Item 1.01 Entry Into a Material Definitive Agreement.
On June 16, 2021, Rhodium BA Holdings, LLC, a Delaware limited liability company
("Rhodium"), Rhodium BA Merger Sub, Inc., a Maryland corporation ("Merger Sub"),
Mark Silber, Sunnyside Bancorp, Inc., a Maryland corporation ("Sunnyside
Bancorp"), and Sunnyside Federal Savings and Loan Association of Irvington, a
federally-chartered savings and loan association and the wholly owned subsidiary
of Sunnyside Bancorp ("Sunnyside Federal"), entered into an Agreement and Plan
of Merger (the "Merger Agreement"), pursuant to which Rhodium will acquire
Sunnyside Bancorp and Sunnyside Federal.
Under the terms of the Merger Agreement, Rhodium will acquire all of Sunnyside
Bancorp's outstanding common stock at a price of $18.75 per share in cash. The
aggregate value of the transaction is expected to be approximately $14.9
million.
Pursuant to the Merger Agreement, and subject to the terms and conditions
thereof, Rhodium's acquisition of Sunnyside Bancorp will be effected by a merger
in which Merger Sub will merge with and into Sunnyside Bancorp, with Sunnyside
Bancorp as the surviving corporation and a wholly-owned subsidiary of Rhodium.
The Merger Agreement contains customary representations and warranties from
Rhodium, Merger Sub, Mark Silber, Sunnyside Bancorp and Sunnyside Federal, and
each party has agreed to customary covenants, including, among others, covenants
relating to (1) the conduct of Sunnyside Bancorp and Sunnyside Federal's
business during the interim period between the execution of the Merger Agreement
and the closing of the merger, (2) Sunnyside Bancorp's obligations to facilitate
its stockholders' consideration of, and voting upon, the Merger Agreement and
the merger, (3) the recommendation by the board of directors of Sunnyside
Bancorp in favor of approval of the Merger Agreement and the merger by its
stockholders, and (4) Sunnyside Bancorp's non-solicitation obligations relating
to alternative business combination transactions.
Consummation of the merger is subject to certain conditions, including, among
others, approval of the merger by Sunnyside Bancorp's stockholders, the receipt
of all required regulatory approvals and expiration of applicable waiting
periods, accuracy of specified representations and warranties of each party, the
performance in all material respects by each party of its obligations under the
Merger Agreement, and the absence of any injunctions or other legal restraints.
The Merger Agreement provides certain termination rights for both Rhodium and
Sunnyside Bancorp, and further provides that upon termination of the Merger
Agreement under certain circumstances, Sunnyside Bancorp will be obligated to
pay Rhodium a termination fee of $615,000. The Merger Agreement further provides
that upon termination of the Merger Agreement under certain circumstances, Mr.
Silber will be obligated to pay Sunnyside Bancorp a termination fee of $850,000.
Those funds were placed in escrow by Mr. Silber at the time of the execution of
the Merger Agreement.
Sunnyside Bancorp will be subject to customary restrictions on soliciting or
initiating discussions with respect to acquisition proposals and restrictions on
its ability to respond to or enter into any agreement with respect to an
acquisition proposal, subject to certain fiduciary duty related exceptions
provided in the Merger Agreement.
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Under the Merger Agreement, all current directors of Sunnyside Bancorp and
Sunnyside Federal will be invited to remain on the Boards of Directors of
Sunnyside Bancorp and Sunnyside Federal.
In connection with the execution of the Merger Agreement, the directors and
executive officers of Sunnyside Bancorp entered into shareholder support
agreements pursuant to which such individuals, in their capacities as
stockholders, have agreed, among other things, to vote their respective shares
of Sunnyside Bancorp common stock in favor of the approval of the Merger
Agreement and the transactions contemplated thereby. The foregoing summary of
the shareholder support agreement does not purport to be complete and is
qualified in its entirety by reference to the complete text of such agreement,
which is filed as Exhibit 10.2 and is incorporated herein by reference.
As of June 16, 2021, the date of the shareholder support agreements, the
directors and executive officers owned 47,888 shares of Sunnyside Bancorp's
common stock, representing approximately 6.0% of the 793,500 outstanding shares
of Sunnyside Bancorp's common stock as of such date. The approval of the Merger
Agreement will require the affirmative vote of the holders of at least a
majority of the outstanding shares of Sunnyside Bancorp's common stock.
The foregoing summary of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of such
document, which is attached hereto as Exhibit 2.1 and is incorporated herein by
reference. The representations, warranties and covenants of each party set forth
in the Merger Agreement have been made only for purposes of, and were and are
solely for the benefit of the parties to, the Merger Agreement, may be subject
to limitations agreed upon by the contracting parties, including being qualified
by confidential disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to investors.
Accordingly, the representations and warranties may not describe the actual
state of affairs at the date they were made or at any other time, and investors
should not rely on them as statements of fact. In addition, such representations
and warranties (1) will not survive consummation of the merger, unless otherwise
specified therein, and (2) were made only as of the date of the Merger Agreement
or such other date as is specified in the Merger Agreement. Moreover,
information concerning the subject matter of the representations and warranties
may change after the date of the Merger Agreement, which subsequent information
may or may not be fully reflected in any public disclosure. Accordingly, the
Merger Agreement is included with this filing only to provide investors with
information regarding the terms of the Merger Agreement, and not to provide
investors with other factual information regarding Sunnyside Bancorp, Sunnyside
Federal or Rhodium, their respective affiliates or their respective businesses.
