-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BFK7JS4TeF3prRv/WQUWBQFhJKsdarOTcYns3J0cBusSdgkLv/A4pJAjskYM+5nF MqRovo43fcAkSbK3YTjzRQ== 0000730255-07-000045.txt : 20071217 0000730255-07-000045.hdr.sgml : 20071217 20071217081637 ACCESSION NUMBER: 0000730255-07-000045 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20071214 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071217 DATE AS OF CHANGE: 20071217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CalAmp Corp. CENTRAL INDEX KEY: 0000730255 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 953647070 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12182 FILM NUMBER: 071308883 BUSINESS ADDRESS: STREET 1: 1401 N. RICE AVENUE CITY: OXNARD STATE: CA ZIP: 93030 BUSINESS PHONE: 8059879000 MAIL ADDRESS: STREET 1: 1401 N. RICE AVENUE CITY: OXNARD STATE: CA ZIP: 93030 FORMER COMPANY: FORMER CONFORMED NAME: CALIFORNIA AMPLIFIER INC DATE OF NAME CHANGE: 19920703 8-K 1 form8-k_echo.txt FORM 8-K ITEM 1.01 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. ___________________________________ 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) EX-4 2 exh_4-1.txt WARRANT DATED DECEMBER 14, 2007 EXHIBIT 4.1 THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), NOR HAVE THEY BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (B) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. WARRANT TO PURCHASE COMMON STOCK OF CALAMP CORP. FOR VALUE RECEIVED, subject to the terms and conditions herein set forth, EchoStar Technologies Corporation, a Texas corporation (the "Customer"), or its permitted successors and assigns (collectively, "Holder") is entitled to purchase from CalAmp Corp., a Delaware corporation (the "Company"), at any time prior to the Expiration Date (as defined below), at a price per share as set forth in Section 1 hereof (the "Warrant Price"), Three Hundred Fifty Thousand (350,000) fully paid and non- assessable shares of the common stock (the "Common Stock") of the Company, par value $0.01 per share (the "Shares"). On or prior to the date of issuance of this Warrant, the Customer and the Company have entered into a Settlement Agreement dated as of December 14, 2007 (the "Settlement Agreement"). 1. Warrant Price. The Warrant Price for each of the Shares purchasable hereunder shall be equal to $3.72, 110% of the Average Stock Price (as defined in the Settlement Agreement), subject to adjustment as provided in Section 7. 2. Expiration of Warrant. This Warrant shall expire and shall no longer be exercisable after the third anniversary of the date hereof (the "Expiration Date"). 3. No Stockholder Rights. This Warrant shall not entitle Holder to any of the rights of a stockholder of the Company until such time as Holder exercises this Warrant. 4. Reservation of Shares. The Company covenants that during the period this Warrant is exercisable it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the maximum number of shares of Common Stock issuable upon the exercise of this Warrant. The Company agrees that its issuance of this Warrant shall constitute full authority to its officers to instruct the Company's transfer agent to issue the necessary certificates for shares of Common Stock upon the exercise of this Warrant. 5. Exercise of Warrant. (a) This Warrant may be exercised by Holder, in whole or in part, by the surrender of this Warrant at the principal office of the Company, accompanied by an executed copy of the Exercise Form attached hereto and payment in full of the aggregate Warrant Price for the Shares being purchased upon such exercise. In the event of exercise of this Warrant in compliance with the provisions hereof, certificates for the Shares so purchased shall be delivered to Holder promptly and, unless this Warrant has been fully exercised or expired, a new Warrant representing that portion of the Shares, if any, with respect to which this Warrant will not then have been exercised, shall be issued to Holder. The Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and Holder shall be treated for all purposes as the holder of record of such shares as of the close of business on such date. (b) Issuance of certificates for the Shares upon the exercise of this Warrant shall be made without charge to the registered Holder hereof for any issue or transfer tax or other incidental expense with respect to the issuance of such certificates, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the registered holder of this Warrant or in such name or names as may be directed by the registered holder of this Warrant; provided, however, that in the event certificates for the Shares are to be issued in a name other than the name of the registered Holder of this Warrant, this Warrant, when surrendered for exercise, shall be accompanied by the Assignment Form attached hereto duly executed by Holder hereof, and provided further, that any such transfer shall comply with Section 6 hereof. 6. Transfer or Assignment of Warrant. (a) This Warrant, and any rights hereunder, may not be assigned or transferred, except as provided herein and in accordance with and subject to the provisions of (i) applicable state securities laws, and (ii) the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (such Act and such rules and regulations being hereinafter collectively referred to as the "Act"). Any purported transfer or assignment made other than in accordance with this Section 7 shall be null and void and of no force and effect. (b) This Warrant, and any rights hereunder, may be transferred or assigned only upon receipt by the Company of (i) notice of the proposed transfer or assignment and a detailed statement of the circumstances surrounding the proposed transfer or assignment, (ii) if reasonably requested by the Company, an opinion of counsel reasonably satisfactory to the Company that (A) the transferee is a person to whom this Warrant may be legally transferred without registration under the Act, and (B) such transfer will not violate any applicable law or governmental rule or regulation, including, without limitation, any applicable federal or state securities law and (iii) an agreement in writing that the transferee shall be subject to each of the terms of that certain Voting and Lock-Up Agreement, dated as of December 14, 2007, by and between the Company and the Customer. (c) Any assignment permitted hereunder shall be made by surrender of this Warrant to the Company at its principal office with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, if any. In such event, the Company shall, without charge, execute and deliver a new warrant in the name of the assignee named in such instrument of assignment in the amount so assigned and this Warrant shall be promptly canceled; provided, however, that in the event that Holder hereof shall assign or transfer less than the full amount of this Warrant, a new warrant evidencing the remaining portion of this Warrant not so assigned or transferred shall be issued in the name of Holder. 7. Adjustments to Shares. (a) If outstanding shares of the Company's Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Warrant Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If outstanding shares of Common Stock shall be combined into a smaller number of shares, the Warrant Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Warrant Price, the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Warrant Price in effect immediately prior to such adjustment, by (ii) the Warrant Price in effect immediately after such adjustment. (b) If any capital reorganization or reclassification of the capital stock of Company, any consolidation or merger of the Company with another entity, or the sale, lease or exchange of all or substantially all of the Company's assets to another entity shall be effected in such a way that holders of shares of Common Stock of the Company shall be entitled to receive stock, securities or assets with respect to or in exchange for such shares, then, as a condition precedent to such reorganization, reclassification, consolidation, merger, sale, lease or exchange, lawful and adequate provisions shall be made whereby the holder shall thereafter have the right to purchase and receive upon the basis and the terms and conditions specified in this Agreement and in lieu of the shares of Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such shares of stock, securities or assets as may be issued or payable in such reorganization, reclassification, consolidation, merger, sale, lease or exchange with respect to or in exchange for the number of shares of Common Stock purchasable and receivable upon the exercise of the rights represented hereby had such rights been exercised immediately prior thereto, and in any such case appropriate provision shall be made with respect to the rights and interests of Holder to the end that the provisions hereof shall thereafter be applicable, as nearly as may be possible, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company will not effect any such reorganization, recapitalization, consolidation, merger, sale, lease or exchange, unless prior to the consummation thereof the successor entity (if other than Company) resulting from such consolidation or merger or the entity purchasing or leasing such assets or acquiring such surviving or resulting entity shall assume by written instrument, executed and mailed or delivered to Holder at the last address thereof appearing on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase. (c) When any adjustment is required to be made in the number of shares of Common Stock purchasable hereunder or the Warrant Price pursuant to this Section 7, the Company shall promptly mail to Holder a certificate setting forth (i) a brief statement of the facts requiring such adjustment, (ii) the Warrant Price after such adjustment and (iii) the kind and amount of stock or other securities or property into which this Warrant shall be exercisable after such adjustment. 8. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new warrant identical in tenor and date in lieu of this Warrant. 9. General. This Warrant shall be governed by and interpreted in accordance with the laws of the State of Delaware, except for its principles of conflicts of laws. The headings in this Warrant are for purposes of convenience and reference only and shall not be deemed to constitute a part hereof. Neither this Warrant nor any term hereof may be changed, waived, discharged or terminated orally, but rather only by an instrument in writing signed by the Company and Holder. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute in this Warrant. All notices and other communications from the Company to Holder shall be mailed by prepaid courier or first-class registered or certified mail, postage pre-paid, to the address furnished to the Company in writing by the last holder who shall have furnished an address to the Company in writing. Issued this 14th day of December, 2007. CALAMP CORP. By: /s/ Fred Sturm ___________________ Name: Fred Sturm Title: CEO FORM OF ASSIGNMENT (To be signed only upon assignment of Warrant) FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ (Name and address of assignee must be printed or typewritten) _____________ shares of CalAmp Corp. Common Stock purchasable under the within Warrant, hereby irrevocably constituting and appointing ____________________ Attorney to transfer said Warrant on the books of the Company, with full power of substitution in the premises. Dated: _____________ _______________________________ (Signature of Registered Owner) EXERCISE FORM (to be executed only upon exercise of Warrant) To: CalAmp Corp. 1401 N. Rice Avenue Oxnard, CA 93030 The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby irrevocably elects to purchase _____________ shares of the Common Stock, par value $0.01, covered by such Warrant and herewith makes payment of $_____________, representing the full purchase price for such shares at the price per share provided for in such Warrant. The undersigned requests that (1) a certificate for such shares be registered in the name of the undersigned hereinafter set forth and that such certificate be delivered to the undersigned at the address hereinafter set forth, and (2) unless the attached Warrant has been fully exercised or expired, a new Warrant representing that portion of the shares of Common Stock, if any, with respect to which the attached Warrant will not then have been exercised, be issued to the undersigned. Dated: ____________ Name: _______________________ Signature _______________________ Address: _______________________ _______________________ EX-10 3 exh_10-1.txt