Document:

Exhibit 10.9

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (this “Agreement”) is made as of December 21, 2016 by and between Broadway Financial Corporation (the “Company”), a Delaware corporation and parent company of Broadway Federal Bank, f.s.b., and CJA Private Equity Financial Restructuring Master Fund I L.P. (“Investor”).

 

W I T N E S S E T H

 

WHEREAS, Investor owns shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”);

 

WHEREAS, pursuant to the terms of that certain letter agreement dated August 22, 2013 between the Company and Investor and that certain letter agreement dated October 16, 2014 between the Company and Gapstow Financial Growth Capital Fund I L.P. (“Gapstow”) (such letter agreements being collectively referred to herein as the “Letter Agreements”), Investor and its successors and assigns (collectively hereinafter referred to as “Investor”) have the right to exchange any voting common stock held by them for Non-Voting Stock (as defined in the Letter Agreement), in order to effect a reduction of its or their ownership of voting securities to as low as 4.9% of the voting securities of the Company, as determined on a fully-diluted basis; and

 

WHEREAS, Investor wishes to exercise its right pursuant to the Letter Agreements to exchange 284,675 shares of the Company’s Common Stock (the “Exchanged Shares”) for 284,675 shares of Non-Voting Stock (the “Replacement Shares”) to maintain its ownership of outstanding voting securities of the Company at a level not exceeding 9.95%.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the parties hereby agree as follows:

 

ARTICLE 1
  
 EXCHANGE TRANSACTION

 

1.1                            Exchange.  Subject to the terms and conditions of this Agreement, at the Closing (as defined below), Investor shall deliver to the Company a stock certificate representing a number of shares of the Company’s Common Stock that exceeds the number of Exchanged Shares and in exchange therefor the Company shall issue and deliver to Investor stock certificates, registered in Investor’s name and address, representing (x) the Replacement Shares, and (y) the number of shares of the Company’s Common Stock equal to the difference between the number of Exchanged Shares and the number of shares of the Company’s Common Stock represented by the stock certificate delivered to the Company pursuant to this Section 1.1.

 

ARTICLE 2
  
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Investor as follows:

 

 

2.1                            Organization; Qualification. The Company is a corporation duly incorporated and validly existing under the laws of the State of Delaware.  The Company has all requisite corporate power to execute and deliver this Agreement, to issue and exchange the Replacement Shares for the Exchanged Shares and otherwise to carry out the provisions of this Agreement.

 

2.2                            Authorization; Valid and Binding Obligation. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization of this Agreement, the performance of all obligations of the Company hereunder and the authorization and exchange of the Replacement Shares for the Exchanged Shares pursuant hereto has been taken.  The Replacement Shares, including the Common Stock issuable upon conversion of the Replacement Shares, when so issued, sold and delivered against receipt of the consideration therefor in accordance with the provisions of this Agreement, shall be duly and validly issued, fully paid and non-assessable.  This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

2.3                            Capitalization.                                             The Company has disclosed to Investor in writing the capitalization of the Company that will be in effect immediately after the Closing.  Such disclosure, which is based on the Company’s understanding that the ownership of stock in the Company of Investor and its affiliates immediately prior to the Closing consists solely of 2,129,816 shares of Common Stock and 6,169,320 shares of Non-Voting Stock, indicates that immediately after the consummation of the transactions contemplated by this Agreement and the transactions contemplated by that certain Securities Purchase Agreement by and among the United States Department of the Treasury and certain named purchasers, including the Company, (i) Investor will not own more than 9.95% of the Common Stock then outstanding for purposes of the Change in Bank Control Act and the regulations of the Board of Governors of the Federal Reserve System promulgated thereunder and (ii) Investor’s aggregate investment in the Company will not account for more than 24.95% of the Company’s contributed capital for purposes of the Home Owners’ Loan Act and the regulations of the Board of Governors of the Federal Reserve System promulgated thereunder.

 

ARTICLE 3
  
 REPRESENTATIONS AND WARRANTIES OF INVESTOR

 

Investor represents and warrants to the Company as follows:

 

3.1                            Authorization; Valid and Binding Obligation. Investor has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and binding obligation of Investor, enforceable against it in accordance with its terms, assuming the due authorization, execution and delivery hereof by the Company.

