March 1, 1996
BY EDGAR
Securities and Exchange Commission
450 5th Street, Judiciary Plaza
Washington, D.C. 20549
Attention: Filing Desk
Re: Schedule 13D of Electromagnetic Sciences, Inc.
Concerning the Common Stock of LXE Inc.
Gentlemen:
We enclose for filing pursuant to Rule 13d-1(a) under the
Securities Exchange Act of 1934, as amended, the referenced
Schedule 13D of Electromagnetic Sciences, Inc.
Funds to cover the $100 filing fee have been deposited via
Fedwire in the Commission's Mellon Bank account.
Should there be any questions concerning this filing, please
contact the undersigned.
Very truly yours,
ELECTROMAGNETIC SCIENCES, INC.
/S/ William S. Jacobs
William S. Jacobs
Vice President and General
Counsel
cc: LXE Inc. (w/enclosures) (By Certified Mail)
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
LXE Inc.
(Name of Issuer)
Common Stock, par value $.01 Per Share
(Title of Class of Securities)
502465 10 7
(CUSIP Number)
William S. Jacobs
Electromagnetic Sciences, Inc.
660 Engineering Drive
Technology Park/Atlanta
P.O. Box 7700
Norcross, Georgia 30091-7700
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
February 23, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4),
check the following box .
Check the following box if a fee is being paid with this
statement X. (A fee is not required only if the reporting
person: (1) has a previous statement of file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1: and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent
of such class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosure provided in a
prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).<PAGE>
1. Names of Reporting Person (S.S. or I.R.S. Identification
Nos. of Above Persons):
Electromagnetic Sciences, Inc. 58-1035424
2. Check the Appropriate Box if a Member of a Group (See
Instructions):
a. Not
b. Applicable
3. SEC Use Only
4. Source of Funds (See Instructions): WC, OO
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e):
Not Applicable
6. Citizenship or Place of Organization: Georgia
Number of Shares 7. Sole Voting Power: 4,523,200
Beneficially owned 8. Shared Voting Power: 0
by Each Reporting 9. Sole Dispositive Power: 4,523,200
Person With: 10. Shared Dispositive Power: 0
11. Aggregate Amount Beneficially owned by Each Reporting
Person: 4,523,200
12. Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions:)
Not Applicable
13. Percent of Class Represented by Amount in Row (11):
81.4%
14. Type of Reporting Person (See Instructions): CO
Item 1. Security and Issuer.
This statement relates to the common stock par value $.01
per share (the "Shares"), of LXE Inc. ("LXE"), a Georgia
corporation with principal executive offices located at 303
Research Drive, Norcross, Georgia 30092.
Item 2. Identity and Background.
The person filing this Statement is Electromagnetic
Sciences, Inc. ("ELMG"), a corporation organized under the laws
of the State of Georgia. ELMG is a wireless communications
company that, through its subsidiaries, EMS Technologies, Inc.,
LXE Inc. and CAL Corporation, serves worldwide markets with its
expertise in space technologies, wireless data communications and
local-area and wide-area networks, antennas and other high-performance
electronic products. The address of ELMG's principal
business and executive offices is 660 Engineering Drive,
Technology Park/Atlanta, Norcross, Georgia 30092.
ELMG has not, during the past five years, been convicted in
a criminal proceeding, nor been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction
resulting in ELMG having been subject to a judgment, decree, or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities
laws, or finding any violation with respect to such laws.
The names, addresses, and present principal occupation or
employment, and the name, principal business and address of any
corporation or other organization in which such employment is
conducted, of each of ELMG's executive officers and directors
are as follows. No other individual or corporation controls
ELMG. Each of the following individuals is a citizen of the
United States, except that Dr. Mackay is a citizen of Canada.
Residence or
Business
Address/Name
Address and
Principal Occupation or Business of
Name and Address Employment Employer
Anthony J. Iorillo Chairman of the Board American Mobile
American Mobile Satellite Satellite Corp.
Corp. 10802 Parkridge
Blvd.
Reston, VA 22091
(Satellite-based
communications
for ground vehicles,
ships and aircraft)
Jerry H. Lassiter Organizing and managing 48 Hickory Hollow
private investment Winder, GA 30680
interests in finance
and real estate
John H. Levergood President - Broadband Scientific-Atlanta,
Communications Group Inc.
Scientific-Atlanta, Inc. 4261 Communications
Drive
Norcross, GA 30092
(Advanced cable
television eqiup-
ment)
John B. Mowell President Mowell Financial
Mowell Financial Group, Inc. Group, Inc.