SETTLEMENT AGREEMENT DATED DECEMBER 14, 2007 EXHIBIT 10.1 SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (the "Agreement") is made and entered into as of December 14, 2007, by and between CalAmp Corp., a Delaware corporation ("CalAmp"), and EchoStar Technologies Corporation, a Texas corporation (the "Customer"). R E C I T A L S WHEREAS, CalAmp from time to time manufactures and sells to the Customer the Products (as defined below) and certain of the Products shipped to the Customer by CalAmp have been found to be prone to failures related to local oscillator drift of +/- 5MHz (the "Defects"); WHEREAS, the Customer believes that it has claims against CalAmp with respect to such defective Products; WHEREAS, CalAmp is currently in default with respect to the financial covenants (the "Default") under a Credit Agreement (the "Credit Agreement") between CalAmp and Bank of Montreal, as administrative agent, and the other financial institutions that from time to time may become parties to the Credit Agreement (collectively, the "Lenders"); WHEREAS, this Default precludes CalAmp from any additional borrowing under the Credit Agreement until CalAmp is able to obtain a waiver from the Lender and/or an amendment of the Credit Agreement; WHEREAS, CalAmp believes that a settlement with the Customer will facilitate negotiations with the Lenders regarding a waiver of the Default or amendment of the Credit Agreement; WHEREAS, each of CalAmp and the Customer believe that it is in its best interest to resolve any potential matters relating to such defective Products expeditiously and to cooperate with the other party to formulate a plan for the continued manufacture and sale of Products by CalAmp to the Customer; WHEREAS, the settlement reflected in this Agreement has been reviewed by legal counsel, and CalAmp and the Customer each agree that this Agreement is fair, reasonable, and adequate; WHEREAS, CalAmp expressly and vigorously denies any wrongdoing, and does not admit or concede any actual or potential fault, wrongdoing or liability in connection with any fact or Claim (as defined below) that has been or could have been alleged against them in connection with any of the Released Claims (as defined below); and WHEREAS, CalAmp considers it desirable for the Released Claims to be settled and resolved at this time because such settlement will confer substantial benefits on CalAmp and its stockholders, including, among other things, facilitating negotiations with its Lenders to resolve the Default. A G R E E M E N T NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. DEFINITIONS. The following terms have the following meanings when used in this Agreement: 1.1 "AO2 Products" means (a) all DP Twin Products, (b) with respect to the DPP Twin, Products manufactured by CalAmp with a date code before 613 and (c) with respect to the DP Dual, Products manufactured by CalAmp with a date code before 639. 1.2 "AO3 Products" means (a) with respect to the DPP Twin, Products manufactured by CalAmp with a date code on or after 613, (b) with respect to the DP Dual, Products manufactured by CalAmp with a date code on or after 639 and (c) all DPP Triple Products manufactured by Cal Amp. 1.3 "AO3 Release Date" means the later of (a) the date that is fifteen (15) months from the Closing Date and (b) the date on which CalAmp has shipped to the Customer in the aggregate 400,000 AO3 Products that have been re-worked or refurbished pursuant to Paragraph 3.1(e) below and are free of any Defects and otherwise in good working order; provided, however, that if the AO3 Release Date has not occurred by the date that is two (2) years after the Closing Date, the AO3 Release Date shall not occur as set forth in Paragraph 4.3. 1.4 "Affiliate" means, with respect to a specified Person, any other Person that (a) directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with the specified Person or (b) is a predecessor, successor or assign (including by merger or otherwise by operation of law) of such specified Person. 1.5 "Average Stock Price" means the average of the daily volume- weighted sales prices per share of Common Stock on the NASDAQ-GS Market for each trading day within the one hundred twenty (120) consecutive calendar days immediately preceding the Closing Date, as reported by the NASDAQ-GS Market. 1.6 "Business Day" means any day other than a Saturday, Sunday, or legal holiday in the State of California in which state government is not generally open for business to the public. 1.7 "Claim" means any (a) right to payment or value, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, (b) right to a legal or equitable remedy for breach of performance, whether or not such right to a legal or equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured, and/or (c) right granted by statute, regulation, common law or order or judgment of any agency or court not otherwise covered by clauses (a) or (b) above. 1.8 "Common Stock" means the Common Stock, par value $.01 per share, of CalAmp. 1.9 "Control" means the possession, directly or indirectly through one or more intermediaries, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Without limiting the generality of the foregoing, for purposes of this Agreement, a specified Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly through one or more intermediaries, (a) the power to elect, designate or otherwise cause the designation of a majority of the members of the board of directors or the equivalent governing body of such specified Person, or (b) legal or beneficial ownership of at least fifty-one percent (51%) of the equity interests of such Person. "Controlling" and "Controlled" have meanings correlative thereto. For purposes of this Agreement "beneficial ownership" shall have the meaning set forth in Rule 13d-3(a) as currently promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. 1.10 "DPP Triple Qualification" means the date of release for manufacture by CalAmp of the DPP Triple product design after CalAmp has received approval in writing by the Customer of the DPP Triple product design following testing by the Customer to validate that such design meets the product specifications of the Customer for the DPP Triple. 1.11 "DPP Twin Qualification" means the date of release for manufacture by CalAmp of the DPP Twin product design after CalAmp has received approval in writing by the Customer of the DPP Twin product design following testing by the Customer to validate that such design meets the product specifications of the Customer for the DPP Twin. 1.12 "Liabilities" means any and all direct or indirect costs, expenses, actions, causes of actions, suits, judgments, controversies, damages, claims, indebtedness, obligations, commitments, deficiencies, guarantees, liabilities or demands of any nature, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, liquidated or unliquidated, matured or unmatured, contingent or direct, whether arising at common law, in equity, or under any statute, regulation or order, based in whole or in part upon any act or omission or other occurrence taking place on or prior to the date of this Agreement. 1.13 "Paragraph" means a numbered paragraph of this Agreement, unless otherwise noted, and all references to a Paragraph shall include all subparts or subparagraphs of that Paragraph. 1.14 "Parties" means CalAmp and the Customer, individually and collectively, and their successors and assigns. Each of the Parties may be individually referred to herein as a "Party." 1.15 "Person" or "Persons" means an individual, trustee, partnership, limited partnership, limited liability partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture, business association, firm, governmental agency or authority or other entity or organization of any type. 1.16 "Product" or "Products" means any and each of the following: (a) the product identified by CalAmp as the DP Dual and by the Customer as the LNBF, Dish Pro Dual, part number 120810 (the "DP Dual"), (b) the product identified by CalAmp as the DP Twin and by the Customer as the LNBF, Dish Pro Twin, part number 107102 (the "DP Twin"), (c) the product identified by CalAmp as the DPP Twin and by the Customer as the LNBF, Dish Pro Plus Twin, part number 134336 (the "DPP Twin") and (d) the product identified by CalAmp as the DPP Triple and by the Customer as the LNBF, Dish 1000 Dish Pro Plus, part number 145511 (the "DPP Triple"). For the avoidance of doubt, Products include AO2 Products and AO3 Products that are re-worked and/or refurbished by CalAmp as set forth herein. 1.17 "Subsidiary" means, as to any specified Person, (a) any Person the accounts of which are, or are required to be, consolidated with those of the specified Person's consolidated financial statements or (b) any Person that is Controlled by such specified Person. 2. CLOSING. 2.1 Closing. Consummation of the settlement contemplated by this Agreement (the "Closing") shall take place simultaneously with the execution of this Agreement by each of the Parties. The date upon which the Closing occurs shall be referred to herein as the "Closing Date." The releases and waivers set forth in Paragraphs 4.1 and 4.2 shall become effective upon the Closing and the releases and waivers set forth in Paragraphs 4.3 and 4.4 shall become effective as of the AO3 Release Date. In addition, no consideration shall be paid or given by CalAmp or the Customer as set forth in Paragraph 3 until the Closing Date. 2.2 Deliveries by CalAmp. At the Closing, CalAmp shall deliver, or cause to be delivered: (a) a certificate representing all of the CalAmp Shares (as defined below); (b) an executed copy of the Note (as defined below); (c) an executed copy of the Warrant (as defined below); and (d) such other documents and items as the Customer may reasonably request. 2.3 Deliveries by the Customer. At the Closing, the Customer shall deliver, or cause to be delivered: (a) the payment contemplated by Paragraph 3.2(c) below; (b) an executed copy of the Voting and Lock-Up Agreement; and (c) such other documents and items as CalAmp may reasonably request. 3. CONSIDERATION FOR AGREEMENT. 3.1 Consideration By CalAmp. To induce the Customer to give the consideration described in Paragraph 3.2 of this Agreement, and to make the representations, warranties, covenants and other agreements set forth herein, CalAmp agrees to the following: (a) CalAmp Shares. Upon the Closing, CalAmp shall issue to the Customer 1,000,000 shares of Common Stock (the "CalAmp Shares"). Such CalAmp Shares shall be subject to a voting and lock-up agreement substantially in the form of Annex A attached hereto (the "Voting and Lock- Up Agreement"), pursuant to which (i) the Customer will agree to vote all of the CalAmp Shares either (A) with the Board of Directors of CalAmp (the "Board") or (2) in proportion to the other outstanding shares and (ii) the Customer will agree, with respect to 500,000 of such CalAmp Shares (the "Restricted Shares"), not to sell more than 285,000 of such Restricted Shares and any shares issued upon exercise of the Warrant in any one year period following the Closing Date, subject in any event to securities law restrictions. The other, unrestricted 500,000 CalAmp Shares shall be immediately available for sale by the Customer and not restricted in any way, other than securities law restrictions. The Customer shall also be granted certain piggyback registration rights pursuant to a registration rights agreement substantially in the form of Annex B attached hereto (the "Registration Rights Agreement"). (b) Warrants. Upon the Closing, CalAmp shall deliver to the Customer a warrant (the "Warrant") to purchase 350,000 shares of Common Stock in substantially the form attached hereto as Annex C. Such warrant shall be exercisable for a three year period beginning upon the date hereof at an exercise price representing a 10% premium over the Average Stock Price. Any shares of Common Stock purchased by the Customer pursuant to the Warrant shall be considered to be Restricted Shares and subject to the Voting and Lock-Up Agreement. (c) Subordinated Note. Upon the Closing, CalAmp shall deliver to the Customer a non-interest bearing promissory note which shall only be subordinated to the secured claims of the Lenders under the Credit Agreement (the "Note") in the amount of $5,000,000 in substantially the form attached hereto as Annex D. Such Note shall provide for a payment schedule of $5.00 per unit of Product purchased and fully paid for by the Customer subsequent to the Closing Date, up to a maximum of 1,000,000 units of Product, with an acceleration of the full principal amount if CalAmp becomes