Majesco (NYSEAMERICAN: MJCO) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01 Entry into a Material Definitive Agreement

On November 27, 2018 (the “Effective Date”), Majesco (“Majesco” or the “Company”) entered into a share purchase agreement (the “Agreement”) for the acquisition of all the issued share capital (collectively, the “Securities”) of Exaxe Holdings Limited, a private limited company incorporated in Ireland (“Exaxe”). On the Effective Date, the Company consummated the purchase of 90% of the Securities. The Company has agreed to purchase, and the sellers have agreed to sell to the Company, the remaining 10% of the Securities on August 1, 2019.

In consideration for the purchase of the Securities, on the Effective Date, the Company paid the sellers EUR 6,392,009.80. In addition, the Company agreed to make an additional payment to the sellers of EUR 716,612.20 for the remainder of the Securities on August 1, 2019.

The Company also agreed to make certain earnout payments to the sellers if certain adjusted EBITDA (as defined in the Agreement) targets for Exaxe are met. If adjusted EBITDA for Exaxe for the period of January 1, 2019 through December 31, 2019 is at least equal to 75% of the adjusted EBITDA target for such year, the Company has agreed to pay EUR 625,000 to the sellers and an additional EUR 25,000 for each full 1% increase above 75%, up to a maximum of 50% (with a maximum earnout payment amount not to exceed EUR 1,250,000). If adjusted EBITDA for Exaxe for the period of January 1, 2020 through December 31, 2020 is at least equal to 75% of the adjusted EBITDA target for such year, the Company has agreed to pay EUR 750,0000 to the sellers and an additional EUR 30,000 for each full 1% increase above 75%, up to a maximum of 50% (with a maximum earnout payment amount not to exceed EUR 1,500,000). If adjusted EBITDA for Exaxe for the period of January 1, 2021 through December 31, 2021 is at least equal to 75% of the adjusted EBITDA target for such year, the Company has agreed to pay EUR 875,000 to the sellers and an additional EUR 35,000 for each full 1% increase above 75%, up to a maximum of 50% (with a maximum earnout payment amount not to exceed EUR 1,750,000). In lieu of being paid to the sellers, a portion of these earn-out payments will be paid to key employees as bonuses if they remain employed by Exaxe at the earnout payment date. The Company may also withhold 15% of any earnout payment if a seller who is a key employee leaves the employment of Exaxe prior to the end of the earnout period (other than due to death, serious illness, compassionate grounds, by mutual agreement or termination for cause or misconduct). The Company will also be entitled to withhold and off set against any earnout payment such amounts due and payable or which may become due and payable by the sellers to the Company with respect to claims under the Agreement and related transaction documents.

The entire earnout amount of EUR 4,500,000 (less any portion already paid) will become due and payable upon a sale of beneficial interests in a majority of the outstanding shares of Exaxe or its subsidiary or a sale or other disposal in whole or substantial part of the undertaking or assets of Exaxe or its subsidiary before the end of the earnout period.

The Company will also be restricted from making certain changes to the business of Exaxe, or diverting or redirecting Exaxe’s orders, revenue, customers, clients, suppliers or employees during the earnout period.

In connection with the transaction, on the Effective Date, Exaxe Limited, a subsidiary of Exaxe, entered into employment agreements with each of Norman Carroll (the Chief Executive Officer of Exaxe) and Philip Naughton (the Executive Director – Business Development of Exaxe) to which Norman Carroll and Philip Naughton will act as SVP Ireland/UK Operations and Executive Director Business Development of Exaxe Limited, respectively. The Company agreed to grant Norman Carroll and Philip Naughton stock options awards with respect to such number of shares of the Company’s common stock having an aggregate value of EUR 1,000,000 to the Company’s 2015 equity incentive plan.

In addition, in connection with the transaction, the parties have agreed to enter into a revised lease agreement with certain sellers (including Norman Carroll and Philip Naughton) for certain real property facilities leased by Exaxe Limited.

The parties to the Agreement made representations and warranties and agreed to indemnities and covenants that are customary for transactions of this nature, subject to exclusions and limitations.

The Company funded the purchase price at closing with available cash on hand and available borrowings under its credit facilities.

The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement which is filed as Exhibit 2.1 to this Current Report on Form 8-K and is hereby incorporated by reference.

On the Effective Date, the Company completed the purchase of 90% of the Securities. Reference is made to the disclosure under Item 1.01 above which is hereby incorporated in this Item 2.01 by reference.

A copy of the press release issued by the Company concerning the foregoing is attached hereto as Exhibit 99.1.

(1)Confidential treatment has been requested for a portion of this exhibit, and such confidential portion has been deleted and filed separately with the SEC to Rule 24b-2 of the Securities Exchange Act of 1934.

(2)Schedules or similar attachments have been omitted to Item 601(b)(2) of Regulation S-K. Majesco agrees to furnish supplementally a copy of any such omitted schedules or attachments to the SEC upon request; provided, however, that Majesco may request confidential treatment to Rule 24b-2 under the Exchange Act for any schedule or attachment so furnished.

Majesco Exhibit
EX-2.1 2 tv508015_ex2-1.htm EXHIBIT 2.1 Exhibit 2.1   Execution Version   Portions of this exhibit have been omitted and filed separately with the Secretary of the Securities and Exchange Commission (the “Commission”) pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,…
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