product performance issue affecting Direct
Broadcast Satellite ("DBS") equipment manufactured by CalAmp for this
customer.
As previously disclosed, certain products shipped by CalAmp to
EchoStar experienced a field performance issue as a result of the premature
deterioration of printed circuit board ("PCB") laminate material provided by
another vendor. In addressing this matter, earlier this year EchoStar began
returning product to CalAmp for corrective action and put on hold new orders
for CalAmp equipment, pending the requalification of all products
manufactured by CalAmp for EchoStar.
Under terms of the settlement agreement, CalAmp agreed to rework
certain DBS products previously returned to CalAmp or to be returned over a
15 month period and will provide extended warranty periods for workmanship
(18 months) and product failures due to the issue with the PCB laminate
material (36 months). In addition, as part of the settlement:
* CalAmp issued to EchoStar one million shares of CalAmp
common stock.
* CalAmp issued to EchoStar a warrant to purchase an additional
350,000 shares of common stock at $3.72 per share, which is 110% of
the volume-weighted average price of CalAmp's common stock for the
120 calendar days immediately preceding the date of the settlement
agreement, exercisable for three years.
* EchoStar agreed to restrictions on 500,000 shares of the common
stock issued in connection with the settlement and the warrant
shares that limit sales to 285,000 shares in any one year period
following the settlement date. EchoStar also agreed to vote all of
its CalAmp shares (including the warrant shares) either with the
recommendation of CalAmp's Board of Directors or in the same
proportion as all other outstanding shares.
* CalAmp issued a $5 million non-interest bearing promissory note to
EchoStar that is payable at a rate of $5.00 per unit on the first
one million DBS units purchased by EchoStar after the date of the
settlement agreement. The promissory note, which is subordinated
to the outstanding indebtedness under CalAmp's bank credit
facility, will be accelerated if CalAmp becomes insolvent, files
for bankruptcy, or undergoes a change of control.
* CalAmp granted piggyback registration rights to EchoStar to include
its CalAmp shares in certain offerings by CalAmp.
* EchoStar agreed to pay $1.3 million of $2.3 million in outstanding
accounts receivable due to CalAmp, with the remaining $1 million of
receivables canceled by CalAmp as additional consideration for the
settlement.
* The parties agreed to immediately release each other from claims
related to certain products manufactured with the defective PCB
laminate material, and to release claims related to certain other
products upon the later of: (i) the 15-month anniversary of the
settlement agreement; and (ii) the date that CalAmp has shipped a
total of 400,000 reworked products; provided that if this delayed
release date has not occurred within two years of the original
settlement date, such claims will not be released. In addition,
each party has agreed not to initiate any proceeding with respect
to the delayed release claims prior to the earlier of the delayed
release date and the second anniversary of the settlement, subject
to certain acceleration events based on CalAmp's performance under
the settlement agreement.
Based on currently available information, CalAmp believes that its
previously established reserves as of August 31, 2007, the end of its most
recently reported fiscal quarter, will be adequate to cover the total costs
of this settlement agreement. However, it is possible that the final
charges could be materially different from the amount of existing reserves.
A copy of the settlement agreement and agreements ancillary to the
settlement agreement, and a copy of CalAmp's press release, dated December
17, 2007, with respect to the settlement agreement, are each filed as an
exhibit to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
4.1 Warrant, dated December 14, 2007, issued by CalAmp Corp. to
EchoStar Technologies Corporation.
10.1 Settlement Agreement, dated December 14, 2007, by and between
CalAmp Corp. and EchoStar Technologies Corporation.
10.2 Subordinated Promissory Note, dated December 14, 2007, in the
amount of $5,000,000 issued by CalAmp Corp. to EchoStar
Technologies Corporation.
10.3 Registration Rights Agreement, dated December 14, 2007, by and
between CalAmp Corp. and EchoStar Technologies Corporation.
10.4 Voting and Lock-Up Agreement, dated December 14, 2007, by and
between CalAmp Corp. and EchoStar Technologies Corporation.
99.1 Press release of CalAmp Corp., dated December 17, 2007,
announcing the settlement agreement with EchoStar Technologies
Corporation
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALAMP CORP.
December 17, 2007 By: /s/ Richard K. Vitelle
___________________ _________________________
Date Richard K. Vitelle,
Vice President-Finance
(Principal Financial Officer)