insolvent or files for bankruptcy or upon a change of control of CalAmp. Notwithstanding any other provision herein or in any other document executed in connection with this Agreement, the Customer shall have the absolute right to setoff or recoup against any amounts due and payable under the Note pursuant to its terms. (d) Accounts Receivable. Upon the Closing, the Customer shall setoff and recoup $1,000,000 worth of accounts receivable due to CalAmp against $1,000,000 of the amount due and owing from the Customer on account of sales invoices to the Customer that were dated on or before September 10, 2007 as described in Paragraph 3.2(c). (e) Services. CalAmp shall provide re-work and/or refurbishment services on AO3 Products (i) previously returned to CalAmp by the Customer and held by CalAmp as of the Closing Date or (ii) returned to CalAmp during the 15 month period following the Closing Date, in each case at no charge to the Customer. All such re-work and/or refurbishment services on AO3 Products shall be completed no later than two (2) years after the Closing Date. In addition, CalAmp and the Customer agree to review the economic and technical feasibility of re-working and/or refurbishing AO2 Products. In the event that CalAmp and the Customer mutually agree to re-work and/or refurbish AO2 Products within 120 days following the Closing Date, then CalAmp shall provide re-work and/or refurbishment services on AO2 Products (A) previously returned to CalAmp by the Customer and held by CalAmp as of the Closing Date or (B) returned to CalAmp during the 15 month period following the Closing Date; provided that, in each case, the Customer shall pay to CalAmp a negotiated reasonable fee for such re-work and/or refurbishment services on AO2 Products. Any re-work and refurbishment services provided by CalAmp pursuant to this Paragraph 3.1(e) shall be performed pursuant to product and process specifications provided or agreed to by the Customer. (f) Warranty. For all future shipments of Products by CalAmp to the Customer, CalAmp shall provide (i) an 18-month warranty for workmanship and (ii) a 36-month warranty solely with respect to any Defects (which, for the purposes of this Subparagraph (f), shall include any local oscillator drift of greater than +/- 2MHz) in the Products, in each case from the date of original manufacture or, if applicable, the date of re-work or refurbishment pursuant to clause (e) above; provided that, with respect to Products where the only services provided prior to re-shipment of the Product pursuant to clause (e) above are testing and the replacement of the housing for the Product, such warranty shall not apply. (g) Releases. CalAmp shall give the Released Customer Parties (as defined below) the waivers and releases described in Paragraphs 4.2 and 4.4 of this Agreement. 3.2 Consideration by the Customer. To induce CalAmp to give the consideration described in Paragraph 3.1 of this Agreement, and to make the representations, warranties, covenants, and other agreements set forth herein, the Customer agrees to the following: (a) Release. The Customer shall give the Released CalAmp Parties (as defined below) the waivers and releases described in Paragraphs 4.1 and 4.3 of this Agreement. (b) Orders. The Customer shall release orders and work with CalAmp with respect to future orders of Product, in each case as set forth on Annex E attached hereto; provided, however, that the Customer shall not be obligated, for any reason, to place such orders if CalAmp delivers Products that are not free of Defects and otherwise in good working order after the DPP Twin Qualification and/or DPP Triple Qualification, as appropriate. (c) Accounts Receivable. Upon the Closing, the Customer shall agree to forbear from exercising its rights of setoff and/or recoupment and pay to CalAmp by check or wire transfer (i) an amount equal to $1,277,458 in satisfaction of all CalAmp sales invoices to the Customer that were dated on or before September 10, 2007, other than $1,000,000 in invoices that will be recouped or setoff pursuant to Paragraph 3.1(d) and (ii) any amounts payable to CalAmp by the Customer pursuant to sales invoices dated after September 10, 2007 that, by their terms, are due and payable as of the date hereof. (d) Future Payment Terms. The Customer agrees that future payments for products purchased by the Customer from CalAmp shall be on 30 day terms with payments occurring once a month. (e) Approval. Subject to Paragraph 3.1(e), above, the Customer agrees and acknowledges that CalAmp shall have the right, with respect to all AO2 Products in CalAmp's possession as of the Closing Date or provided to CalAmp during the 15 months following the Closing Date, to destroy such AO2 Products or destroy the entire RF board on all such AO2 Products and salvage other usable components to the extent that CalAmp determines that it may be cost effective to do so for future use or salvage value. In the event that CalAmp determines that it will destroy AO2 Products pursuant to this Paragraph 3.2(e), the Customer will provide written approval to CalAmp for such destruction and CalAmp will provide a written certification of such destruction to the Customer promptly following such destruction. (f) Price Targets. The Customer agrees to the price targets set forth on Annex E attached hereto. 4. RELEASES, WAIVERS AND RELATED AGREEMENTS. 4.1 Initial Release by the Customer. As of the Closing Date, the Customer, on behalf of itself and any of its Affiliates, forever waives, releases, discharges and acquits CalAmp, as well as CalAmp's officers, directors, stockholders, Subsidiaries, past Subsidiaries, Affiliates, past Affiliates, partners, members, agents, attorneys, assigns, beneficiaries, employees, heirs, insurers, predecessors, successors and other professional persons (the "Released CalAmp Parties"), directly or indirectly, derivatively, on its own behalf and on behalf of any of its Affiliates, from any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands of whatsoever character, whether known or unknown, accrued or unaccrued, arising out of or relating in any way to the Defects for all AO2 Products shipped by CalAmp to the Customer at any time through and including May 31, 2007. Any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands that are waived, released, discharged and acquitted by this Paragraph 4.1 are referred to herein as "Customer AO2 Released Claims." Without limiting the generality of the foregoing, the Customer AO2 Released Claims shall further expressly include: (a) any violations or claimed violations of any rules, regulations, orders or protocols of any U.S. state or federal agency having or claiming to have regulatory authority over any conduct that is the subject of any of the above Customer AO2 Released Claims; (b) any and all acts, omissions, facts, matters, transactions, occurrences, and oral or written statements and representations made or allegedly made in connection with, or directly or indirectly relating to, this Agreement, but only as such exist as of the Closing Date; and (c) any and all Claims for attorneys' fees, costs or disbursements in connection with or related in any manner to this Agreement. As of the Closing Date, the Customer retains any and all other Claims against CalAmp not specifically released pursuant to this Paragraph 4.1 and no other Claims of the Customer are being released on the Closing Date. 4.2 Initial Release by CalAmp. As of the Closing Date, CalAmp, on behalf of itself and any of its Affiliates, forever waives, releases, discharges and acquits the Customer, as well as the Customer's officers, directors, stockholders, Subsidiaries, past Subsidiaries, Affiliates, past Affiliates, partners, members, agents, attorneys, assigns, beneficiaries, employees, heirs, insurers, predecessors, successors and other professional persons (the "Released Customer Parties"), directly or indirectly, derivatively, on its own behalf and on behalf of any of its Affiliates, from any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands of whatsoever character, whether known or unknown, accrued or unaccrued, arising out of or relating in any way to failures related to the Defects for all AO2 Products shipped by CalAmp to the Customer at any time through and including May 31, 2007. Any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands that are waived, released, discharged and acquitted by this Paragraph 4.2 are referred to herein as "CalAmp AO2 Released Claims." Without limiting the generality of the foregoing, the CalAmp AO2 Released Claims shall further expressly include: (a) any violations or claimed violations of any rules, regulations, orders or protocols of any U.S. state or federal agency having or claiming to have regulatory authority over any conduct that is the subject of any of the above CalAmp AO2 Released Claims; (b) any and all acts, omissions, facts, matters, transactions, occurrences, and oral or written statements and representations made or allegedly made in connection with, or directly or indirectly relating to, this Agreement, but only as such exist as of the Closing Date; and (c) any and all Claims for attorneys' fees, costs or disbursements in connection with or related in any manner to this Agreement. As of the Closing Date, CalAmp retains any and all other Claims against the Customer not specifically released pursuant to this Paragraph 4.2 and no other Claims of CalAmp are being released on the Closing Date. 4.3 Further Release by the Customer; Forbearance. Effective as of the AO3 Release Date, the Customer, on behalf of itself and any of its Affiliates, forever waives, releases, discharges and acquits the Released CalAmp Parties, directly or indirectly, derivatively, on its own behalf and on behalf of any of its Affiliates, from any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands of whatsoever character, whether known or unknown, accrued or unaccrued, arising out of or relating in any way to failures related to the Defects for all AO3 Products shipped by CalAmp to the Customer at any time through and including May 31, 2007. Any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands that are waived, released, discharged and acquitted by this Paragraph 4.3 are referred to herein as "Customer AO3 Released Claims." Without limiting the generality of the foregoing, the Customer AO3 Released Claims shall further expressly include: (a) any violations or claimed violations of any rules, regulations, orders or protocols of any U.S. state or federal agency having or claiming to have regulatory authority over any conduct that is the subject of any of the above Customer AO3 Released Claims; (b) any and all acts, omissions, facts, matters, transactions, occurrences, and oral or written statements and representations made or allegedly made in connection with, or directly or indirectly relating to, this Agreement, but only as such exist as of the AO3 Release Date; and (c) any and all Claims for attorneys' fees, costs or disbursements in connection with or related in any manner to this Agreement, but only as such exist as of the AO3 Release Date. Notwithstanding the foregoing, if the AO3 Release Date has not occurred by the date that is two (2) years after the Closing Date, the AO3 Release Date shall not occur and the Customer AO3 Released Claims shall not be released. In addition, the Customer agrees that, from the date hereof through the earlier of (i) the AO3 Release Date and (ii) the second anniversary of the date hereof, the Customer will not, and will cause its Affiliates not to, institute or prosecute, directly or indirectly, any action or other proceeding based in whole or in part upon Claims related to AO3 Products shipped by CalAmp to the Customer at any time through and including May 31, 2007 (the "Forbearance"); provided, however, that the Forbearance shall be immediately null and void, with no force and effect, upon (A) the thirtieth (30th) day following written notice from the Customer to CalAmp of a failure of CalAmp in any material respect to perform its obligations under Paragraph 3.1 of this Agreement where such failure has not been cured during such 30-day period or (B) the fifth (5th) day following written notice from the Customer to CalAmp of a breach of any of representations and warranties set forth in Paragraph 5.1 of this Agreement. 