407 E. 6th Avenue
Tallahassee, FL
32315
(Investment
counseling)
John E. Pippin Chairman of the Board of Electromagnetic
ELMG; Consultant to ELMG Sciences, Inc.
660 Engineering Dr.
Technology Park/
Atlanta
Norcross, GA 30092
Don T. Scartz Senior Vice President and Electromagnetic
Chief Financial Officer, Sciences, Inc.
and Treasurer, of ELMG 660 Engineering Dr.
Technology Park/
Atlanta
Norcross, GA 30092
Thomas E. Sharon Chief Executive Officer of Electromagnetic
ELMG. Sciences, Inc.
660 Engineering Dr.
Technology Park/
Atlanta
Norcross, GA 30092
William S. Jacobs Vice President and Electromagnetic
General Counsel of ELMG Sciences, Inc.
660 Engineering Dr.
Technology Park/
Atlanta
Norcross, GA 30092
John J. Farrell President LXE Inc.
LXE Inc. 303 Research Dr.
Norcross, GA 30092
Jeffrey A. Leddy President EMS Technologies,
EMS Technologies, Inc. Inc.
660 Engineering Dr.
Technology Park/
Atlanta
Norcross, GA 30092
Neilson A. Mackay President CAL Corporation
CAL Corporation 1050 Morrison Drive
Ottawa, Ontario
K2H 8K7
None of the foregoing individuals has, during the past five
years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), nor has any such individual been
a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in such person being or having been
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
Federal or State securities laws or finding any violation with respect
to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
ELMG has used available working capital funds as the source of
the $500,000 paid in cash in the February 23, 1996, purchase that is
described in Item 5. The balance of the consideration for such
purchase was newly issued shares of the common stock, $.10 par value,
of ELMG.
Item 4. Purpose of Transaction.
The purpose of the February 23, 1996, purchase described in Item
5 was to increase ELMG's ownership of LXE to a level exceeding 80%.
ELMG believes that this increased level of ownership will enable ELMG
to consolidate LXE for federal and state income tax purposes, and
could otherwise provide greater flexibility under applicable rules in
the event ELMG should, in the future, undertake further transactions
involving either a further increase in its ownership of LXE or a
distribution of all or a portion of its holding of LXE Shares to its
own shareholders. The increased level of ownership also increases
ELMG's participation in LXE's future operating results. In addition,
trends in wireless communications markets are creating opportunities
that require coordination of business and technical resources from
throughout the Company, and ELMG believes that its increased level of
ownership will assist both investors and customers in understanding
the total Company's capabilities in these markets.
ELMG periodically reviews the status of its various operating
subsidiaries and its options with respect to them, with a view to
long-term enhancement of the investments of its own shareholders.
Among the possible transactions that ELMG has from time to time
reviewed are transactions in which ELMG would dispose, by sale or
spin-off to its own shareholders, of all or a portion of its LXE
Shares, as well as transactions in which ELMG would acquire all or a
portion of LXE Shares held by other LXE shareholders. Numerous
business, accounting, legal and tax issues affect the desirability,
from the standpoint of ELMG and its shareholders, of any such
transaction, and ELMG has not determined whether to pursue any such
transaction, or the terms on which it would be willing to do so. ELMG
expects that from time to time in the future it will consider the
desirability, under then-prevailing circumstances, of proposing and
pursuing one or more such transactions.
Except as described above, ELMG has no plans or proposals which
relate to or would result in any of the transactions specified in Item
4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
As of February 23, 1996, 5,554,644 LXE Shares were issued and
outstanding, of which ELMG owned 4,523,200 Shares, or 81.4% of those
outstanding. ELMG possesses sole power to vote and direct the
disposition of all LXE Shares owned by it.
The individuals identified in Item 2 above beneficially own LXE
Shares, as follows:
Name LXE Shares Beneficially Owned*
John B. Mowell 26,900
John E. Pippin 114,210
Don T. Scartz 4,092
Thomas E. Sharon 48,219
William S. Jacobs 7,000
*Includes shares that are subject to currently exercisable
options in the amount of 15,900 for Mr. Mowell, 95,400 for Dr.
Pippin, 2,000 for Mr. Scartz, 40,893 for Dr. Sharon and 5,000 for
Mr. Jacobs. The total for Mr. Mowell also includes 1,000 shares,
and for Mr. Jacobs 300 shares, as to which each shares voting and
investment power with a family member, but disclaims beneficial
interest.
