Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition
Item 1.01 Entry into a Material Definitive Agreement
TelVue Corporation ("TelVue") entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with the stockholders holding all of the issued and outstanding shares of capital stock of Princeton Server Group, Inc. ("PSG"), effective March 7, 2007. The Transaction closed on March 12, 2007 as discussed further in Item 2.01 below. Under the terms and conditions of the Stock Purchase Agreement, TelVue acquired all of the issued and outstanding capital stock of PSG for a purchase price of $6.1 million in cash plus the forgiveness of a $400,000 loan (the "Transaction"). The Stock Purchase Agreement contains customary representations, warranties and covenants from each of the sellers of PSG stock, PSG and its subsidiaries and TelVue.
Item 2.01 Completion of Acquisition or Disposition of Assets
On March 12, 2007, pursuant to the Stock Purchase Agreement, TelVue closed the Transaction and acquired all of the issued and outstanding shares of capital stock of PSG from the holders thereof for a purchase price of $6.1 million in cash plus the forgiveness of a $400,000 loan. The Transaction was subject to certain closing conditions, including the procurement of third-party consents by PSG, the delivery of certificates and opinions of counsel by the parties, and the absence of specified legal proceedings or the occurrence of events which would have a material adverse effect on the Transaction. The description of the Stock Purchase Agreement and the Transaction are qualified in their entirety by reference to the Stock Purchase Agreement that is filed as Exhibit 2.1 hereto and is incorporated herein by reference. Further details regarding the Transaction are contained in a Press Release dated March 7, 2007, which is attached to this Current Report on Form 8-K as Exhibit 99.1. This press release is incorporated into this Item 2.01 by reference.
PSG previously issued a 6% Convertible Note (the "Note") to TelVue on December 26, 2006, pursuant to which PSG borrowed $400,000 from TelVue. Under the terms of the Note, PSG was to make monthly payments commencing on July 1, 2007 and running through January 1, 2012. Pursuant to the terms of the Stock Purchase Agreement, the loan was forgiven.
On November 3, 2006, TelVue entered into a Line of Credit Note with its majority stockholder, H.F. (Gerry) Lenfest, pursuant to which TelVue may borrow up to the maximum principal amount of $10 million. In order to finance the Transaction, TelVue has drawn upon the Line of Credit Note in the amount of $6.1 million.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The consolidated financial statements of PSG required by this item have not been filed on this initial Current Report on Form 8-K but will be filed by amendment on or before May 29, 2007.
The audited consolidated financial statements of PSG required by this item have not been filed on this initial Current Report on Form 8-K but will be filed by amendment on or before May 29, 2007.
(b) Pro Forma Financial Information
The pro forma financial information required by this item has not been filed on this initial Current Report on Form 8-K but will be filed by amendment on or before May 29, 2007.
(d) Exhibits
2.1* Stock Purchase Agreement by and among TelVue Corporation and stockholders holding all the issued and outstanding shares of capital stock of Princeton Server Group, Inc. dated as of March 7, 2007.
99.1 Press Release dated March 7, 2007.
*The schedules to the Stock Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-B promulgated by the Securities and Exchange Commission. The omitted schedules from this filing will be provided upon request.
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