4.4 Further Release by CalAmp. Effective as of the AO3 Release Date, CalAmp, on behalf of itself and any of its Affiliates, forever waives, releases, discharges and acquits the Released Customer Parties, directly or indirectly, derivatively, on its own behalf and on behalf of any of its Affiliates, from any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands of whatsoever character, whether known or unknown, accrued or unaccrued, arising out of or relating in any way to failures related to the Defects for all AO3 Products shipped by CalAmp to the Customer at any time through and including May 31, 2007. Any and all actions, causes of action, obligations, costs, damages, losses, Claims, Liabilities, restitution, and/or demands that are waived, released, discharged and acquitted by this Paragraph 4.4 are referred to herein as "CalAmp AO3 Released Claims" and, collectively with the Customer AO2 Released Claims, the Customer AO3 Released Claims and the CalAmp AO2 Released Claims, the "Released Claims." Without limiting the generality of the foregoing, the CalAmp AO3 Released Claims shall further expressly include: (a) any violations or claimed violations of any rules, regulations, orders or protocols of any U.S. state or federal agency having or claiming to have regulatory authority over any conduct that is the subject of any of the above CalAmp AO3 Released Claims; (b) any and all acts, omissions, facts, matters, transactions, occurrences, and oral or written statements and representations made or allegedly made in connection with, or directly or indirectly relating to, this Agreement, but only as such exist as of the AO3 Release Date; and (c) any and all Claims for attorneys' fees, costs or disbursements in connection with or related in any manner to this Agreement, but only as such exist as of the AO3 Release Date. Notwithstanding the foregoing, if the AO3 Release Date has not occurred by the date that is two (2) years after the Closing Date, the AO3 Release Date shall not occur and the CalAmp AO3 Released Claims shall not be released. In addition, CalAmp agrees that, from the date hereof through the earlier of (i) the AO3 Release Date and (ii) the second anniversary of the date hereof, CalAmp will not, and will cause its Affiliates not to, institute or prosecute, directly or indirectly, any action or other proceeding based in whole or in part upon Claims related to AO3 Products shipped by CalAmp to the Customer at any time through and including May 31, 2007 (the "CalAmp Forbearance"); provided, however, that the CalAmp Forbearance shall be immediately null and void, with no force and effect, upon (A) the thirtieth (30th) day following written notice from CalAmp to the Customer of a failure of the Customer in any material respect to perform its obligations under Paragraph 3.2 of this Agreement where such failure has not been cured during such 30-day period or (B) the fifth (5th) day following written notice from CalAmp to the Customer of a breach of any of representations and warranties set forth in Paragraph 5.2 of this Agreement. 4.5 Additional Release Related Provisions. (a) Specific Limit of Waivers. Notwithstanding anything herein to the contrary, nothing in this Agreement shall constitute a limitation on, or waiver of, any right to enforce any obligation or pursue any remedy specifically provided for in this Agreement. (b) Fairness of Settlement and Releases. The Parties agree that this Agreement and the releases and waivers in this Agreement are fair and reasonable and adequate to provide complete satisfaction of the Released Claims. (c) Section 1542 Waiver. Each of the Customer and CalAmp expressly waives the benefits of any statutory provision or common law rule that provides, in sum or substance, that a release does not extend to Claims which the Customer or CalAmp does not know or suspect to exist in its favor at the time of executing the release, which if known by it, would have materially affected its settlement with the other party. In particular, but without limitation, each of the Customer and CalAmp expressly understands the provisions of California Civil Code Section 1542, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. Each of the Customer and CalAmp hereby agrees that (i) the provisions of California Civil Code Section 1542 are hereby knowingly and voluntarily waived and relinquished, and (ii) the provisions of all similar federal or state laws, rights, rules, or legal principles of any other jurisdiction, to the extent that they are found to be applicable herein, also are hereby knowingly and voluntarily waived and relinquished. Notwithstanding the foregoing waiver of California Civil Code Section 1542, each of the Customer and CalAmp acknowledges that the releases set forth in this Agreement are specific to the Released Claims set forth herein and are not intended to create general releases as to all claims, or potential claims, between the releasing and released Parties. (d) Other Unknown Claims. In connection with the releases contained herein, each of the Customer and CalAmp acknowledges that it is aware that it may hereafter discover Released Claims presently unknown or unsuspected, or facts in addition to or different from those which it now knows or believes to be true with respect to the matters released herein. Nevertheless, it is the intention of each of the Customer and CalAmp in executing this Agreement to fully, finally and forever settle and release all such matters, and all Released Claims relating thereto, which exist, hereafter may exist, or might have existed (whether or not previously or currently asserted), in accordance with the releases contained herein. (e) Essential Terms. All Parties hereby expressly agree and acknowledge that each of the releases contained herein constitutes an essential term of this Agreement and that the Agreement shall be null and void if any release shall be deemed ineffective. (f) Breaches of Agreement. The Parties expressly understand that both direct and indirect breaches of the provisions of this Agreement are proscribed. Therefore, each of the Customer and CalAmp covenants that it will not institute or prosecute, directly or indirectly, any action or other proceeding based in whole or in part upon (i) the CalAmp AO2 Released Claims and the Customer AO2 Released Claims, subject to the occurrence of the Closing Date and (ii) the CalAmp AO3 Released Claims and the Customer AO3 Released Claims, subject to the occurrence of the AO3 Release Date. Nothing in this Paragraph shall prohibit or interfere with (A) the Customer's right to setoff or recoup as set forth in Paragraph 3.1(c) of this Agreement or (B) either parties' right to assert that an event has occurred that nullifies and voids the Forbearance or CalAmp Forbearance as set forth in Paragraphs 4.3 and 4.4 of this Agreement. (g) Setoff and Recoupment. Notwithstanding any other provision herein or in any other document executed in connection with this Agreement, nothing shall enhance, impair or otherwise alter the any right the Customer may have to setoff or recoup any amounts arising or accruing after the Closing Date. 5. REPRESENTATIONS AND WARRANTIES. 5.1 Representations and Warranties of CalAmp. As a material inducement to the Customer to enter into this Agreement, CalAmp hereby represents and warrants to the Customer, which representations and warranties are, as of the date hereof, true, correct and complete and, as to Paragraph 5.1(f) below, will continue to be true, correct and complete: (a) Organization. CalAmp is a corporation duly incorporated and organized, and is validly existing and up-to-date in the filing of all corporate and similar returns, under the laws of the State of Delaware, its jurisdiction of incorporation, and has all requisite corporate power and capacity to own its properties and assets and to carry on its business as now conducted and as presently proposed to be conducted. (b) Due Authorization. CalAmp has all requisite power and authority, and has taken all action necessary, to execute and deliver this Agreement and any ancillary agreements referred to herein to which it is a party (the "CalAmp Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the CalAmp Ancillary Agreements by CalAmp and the consummation by CalAmp of the transactions contemplated hereby and thereby have been duly approved by the board of directors of CalAmp. No other proceeding on the part of CalAmp is necessary to authorize this Agreement and the CalAmp Ancillary Agreements and the transactions contemplated hereby and thereby. Each of this Agreement and the CalAmp Ancillary Agreements have been duly executed and delivered by CalAmp and is a legal, valid and binding obligation of CalAmp, enforceable against CalAmp in accordance with their respective terms except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally and except insofar as the availability of equitable remedies may be limited by applicable law. (c) No Conflicts. The execution, delivery and performance of and compliance with this Agreement and the consummation of the transactions contemplated hereby will not result in any violation or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, either a default under CalAmp's charter or bylaws, or any agreement or contract to which CalAmp is party, or, to the best of CalAmp's knowledge, a violation of any applicable laws, regulations or court orders, or an event which results in the creation of any lien, charge or encumbrance upon any of the assets of CalAmp. (d) Consents and Approvals. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements, of state securities laws, no consent, approval or authorization of, declaration to, or filing or registration with, any governmental or regulatory authority, or any other Person, is required to be made or obtained by CalAmp in connection with the execution, delivery and performance by CalAmp of this Agreement and the consummation of the transactions contemplated hereby. (e) Valid Issuance of Stock. The CalAmp Shares, when issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non assessable, free and clear of all liens, claims, encumbrances and adverse interests of any kind, except for such encumbrances as may have been created by the Customer. The CalAmp Shares will be issued in compliance with or pursuant to exemptions from applicable federal and state United States securities laws. (f) Adequate Capitalization. CalAmp (i) has adequate capital and other resources to conduct its business in the ordinary course and (ii) is not insolvent as of the Closing Date or rendered insolvent as a result of entering into this Agreement. (g) Absence of Changes. Since October 11, 2007, there has been no event, change or effect that is materially adverse to the financial condition, business or results of operations of the Company. 5.2 Representations and Warranties of the Customer. As a material inducement to CalAmp to enter into this Agreement, the Customer hereby represents and warrants to CalAmp, which representations and warranties are, as of the date hereof, and will be, as of the Closing Date, true, correct and complete: (a) Organization. The Customer is a corporation duly incorporated and organized, and is validly existing and up-to-date in the filing of all corporate and similar returns under the laws of the State of Texas, its jurisdiction of incorporation, and has all requisite corporate power and capacity to own its properties and assets and to carry on its business as now conducted and as presently proposed to be conducted. (b) Due Authorization. The Customer has all requisite power and authority, and has taken all action necessary, to execute and deliver this Agreement and any ancillary agreements referred to herein to which it is a party (the "Customer Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. No proceeding on the part of the Customer is necessary to authorize this Agreement and the Customer Ancillary Agreements and the transactions contemplated hereby and thereby. Each of this Agreement and the Customer Ancillary Agreements has been duly executed and delivered by the Customer and is a legal, valid and binding obligation of the Customer, enforceable against the Customer in accordance with their respective terms except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally and except insofar as the availability of equitable remedies may be limited by applicable law. (c) No Conflicts. The execution, delivery and performance of and compliance with this Agreement and the consummation of the transactions contemplated hereby will not result in any violation or default, or be in conflict with or constitute, with or without the passage of time or the giving of notice or both, either a default under the Customer's charter or bylaws, or any agreement or contract to which the Customer is party, or, to the best of the Customer's knowledge, a violation of any applicable