Except as indicated, each of the foregoing individuals possesses
sole power to vote and direct the disposition of LXE Shares specified
by his name. No such individual has effected a transaction in LXE
Shares during the 60 days preceding the date of this Schedule 13D.
Of the LXE Shares held by ELMG, 3,975,000 were acquired in
connection with the formation of LXE in 1989, or as a result of a
subsequent stock split occurring prior to the registration of the LXE
Shares under Section 12(g) of the Securities Exchange Act of 1934, as
amended. Subsequent to such registration, which occurred in 1991,
ELMG has not acquired or disposed of any LXE Shares until February 23,
1996. On that date, LXE acquired an aggregate of 548,200 shares (9.9%
of the outstanding) from Rocker Partners L.P. (494,800 shares) and
Compass Holdings Ltd. (53,400 shares). According to Schedules 13D
filed with respect to the holding of LXE Shares by these partnerships,
David A. Rocker possessed the sole power to vote and direct the
disposition of the LXE Shares held by them. In consideration of such
548,200 shares, LXE paid $500,000 in cash and delivered an aggregate
of 457,052 shares of the common stock, $.10 par value, of ELMG, or
$.912 in cash and .8337 shares of ELMG stock for each LXE share
acquired. In connection with this transaction, ELMG agreed to
register the ELMG shares for resale by the foregoing partnerships, and
received the agreements of those partnerships and Mr. Rocker to
forbear for a period of 5 years from, directly or indirectly,
acquiring LXE voting securities or options, from forming, joining or
in any way participating in a "group" within the meaning of Section
13(d)(3) of the 1934 Act with respect to any LXE voting securities,
and from otherwise acting, alone or in concert with others, to seek to
control or influence the management, board of directors or policies of
LXE.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Except as described in Item 5, no contract, arrangements,
understandings or similar relationships exist with respect to the LXE
Shares held by ELMG and the individuals identified in Item 2 and any
other persons or entities.
Item 7. Material to be Filed as Exhibits.
1. Letter Agreement dated February 23, 1996, among
ELMG, Rocker Partners, L.P., Compass Holdings,
Ltd., and David A. Rocker.
Signature
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned hereby certifies that the
information set forth in this statement is true, complete and correct.
February 29, 1996
ELECTROMAGNETIC SCIENCES, INC.
By: /s/ Thomas E. Sharon
Thomas E. Sharon
President and Chief
Executive Officer
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
<PAGE>
February 23, 1996
Rocker Partners, L.P.
Compass Holdings, Ltd.
Attention: Mr. David A. Rocker
Suite 1759
45 Rockefeller Plaza
New York, NY 10111
Dear Mr. Rocker:
1. Sale and Purchase. You hereby confirm the sale and we hereby
confirm the purchase by Electromagnetic Sciences, Inc. ("ELMG") of
548,200 shares (the"Shares") of the common stock, $.01 par value, of
LXE Inc. ("LXE"), owned by you, for an aggregate of $500,000.00 plus
457,052 shares (the "ELMG Shares") of the common stock, $.10 par value
per share of ELMG. Payment shall be made in immediately available
funds and by delivery of certificates representing the ELMG Shares
registered in your names as directed by David A. Rocker, against
delivery of certificates representing the Shares, duly endorsed for
transfer, simultaneously with the execution and delivery of this
agreement.
2. Stand-Still Agreement. You and David A. Rocker hereby agree
that for a period of five years from the date hereof, neither you, he
nor any Affiliate (as that term is defined in Rule 405 under the
Securities Act of 1933, as amended (the "1933 Act")) controlled by you
or him (regardless of whether such person or entity is an Affiliate on
the date hereof) will (a) acquire, directly or indirectly, by purchase
or otherwise (except as a result of a distribution by ELMG to its
shareholders), any voting securities or direct or indirect rights or
options to acquire any voting securities of LXE, (b) form, join or in
any way participate in a "group" within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), with respect to any voting securities of LXE, or (c) otherwise
act, alone or in concert with others, to seek to control or influence
the management, board of directors or policies of LXE. You and David
A. Rocker acknowledge that ELMG would not have an adequate remedy at
law for money damages in the event that this covenant were not
performed in accordance with its terms, and therefore agree that ELMG
shall be entitled to specific enforcement of the terms hereof in
addition to any other remedy to which it may be entitled at law or in
equity.