 

3.2                            Title to Shares.  Investor has valid title to the Exchanged Shares, free and clear of all liens, restrictions, proxies, voting trusts, voting agreements, encumbrances and claims of any kind. At the Closing, the Company shall acquire valid title to and beneficial and record ownership of the Exchanged Shares being transferred by Investor pursuant to this Agreement.

 

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ARTICLE 4
  
 CLOSING

 

4.1                            Closing.  The Closing of the transactions contemplated by this Agreement (“Closing”) shall take place concurrently with the execution of this Agreement, either by mail, virtually through the Internet, or at the offices of Arnold & Porter LLP, 777 South Figueroa Street, 44th Floor, Los Angeles, California, or at such other time and place as may be mutually agreed upon by the parties hereto.

 

4.2                            Deliveries at the Closing.

 

(a)                               By Investor. At the Closing, Investor shall deliver or cause to be delivered to the Company or, if applicable, the transfer agent for the Replacement Shares, certificates representing the Exchanged Shares owned by Investor free and clear of all liens, encumbrances, pledges and claims of any kind, accompanied by instruments of transfer sufficient to transfer such stock to the Company.

 

(b)                              By the Company. At the Closing, the Company shall deliver the Replacement Shares to Investor, including the certificates specified in Section 1.1.

 

ARTICLE 5
  
 MISCELLANEOUS

 

5.1                            Survival of Representations, Warranties and Covenants.  The representations, warranties, agreements and covenants made by each party in this Agreement shall survive execution and delivery of this Agreement and the consummation of the transactions contemplated hereby notwithstanding any investigation, audit or review made at any time by any party to this Agreement and notwithstanding the delivery of any documents, exhibits, schedules or certificates pursuant to this Agreement.

 

5.2                            Further Assurances.  Each party will at any time and from time to time execute, acknowledge, deliver and perform all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be necessary to carry out the provisions and intent of this Agreement.

 

5.3                            Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earliest of: (i) personal delivery to the party to be notified; (ii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iii) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to each party as follows:

 

If to the Company:

 

Broadway Financial Corporation

 

3

 

5055 Wilshire Boulevard, Suite 500

Los Angeles, CA 90036

Attention: Wayne-Kent A. Bradshaw, President and CEO

 

with a copy to:

 

Arnold & Porter LLP

777 South Figueroa Street, 44th Floor

Los Angeles, CA 90017

Attention: James R. Walther, Esq.

 

If to Investor:

 

CJA Private Equity Financial Restructuring Master Fund I L.P.

654 Madison Avenue, Suite 601

New York, NY 10065

 

5.4                            Entire Agreement.  This Agreement contains the entire understanding of the parties in respect of its subject matter and supersedes all prior agreements and understandings between or among the parties with respect to such subject matter.

 

5.5                            Expenses. The parties shall pay their own fees and expenses, including their own counsel fees, incurred in connection with this Agreement or any transaction contemplated by this Agreement.

 

5.6                            Amendment; Waiver. This Agreement may not be modified, amended, supplemented, cancelled or discharged, except by written instrument executed by each of the parties. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.

 

5.7                            Binding Effect; Assignment. Except as otherwise provided herein, the rights and obligations of this Agreement shall bind and inure to the benefit of the parties and their respective successors and legal assigns. The rights and obligations of this Agreement may not be assigned by any of the parties without the prior written consent of the other parties. Any assignment in violation of this Section 5.7 shall be void and of no force or effect.

 

5.8                            Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile or PDF signatures shall be deemed originals for all purposes.

 

5.9                            Headings. The headings contained in this Agreement are for convenience of reference only and are not to be given any legal effect and shall not affect the meaning or interpretation of this Agreement.

 

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5.10                    Governing Law. This Agreement shall be governed by, and construed in accordance with the laws of the State of Delaware, all rights and remedies being governed by said laws, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws.

 

IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has executed this Agreement or has caused this Agreement to be executed by its duly authorized representatives as of the date first above written.