laws, regulations or court orders, or an event which results in the creation of any lien, charge or encumbrance upon any of the assets of the Customer. (d) Consents and Approvals. Except for ownership filings under the federal securities laws, no consent, approval or authorization of, declaration to, or filing or registration with, any governmental or regulatory authority, or any other Person, is required to be made or obtained by the Customer in connection with the execution, delivery and performance by the Customer of this Agreement and the consummation of the transactions contemplated hereby. (e) Claims. The Customer has not sold, assigned, transferred, or encumbered, or otherwise disposed of, in whole or in part, voluntarily or involuntarily, by operation of law or otherwise, any Claim of any nature whatsoever released or settled pursuant to this Agreement (f) Representations Regarding CalAmp Shares. The Customer acknowledges that it has had an opportunity to discuss the business, affairs and current prospects of CalAmp with its officers. The Customer further acknowledges having had access to information about CalAmp that it has requested. The Customer acknowledges that it is able to fend for itself in the transactions contemplated by this Agreement and has the ability to bear the economic risks of holding the CalAmp Shares pursuant to this Agreement. The CalAmp Shares will be acquired by the Customer for the Customer's own account, not as a nominee or agent, and not with a view to or in connection with the sale or distribution of any part thereof. The Customer understands that the CalAmp Shares being issued will not be registered. The Customer is an "accredited investor" as defined in Rule 501 under the Securities Act of 1933, as amended. It is understood by the Customer that each certificate representing the shares of Common Stock and any other securities issued in respect of such shares upon any stock split, stock dividend, recapitalization, merger or similar event shall be stamped or otherwise imprinted with a legend substantially in the following form: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A VOTING AND LOCK-UP AGREEMENT, AS MAY BE AMENDED FROM TIME TO TIME, (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SECURITIES, THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF THAT VOTING AND LOCK-UP AGREEMENT. 5.3 Survival of Representations and Warranties. The representations and warranties of the Parties set forth in Paragraphs 5.1 and 5.2 of this Agreement shall survive the Closing Date indefinitely. 6. NOTICE. 6.1 Form of Notice and Addresses. All notices required or permitted under this Agreement shall be in writing to the other Party and shall be delivered in person, by facsimile, by overnight mail, or by registered or certified mail, to the Parties at the following addresses and facsimile numbers: If to CalAmp: CalAmp Corp. 1401 N. Rice Ave. Oxnard, CA, 93030 Attn: Fred Sturm, CEO Facsimile No.: 805-482-5842 With a copy to: Gibson, Dunn & Crutcher LLP 333 S. Grand Ave. Los Angeles, California 90071 Attn: Peter F. Ziegler Facsimile No.: 213-229-6595 If to the Customer: EchoStar Technologies Corporation 9601 South Meridian Boulevard Englewood, Colorado 80112 Attn: Jeffrey H. Blum, Esq. Facsimile No.: 303-723-3024 With a copy to: Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street, 18th Floor Wilmington, Delaware 19801 Attn: Robert J. Dehney, Esq. Facsimile No.: 302-658-3989 6.2 Date of Delivery. Any notice required or permitted under this Agreement shall: (a) if delivered in person, be deemed to have been given or made at the time of delivery; (b) if sent via certified or registered mail, be deemed to have been given or made on the date of receipt; and (c) if sent by facsimile or other similar form of communication, be deemed to have been given or made on the first Business Day following the day on which it was sent. 6.3 Address Changes. Each party may each give written notice of a change of address in the same manner described in Paragraph 6.1, in which event all subsequent written communications shall be given to that Party at the changed address or addresses. 7. GENERAL PROVISIONS. 7.1 Admissions. CalAmp does not admit or concede any actual or potential liability in connection with any facts or claims that could have been alleged against them in connection with the Released Claims. The Parties agree that the terms of this Agreement reflect a good-faith settlement of all Parties hereto, reached voluntarily after consultation with experienced legal counsel. Neither this Agreement nor the settlement contained herein, nor any act performed or document executed pursuant to or in furtherance of this Agreement or the settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing or liability of any of CalAmp or the Released CalAmp Parties; (b) is or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of any of CalAmp or the Released CalAmp Parties in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal; or (c) shall be offered in evidence or alleged in any pleading, directly or indirectly, by any Party. In no event shall the Agreement, any of its provisions or any negotiations, statements or court proceedings relating to them or the settlement contained herein in any way be construed as, offered as, received as, used as or deemed to be evidence of any kind in any action, or in any judicial, administrative, regulatory or other proceeding, except in a proceeding to enforce this Agreement. Without limiting the foregoing, this Agreement, the settlement contained herein, any related negotiations, statements and documents delivered hereunder, and any court and regulatory proceedings shall not be construed as, offered as, received as, used as or deemed to be evidence of or an admission or concession of any liability or wrongdoing whatsoever on the part of CalAmp or the Released CalAmp Parties, or as a waiver by CalAmp or the Released CalAmp Parties of any applicable argument or defense. The Parties to this Agreement, and any other party entitled to enforce this Agreement, may use and file this Agreement and/or orders and judgments related hereto in any action that has been or may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good-faith settlement, judgment bar or reduction or any theory of claim preclusion or issue preclusion or similar defense or counterclaim. 7.2 Amendments. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by all of the Parties hereto. No waiver of any provision of this Agreement nor consent to any departure therefrom by any Party shall be effective unless the same shall be in writing and signed by CalAmp, with respect to any waiver or consent requested by the Customer, and by the Customer with respect to any waiver or consent requested by CalAmp. In either case, such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 7.3 Confidentiality. Subject to any SEC and stock exchange disclosure requirements, each of the Parties, and their respective representatives, agree that they shall keep and maintain this settlement and Agreement, the individual provisions hereof, the existence of this Agreement and settlement and the matters contemplated herein (collectively, "Confidential Settlement Information") in strict confidence, and shall not transmit, reveal, disclose or otherwise communicate any such information to any third party without the prior written consent of the other Party; provided that any information that would otherwise constitute Confidential Settlement Information that is required to be publicly disclosed by a Party pursuant to its SEC and stock exchange disclosure requirements shall not be deemed to be Confidential Settlement Information for purposes of this Agreement once disclosed pursuant to those obligations. Consistent with the above provisions, the Parties, and their respective counsel, agree to cooperate in good faith with respect to the timing and content of any initial press releases or public announcements of this settlement and Agreement pursuant to any SEC or stock exchange disclosure requirements. The Parties agree that their initial press release or public announcement concerning the settlement and Agreement will be released at the same time, and that such time shall not be during market hours of the NASDAQ-GS Market. The Parties agree that these confidentiality and disclosure provisions are a material part of the Agreement and that any breach of these confidentiality provisions will constitute a material breach of this Agreement. The Parties further agree to cause their respective agents, employees, Affiliates, officers, directors, attorneys, partners, auditors and other representatives to comply with these restrictions. The Parties agree that, prior to any disclosure to a third party not referenced in this section that may occur as a result of a legal obligation arising under any court order, statute, law, rule or regulation, the disclosing Party shall notify the other Party in writing and give the other Party a reasonable opportunity to object prior to disclosure. 7.4 Construction of Agreement. The language of this Agreement shall be construed as a whole, according to its fair meaning and intent, and not strictly for or against any Party, regardless of who drafted or was principally responsible for drafting the Agreement or any specific terms or conditions hereof. This Agreement shall be deemed to have been drafted by all Parties, and no Party shall urge otherwise. 7.5 Cooperation. Upon the terms and subject to the conditions contained herein, the Parties agree (A) to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, (b) to execute any documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out any of the transactions contemplated hereunder and (c) to cooperate with each other in connection with the foregoing. 7.6 Costs. Except as otherwise provided herein, each Party shall bear its own costs in connection with the negotiation, execution, administration, performance and enforcement of this Agreement, including, without limitation, all attorneys fees and costs. 7.7 Counterparts. This Agreement may be executed in multiple original and/or facsimile counterparts, each of which, when taken together, shall constitute a duplicate original, and each such duplicate original is equally admissible in evidence and shall be deemed to be one and the same instrument. With the exception of the confidentiality provisions of Paragraph 7.4, this Agreement shall not take effect until each Party has signed a counterpart. 7.8 Enforcement of Agreement. This Agreement may be pleaded as a full and complete defense to any action filed in which a Released Claim is asserted; provided, however, that such Released Claim has been actually released pursuant to Paragraph 4 of this Agreement. The Parties and their respective counsel may file this Agreement in any proceeding brought to enforce any of its terms or provisions. The Parties further agree that their respective duties and obligations hereunder may be specifically enforced through an action seeking equitable relief or a petition for writ of mandamus by the Party or Parties for whose benefit such duty or obligation is to be performed, but no breach of any duty or obligation by any Party hereunder shall entitle any other Party to rescind or terminate this Agreement, except as provided expressly herein. In any such action, and in any action to enforce the provisions of this Agreement, the prevailing party shall recover its reasonable attorneys' fees and costs. 7.9 Governing Law. This Agreement and all disputes or controversies arising from or relating thereto shall be governed by and interpreted according to the laws of the state of Delaware applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State. 7.10 Headings. The headings in this Agreement are for convenience only. They in no way limit, alter or affect the meaning of this Agreement. 7.11 Integration. This Agreement, together with its Attachments, all other documents, instruments, and agreements delivered in connection herewith or therewith constitute the entire agreement among the Parties with respect to the subject matter hereof, and no representations, warranties or inducements have been made to any Party concerning this Agreement other than the representations, warranties and covenants contained and memorialized in such documents. 