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 3, 1998
OSICOM TECHNOLOGIES, INC.
(Exact name of Registrant as specified in charter)
Commission File number: 0-15810
New Jersey 22-2367234
(State or other jurisdiction of (IRS Employer Identification Number)
2800 28th Street, Suite 100
Santa Monica, California 90405
(Address of principal executive offices) (Zip Code)
(310) 581-4030
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On November 6, 1998, the Company notified Series C Convertible
Preferred shareholder CC Investments, LDC ("CCI") that it had assigned to a
third party, International Investment Group Orloff Fund NV ("IIG"), the
Company's right to redeem 2,000 shares of the Series C Convertible Preferred
Stock then outstanding in the name of CCI, and that IIG was exercising that
right of redemption. The Company further notified CCI that it was redeeming on
its own behalf the remaining 760 shares of Series C Convertible Preferred Stock
then outstanding in the name of CCI. CCI disputed the Company's right of
assignment and redemption and filed a lawsuit against the Company.
On December 3, 1998, in resolution of that dispute, the Company
withdrew its notice of redemption with respect to the 760 shares, and agreed to
permit the immediate conversion by CCI of the 760 shares of the Series C
Convertible Preferred Stock, plus a contractually agreed upon redemption premium
of 16%, at a conversion price of $5.81 per share. The conversion of the
resultant $881,600 face value of the Series C Convertible Preferred Stock will
result in the issuance to CCI of 151,738 shares of common stock. In further
resolution of the dispute, CCI agreed to withdraw its lawsuit against the
Company and transfer the remaining 2000 shares of Series C Convertible Preferred
Stock held in its name to IIG, in return for which IIG will pay to CCI $2.5
million. In consideration of the $2.5 million paid by IIG to CCI, and in
consideration for IIG's acceptance of new terms with respect to conversion and
other features of the Series C Convertible Preferred Stock, the Company has
agreed to issue to IIG an additional $500,000 face amount of the Series C
Convertible Preferred Stock.
A total of 6,200 shares of the Series C Convertible Preferred Stock
remain outstanding after taking into account the terms of the resolution of the
dispute described above. The 6,200 shares, if converted at contractually
applicable conversion prices on December 3, 1998, plus the 881.6 convertible
shares converted at $5.81, would yield 1,126,116 shares of common stock. This
compares to the 2,289,200 shares of common stock that would have been issuable
at the then-contractually applicable conversion prices on November 6, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
10. Settlement Agreement dated December 3, 1998 between CC Investments, LDC
and the registrant.
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SIGNATURES
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.
OSICOM TECHNOLOGIES, INC.
DATE: December 3, 1998 By: /s/Christopher E. Sue
----------------------
Christopher E. Sue
Vice-President Finance
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Exhibit 10
SETTLEMENT AGREEMENT
The undersigned, CC Investments, LDC ("CC") and Osicom Technologies, Inc.
("Osicom") hereby agree as follows:
WHEREAS, the parties hereto are parties to a lawsuit captioned as CC
Investments, LDC v. Osicom Technologies, Inc., 98 Civ. 8103 (the "Case"),
pending in the United States District Court for the Southern District of New
York; and
WHEREAS, CC currently owns 2,760 shares of Series C Convertible Preferred
Stock of Osicom, with a current face amount of $2,760,000 (the "Shares"); and
WHEREAS, each of CC and Osicom has sent the other a redemption notice with
respect to the Shares; and
WHEREAS, the parties dispute, among other things, the validity and
effectiveness of the redemption notice of the other; and
WHEREAS, the parties desire to amicably compromise, settle and resolve
their disputes, including those disputes set forth in the Case and those
relating to the redemption notices described herein, without further legal
proceedings or controversy
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Immediately upon execution of this Settlement Agreement, Osicom
shall:
(a) cause to be paid to CC cash in the amount of $2,500,000 (Two Million
Five Hundred Thousand Dollars); and
(b) issue to CC 151,738 shares of common stock of Osicom (which number
represents 116% of $760,000, divided by $5.81).
2. Upon receipt of the cash and securities described in paragraph 1(a)
and 1(b) of this Settlement Agreement, CC shall:
(a) deliver the Shares to Osicom;
(b) cause the Case to be dismissed with prejudice; and
(c) be deemed, without further documentation, to have specifically
consented to the purchase of shares of Series C Convertible Preferred Stock by
IIG, notwithstanding the provisions of Sections 4.11 and 4.12 of the Securities
Purchase Agreement dated as of April 30, 1998 between CC and Osicom.
3. Osicom agrees to use its best efforts to cause a registration
statement under the Securities Act of 1933 for registration of the resale by CC
of the common stock described in paragraph 1(b) hereof to be declared effective
on or prior to December 31, 1998. Osicom further agrees that any inclusion of
IIG as a selling shareholder under the registration statement shall not in any
way delay the effectiveness of such registration statement.
4. Osicom hereby agrees, without need of further documentation, on
behalf of itself, its officers, directors, shareholders, affiliates, principals,
successors and assign, to release, remise and requit CC and its officers,
directors, shareholders, affiliates, principals, successors and assigns,
including
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without limitation John Zeigelman and Dan Asher, from any and all manner of
claims, lawsuits, actions, causes of actions, judgments, cases or disputes that
Osicom has, may have or shall ever have against any of them based in whole or in
part upon any event, transaction or occurrence that took place prior to the date
hereof.
5. CC hereby agrees, upon receipt of the cash and securities described
in paragraph 1 hereof, without need of further documentation, on behalf of
itself, its officers, directors, shareholders, affiliates, principals,
successors and assigns, to release, remise and requit Osicom and its officers,
directors, shareholders, affiliates, principals, successors and assigns,
including without limitation Par Chadha, from any and all manner of claims,
lawsuits, actions, causes of actions, judgments, cases or disputes that CC has,
may have or shall ever have against any of them based in whole or in part upon
any event, transaction or occurrence that took place prior to the date hereof.
6. This Settlement Agreement shall be governed and construed under the
laws of the State of New York without regard to the conflicts of laws doctrines
thereof.
IN WITNESS WHEREOF the parties have set their hands as of this 3rd day
of December 1998.
CC INVESTMENTS, LDC OSICOM TECHNOLOGIES, INC.
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By: /s/ William J. Shimanek, an By: /s/ Par Chadha, CEO
authorized individual of its
Investment Manager