 

	
 
    	
BROADWAY FINANCIAL CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/Wayne-Kent   A. Bradshaw
    	
 
    
	
 
    	
Name:   Wayne-Kent A. Bradshaw
    
	
 
    	
Title:   President and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CJA PRIVATE EQUITY FINANCIAL RESTRUCTURING MASTER FUND I L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
CJA   Private Equity Financial Restructuring Master Fund GP I Ltd., its General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/Christopher   J. Acito
    	
 
    
	
 
    	
Name:
    	
Christopher   J. Acito
    
	
 
    	
Title:
    	
Managing   Member
    
					

 

5Exhibit 10.10

 

 

 

 

 

 

 

 

 

 

 

 

STOCK PURCHASE AGREEMENT

 

between

 

BROADWAY FINANCIAL CORPORATION

 

and

 

THE SELLER OR SELLERS SIGNATORY HERETO

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Definitions   of Certain Terms
    	
1
    
	
Section 1.02
    	
Interpretation
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE II THE SECURITIES PURCHASE
    	
4
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Purchase   and Sale of the Shares
    	
4
    
	
Section 2.02
    	
Closing   of the Securities Purchase
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE III REPRESENTATIONS AND WARRANTIES
    	
4
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Representations   and Warranties of the Company
    	
4
    
	
Section 3.02
    	
Representations   and Warranties of the Seller
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE IV COVENANTS
    	
6
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Forbearances   of the Seller
    	
6
    
	
Section 4.02
    	
Further   Action
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE V CONDITIONS TO THE CLOSING
    	
6
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Conditions   to Each Party’s Obligations
    	
6
    
	
Section 5.02
    	
Condition   to Obligations of the Seller
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE VI TERMINATION
    	
8
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Termination   Events
    	
8
    
	
Section 6.02
    	
Effect   of Termination
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE VII MISCELLANEOUS
    	
8
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Waiver;   Amendment
    	
8
    
	
Section 7.02
    	
Counterparts
    	
8
    
	
Section 7.03
    	
Governing   Law; Choice of Forum; Waiver of Jury Trial
    	
9
    
	
Section 7.04
    	
Notices
    	
9
    
	
Section 7.05
    	
Entire   Understanding; No Third Party Beneficiaries
    	
9
    
	
Section 7.06
    	
Assignment
    	
10
    
	
Section 7.07
    	
Severability
    	
10
    

 

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STOCK PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of December 21, 2016, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”), and the seller or sellers set forth on the signature page hereto (individually and collectively, the “Seller”).

 

RECITALS

 

WHEREAS, the Seller currently owns shares of Company Common Stock and, pursuant to certain contractual arrangements entered into with the Company, the Seller has the right to require the Company to purchase a portion of the shares of such stock the Seller owns to the extent necessary to maintain the percentage ownership by the Seller of voting stock of the Company below a specified level;

 

WHEREAS, the Seller desires to sell to the Company, and the Company agrees to purchase from the Seller, subject to the terms and conditions contained in this Agreement and in the contractual arrangements referred to in the preceding paragraph, 89,119 shares of Company Common Stock (the “Purchased Shares”) at a purchase price of $1.59 per share (the “Securities Purchase”); and

 

WHEREAS, the purchase of the Purchased Shares contemplated hereby is only intended by the parties to take place concurrently with certain sales of shares of Company Common Stock currently held by the U.S. Treasury Department that are proposed to be made pursuant to that certain Securities Purchase Agreement, dated the date hereof, entered into by and among the U. S. Treasury Department and the Purchasers named therein (such purchase transactions being collectively referred to herein as the “Treasury Sale”).

 

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and other agreements of the parties hereto, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01    Definitions of Certain Terms. For purposes of this Agreement, the following terms are used with the meanings assigned below (such definitions to be equally applicable to both the singular and plural forms of the terms herein defined):

 

“Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under 

 

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common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning set forth in the introductory paragraph of this agreement.

 

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banking organizations in the State of California are required or authorized by Law to be closed.

 

“Closing” has the meaning set forth in Section 2.02(A).

 

“Closing Date” has the meaning set forth in Section 2.02(A).