7.12 Assignment. This Agreement shall not be assigned by operation of law or otherwise without the prior written consent of the other Party, and any assignment without such consent shall be null and void. CalAmp acknowledges and agrees that this Agreement includes a limited non-exclusive non-transferable license of certain intellectual property of the Customer to enable CalAmp to provide the re-work and/or refurbishment services set forth herein on the same basis as the license to CalAmp for the manufacture of the Products. Consequently, such non-exclusive non-transferable license cannot be assigned by CalAmp by operation of law or otherwise without the prior written consent of the Customer, and any assignment without such consent shall be null and void. 7.13 Mistakes of Fact or Law. In entering and making this Agreement, the Parties assume the risk of any mistake of fact or law. If the Parties, or any of them, should later discover that any fact they relied upon in entering this Agreement is not true, or that their understanding of the facts or law was incorrect, then the Parties shall not be entitled to seek rescission of this Agreement by reason thereof. This Agreement is intended to be final and binding upon the Parties regardless of any mistake of fact or law. 7.14 Successors and Assigns. This Agreement shall be binding upon and for the benefit of any of the Parties and their permitted successors and assigns. Nothing in this Agreement shall be construed or interpreted to impart any rights or obligations to any third party (other than a permitted successor or assignee bound to this Agreement), except as specifically provided herein. 7.15 Time of the Essence. Time shall be of the essence for purposes of construing and enforcing this Agreement. 7.16 No Waivers. The failure of any Party hereto to enforce any condition or provision in this Agreement at any time shall not be construed as a waiver of that condition or provision unless such waiver is in writing and signed by the waiving Party, nor shall it forfeit any rights to future enforcement thereof. 7.17 Validity. Except as provided in Paragraph 4.5(e), if any provision of this Agreement is deemed or held to be illegal, invalid or unenforceable, this Agreement shall be considered divisible and inoperative as to such provision to the extent it is deemed to be illegal, invalid or unenforceable, and in all other respects this Agreement shall remain in full force and effect. 7.18 Settlement Agreement Controls. To the extent that this Agreement is inconsistent with any other agreement executed in connection with this Agreement, this Agreement shall control. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year herein above first written. CALAMP CORP., a Delaware corporation By: /s/ Fred Sturm ___________________ Name: Fred Sturm Title: CEO ECHOSTAR TECHNOLOGIES CORPORATION, a Texas corporation By: /s/ Charles W. Ergen ___________________________ Name: Charles W. Ergen Title: Chairman & CEO EX-10 4 exh_10-2.txt SUBORDINATED PROMISSORY NOTE DATED DECEMBER 14, 2007 EXHIBIT 10.2 SUBORDINATED PROMISSORY NOTE $5,000,000.00 December 14, 2007 SECTION 1. Payment Obligation. CalAmp Corp., a Delaware corporation (the "Company"), for value received, hereby promises to pay to the order of EchoStar Technologies Corporation, a Texas corporation (the "Holder"), in lawful money of the United States, the principal sum of $5,000,000.00 upon the terms and conditions set forth herein. Payment of the principal of this Subordinated Note will be made in currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. SECTION 2. Definitions. As used herein, the following terms shall be deemed to have the meanings set forth below: "Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. Section 101, et seq.). "Bankruptcy Event" means: (a) the Company (i) ceases or fails to be solvent, or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any, whether at stated maturity or otherwise; (ii) voluntarily ceases to conduct its business in the ordinary course; (iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes any action to effectuate or authorize any of the foregoing; or (b) (i) any involuntary Insolvency Proceeding is commenced or filed against the Company, or any writ, judgment, warrant of attachment, execution or similar process, is issued or levied against a substantial part of the Company's assets or properties, and any such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded within 60 days after commencement, filing or levy; (ii) the Company admits the material allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company acquiesces in the appointment of a receiver, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent therefor), or other similar person for itself or a substantial portion of its assets, property or business. "Business Day" means any day that is not a Saturday, Sunday, or other day on which national banks are authorized or required to close. "Change of Control" means the acquisition by any "person" or "group" (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) at any time of beneficial ownership of 50% or more of the outstanding capital stock or other equity interests of the Company on a fully diluted basis. "Credit Agreement" shall mean the Credit Agreement, dated as of May 26, 2006, as amended from time to time, by and among the Company, the guarantors from time to time party thereto, the lenders from time to time party thereto and Bank of Montreal, as Administrative Agent. "Insolvency Proceeding" means, with respect to any Person, (a) any case, action or proceeding with respect to such Person before any court or other governmental agency or authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in either case undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code. "Person" means any person, corporation, general or limited partnership, joint venture, trust, limited liability company, association or other entity or organization, including a government or political subdivision or any agency or instrumentality thereof. "Product" has the meaning set forth in the Settlement Agreement. "Senior Creditors" shall mean the collective reference to the lenders party to the Credit Agreement. "Senior Agent" shall mean Bank of Montreal, in its capacity as agent for the Senior Creditors. "Settlement Agreement" means the Settlement Agreement dated as of the date hereof, by and between the Company and the Holder, as may be amended from time to time. "Superior Indebtedness" shall mean the principal amount of any and all indebtedness, obligations and liabilities of the Company or any guarantor under the Credit Agreement arising under or in relation to the Credit Agreement, including without limitation all liabilities of the Company under any notes issued pursuant to the Credit Agreement, in respect of any letters of credit issued thereunder and any liabilities of the Company or any guarantor thereof under the Loan Documents (as defined in the Credit Agreement), all as the same may from time to time be amended or modified. "Subordinated Indebtedness" shall mean the principal amount of this Subordinated Note from time to time outstanding and unpaid. "Subordinated Note" means this subordinated promissory note issued by the Company. SECTION 3. Payments. (a) Principal shall be due and payable from time to time within 5 Business Days after receipt by the Company of payment by the Holder for each unit of Product purchased, at a rate of $5.00 of principal per unit of Product, subject to a maximum of 1,000,000 units of Product. For the purposes of this Section 3(a), "Product" shall include new products that are introduced by CalAmp after the date hereof that have a value greater than $25 per unit of product. (b) Upon the occurrence of a Bankruptcy Event or a Change of Control, the entire principal balance of this Subordinated Note shall immediately become due and payable without any action on the part of the Holder. (c) Notwithstanding anything to the contrary herein, other than as permitted by clause (e) of this Section 3, no payment or prepayment of principal on this Subordinated Note may be made, directly or indirectly (whether in cash, securities or other property), if a Default or Event of Default (as each such term is defined in the Credit Agreement) shall have occurred and be continuing or would result therefrom. (d) The outstanding principal amount of this Subordinated Note shall not bear interest. (e) Notwithstanding any other provision herein or in any other document executed in connection with the Settlement Agreement, the Holder shall have the absolute right to setoff or recoup against any amounts due and payable under this Subordinated Note pursuant to its terms. SECTION 4. Subordination. (a) Other than as permitted by Section 3, so long as any Superior Indebtedness shall remain outstanding and unpaid or any of the commitments remain outstanding, no prepayment of principal shall be made by the Company or accepted by the Holder on Subordinated Indebtedness except with the prior written consent of the Required Lenders (as defined in the Credit Agreement), and the Holder will take no steps, whether by suit or otherwise, to compel or enforce the collection of Subordinated Indebtedness. (b) In the event of any distribution, dividend, or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the assets of the Company or of the proceeds thereof to the creditors thereof or upon any indebtedness of the Company, occurring by reason of a Bankruptcy Event, no dividend, distribution or application shall be made, and the Holder shall not be entitled to receive or retain any such dividend, distribution or application on or in respect of principal of or interest on Subordinated Indebtedness, unless and until all principal of and interest on Superior Indebtedness then outstanding shall have been paid and satisfied in full and in cash, all letters of credit issued pursuant to the Credit Agreement shall have expired and all commitments to extend further credit under the Credit Agreement have terminated, and in any such event any such dividend, distribution or application otherwise payable in respect of Subordinated Indebtedness shall be paid to the Senior Agent and applied to repay Superior Indebtedness until such Superior Indebtedness has been fully paid and satisfied or secured with cash in the case of Superior Indebtedness consisting of contingent liabilities. (c) The Senior Creditors and the Senior Agent need not at any time give the Holder notice of any kind of the creation or existence of any Superior Indebtedness, nor of the amount or terms thereof, all such notice requirements being hereby expressly waived by the Holder. Also, the Senior Creditors and the Senior Agent may at any time and from time to time, without the consent of or notice to the Holder, without incurring responsibility to the Holder and without impairing or releasing the obligation of the Holder hereunder (i) renew, refund, increase or extend the maturity of any Superior Indebtedness, or any part thereof, or otherwise revise, amend or alter the terms and conditions thereof or of the Loan Documents, (ii) sell, exchange, release or otherwise deal with any property by whomever at any time pledged, mortgaged or otherwise hypothecated or subjected to a lien to secure any Superior Indebtedness and (iii) exercise or refrain from exercising any rights against the Company and any guarantor of the Superior Indebtedness. (d) The Senior Creditors shall be deemed third party beneficiaries of the subordination provisions herein contained but the Senior Agent shall have the exclusive right to enforce the terms, conditions and provisions hereof on behalf of the Senior Creditors. No provisions of this Section 4 may be amended, modified or waived except by a written agreement and signed by the Holder, the Required Lenders and the Senior Agent. (e) The Company agrees that it shall not incur, create, issue, assume guarantee or otherwise become liable for any indebtedness that is senior in right of payment to the obligations due hereunder other than (i) Superior Indebtedness and (ii) purchase money debt or capital lease obligations in existence as of the date hereof. SECTION 5. Miscellaneous. (a) The Company and any endorsers of this Subordinated Note hereby consent to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand, and notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder. (b) THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. (c) Any provision of this Subordinated Note that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. (d) The covenants, terms and conditions hereof shall bind the heirs, successors and assigns of the Company and shall inure to the benefit of the successors and assigns of the Holder. The Company may not assign or transfer any interest hereunder without the prior written consent of the Holder. Without requiring the consent of the Company, the Holder