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Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act. Forward-looking statements include
statements regarding the anticipated closing date of the transaction and
anticipated future results. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current facts. They often
include words like "believe", "expect", "anticipate", "estimate", and "intend"
or future or conditional verbs such as "will", "would", "should", "could" or
"may". Certain factors that could cause actual results to differ materially from
expected results include; the merger may involve unexpected costs, liabilities
or delays; the inability to obtain the necessary regulatory or shareholder
approvals or to obtain them in a timely fashion; the reaction of the companies'
customers, employees and counterparties to the proposed merger; the outcome of
any legal proceedings related to the merger; the occurrence of any event, change
or other circumstances that could give rise to the termination of the merger
agreement; increased competitive pressures; changes in the interest rate
environment; changes in general economic conditions; legislative and regulatory
changes that adversely affect the business in which Sunnyside Bancorp, Inc.,
Sunnyside Federal and Rhodium are engaged; changes in the securities markets;
and other risks and uncertainties set forth in Sunnyside Bancorp's filings with
the Securities and Exchange Commission, including its most recently filed Annual
Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and other filings with the SEC, which are available on the SEC's
website at www.sec.gov. Undue reliance should not be placed on the
forward-looking statements, which speak only as of the date hereof. None of
Sunnyside Bancorp, Inc., Sunnyside Federal or Rhodium undertake, and
specifically disclaim any obligation, to publicly release the result of any
revisions that may be made to update any forward-looking statement to reflect
the events or circumstances after the date on which the forward-looking
statement is made, or reflect the occurrence of unanticipated events, except to
the extent required by law.
Additional Information Regarding the Merger and Where to Find It
This communication does not constitute an offer to sell or the solicitation of
an offer to buy the securities of Sunnyside Bancorp or the solicitation of any
vote or approval. In connection with the proposed merger, Sunnyside Bancorp,
Inc. will provide its shareholders with a proxy statement and other relevant
documents concerning the proposed merger. Shareholders of Sunnyside Bancorp,
Inc. are urged to read the proxy statement and other relevant documents and any
amendments or supplements to those documents, because they will contain
important information which should be considered before making any decision
regarding proposed the merger. Shareholders of Sunnyside Bancorp, Inc. will be
. . .
Item 1.02 Termination of a Material Definitive Agreement
On March 16, 2021, DLP Bancshares, Inc., a Delaware corporation ("DLP
Bancshares"), DLP Ventures Holdings Inc., a Delaware corporation ("Merger Sub"),
Donald Wenner, Sunnyside Bancorp and Sunnyside Federal entered into an Agreement
and Plan of Merger (the "DLP Merger Agreement"), pursuant to which DLP
Bancshares was to acquire Sunnyside Bancorp and Sunnyside Federal.
Under the terms of the Merger Agreement, DLP Bancshares would acquire all of
Sunnyside Bancorp's outstanding common stock at a price of $15.55 per share in
cash, subject to potential adjustment as provided in the DLP Merger Agreement.
In connection with Sunnyside Bancorp's determination to enter into the Merger
Agreement with Rhodium, on June 16, 2021, DLP Bancshares and Sunnyside Bancorp
mutually agreed to terminate the DLP Merger Agreement. In accordance with the
terms of the DLP Merger Agreement, DLP Bancshares was paid a termination fee of
$615,000. Also, the parties agreed to release the $615,000 of funds that Mr.
Wenner had placed in escrow at the time of execution of the DLP Merger
Agreement. In connection with the termination of the DLP Merger Agreement, the
shareholder support agreements, claims letters and restrictive covenant
agreements by and between the directors of Sunnyside Bancorp and DLP Bancshares
were also terminated.
The foregoing summary of the termination of the DLP Merger Agreement is not
complete and is qualified in its entirety by reference to the complete text of
such document, which is filed as Exhibit 10.1 to this Form 8-K and which is
incorporated herein by reference in its entirety.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1* Agreement and Plan of Merger, dated as of June 16, 2021,
by and among Rhodium BA Holdings, LLC, Rhodium BA Merger
Sub, Inc., Mark Silber, Sunnyside Bancorp, Inc. and
Sunnyside Federal Savings and Loan Association of
Irvington
10.1 Merger Termination Agreement, dated as of June 16, 2021,
by and among DLP Bancshares, Inc., DLP Ventures Holdings
Inc., Donald Wenner, Sunnyside Bancorp, Inc. and Sunnyside
Federal Savings and Loan Association of Irvington
10.2 Form of Company Shareholder Support Agreement
99.1 Joint Press Release dated June 16, 2021
* Sunnyside Bancorp has omitted schedules and similar attachments to the subject
agreement pursuant to Item 601(b) of Regulation S-K. Sunnyside Bancorp will
furnish a copy of any omitted schedule or similar attachment to the SEC upon
request.
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