 

“Company” has the meaning set forth in the introductory paragraph to this Agreement.

 

“Company Common Stock” means the common stock, par value $0.01, of the Company.

 

“Company Material Adverse Effect” means a material adverse effect on the business, results of operations or financial condition of the Company and its consolidated Subsidiaries taken as a whole; provided, however, that Company Material Adverse Effect shall not be deemed to include the effects of (i) changes after the date hereof in general business, economic or market conditions (including changes generally in prevailing interest rates, credit availability and liquidity, currency exchange rates and price levels or trading volumes in the United States or foreign securities or credit markets), or any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism, in each case generally affecting the industries in which the Company and its Subsidiaries operate, (ii) changes or proposed changes after the date hereof in United States generally accepted accounting principles or regulatory accounting requirements, or authoritative interpretations thereof, (iii) changes or proposed changes after date hereof in securities, banking and other Laws of general applicability or related policies or interpretations of Governmental Entities (in the case of each of these clauses (i), (ii) and (iii), other than changes or occurrences to the extent that such changes or occurrences have or would reasonably be expected to have a materially disproportionate adverse effect on the Company and its consolidated Subsidiaries taken as a whole relative to comparable United States banking or financial services organizations), or (iv) changes in the market price or trading volume of the Company Common Stock or any other equity, equity-related or debt securities of the Company or its consolidated Subsidiaries (it being understood and agreed that the exception set forth in this clause (iv) does not apply to the underlying reason giving rise to or contributing to any such change).

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

“Governmental Entity” means any court, administrative agency or commission or other governmental or regulatory authority or instrumentality or self-regulatory organization.

 

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“Law” means any law, statute, code, ordinance, rule, regulation, judgment, order, award, writ, decree or injunction issued, promulgated or entered into by or with any Governmental Entity.

 

“Liens” means any liens, licenses, pledges, charges, encumbrances, adverse rights or claims and security interests whatsoever.

 

“Purchase Price” has the meaning set forth in Section 2.01.

 

“Purchased Shares” has the meaning set forth in the recitals to this Agreement.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended.

 

“Securities Purchase” has the meaning set forth in the recitals to this Agreement.

 

“Seller” has the meaning set forth in the introductory paragraph to this Agreement.

 

“Subsidiary” means, with respect to any person, any bank, corporation, partnership, joint venture, limited liability company or other organization, whether incorporated or unincorporated, (i) of which such person or a subsidiary of such person is a general partner or managing member or (ii) at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or persons performing similar functions with respect to such entity is directly or indirectly owned by such person and/or one or more subsidiaries thereof.

 

Section 1.02    Interpretation.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”  The term “person” as used in this Agreement shall mean any individual, corporation, limited liability company, limited or general partnership, joint venture, government or any agency or political subdivision thereof, or any other entity or any group (as defined in Section 13(d)(3) of the Exchange Act) comprised of two or more of the foregoing.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  In this Agreement, all references to “dollars” or “$” are to United States dollars.  This Agreement and any documents or instruments delivered pursuant hereto or in connection herewith shall be construed without regard to the identity of the person who drafted the various provisions of the same.  Each and every provision of this Agreement and such other documents and instruments shall be construed as though all of the parties participated equally in the drafting of the same.  Consequently, the parties acknowledge and agree that any rule of construction that a document is to be construed against the drafting party shall not be applicable either to this Agreement or such other documents and instruments.

 

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ARTICLE II

 

THE SECURITIES PURCHASE

 

Section 2.01    Purchase and Sale of the Shares.  Subject to, and on the terms and conditions of, this Agreement, effective at the Closing, the Company will purchase from the Seller, and the Seller will sell, transfer, convey, assign and deliver to the Company the Purchased Shares set forth herein, free and clear of all Liens other than restrictions on transfer imposed by federal and state securities laws.  The aggregate purchase price for the Purchased Shares shall be an amount in cash equal to $141,699.21 (the “Purchase Price”).

 

Section 2.02    Closing of the Securities Purchase.

