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): April 29, 2009 (April 25,
2009)
RURBAN
FINANCIAL CORP.
(Exact
name of registrant as specified in its charter)
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Ohio
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0-13507
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34-1395608
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(State
or other jurisdiction
of
incorporation or organization)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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401 Clinton Street,
Defiance, Ohio 43512
(Address
of principal executive offices) (Zip Code)
(419)
783-8950
(Registrant’s
telephone number, including area code)
Not
Applicable
(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:
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x
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01. Entry into a
Material Definitive Agreement.
On April
27, 2009, Rurban Financial Corp. (“Rurban”) announced that its wholly-owned data
and item processing subsidiary, Rurbanc Data Services, Inc. d/b/a RDSI Banking
Systems (“RDSI”), entered into an Agreement and Plan of Merger dated April 25,
2009 (the “Merger Agreement”), with New Core Holdings, Inc. d/b/a New Core
Banking Systems (“New Core”). The Merger Agreement contemplates the
acquisition by RDSI of New Core through the merger of NC Merger Corp., a
newly-formed subsidiary of RDSI, into New Core with New Core becoming a
wholly-owned subsidiary of RDSI. New Core designs and delivers
software and hardware solutions for community financial institutions and is
headquartered in Birmingham, Alabama.
Under the
terms of the Merger Agreement, the consummation of the merger is conditioned
upon the prior spin-off of RDSI, pursuant to which Rurban would distribute at
least 80% of the outstanding common shares of RDSI common shares to the
then-existing shareholders of Rurban (the “Spin-Off”). The Board of
Directors of Rurban will decide at a later date whether to proceed with the
Spin-Off and the timing and terms of that Spin-Off. If the merger
with New Core does not occur on or before December 31, 2010 because Rurban has
not completed the Spin-Off by that date, or if RDSI is sold to an unrelated
third party prior to the merger, New Core will be entitled to terminate the
Merger Agreement and receive a $500,000 termination fee from RDSI.
The
consummation of the merger is also subject to the approval of New Core’s
shareholders; the receipt of necessary regulatory approvals; the filing by RDSI
of a registration statement with the Securities and Exchange Commission (the
“SEC”) to register the issuance of the common shares of RDSI in the merger under
the Securities Act of 1933, as amended (and the effectiveness of such
registration statement); the approval for listing on the NASDAQ Stock Market of
the common shares to be issued in the merger; and the satisfaction of other
customary closing conditions set forth in the Merger
Agreement. Certain shareholders of New Core who are “accredited
investors” as defined in Rule 501 of Regulation D have agreed to vote their
shares of New Core common stock in favor of the adoption and approval of the
Merger Agreement and the merger.
Pursuant
to the terms and conditions of the Merger Agreement, all of the shares of New
Core common stock issued and outstanding immediately prior to the effective time
of the merger will be converted into the right to receive common shares of
RDSI. New Core shareholders will receive between 15.5% and 31% of the
aggregate RDSI common shares outstanding following the Spin-Off and merger
(after taking into account the issuance of RDSI common shares to New Core
shareholders in the merger). The merger consideration will be
calculated and paid as described below.
Closing
Consideration. Upon the closing of the merger, RDSI will issue
to the New Core shareholders a number of RDSI common shares calculated based on
the relative values of RDSI and New Core. The values of RDSI and New
Core will be computed using formulas set forth in the Merger Agreement as of a
month-end prior to the closing of the merger (the “Valuation
Date”). The computed value of RDSI will be derived from RDSI’s
results of operations for the twelve (12) months prior to the Valuation
Date. The computed value of New Core will be calculated as the sum of
$6,500,000 and ascribed revenue and income results based on contracts with
financial institutions for New Core’s Single SourceTM
software system and related services. Notwithstanding the foregoing
calculations, the Merger Agreement provides that the New Core shareholders, in
the aggregate, will be entitled to receive a minimum number of RDSI common
shares as Closing Consideration equal to 15.5% of the total outstanding RDSI
common shares.
Earn-Out
Consideration. Following the consummation of the merger, in
addition to the Closing Consideration, the New Core shareholders will be
entitled to receive additional RDSI common shares as earn-out consideration (the
“Earn-Out Consideration”). Under the terms of the Merger Agreement,
the Earn-Out Consideration will be calculated based on ascribed revenue and
income results based on contracts entered into before December 31, 2011 under
which the financial institution customer is converted to New Core’s Single
SourceTM
software system on or before December 31, 2012. The Earn-Out
Consideration is subject to certain adjustments set forth in the Merger
Agreement. In addition, the Merger Agreement provides that the
aggregate number of RDSI common shares issued to New Core shareholders may not
exceed 31% of the total outstanding RDSI common shares.
An
aggregate of 25% of the RDSI common shares issued as Closing Consideration will
be deposited on the Closing Date with an escrow agent to be held for twelve (12)
months following the effective time of the merger (or, if later, June 30, 2011)
to support certain indemnification obligations of New Core under the Merger
Agreement.