3. Your Representations. You represent and warrant that:
(a)you have the authority and are duly authorized to
sell to ELMG the Shares pursuant to this agreement, and to do all
other things and take all other actions required or contemplated
hereby;
(b) you will convey the Shares to ELMG with good
title, free and clear of all liens, encumbrances and adverse claims as
to title;
(c) the Shares represent all of the voting securities
or direct or indirect rights or options to acquire voting securities
of LXE owned on the date hereof by you or any Affiliate of you or
David A. Rocker;
(d) neither this agreement nor your performance of
your obligations hereunder will contravene, violate or result in a
breach of (i) any agreement, obligation or commitment to which you are
a party or by which you are bound, or (ii) any law, rule, regulation,
judgment, order or restriction of any governmental, administrative or
regulatory agency, and no consent of, notice to or filing with any
person or entity is required for the performance by you of the
transactions contemplated herein or your obligations hereunder, other
any filings to be required under Sections 13(d) or 16(a) of the 1934
Act.
4. ELMG's Representations. ELMG represents and warrants that:
(a) it has all necessary authority and is duly
authorized to purchase the Shares pursuant to this agreement and to do
all other things and take all other actions required or contemplated
hereby;
(b) upon delivery to you the ELMG Shares will be duly
authorized, validly issued and fully-paid nonassessable shares of the
common stock, $.10 par value per share, of ELMG;
(c) neither this agreement nor ELMG's performance of
its obligations hereunder will contravene, violate or result in a
breach of (i) any agreement, obligation or commitment to which ELMG is
a party or by which it is bound, or (ii) any law, rule, regulation,
judgment, order or restriction of any governmental, administrative or
regulatory agency, and no consent of, notice to or filing with any
person or entity is required for the performance by ELMG of the
transactions contemplated by or its obligations under this agreement,
other than filings under the 1933 Act or 1934 Act;
(d) ELMG and LXE have each filed all reports,
statements, schedules and other materials required by law, rule or
regulation to be filed by it with the Securities and Exchange
Commission, (collectively, the "Public Filings"), and as of their
respective dates the Public Filings are true, correct and complete in
all material respects and do not fail to state any material fact
necessary to make the information set forth therein not misleading;
and
(e) the press releases issued by ELMG and LXE on
February 1, 1996, are each true and correct in all material respects,
and does not fail to state any material fact necessary to make the
information set forth therein not misleading.
5. Acquisition for Investment. You represent that you are
acquiring the ELMG Shares to hold for investment, for your own
accounts, with no present intention of dividing the ELMG Shares with
others or reselling or otherwise participating, directly or
indirectly, in a distribution of the ELMG Shares, except as
contemplated in this letter. You further represent that none of you
is a broker or dealer as defined under the 1934 Act. You acknowledge
that the ELMG Shares will be issued in a transaction that is not
registered under the 1933 Act, or under the securities laws of any
state, and may not be resold or otherwise distributed other than in
transactions registered under the 1933 Act or any applicable state
securities law, or pursuant to an exemption from registration under
the 1933 Act or any such state laws. You understand and agree that
the certificates evidencing the ELMG Shares will bear a legend
stating, in substance, as follows:
"The shares evidenced by this certificate have been issued without
registration under the Securities Act of 1933, as amended
(the "1933 Act"), or the securities laws of any state, pursuant to
exemptions thereunder. Such shares may not be transferred other
than in a transaction that is registered under the 1933 Act and
any applicable state securities laws, or as to which it is
established to the satisfaction of counsel to the issuer that such
transaction is exempt from registration thereunder."