 

(A)       Subject to Article V, the closing of the Securities Purchase (the “Closing”) shall occur at such time or date that is agreed to in writing by the Company and the Seller.  The date on which the Closing occurs is referred to herein as the “Closing Date”.  The Closing shall be held at such place as the Company and the Seller shall mutually agree in writing.

 

(B)       At the Closing, or simultaneously therewith, the following shall occur:

 

(1)                              the Company will pay the Purchase Price to the Seller, by wire transfer in immediately available funds, to an account or accounts designated in writing by the Seller to the Company, such designation to be made not later than two Business Days prior to the Closing Date.

 

(2)                              The Seller will deliver the Purchased Shares in book entry form without any restrictive legends and transferred via Deposit/Withdrawal At Custodian to accounts designated in writing by the Company to the Seller, such designation to be made not later than two Business Days prior to the Closing Date.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.01    Representations and Warranties of the Company.  The Company hereby represents and warrants to the Seller as follows:

 

(A)       Due Organization,  Power and Authority.  The Company is duly organized and has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement.

 

(B)       Authorization.  The execution and delivery of this Agreement, and the consummation by the Company of the transactions contemplated hereby, have been duly and validly approved in accordance with all requirements and procedures applicable to the Company, and no other proceedings on the part of the Company are necessary to approve this Agreement or to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by the Company, and (assuming the due authorization, execution and 

 

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delivery of this Agreement by the Seller) this Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by general principles of equity, whether applied in a court of law or a court of equity, and by bankruptcy, insolvency and similar Laws affecting creditors’ rights and remedies generally.

 

(C)       Non-Contravention.  Neither the execution and delivery of this Agreement nor the consummation by the Company of the transactions contemplated hereby will violate the Company’s certificate of incorporation or bylaws, any agreement, arrangement, note, contract or other binding instrument to which the Company is a party or bound, or applicable Law.

 

(D)       Consents and Approvals.  No consents or approvals of, or filings or registrations with, any Governmental Entity or any other third party by or on behalf of the Company are necessary in connection with the execution and delivery by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby.

 

(E)       Availability of Funds.  The Company has and will have as of the Closing sufficient funds available to consummate the transactions contemplated hereunder.

 

Section 3.02    Representations and Warranties of the Seller.  The Seller hereby represents and warrants to the Company as follows:

 

(A)       Power and Authority.  The Seller has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement.

 

(B)       Authorization.  The execution and delivery of this Agreement, and the consummation by the Seller of the transactions contemplated hereby, have been duly and validly approved in accordance with all requirements and procedures applicable to the Seller, and no other proceedings on the part of the Seller are necessary to approve this Agreement or to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed and delivered by the Seller, and (assuming the due authorization, execution and delivery of this Agreement by the other parties hereto) this Agreement constitutes a valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforcement may be limited by general principles of equity, whether applied in a court of law or a court of equity, and by bankruptcy, insolvency and similar Laws affecting creditors’ rights and remedies generally.

 

(C)       Non-Contravention.  Neither the execution and delivery of this Agreement nor the consummation by the Seller of the transactions contemplated hereby, will violate any provision of any agreement to which Seller is a party or any applicable Law.  Without limiting the foregoing, the Seller is the sole record and beneficial owner of the Purchased Shares, free and clear of any Lien, but subject to the restrictions on transfer imposed by federal and state laws, and the Seller has the unrestricted right to sell the Purchased Shares to the Company as herein provided.

 

(D)       Consents and Approvals.  No consents or approvals of, or filings or registrations with, any Governmental Entity or any other third party by and on behalf of the 

 

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Seller are necessary in connection with the execution and delivery by the Seller of this Agreement and the consummation by the Seller of the transactions contemplated hereby.

 

ARTICLE IV

 

COVENANTS

 

Section 4.01    Forbearances of the Seller.  From the date hereof until the Closing, without the prior written consent of the Company, the Seller will not:

 

(A)       directly or indirectly transfer, sell, assign, distribute, exchange, pledge, hypothecate, mortgage, encumber or otherwise dispose of or engage in or enter into any hedging transactions with respect to, any of the Purchased Shares or any portion thereof or interest therein (other than pursuant to the Securities Purchase); or

 

(B)       agree, commit to or enter into any agreement to take any of the actions referred to in Section 4.01(A).