The Merger Agreement contains
provisions which limit the activities of New Core, without the consent of RDSI,
pending the completion of the merger, including restrictions on the payment of
dividends to shareholders, the acquisition and disposition of assets, the
issuance of additional securities and the borrowing of money. RDSI
has also agreed to refrain from certain activities, without the consent of New
Core, pending the completion of the merger, including restrictions on the
payment of dividends by RDSI and the issuance of additional securities by
RDSI. New Core has agreed not to solicit or pursue any other
proposals from any other entity to acquire or merge with New Core prior to the
completion of the merger or the termination of the Merger
Agreement.
In connection with the execution of the
Merger Agreement, New Core and RDSI have agreed to a strategic partnership
pursuant to which RDSI is granted rights as the exclusive provider of New Core’s
Single SourceTM
software system. Pursuant to this partnership, RDSI will provide
installation, support and customer service and New Core will continue to develop
the Single SourceTM
product. In the event the Merger Agreement is terminated prior to the
consummation of the merger, RDSI’s right to provide New Core’s Single
SourceTM
software system will become non-exclusive.
In connection with the execution of the
Merger Agreement, RDSI also agreed to lend to New Core up to $5,000,000 for the
purpose of funding the continued development of the Single SourceTM
software system and other working capital needs. All or part of the
loans may be converted to equity in New Core (a) at any time upon the mutual
agreement of RDSI and New Core or (b) at the option of New Core if the merger is
not completed in accordance with the Merger Agreement.
The
description of the Merger Agreement set forth above does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Merger Agreement, which is filed with this Current Report on Form 8-K as Exhibit
2.1.
Rurban
issued a press release on April 27, 2009, announcing the execution of the Merger
Agreement and the strategic partnership with New Core. A copy of the
press release is attached hereto as Exhibit 99.1.
Cautionary
Statement
The
Merger Agreement, which has been included to provide investors with information
regarding its terms, contains representations and warranties of each of the
parties. The assertions embodied in those representations and warranties are
qualified by information in confidential disclosure schedules that the parties
delivered to each other in connection with the execution of the Merger
Agreement. In addition, certain representations and warranties were
made as of a specific date, may be subject to a contractual standard of
materiality different from those generally applicable to shareholders or may
have been used for purposes of allocating risk between the respective parties
rather than establishing matters as facts. Accordingly, investors should not
rely on the representations and warranties as characterizations of the actual
state of facts, or for any other purpose, at the time they were made or
otherwise.
Additional
Information
If and
when the Board of Directors of Rurban decides to proceed with the Spin-Off,
Rurban and/or RDSI will file with the SEC a registration statement concerning
the Spin-Off and the merger transaction between RDSI and New
Core. That registration statement would include a combined prospectus
for the offer and sale of RDSI common shares as well as an information statement
or proxy statement to be delivered to the New Core shareholders in connection
with the approval of the merger transaction by the New Core shareholders. The
combined prospectus and information statement/proxy statement and other
documents filed by Rurban and/or RDSI with the SEC will contain important
information about Rurban, RDSI, New Core and the merger transaction. WE URGE
INVESTORS AND NEW CORE SHAREHOLDERS TO READ CAREFULLY THE COMBINED PROSPECTUS
AND INFORMATION STATEMENT/PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE
SEC, INCLUDING ANY AMENDMENTS OR SUPPLEMENTS ALSO FILED WITH THE
SEC. NEW CORE SHAREHOLDERS IN PARTICULAR SHOULD READ THE COMBINED
PROSPECTUS AND INFORMATION STATEMENT/PROXY STATEMENT CAREFULLY BEFORE MAKING A
DECISION CONCERNING THE MERGER TRANSACTION. Investors and
shareholders will be able to obtain a free copy of the combined prospectus and
information statement/proxy statement — along with other filings containing
information about Rurban and RDSI — at the SEC’s website at
http://www.sec.gov. Copies of the combined prospectus and information
statement/proxy statement, and the filings with the SEC incorporated by
reference in the combined prospectus and information statement/proxy statement,
can also be obtained free of charge by directing a request to Rurban Financial
Corp., 401 Clinton Street, Defiance, Ohio 43512; Attention: Ms. Valda Colbart,
Investor Relations Officer;
Telephone: (419) 784-2759.
This
communication shall not constitute an offer to sell or the solicitation of an
offer to buy any securities nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation, or sale is unlawful before
registration or qualification of the securities under the securities laws of the
jurisdiction. No offer of securities shall be made except by means of
a prospectus satisfying the requirements of Section 10 of the Securities
Act of 1933, as amended.
Item 9.01. Financial
Statements and Exhibits.
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Exhibit
No.
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Description
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2.1
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Agreement
and Plan of Merger, dated as of April 25, 2009, by and among Rurbanc Data
Services, Inc., NC Merger Corp. and New Core Holdings,
Inc.
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99.1
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Press
Release issued by Rurban Financial Corp. on April 27,
2009
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SIGNATURE
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.
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RURBAN
FINANCIAL CORP.
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Dated: April
29, 2008
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By:
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/s/
Duane L. Sinn |
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Duane
L. Sinn |
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Executive
Vice President and Chief Financial Officer |
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Current
Report on Form 8-K
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Exhibit
No.
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Description
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2.1
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Agreement
and Plan of Merger, dated as of April 25, 2009, by and among Rurbanc Data
Services, Inc., NC Merger Corp. and New Core Holdings,
Inc.
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99.1
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Press
Release issued by Rurban Financial Corp. on April 27,
2009
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