6. ELMG's Registration Obligations.
(a) On or before February 29, 1996, ELMG shall file with
the Securities and Exchange Commission a registration statement on an
appropriate form under the 1933 Act (the "Registration Statement") to
register the ELMG Shares for resale by you (in ordinary brokers'
transactions or in transactions with any market maker with respect to
the ELMG common stock), and ELMG shall thereafter use its best efforts
(i) to cause the Registration Statement to become effective, (ii) to
register, qualify, or obtain an exemption from such registration or
qualification of the ELMG Shares under the applicable blue sky or
other securities laws of such jurisdictions as you shall reasonably
request if, in ELMG's reasonable opinion after consultation with
qualified securities counsel, such action is necessary (provided,
however, that ELMG shall not be required to qualify to do business in
any jurisdiction where it is not otherwise so qualified or to execute
or file any general consent to service of process under the laws of
any jurisdiction where it has not previously done so), and (iii) to
make all such other filings with the Securities and Exchange
Commission, the National Association of Securities Dealers, or other
regulatory body as shall be required in connection with your sale of
the ELMG Shares under the Registration Statement, in each case as soon
as practicable. ELMG shall use its best efforts to maintain the
currency of the prospectus filed as part of the Registration Statement
("the Prospectus") for a period expiring two years after the date
hereof, and shall file as necessary amendments to the Registration
Statement or supplements to the Prospectus, including without
limitation any necessary to satisfy the requirements of Section 10(a)
(3) of the 1933 Act or any succeeding provision. The performance by
ELMG of its obligations under this subsection shall be subject to your
compliance with all reasonable requests by ELMG or its counsel for
information, documents and certificates necessary for such performance
by ELMG. ELMG shall pay all expenses it incurs in connection with the
preparation, printing, and filing of the Registration Statement, the
Prospectus, and all amendments and supplements thereto, and shall
furnish to you (without charge) such number of copies thereof as you
shall reasonably request. You shall pay any expenses incurred by you
in reviewing the Registration Statement or providing information for
inclusion therein, or in offering or selling ELMG Shares thereunder.
(b) Notwithstanding any other provision hereof, after the
Registration Statement shall become effective, upon receipt of notice
from ELMG (i) that the Prospectus, as then in effect, contains an
untrue statement of material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, or
(ii) that the Prospectus otherwise requires amendment or
supplementation in order to comply with any applicable provision of
the 1933 Act or applicable state securities law, you shall cease
making offers and sales of the ELMG Shares pursuant to such
Prospectus, and shall return to ELMG any remaining copies of such
Prospectus; ELMG shall promptly notify you of any event that results
in such a situation or requires any such amendment or supplementation,
and shall use its best efforts to promptly prepare and file such
required amendment or supplement.
(c) We shall cooperate fully with each other and our respective
counsel, accountants and other authorized representatives in
connection with any steps required to be taken as part of our
respective obligations with respect to registration of the ELMG
Shares.
(d) Indemnification by ELMG. In connection with the
Registration Statement, and to the extent permitted by law, ELMG
shall indemnify and hold harmless you, and each person, if any, who
controls (within the meaning of the 1933 Act) you, against any losses,
claims, damages or liabilities, joint or several, including any of the
foregoing incurred in settlement of any litigation commenced or
threatened, arising out of or based on (i) any untrue statement of a
material fact contained in the Registration Statement or the
Prospectus (or any supplement or amendment thereto), (ii) any omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any
violation by ELMG of any rule or regulation promulgated under the 1933
Act applicable to ELMG and related to action or inaction required of
ELMG in connection with such registration and offers and sales
thereunder, and ELMG shall reimburse you and each of such persons
for any legal or other expenses incurred in
connection with the investigation or defense thereof; provided,
however, ELMG shall not be liable in any such instance to the extent
that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission made in the Registration
Statement or Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with information furnished to ELMG by
you in writing for use in preparation thereof.
(e) Indemnification by You. In connection with the Registration
Statement, and to the extent permitted by law, you shall indemnify
ELMG, each director of ELMG, each officer of ELMG who signs the
Registration Statement, and each person, if any, who controls (within
the meaning of the 1933 Act) ELMG, to the same extent and with
comparable limitations as the indemnity from the Company provided in
the foregoing subsection (d) , but only with respect to (i)
information furnished by you in writing for use in the preparation of
the Registration Statement or Prospectus or any amendment or
supplement thereto, and (ii) violations of rules or regulations
applicable to you in connection with such registration and offers and
sales thereunder.