 

Section 4.02    Further Action.  The Company and the Seller (A) shall each execute and deliver, or shall cause to be executed and delivered, such documents and other instruments and shall take, or shall cause to be taken, such further action as may be reasonably necessary to carry out the provisions of this Agreement and give effect to the transactions contemplated by this Agreement and (B) shall refrain from taking any actions that could reasonably be expected to impair, delay or impede the Closing or the consummation of the transactions contemplated by this Agreement.

 

ARTICLE V

 

CONDITIONS TO THE CLOSING

 

Section 5.01    Conditions to Each Party’s Obligations.  The respective obligations of the Company and the Seller to consummate the Securities Purchase are subject to the fulfillment, or written waiver by the Company and the Seller, at or prior to the Closing, of each of the following conditions:

 

(A)       No Injunctions or Restraints; Illegality.  No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Securities Purchase shall be in effect.  No Law shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or makes illegal the consummation of the Securities Purchase.

 

(B)       Representations and Warranties.  The representations and warranties set forth in Article III of this Agreement shall be true and correct as though made on and as of the Closing Date.

 

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(C)       Other Events.  None of the following shall have occurred since the date hereof:

 

(1)        the Company or any of its Subsidiaries shall have (a)  become insolvent or unable to pay its debts or failed or admitted in writing its inability generally to pay its debts as they become due; (b) made a general assignment, arrangement or composition with or for the benefit of its creditors; (c)  have instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or have a petition presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition shall have resulted in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; (d) had a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (e) sought or shall have become subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (f) had a secured party take possession of all or substantially all its assets or had a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets; (g) caused or shall have been subject to any event with respect to it which, under the applicable laws of any jurisdiction, had an analogous effect to any of the events specified in clauses (a) to (f) (inclusive); or (g) taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts;

 

(2)        a Governmental Entity in any jurisdiction shall have (a) commenced an action or proceeding against the Company or any of its Subsidiaries; or (b) issued or entered a temporary restraining order, preliminary or permanent injunction or other order binding upon the Company or any of its Subsidiaries, which in the case of (a) and (b) shall have had or be reasonably expected to have a Company Material Adverse Effect; or

 

(3)        any fact, circumstance, event, change, occurrence, condition or development shall have occurred that, individually or in the aggregate, shall have had or shall be reasonably likely to have a Company Material Adverse Effect.

 

(D)       The Treasury Sale shall be completed concurrently with the transactions provided for in this Agreement.

 

Section 5.02    Condition to Obligations of the Seller.  The obligation of the Seller to consummate the Securities Purchase is also subject to the fulfillment, or written waiver by the Seller, prior to the Closing, of the following conditions:

 

(A)       Performance of Obligations.  The Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing.

 

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(B)       Closing Certificates.  The Company shall deliver to the Seller a certificate, dated as of the Closing Date, certifying to the effect that all conditions precedent to the Closing have been satisfied.

 

ARTICLE VI

 

TERMINATION

 

Section 6.01    Termination Events.  This Agreement may be terminated at any time prior to the Closing:

 

(A)       by mutual written agreement of the Company and the Seller; or

 

(B)       by the Company, upon written notice to the Seller, or by the Seller, upon written notice to the Company, in the event that the Closing Date does not occur on or before December 31, 2016; provided, however, that the respective rights to terminate this Agreement pursuant to this Section 6.01(B) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date.

 

Section 6.02    Effect of Termination.  In the event of termination of this Agreement as provided in Section 6.01, this Agreement shall forthwith become void and have no effect, and none of the Company, the Seller or any officers, directors or employees of the Company or the Seller, or any of their respective Affiliates, shall have any liability of any nature whatsoever hereunder, or in connection with the transactions contemplated hereby, except that this Section 6.02 and Sections 7.03, 7.04, 7.05 and 7.06 shall survive any termination of this Agreement.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01    Waiver; Amendment.  Any provision of this Agreement may be (A) waived in writing by the party benefiting by the provision, or (B) amended or modified at any time by an agreement in writing signed by each of the parties hereto.  Neither any failure nor any delay by any party in exercising any right, power or privilege under this Agreement or any of the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege.

