UNITED STATES

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): March 28, 2016 (March 23, 2016)

 

 

 

Majesco

 

(Exact Name of Registrant as Specified in its Charter)

 

 

 

California 001-37466 77-0309142
(State or Other Jurisdiction
 of Incorporation)		 (Commission File Number) (IRS Employer Identification
No.)

 

412 Mount Kemble Ave, Suite 110C, Morristown, NJ 07960

 

(Address of Principal Executive Offices)

 

Registrant's telephone number, including area code (973) 461-5200

 

N/A

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

 

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 14a-12 under the Exchange Act (17 CFR 240.14a-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 March 23, 2016, Majesco entered into a Loan Agreement (the “Loan Agreement”) with HSBC Bank USA, National Association (“HSBC”) pursuant to which HSBC agreed to extend loans to Majesco in the amount of up to $10,000,000 and Majesco issued a promissory note to HSBC in the maximum principal amount of $10,000,000 or any lesser amount borrowed under the Loan Agreement (the “Note”, and together with the “Loan Agreement”, the “Facility”). On March 23, 2016, Majesco borrowed $6,800,000 under the Facility, and the remainder of the loan amount may be borrowed at any time up to and including May 23, 2016. The outstanding principal balance of the loan will bear interest based on LIBOR plus a margin in effect on the first day of the relevant interest period. Until January 1, 2018, only interest will be payable under the loan. Commencing on January 1, 2018, and on each January 1 and July 1 thereafter until July 1, 2020, installments of principal in the amount of $1,666,666.67 shall be due and payable semi-annually. All principal and interest outstanding under the Note shall be due and payable on March 1, 2021. The Facility is unsecured and supported by a letter of credit of $10,000,000.

 

The Facility contains affirmative covenants that require Majesco to furnish financial statements to HSBC and cause Majesco Limited to maintain (1) a Net Debt-to-EBITDA Ratio (as defined in the Loan Agreement) of not more than (a) 5.00 to 1.00 as of the last day of its 2017 fiscal year and (b) 2.50 to 1.00 as of the last day of each fiscal year thereafter, and (2) a Debt Service Coverage Ratio (as defined in the Loan Agreement) of not less than 1.50 to 1.00 as of the last day of each fiscal year. The Facility contains restrictive covenants on Majesco, including restrictions on declaring or paying dividends, incurring additional indebtedness, selling material portions of its assets or undertaking other substantial changes to the business, purchasing or holdings securities for investment, and extending credit to any person outside the ordinary course of business. The Facility also contains customary events of default provision and indemnification provisions whereby Majesco will indemnify HSBC against all losses or damages related to the Facility, provided, however, that Majesco shall not have any indemnification obligations to HSBC for any claims caused by HSBC’s gross negligence or willful misconduct. Majesco shall use the loan proceeds solely for the purpose of (i) refinancing existing indebtedness, (ii) capital expenditures and (iii) working capital and other general corporate purposes. Majesco paid a fee of $20,000 in connection with the Facility.

 

Majesco intends to use the proceeds from the Facility for the purpose of (i) refinancing its existing $3,000,000 term loan agreement with Punjab National Bank (International) Limited, (ii) capital expenditures and (iii) working capital and other general corporate purposes.

 

The foregoing summary of the Facility with HSBC does not purport to be complete and is qualified in its entirety by reference to the Loan Agreement and Note, attached hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.

 

ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

 

Reference is made to the disclosure under Item 1.01 above which is hereby incorporated in this Item 2.03 by reference.

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

 

(d) Exhibits.

 

 

 

 

10.1 Loan Agreement, dated March 23, 2016, by and between Majesco and HSBC Bank USA, National Association

10.2 Promissory Note in favor of HSBC Bank USA, National Association, dated March 23, 2016

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Majesco
     
  By: /s/ Ketan Mehta
    Ketan Mehta, President and Chief Executive Officer

 

Date: March 28, 2016

 

 

 

 

EXHIBIT INDEX

 

10.1 Loan Agreement, dated March 23, 2016, by and between Majesco and HSBC Bank USA, National Association

10.2 Promissory Note in favor of HSBC Bank USA, National Association, dated March 23, 2016