(f) Claims for Indemnification. Whenever any claim for
indemnification arises hereunder, a party claiming indemnification
("the Indemnified Party") shall give notice thereof (the "Notice of
Claim") to the party claimed to be obligated to provide such
indemnification (the "Indemnifying Party") promptly after the
Indemnified Party has actual knowledge of the claim. The Notice of
Claim shall specify the material facts known to the Indemnified Party
giving rise to such indemnification claim and the amount thereof (or
the estimated amount). The Indemnifying Party shall be entitled to
defend or prosecute such claim at its expense and through counsel of
its own choosing (provided that such counsel is reasonably
satisfactory to the Indemnified Party) if it gives notice of its
intention to do so to the Indemnified Party within 60 days after
receipt of the Notice of Claim; provided, however, that if the named
parties in any such action (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and either (i)
the Indemnifying Party or Parties and the Indemnified Party or Parties
mutually agree, or (ii) representation of both the Indemnifying Party
or Parties and the Indemnified Party or Parties by the same counsel is
determined by qualified counsel to be inappropriate because one or
more legal defenses available to such Indemnified Party or Parties is
different from or additional to those available to the Indemnifying
Party or Parties, and is reasonably expected to create a conflict of
interest between them, the Indemnified Party or Parties shall have the
right to select separate counsel, reasonably acceptable to the
Indemnifying Party, to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such
Indemnified Party or Parties. Upon receipt of notice from the
Indemnifying Party to such Indemnified Party of its election to assume
the defense of any such action and approval by the Indemnified Party
of counsel, the Indemnifying Party will not be liable to such
Indemnified Party for any legal or other expenses incurred by such
Indemnified Party in connection with the defense thereof unless (i)
the Indemnified Party shall have employed counsel in connection with
the assumption of legal defenses in accordance with clause (ii) of the
immediately preceding sentence (it being understood, however, that the
Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
expenses of more than one separate counsel representing the
Indemnified Parties), (ii) the Indemnifying Party shall not have
employed counsel reasonably satisfactory to the Indemnified Party
within a reasonable time after notice of commencement of the action,
or (iii) the Indemnifying Party has authorized the employment of
counsel for the Indemnified Party at the expense of the Indemnifying
Party. If the Indemnifying Party so elects to defend or prosecute
such claim at its expense, the Indemnified Party shall render
reasonable assistance to the Indemnifying Party in connection
therewith, including affording the Indemnifying Party and its
representatives the right of access during normal business hours to
pertinent books, records and other information that may be reasonably
requested. If the Indemnifying Party elects not to defend or
prosecute such a claim at its expense, or the Indemnified Party is
entitled to its own legal counsel at the Indemnifying Party's expense,
the Indemnifying Party shall (i) cooperate with each Indemnified Party
in the defense or prosecution thereof, including affording the
Indemnified Party and its representatives the right of access during
normal business hours to pertinent books and records and other
information that may be reasonably requested, and (ii) pay the
reasonable fees and expenses of counsel for the Indemnified Party
promptly upon receipt of billing statements from such counsel. No
Indemnified Party shall make any settlement of any claim which would
give rise to liability hereunder on the part of the Indemnifying Party
without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed.
(g) Contribution. If the indemnification provided hereby is
unavailable and may not be paid for any reason, the parties agree to
contribute to the amount of any losses, claims, damages or liabilities
incurred and otherwise subject to indemnification hereunder, in such
proportion as is appropriate to reflect the relative fault of the
parties in connection with the events which resulted in such loss,
claim, damage or liability. The relative fault of the parties shall
be determined by reference to, among other things, the parties'
relative intent, knowledge, access to information, and opportunity to
correct or prevent the circumstances resulting in such losses, claims,
damages or liabilities.
(h) Obligations of any ELMG Successor. ELMG's obligations under
this Section 6 shall be binding upon any successor to ELMG by virtue
of any merger or corporate consolidation. The terms of any such
merger or consolidation shall not restrict or limit in any way your
rights as set forth herein, and shall provide that such rights shall
apply and pertain to any securities issued in such transaction in
exchange for or upon conversion of the ELMG Shares.
(i) Other Registration Rights. ELMG represents and warrants that
no other person or entity currently holds registration rights with
respect to the registration for offer and sale of any securities of
ELMG.
(j) Contingent Payments. In the event the Registration Statement
is not declared effective on or before June 30, 1996, as a result of
ELMG's failure to timely perform its obligations under this Section 6,
ELMG shall thereafter within 10 business days pay to you the sum of
$250,000, and in the event the Registration Statement is not for any
such reason thereafter declared effective on or before December 31,
1996, ELMG shall thereafter within 10 business days pay to you an
additional sum of $250,000. Such sums shall be payable, and shall not
be refundable, regardless of whether EMS performs it obligations or
obtains effectiveness of the Registration Statement after the date or
dates on which you become entitled to any such payment.
Very truly yours,
ELECTROMAGNETIC SCIENCES, INC.
/s/ Thomas E. Sharon
Thomas E. Sharon
President and Chief Executive
Officer
Accepted and Agreed:
/s/ David A. Rocker
David A. Rocker,
individually as to
Section 2, and as
managing partner of
Rocker Partners, L.P.
and as president of
Rocker Offshore Management
Company, Inc., the
investment adviser to
Compass Holdings, Ltd.