may assign to one or more other entities all or a portion of its rights and obligations under this Subordinated Note. (e) Subject to the provisions of Section 4(d), no amendment, supplement, waiver or other modification to this Subordinated Note shall be effective without the prior written consent of the Company and the Holder. (f) Each of the Company and the Holder confirms that this Subordinated Note, together with the Settlement Agreement and the transactions provided for therein, constitutes the entire contract among the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. (g) This Subordinated Note may be executed on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned has executed this Subordinated Note effective as of the date first above written. CALAMP CORP., a Delaware corporation By: /s/ Fred Sturm ________________________ Name: Fred Sturm Title: CEO Acknowledged and Agreed: ECHOSTAR TECHNOLOGIES CORPORATION, a Texas corporation By: Charles W. Ergen ___________________________ Name: Charles W. Ergen Title: Chairman & CEO [Footnote continued from previous page] [Footnote continued on next page] EX-10 5 exh_10-3.txt REGISTRATION RIGHTS AGREEMENT DATED DECEMBER 14, 2007 EXHIBIT 10.3 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made as of the 14th day of December, 2007, by and between CalAmp Corp., a Delaware corporation (the "Company"), and EchoStar Technologies Corporation, a Texas corporation ("EchoStar"). RECITALS WHEREAS, on the date hereof, the Company and EchoStar are entering into a Settlement Agreement (the "Settlement Agreement") providing for, among other things, the issuance of (a) 1,000,000 shares of the Company's common stock (the "Common Stock"), par value $.01 per share (the "Shares") and (b) a warrant to purchase 350,000 shares of Common Stock (the "Warrant Shares"); and WHEREAS, as contemplated by Section 3.1(a) of the Settlement Agreement, EchoStar and the Company hereby agree that this Agreement shall govern the rights of the Holder with respect to certain piggyback registration rights relating to the Shares and Warrant Shares. NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions. For purposes of this Agreement: 1.1 "Affiliate" means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by, or is under common control with such specified Person, including without limitation any general partner, officer, director, or manager of such Person and any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person. 1.2 "Damages" means any loss, damage or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such loss, damage or liability (or any action in respect thereof) arises out of or is based upon (a) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (b) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (c) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law. 1.3 "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 1.4 "Excluded Registration" means (a) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase or similar plan; (b) a registration relating to an SEC Rule 145 transaction; (c) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (d) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered. 1.5 "Holder" means collectively EchoStar or a permitted transferee of Registrable Securities pursuant to Section 3.1. 1.6 "Registrable Securities" means (a) the Shares, (b) the Warrant Shares and (c) any Common Stock issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, any of the Shares or any of the Warrant Shares; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not transferred pursuant to Section 3.1, and excluding any shares for which registration rights have terminated pursuant to Section 2.8 of this Agreement. 1.7 "SEC" means the Securities and Exchange Commission. 1.8 "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 1.9 "Selling Expenses" means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for the Holder. 2. Registration Rights. The Company covenants and agrees as follows: 2.1 Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holder) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly (but not later than thirty (30) days before the anticipated date of filing such registration statement give the Holder notice of such registration. Upon the request of the Holder given within fifteen (15) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.2, cause to be registered all of the Registrable Securities that the Holder has requested to be included in such registration. The Company shall have the right to terminate, withdraw or delay any registration initiated by it under this Section 2.1 before the effective date of such registration, whether or not the Holder has elected to include Registrable Securities in such registration. 2.2 Underwriting Requirements. In connection with any offering involving an underwriting of shares of the Company's capital stock pursuant to Section 2.1, the Company shall not be required to include any of the Holder's Registrable Securities in such underwriting unless the Holder accepts the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. All Registrable Securities excluded from any registration as a result of the underwriter's cutback provisions in this Section 2.2 may not be publicly offered or sold for a period reasonably required by the underwriter(s) as necessary in order to effect such offering (not to exceed a period beginning 30 days prior to the effective date of such registration statement and ending 90 days after such effective date). 2.3 Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective, and, upon request of Holder, keep such registration statement effective for a period of one hundred twenty (120) days or, if earlier, until the disposition contemplated in the registration statement has been completed. (b) Prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement. (c) Furnish to the selling Holder such number of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holder may reasonably request in order to facilitate their disposition of their Registrable Securities. (d) Use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holder; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering. (f) Use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed. (g) Provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration. (h) Promptly make available for inspection by the Holder and any attorney or accountant or other agent retained by the Holder, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company's officers, directors, employees, and independent accountants to supply all information reasonably requested by the Holder or any such attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith. (i) Notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed. (j) After such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus. 2.4 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of the Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of such securities as is reasonably required to effect the registration of the Holder's Registrable Securities. 2.5 Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing and qualification fees, printers' and accounting fees and fees and disbursements of counsel for the Company, shall be borne and paid by the Company. All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holder. 2.6 Delay of Registration. The Holder shall not have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. 2.7 Indemnification. If any Registrable Securities are included in a registration statement under this Section 2: (a) To the extent permitted by law, the Company will indemnify and hold harmless the selling Holder, and the partners, members, officers, directors, and stockholders of the Holder, legal counsel and accountants for the Holder, any underwriter (as defined in the Securities Act) for the Holder, and each Person, if any, who controls the Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to the Holder and each such underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.7(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of the Holder or such underwriter, controlling Person or other aforementioned Person expressly for use in connection with such registration. (b) To the extent permitted by law, the selling Holder will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), and any controlling Person of any such underwriter, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of the Holder expressly for use in connection with such registration; and the Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.7(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amount paid by Holder under this Section 2.7(b) exceed the proceeds from the offering received by the Holder, except in the case of fraud or willful misconduct by the Holder. (c) Promptly after receipt by an indemnified party under this Section 2.7 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.7, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the indemnified party under this Section 2.7, except to the extent that such failure materially prejudices the indemnifying party's ability to defend such action. (d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.7 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.7 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.7, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions or other actions that resulted in such loss, claim, damage, liability or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (A) the Holder will not be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by the Holder pursuant to such registration statement, and (B) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall the Holder's liability pursuant to this Section 2.7(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.7(b), exceed the proceeds from the offering received by such Holder, except in the case of willful misconduct or fraud by the Holder. (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. (f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and the Holder under this Section 2.7 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement. 2.8 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holder, enter into any agreement with any holder or prospective holder of any securities of the Company other than a Holder that would allow such holder or prospective holder (i) to include such securities in any registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities of the Holders that are included or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder. 2.9 Termination of Registration Rights. The right of the Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1 shall terminate upon when all of the Holder's Registrable Securities could be sold without restriction (including, without limitation, holding periods and volume limitations) under Rule 144(k) promulgated by the SEC under the Securities Act. 3. Miscellaneous. 3.1 Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by the Holder to a transferee of Registrable Securities that is an Affiliate of the Holder; provided, however, that (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (b) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement. The terms and conditions of this Agreement shall inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein. 3.2 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. 3.3 Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile (or other electronic transmission) signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 3.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 3.5 Notices. All notices required or permitted under this Agreement shall be in writing to the other party and shall be delivered in person, by facsimile, by overnight mail, or by registered or certified mail, to the parties at the following addresses and facsimile numbers: If to the Company: CalAmp Corp. 1401 N. Rice Avenue Oxnard, California 93030 Attn: Fred Sturm, CEO Facsimile No.: 805-482-5842 With a copy to: Gibson, Dunn & Crutcher LLP 333 S. Grand Avenue Los Angeles, California 90071 Attn: Peter F. Ziegler Facsimile No.: 213-229-6595 If to Holder: EchoStar Technologies Corporation 9601 South Meridian Boulevard Englewood, Colorado 80112 Attn: Jeffrey H. Blum, Esq. Facsimile No.: 303-723-3024 With a copy to: Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street, 18th Floor Wilmington, Delaware 19801 Attn: Robert J. Dehney, Esq. Facsimile No.: 302-658-3989 3.6 Amendment, Termination or Waiver. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by all of the parties hereto. No waiver of any provision of this Agreement nor consent to any departure therefrom by any party shall be effective unless the same shall be in writing and signed by the Company, with respect to any waiver or consent requested by the Holder, and by the Holder with respect to any waiver or consent requested by the Company. In either case, such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall, except as expressly provided in this Agreement, impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. 3.7 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 3.8 Entire Agreement. This Agreement, together with the Settlement Agreement, constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled. 3.9 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year herein above first written. CALAMP CORP., a Delaware corporation By: /s/ Fred Sturm ________________________ Name: Fred Sturm Title: CEO ECHOSTAR TECHNOLOGIES CORPORATION, a Texas corporation By: Charles W. Ergen ___________________________ Name: Charles W. Ergen Title: Chairman & CEO EX-10 6 exh_10-4.txt VOTING AND LOCK-UP AGREEMENT DATED DECEMBER 14, 2007 EXHIBIT 10.4 VOTING AND LOCK-UP AGREEMENT THIS VOTING AND LOCK-UP AGREEMENT (the "Agreement") is made and entered into as of this 14th day of December, 2007, by and between CALAMP CORP., a Delaware corporation (the "Company"), and ECHOSTAR TECHNOLOGIES CORPORATION, a Texas corporation (the "Customer"). RECITALS WHEREAS, on the date hereof, the Company and the Customer are entering into a Settlement Agreement (the "Settlement Agreement") providing for, among other things, the issuance of (a) 500,000 shares of the Company's common stock (the "Common Stock"), par value $.01 per share not subject to Section 2 below (the "Unrestricted Shares"), (b) 500,000 shares of Common Stock subject to Section 2 below (the "Restricted Shares" and, collectively with the Unrestricted Shares, the "Shares"), and (c) a warrant (the "Warrant") to purchase 350,000 shares of Common Stock (the "Warrant Shares"); and WHEREAS, the parties desire to enter into this Agreement to set forth their agreements and understandings with respect to the voting of the Shares and Warrant Shares, and with respect to certain other matters. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Voting Provision. The Customer agrees to vote, or cause to be voted, all Shares and Warrant Shares owned by the Customer, or over which the Customer has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that at each annual or special meeting of stockholders such Shares and Warrant Shares are voted (a) in the election of directors in favor of any candidates for the Company's Board of Director (the "Board") proposed or supported by the Board or in proportion to the vote of the outstanding shares of Common Stock, including shares not voted and expressly withheld and (b) on any proposal proposed or supported by the Board, either for such proposal or in proportion to the vote of the outstanding shares of Common Stock, including shares not voted and expressly abstaining. 2. Lock-Up Agreement. The Customer agrees that it will not offer to sell, contract to sell, or otherwise sell, dispose of, loan, pledge or grant any rights with respect to (collectively, a "Disposition") more than 285,000 Restricted Shares or Warrant Shares in any one year period following the date hereof. The Customer also consents to the entry of stop transfer instructions by the Company's transfer agent and registrar prohibiting the transfer of any Restricted Shares or Warrant Shares held by the Customer except in compliance with the foregoing restrictions. This restriction shall not apply to any Restricted Shares or Warrant Shares (a) sold pursuant to a tender or exchange offer or (b) transferred to any affiliate of the Customer that agrees to be bound by the terms hereof. 3. Legend. Each certificate representing the Shares or Warrant Shares and any other securities issued in respect of the Shares or Warrant Shares upon any stock split, stock dividend, recapitalization, merger or similar event shall bear a legend substantially in the following form: THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A VOTING AND LOCK-UP AGREEMENT, AS MAY BE AMENDED FROM TIME TO TIME, (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SECURITIES, THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF THAT VOTING AND LOCK-UP AGREEMENT. 4. Remedies. The Customer acknowledges and agrees that the Company will be irreparably damaged in the event any of the provisions of this Agreement are not performed by the Customer in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that the Company shall be entitled to an injunction to prevent breaches of this Agreement, and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. 5. Miscellaneous. 5.1 Transfers. Each transferee or assignee of any Shares or Warrant Shares subject to this Agreement that is an affiliate of the Customer shall continue to be subject to the terms hereof, and, as a condition precedent to the Company's recognizing such transfer, each transferee or assignee shall agree in writing to be subject to each of the terms of this Agreement. The Company shall not permit the transfer of the Shares or Warrant Shares subject to this Agreement to an affiliate of the Customer on its books or issue a new certificate representing any such Shares or Warrant Shares unless and until such transferee shall have complied with the terms of this Section 5.1. Each certificate representing the Shares or Warrant Shares subject to this Agreement if issued on or after the date of this Agreement shall be endorsed by the Company with the legend set forth in Section 3. 5.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 5.3 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. 5.4 Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile (or other electronic transmission) signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 5.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 5.6 Notices. All notices required or permitted under this Agreement shall be in writing to the other party and shall be delivered in person, by facsimile, by overnight mail, or by registered or certified mail, to the parties at the following addresses and facsimile numbers: If to the Company: CalAmp Corp. 1401 N. Rice Ave. Oxnard, CA, 93030 Attn: Fred Sturm, CEO Facsimile No.: 805-482-5842 With a copy to: Gibson, Dunn & Crutcher LLP 333 S. Grand Ave. Los Angeles, California 90071 Attn: Peter F. Ziegler Facsimile No.: 213-229-6595 If to the Customer: EchoStar Technologies Corporation 9601 South Meridian Boulevard Englewood, Colorado 80112 Attn: Jeffrey H. Blum, Esq. Facsimile No.: 303-723-3024 With a copy to: Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street, 18th Floor Wilmington, Delaware 19801 Attn: Robert J. Dehney, Esq. Fascimile No.: 302-658-3989 5.7 Amendment, Termination or Waiver. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by all of the parties hereto. No waiver of any provision of this Agreement nor consent to any departure therefrom by any party shall be effective unless the same shall be in writing and signed by the Company, with respect to any waiver or consent requested by the Customer, and by the Customer with respect to any waiver or consent requested by the Company. In either case, such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall, except as expressly provided in this Agreement, impair any such right, power or remedy of such non-breaching or non- defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. 5.8 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 5.9 Entire Agreement. This Agreement, together with the Warrant and the Settlement Agreement, constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled. 5.10 Manner of Voting The voting of Shares and Warrant Shares pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law. 5.11 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year herein above first written. CALAMP CORP., a Delaware corporation By: /s/ Fred Sturm ________________________ Name: Fred Sturm Title: CEO ECHOSTAR TECHNOLOGIES CORPORATION, a Texas corporation By: Charles W. Ergen ___________________________ Name: Charles W. Ergen Title: Chairman & CEO EX-99 7 exh_99-1.txt PRESS RELEASE DATED DECEMBER 17, 2007 EXHIBIT 99.1 [on CalAmp letterhead] FOR IMMEDIATE RELEASE CalAmp Announces Settlement Agreement with Key DBS Customer OXNARD, Calif., December 17, 2007--CalAmp Corp. (NASDAQ: CAMP), a leading provider of wireless products, today announced that it has entered into a settlement agreement with a key customer that resolves matters regarding a previously disclosed product performance issue affecting Direct Broadcast Satellite (DBS) equipment manufactured by CalAmp for this customer that resulted in the customer returning product and putting orders on hold pending the requalification of products. Among other agreement terms, CalAmp will issue to the customer one million shares of CalAmp common stock and a three year warrant to purchase an additional 350,000 shares of common stock subject to certain restrictions. CalAmp will also issue a $5 million non-interest bearing promissory note to this customer. Please refer to CalAmp's 8K filed today for details. "In reaching this agreement, we have reaffirmed our commitment to stand firmly behind our products and regain the confidence of this key customer," commented Fred Sturm, CalAmp's President and Chief Executive Officer. "This customer has accounted for a substantial portion of CalAmp's revenues during the last three fiscal years, so a successful resolution of this matter and retention of this customer were important for our Company. The settlement addresses the customer's claims in a manner that mitigates the cash flow impact on CalAmp. Furthermore, we believe this agreement aligns the interests of both companies to expeditiously resume our commercial relationship and we will work closely with the customer to finalize requalification of our products." Based on currently available information, the Company 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. About CalAmp Corp. CalAmp is a leading provider of wireless communications products that enable anytime/anywhere access to critical information, data and entertainment content. With comprehensive capabilities ranging from product design and development through volume production, CalAmp delivers cost-effective high quality solutions to a broad array of customers and end markets. CalAmp is a supplier of Direct Broadcast Satellite (DBS) outdoor customer premise equipment to the U.S. satellite television market. The Company also provides wireless data communication solutions for the telemetry and asset tracking markets, private wireless networks, public safety communications and critical infrastructure and process control applications. For additional information, please visit the Company's website at www.calamp.com. Forward-Looking Statement Statements in this press release that are not historical in nature are forward-looking statements, which involve known and unknown risks and uncertainties. Words such as "may", "will", "expect", "intend", "plan", "believe", "seek", "could", "estimate", "judgment", "targeting", "should", "anticipate", "goal" and variations of these words and similar expressions, are intended to identify forward-looking statements. Actual results could differ materially from those implied by such forward-looking statements due to a variety of factors, including general and industry economic conditions, product demand, increased competition, competitive pricing and continued pricing declines in the DBS market, the timing of customer approvals of new product designs, operating costs, the Company's ability to efficiently and cost-effectively integrate its acquired businesses, the Company's ability to obtain a waiver from the lenders under its bank credit agreement of the event of default under the credit agreement, the Company's ability to successfully requalify with respect to the sale of products to one of its key DBS customers, the risk that the ultimate cost of resolving a product performance issue with that DBS customer may exceed the amount of reserves established for that purpose, and other risks or uncertainties that are described in the Company's periodic filings with the Securities and Exchange Commission, including the Company's fiscal 2007 Annual Report on Form 10-K filed on May 17, 2007. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. AT THE COMPANY: AT FINANCIAL RELATIONS BOARD: Rick Vitelle Lasse Glassen Chief Financial Officer General Information (805) 987-9000 (213) 486-6546 lglassen@frbir.com -----END PRIVACY-ENHANCED MESSAGE-----