 

Section 7.02    Counterparts.  This Agreement may be executed by facsimile or other electronic means and in counterparts, all of which shall be considered an original and one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

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Section 7.03                Governing Law; Choice of Forum; Waiver of Jury Trial.  (A)  This Agreement and any claim, controversy or dispute arising under or related to this Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties shall be enforced, governed, and construed in all respects (whether in contract or in tort) in accordance with the federal law of the United States if and to the extent such law is applicable, and otherwise in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.  Each of the parties hereto agrees (a) to submit to the exclusive jurisdictions and venue of the United States District Court of the District of Columbia and the United States Court of Federal Claims for any and all civil actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby, and (b) that notice may be served upon (i) the Company at the address and in the manner set forth for notices to the Company in Section 7.04, and (ii) the Seller at the address and in the manner set forth for notices to the Seller in Section 7.04.

 

(B)                           To the extent permitted by applicable Law, each of the parties hereto hereby unconditionally waives trial by jury in any civil legal action or proceeding relating to this Agreement or the transactions contemplated hereby.

 

Section 7.04                Notices.  All notices and other communications hereunder shall be in writing and shall be deemed given on the date of delivery if delivered personally or telecopied (upon telephonic confirmation of receipt), on the first Business Day following the date of dispatch if delivered by a recognized next day courier service, or on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid.  All notices hereunder shall be delivered as set forth below or on the signature page hereof, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

 

If to the Company to:

 

Broadway Financial Corporation

5055 Wilshire Boulevard

Suite 500

Los Angeles, California 90036

Facsimile: (323) 634-1723

Attention:  Chief Financial Officer

 

With a copy to:

 

Arnold & Porter LLP

777 South Figueroa Street,

Suite 4400

Los Angeles, California 90017

Facsimile:  (213) 243-4199

Attention:  James. R. Walther

 

Section 7.05                Entire Understanding; No Third Party Beneficiaries.  This Agreement (together with the documents, agreements and instruments referred to herein) 

 

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represents the entire understanding of the parties with respect to the subject matter hereof and supersedes any and all other oral or written agreements heretofore made with respect to the subject matter hereof.  Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto, any rights or remedies hereunder.

 

Section 7.06                Assignment.  Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party hereto without the prior written consent of the other parties, and any attempt to assign any right, remedy, obligation or liability hereunder without such consent shall be null and void; provided, however, that the Seller may assign this Agreement to an Affiliate of the Seller.  If the Seller assigns this Agreement to an Affiliate, the Seller shall be relieved of its obligations and liabilities under this Agreement but (i) all rights, remedies, obligations and liabilities of the Seller hereunder shall continue and be enforceable by and against and assumed by such Affiliate, (ii) the Seller’s obligations and liabilities hereunder shall continue to be outstanding and (iii) all references to the Seller herein shall be deemed to be references to such Affiliate.  The Seller will give the Company notice of any such assignment; provided, that the failure to provide such notice shall not void any such assignment.

 

Section 7.07                Severability.  Any term or provision of this Agreement which is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid, illegal or unenforceable the remaining terms and provisions of this Agreement. or affecting the validity, legality or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction, and if any provision of this Agreement is determined to be so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable, in all cases so long as neither the economic nor legal substance of the transactions contemplated hereby is affected in any manner materially adverse to any party or its shareholders.  Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

 

[remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

	
BROADWAY   FINANCIAL CORPORATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Wayne-Kent A. Bradshaw
    	
 
    	
 
    
	
Name:
    	
Wayne-Kent   A. Bradshaw
    	
 
    	
 
    
	
Title:
    	
President   and Chief Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BANK   OF HOPE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Douglas Goddard
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Notice   Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Bank   of Hope
    
	
 
    	
 
    	
 
    	
3200   Wilshire Blvd., 5th Floor
    
	
 
    	
 
    	
 
    	
Los   Angeles, CA 90010
    
	
 
    	
 
    	
 
    	
Attention:   Chief Financial Officer
    

 

[Signature Page to Securities Purchase Agreement]

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